S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   7670
 
                        2025-2026 Regular Sessions
 
                             I N  S E N A T E
 
                              April 28, 2025
                                ___________
 
 Introduced  by  Sens.  JACKSON, RAMOS -- 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
   setting the increase to the overtime ceiling as a fixed percentage

   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Paragraph (c) of subdivision  24  of  section  501  of  the
 retirement  and  social  security  law, as amended by chapter 368 of the
 laws of 2017, is amended to read as follows:
   (c) [(i)] The "overtime ceiling" shall mean fifteen  thousand  dollars
 per  annum on January first, two thousand ten, and shall be increased by
 three percent each year thereafter, provided, however, that [for]:
   (I) FOR members who first become members of the  New  York  state  and
 local employees' retirement system on or after April first, two thousand
 twelve, "overtime ceiling" shall mean fifteen thousand dollars per annum
 on  April  first,  two thousand twelve, and shall be increased each year
 thereafter by a percentage to be determined annually by reference to the
 consumer price index (all urban consumers, CPI-U, U.S. city average, all
 items, 1982-84=100), published by the  United  States  bureau  of  labor
 statistics,  for  each  applicable  calendar year. Said percentage shall
 equal the annual inflation  as  determined  from  the  increase  in  the
 consumer price index in the one year period ending on the December thir-
 ty-first  preceding  the  overtime  ceiling  adjustment effective on the
 ensuing April first.
   (ii) Commencing January first, two thousand eighteen,  and  each  year
 thereafter,  the  overtime  ceiling  percentage shall be increased by an
 amount equal to the annual inflation as determined from the increase  in
 the  consumer price index in the one year period ending on the September
 thirtieth prior to the overtime  ceiling  adjustment  effective  on  the
 ensuing January first.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD11208-02-5
              

 S. 7670                             2
 
   (III) COMMENCING JANUARY FIRST, TWO THOUSAND TWENTY-SIX, AND EACH YEAR
 THEREAFTER,  FOR  MEMBERS WHO FIRST BECOME MEMBERS OF THE NEW YORK STATE
 AND LOCAL EMPLOYEES' RETIREMENT SYSTEM ON  OR  AFTER  APRIL  FIRST,  TWO
 THOUSAND TWELVE, THE OVERTIME CEILING PERCENTAGE INCREASE SHALL BE EQUAL
 TO  THE  GREATER  OF:  (A) THREE PERCENT, OR (B) THE ANNUAL INFLATION AS
 DETERMINED FROM THE INCREASE IN THE CONSUMER PRICE INDEX IN THE ONE YEAR
 PERIOD ENDING ON THE SEPTEMBER THIRTIETH PRIOR TO THE  OVERTIME  CEILING
 ADJUSTMENT EFFECTIVE ON THE ENSUING JANUARY FIRST.
   §  2.  Paragraph (c) of subdivision l of section 601 of the retirement
 and social security law, as amended by chapter 368 of the laws of  2017,
 is amended to read as follows:
   (c)  The  "overtime  ceiling"  shall mean fifteen thousand dollars per
 annum on January first, two thousand ten,  and  shall  be  increased  by
 three [per cent] PERCENT each year thereafter, provided, however, that:
   (i)  [for] FOR members who first become members of a public retirement
 system of the state on or after April first, two thousand twelve, "over-
 time ceiling" shall mean fifteen thousand dollars  per  annum  on  April
 first,  two thousand twelve, and shall be increased each year thereafter
 by a percentage to be determined annually by reference to  the  consumer
 price  index  (all urban consumers, CPI-U, U.S. city average, all items,
 1982-84=100), published by the United States bureau of labor statistics,
 for each applicable calendar year. Said percentage shall equal the annu-
 al inflation as determined from the increase in the consumer price index
 in the one year period ending on the December thirty-first preceding the
 overtime ceiling adjustment effective on the ensuing April first.
   (ii) Commencing January first, two thousand eighteen,  and  each  year
 thereafter,  the  overtime  ceiling  percentage shall be increased by an
 amount equal to the annual inflation as determined from the increase  in
 the  consumer price index in the one year period ending on the September
 thirtieth prior to the overtime  ceiling  adjustment  effective  on  the
 ensuing January first.
   (III) COMMENCING JANUARY FIRST, TWO THOUSAND TWENTY-SIX, AND EACH YEAR
 THEREAFTER,  FOR  MEMBERS WHO FIRST BECOME MEMBERS OF THE NEW YORK STATE
 AND LOCAL EMPLOYEES' RETIREMENT SYSTEM ON  OR  AFTER  APRIL  FIRST,  TWO
 THOUSAND TWELVE, THE OVERTIME CEILING PERCENTAGE INCREASE SHALL BE EQUAL
 TO  THE  GREATER  OF:  (A) THREE PERCENT, OR (B) THE ANNUAL INFLATION AS
 DETERMINED FROM THE INCREASE IN THE CONSUMER PRICE INDEX IN THE ONE YEAR
 PERIOD ENDING ON THE SEPTEMBER THIRTIETH PRIOR TO THE  OVERTIME  CEILING
 ADJUSTMENT EFFECTIVE ON THE ENSUING JANUARY FIRST.
   § 3. Notwithstanding any provision of law to the contrary, none of the
 provisions of this act shall be subject to the appropriation requirement
 of section twenty-five of the retirement and social security law.
   § 4. This act shall take effect immediately.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   This  bill  would  change the overtime ceiling percentage increase for
 Tier 6 members in the New York State  and  Local  Employees'  Retirement
 System  (NYSLERS)  to the greater of three percent or the rate of annual
 inflation, beginning January 1, 2026. Under current law, the ceiling was
 set at $15,000 at the inception of Tier 6 and is increased  annually  by
 the rate of inflation.
   The provisions of Section 25 of the Retirement and Social Security Law
 shall not apply.
   Insofar  as  this  bill  affects NYSLERS, the increased costs would be
 shared by the State of New York and the local participating employers in
 NYSLERS. If this bill were enacted during the 2025 Legislative  Session,
 S. 7670                             3

 the  increase  in  the  present value of benefits would be approximately
 $290 million.
 
   NYSLERS                     Increase in present    Increase in required
                                value of benefits        contributions
   Actives Tiers 1-5 (Closed)        $   0 mn               $  53 mn
   Actives Tier 6 (Open)             $ 290 mn               $ 237 mn
     Total                           $ 290 mn               $ 290 mn
 
   In  the NYSLERS, 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  NYSLERS  is  0.1%  of  billable  salary,  or
 approximately $13 million to the State of New York and approximately $20
 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.
   These estimated costs are based on 295,617 affected  Tier  6  members,
 with annual salary of approximately $14 billion as of March 31, 2024.
   To develop the above costs, our models included a Monte Carlo analysis
 consisting  of  5,000  simulations,  each  consisting of thirty years of
 annual CPI-U projections. In all 5,000 simulations,  for  at  least  one
 year  in  the  thirty-year period, the 3% floor provided by the proposed
 legislation resulted in a higher overtime ceiling. The 3% floor exceeded
 annual inflation projections in approximately 60% of the  150,000  trial
 years.
   Summary of relevant resources:
   The  inflation  measurement  used  in  this  analysis was based on the
 February 2025 Consumer Price Index for All Urban  Consumers:  U.S.  City
 average, published by the U.S. Bureau of Labor Statistics.
   Membership  data as of March 31, 2024 was used in measuring the impact
 of the proposed change, the same data used in the April 1, 2024 actuari-
 al valuation. Distributions and other statistics can  be  found  in  the
 2024  Report  of the Actuary and the 2024 Annual Comprehensive Financial
 Report.  The actuarial assumptions and methods used are described in the
 2024 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, 2024 New York State and Local Retirement System Financial Statements
 and Supplementary Information.
   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 April 28, 2025, and intended for use only during
 the 2025 Legislative Session, is Fiscal  Note  No.  2025-142.  As  Chief
 Actuary  of  the  New  York  State and Local Retirement System, I, Aaron
 Schottin Young, hereby certify that this analysis complies with applica-
 ble Actuarial Standards of Practice as well as the Code of  Professional
 Conduct  and Qualification Standards for Actuaries Issuing Statements of
 Actuarial Opinion of the American Academy of Actuaries, of which I am  a
 member.