Bill Text: NY A06574 | 2023-2024 | General Assembly | Amended

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Bill Title: Increases the limitation of overtime compensation in final average salary calculations from fifteen percent to thirty percent.

Spectrum: Moderate Partisan Bill (Democrat 8-2)

Status: (Introduced) 2024-02-21 - print number 6574a [A06574 Detail]

Download: New_York-2023-A06574-Amended.html

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                STATE OF NEW YORK
        ________________________________________________________________________

                                         6574--A

                               2023-2024 Regular Sessions

                   IN ASSEMBLY

                                     April 19, 2023
                                       ___________

        Introduced  by  M. of A. PHEFFER AMATO, LUPARDO, PAULIN, BURDICK, STECK,
          LUNSFORD, DICKENS, WALLACE, SLATER -- 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, in relation to
          the limitation of overtime compensation in final average salary calcu-
          lations

          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:

     1    Section  1. Section 1203 of the retirement and social security law, as
     2  added by section 1 of part A of chapter 504 of  the  laws  of  2009,  is
     3  amended to read as follows:
     4    §  1203. Overtime. A member's final average salary shall be calculated
     5  in accordance with such provisions of article eight or article eleven of
     6  this chapter as govern the member's benefits including overtime,  except
     7  that earnings classified as overtime compensation in an amount in excess
     8  of [fifteen] thirty percent of a member's annual wages not classified as
     9  overtime compensation shall be excluded from such calculation. "Overtime
    10  compensation"  shall  mean,  for  purposes of this section, compensation
    11  paid under any law or policy under which employees are paid  at  a  rate
    12  greater  than  their  standard  rate  for additional hours worked beyond
    13  those required, including compensation paid under  section  one  hundred
    14  thirty-four  of  the civil service law and section ninety of the general
    15  municipal law.
    16    § 2. This act shall take effect immediately.
          FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
          This bill would increase the allowable overtime compensation  included
        in  the  final  average  salary  calculation to 30 percent of a member's
        annual wages for Tier 5 and Tier 6 members in the  New  York  State  and

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD08426-03-4
        A. 6574--A                          2

        Local Police and Fire Retirement System (NYSLPFRS). The current limit is
        15 percent.
          Insofar  as  this bill affects the 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 approxi-
        mately $493 million.

        NYSLPFRS       Increase in present                Increase in required
                         value benefits                     contributions
        Tiers 1-5      $31 million                        $75 million
        Tier 6         $462 million                       $418 million
        Total          $493 million                       $493 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  1.0%  of billable salary, or
        approximately $8.6 million to the State of New  York  and  approximately
        $35 million to the local participating employers.  This permanent annual
        cost  will  increase  as  Tier  6 salary grows and will vary by employer
        based upon the plan coverage and salary reported in Tier 6.
          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  16,  2024, and intended for use only
        during the  2024  Legislative  Session,  is  Fiscal  Note  No.  2024-42,
        prepared  by  the  Actuary  for  the New York State and Local Retirement
        System.