NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A5088B
SPONSOR: Abinanti TITLE OF BILL:
An act to provide temporary retirement incentive for certain public
employees
PURPOSE OR GENERAL IDEA OF BILL:
To provide certain public employees with an option to retire early with-
out penalty and reduce costs for qualifying employers.
SUMMARY OF PROVISIONS:
Section 1 of the bill establishes the purpose of the bill, which would
allow certain public employees to be eligible for retirement upon the
attainment of at least twenty-five years or more of service, and of at
least fifty-five years of age.
Section 2 the legislative findings declare the retirement benefit of
55/25 is a service intended only to be temporary for employees who are
eligible to receive and qualify for this benefit during the period spec-
ified in this act.
Section 3 sets forth definitions.
Section 4 establishes who may retire early.
Section 5 provides that a participating employer may elect to provide
its employees the retirement incentive and establishes how a participat-
ing employer would elect to participate.
Section 6 provides that any employee who is a member of a retirement
system and entitled to a retirement benefit pursuant to section four of
this act meets the eligibility requirements for retirement during the
open period without the reduction of his or her retirement benefit if he
or she has attained the age of fifty-five and has completed twenty-five
years or more of service.
Section 7 establishes that this act will not have any impact on retire-
ment incentives, options or inducements offered as part of a contractual
agreement between an eligible employee and eligible employer, which were
negotiated prior to the effective date of this act.
Section 8 provides that the pension benefit costs provided for in this
act shall be paid by the participating employers over a period not to
exceed five years commencing in the state fiscal year ending March 31,
2023.
Section 9 is the severability clause.
Section 10 is the effective date.
DIFFERENCE BETWEEN ORIGINAL AND AMENDED VERSION:
To provide that a participating employer may elect to participate in the
retirement incentive; the process for a participating employer to elect
to participate; and that the pension benefit costs associated with
providing the retirement incentive shall be paid by the participating
employer electing to participate and include the fiscal notes from TRS
and NYSLRS.
JUSTIFICATION:
Under current law, all public-school teachers and teaching assistants
belong to the Teachers' Retirement System (TRS), and public higher
education members have the option to enroll in the Employees' Retirement
System (ERS). Public employees may retire without penalty upon the
attainment of thirty years of service, and at age fifty-five. However,
if an employee needs to retire before attaining thirty years of service,
an early retirement reduction is imposed on such employee.
With the enactment of this legislation, public employees who are members
of the ERS and TRS, will be able to retire at age fifty-five and with at
least twenty-five years of service without an early retirement
reduction.
Educators are essential to the success and the upward mobility of our
communities. It is incredibly important that we recognize the service of
such public employees who work tirelessly to provide generations with
critical knowledge to assure the success of individuals throughout New
York State. Allowing certain public employees to retire after at least
twenty-five years of service without an early retirement reduction would
provide such employees with the financial security that is paramount
after retirement. In addition, this will make positions available for
new employees and help reduce costs for the qualifying employers during
these difficult financial times.
This legislation would provide a temporary retirement incentive during
the fiscal year 2021-2022, and would allow members who are eligible to
retire without an early retirement reduction upon attainment of at least
age fifty-five and with at least twenty-five years of service.
LEGISLATIVE HISTORY:
2020: A10477A referred to governmental employees; same as S8151-A
(Martinez) referred to civil service and pensions
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
Insofar as it affects the ERS, the additional cost for each member who
receives these benefits will vary depending on the member's age, years
of service, plan and final average salary. The estimate per-member cost
could average approximately 120% of a member's final average salary.
These costs would be borne entirely by the State of New York.
"It is estimated that the annual cost, over a five-year period, to the
participating employers of members of the New York State Teachers'
Retirement System for this benefit is estimated to be $69.4 million or
.40% of payroll.
For additional information see the fiscal notes in the legislation.
EFFECTIVE DATE:
This act shall take effect immediately.
