Relates to eligibility for participants in the automotive 25 year/age 50 pension plan with more than 30 years of credited service who remain in active service after age 62 to receive a service retirement benefit equivalent to the standard service retirement benefit received by Tier IV members with the same age and service.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A7359
SPONSOR: Pheffer Amato TITLE OF BILL:
An act to amend the retirement and social security law, in relation to
eligibility for participants in the automotive 25 year/age 50 pension
plan with more than 30 years of credited service who remain in active
service after age 62 to receive a service retirement benefit equivalent
to the standard service retirement benefit received by Tier IV members
with the same age and service
PURPOSE:
This bill will permit members of the Automotive 25 year/age 50 retire-
ment program with more than 30 years of credit to retire with the same
benefits that they would have been entitled to if they had not elected
to become members of that program and had simply remained in Tier 4.
SUMMARY OF PROVISIONS:
Sections 1 and 2 amend subdivision a of Section 603 of the Retirement
and Social Security Law.
Section 3 amends paragraph 3 of subdivision b of Section 604-G of the
Retirement and Social Security Law to provide that a participant who has
more than 30 years of credited service and has remained active after
reaching 62 years of age may elect to retire with the same benefits that
they would have been entitled to if they had not elected to become
members of that program and had simply remained in Tier 4.
Section 4 is the effective date.
JUSTIFICATION:
The 25-year/age 50 retirement program for Automotive members was enacted
by Chapter 414 of the Laws of 2002 (see Retirement and Social Security
Law Section 604-g). It is a special early retirement program for New
York City employees in certain automotive mechanic and related titles,
enabling those employees to retire after they have attained at least 25
years of credited service and are at least 50 years of age. The automo-
tive 25/50 program requires that covered employees make additional
member contributions in excess of those required of Tier 4 members.
The Automotive 25/50 program provides that the retirement benefit of
covered members shall be 50% of final average salary for 25 years of
credited service and an additional 2% of final average service for each
additional year of credited service up to a maximum of 30 years.
Notwithstanding the early retirement option provided by the Automotive
25/50 program, a number of covered employees have chosen to continue
working in covered employment well beyond their 50th birthday and have
accrued more than 30 years of service. Ironically, these employees are
disadvantaged by the Automotive 25/50 service program when their age and
years of credited service reaches a certain level. The retirement
allowance for participants in the standard Tier 4 program who have at
least 25 years of credited service is 2% of final average salary for
each year of service up to a maximum of 30 years, and an additional 1.5%
of final average salary for years of credited service beyond 30 years
(see Retirement and Social Security Law
Sections 603 and 604). Thus, a Tier 4 member with more than 30 years of
credited service is entitled to a retirement benefit calculated at a
higher rate than the rate applicable to an Automotive 25/50 program
member. And yet, the Tier 4 member has not had to pay the additional
member contributions required of the Automotive 25/50 member.
This act will enable members of the Automotive 25/50 program to revert
to the standard Tier 4 formulation in the event they attain more than 30
years of credited service and have reached the retirement age provided
for in Tier 4. In these circumstances, the member can accrue the addi-
tions to retirement allowance for service beyond 30 years that are
available to members in the standard Tier 4 program. There is no
rational basis for disadvantaging these employees who have decided not
to avail themselves of the early retirement option afforded by the 25/50
Automotive program and have continued to render service to New York
City. This law remedies a structural inequity that the drafters of the
25/50 Automotive program did not foresee and certainly did not intend.
LEGISLATIVE HISTORY:
2024-A.7572-VETO, memo 101
STATE AND LOCAL FISCAL IMPLICATIONS:
Please see fiscal note.
EFFECTIVE DATE:
This act shall take effect immediately; provided that the amendments to
subdivision a of section 603 of the retirement and social security law
made by section one of this act shall be subject to the expiration and
reversion of such subdivision pursuant to subdivision (b) of section 13
of chapter 683 of the laws of 2003, as amended, when upon such date the
provisions of section two of this act shall take effect.
