Relates to providing cost-of-living adjustments

BILL NUMBER:S6787

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. The bill provides a desirable amend- ment 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 seeks to further close that gap.

Summary of provisions

Effective September 1, 2014, the following changes to Sections 78-a and 378-a of the Retirement and Social Security Law, Section 532-a of the Education Law, and Section 13-396 of the Administrative Code of the City of New York as added by Chapter 125 of the laws of 2000 are proposed:

Subdivision d of said sections of law is amended by this bill, to increase the maximum percentage of the CPI for COLA benefits from not more than 3% and not less than 1% of CPI to not more than 5% and not less than 1% of CPI. It has been four years since the COLA bill was enacted. The general cost-of-living for retirees has been steadily increasing. In particular, medical costs including co-payments, premi- ums, and medication, have risen at a rate far in excess of the CPI. Federal amendments to the Medicare law, especially the prescription drug coverage, has caused significant increases in retired public employee health care costs.

Justification

Significant strides were made by the enactment of Chap- ter 125 of the Laws of 2000. While the CPI has remained very modest since the enactment of COLA, as noted above other costs have had a significant impact on retiree security. For example, medical costs including co-payments, premiums, and medication, have been rising at a rate far in excess of the CPI. Recent federal amendments to the Medicare law, especially the prescription drug coverage, are likely to cause a significant increase in retired public employee health care costs.

This modest increase in the maximum percentage of the CPI for COLA bene- fits will provide needed but modest protection for retirees in the event the CPI exceeds 3%.

This bill will help assure public retirees achieve a dignified and secure retirement, allowing them to continue to contribute more effec- tively to the long-term health of our economy.

Legislative history

2007-08: A8558 - referred to Governmental employ- ees 2005-06: A7237 - referred to Governmental employees 2004: A10828 - Governmental employees 2003: A4146 - Governmental employees 2000: S8180 - enacted - Chapter 125 Laws of 2000.

Fiscal implications

See fiscal notes submitted with and made a part of this bill.

Effective date

This act shall take effect immediately.