STATE OF NEW YORK
________________________________________________________________________
4245
2023-2024 Regular Sessions
IN SENATE
February 6, 2023
___________
Introduced by Sen. PALUMBO -- read twice and ordered printed, and when
printed to be committed to the Committee on Civil Service and Pensions
AN ACT to amend the retirement and social security law, in relation to
participation by free association libraries in the New York state and
local employees' retirement system
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 section 31-g to read as follows:
3 § 31-g. Participation by free association libraries. A free associ-
4 ation library as defined in section two hundred fifty-three of the
5 education law and which meets the criteria set forth in this section,
6 may by resolution adopted as provided in section seven hundred eight of
7 the not-for-profit corporation law by its board of trustees and subject
8 to the approval of the comptroller, elect to participate in the retire-
9 ment system. Acceptance of its employees for membership in the retire-
10 ment system shall be mandatory with the comptroller, who shall determine
11 the amounts of contribution payable by such library and its employees,
12 shall resolve questions of credit for prior service, and shall in all
13 other respects assure that such employees share the same rights, obli-
14 gations and benefits as other members of the retirement system. A free
15 association library shall be eligible to join the retirement system
16 under the following conditions:
17 (a) such library shall be chartered by the state board of regents;
18 (b) such library shall serve the entire population of its chartered
19 service area;
20 (c) the board of trustees of such library shall be elected by the
21 voters of its chartered service area;
22 (d) such library's budget shall be approved by the voters of its char-
23 tered service area;
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD03853-02-3
S. 4245 2
1 (e) at least fifty-one percent of such library's budget shall derive
2 from public sources; and
3 (f) such library shall file the annual report with the comptroller as
4 required of public libraries by section thirty of the general municipal
5 law.
6 § 2. This act shall take effect immediately.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
This bill would permit any free association public library which meets
certain specific criteria to elect participation in the New York State
and Local Employees' Retirement System (NYSLERS).
If this bill is enacted during the 2023 legislative session, and an
eligible corporation elects participation, the future annual cost would
depend on the retirement plan adopted and the billable salary of the
electing corporation.
As a percentage of payroll, we anticipate that the annual contrib-
utions of the affected corporation for the fiscal year ending March 31,
2024, will be as follows:
Tier Rate
1 9.8% to 19.7%
2 9.1% to 18.0%
3 14.8%
4 14.8%
5 12.8%
6 9.4%
In addition to the annual contributions discussed above, there will be
a deficiency cost to the affected corporation which will be payable for
a 25-year period. This cost will depend on the age, service, salary,
tier status and plan of the affected employees.
Internal Revenue Service (IRS) plan qualification issues: permitting
participation of non-governmental employees in the NYSLERS could jeop-
ardize the Retirement System's governmental plan status and its
exemption from ERISA. This development could result in the loss of qual-
ified 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 $28,000 for the services of
the IRS, and $800 per hour for legal consultants
Summary of relevant resources:
Membership data as of March 31, 2022 was used in measuring the impact
of the proposed change, the same data used in the April 1, 2022 actuari-
al valuation. Distributions and other statistics can be found in the
2022 Report of the Actuary and the 2022 Annual Comprehensive Financial
Report.
The actuarial assumptions and methods used are described in the 2020,
2021, and 2022 Annual Report to the Comptroller on Actuarial Assump-
tions, 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, 2022
New York State and Local Retirement System Financial Statements and
Supplementary Information.
S. 4245 3
I am a member of the American Academy of Actuaries and meet the Quali-
fication Standards to render the actuarial opinion contained herein.
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 February 2, 2023, and intended for use only
during the 2023 Legislative Session, is Fiscal Note No. 2023-40,
prepared by the Actuary for the New York State and Local Retirement
System.
