Retirement Incentive Update
There are identical sections of the Assembly and Senate Budget Bills that, if passed as written, would provide for two different temporary retirement incentives for certain New York State public employees.
The two incentives are:
This retirement incentive would provide certain eligible employees of employers who elect to participate a retirement incentive of one-twelfth of a year of additional service credit per year of accrued service credit. This additional service credit would be for a maximum of three years. To be eligible, a member must be eligible to retire, or have attained age 50 or greater, with at least ten years of service. Reductions in retirement benefits would apply to those retiring prior to age 55. This incentive would only apply to positions that are being eliminated or for which the district can show a 50% salary savings over two years. Additionally, those enrolling in this incentive would have to forgo any contractual retirement incentives, unless the district chooses otherwise.
This is a traditional 55/25 incentive. It would permit eligible Tier 2, 3 and 4 employees to elect to retire without early retirement reductions upon attainment of at least age 55 with 25 years of service. This incentive has no requirements for position elimination, salary savings, or forfeiting of contractual benefits.
Employees could not receive a benefit under both Subpart A and Subpart B.
Employers may elect to participate and offer either or both provisions to employees. Without district participation, these would not be available to otherwise eligible employees. Districts participating in Subpart A or Subpart B (or both) would pay the cost of the retirement incentive over a period not to exceed five years, beginning in the state fiscal year ending March 31, 2023.
The SAANYS staff has initially concluded that:
- It is not likely that many districts will elect to participate in Subpart A. Even if employers participate, some SAANYS members would be giving up significant contractual benefits to enroll. Therefore, we believe few of our members will benefit from this provision.
- It is more likely that employers would elect to participate in Subpart B. Where this is the case, this provision is more likely to benefit some SAANYS members.
We will continue to analyze and track progress of this or any other retirement incentive bill language and keep our members informed.