STATE OF NEW YORK
________________________________________________________________________
5754
2023-2024 Regular Sessions
IN ASSEMBLY
March 23, 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
providing Tier 5 and 6 members of the New York state teachers' retire-
ment system with the same service retirement pension factor as Tier 4
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subdivision a of section 504 of the retirement and social
2 security law, as amended by chapter 18 of the laws of 2012, is amended
3 to read as follows:
4 a. The service retirement benefit for general members at normal
5 retirement age with twenty or more years of credited service shall be a
6 pension equal to one-fiftieth of final average salary times years of
7 credited service, not in excess of thirty years, less fifty percent of
8 the primary social security retirement benefit as provided in section
9 five hundred eleven of this article. The service retirement benefit for
10 general members at normal retirement age with twenty or more years of
11 service who first become members of the New York state and local employ-
12 ees' retirement system on or after April first, two thousand twelve at
13 normal retirement age shall be a pension equal to the sum of [thirty-
14 five] forty per centum and one-fiftieth of final average salary for each
15 year of service in excess of twenty, but not in excess of thirty, times
16 final average salary times years of credited service.
17 § 2. Subdivisions a, b and b-1 of section 604 of the retirement and
18 social security law, subdivision a as amended and subdivision b-1 as
19 added by chapter 18 of the laws of 2012, subdivision b as amended by
20 chapter 266 of the laws of 1998, and the opening paragraph of subdivi-
21 sion b as amended by section 8-b of part B of chapter 504 of the laws of
22 2009, are amended to read as follows:
23 a. The service retirement benefit at normal retirement age for a
24 member with less than twenty years of credited service[, or less than
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD10094-01-3
A. 5754 2
1 twenty-five years credited service for a member who joins the New York
2 state teachers' retirement system on or after January first, two thou-
3 sand ten,] shall be a retirement allowance equal to one-sixtieth of
4 final average salary times years of credited service. Normal retirement
5 age for members who first become members of a public retirement system
6 of the state on or after April first, two thousand twelve shall be age
7 sixty-three.
8 b. The service retirement benefit at normal retirement age for a
9 member with twenty years or more of credited service[, or with twenty-
10 five or more years credited service for a member who first joins the New
11 York state teachers' retirement system on or after January first, two
12 thousand ten,] shall be a retirement allowance equal to one-fiftieth of
13 final average salary times years of credited service not in excess of
14 thirty years.
15 Credited service in excess of thirty years shall provide an additional
16 retirement allowance equal to three-two hundredths of the final average
17 salary for each year of credited service in excess of thirty years.
18 b-1. Notwithstanding any other provision of law to the contrary, the
19 service retirement benefit for members with [twenty] forty or more years
20 of credit service who first become a member of a public retirement
21 system of the state on or after April first, two thousand twelve at age
22 sixty-three shall be a pension equal to the sum of [thirty-five] seven-
23 ty-five per centum and one-fiftieth of final average salary for each
24 year of service in excess of [twenty] forty times final average salary
25 times years of credited service. In no event shall any retirement bene-
26 fit payable without optional modification be less than the actuarially
27 equivalent annuitized value of the member's contributions accumulated
28 with interest at five percent per annum compounded annually to the date
29 of retirement.
30 § 3. Section 1312 of the retirement and social security law, as added
31 by chapter 18 of the laws of 2012, is amended to read as follows:
32 § 1312. Benefit enhancements. Notwithstanding any other law to the
33 contrary, eligible employees shall be permitted to retire, without
34 penalty, upon reaching age fifty-seven and completing at least thirty
35 years of credited service. Employees retiring pursuant to this section
36 shall receive a pension allowance equal to the sum of [thirty-five]
37 forty per centum and one-fiftieth of final average salary for each year
38 of service in excess of twenty times final average salary times years of
39 credited service.
40 § 4. Notwithstanding any other provision of law to the contrary, none
41 of the provisions of this act shall be subject to section 25 of the
42 retirement and social security law.
43 § 5. This act shall take effect immediately.
FISCAL NOTE.-- Pursuant to Legislative Law, Section 50:
This bill would amend subdivisions a, b and b-1 of Section 604 of the
Retirement and Social Security Law to provide Tier 5 and 6 members the
same service retirement pension factor as Tier 4. The Tier 4 service
retirement pension factor for members with less than 20 years of service
is equal to one-sixtieth of final average salary times years of service;
for members with 20 or more years of service it is equal to 2.0% times
all years of service up to 30 years, plus 1.5% for each year above 30,
times final average salary. The current Tier 5 pension factor is the
same as that of Tier 4, with the breakpoint being at 25 years of service
instead of 20. The current Tier 6 pension formula for members with less
than 20 years of service is equal to one-sixtieth of final average sala-
ry times years of service; for members with 20 or more years of service
A. 5754 3
it is equal to 35.0% plus 2.0% for each year above 20, times final aver-
age salary. For Tier 6 members with more than 40 years of service the
current Tier 6 pension formula is better than that of Tier 4 and would
remain in place.
The annual cost to the employers of members of the New York State
Teachers' Retirement System for this benefit is estimated to be $50.8
million or 0.28% of payroll if this bill is enacted.
The System's "new entrant rate", a hypothetical employer contribution
rate that would occur if we started a new Retirement System without any
assets, is equal to 5.15% of pay under the current Tier 6 benefit struc-
ture. This can be thought of as the long-term expected employer cost of
Tier 6, based on current actuarial assumptions. For the proposed change
to the Tier 6 benefit structure under this bill, this new entrant rate
would increase to 5.74% of pay, an increase of 0.59% of pay.
Member data is from the System's most recent actuarial valuation
files, consisting of data provided by the employers to the Retirement
System. Data distributions and statistics can be found in the System's
Annual Report. System assets are as reported in the System's financial
statements and can also be found in the System's Annual Report. Actuari-
al assumptions and methods are provided in the System's Actuarial Valu-
ation Report.
The source of this estimate is Fiscal Note 2023-2 dated February 22,
2023 prepared by the Office of the Actuary of the New York State Teach-
ers' Retirement System and is intended for use only during the 2023
Legislative Session. I, Richard A. Young, am the Chief Actuary for the
New York State Teachers' Retirement System. I am a member of the Ameri-
can Academy of Actuaries and I meet the Qualification Standards of the
American Academy of Actuaries to render the actuarial opinion contained
herein.
