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A08092 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          8092
 
                               2017-2018 Regular Sessions
 
                   IN ASSEMBLY
 
                                      May 25, 2017
                                       ___________
 
        Introduced  by  M. of A. ABBATE -- (at request of the State Comptroller)
          -- read once and referred to the Committee on Governmental Employees
 
        AN ACT to amend the retirement and social security law, in  relation  to
          standardizing the overtime reporting period for certain members of the
          New York state and local employees' retirement system

          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 
     1    Section 1. Subdivision 24 of section 501 of the retirement and  social
     2  security  law, as amended by chapter 298 of the laws of 2016, is amended
     3  to read as follows:
     4    24. (a) "Wages" shall mean regular compensation earned by and paid  to
     5  a  member  by  a public employer, except that for members who first join
     6  the state and local employees' retirement system  on  or  after  January
     7  first,  two  thousand  ten,  overtime  compensation  paid in any year in
     8  excess of the overtime ceiling, as defined by  this  subdivision,  shall
     9  not be included in the definition of wages.
    10    (b)  "Overtime compensation" shall mean, for purposes of this section,
    11  compensation paid under any law or policy under which employees are paid
    12  at a rate greater than their standard rate for additional  hours  worked
    13  beyond  those  required,  including  compensation paid under section one
    14  hundred thirty-four of the civil service law and section ninety  of  the
    15  general municipal law.
    16    (c)(i)  The "overtime ceiling" shall mean fifteen thousand dollars per
    17  annum on January first, two thousand ten,  and  shall  be  increased  by
    18  three  percent each year thereafter, provided, however, that for members
    19  who first become members of the New  York  state  and  local  employees'
    20  retirement  system  on or after April first, two thousand twelve, "over-
    21  time ceiling" shall mean fifteen thousand dollars  per  annum  on  April
    22  first,  two thousand twelve, and shall be increased each year thereafter
    23  by a percentage to be determined annually by reference to  the  consumer
    24  price  index  (all urban consumers, CPI-U, U.S. city average, all items,
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD07063-06-7

        A. 8092                             2
 
     1  1982-84=100), published by the United States bureau of labor statistics,
     2  for each applicable calendar year. Said percentage shall equal the annu-
     3  al inflation as determined from the increase in the consumer price index
     4  in  the  one  year period ending on the December thirty-first [prior to]
     5  preceding the [cost-of-living] overtime ceiling adjustment effective  on
     6  the ensuing April first.
     7    (ii)  Commencing  January  first, two thousand eighteen, and each year
     8  thereafter, the overtime ceiling percentage shall  be  increased  by  an
     9  amount  equal to the annual inflation as determined from the increase in
    10  the consumer price index in the one year period ending on the  September
    11  thirtieth  prior  to  the  overtime  ceiling adjustment effective on the
    12  ensuing January first.
    13    (d) For the purpose of calculation a member's primary  federal  social
    14  security  retirement or disability benefit, wages shall, in any calendar
    15  year, be limited to the portion of the member's  wages  which  would  be
    16  subject  to  tax  under section three thousand one hundred twenty-one of
    17  the internal revenue code of nineteen hundred fifty-four, or any  prede-
    18  cessor  or  successor  provision  relating  thereto,  if such member was
    19  employed by a private employer.
    20    (e) For members who first become members of the  New  York  state  and
    21  local  employees'  retirement  system  on or after the effective date of
    22  chapter eighteen of the laws of two thousand twelve, the following items
    23  shall not be included in the definition of wages: (a) wages in excess of
    24  the annual salary paid to the governor  pursuant  to  section  three  of
    25  article  four  of  the  state  constitution,  (b)  lump sum payments for
    26  deferred compensation, sick leave, accumulated vacation or other credits
    27  for time not worked, (c) any form of termination pay, (d) any additional
    28  compensation paid in anticipation of retirement, and (e) in the case  of
    29  employees  who  receive  wages  from three or more employers in a twelve
    30  month period, the wages paid by the third and each successive employer.
    31    (f) For New York city enhanced plan members who receive  the  ordinary
    32  disability  benefit  provided  for  in  subdivision  c-1 of section five
    33  hundred six  of  this  article  or  the  accidental  disability  benefit
    34  provided for in paragraph three of subdivision c of section five hundred
    35  seven  of this article, the following items shall not be included in the
    36  definition of wages: (a) lump sum payments  for  deferred  compensation,
    37  sick  leave,  accumulated vacation or other credits for time not worked,
    38  (b) any form of termination pay, (c) any additional compensation paid in
    39  anticipation of retirement, and (d) in the case of employees who receive
    40  wages from three or more employers in a twelve month period,  the  wages
    41  paid by the third and each successive employer.
    42    § 2. Subdivision l of section 601 of the retirement and social securi-
    43  ty  law,  as  amended  by chapter 510 of the laws of 2015, is amended to
    44  read as follows:
    45    l. (a) "Wages" shall mean regular compensation earned by and paid to a
    46  member by a public employer, except that for members who first join  the
    47  New  York  state  and local employees' retirement system or the New York
    48  state teachers' retirement system on or after January first,  two  thou-
    49  sand  ten, overtime compensation paid in any year in excess of the over-
    50  time ceiling, as defined by this subdivision, shall not be  included  in
    51  the definition of wages.
    52    (b)  "Overtime compensation" shall mean, for purposes of this section,
    53  compensation paid under any law or policy under which employees are paid
    54  at a rate greater than their standard rate for additional  hours  worked
    55  beyond  those  required,  including  compensation paid under section one

        A. 8092                             3
 
     1  hundred thirty-four of the civil service law and section ninety  of  the
     2  general municipal law.
     3    (c)  The  "overtime  ceiling"  shall mean fifteen thousand dollars per
     4  annum on January first, two thousand ten,  and  shall  be  increased  by
     5  three per cent each year thereafter, provided, however, that:
     6    (i) for members who first become members of a public retirement system
     7  of  the  state  on  or after April first, two thousand twelve, "overtime
     8  ceiling" shall mean fifteen thousand dollars per annum on  April  first,
     9  two  thousand  twelve,  and shall be increased each year thereafter by a
    10  percentage to be determined annually by reference to the consumer  price
    11  index  (all  urban  consumers,  CPI-U,  U.S.  city  average,  all items,
    12  1982-84=100), published by the United States bureau of labor statistics,
    13  for each applicable calendar year. Said percentage shall equal the annu-
    14  al inflation as determined from the increase in the consumer price index
    15  in the one year period ending on the December  thirty-first  [prior  to]
    16  preceding  the [cost-of-living] overtime ceiling adjustment effective on
    17  the ensuing April first.
    18    (ii) Commencing January first, two thousand eighteen,  and  each  year
    19  thereafter,  the  overtime  ceiling  percentage shall be increased by an
    20  amount equal to the annual inflation as determined from the increase  in
    21  the  consumer price index in the one year period ending on the September
    22  thirtieth prior to the overtime  ceiling  adjustment  effective  on  the
    23  ensuing January first.
    24    (d) For members who first join a public retirement system of the state
    25  on  or after April first, two thousand twelve, the following items shall
    26  not be included in the definition of wages: 1. wages in  excess  of  the
    27  annual  salary paid to the governor pursuant to section three of article
    28  four of the state  constitution,  2.  lump  sum  payments  for  deferred
    29  compensation, sick leave, accumulated vacation or other credits for time
    30  not  worked,  3.  any form of termination pay, 4. any additional compen-
    31  sation paid in anticipation of retirement, and 5. in the case of employ-
    32  ees who receive wages from three or more employers  in  a  twelve  month
    33  period, the wages paid by the third and each additional employer.
    34    § 3. This act shall take effect immediately.
          FISCAL NOTE. -- Pursuant to Legislative Law, Section 50:
          This  bill will change the date of the annual increase in the overtime
        ceiling that can be included in the calculation of final average  salary
        for  Tier 6 members of certain public retirement systems from April 1 to
        January 1. The annual increase will be based  on  the  increase  in  the
        consumer  price  index  in  the  one year period ending on the September
        thirtieth prior to each ensuing January first. This change  will  become
        effective on January 1, 2018.
          If this bill is enacted, insofar as it would affect the New York State
        and Local Employees Retirement System, we estimate that there would be a
        small initial administrative cost to the system.
          Summary of relevant resources:
          The  membership  data  used  in  measuring  the impact of the proposed
        change was the same as that used in the March 31, 2016  actuarial  valu-
        ation.    Distributions  and  other  statistics can be found in the 2016
        Report of the  Actuary  and  the  2016  Comprehensive  Annual  Financial
        Report.
          The  actuarial  assumptions and methods used are described in the 2015
        and 2016 Annual Report to the Comptroller on Actuarial Assumptions,  and
        the  Codes  Rules  and  Regulations  of the State of New York: Audit and
        Control.

        A. 8092                             4
 
          The Market Assets and GASB Disclosures are found in the March 31, 2016
        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  estimate,  dated  February  13,  2017  and intended for use only
        during the  2017  Legislative  Session,  is  Fiscal  Note  No.  2017-21,
        prepared  by  the  Actuary  for  the New York State and Local Retirement
        System.
          FISCAL NOTE. -- Pursuant to Legislative Law, Section 50:
          This bill would amend Section 501 and Section 601  of  the  Retirement
        and Social Security Law to change the date of the annual increase in the
        overtime  ceiling  that  can be used in the calculation of final average
        salary for Tier 6 members from April 1st to January 1st. This bill  also
        provides  that the annual increase in the overtime ceiling will be based
        on the increase in the Consumer Price Index (CPI) in the one year period
        ending on the September 30th prior to each ensuing January 1st.    These
        changes will commence January 1, 2018.
          It  is estimated that there will be no annual cost to the employers of
        members of the New York State Teachers' Retirement System if  this  bill
        is enacted.
          Employee  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
        Comprehensive Annual Financial  Report  (CAFR).  System  assets  are  as
        reported  in the System's financial statements, and can also be found in
        the CAFR. Actuarial assumptions and methods are provided in the System's
        Actuarial Valuation Report.
          The source of this estimate is Fiscal Note  2017-13  dated  March  31,
        2017  prepared by the Actuary of the New York State Teachers' Retirement
        System and is intended for use only during the 2017 Legislative Session.
        I, Richard A. Young, am the 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  Actu-
        aries to render the actuarial opinion contained herein.
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