This bill has been amended

Bill S5936-2013

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

Limits participation by employees of the New York state association of town superintendents of highways, inc., the New York state school boards association, the New York state association of counties, the association of towns of the state of New York, the New York conference of mayors and other municipal officials, or any school board association in the retirement system.

Details

Actions

  • Jan 8, 2014: REFERRED TO CIVIL SERVICE AND PENSIONS
  • Sep 18, 2013: REFERRED TO RULES

Memo

BILL NUMBER:S5936

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 new employees of certain private organizations in the New York State pension system.

Section 2 of the bill amends section 609 of the retirement and social security law in relation to additional service credit for current employees of certain private organizations in the New York State pension system.

Section 3 is a severability clause.

Section 4 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 reduce additional service credit for certain individuals already in the retirement system. Therefore, pension costs for NYS and for local governments will be reduced.

EFFECTIVE DATE:

Immediately.


Text

STATE OF NEW YORK ________________________________________________________________________ 5936 2013-2014 Regular Sessions IN SENATE September 18, 2013 ___________
Introduced by Sen. MAZIARZ -- read twice and ordered printed, and when printed to be committed to the Committee on Rules AN ACT to amend the retirement and social security law, in relation to participation by public or quasi-public organizations in the retire- ment system THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Subdivision a of section 31 of the retirement and social security law, as amended by chapter 379 of the laws of 1989, is amended to read as follows: a. Any public or quasi-public organization created wholly or partly or deriving its powers by the legislature of the state and which organiza- tion employs persons engaged in service to the public or any state agen- cy as defined in section fifty-three-a of the state finance law, or the New York state association of town superintendents of highways, inc. or any school board association, by resolution legally adopted by its governing body and approved by the comptroller, may elect to have its officers and employees become eligible to participate in the retirement system. Acceptance of the officers and employees of such an employer for membership in the retirement system shall be optional with the comp- troller. If he shall approve their participation, such organization, except as specifically provided in this article to the contrary, shall thereafter be treated as a participating employer. Any election made pursuant to this subdivision by a school board association shall be applicable to current employees of such association. NOTWITHSTANDING THE FOREGOING PROVISIONS, ANY OFFICER OR EMPLOYEE OF THE NEW YORK STATE ASSOCIATION OF TOWN SUPERINTENDENTS OF HIGHWAYS, INC., THE NEW YORK STATE SCHOOL BOARDS ASSOCIATION, THE NEW YORK STATE ASSOCIATION OF COUN- TIES, THE ASSOCIATION OF TOWNS OF THE STATE OF NEW YORK, THE NEW YORK CONFERENCE OF MAYORS AND OTHER MUNICIPAL OFFICIALS, OR ANY SCHOOL BOARD ASSOCIATION, FIRST EMPLOYED ON OR AFTER THE EFFECTIVE DATE OF THE CHAP-
TER OF THE LAWS OF TWO THOUSAND FOURTEEN WHICH AMENDED THIS SUBDIVISION, SHALL NOT BE ELIGIBLE TO PARTICIPATE IN THE RETIREMENT SYSTEM. S 2. Section 609 of the retirement and social security law is amended by adding a new subdivision i to read as follows: I. NOTWITHSTANDING ANY OTHER PROVISION OF THIS SECTION OR ANY OTHER LAW, RULE OR REGULATION, AN OFFICER OR EMPLOYEE OF THE NEW YORK STATE ASSOCIATION OF TOWN SUPERINTENDENTS OF HIGHWAYS, INC., THE NEW YORK STATE SCHOOL BOARDS ASSOCIATION, THE NEW YORK STATE ASSOCIATION OF COUN- TIES, THE ASSOCIATION OF TOWNS OF THE STATE OF NEW YORK, THE NEW YORK CONFERENCE OF MAYORS AND OTHER MUNICIPAL OFFICIALS, OR ANY SCHOOL BOARD ASSOCIATION, SHALL NOT RECEIVE SERVICE CREDIT FOR EMPLOYMENT WITH SUCH ORGANIZATION ON OR AFTER THE EFFECTIVE DATE OF THIS SUBDIVISION. S 3. Severability clause. If any clause, sentence, paragraph, subdivi- sion, section or part of this act shall be adjudged by any court of competent jurisdiction to be invalid, such judgment shall not affect, impair, or invalidate the remainder thereof, but shall be confined in its operation to the clause, sentence, paragraph, subdivision, section or part thereof directly involved in the controversy in which such judg- ment shall have been rendered. It is hereby declared to be the intent of the legislature that this act would have been enacted even if such invalid provisions had not been included herein. S 4. This act shall take effect immediately. FISCAL NOTE.--This bill would require that persons first employed by the following associations on or after the effective date will not be eligible for membership in the New York State and Local Employees' Retirement System: The New York state association of town superintendents of highways, inc, The New York state school board association, The New York state association of counties, The association of towns of the state of New York, The New York conference of mayors and other municipal officials, and Any school board association. This legislation also would freeze the benefit accruals of employees of one of the boards or associations who are members of the NYS&LERS as of the effective date. If this bill is enacted, it is likely to face a constitutional challenge based upon the guarantee that a member's bene- fits may not be diminished. If this bill is enacted, there will be no cost to the retirement system. Summary of relevant resources: The membership data used in measuring the impact of the proposed change was the same as that used in the March 31, 2013 actuarial valu- ation. Distributions and other statistics can be found in the 2013 Report of the Actuary and the 2013 Comprehensive Annual Financial Report when released in the fall of 2013. The actuarial assumptions and methods used are described in the 2010, 2011, 2012 and 2013 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, 2013 New York State and Local Retirement System Financial Statements and Supplementary Information. I am a member of the American Academy of Actuaries and meet the Quali- fication Standards to render the statement of actuarial opinion contained herein.

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