Bill Text: NY S08461 | 2021-2022 | General Assembly | Introduced
Bill Title: Permits wages earned through shared services agreements to be included in the computation of final average salaries regardless if such earnings make the final average salary exceed that of the previous two years by more than ten percent; provides any additional costs shall be borne by the participating members of the shared services agreement, not the state.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2022-03-03 - REFERRED TO CIVIL SERVICE AND PENSIONS [S08461 Detail]
Download: New_York-2021-S08461-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 8461 IN SENATE March 3, 2022 ___________ Introduced by Sen. RITCHIE -- read twice and ordered printed, and when printed to be committed to the Committee on Civil Service and Pensions AN ACT to amend the retirement and social security law, in relation to permitting wages earned through shared services agreements to be included in the computation of final average salaries The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Subdivisions a and b of section 512 of the retirement and 2 social security law, subdivision a as amended by chapter 298 of the laws 3 of 2016 and subdivision b as amended by chapter 18 of the laws of 2012, 4 are amended and a new subdivision e is added to read as follows: 5 a. A member's final average salary shall be the average wages earned 6 by such a member during any three consecutive years which provide the 7 highest average wage; provided, however, if the wages earned during any 8 year included in the period used to determine final average salary 9 exceeds that of the average of the previous two years by more than ten 10 percent, the amount in excess of ten percent shall be excluded from the 11 computation of final average salary; provided however if the amount in 12 excess of ten percent was earned while working under a shared services 13 agreement, such excess shall be included in the computation of the final 14 average salary. Notwithstanding the preceding provisions of this subdi- 15 vision to the contrary, for a member who first becomes a member of the 16 New York state and local employees' retirement system on or after April 17 first, two thousand twelve, or for a New York city police/fire revised 18 plan member, a New York city enhanced plan member who receives the ordi- 19 nary disability benefit provided for in subdivision c-1 of section five 20 hundred six of this article or the accidental disability benefit 21 provided for in paragraph three of subdivision c of section five hundred 22 seven of this article, a New York city uniformed correction/sanitation 23 revised plan member or an investigator revised plan member, a member's 24 final average salary shall be the average wages earned by such a member 25 during any five consecutive years which provide the highest average 26 wage; provided, however, if the wages earned during any year included in 27 the period used to determine final average salary exceeds that of the EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD14387-03-2S. 8461 2 1 average of the previous four years by more than ten percent, the amount 2 in excess of ten percent shall be excluded from the computation of final 3 average salary. In determining final average salary pursuant to any 4 provision of this subdivision, where the period used to determine final 5 average salary is the period which immediately precedes the date of 6 retirement, any month or months (not in excess of twelve) which would 7 otherwise be included in computing final average salary but during which 8 the member was on authorized leave of absence at partial pay or without 9 pay shall be excluded from the computation of final average salary and 10 the month or an equal number of months immediately preceding such period 11 shall be substituted in lieu thereof. 12 b. Notwithstanding the provisions of subdivision a of this section, 13 with respect to members of the New York state employees' retirement 14 system who first become members of the New York state and local employ- 15 ees' retirement system before April first, two thousand twelve, the New 16 York state and local police and fire retirement system and the New York 17 city teachers' retirement system, a member's final average salary shall 18 be equal to one-third of the highest total wages earned during any 19 continuous period of employment for which the member was credited with 20 three years of service credit; provided, however, if the wages earned 21 during any year of credited service included the period used to deter- 22 mine final average salary exceeds the average of the wages of the previ- 23 ous two years of credited service by more than ten percent, the amount 24 in excess of ten percent shall be excluded from the computation of final 25 average salary; provided however if the amount in excess of ten percent 26 was earned while working under a shared services agreement, such 27 excess shall be included in the computation of the final average salary. 28 For members who first become a member of the New York state and local 29 employees' retirement system on or after April first, two thousand 30 twelve, with respect to members of the New York state and local employ- 31 ees' retirement system, a member's final average salary shall be equal 32 to one-fifth of the highest total wages earned during any continuous 33 period of employment for which the member was credited with five years 34 of service credit; provided, however, if the wages earned during any 35 year of credited service included the period used to determine final 36 average salary exceeds the average of the wages of the previous four 37 years of credited service by more than ten percent, the amount in excess 38 of ten percent shall be excluded from the computation of final average 39 salary; provided however if the amount in excess of ten percent was 40 earned while working under a shared services agreement, such excess 41 shall be included in the computation of the final average salary. 42 e. For the purposes of this section "shared services agreement" shall 43 mean an agreement entered into between two or more municipalities, 44 libraries, or public or quasi-public organizations participating in the 45 retirement system, whereby such participating entities agree to share 46 services described in such agreement. 47 § 2. Subdivisions a and b of section 608 of the retirement and social 48 security law, as amended by chapter 18 of the laws of 2012, are amended 49 and a new subdivision f is added to read as follows: 50 a. For members who first become members of a public retirement system 51 of the state before April first, two thousand twelve, a member's final 52 average salary shall be the average wages earned by such a member during 53 any three consecutive years which provide the highest average wage; 54 provided, however, if the wages earned during any year included in the 55 period used to determine final average salary exceeds that of the aver- 56 age of the previous two years by more than ten percent, the amount inS. 8461 3 1 excess of ten percent shall be excluded from the computation of final 2 average salary; provided however if the amount in excess of ten percent 3 was earned while working under a shared services agreement, such 4 excess shall be included in the computation of the final average salary. 5 For members who first become members of the New York state and local 6 employees' retirement system or the New York state teachers' retirement 7 system on or after April first, two thousand twelve, a member's final 8 average salary shall be the average wages earned by such member during 9 any five consecutive years which provide the highest average wage; 10 provided, however, if the wages earned during any year included in the 11 period used to determine final average salary exceeds that of the aver- 12 age of the previous four years by more than ten percent, the amount in 13 excess of ten percent shall be excluded from the computation of final 14 average salary; provided however if the amount in excess of ten percent 15 was earned while working under a shared services agreement, such 16 excess shall be included in the computation of the final average salary. 17 Where the period used to determine final average salary is the period 18 which immediately precedes the date of retirement, any month or months 19 (not in excess of twelve) which would otherwise be included in computing 20 final average salary but during which the member was on authorized leave 21 of absence at partial pay or without pay shall be excluded from the 22 computation of final average salary and the month or an equal number of 23 months immediately preceding such period shall be substituted in lieu 24 thereof. 25 b. Notwithstanding the provisions of subdivision a of this section, 26 with respect to members who first became members of the New York state 27 and local employees' retirement system and the New York city teachers' 28 retirement system before April first, two thousand twelve, a member's 29 final average salary shall be equal to one-third of the highest total 30 wages earned by such member during any continuous period of employment 31 for which the member was credited with three years of service credit; 32 provided, however, if the wages earned during any year of credited 33 service included in the period used to determine final average salary 34 exceeds the average of the wages of the previous two years of credited 35 service by more than ten percent, the amount in excess of ten percent 36 shall be excluded from the computation of final average salary; provided 37 however if the amount in excess of ten percent was earned while working 38 under a shared services agreement, such excess shall be included in 39 the computation of the final average salary. With respect to members who 40 first become members of the New York state and local employees' retire- 41 ment system and the New York city teachers' retirement system on or 42 after April first, two thousand twelve, a member's final average salary 43 shall be equal to one-fifth of the highest total wages earned by such 44 member during any continuous period of employment for which the member 45 was credited with five years of service credit; provided, however, if 46 the wages earned during any year of credited service included in the 47 period used to determine final average salary exceeds the average of the 48 wages of the previous four years of credited service by more than ten 49 percent, the amount in excess of ten percent shall be excluded from the 50 computation of final average salary; provided however if the amount in 51 excess of ten percent was earned while working under a shared services 52 agreement, such excess shall be included in the computation of the final 53 average salary. 54 f. For the purposes of this section "shared services agreement" shall 55 mean an agreement entered into between two or more municipalities, 56 libraries, or public or quasi-public organizations participating in theS. 8461 4 1 retirement system, whereby such participating entities agree to share 2 services described in such agreement. 3 § 3. Section 1209 of the retirement and social security law, as added 4 by chapter 18 of the laws of 2012, is amended to read as follows: 5 § 1209. Final average salary. a. For members who first become members 6 of the New York state and local police and fire retirement system on or 7 after April first, two thousand twelve, a member's final average salary 8 shall be equal to one-fifth of the highest total wages earned by such 9 member during any continuous period of employment for which the member 10 was credited with five years of service credit; provided, however, if 11 the wages earned during any year of credited service included in the 12 period used to determine final average salary exceeds the average of the 13 wages of the previous four years of credited service by more than ten 14 percent, the amount in excess of ten percent shall be excluded from the 15 computation of final average salary; provided however if the amount in 16 excess of ten percent was earned while working under a shared services 17 agreement, such excess shall be included in the computation of the final 18 average salary. Wages in excess of the annual salary paid to the gover- 19 nor pursuant to section three of article four of the state constitution 20 shall be excluded from the computation of final average salary for 21 members who first become members of the New York state and local police 22 and fire retirement system on or after April first, two thousand twelve. 23 b. For the purposes of this section "shared services agreement" shall 24 mean an agreement entered into between two or more municipalities, 25 libraries, or public or quasi-public organizations participating in the 26 retirement system, whereby such participating entities agree to share 27 services described in such agreement. 28 § 4. All costs associated with implementing the provisions of this act 29 shall be borne by the entities involved in such shared services agree- 30 ments and shall not be subject to the provisions of section twenty-five 31 of the retirement and social security law. 32 § 5. This act shall take effect immediately. FISCAL NOTE.--Pursuant to Legislative Law, Section 50: This bill would allow earnings while working under a shared services agreement in excess of the ten percent limitation to be included in the computation of final average salary for tiers 3 through 6. Currently, earnings in any year used in computation of the final average salary cannot exceed the average of the previous two years (four years for tier 6) by more than ten percent. A shared services agreement is an agreement between two municipalities, libraries or public or quasi-public organ- izations participating in the retirement system which agree to share services. The exact number of current members as well as future members who could be affected by this legislation cannot be readily determined. In all likelihood, very few members would be affected. However, if a large number of members earn salary under these shared services agreements there could be significant additional annual costs. If this bill is enacted, insofar as this proposal affects the New York State and Local Employees' Retirement System (NYSLERS), any costs aris- ing from this legislation would be shared by the State of New York and the participating employers in the NYSLERS. Insofar as this proposal affects the New York State and Local Police and Fire Retirement System (NYSLPFRS), any costs arising from this legislation would be shared by the State of New York and the participat- ing employers in the NYSLPFRS. Summary of relevant resources:S. 8461 5 Membership data as of March 31, 2021 was used in measuring the impact of the proposed change, the same data used in the April 1, 2021 actuari- al valuation. Distributions and other statistics can be found in the 2021 Report of the Actuary and the 2021 Comprehensive Annual Financial Report. The actuarial assumptions and methods used are described in the 2020 and 2021 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, 2021 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 18, 2022, and intended for use only during the 2022 Legislative Session, is Fiscal Note No. 2022-66, prepared by the Actuary for the New York State and Local Retirement System.