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A10335 Summary:

BILL NOA10335
 
SAME ASNo Same As
 
SPONSORRules (Abbate)
 
COSPNSR
 
MLTSPNSR
 
Amd §§613, 603, 517 & 1204, rpld §613 sub g, R & SS L; amd §182, Ed L
 
Relates to providing reforms to employee pension contributions; provides that members of Tier 6 shall contribute three percent of annual wages to their retirement system.
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A10335 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A10335
 
SPONSOR: Rules (Abbate)
  TITLE OF BILL: An act to amend the retirement and social security law and the education law, in relation to providing reforms to employee pension contributions; and repealing certain provisions of the retirement and social security law relating thereto   PURPOSE OR GENERAL IDEA OF BILL: This bill would amend various sections of the retirement and social security law to provide three percent employee contributions for all Tier 6 members, regardless of earnings.   SUMMARY OF PROVISIONS: Section 1 of the bill amends subdivision a of section 613 of the retire- ment and social security law. Section 2 of the bill repeals subdivision g of section 613 of the retirement and social security law. Section 3 of the bill amends subdivision t of section 603 of the retire- ment and social security law. Section 4 of the bill amends subdivision a of section 517 of the retire- ment and social security law. Section 5 of the bill amends section 1204 of the retirement and social security law. Section 6 of the bill amends subdivision 2 of section 182 of the education law. Section 7 of the bill amends subdivision f of section 613 of the retire- ment and social security law. Section 8 of the bill provides that employees will not be refunded any contributions they have made or that have been collected. Section 9 of the bill provides that this act shall be subject to section 25 of the retirement and social security law. Section 10 of the bill provides for an effective date of 60 days after enactment.   JUSTIFICATION: Reforming the state's pension system is critical for the state, local governments, school districts, and transportation systems to recruit and retain public employees. Over recent years, our public work force has steadily declined to the point where many state agencies, local govern- ments and school districts are finding it difficult to carry out their critical public missions. While the enacted 2022-23 State Budget reduced the vesting time for tier 6 members to five years and temporarily does not count overtime compensation to be used in determining their pension contribution rate, more needs to be done. Historically, one of the greatest attractions for people to enter public service has been the ability to earn a good public pension. Unfortunately, notwithstanding modest pension reforms passed in this year's state budget, this is no longer the case. Further reforms to our public pension system are warranted and needed to make public service more attractive and compet- itive with the private sector. This legislation would provide three percent employee contributions for all Tier 6 members, regardless of earnings. Tier 6 employees pay anywhere from three percent to six percent of their salary for their pension, while nearly all other pension tiers pay a maximum of Three percent. For many Tier 6 employees, one annual pay raise moves them to a higher contribution bracket, effectively erasing any raise they received. Creating a standardized three percent contribution for all Tier 6 members is a matter of equity and fairness. It would also help ameliorate the current public employment recruitment and retention issues the state and local governments are now experiencing.   PRIOR LEGISLATIVE HISTORY: New bill.   FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS: See fiscal note.   EFFECTIVE DATE: Sixty days after enactment.
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A10335 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          10335
 
                   IN ASSEMBLY
 
                                      May 13, 2022
                                       ___________
 
        Introduced  by  COMMITTEE ON RULES -- (at request of M. of A. Abbate) --
          read once and referred to the Committee on Governmental Employees
 
        AN ACT to amend the retirement and social security law and the education
          law, in relation to providing reforms  to  employee  pension  contrib-
          utions;  and repealing certain provisions of the retirement and social
          security law relating thereto

          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 613 of the retirement and social
     2  security law, as amended by chapter 10 of the laws of 2000, paragraphs 1
     3  and 2 as amended by chapter 510 of the laws of 2015, the second undesig-
     4  nated paragraphs of paragraphs 1 and 2 as amended by section 2  of  part
     5  SS of chapter 56 of the laws of 2022, is amended to read as follows:
     6    a.  1.  [Except  as  provided  by  paragraph  two of this subdivision,
     7  members] Members shall contribute three percent of annual wages  to  the
     8  retirement  system in which they have membership[, except that beginning
     9  April first, two thousand thirteen for members who first become  members
    10  of  a public retirement system of the state on or after April first, two
    11  thousand twelve, the rate at which each such member shall contribute  in
    12  any  current  plan  year  (April first to March thirty-first, except for
    13  members of the New York city employees' retirement system, New York city
    14  teachers' retirement system and New York city board of education retire-
    15  ment system, plan year shall mean January first through  December  thir-
    16  ty-first commencing with the January first next succeeding the effective
    17  date  of  the  chapter  of the laws of two thousand fifteen that amended
    18  this paragraph) shall be determined by reference to the  wages  of  such
    19  member  in  the  second  plan  year  (April first to March thirty-first,
    20  except for members of the New York city  employees'  retirement  system,
    21  New  York  city  teachers'  retirement system and New York city board of
    22  education retirement system, plan year shall mean January first  through
    23  December  thirty-first commencing with the January first next succeeding
    24  the effective date of the chapter of the laws of  two  thousand  fifteen
    25  that  amended  this  paragraph)  preceding  such  current  plan  year as
    26  follows:

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD15738-05-2

        A. 10335                            2

     1    (i) members with wages of forty-five thousand  dollars  per  annum  or
     2  less shall contribute three per centum of annual wages;
     3    (ii)  members  with  wages greater than forty-five thousand per annum,
     4  but not more than fifty-five thousand per annum shall  contribute  three
     5  and one-half per centum of annual wages;
     6    (iii)  members  with wages greater than fifty-five thousand per annum,
     7  but not more than seventy-five thousand per annum shall contribute  four
     8  and one-half per centum of annual wages;
     9    (iv)  members  with wages greater than seventy-five thousand per annum
    10  but not more than one hundred thousand per annum shall  contribute  five
    11  and three-quarters per centum of annual wages; and
    12    (v)  members  with  wages  greater than one hundred thousand per annum
    13  shall contribute six per centum of annual wages].
    14    Notwithstanding the foregoing, during each of  the  first  three  plan
    15  years (April first to March thirty-first, except for members of New York
    16  city  employees'  retirement  system, New York city teachers' retirement
    17  system and New York city board of education retirement system, plan year
    18  shall mean January first through December thirty-first  commencing  with
    19  the  January  first  next  succeeding the effective date of chapter five
    20  hundred ten of the laws of two thousand fifteen) in  which  such  member
    21  has  established  membership in a public retirement system of the state,
    22  such member shall contribute a percentage of annual wages in  accordance
    23  with  the  preceding  schedule  based  upon a projection of annual wages
    24  provided by the employer. Notwithstanding the foregoing, when  determin-
    25  ing  the  rate  at which each such member who became a member of the New
    26  York state and local employees' retirement system, New York city employ-
    27  ees' retirement system, New York city teachers'  retirement  system  and
    28  New  York  city  board of education retirement system, on or after April
    29  first, two thousand twelve shall contribute for  any  plan  year  (April
    30  first  to  March  thirty-first,  except for members of the New York city
    31  employees' retirement system, New York city teachers' retirement  system
    32  and  New York city board of education retirement system, plan year shall
    33  mean January first through December thirty-first commencing with January
    34  first next succeeding the effective date of chapter five hundred ten  of
    35  the  laws  of  two  thousand  fifteen) between April first, two thousand
    36  twenty-two and April first, two thousand twenty-four, such rate shall be
    37  determined by reference to employees annual base wages of such member in
    38  the second plan year (April first to March thirty-first) preceding  such
    39  current plan year. Base wages shall include regular pay, shift differen-
    40  tial pay, location pay, and any increased hiring rate pay, but shall not
    41  include any overtime payments or compensation earned for extracurricular
    42  programs or any other pensionable earnings paid in addition to the annu-
    43  al base wages.
    44    The  head  of each retirement system shall promulgate such regulations
    45  as may be necessary and appropriate with respect  to  the  deduction  of
    46  such  contribution  from  members'  wages and for the maintenance of any
    47  special fund or funds with respect to amounts so contributed.
    48    2. A member of the New York city employees' retirement system  who  is
    49  eligible  to be a participant in the twenty-five-year and age fifty-five
    50  retirement program, as defined by paragraph five  of  subdivision  a  of
    51  section  six hundred four-b of this article shall contribute two percent
    52  of annual wages to such system effective on the  starting  date  of  the
    53  elimination  of  additional  member  contributions,  as  defined  in  an
    54  election made pursuant to paragraph ten of subdivision e of section  six
    55  hundred  four-b of this article[, except that beginning April first, two
    56  thousand thirteen for members who first become members of the  New  York

        A. 10335                            3

     1  city  employees' retirement system on or after April first, two thousand
     2  twelve, the rate at which each  such  member  shall  contribute  in  any
     3  current plan year (April first to March thirty-first, provided, however,
     4  that  plan  year  shall mean January first through December thirty-first
     5  commencing with the January first next succeeding the effective date  of
     6  the  chapter of the laws of two thousand fifteen that amended this para-
     7  graph) shall be determined by reference to the wages of such  member  in
     8  the  second  plan  year  (April  first  to March thirty-first, provided,
     9  however, that plan year shall mean January first through December  thir-
    10  ty-first commencing with the January first next succeeding the effective
    11  date  of  the  chapter  of the laws of two thousand fifteen that amended
    12  this paragraph) preceding such current plan year as follows:
    13    (i) members with wages of forty-five thousand  dollars  per  annum  or
    14  less shall contribute three per centum of annual wages;
    15    (ii)  members  with  wages greater than forty-five thousand per annum,
    16  but not more than fifty-five thousand per annum shall  contribute  three
    17  and one-half per centum of annual wages;
    18    (iii)  members  with wages greater than fifty-five thousand per annum,
    19  but not more than seventy-five thousand per annum shall contribute  four
    20  and one-half per centum of annual wages;
    21    (iv)  members  with wages greater than seventy-five thousand per annum
    22  but not more than one hundred thousand per annum shall  contribute  five
    23  and three-quarters per centum of annual wages; and
    24    (v)  members  with  wages  greater than one hundred thousand per annum
    25  shall contribute six per centum of annual wages].
    26    Notwithstanding the foregoing, during each of  the  first  three  plan
    27  years  (April  first to March thirty-first, provided, however, that plan
    28  year shall mean January first through December  thirty-first  commencing
    29  with  the  January  first  next succeeding the effective date of chapter
    30  five hundred ten of the laws of two  thousand  fifteen)  in  which  such
    31  member  has  established  membership  in  the  New  York city employees'
    32  retirement system, such member shall contribute a percentage  of  annual
    33  wages  in accordance with the preceding schedule based upon a projection
    34  of annual wages provided by the employer. Notwithstanding the foregoing,
    35  when determining the rate at which each such member who became a  member
    36  of, New York city employees' retirement system, on or after April first,
    37  two  thousand  twelve shall contribute for any plan year (April first to
    38  March thirty-first, provided, however, that plan year shall mean January
    39  first through December thirty-first commencing with  the  January  first
    40  next  succeeding  the  effective date of chapter five hundred ten of the
    41  laws of two thousand fifteen) between April first, two thousand  twenty-
    42  two and April first, two thousand twenty-four, such rate shall be deter-
    43  mined  by reference to employees annual base wages of such member in the
    44  second plan year (April first  to  March  thirty-first)  preceding  such
    45  current plan year. Base wages shall include regular pay, shift differen-
    46  tial pay, location pay, and any increased hiring rate pay, but shall not
    47  include any overtime payments.
    48    § 2. Subdivision g of section 613 of the retirement and social securi-
    49  ty law is REPEALED.
    50    § 3. Subdivision t of section 603 of the retirement and social securi-
    51  ty law, as amended by chapter 18 of the laws of 2012, is amended to read
    52  as follows:
    53    t.  Members who join the New York state teachers' retirement system on
    54  or after January first, two thousand ten, shall be  eligible  to  retire
    55  without reduction of his or her retirement benefit upon attainment of at
    56  least fifty-seven years of age and completion of thirty or more years of

        A. 10335                            4
 
     1  service. [Members who retire pursuant to the provisions of this subdivi-
     2  sion  shall  be  required  to  make the member contributions required by
     3  subdivision g of section six hundred thirteen of this  article  for  all
     4  years of credited and creditable service.] The provisions of this subdi-
     5  vision  shall  not apply to members who first become a member of the New
     6  York state teachers' retirement system on  or  after  April  first,  two
     7  thousand twelve.
     8    § 4. Subdivision a of section 517 of the retirement and social securi-
     9  ty  law, as amended by chapter 18 of the laws of 2012, the second undes-
    10  ignated paragraph as amended by section 1 of part SS of  chapter  56  of
    11  the laws of 2022, is amended to read as follows:
    12    a.  Members  shall  contribute  three  percent  of annual wages to the
    13  retirement system in which they  have  membership,  provided  that  such
    14  contributions  shall  not  be  required  for more than thirty years, for
    15  general members, or twenty-five years, for police/fire members[,  except
    16  that  beginning April first, two thousand thirteen for members who first
    17  become members of the New York state  and  local  employees'  retirement
    18  system  on  or after April first, two thousand twelve, the rate at which
    19  each such member shall contribute in any current plan year (April  first
    20  to  March thirty-first) shall be determined by reference to the wages of
    21  such member in the second plan year (April first to March  thirty-first)
    22  preceding such current plan year as follows:
    23    1. members with wages of forty-five thousand dollars per annum or less
    24  shall contribute three per centum of annual wages;
    25    2.  members with wages greater than forty-five thousand per annum, but
    26  not more than fifty-five thousand per annum shall contribute  three  and
    27  one-half per centum of annual wages;
    28    3.  members with wages greater than fifty-five thousand per annum, but
    29  not more than seventy-five thousand per annum shall contribute four  and
    30  one-half per centum of annual wages;
    31    4. members with wages greater than seventy-five thousand per annum but
    32  not  more  than one hundred thousand per annum shall contribute five and
    33  three-quarters per centum of annual wages; and
    34    5. members with wages greater than  one  hundred  thousand  per  annum
    35  shall contribute six per centum of annual wages].
    36    Notwithstanding  the  foregoing,  during  each of the first three plan
    37  years (April first to March  thirty-first)  in  which  such  member  has
    38  established  membership  in  the  New  York  state  and local employees'
    39  retirement system, such member shall contribute a percentage  of  annual
    40  wages  in accordance with the preceding schedule based upon a projection
    41  of annual wages provided by the employer. Notwithstanding the foregoing,
    42  when determining the rate at which each such member who became a  member
    43  of the New York state and local employees' retirement system on or after
    44  April  first,  two  thousand  twelve  shall contribute for any plan year
    45  (April first to March thirty-first) between April  first,  two  thousand
    46  twenty-two and April first, two thousand twenty-four, such rate shall be
    47  determined by reference to employees annual base wages of such member in
    48  the  second plan year (April first to March thirty-first) preceding such
    49  current plan year. Base wages shall include regular pay, shift differen-
    50  tial pay, location pay, and any increased hiring rate pay, but shall not
    51  include any overtime payments.
    52    The head of each retirement system shall promulgate  such  regulations
    53  as  may  be  necessary  and appropriate with respect to the deduction of
    54  such contribution from members' wages and for  the  maintenance  of  any
    55  special fund or funds with respect to amounts so contributed.

        A. 10335                            5
 
     1    §  5.  Section  1204  of  the  retirement  and social security law, as
     2  amended by chapter 18 of the laws of 2012, the second undesignated para-
     3  graph as amended by section 3 of part SS of chapter 56 of  the  laws  of
     4  2022, is amended to read as follows:
     5    §   1204.  Member  contributions.  Members  who  are  subject  to  the
     6  provisions of this article shall  contribute  three  percent  of  annual
     7  wages  to  the  retirement system in which they have membership[, except
     8  that beginning April first, two thousand thirteen for members who  first
     9  become  members  of the New York state and local police and fire retire-
    10  ment system on or after April first, two thousand twelve,  the  rate  at
    11  which  each such member shall contribute in any current plan year (April
    12  first to March thirty-first) shall be determined  by  reference  to  the
    13  wages of such member in the second plan year (April first to March thir-
    14  ty-first) preceding such current plan year as follows:
    15    a. members with wages of forty-five thousand dollars per annum or less
    16  shall contribute three per centum of annual wages;
    17    b.  members with wages greater than forty-five thousand per annum, but
    18  not more than fifty-five thousand per annum shall contribute  three  and
    19  one-half per centum of annual wages;
    20    c.  members with wages greater than fifty-five thousand per annum, but
    21  not more than seventy-five thousand per annum shall contribute four  and
    22  one-half per centum of annual wages;
    23    d. members with wages greater than seventy-five thousand per annum but
    24  not  more  than one hundred thousand per annum shall contribute five and
    25  three-quarters per centum of annual wages; and
    26    e. members with wages greater than  one  hundred  thousand  per  annum
    27  shall contribute six per centum of annual wages].
    28    Notwithstanding  the  foregoing,  during  each of the first three plan
    29  years (April first to March  thirty-first)  in  which  such  member  has
    30  established  membership  in the New York state and local police and fire
    31  retirement system, such member shall contribute a percentage  of  annual
    32  wages  in accordance with the preceding schedule based upon a projection
    33  of annual wages provided by the employer. Notwithstanding the foregoing,
    34  when determining the rate at which each such member who became a  member
    35  of  the New York state and local police and fire retirement system on or
    36  after April first, two thousand twelve shall  contribute  for  any  plan
    37  year  (April first to March thirty-first) between April first, two thou-
    38  sand twenty-two and April first, two  thousand  twenty-four,  such  rate
    39  shall  be determined by reference to employees annual base wages of such
    40  member in the second plan  year  (April  first  to  March  thirty-first)
    41  preceding  such current plan year. Base wages shall include regular pay,
    42  shift differential pay, location pay, and any increased hiring rate pay,
    43  but shall not include any overtime payments. Effective April first,  two
    44  thousand  twelve,  all members subject to the provisions of this article
    45  shall not be required to  make  member  contributions  on  annual  wages
    46  excluded  from  the  calculation  of  final  average  salary pursuant to
    47  section twelve hundred three of this article. Nothing in  this  section,
    48  however,  shall  be  construed  or  deemed to allow members to receive a
    49  refund of any member contributions on such wages  paid  prior  to  April
    50  first, two thousand twelve.
    51    Members  who  are enrolled in a retirement plan that limits the amount
    52  of creditable service a member can accrue shall not be required to  make
    53  contributions pursuant to this section after accruing the maximum amount
    54  of  service  credit  allowed  by  the  retirement plan in which they are
    55  enrolled. The state comptroller shall promulgate such regulations as may
    56  be necessary and appropriate with  respect  to  the  deduction  of  such

        A. 10335                            6
 
     1  contribution  from members' wages and for the maintenance of any special
     2  fund or funds with respect to amounts so contributed. In  no  way  shall
     3  the  member  contributions  made  pursuant  to  this  section be used to
     4  provide for pension increases or annuities of any kind.
     5    §  6. Subdivision 2 of section 182 of the education law, as amended by
     6  chapter 18 of the laws of 2012, is amended to read as follows:
     7    2. Employee contributions. In  the  case  of  any  electing  employee,
     8  contributions  at the rate of three per centum of his state salary shall
     9  be deducted by the  state  comptroller  as  the  employee  contribution,
    10  provided  however,  that such employee contribution shall be made by the
    11  state in accordance with subdivision one of  this  section  during  such
    12  period  as  (a)  either  section  seventy-a of the retirement and social
    13  security law or section five hundred twenty-eight of this title provides
    14  that the contribution of each member of the New  York  state  employees'
    15  retirement  system  or the New York state teachers' retirement system in
    16  the employ of the state shall be reduced by at least eight per centum of
    17  his compensation, or (b) employee contributions to  either  such  system
    18  are no longer required by reason of such system becoming noncontributory
    19  for state employees.
    20    [Notwithstanding any other law to the contrary, beginning April first,
    21  two  thousand thirteen any electing employee appointed on or after April
    22  first, two thousand twelve, the rate at which each such  employee  shall
    23  contribute  in  any current plan year (January first to December thirty-
    24  first) shall be determined by reference to the wages of such  member  in
    25  the  second plan year (January first to December thirty-first) preceding
    26  such current plan year as follows:
    27    (a) members with wages of forty-five thousand  dollars  per  annum  or
    28  less shall contribute three per centum of annual wages;
    29    (b) members with wages greater than forty-five thousand per annum, but
    30  not  more  than fifty-five thousand per annum shall contribute three and
    31  one-half per centum of annual wages;
    32    (c) members with wages greater than fifty-five thousand per annum, but
    33  not more than seventy-five thousand per annum shall contribute four  and
    34  one-half per centum of annual wages;
    35    (d)  members  with  wages greater than seventy-five thousand per annum
    36  but not more than one hundred thousand per annum shall  contribute  five
    37  and three-quarters per centum of annual wages; and
    38    (e)  members  with  wages  greater than one hundred thousand per annum
    39  shall contribute six per centum of annual wages.
    40    Notwithstanding the foregoing, during each of  the  first  three  plan
    41  years  (January first to December thirty-first) in which such member has
    42  established membership in the Education Department  Optional  Retirement
    43  Program,  such  employee  shall  contribute a percent of annual wages in
    44  accordance with the preceding schedule based upon a projection of annual
    45  wages provided by the employer.]
    46    § 7. Subdivision f of section 613 of the retirement and social securi-
    47  ty law, as amended by chapter 18 of the laws of 2012, the second  undes-
    48  ignated  paragraph  as  amended by section 2 of part SS of chapter 56 of
    49  the laws of 2022, is amended to read as follows:
    50    f. Anything in subdivision a of this section to the contrary  notwith-
    51  standing a member employed as a uniformed court officer or peace officer
    52  in the unified court system who first joins the New York state and local
    53  employees' retirement system on or after January first, two thousand ten
    54  shall  contribute four percent of annual wages to the New York state and
    55  local employees' retirement system[, except that beginning April  first,
    56  two  thousand  thirteen  for members who first become members of the New

        A. 10335                            7

     1  York state and local employees' retirement  system  on  or  after  April
     2  first,  two  thousand  twelve,  the rate at which each such member shall
     3  contribute in any current plan year (April first to March  thirty-first)
     4  shall  be  determined  by  reference  to the wages of such member in the
     5  second plan year (April first  to  March  thirty-first)  preceding  such
     6  current plan year as follows:
     7    1. members with wages of forty-five thousand dollars per annum or less
     8  shall contribute three per centum of annual wages;
     9    2.  members with wages greater than forty-five thousand per annum, but
    10  not more than fifty-five thousand per annum shall contribute  three  and
    11  one-half per centum of annual wages;
    12    3.  members with wages greater than fifty-five thousand per annum, but
    13  not more than seventy-five thousand per annum shall contribute four  and
    14  one-half per centum of annual wages;
    15    4. members with wages greater than seventy-five thousand per annum but
    16  not  more  than one hundred thousand per annum shall contribute five and
    17  three-quarters per centum of annual wages; and
    18    5. members with wages greater than  one  hundred  thousand  per  annum
    19  shall contribute six per centum of annual wages].
    20    Notwithstanding  the  foregoing,  during  each of the first three plan
    21  years (April first to March  thirty-first)  in  which  such  member  has
    22  established  membership  in  the  New  York  state  and local employees'
    23  retirement system, such member shall contribute a percentage  of  annual
    24  wages  in accordance with the preceding schedule based upon a projection
    25  of annual wages provided by the employer. Notwithstanding the foregoing,
    26  when determining the rate at which each such member who became a  member
    27  of the New York state and local employees' retirement system on or after
    28  April  first,  two  thousand  twelve  shall contribute for any plan year
    29  (April first to March thirty-first) between April  first,  two  thousand
    30  twenty-two and April first, two thousand twenty-four, such rate shall be
    31  determined by reference to employees annual base wages of such member in
    32  the  second plan year (April first to March thirty-first) preceding such
    33  current plan year. Base wages shall include regular pay, shift differen-
    34  tial pay, location pay, and any increased hiring rate pay, but shall not
    35  include any overtime payments.
    36    The head of the New York state and local employees' retirement  system
    37  shall  promulgate  such  regulations as may be necessary and appropriate
    38  with respect to the deduction of such contribution from  members'  wages
    39  and  for  the  maintenance  of any special fund or funds with respect to
    40  amounts so contributed.
    41    § 8. Nothing in this act shall be construed or deemed to allow members
    42  to receive a refund of any member contributions made or collected  prior
    43  to the effective date of this act.
    44    §  9. Notwithstanding any other provision of law to the contrary, none
    45  of the provisions of this act shall be subject  to  section  25  of  the
    46  retirement and social security law.
    47    §  10.  This  act shall take effect on the sixtieth day after it shall
    48  have become a law.
          FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
          This bill would change the member contribution rate to 3% for  Tier  5
        uniformed  court  peace  officers  (UCPOs) and Tier 6 members of the New
        York State and Local Retirement System. Tier 5 UCPOs  currently  pay  4%
        and Tier 6 members currently pay a variable percentage between 3% and 6%
        depending  on  annual  compensation.  There  will be no return of member
        contributions.  Section 25 does not apply.

        A. 10335                            8
 
          Insofar as this bill affects the New York State and  Local  Employees'
        Retirement  System  (NYSLERS), if this legislation is enacted during the
        2022 legislative session, there will be an increase in the present value
        of benefits of approximately $2.8 billion which would be shared  by  the
        State  of  New  York and all participating employers in the NYSLERS. The
        estimated first-year cost would be approximately  $126  million  to  the
        State  of  New  York and approximately $179 million to the participating
        employers in the NYSLERS.
          Insofar as this bill affects the New York State and Local  Police  and
        Fire Retirement System (NYSLPFRS), if this legislation is enacted during
        the  2022  legislative session, there will be an increase in the present
        value of benefits of approximately $500 million which would be shared by
        the State of New York and all participating employers in  the  NYSLPFRS.
        The  estimated first-year cost would be approximately $10 million to the
        State of New York and approximately $40  million  to  the  participating
        employers in the NYSLPFRS.
          Summary of relevant resources:
          Membership  data as of March 31, 2021 was used in measuring the impact
        of the proposed change, the same data used in the April 1, 2021 actuari-
        al valuation. Distributions and other statistics can  be  found  in  the
        2021  Report  of the Actuary and the 2021 Comprehensive Annual Financial
        Report.
          The actuarial assumptions and methods used are described in  the  2020
        and  2021 Annual Report to the Comptroller on Actuarial Assumptions, 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, 2021
        New  York  State  and  Local  Retirement System Financial Statements and
        Supplementary Information.
          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 May 9, 2022, and intended for use only during the
        2022 Legislative Session, is Fiscal Note No. 2022-143, prepared  by  the
        Actuary for the New York State and Local Retirement System.
          FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
          As  it relates to the New York State Teachers' Retirement System, this
        bill would amend Section 613 of the Retirement and Social  Security  Law
        to  reduce  the  required  employee  contribution  rate for Tier 5 and 6
        members to a flat 3.0% of salary, payable over their career.  Currently,
        Tier  5  members are required to contribute at a rate of 3.5% of salary,
        and Tier 6 members are required to contribute between 3.0% and  6.0%  of
        salary,  in  accordance  with  a salary-based schedule. No contributions
        made or collected before the  effective  date  of  this  bill  would  be
        refunded.
          The  annual  cost  to  the  employers of members of the New York State
        Teachers' Retirement System for this benefit is estimated to  be  $102.4
        million or 0.59% 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 4.69% of pay under the current Tier 6 benefit struc-
        ture.  This can be thought of as the long-term expected employer cost of
        the benefit structure, based on current actuarial assumptions.  For  the
        reduction  to  the Tier 6 employee contribution rate proposed under this

        A. 10335                            9
 
        bill, this new entrant rate would increase to 6.16% of pay, an  increase
        of 1.47% 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.  Actuar-
        ial assumptions and methods are provided in the System's Actuarial Valu-
        ation Report and the 2021 Actuarial Assumptions Report.
          The  source  of this estimate is Fiscal Note 2022-41 dated May 9, 2022
        prepared by the Office of the Actuary of the New  York  State  Teachers'
        Retirement  System and is intended for use only during the 2022 Legisla-
        tive Session. I, Richard A. Young, am the Chief Actuary for the New York
        State Teachers' Retirement System. I am a member of the American Academy
        of Actuaries and I meet the  Qualification  Standards  of  the  American
        Academy of Actuaries to render the actuarial opinion contained herein.
          FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
          SUMMARY  OF  BILL: This proposed legislation, as it relates to the New
        York City Retirement Systems and  Pension  Funds  (NYCRS),  would  amend
        Section  613  of the Retirement and Social Security Law (RSSL) to reduce
        the Basic Member Contribution (BMC) rate to 3% for Tier 6 members of the
        New York City Employees' Retirement System (NYCERS), the New  York  City
        Teachers'  Retirement  System  (NYCTRS),  and the New York City Board of
        Education Retirement System (BERS).
          Effective Date: 60th day after enactment.
          IMPACT ON MEMBER CONTRIBUTIONS: Currently, Tier 6 members  of  NYCERS,
        NYCTRS, and BERS are required to make BMCs ranging from 3% to 6% depend-
        ing on the members' applicable annual wages.
          Under the proposed legislation, if enacted, the required BMCs would be
        reduced  to  a  flat  3%  starting on the effective date of the proposed
        legislation. Refunds of contributions made prior to the  effective  date
        would not be permitted.
          FINANCIAL  IMPACT  - SUMMARY: The estimated financial impact of imple-
        menting a flat 3% contribution rate as described above is a decrease  in
        the  Present  Value  of  member  contributions.  There  is  also a small
        decrease in the Present Value of Future Benefits (PVFB) as a  result  of
        reduced  refunds of member contributions upon termination of employment.
        The net result is an increase in the Present Value  of  future  employer
        contributions  and  annual employer contributions of NYCERS, NYCTRS, and
        BERS.
          In the initial year, the Present Value  of  future  employer  contrib-
        utions  as of June 30, 2021 would increase by approximately $1.5 billion
        for NYCERS, $1.7 billion for NYCTRS, and $0.1  billion  for  BERS.  This
        total  increase in the Present Value of future employer contributions of
        approximately $3.3 billion for NYCRS is estimated to be $2.4 billion for
        New York City and $0.9 billion for the other obligors of NYCRS.
          The  financial  impact  will  increase  as  the  impacted  populations
        increase  over  time.  The  estimate  of the increase in annual employer
        contributions for Fiscal Years 2023 through 2027 based on the applicable
        actuarial assumptions and methods noted herein, are shown in  the  table
        below.
 
                          Increase in Employer Contributions
                                     ($ Millions)
             Fiscal
              Year         NYCERS      NYCTRS         BERS          TOTAL

        A. 10335                           10
 
              2023         $130.8      $112.7        $13.6        $257.1*
              2024         $146.9      $122.3        $14.2         $283.4
              2025         $162.9      $130.9        $15.0         $308.8
              2026         $179.0      $139.1        $15.7         $333.8
              2027         $199.8      $153.1        $17.0         $369.9
 
          *  The  increase in annual employer contributions for Fiscal Year 2023
        is estimated to be $182.7 million for New York City  and  $74.4  million
        for the other obligors of NYCRS.
          In accordance with Section 13-638.2(k-2) of the Administrative Code of
        the  City  of  New  York  (ACCNY),  new Unfunded Accrued Liability (UAL)
        attributable to benefit changes are to be amortized as determined by the
        Actuary but are generally amortized over the remaining working  lifetime
        of  those  impacted  by  the  benefit  changes. As of June 30, 2021, the
        remaining working lifetime is approximately 16 years for NYCERS  Tier  6
        members,  approximately 20 years for NYCTRS Tier 6 members, and approxi-
        mately 14 years for BERS Tier 6 members.
          For purposes of this Fiscal Note, the increase in the UAL  for  NYCERS
        was  amortized over a 16-year period (15 payments under the One-Year Lag
        Methodology (OYLM)) using level dollar payments. Under the same  method-
        ology  the increase in the UAL for NYCTRS and BERS was amortized over 19
        and 13 payments, respectively.
          CONTRIBUTION TIMING: For the purposes  of  this  Fiscal  Note,  it  is
        assumed  that  the  changes  in  the  Present  Value  of future employer
        contributions and annual employer contributions would be  reflected  for
        the first time in the Final June 30, 2021 actuarial valuation of NYCERS,
        NYCTRS, and BERS. In accordance with the OYLM used to determine employer
        contributions,  the  increase  in  employer contributions would first be
        reflected in Fiscal Year 2023.
          CENSUS DATA: The estimates presented herein are based  on  the  census
        data  used in the Preliminary June 30, 2021 (Lag) actuarial valuation of
        NYCERS, NYCTRS, and BERS to determine the Preliminary Fiscal  Year  2023
        employer contributions.
          The  table below contains a summary of the census data for active Tier
        6 members in NYCERS, NYCTRS, and BERS as of June 30, 2021.

                NYCRS      Active          Average        Average      Average
                            Count            Age          Service       Salary
               NYCERS      71,663           41.3            3.9         $72,000
               NYCTRS      49,642           37.1            4.5         $74,600
                 BERS      12,229           45.5            3.3         $50,400
 
          ACTUARIAL ASSUMPTIONS AND METHODS: The changes in the Present Value of
        future  employer  contributions  and   annual   employer   contributions
        presented herein have been calculated based on the actuarial assumptions
        and  methods in effect for the Preliminary June 30, 2021 (Lag) actuarial
        valuations used to determine the Preliminary Fiscal Year  2023  employer
        contributions of NYCERS, NYCTRS, and BERS.
          This  Fiscal  Note also reflects changes to plan provisions enacted as
        part of Chapter 56 of the laws of 2022.
          New entrants were projected to replace the members expected  to  leave
        the active population to maintain a steady-state population. New entrant
        demographics  and future salary increases are consistent with those used
        in projections for the New York City Office of Management and Budget  in
        April 2022.

        A. 10335                           11
 
          RISK  AND  UNCERTAINTY: The costs presented in this Fiscal Note depend
        highly on the realization of the actuarial assumptions used, as well  as
        certain  demographic  characteristics  of  NYCERS,  NYCTRS, and BERS and
        other exogenous factors such  as  investment,  contribution,  and  other
        risks.  If  actual  experience  deviates from actuarial assumptions, the
        actual costs could differ from those presented herein.  Costs  are  also
        dependent on the actuarial methods used, and therefore different actuar-
        ial  methods could produce different results. Quantifying these risks is
        beyond the scope of this Fiscal Note.
          Not measured in this Fiscal Note are the following:
          * The initial, additional  administrative  costs  of  NYCERS,  NYCTRS,
        BERS,  and other New York City agencies to implement the proposed legis-
        lation.
          * Pension costs for future members of NYCERS, NYCTRS, and  BERS  hired
        on or after 7/1/2025.
          *  The  impact  of  this  proposed legislation on Other Postemployment
        Benefit (OPEB) costs.
          STATEMENT OF ACTUARIAL OPINION: I, Michael J. Samet,  am  the  Interim
        Chief  Actuary  for,  and  independent  of, the New York City Retirement
        Systems and Pension Funds. I am a Fellow of the Society of Actuaries and
        a Member of the American Academy of Actuaries. I meet the  Qualification
        Standards  of  the American Academy of Actuaries to render the actuarial
        opinion contained herein. To the  best  of  my  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 2022-45 dated May 9, 2022
        was  prepared by the Interim Chief Actuary for the New York City Employ-
        ees' Retirement System, the New York City Teachers'  Retirement  System,
        and  the  New York City Board of Education Retirement System. This esti-
        mate is intended for use only during the 2022 Legislative Session.
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