Provides temporary retirement incentive for certain public employees

1 Co-sponsor

• Suzi Oppenheimer

Title of bill

An act to provide temporary retirement incentive for certain public employees

Purpose

This bill will establish a temporary 55/25 retirement option benefit for certain members of the New York State & Local Public Employees Retirement System (ERS) and the New York State Teachers' Retirement System (TRS) who are represented by the New York State United Teachers (NYSUT).

Summary of provisions

This legislation provides for a temporary early retirement option for specific NYSUT represented public employees who are members of the either the ERS or TRS. This temporary option will allow specific public employees to retire at age 55 with 25 years of service without diminution or penalty of their standard benefits. Presently, anyone who retires prior to 30 years of service is subject to a maximum 27 percent penalty.

In order for these specific employees to take advantage of this option, they must be at least 55 years of age and have at least 25 years of service time; retire within a specific open retirement enrollment period, commencing on June 3, 2010 and ending on August 31, 2010 for school districts employees and a 90-day period prior to December 31, 2010 for community college employees and state operated institutions of the state university of New York.

Justification

Language committing the State to enact a 55/25 early retirement option for NYSUT members was included as part of Chapter 504 of the laws of 2009. This bill codifies this commitment by the State.

This temporary retirement option will provide budgetary flexibility to school districts, SUNY and community colleges, averting layoffs while not placing undue hardship on either the state and local public retirement systems or the teachers' retirement system.

Legislative history

2010 Session - New Bill

Fiscal implications

New York State Teachers' Retirement System - The annual cost to the employers of members of the New York State Teachers' Retirement System for this benefit is estimated to be $13.2 million or .09% of payroll if this bill is enacted.

New York State and Local Employees Retirement System - If this bill is enacted, insofar as it affects the New York State and Local Employees Retirement System (ERS), the additional cost for each member who receives these benefits will vary depending on the member's age, years of service, plans and final average salary. We estimate that the per-member cost could average approximately 110% of a member's final average salary. We anticipate that the number of participants will be less than 1000. For every 100 participants, we estimate that there would be an increase in the annual contributions of approximately $260,000 to the State of New York and $360,000 to the participating employers in the ERS.

Effective date

Immediately.