Bill Text: NY A05487 | 2023-2024 | General Assembly | Introduced
Bill Title: Relates to providing reforms to employee pension contributions; provides that members of Tier 6 shall contribute three percent of annual wages to their retirement system.
Spectrum: Strong Partisan Bill (Democrat 10-1)
Status: (Introduced) 2024-01-03 - referred to governmental employees [A05487 Detail]
Download: New_York-2023-A05487-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 5487 2023-2024 Regular Sessions IN ASSEMBLY March 13, 2023 ___________ Introduced by M. of A. PHEFFER AMATO -- read once and referred to the Committee on Governmental Employees AN ACT to amend the retirement and social security law and the education law, in relation to providing reforms to employee pension contrib- utions; and repealing certain provisions of the retirement and social security law relating thereto 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 613 of the retirement and social 2 security law, as amended by chapter 10 of the laws of 2000, paragraphs 1 3 and 2 as amended by chapter 510 of the laws of 2015, the second undesig- 4 nated paragraphs of paragraphs 1 and 2 as amended by section 2 of part 5 SS of chapter 56 of the laws of 2022, is amended to read as follows: 6 a. 1. [Except as provided by paragraph two of this subdivision,7members] Members shall contribute three percent of annual wages to the 8 retirement system in which they have membership[, except that beginning9April first, two thousand thirteen for members who first become members10of a public retirement system of the state on or after April first, two11thousand twelve, the rate at which each such member shall contribute in12any current plan year (April first to March thirty-first, except for13members of the New York city employees' retirement system, New York city14teachers' retirement system and New York city board of education retire-15ment system, plan year shall mean January first through December thir-16ty-first commencing with the January first next succeeding the effective17date of the chapter of the laws of two thousand fifteen that amended18this paragraph) shall be determined by reference to the wages of such19member in the second plan year (April first to March thirty-first,20except for members of the New York city employees' retirement system,21New York city teachers' retirement system and New York city board of22education retirement system, plan year shall mean January first through23December thirty-first commencing with the January first next succeedingEXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD08569-02-3A. 5487 2 1the effective date of the chapter of the laws of two thousand fifteen2that amended this paragraph) preceding such current plan year as3follows:4(i) members with wages of forty-five thousand dollars per annum or5less shall contribute three per centum of annual wages;6(ii) members with wages greater than forty-five thousand per annum,7but not more than fifty-five thousand per annum shall contribute three8and one-half per centum of annual wages;9(iii) members with wages greater than fifty-five thousand per annum,10but not more than seventy-five thousand per annum shall contribute four11and one-half per centum of annual wages;12(iv) members with wages greater than seventy-five thousand per annum13but not more than one hundred thousand per annum shall contribute five14and three-quarters per centum of annual wages; and15(v) members with wages greater than one hundred thousand per annum16shall contribute six per centum of annual wages]. 17 Notwithstanding the foregoing, during each of the first three plan 18 years (April first to March thirty-first, except for members of New York 19 city employees' retirement system, New York city teachers' retirement 20 system and New York city board of education retirement system, plan year 21 shall mean January first through December thirty-first commencing with 22 the January first next succeeding the effective date of chapter five 23 hundred ten of the laws of two thousand fifteen) in which such member 24 has established membership in a public retirement system of the state, 25 such member shall contribute a percentage of annual wages in accordance 26 with the preceding schedule based upon a projection of annual wages 27 provided by the employer. Notwithstanding the foregoing, when determin- 28 ing the rate at which each such member who became a member of the New 29 York state and local employees' retirement system, New York city employ- 30 ees' retirement system, New York city teachers' retirement system and 31 New York city board of education retirement system, on or after April 32 first, two thousand twelve shall contribute for any plan year (April 33 first to March thirty-first, except for members of the New York city 34 employees' retirement system, New York city teachers' retirement system 35 and New York city board of education retirement system, plan year shall 36 mean January first through December thirty-first commencing with January 37 first next succeeding the effective date of chapter five hundred ten of 38 the laws of two thousand fifteen) between April first, two thousand 39 twenty-two and April first, two thousand twenty-four, such rate shall be 40 determined by reference to employees annual base wages of such member in 41 the second plan year (April first to March thirty-first) preceding such 42 current plan year. Base wages shall include regular pay, shift differen- 43 tial pay, location pay, and any increased hiring rate pay, but shall not 44 include any overtime payments or compensation earned for extracurricular 45 programs or any other pensionable earnings paid in addition to the annu- 46 al base wages. 47 The head of each retirement system shall promulgate such regulations 48 as may be necessary and appropriate with respect to the deduction of 49 such contribution from members' wages and for the maintenance of any 50 special fund or funds with respect to amounts so contributed. 51 2. A member of the New York city employees' retirement system who is 52 eligible to be a participant in the twenty-five-year and age fifty-five 53 retirement program, as defined by paragraph five of subdivision a of 54 section six hundred four-b of this article shall contribute two percent 55 of annual wages to such system effective on the starting date of the 56 elimination of additional member contributions, as defined in anA. 5487 3 1 election made pursuant to paragraph ten of subdivision e of section six 2 hundred four-b of this article[, except that beginning April first, two3thousand thirteen for members who first become members of the New York4city employees' retirement system on or after April first, two thousand5twelve, the rate at which each such member shall contribute in any6current plan year (April first to March thirty-first, provided, however,7that plan year shall mean January first through December thirty-first8commencing with the January first next succeeding the effective date of9the chapter of the laws of two thousand fifteen that amended this para-10graph) shall be determined by reference to the wages of such member in11the second plan year (April first to March thirty-first, provided,12however, that plan year shall mean January first through December thir-13ty-first commencing with the January first next succeeding the effective14date of the chapter of the laws of two thousand fifteen that amended15this paragraph) preceding such current plan year as follows:16(i) members with wages of forty-five thousand dollars per annum or17less shall contribute three per centum of annual wages;18(ii) members with wages greater than forty-five thousand per annum,19but not more than fifty-five thousand per annum shall contribute three20and one-half per centum of annual wages;21(iii) members with wages greater than fifty-five thousand per annum,22but not more than seventy-five thousand per annum shall contribute four23and one-half per centum of annual wages;24(iv) members with wages greater than seventy-five thousand per annum25but not more than one hundred thousand per annum shall contribute five26and three-quarters per centum of annual wages; and27(v) members with wages greater than one hundred thousand per annum28shall contribute six per centum of annual wages]. 29 Notwithstanding the foregoing, during each of the first three plan 30 years (April first to March thirty-first, provided, however, that plan 31 year shall mean January first through December thirty-first commencing 32 with the January first next succeeding the effective date of chapter 33 five hundred ten of the laws of two thousand fifteen) in which such 34 member has established membership in the New York city employees' 35 retirement system, such member shall contribute a percentage of annual 36 wages in accordance with the preceding schedule based upon a projection 37 of annual wages provided by the employer. Notwithstanding the foregoing, 38 when determining the rate at which each such member who became a member 39 of, New York city employees' retirement system, on or after April first, 40 two thousand twelve shall contribute for any plan year (April first to 41 March thirty-first, provided, however, that plan year shall mean January 42 first through December thirty-first commencing with the January first 43 next succeeding the effective date of chapter five hundred ten of the 44 laws of two thousand fifteen) between April first, two thousand twenty- 45 two and April first, two thousand twenty-four, such rate shall be deter- 46 mined by reference to employees annual base wages of such member in the 47 second plan year (April first to March thirty-first) preceding such 48 current plan year. Base wages shall include regular pay, shift differen- 49 tial pay, location pay, and any increased hiring rate pay, but shall not 50 include any overtime payments. 51 § 2. Subdivision g of section 613 of the retirement and social securi- 52 ty law is REPEALED. 53 § 3. Subdivision t of section 603 of the retirement and social securi- 54 ty law, as amended by chapter 18 of the laws of 2012, is amended to read 55 as follows:A. 5487 4 1 t. Members who join the New York state teachers' retirement system on 2 or after January first, two thousand ten, shall be eligible to retire 3 without reduction of his or her retirement benefit upon attainment of at 4 least fifty-seven years of age and completion of thirty or more years of 5 service. [Members who retire pursuant to the provisions of this subdivi-6sion shall be required to make the member contributions required by7subdivision g of section six hundred thirteen of this article for all8years of credited and creditable service.] The provisions of this subdi- 9 vision shall not apply to members who first become a member of the New 10 York state teachers' retirement system on or after April first, two 11 thousand twelve. 12 § 4. Subdivision a of section 517 of the retirement and social securi- 13 ty law, as amended by chapter 18 of the laws of 2012, the second undes- 14 ignated paragraph as amended by section 1 of part SS of chapter 56 of 15 the laws of 2022, is amended to read as follows: 16 a. Members shall contribute three percent of annual wages to the 17 retirement system in which they have membership, provided that such 18 contributions shall not be required for more than thirty years, for 19 general members, or twenty-five years, for police/fire members[, except20that beginning April first, two thousand thirteen for members who first21become members of the New York state and local employees' retirement22system on or after April first, two thousand twelve, the rate at which23each such member shall contribute in any current plan year (April first24to March thirty-first) shall be determined by reference to the wages of25such member in the second plan year (April first to March thirty-first)26preceding such current plan year as follows:271. members with wages of forty-five thousand dollars per annum or less28shall contribute three per centum of annual wages;292. members with wages greater than forty-five thousand per annum, but30not more than fifty-five thousand per annum shall contribute three and31one-half per centum of annual wages;323. members with wages greater than fifty-five thousand per annum, but33not more than seventy-five thousand per annum shall contribute four and34one-half per centum of annual wages;354. members with wages greater than seventy-five thousand per annum but36not more than one hundred thousand per annum shall contribute five and37three-quarters per centum of annual wages; and385. members with wages greater than one hundred thousand per annum39shall contribute six per centum of annual wages]. 40 Notwithstanding the foregoing, during each of the first three plan 41 years (April first to March thirty-first) in which such member has 42 established membership in the New York state and local employees' 43 retirement system, such member shall contribute a percentage of annual 44 wages in accordance with the preceding schedule based upon a projection 45 of annual wages provided by the employer. Notwithstanding the foregoing, 46 when determining the rate at which each such member who became a member 47 of the New York state and local employees' retirement system on or after 48 April first, two thousand twelve shall contribute for any plan year 49 (April first to March thirty-first) between April first, two thousand 50 twenty-two and April first, two thousand twenty-four, such rate shall be 51 determined by reference to employees annual base wages of such member in 52 the second plan year (April first to March thirty-first) preceding such 53 current plan year. Base wages shall include regular pay, shift differen- 54 tial pay, location pay, and any increased hiring rate pay, but shall not 55 include any overtime payments.A. 5487 5 1 The head of each retirement system shall promulgate such regulations 2 as may be necessary and appropriate with respect to the deduction of 3 such contribution from members' wages and for the maintenance of any 4 special fund or funds with respect to amounts so contributed. 5 § 5. Section 1204 of the retirement and social security law, as 6 amended by chapter 18 of the laws of 2012, the second undesignated para- 7 graph as amended by section 3 of part SS of chapter 56 of the laws of 8 2022, is amended to read as follows: 9 § 1204. Member contributions. Members who are subject to the 10 provisions of this article shall contribute three percent of annual 11 wages to the retirement system in which they have membership[, except12that beginning April first, two thousand thirteen for members who first13become members of the New York state and local police and fire retire-14ment system on or after April first, two thousand twelve, the rate at15which each such member shall contribute in any current plan year (April16first to March thirty-first) shall be determined by reference to the17wages of such member in the second plan year (April first to March thir-18ty-first) preceding such current plan year as follows:19a. members with wages of forty-five thousand dollars per annum or less20shall contribute three per centum of annual wages;21b. members with wages greater than forty-five thousand per annum, but22not more than fifty-five thousand per annum shall contribute three and23one-half per centum of annual wages;24c. members with wages greater than fifty-five thousand per annum, but25not more than seventy-five thousand per annum shall contribute four and26one-half per centum of annual wages;27d. members with wages greater than seventy-five thousand per annum but28not more than one hundred thousand per annum shall contribute five and29three-quarters per centum of annual wages; and30e. members with wages greater than one hundred thousand per annum31shall contribute six per centum of annual wages]. 32 Notwithstanding the foregoing, during each of the first three plan 33 years (April first to March thirty-first) in which such member has 34 established membership in the New York state and local police and fire 35 retirement system, such member shall contribute a percentage of annual 36 wages in accordance with the preceding schedule based upon a projection 37 of annual wages provided by the employer. Notwithstanding the foregoing, 38 when determining the rate at which each such member who became a member 39 of the New York state and local police and fire retirement system on or 40 after April first, two thousand twelve shall contribute for any plan 41 year (April first to March thirty-first) between April first, two thou- 42 sand twenty-two and April first, two thousand twenty-four, such rate 43 shall be determined by reference to employees annual base wages of such 44 member in the second plan year (April first to March thirty-first) 45 preceding such current plan year. Base wages shall include regular pay, 46 shift differential pay, location pay, and any increased hiring rate pay, 47 but shall not include any overtime payments. Effective April first, two 48 thousand twelve, all members subject to the provisions of this article 49 shall not be required to make member contributions on annual wages 50 excluded from the calculation of final average salary pursuant to 51 section twelve hundred three of this article. Nothing in this section, 52 however, shall be construed or deemed to allow members to receive a 53 refund of any member contributions on such wages paid prior to April 54 first, two thousand twelve. 55 Members who are enrolled in a retirement plan that limits the amount 56 of creditable service a member can accrue shall not be required to makeA. 5487 6 1 contributions pursuant to this section after accruing the maximum amount 2 of service credit allowed by the retirement plan in which they are 3 enrolled. The state comptroller shall promulgate such regulations as may 4 be necessary and appropriate with respect to the deduction of such 5 contribution from members' wages and for the maintenance of any special 6 fund or funds with respect to amounts so contributed. In no way shall 7 the member contributions made pursuant to this section be used to 8 provide for pension increases or annuities of any kind. 9 § 6. Subdivision 2 of section 182 of the education law, as amended by 10 chapter 18 of the laws of 2012, is amended to read as follows: 11 2. Employee contributions. In the case of any electing employee, 12 contributions at the rate of three per centum of his state salary shall 13 be deducted by the state comptroller as the employee contribution, 14 provided however, that such employee contribution shall be made by the 15 state in accordance with subdivision one of this section during such 16 period as (a) either section seventy-a of the retirement and social 17 security law or section five hundred twenty-eight of this title provides 18 that the contribution of each member of the New York state employees' 19 retirement system or the New York state teachers' retirement system in 20 the employ of the state shall be reduced by at least eight per centum of 21 his compensation, or (b) employee contributions to either such system 22 are no longer required by reason of such system becoming noncontributory 23 for state employees. 24 [Notwithstanding any other law to the contrary, beginning April first,25two thousand thirteen any electing employee appointed on or after April26first, two thousand twelve, the rate at which each such employee shall27contribute in any current plan year (January first to December thirty-28first) shall be determined by reference to the wages of such member in29the second plan year (January first to December thirty-first) preceding30such current plan year as follows:31(a) members with wages of forty-five thousand dollars per annum or32less shall contribute three per centum of annual wages;33(b) members with wages greater than forty-five thousand per annum, but34not more than fifty-five thousand per annum shall contribute three and35one-half per centum of annual wages;36(c) members with wages greater than fifty-five thousand per annum, but37not more than seventy-five thousand per annum shall contribute four and38one-half per centum of annual wages;39(d) members with wages greater than seventy-five thousand per annum40but not more than one hundred thousand per annum shall contribute five41and three-quarters per centum of annual wages; and42(e) members with wages greater than one hundred thousand per annum43shall contribute six per centum of annual wages.44Notwithstanding the foregoing, during each of the first three plan45years (January first to December thirty-first) in which such member has46established membership in the Education Department Optional Retirement47Program, such employee shall contribute a percent of annual wages in48accordance with the preceding schedule based upon a projection of annual49wages provided by the employer.] 50 § 7. Subdivision f of section 613 of the retirement and social securi- 51 ty law, as amended by chapter 18 of the laws of 2012, the second undes- 52 ignated paragraph as amended by section 2 of part SS of chapter 56 of 53 the laws of 2022, is amended to read as follows: 54 f. Anything in subdivision a of this section to the contrary notwith- 55 standing a member employed as a uniformed court officer or peace officer 56 in the unified court system who first joins the New York state and localA. 5487 7 1 employees' retirement system on or after January first, two thousand ten 2 shall contribute four percent of annual wages to the New York state and 3 local employees' retirement system[, except that beginning April first,4two thousand thirteen for members who first become members of the New5York state and local employees' retirement system on or after April6first, two thousand twelve, the rate at which each such member shall7contribute in any current plan year (April first to March thirty-first)8shall be determined by reference to the wages of such member in the9second plan year (April first to March thirty-first) preceding such10current plan year as follows:111. members with wages of forty-five thousand dollars per annum or less12shall contribute three per centum of annual wages;132. members with wages greater than forty-five thousand per annum, but14not more than fifty-five thousand per annum shall contribute three and15one-half per centum of annual wages;163. members with wages greater than fifty-five thousand per annum, but17not more than seventy-five thousand per annum shall contribute four and18one-half per centum of annual wages;194. members with wages greater than seventy-five thousand per annum but20not more than one hundred thousand per annum shall contribute five and21three-quarters per centum of annual wages; and225. members with wages greater than one hundred thousand per annum23shall contribute six per centum of annual wages]. 24 Notwithstanding the foregoing, during each of the first three plan 25 years (April first to March thirty-first) in which such member has 26 established membership in the New York state and local employees' 27 retirement system, such member shall contribute a percentage of annual 28 wages in accordance with the preceding schedule based upon a projection 29 of annual wages provided by the employer. Notwithstanding the foregoing, 30 when determining the rate at which each such member who became a member 31 of the New York state and local employees' retirement system on or after 32 April first, two thousand twelve shall contribute for any plan year 33 (April first to March thirty-first) between April first, two thousand 34 twenty-two and April first, two thousand twenty-four, such rate shall be 35 determined by reference to employees annual base wages of such member in 36 the second plan year (April first to March thirty-first) preceding such 37 current plan year. Base wages shall include regular pay, shift differen- 38 tial pay, location pay, and any increased hiring rate pay, but shall not 39 include any overtime payments. 40 The head of the New York state and local employees' retirement system 41 shall promulgate such regulations as may be necessary and appropriate 42 with respect to the deduction of such contribution from members' wages 43 and for the maintenance of any special fund or funds with respect to 44 amounts so contributed. 45 § 8. Nothing in this act shall be construed or deemed to allow members 46 to receive a refund of any member contributions made or collected prior 47 to the effective date of this act. 48 § 9. Notwithstanding any other provision of law to the contrary, none 49 of the provisions of this act shall be subject to section 25 of the 50 retirement and social security law. 51 § 10. This act shall take effect on the sixtieth day after it shall 52 have become a law. FISCAL NOTE.--Pursuant to Legislative Law, Section 50: As it relates to the New York State Teachers' Retirement System, this bill would amend Section 613 of the Retirement and Social Security Law to reduce the required employee contribution rate for Tier 5 and 6A. 5487 8 members to a flat 3.0% of salary, payable over their career. Currently, Tier 5 members are required to contribute at a rate of 3.5% of salary, and Tier 6 members are required to contribute between 3.0% and 6.0% of salary, according to a salary-based schedule. No contributions made or collected before the effective date of this bill would be refunded. The annual cost to the employers of members of the New York State Teachers' Retirement System for this benefit is estimated to be $136.5 million or 0.74% of payroll if this bill is enacted. The System's "new entrant rate", a hypothetical employer contribution rate that would occur if we started a new Retirement System without any assets, is equal to 5.15% of pay under the current Tier 6 benefit struc- ture. This can be thought of as the long-term expected employer cost of Tier 6, based on current actuarial assumptions. For the reduction to the Tier 6 employee contribution rate proposed under this bill, this new entrant rate would increase to 6.72% of pay, an increase of 1.57% of pay. 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 2023-03 dated February 22, 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.