Relates to the definition of overtime ceiling for members who first become members of a public retirement system of the state on or after April first, two thousand twelve.
STATE OF NEW YORK
________________________________________________________________________
8087
2025-2026 Regular Sessions
IN SENATE
May 15, 2025
___________
Introduced by Sen. GOUNARDES -- read twice and ordered printed, and when
printed to be committed to the Committee on Civil Service and Pensions
AN ACT to amend the retirement and social security law, in relation to
the definition of overtime ceiling
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subdivision l of section 601 of the retirement and social
2 security law, as amended by chapter 368 of the laws of 2017, is amended
3 to read as follows:
4 l. (a) "Wages" shall mean regular compensation earned by and paid to a
5 member by a public employer, except that for members who first join the
6 New York state and local employees' retirement system or the New York
7 state teachers' retirement system on or after January first, two thou-
8 sand ten, overtime compensation paid in any year in excess of the over-
9 time ceiling, as defined by this subdivision, shall not be included in
10 the definition of wages.
11 (b) "Overtime compensation" shall mean, for purposes of this section,
12 compensation paid under any law or policy under which employees are paid
13 at a rate greater than their standard rate for additional hours worked
14 beyond those required, including compensation paid under section one
15 hundred thirty-four of the civil service law and section ninety of the
16 general municipal law.
17 (c) The "overtime ceiling" shall mean fifteen thousand dollars per
18 annum on January first, two thousand ten, and shall be increased by
19 three per cent each year thereafter, provided, however, that:
20 (i) for members who first become members of a public retirement system
21 of the state on or after April first, two thousand twelve, other than a
22 pension authorized under section six hundred four-b of this article,
23 "overtime ceiling" shall mean fifteen thousand dollars per annum on
24 April first, two thousand twelve, and shall be increased each year ther-
25 eafter by a percentage to be determined annually by reference to the
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD09452-02-5
S. 8087 2
1 consumer price index (all urban consumers, CPI-U, U.S. city average, all
2 items, 1982-84=100), published by the United States bureau of labor
3 statistics, for each applicable calendar year. Said percentage shall
4 equal the annual inflation as determined from the increase in the
5 consumer price index in the one year period ending on the December thir-
6 ty-first preceding the overtime ceiling adjustment effective on the
7 ensuing April first.
8 (ii) Commencing January first, two thousand eighteen, and each year
9 thereafter, the overtime ceiling percentage shall be increased by an
10 amount equal to the annual inflation as determined from the increase in
11 the consumer price index in the one year period ending on the September
12 thirtieth prior to the overtime ceiling adjustment effective on the
13 ensuing January first.
14 (d) For members who first join a public retirement system of the state
15 on or after April first, two thousand twelve, the following items shall
16 not be included in the definition of wages: 1. wages in excess of the
17 annual salary paid to the governor pursuant to section three of article
18 four of the state constitution, 2. lump sum payments for deferred
19 compensation, sick leave, accumulated vacation or other credits for time
20 not worked, 3. any form of termination pay, 4. any additional compen-
21 sation paid in anticipation of retirement, and 5. in the case of employ-
22 ees who receive wages from three or more employers in a twelve month
23 period, the wages paid by the third and each additional employer.
24 § 2. This act shall take effect immediately.
FISCAL NOTE.-- Pursuant to Legislative Law, Section 50:
SUMMARY: This proposed legislation would remove the Overtime Ceiling
for Tier 6 New York City Transit Authority (NYCTA) members subject to
the 25-Year and Age 55 Retirement Program (the 55/25 NYCTA Plan) for
wages used to calculate member contributions and pension benefits.
EXPECTED INCREASE (DECREASE) IN EMPLOYER CONTRIBUTIONS
by Fiscal Year for the first 25 years ($ in Millions)
Year NYCERS
2026 20.2
2027 21.1
2028 22.1
2029 23.1
2030 24.0
2031 25.0
2032 26.0
2033 27.0
2034 28.1
2035 29.2
2036 30.2
2037 31.3
2038 32.4
2039 33.5
2040 34.6
2041 35.7
2042 26.1
2043 27.2
2044 28.2
2045 29.3
2046 30.3
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2047 31.3
2048 32.3
2049 33.3
2050 34.3
Projected contributions include future new hires that may be impacted.
For Fiscal Year 2051 and beyond, the expected increase in normal cost as
a level percent of pay for impacted new entrants is approximately 0.45%.
The entire increase in employer contributions will be allocated to the
New York City Transit Authority.
PRESENT VALUE OF BENEFITS: The Present Value of Benefits is the
discounted expected value of benefits paid to current members if all
assumptions are met, including future service accrual and pay increases.
Future new hires are not included in this present value.
INITIAL INCREASE (DECREASE) IN ACTUARIAL PRESENT VALUES
as of June 30, 2024 ($ in Millions)
Present Value (PV) NYCERS
(1) PV of Employer Contributions: 220.1
(2) PV of Employee Contributions: 84.3
Total PV of Benefits (1) + (2): 304.3
UNFUNDED ACCRUED LIABILITY (UAL): Actuarial Accrued Liabilities are
the portion of the Present Value of Benefits allocated to past service.
Changes in UAL were amortized over the expected remaining working life-
time of those impacted using level dollar payments.
AMORTIZATION OF UNFUNDED ACCRUED LIABILITY
NYCERS
Increase (Decrease) in UAL: 97.0 M
Number of Payments: 16
Amortization Payment: 10.6 M
CENSUS DATA: The estimates presented herein are based on preliminary
census data collected as of June 30, 2024. The census data for the
impacted population is summarized below.
NYCERS
Active Members
- Number Count: 21,909
- Average Age: 43.2
- Average Service: 5.4
- Average Salary: 86,000
IMPACT ON MEMBER BENEFITS AND CONTRIBUTIONS: Under the proposed legis-
lation, the Overtime Ceiling would become inapplicable to participants
in the Tier 6 55/25 NYCTA Plan. As a result, overtime earnings exceeding
the Overtime Ceiling would be included in determining member contrib-
ution rates and annual contributions to be paid by the member. Partic-
S. 8087 4
ipants may be entitled to a higher annual pension benefit if such earn-
ings increase their Final Average Salary.
ASSUMPTIONS AND METHODS: The estimates presented herein have been
calculated based on the Revised 2021 Actuarial Assumptions and Methods
of the impacted retirement systems. In addition:
* Future overtime earnings exceeding the Overtime Ceiling were assumed
to remain level based on reported overtime for the last three fiscal
years.
* New entrants were assumed to replace exiting members so that total
payroll increases by 3% each year for NYC Transit members. New entrant
demographics were developed based on data for recent new hires and actu-
arial judgement.
RISK AND UNCERTAINTY: The costs presented in this Fiscal Note depend
highly on the actuarial assumptions, methods, and models used, demo-
graphics of the impacted population, and other factors such as invest-
ment, contribution, and other risks. If actual experience deviates from
actuarial assumptions, the actual costs could differ from those
presented herein. Quantifying these risks is beyond the scope of this
Fiscal Note.
This Fiscal Note is intended to measure pension-related impacts and
does not include other potential costs (e.g., administrative and Other
Postemployment Benefits). This Fiscal Note does not reflect any chapter
laws that may have been enacted during the current legislative session.
STATEMENT OF ACTUARIAL OPINION: Marek Tyszkiewicz and Gregory Zelikov-
sky are members of the Society of Actuaries and the American Academy of
Actuaries. We are members of NYCERS, but do not believe it impairs our
objectivity, and we meet the Qualification Standards of the American
Academy of Actuaries to render the actuarial opinion contained herein.
To the best of our knowledge, the results contained herein have been
prepared in accordance with generally accepted actuarial principles and
procedures and with the Actuarial Standards of Practice issued by the
Actuarial Standards Board.
FISCAL NOTE IDENTIFICATION: This Fiscal Note 2025-62 dated May 14,
2025 was prepared by the Chief Actuary for the New York City Retirement
Systems and Pension Funds and is intended for use only during the 2025
Legislative Session.
