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
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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
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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.
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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.
