A 7925: Relates to providing state correction officers with a special optional twenty year retirement plan.

  
  STATE OF NEW YORK ________________________________________________________________________ 7925 2025-2026 Regular Sessions  IN ASSEMBLY April 15, 2025 ___________ Introduced by M. of A. BAILEY -- read once and referred to the Committee on Governmental Employees AN ACT to amend the retirement and social security law, in relation to providing state correction officers with a special optional twenty year retirement plan The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. The retirement and social security law is amended by adding 2 a new article 14-C to read as follows: 3 ARTICLE 14-C 4 OPTIONAL RETIREMENT PLAN FOR STATE CORRECTION OFFICERS 5 Section 561. Definitions. 6 562. Optional twenty year retirement plan for certain state 7 correction officers. 8 563. Additional pension benefit for members of optional twenty 9 year retirement plan. 10 564. Consistent provisions. 11 § 561. Definitions. For purposes of this article: 12 (a) "Member" shall mean a person who is employed as a state correction 13 officer or other state employee who is engaged directly in correction 14 officer duties. 15 (b) "Retirement system" shall mean the New York state and local 16 employees' retirement system. 17 (c) "Creditable service" shall include any and all services performed 18 as a state correction officer. Credit for service as a member or officer 19 of the state police or as a paid firefighter, police officer or officer 20 of any organized fire department or police force or department of any 21 county, city, village, town, fire district or police district, shall 22 also be deemed to be creditable service and shall be included in comput- 23 ing years of total service for retirement pursuant to this section, 24 provided such service was performed by the member while contributing to EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD01334-03-5 
 A. 7925 2 1 the retirement system pursuant to the provisions of this article or 2 article eight of this chapter. 3 § 562. Optional twenty year retirement plan for certain state 4 correction officers. (a) Any member of the retirement system may elect 5 to become a member pursuant to the provisions of this section within one 6 year after the effective date of this article or within one year after 7 such person becomes a member. 8 (b) Elections made pursuant to this section shall be in writing and 9 shall be duly acknowledged and filed with the comptroller. Any member 10 who files such an election pursuant to this section may withdraw it 11 after it has been filed for at least a year. Such withdrawal shall be by 12 written notice duly acknowledged and filed with the comptroller. 13 (c) A member participating on the basis of this section at the time of 14 retirement shall be entitled to retire after the completion of twenty 15 years of total creditable service or upon the attainment of age sixty- 16 two, by filing an application therefor in a manner similar to that 17 provided in this chapter. 18 (i) Upon completion of twenty years of such service and upon retire- 19 ment, each such member shall receive a pension sufficient to provide a 20 retirement allowance equal to one-fortieth of the final average salary 21 for each year of total creditable service for which such member is 22 otherwise entitled but not exceeding in the aggregate one-half of their 23 final average salary. 24 (ii) Upon attainment of age sixty-two and upon retirement without 25 completion of twenty years of such service, each such member shall 26 receive a pension sufficient to provide a retirement allowance equal to 27 one-fortieth of the final average salary for each year of creditable 28 service. Every such member shall also be entitled to an additional 29 pension equal to the pension for any other creditable service rendered 30 as otherwise provided for in this chapter. This latter pension shall 31 not increase the total allowance to more than one-half of their final 32 average salary. 33 (d) The increased pensions to such members, as provided by this 34 section, shall be paid from additional contributions made by the state 35 on account of such members. The actuary of the retirement system shall 36 compute the additional contribution required for each member who elects 37 to receive the special benefits provided under this section. Such addi- 38 tional contributions shall be computed on the basis of contributions 39 during the prospective service of such member which will cover the 40 liability of the retirement system for such extra pensions. Upon 41 approval of the comptroller, such additional contributions shall be 42 certified by them. The amount thereof shall be included in the annual 43 appropriation of the state. Such amount shall be paid on the warrant of 44 the comptroller to the pension accumulation fund of the retirement 45 system. 46 (e) In computing the twenty years of completed service of a member, 47 full credit shall be given for military service as defined in subdivi- 48 sions twenty-nine-a and thirty of section three hundred two of this 49 chapter. 50 (f) Every member participating on the basis of this section shall be 51 separated from the service on the last day of the calendar month next 52 succeeding the calendar month in which such member attains age sixty- 53 two, provided, however, that such a member who attained the age of 54 sixty-two before the effective date of this article, to be eligible for 55 a pension computed in accordance with the provisions of this section, 
 A. 7925 3 1 shall be separated from the service within three months of such effec- 2 tive date. 3 (g) The provisions of this section shall be controlling notwithstand- 4 ing any other provision of this article to the contrary. 5 (h) The benefits provided by this section shall be payable to a 6 member, unless at the date of retirement such member would otherwise be 7 entitled to a greater benefit under other provisions of this chapter had 8 such member withdrawn from this section, in which event such greater 9 benefits shall be payable. 10 § 563. Additional pension benefit for members of optional twenty year 11 retirement plan. (a) A participating employer may elect to make contrib- 12 utions for the purpose of providing an additional pension pursuant to 13 this section for members who are entitled to a pension pursuant to 14 section five hundred sixty-two of this article. Every member employed 15 by the state may elect to be covered by the provisions of this section 16 by filing with the comptroller, a duly executed and acknowledged form 17 prepared by the comptroller for that purpose. 18 (b) Upon retirement, each such member shall receive, for each year of 19 service in excess of twenty, an additional pension which shall be equal 20 to one-sixtieth of the final average salary; provided, however, that the 21 total allowance payable pursuant to this section shall not exceed three- 22 quarters of such member's final average salary. 23 § 564. Consistent provisions. Nothing contained in this article shall 24 be construed to otherwise affect the applicability of article eleven, 25 fourteen or fifteen of this chapter. Any other provisions of this chap- 26 ter relating to mandatory contribution to the retirement system based 27 upon a member's date of membership in such system shall not be deemed to 28 be affected by the provisions of this article, and any member who on the 29 effective date of this article is not required to contribute shall not 30 be required to make any contributions as a result of this section. For 31 those members required to contribute to the retirement system, such 32 contribution shall be treated in the same manner as specified for such 33 members in article fourteen or fifteen of this chapter. 34 § 2. This act shall take effect immediately. FISCAL NOTE.--Pursuant to Legislative Law, Section 50: This bill would add Article 14-C to the Retirement and Social Security Law, creating optional twenty-year plans covering, upon their election, any New York State correction officers or other State employees engaged directly in correction officer duties. The retirement benefit will be equal to fifty percent of final average salary (FAS) after twenty years of service. The State may further elect to provide for additional sixti- eths for service in excess of twenty years. Any member who elects to become covered under this new Article 14-C is expected to lose their Section 507-b performance of duty (POD) disability benefit. All service rendered as a State correction officer, a member or offi- cer of the State Police, a paid firefighter, a police officer, or an officer of any organized fire department or police force will be credit- able. The retirement benefit is not to exceed seventy-five percent of FAS. If this bill is enacted during the 2025 Legislative Session, we antic- ipate that there will be an increase in the annual contributions of the State of New York of approximately $61 million for the twenty-year plan and an additional $18 million (for $79 million total) to provide addi- tional 60ths for the fiscal year ending March 31, 2026. In future years these costs will vary but are expected to average 3.2% and 4.1% of sala- ry annually, respectively. 
 A. 7925 4 In addition to the annual contributions discussed above, there will be an immediate past service cost of approximately $756 million for the twenty-year plan and an additional $534 million (for $1.29 billion total) to provide additional sixtieths. The cost will be borne by the State of New York as a one-time payment. This estimate assumes that payment will be made on March 1, 2026. These estimated costs are based on 15,926 affected members employed by the State of New York, with annual salary of approximately $1.5 billion as of March 31, 2024. Internal Revenue Service (IRS) plan qualification issues: granting State employees engaged directly in correction officer duties, other than State correction officers, service credit towards retirement in a twenty-year plan could jeopardize the governmental plan status of the Retirement System (the System) and its exemption from the Employees Retirement Income Security Act (ERISA). This development could result in the loss of qualified status, which would mean the loss of tax benefits. This result would substantially impair the System's value to our more than one million participants. Prior to the enactment of this legislation, we recommend that a favor- able ruling be obtained from the IRS stating that these provisions would not harm the qualification status of the System. It is estimated that the costs to obtain such a ruling would be $50,000 for the services of the IRS, and $1,000 per hour for legal consultants. Summary of relevant resources: Membership data as of March 31, 2024 was used in measuring the impact of the proposed change, the same data used in the April 1, 2024 actuari- al valuation. Distributions and other statistics can be found in the 2024 Report of the Actuary and the 2024 Annual Comprehensive Financial Report. The actuarial assumptions and methods used are described in the 2024 Annual Report to the Comptroller on Actuarial Assumptions, and the Codes, Rules and Regulations of the State of New York: Audit and Control. The Market Assets and GASB Disclosures are found in the March 31, 2024 New York State and Local Retirement System Financial Statements and Supplementary Information. This fiscal note does not constitute a legal opinion on the viability of the proposed change nor is it intended to serve as a substitute for the professional judgment of an attorney. This estimate, dated March 26, 2025, and intended for use only during the 2025 Legislative Session, is Fiscal Note No. 2025-21. As Chief Actu- ary of the New York State and Local Retirement System, I, Aaron Schottin Young, hereby certify that this analysis complies with applicable Actu- arial Standards of Practice as well as the Code of Professional Conduct and Qualification Standards for Actuaries Issuing Statements of Actuari- al Opinion of the American Academy of Actuaries, of which I am a member.