Provides a cost-of-living adjustment for members of retirement systems

Section 2 amends § 378-a(c) of the Retirement and Social Security Law to provide that beginning September 1, 2016, the cost of living adjustment shall be computed on a base benefit amount not to exceed $25,000 of the annual retirement allowance.

Section 3 amends § 532-a(c) of the Education Law to provide that beginning September 1, 2016, the cost of living adjustment shall be computed on a base benefit amount not to exceed $25,000 of the annual retirement allowance.

Section 4 amends § 13-696(c) of the Administrative Code of the City of New York to provide that provide that beginning September 1, 2016, the cost of living adjustment shall be computed on a base benefit amount not to exceed $25,000 of the annual retirement allowance.

Section 5 provides the effective date.

Existing law

Section 78-a of the Retirement and Social Security Law relates to the cost-of-living adjustment for retirement plans applicable to members of the New York State Employees' Retirement System generally. Pursuant to this title, a cost-of-living adjustment is payable to all pensioners who have attained age 62 and have been retired for five years, all pensioners who have attained age 55 and have been retired for ten years, all disability pensioners regardless of age who have been retired for five years; and all recipients of an accidental death benefit regardless of age who have been receiving such benefit for five years.

Subdivision (c) provides the cost-of-living adjustment shall be computed on a base benefit amount to exceed $18,000 of the annual retirement allowance defined in subdivision (b) of this section.

Subdivision (b) provides the cost-of-living adjustment shall be a percentage of the annual retirement allowance otherwise payable, computed without optional modification, but including any benefit derived from subdivision (f) of this section and any prior year's cost-of-living adjustment derived from this section. Said percentage is set forth is subdivision (d) of this section.

Subdivision (f) provides that all retired members who have retired prior to 1997 and meet the eligibility criteria listed above, shall be paid an adjusted benefit in monthly installments. The adjusted benefit shall be equal to a percentage of the change in Consumer Price Index, published by the United States Bureau of Labor Statistics, measured from the year of retirement according to the following schedule:

Year of retirementÑPercentage 1968 through 1996Ñ50% 1966 and 1967Ñ55% 1965Ñ60% 1964Ñ65% 1936Ñ70% 1962Ñ80% 1961Ñ90% Prior to 1961Ñ100%

The adjusted benefit shall be computed on a base benefit amount not to exceed $18,000 of the retirement allowance otherwise payable, computed without modification. Any benefit received pursuant to this subdivision shall be in lieu of any benefit received pursuant to § 78 of the Retirement and Social Security Law.

Subdivision (d) provides that the percentage shall be determined annually by reference to the Consumer Price Index, published by the United States Bureau of Labor Statistics, for year applicable calendar year. The percentage shall equal 50% of the annual inflation, as determined from the increase in the Consumer Price Index in the one year period ending on the March 31 prior to the cost-of-living adjustment effecting on the ensuing September 1st. The percentage is rounded up to the next higher one-tenth of one percent and shall not exceed 3% not be less than 1%.

Section 378-a of the Retirement and Social Security Law relates to the cost of living adjustment for retirement plans applicable to members of the New York State Policemen's and Firemen's Retirement System generally. Pursuant to this section, a cost-of-living adjustment shall be payable to all pensioners who have attained age 62 and have been retired for five years, all pensioners who have attained age 55 and have been retired for ten years, and all disability pensioners regardless of age who have been retired for five years.

Subdivision (c) currently provides, the cost-of-living adjustment shall be computed on a base benefit amount to exceed $18,000 of the annual retirement allowance defined in subdivision (b) of this section.

Subdivision (b) provides the cost-of-living adjustment shall be a percentage of the annual retirement allowance otherwise payable, computed without optional modification, but including any benefit derived from subdivision (1) of this section and any prior year's cost-of-living adjustment derived from this section. Said percentage is set forth is subdivision (d) of this section.

Subdivision (f) provides that all retired members who have retired prior to 1997 and meet the eligibility criteria shall be paid an adjusted benefit in monthly installments. The adjusted benefit shall be equal to a percentage of the change in Consumer Price Index, published by the United States Bureau of Labor Statistics, measured from the year of retirement according to the following schedule:

Year of retirementÑPercentage 1968 through 1996Ñ50% 1966 and 1967Ñ55% 1965Ñ60% 1964Ñ65% 1936Ñ70% 1962Ñ80% 1961Ñ90% Prior to 1961Ñ100% The adjusted benefit shall be computed on a base benefit amount not to exceed $18,000 of the retirement allowance otherwise payable, computed without modification. Any benefit received pursuant to this subdivision shall be in lieu of any benefit received pursuant to § 378 of the Retirement and Social Security Law.

Subdivision (d) provides that the percentage shall be determined annually by reference to the Consumer Price Index, published by the United States Bureau of Labor Statistics, for year applicable calendar year. The percentage shall equal 50% of the annual inflation, as determined from the increase in the Consumer Price Index in the one year period ending on the March 31 prior to the cost-of-living adjustment effecting on the ensuing September 1st. The percentage is rounded up to the next higher one-tenth of one percent and shall not exceed 3% not be less than 1%.

Section 532-a of the Education Law pertains to the cost-of-living adjustment for retirement plans applicable to members of the State Teachers' Retirement System for Public School Teachers. Pursuant to this title, a cost-of-living adjustment is payable to all pensioners who have attained age 62 and have been retired for five years, all pensioners who have attained age 55 and have been retired for ten years, all disability pensioners regardless of age who have been retired for five years; and all recipients of an accidental death benefit regardless of age who have been receiving such benefit for five years.

Subdivision (c) provides the cost-of-living adjustment shall be computed on a base benefit amount to exceed $18,000 of the annual retirement allowance defined in subdivision (b) of this section.

Subdivision (b) provides the cost-of-living adjustment shall be a percentage of the annual retirement allowance otherwise payable, computed without optional modification, excluding any annuity derived from voluntary contributions made by members, except those made pursuant to elections under § 511-a(1) or § 516(3)(c) of this article, but including any benefit derived from subdivision (f) of this section. The percentage is set for in subdivision (d) of this section.

Subdivision (f) provides that all retired members who have retired prior to 1997 and meet the eligibility criteria shall be paid an adjusted benefit in monthly installments. The adjusted benefit shall be equal to a percentage of the change in Consumer Price Index, published by the United States Bureau of Labor Statistics, measured from the year of retirement according to the following schedule:

Year of retirementÑPercentage 1968 through 1996Ñ50% 1966 and 1967Ñ55% 1965Ñ60% 1964Ñ65% 1936Ñ70% 1962Ñ80% 1961Ñ90% Prior to 1961Ñ100%

The adjusted benefit is computed on a base benefit amount not to exceed $18,000 of the retirement allowance otherwise payable, computed without optional modification excluding any annuity derived from voluntary contributions made by members, except those made pursuant to elections under § 511-a(1) or § 516(3)(c) of this article. Any benefits received pursuant to § 532 of this Article, unless such benefits are in excess of those provided by this section, in which case such benefits shall be paid by the retirement system pursuant to such provision.

Subdivision (d) provides that the percentage shall be determined annually by reference to the Consumer Price Index, published by the United States Bureau of Labor Statistics, for year applicable calendar year. The percentage shall equal 50% of the annual inflation, as determined from the increase in the Consumer Price Index in the one year period ending on the March 31 prior to the cost-of-living adjustment effecting on the ensuing September 1st. The percentage is rounded up to the next higher one-tenth of one percent and shall not exceed 3% not be less than 1%.

Section 511-a of the Education Law refers to a special service retirement allowance.

Section 516 Education Law refers to the annuity savings fund, including contributions and payments. Subdivision (3)(c) provides that any member by written notice duly acknowledged and filed with the retirement board before July 1, 1967 or within two years after he last became a member, whichever is later, may elect to contribute to the annuity savings fund in order to qualify for an increased pension for total service in excess of 25 years.

Section 532 of the Education Law refers to the supplemental retirement allowance. A supplemental retirement allowance shall be paid to pensioners who have retired from the retirement system prior to the calendar year 1994.

Section 13-696 of the Administrative Code of the City of New York pertains to the cost-of-living adjustment for members of the New York City Employees' Retirement System, the New York City Police Pension fund, the New York City Fire Department Pension Fund, the New York City Board of Education retirement system, and the Relief and Pension Fund of the Department of Street Cleaning.

Subdivision (c) provides the cost-of-living adjustment shall be computed on a base benefit amount to exceed $18,000 of the annual retirement allowance defined in subdivision b of this section.

Subdivision (b) provides the cost-of-living adjustment shall be a percentage of the annual retirement allowance otherwise payable, computed without optional modification, but including any benefit derived from subdivision (f) of this section and any prior year's cost-of-living adjustment derived from this section. The percentage is set for in subdivision (d) of this section.

Subdivision (f) provides that all retired members who have retired prior to 1997 and meet the eligibility criteria shall be paid an adjusted benefit in monthly installments. The adjusted benefit shall be equal to a percentage of the change in Consumer Price Index, published by the United States Bureau of Labor Statistics, measured from the year of retirement according to the following schedule:

Year of retirementÑPercentage 1968 through 1996Ñ50% 1966 and 1967Ñ55% 1965Ñ60% 1964Ñ65% 1936Ñ70% 1962Ñ80% 1961Ñ90% Prior to 1961Ñ100%

The adjusted benefit is computed on a base benefit amount not to exceed $18,000 of the retirement allowance otherwise payable, computed without optional modification excluding any annuity derived from voluntary contributions made by members, except those made pursuant to elections under § 511-a(1) or § 516(3)(c) of this article. Any benefits received pursuant to § 532 of this Article, unless such benefits are in excess of those provided by this section, in which case such benefits shall be paid by the retirement system pursuant to such provision.

Subdivision (d) provides that the percentage shall be determined annually by reference to the Consumer Price Index, published by the United States Bureau of Labor Statistics, for year applicable calendar year. The percentage shall equal 50% of the annual inflation, as determined from the increase in the Consumer Price Index in the one year period ending on the March 31 prior to the cost-of-living adjustment effecting on the ensuing September 1st. The percentage is rounded up to the next higher one-tenth of one percent and shall not exceed 3% not be less than 1%.

Justification

This legislation provides a cost-of-living adjustment for members of the New York State Employees' Retirement System, New York State Policemen's and Firemen's Retirement System, New York State Policemen's and Firemen's Retirement System, the New York City Employees' Retirement System, the New York City Police Pension fund, the New York City Fire Department Pension Fund, the New York City Board of Education retirement system, and the Relief and Pension Fund of the Department of Street Cleaning, by increasing the base benefit amount to $25,000 from the current annual retirement allowance of $18,000.

As incomes of active employees continue to rise to meet cost-of-living concerns, the caps placed on COLA covered benefits further erodes retirement income of those affected retirees. In particular, as noted above, medical costs including co-payments, premiums, and medication, have been rising at a rate far in excess of the CPR. Recent federal amendments to the Medicaid law, especially the prescription drug coverage, are likely to cause a significant increase in retired public employee health care costs. By increasing the annual retirement allowance this bill will help ensure public retirees achieve a dignified and secure retirement and allowing them to continue to contribute more effectively to the long-term health of our economy.

Legislative history

2009: S.1816 - Referred to Civil Service & pensions 2008: S.7862 Referred to Civil Service & Pensions/A.8373 - Referred to Governmental Employees. 2007: S.7862 Referred to Civil Service & Pensions/A.8373 - Referred to Governmental Employees. 2006: S.4451 - Referred to Civil Service and Pensions/A.7236 - Referred to Governmental Employees. 2005: S.4451- Referred to Civil Service & Pensions A.7236 - Referred to Governmental Employees. 2004: A.10825 - Referred to Governmental Employees.

Fiscal implications

EFFECTIVE DATE : This act shall take effect immediately.