Relates to limiting participation by public or quasi-public organizations in the retirement system

3 Co-sponsors

• Kemp Hannon
• Tom Libous
• James L. Seward

BILL NUMBER:S5935A

Title of bill

An act to amend the retirement and social security law, in relation to participation by public or quasi-public organizations in the retirement system

Purpose

To limit participation by officers and employees of certain private organizations in the New York State public retirement system.

Summary of provisions

Section 1 of the bill amends section 31 of the retirement and social security law in relation to participation of certain private organizations in the New York State pension system.

Section 2 of the bill is the effective date.

Justification

The NYS retirement system is one of the largest in the nation - with over a million participants and having a value of almost $160 billion. The system is a benefit to hardworking public employees and it is a benefit to state and local government in terms of attracting and retaining qualified employees As much as the retirement system is a benefit, it is also a financial burden especially to local governments. According to the NYS Office of the State Comptroller, for the 2011-2012 fiscal year, contributions to the retirement. system from government employers totaled over $4.5 billion.

In recent years, the NYS Legislature has acted responsibly in passing measures to help control the cost of the state pension system, particularly for local governments. And, although reform measures such as new pension tiers have been established, there are still other problems with the pension system that must be fixed. A prime example of this is the state's law permitting employees of certain private organizations to participate in the state's public retirement system.

Under current law, officers and employees of private organizations such as the NYS Association of Counties, the NYS School Boards Association, the Association of Towns of the State of New York, and the NYS Conference of Mayors are all eligible to participate in New York's retirement system. Decades ago, these organizations applied for (and were granted) this special privilege. Consequently, the state's public retirement system includes certain private-sector employees that enjoy a special benefit that other similarly situated private sector employees do not have. A particularly troubling aspect of this arrangement is that, in some cases, the officers and employees of these private organizations are actually registered lobbyists. Ultimately, the state pensions for these individuals increases costs for state and local government - costs that are ultimately borne by New York residents. It is outrageous and unfair to require New York residents to pay the costs of a public pension for private sector lobbying organizations.

Another particularly irksome aspect of this situation is that these groups regularly lobby New York state government officials to reduce the high costs of pensions for local governments - the very costs that their officers and employees are contributing to through the special privilege they are taking advantage of. In fact, the NYS Association

of Counties, The NYS Conference of Mayors and the NYS Schools Boards Association have all had pension reform on their lobbying agenda.

To be sure, the NYS retirement system is large and costs a lot of money. There are many, many hard-working public employees that deserve a public pension - and a pension system should be maintained for these individuals. However, the fact that the current system provides a public pension to private-sector lobbying organizations demands a fix. This bill does just that.

Bill history

New Bill

Fiscal implications

This bill will reduce the number of individuals eligible for the NYS retirement system and will therefore reduce pension costs for NYS and for local governments.

Effective date

Immediately.