Part B reflects an agreement between the state and the 4 major state unions, the CSREA, the NYSUT, the Court Officer unions, and the state correction force unions. New members of NYSL-ERS and NYS-TRS systems are impacted by Chapter 504 (“Tier 5”).
The effective date for Part B is Jan. 1, 2010.
Sections.1-4 deal with new Tier 3 members in the NYSL-ERS system only.
Tier 3 applies to State and city uniform correction force employees, and for the time being new NYPD and FDNY employees. Part A, above, returned new police officers and firefighters outside NYC to Tier 2. They had been trapped in Tier 3 since July 1, 2009.
(Sections 1-4) These new state correction force members are still covered by Tier 3 but are subject to certain new benefits reductions. These reductions apply only to employees (state correction force) who join NYSL-ERS on or after 1/1/2010:
OT in annual wages is capped at $15,000 in 2010.
The cap increases by 3% each year.
Ten years are needed to retire for service. Previously, it was 5 years.
Early retirement reductions for members between ages 55 to 60 have increased to 5% per year up from 3.33% per year. -- The age 60 to 62 reduction stays at 6.66% per year. This comes into play for a state CO with less than 25 years of service. All correction force members can still retire at 25 years of service at any age without age reduction and Social Security reduction. City correction force members have special 20 year plans.
Ten years are needed for the deferred vested benefit. Previously, it was 5 years. This benefit is payable at the projected 25th year of service (generally).
Sections. 5 - 10 deal with new Tier 4 members (1/1/2010).
(Section. 5) All NYSLERS and NYSTRS members who join on or after 1/1/2010 will have a $15,000 cap on annual overtime wages being used in the statutory definition of wages for 2010. Any benefit keyed into wages will have all OT over $15,000 excluded from the wages for 2010. In each succeeding year the $15,000 limit will be increased by 3%that year. (i.e. 2011: $15,450, 2012: $15,913.50).
This is less harsh than the limit on the police & fire. But police & fire may be retiring with basic comp bases higher than $100,000. The 3% increase will come in handy later on. Police & Fire get no annual increase in the limit.
(Section. 6) All NYSLERS and NYSTRS members who join on or after 1/1/2010 must have ten years of credited service to retire. Previous to that date, it was 5 years.
(Section. 7) NYSL-ERS & NYS-TRS members who join on or after 1/1/2010 are no longer eligible to retire without penalty at age 55 and 30 years of service. New court officers, however, can still retire at age 55 with 30 years of service but they now must contribute 4% of pay for all service instead of 3%.
(Section. 8) For NYSL-ERS and NYS-TRS members, who join on or after 1/1/2010,
may retire with more than 10 years and age 55 with the following reductions:
for the 24 months preceding age 62,
1/15 (6.66%) per year (previous, .5% per month, 6%/yr.),
for the 60 months preceding age 60,
1/20 (5%) per year (previous, .25% per month, 3%/yr)).
(Section. 8-a) NYS-TRS members, who join on or after 1/1/2010, are age 57 and have 30 or more years of service, may retire without reduction. (Requires an increase to 3.5% in the contribution rate on all service. Previously the rate was 3% for 10 years of service).
(Section. 8-b) NYS-TRS members, who join on or after 1/1/2010, now need 25 years of service to be eligible for 2% service credit. The service credit under 25 years is 1.67%. Previously, the threshold was 20 years.
(Section. 8-c) When NYS-TRS members, who join on or after 1/1/2010, elect to buy back service they will have to purchase the service at a rate of 3.5% rather than 3%. The interest rate stays at 5 %.
(Section. 9) All NYSL-ERS and NYS-TRS members who join on or after 1/1/2010 will have to have ten years of credited service to be entitled for a deferred vested benefit. Previous to that date, it was 5 years. This benefit is payable at age 62 without reduction or between ages 55 to 62 with the new reduction percentages (6.66%:61-62 & 5%:55-60)
(Section. 9-a) Court Officers who join NYSL-ERS on or after 1/1/2010 must contribute 4% of annual earnings. Members who join the NYS-TRS on or after 1/1/2010 must contribute 3.5% of annual earnings. The previous contribution rate for both groups was 3%.
(Section. 10) All NYSL-ERS and NYS-TRS members who join on or after 1/1/2010 will have to contribute 3% (3.5% for Court Officers, 4% for NYSTRS), for all years of credited service to retirement. Previous to that date, the contributions stopped after 10 years of credited service.
There are no Sections. 11-13.
(Section. 14) This section makes permanent a prohibition applicable to school districts and other associated education employer. The prohibition prevents them from reducing the heath insurance benefits of retires or the contributions made for that coverage, unless there is a corresponding reduction for the corresponding active employees for such retirees. This is obviously a protection to retirees and not a cost cutting measure.
(Section .15) This section states that the legislature intends to enact a law to offer a 3 month period in 2010 for members covered by NYSUT in both state pension systems with 25+ years of service and age 55+ allowing them to retire early without penalty.
