NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A6640A
SPONSOR: Pheffer Amato 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 protect public retirees from the continued erosion of their retire-
ment income from inflation by providing cost-of-living benefits to more
pensioners.
SUMMARY OF PROVISIONS:
Section 1 amends subdivision a of Section 78-A of the Retirement and
Social Security Law to provide cost-of-living (COLA) pension adjustments
to all pensioners who are at least 55 years old and who have been
retired for 5 years. These benefits shall be paid to eligible retirees
starting September 1, 2023.
Section 2 amends subdivision a of Section 378-A of the Retirement and
Social Security Law to provide COLA pension adjustments to all pension-
ers who are at least 55 years old and who have been retired for 5 years.
These benefits shall be paid to eligible retirees starting September 1,
2023.
Section 3 amends subdivision a of Section 532-A of the Education Law to
provide COLA pension adjustments to all pensioners who are at least 55
years old and who have been retired for 5 years. These benefits shall be
paid to eligible retirees starting September 1, 2023.
Section 4 amends subdivision a of Section 13-696 of the Administrative
Code of the City of New York to provide COLA pension adjustments to all
pensioners who are at least 55 years old and who have been retired for 5
years. These benefits shall be paid to eligible retirees starting
September 1, 2023.
Section 5 is the effective date.
JUSTIFICATION:
In 2000, Chapter 125 recognized the need to provide public retirees with
COLA adjustment to prevent them from facing financial hardship because
the amount of their pensions did not change. even though it cost more
for them to live. Currently, public employees who retire at age 55 must
wait ten years before receiving a COLA adjustment that would result in
an increased pension, while those who retire at age 62 only have to wait
five years before receiving the COLA adjustment.
This bill will help ensure public retirees achieve a dignified and
secure retirement. The COLA adjustment will allow them to continue to
contribute more effectively to the long term health of our economy.
LEGISLATIVE HISTORY:
2021-2022: A.10058 - Referred to Governmental Employees
STATE AND LOCAL FISCAL IMPLICATIONS:
Please see fiscal note.
EFFECTIVE DATE:
This act shall take effect immediately.
STATE OF NEW YORK
________________________________________________________________________
6640--A
2023-2024 Regular Sessions
IN ASSEMBLY
April 25, 2023
___________
Introduced by M. of A. PHEFFER AMATO, KELLES -- read once and referred
to the Committee on Governmental Employees -- recommitted to the
Committee on Governmental Employees in accordance with Assembly Rule
3, sec. 2 -- committee discharged, bill amended, ordered reprinted as
amended and recommitted to said committee
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 a 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 a. [A] Effective on the first day of September, two thousand twenty-
5 four, a cost-of-living adjustment shall be payable on the basis provided
6 for in this section to: (i) all pensioners who have attained age
7 [sixty-two] fifty-five and have been retired for five years; (ii) [all
8 pensioners who have attained age fifty-five and have been retired for
9 ten years; (iii)] all disability pensioners regardless of age who have
10 been retired for five years; and [(iv)] (iii) all recipients of an acci-
11 dental death benefit regardless of age who have been receiving such
12 benefit for five years.
13 § 2. Subdivision a of section 378-a of the retirement and social secu-
14 rity law, as added by chapter 125 of the laws of 2000, is amended to
15 read as follows:
16 a. [A] Effective on the first day of September, two thousand twenty-
17 four, a cost-of-living adjustment shall be payable on the basis provided
18 for in this section to: (i) all pensioners who have attained age
19 [sixty-two] fifty-five and have been retired for five years; and (ii)
20 [all pensioners who have attained age fifty-five and have been retired
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD08563-05-4
A. 6640--A 2
1 for ten years; and (iii)] all disability pensioners regardless of age
2 who have been retired for five years.
3 § 3. Subdivision a of section 532-a of the education law, as added by
4 chapter 125 of the laws of 2000, is amended to read as follows:
5 a. [A] Effective on the first day of September, two thousand twenty-
6 four, a cost-of-living adjustment shall be payable on the basis provided
7 for in this section to: (i) all pensioners who have attained age
8 [sixty-two] fifty-five and have been retired for five years; (ii) [all
9 pensioners who have attained age fifty-five and have been retired for
10 ten years; (iii)] all disability pensioners regardless of age who have
11 been retired for five years; and [(iv)] (iii) all recipients of an acci-
12 dental death benefit regardless of age who have been receiving such
13 benefit for five years.
14 § 4. Subdivision a of section 13-696 of the administrative code of the
15 city of New York, as amended by chapter 288 of the laws of 2001, is
16 amended to read as follows:
17 a. [A] Effective on the first day of September, two thousand twenty-
18 four, a cost-of-living adjustment shall be payable to retired members of
19 the New York city employees' retirement system, the New York city teach-
20 ers' retirement system, the New York city police pension fund, the New
21 York city fire department pension fund, the New York city board of
22 education retirement system or the relief and pension fund of the
23 department of street cleaning provided for in subchapter one of this
24 chapter on the basis provided for in this section to: (i) all retired
25 members who have attained age [sixty-two] fifty-five and have been
26 retired for five years; (ii) [all retired members who have attained age
27 fifty-five and have been retired for ten years; (iii)] all members who
28 retired for disability regardless of age who have been retired for five
29 years; and [(iv)] (iii) all recipients of an accidental death benefit
30 regardless of age who have been receiving such benefit for five years.
31 § 5. This act shall take effect immediately.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
This bill would provide an increase in the defined benefit cost-of-
living adjustment (COLA) for New York public retirement systems. Start-
ing with a payment in September 2024, COLA will be payable to pensioners
who have attained age fifty-five and have been retired at least five
years.
Insofar as this bill affects the New York State and Local Employees'
Retirement System (NYSLERS), pursuant to Section 25 of the Retirement
and Social Security Law, the increased costs would be borne entirely by
the State of New York and would require an itemized appropriation suffi-
cient to pay the cost of the provision. If this bill were enacted during
the 2024 Legislative Session, the increase in the present value of bene-
fits would be approximately $611 million.
In the NYSLERS, this benefit improvement will be funded by (1) billing
a past service cost to cover retrospective benefit increases and (2)
increasing the billing rates charged annually to cover prospective bene-
fit increases, as follows:
(1) To fund retrospective costs, the State of New York will be
required to pay $398 million (including interest) as of March 1, 2025.
(2) To fund prospective costs, the annual contribution required of all
participating employers in NYSLERS is 0.09% of billable salary, or
approximately $11 million to the State of New York and approximately $17
million to the local participating employers. This permanent annualcost will vary in subsequent billing cycles with changes in the billing
rate and salary of the affected members.
A. 6640--A 3
Insofar as this bill affects the New York State and Local Police and
Fire Retirement System (NYSLPFRS), the increased costs would be shared
by the State of New York and the local participating employers in the
NYSLPFRS. If this bill were enacted during the 2024 Legislative Session,
the increase in the present value of benefits would be approximately
$131 million.
NYSLPFRS Increase in present Increase in required
value benefits contributions
Tiers 1 - 5 $107 million $62 million
Tier 6 $24 million $69 million
Total $131 million $131 million
In the NYSLPFRS, this benefit improvement will be funded by increasing
the billing rates charged annually to cover both retrospective and
prospective benefit increases. The annual contribution required of all
participating employers in NYSLPFRS is 0.3% of billable salary, or
approximately $2.6 million to the State of New York and approximately
$11 million to the local participating employers. This permanent annualcost will vary in subsequent billing cycles with changes in the billing
rate and salary of the affected members.
Summary of relevant resources:
Membership data as of March 31, 2023 was used in measuring the impact
of the proposed change, the same data used in the April 1, 2023 actuari-
al valuation. Distributions and other statistics can be found in the
2023 Report of the Actuary and the 2023 Annual Comprehensive Financial
Report.
The actuarial assumptions and methods used are described in the 2023
Annual Report to the Comptroller on Actuarial Assumptions, and the
Codes, Rules and Regulations of the State of New York: Audit and
Control.
The Market Assets and GASB Disclosures are found in the March 31, 2023
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 fiscal note does not constitute a legal opinion on the viability
of the proposed change nor is it intended to serve as a substitute for
the professional judgment of an attorney.
This estimate, dated February 6, 2024, and intended for use only
during the Legislative Session, is Fiscal Note No. 2024-46, prepared by
the Actuary for the New York State and Local Retirement System.
