Provides that certain members of the police and fire retirement system shall have final average salary be calculated as the regular compensation earned during the twelve months of actual service immediately preceding the date of such member's retirement.
STATE OF NEW YORK
________________________________________________________________________
5136
2023-2024 Regular Sessions
IN ASSEMBLY
March 2, 2023
___________
Introduced by M. of A. PHEFFER AMATO -- read once and referred to the
Committee on Governmental Employees
AN ACT to amend the retirement and social security law, in relation to
the calculation of final average salary for certain members of the New
York state and local police and fire retirement system
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Section 1209 of the retirement and social security law, as
2 added by chapter 18 of the laws of 2012, is amended to read as follows:
3 § 1209. Final average salary. a. For members who first become members
4 of the New York state and local police and fire retirement system on or
5 after April first, two thousand twelve, a member's final average salary
6 shall be equal to one-fifth of the highest total wages earned by such
7 member during any continuous period of employment for which the member
8 was credited with five years of service credit; provided, however, if
9 the wages earned during any year of credited service included in the
10 period used to determine final average salary exceeds the average of the
11 wages of the previous four years of credited service by more than ten
12 percent, the amount in excess of ten percent shall be excluded from the
13 computation of final average salary. Wages in excess of the annual sala-
14 ry paid to the governor pursuant to section three of article four of the
15 state constitution shall be excluded from the computation of final aver-
16 age salary for members who first become members of the New York state
17 and local police and fire retirement system on or after April first, two
18 thousand twelve.
19 b. Notwithstanding subdivision a of this section, members who first
20 become members of the New York state and local police and fire retire-
21 ment system on or after April first, two thousand twelve, and who retire
22 from an employer which, prior to April first, two thousand twelve,
23 elected by the adoption, filing and approval of a resolution in the
24 manner provided by section three hundred thirty of this chapter to
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD06417-02-3
A. 5136 2
1 provide that final average salary shall mean the regular compensation
2 earned from such participating employer by a member during the twelve
3 months of actual service immediately preceding the date of such member's
4 retirement pursuant to subdivision f of section four hundred forty-three
5 of this chapter, shall continue to have his or her final average salary
6 computed with such twelve month final average salary unless such member
7 would otherwise be entitled to a greater benefit under subdivision a of
8 this section, in which case such greater benefit shall be payable.
9 § 2. This act shall take effect immediately.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
This bill would change the calculation of final average salary (FAS)
for Tier 6 members of the New York State and Local Police and Fire
Retirement System (NYSLPFRS) whose employer previously elected to
provide the one-year FAS benefit to members of Tiers 2 and 5 under
Retirement and Social Security Law Section 443-f. Currently, a Tier 6
member's FAS is defined as the average wages earned over five consec-
utive years, with wages earned during any year limited to the average of
the prior four years' wages increased by 10%. If this bill is enacted, a
Tier 6 member's FAS will be defined as the earnings reported over the 12
months preceding their date of retirement. Wages exceeding the annual
salary paid to the governor will continue to be excluded.
If this bill is enacted during the 2023 legislative session, we antic-
ipate that there will be an increase of approximately $3.9 million in
the annual contributions of the affected employers for the fiscal year
ending March 31, 2024. In future years, this cost will vary as the bill-
ing rates and salary of the affected members change. As a percentage of
payroll, we anticipate that the annual contributions of the affected
employers will increase as follows:
Plan Rate Increase
Age-55 1.6%
25-Year 1.9%
25-Year w/ Additional 60ths 2.1%
20-Year 2.3%
20-Year w/ Additional 60ths 2.4%
In addition to the annual contributions discussed above, there will be
an immediate past service cost of approximately $23.4 million, calcu-
lated as of February 1, 2024, which will be shared by the State of New
York and all the participating employers in the NYSLPFRS, including
those participating employers whose employees do not benefit from this
proposal.
These estimated costs are based on 1,817 affected members employed by
various participating employers in the NYSLPFRS, with annual salary of
approximately $152 million as of March 31, 2022.
Summary of relevant resources:
Membership data as of March 31, 2022 was used in measuring the impact
of the proposed change, the same data used in the April 1, 2022 actuari-
al valuation. Distributions and other statistics can be found in the
2022 Report of the Actuary and the 2022 Annual Comprehensive Financial
Report.
The actuarial assumptions and methods used are described in the 2020,
2021, and 2022 Annual Report to the Comptroller on Actuarial Assump-
tions, and the Codes, Rules and Regulations of the State of New York:
Audit and Control.
The Market Assets and GASB Disclosures are found in the March 31, 2022
New York State and Local Retirement System Financial Statements and
Supplementary Information.
A. 5136 3
I am a member of the American Academy of Actuaries and meet the Quali-
fication Standards to render the actuarial opinion contained herein.
This fiscal note does not constitute a legal opinion on the viability
of the proposed change nor is it intended to serve as a substitute for
the professional judgment of an attorney.
This estimate, dated February 3, 2023, and intended for use only
during the 2023 Legislative Session, is Fiscal Note No. 2023-41,
prepared by the Actuary for the New York State and Local Retirement
System.
