NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A6015
SPONSOR: Steck TITLE OF BILL:
An act to amend the retirement and social security law, the education
law and the administrative code of the city of New York, in relation to
providing cost-of-living adjustments
PURPOSE:
To provide a cost-of-living adjustment for members of retirement systems
by increasing the base benefit amount for computation to $21,000.
SUMMARY OF PROVISIONS:
Section 1 amends § 78-a(c) of the Retirement and Social Security Law to
provide that beginning September 1, 2023, the cost of living adjustment
shall be computed on a base benefit amount not to exceed $21,000 of the
annual retirement allowance.
Section 2 amends § 378-a(c) of the Retirement and Social Security Law to
provide that beginning September 1, 2023, the cost. of living adjustment
shall be computed on a base benefit amount not to exceed $21,000 of the
annual retirement allowance.
Section 3 amends § 532-a(c) of the Education Law to provide that begin-
ning September 1, 2023, the cost of living adjustment shall be computed
on a base benefit amount not to exceed $21,000 of the annual retirement
allowance.
Section 4 amends. 13-696(c) of the Administrative Code of the City of
New York to provide that provide that beginning September 1, 2023, the
cost of living adjustment shall be computed on a base benefit amount not
to exceed $21,000 of the annual retirement allowance.
Section 5 provides the fiscal notes. Section 6 provides the effective
date.
EXISTING LAW:
Section 78-a of the Retirement and Social Security Law relates to the
cost-of-living adjustment for retirement plans applicable to members of
the New York State Employees' Retirement System generally. Pursuant to
this title, a cost-of-living adjustment is payable to all pensioners who
have attained age 62 and have been retired for five years, all pension-
ers who have attained age 55 and have been retired for ten years, all
disability pensioners regardless of age who have been retired for five
years; and all recipients of an accidental death benefit regardless of
age who have been receiving such benefit for five years.
Subdivision (c) provides the cost-of-living adjustment shall be computed
on a base benefit amount to exceed $18,000 of the annual retirement
allowance defined in subdivision (b) of this section. Subdivision (b)
provides the cost-of-living adjustment shall be a percentage of the
annual retirement allowance otherwise payable, computed without optional
modification, but including any benefit derived from subdivision (f) of
this section and any prior year's cost-of-living adjustment derived from
this section. Said percentage is set forth is subdivision (d) of this
section.
Subdivision (f) provides that all retired members who have retired prior
to 1997 and meet the eligibility criteria listed above, shall.be paid an
adjusted benefit in monthly installments. The adjusted benefit shall be
equal to a percentage of the change in Consumer Price Index, published
by the United States Bureau of Labor Statistics, measured from the year
of retirement according to the following schedule:
Year of retirement Percentage
1968 through 1996 50%
1966 and 1967 55%
1965 60%
1964 65%
1936 70%
1962 80%
1961 90%
Prior to 1961 100%
The adjusted benefit shall be computed on a base benefit amount not to
exceed $18,000 of the retirement allowance otherwise payable, computed
Without modification. Any benefit received pursuant to this subdivision
shall be in lieu of any benefit received pursuant to § 78 of the Retire-
ment and Social Security Law. Subdivision (d) provides that the
percentage shall be determined annually by reference to the Consumer
Price Index, published by the United States Bureau of Labor Statistics,
for year applicable calendar year. The percentage shall equal 50% of the
annual inflation, as determined from the increase in the Consumer Price
Index in the one year period ending on the March 31 prior to the cost-
of-living adjustment effecting on the ensuing September 1st. The
percentage is rounded up to the next higher one-tenth of one percent and
shall not exceed 3% not be less than 1%.
Section 378-a of the Retirement and Social Security Law relates to the
cost of living adjustment for retirement plans applicable to members of
the New York .State Policemen's and Firemen's Retirement System general-
ly. Pursuant to this section, a cost-of-living adjustment shall be paya-
ble to all pensioners who have attained age 62 and have been retired for
five years, all pensioners who have attained age 55 and have been
retired for ten years, and all disability pensioners regardless of age
who have been retired for five years.
Subdivision (c) currently provides, the cost-of-living adjustment shall
be computed on a base benefit amount to exceed $18,000 of the annual
retirement allowance defined in subdivision (b) of this section. Subdi-
vision (b) provides the cost-of-living adjustment shall be a percentage
of the annual retirement allowance otherwise payable; computed without
optional modification, but including any benefit derived from subdivi-
sion (f) of this section and any prior year's cost-of-living adjustment
derived from this Section. Said percentage is set forth is subdivision
(d) of this section. Subdivision (f) provides that all retired members
who have retired prior to 1997 and meet the eligibility criteria shall
be paid an adjusted benefit in monthly installments. The adjusted bene-
fit shall be equal to a-percentage of the change in Consumer Price
Index, published by the United States Bureau of Labor Statistics, meas-
ured from the year of retirement according to the following schedule:
Year of retirement Percentage
1968 through 1996 50%
1966 and 1967 55%
1965 60%
1964 65%
1936 70%
1962 80%
1961 90%
Prior to 1961 100%
The adjusted benefit shall be computed on a base benefit amount not to
exceed $18,000 of the retirement allowance otherwise payable, computed
without modification. Any benefit received pursuant to this subdivision
shall be in lieu of any benefit received pursuant to § 378 of the
Retirement and Social Security Law. Subdivision (d) provides that the
percentage shall be determined annually by reference to the Consumer
Price Index, published by the United States Bureau of Labor Statistics,
for year applicable calendar year. The percentage shall equal 50% of
the annual inflation, as determined from the increase in the Consumer
Price Index in the one year period ending on. the March 31 prior to the
cost-of-living adjustment effecting on the ensuing September 1. The
percentage is rounded up to the next higher one-tenth of one percent and
shall not exceed 3% not be less than 1%.
Section. 532-a of the Education Law pertains to the cost-of-living
adjustment for retirement plans applicable to members of the State
Teachers' Retirement System for Public School Teachers. Pursuant to this
title, a cost-of-living adjustment is payable to all pensioners who have
attained age 62 and have been retired for five years, all pensioner's
who have attained age 55 and have been retired for ten years, all disa-
bility pensioners regardless of age who have been retired for five
years; and all recipients of an accidental death benefit regardless of
age who have been receiving such benefit for five years.
Subdivision (c) provides the cost-of-living adjustment shall be computed
on a base benefit amount to exceed $18,000 of the annual retirement
allowance defined in subdivision (b) of this section. Subdivision (b)
provides the cost-of-living adjustment shall be a percentage of the
annual retirement allowance otherwise payable, computed without optional
modification, excluding any annuity derived from voluntary contributions
made by members, except those made pursuant to elections under §
511-a(1) or § 516(3) (c) of this article, but including any benefit
derived from subdivision (f) of this section. The percentage is set for
in subdivision (d) of this section.
Subdivision (f) provides that all retired members who have retired prior
to 1997 and meet the eligibility criteria shall be paid an adjusted
benefit in monthly installments. The adjusted benefit shall be equal to
a percentage of the change in Consumer Price Index, published by the
United States Bureau of Labor Statistics, measured from the year of
retirement according to the following schedule:
Year of retirement Percentage
1968 through 1996 50%
1966 and 1967 55%
1965 60%
1964 65%
1936 70%
1962 80%
1961 90%
Prior to 1961 100%
The adjusted benefit is computed on a base benefit amount not to exceed
$18,000 of the retirement allowance otherwise payable, computed without
optional modification excluding any annuity derived from voluntary
contributions made by members, except those made pursuant to elections
under § 511-a(1) or § 516(3) (c) of this article. Any benefits received
pursuant to § 532 of this Article, unless such benefits are in excess of
those provided by this section, in which case such benefits shall be
paid by the retirement system pursuant to such provision.
Subdivision (d) provides that the percentage shall be determined annual-
ly by reference to the Consumer Price Index, published by the United
States Bureau of Labor Statistics, for year applicable calendar year.
The percentage shall equal 50% of the annual inflation, as determined
from the increase in the Consumer Price Index in the one year period
ending on the March 31 prior to the cost-of-living adjustment effecting
on the ensuing September 1. The percentage is rounded up to the next
higher one-tenth of one percent and shall not exceed 3% not be less than
1%.
Section 511-a of the Education Law refers to a special service retire-
ment allowance.
Section 516 Education Law refers to the annuity savings fund, including
contributions and payments. Subdivision (3) (c) provides that any member
by written notice duly acknowledged and filed with the retirement board
before July 1, 1967 or within two years after he last became a member,
whichever is later, may elect to contribute to the annuity savings fund
in order to qualify for an increased pension for total service in excess
of 25 years.
Section 532 of the Education Law refers to the supplemental retirement
allowance. A supplemental retirement allowance shall be paid to pension-
ers who have retired from the retirement system prior to the calendar
year 1994.
Section 13-696 of the Administrative Code of the City of New York
pertains to the cost-of-living adjustment for members of the New York
City Employees' Retirement System, the New York City Police Pension
fund, the New York City Fire Department Pension Fund, the New York City
Board of Education retirement system, and the Relief and Pension Fund of
the Department of Street Cleaning.
Subdivision (c) provides the cost-of-living adjustment shall be computed
on a base benefit amount to exceed $18,000 of the annual retirement
allowance defined in subdivision b of this section. Subdivision (b)
provides the cost-of-living adjustment shall be a percentage of the
annual retirement allowance otherwise payable, computed without optional
modification, but including any benefit derived from. subdivision (f) of
this section and any prior year's cost-of-living adjustment derived from
this section. The percentage is set for in subdivision (d) of this
section. Subdivision (f) provides that all retired members who have
retired prior to 1997 and meet the eligibility criteria shall be paid an
adjusted benefit in monthly installments. The adjusted benefit shall be
equal to a percentage of the change in Consumer Price Index, published
by the United .States Bureau of Labor Statistics, measured from the year
of retirement according to the following schedule:
Year of retirement Percentage
1968 through 1996 50%
1966 and 1967 55%
1965 60%
1964 65%
1936 70%
1962 80%
196190%
Prior to 1961 100%
The adjusted benefit is computed on a base benefit amount not to exceed
$18,000 of the retirement allowance otherwise payable, computed without
optional modification excluding any annuity derived from voluntary
contributions made by members, except those made pursuant to elections
under § 511-a(1) or § 516(3) (c) of this article. Any benefits received
pursuant to § 532 of this Article, unless such benefits are in excess of
those provided by this section, in which case such benefits shall be
paid by the retirement system pursuant to such provision.
Subdivision. (d) provides that the percentage shall be determined annu-
ally by reference to the Consumer Price Index, published by the United
States Bureau of Labor Statistics, for year applicable calendar year.
The percentage. shall equal 50% of the annual inflation, as determined
from the increase in the Consumer Price Index in the one year period
ending on the March 31 prior to the cost-of-living adjustment effecting
on the ensuing September 1st. The percentage is rounded up to. the next
higher one-tenth of one percent and shall not exceed 3% not be less than
1%.
JUSTIFICATION:
This legislation provides a cost-of-living adjustment for members of the
New York State Employees' Retirement System, New York State Policemen's
and Firemen's Retirement System, New York State Policemen's and Fire-
men's Retirement System, the New York City Employees' Retirement System,
the New York City Police Pension fund, the New York City Fire Department
Pension Fund, the New York City Board of Education retirement system,
and the Relief and Pension Fund of the Department of Street Cleaning, by
increasing the base benefit amount to $21,000 from the current annual
retirement allowance of $18,000.
As incomes of active employees continue to rise to meet cost-of-living
concerns, the caps placed on COLA covered benefits further erodes
retirement income of those affected retirees. In particular, as rioted
above, medical costs including co-payments, premiums, and medication,
have been rising at a rate far in excess of the CPR. Recent federal
amendments to the Medicaid law, especially the prescription drug cover-
age, are likely to cause a significant increase in retired public
employee health care costs. By increasing the annual retirement allow-
ance this bill will help ensure public retirees achieve a dignified and
secure retirement and allowing them to continue to contribute more
effectively to the long-term health of our economy.
LEGISLATIVE HISTORY:
2015/16 2017/18 2019/20 2021/22
FISCAL IMPLICATIONS:
Fiscal note attached.
EFFECTIVE DATE:
This act shall take effect immediately.
STATE OF NEW YORK
________________________________________________________________________
6015
2023-2024 Regular Sessions
IN ASSEMBLY
March 30, 2023
___________
Introduced by M. of A. STECK, GUNTHER, ZINERMAN, LUPARDO -- read once
and referred to the Committee on Governmental Employees
AN ACT to amend the retirement and social security law, the education
law and the administrative code of the city of New York, in relation
to providing cost-of-living adjustments
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subdivision c of section 78-a of the retirement and social
2 security law, as added by chapter 125 of the laws of 2000, is amended to
3 read as follows:
4 c. Said cost-of-living adjustment shall be computed on a base benefit
5 amount not to exceed eighteen thousand dollars of the annual retirement
6 allowance defined in subdivision b of this section. Effective on the
7 first day of September, two thousand twenty-four, said cost-of-living
8 adjustment shall be computed on a base benefit amount not to exceed
9 twenty-one thousand dollars of the annual retirement allowance defined
10 in subdivision b of this section.
11 § 2. Subdivision c of section 378-a of the retirement and social secu-
12 rity law, as added by chapter 125 of the laws of 2000, is amended to
13 read as follows:
14 c. Said cost-of-living adjustment shall be computed on a base benefit
15 amount not to exceed eighteen thousand dollars of the annual retirement
16 allowance defined in subdivision b of this section. Effective on the
17 first day of September, two thousand twenty-four, said cost-of-living
18 adjustment shall be computed on a base benefit amount not to exceed
19 twenty-one thousand dollars of the annual retirement allowance defined
20 in subdivision b of this section.
21 § 3. Subdivision c of section 532-a of the education law, as added by
22 chapter 125 of the laws of 2000, is amended to read as follows:
23 c. Said cost-of-living adjustment shall be computed on a base benefit
24 amount not to exceed eighteen thousand dollars of the annual retirement
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD06045-02-3
A. 6015 2
1 allowance defined in subdivision b of this section. Effective on the
2 first day of September, two thousand twenty-four, said cost-of-living
3 adjustment shall be computed on a base benefit amount not to exceed
4 twenty-one thousand dollars of the annual retirement allowance defined
5 in subdivision b of this section.
6 § 4. Subdivision c of section 13-696 of the administrative code of the
7 city of New York, as added by chapter 125 of the laws of 2000, is
8 amended to read as follows:
9 c. Said cost-of-living adjustment shall be computed on a base benefit
10 amount not to exceed eighteen thousand dollars of the annual fixed
11 retirement allowance defined in subdivision b of this section. Effec-
12 tive on the first day of September, two thousand twenty-four, said cost-
13 of-living adjustment shall be computed on a base benefit amount not to
14 exceed twenty-one thousand dollars of the annual retirement allowance
15 defined in subdivision b of this section.
16 § 5. This act shall take effect immediately.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
This bill would amend subdivision c of Section 532-a of the Education
Law to apply the cost-of-living adjustment (COLA) percentage to a base
benefit amount not to exceed $21,000 of annual retirement benefit. The
current cap on the annual base benefit amount for COLA purposes is
$18,000. This benefit improvement would be effective in September 2024.
The annual cost to the employers of members of the New York State
Teachers' Retirement System for this benefit is estimated to be $78.6
million or .43% of payroll if this bill is enacted.
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. Actuari-
al assumptions and methods are provided in the System's Actuarial Valu-
ation Report.
The source of this estimate is Fiscal Note 2023-19 dated March 10,
2023 prepared by the Office of the Actuary of the New York State Teach-
ers' Retirement System and is intended for use only during the 2023
Legislative Session. I, Richard A. Young, am the Chief Actuary for the
New York State Teachers' Retirement System. I am a member of the Ameri-
can Academy of Actuaries and I meet the Qualification Standards of the
American Academy of Actuaries to render the actuarial opinion contained
herein.
