Provides cost-of-living adjustments

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

This bill amends Chapter 125 of the Laws of 2000, a chapter which provides public employee retirees with permanent partial cost-of-living increases in New York State. This bill provides a desirable amendment to Chapter 125 needed to protect public retirees from continued erosion of their retirement income from inflation. While chapter 125 began the effort to address pension erosion this bill seek s to partially close that gap.

Summary of specific provisions

Effective September 1, 2007, the following changes to section 78-a and 378-a of the Retirement and Social Security Law, Section 532-a of the Education Law, and Section 13-196 of the Administrative Code of the City of New York as added by chapter 125 of the Laws of 2 000 are proposed: Subdivision d of said sections of law is amended by this bill to increase the percentage of annual COLA increases from 50% of the CPI to 100% of the CPI. The general cost-of-living of retirees has been steadily increasing. In particular, medical costs including co-payments, premiums, and medication, have been rising at a rate far in excess of the CPI. Recent federal amendments t o the Medicare Law, especially the prescription drug coverage, will cause a significant increase in retired public employee health care costs.

Justification

Significant strides were made by the enactment of the Chapter 125 of the Laws of 2000. However, with eligibility to receive more than 50 percent of the CPI limited to those who retired before 1968, with 100 percent of CPI only available to those who retired prior to 1961. Obviously we are talking about retirees of very advanced years and a very small number of the total number of retirees eligible to receive COLA under chapter 125. This bill adds only to those who retired prior to 1966, 38 years ago. Members of the Retired Public Employees Association, the Retired Teachers Association and the Alliance of Public Retiree Associations of New York believe this bill will help assure our oldest public retirees achieve a dignified and secure retirement, allowing them to continue to contribute more effectively to the long-term health of our economy.

Legislative history

2009: S.1809 - Referred to Civil Service/A.7121 - Referred to Governmental Employees. 2008: S.7861 - Referred to Civil Service/A.8376 - Referred to Governmental Employees. 2006: S.4457 - Referred to Civil Service & Pensions/A.7238 - Referred to Governmental Employees. 2005: S.4457 - Referred to Civil Service & Pensions/A.7238 - Referred to Governmental Employees. 2004: A.10827 - Referred to Governmental Employees.

Fiscal implications

Starting with a payment in September 2010 the cost-of-living adjustment will be increased from fifty percent of the annual inflation to one hundred percent of the annual inflation, not to exceed an annual increase of 3%. There would be an estimated first year cost of approximately $310 million to the State of New York, $415 million to participating employers in the New York State and Local Employees' Retirement System and $50 million to the participating

employers in the New York State and Local Police and Fire Retirement System.

Effective date

Immediately.