New York Assembly Bill A08574

New York 2025-2026 Regular Session

• Introduced: 5/21/25
• Refer: 5/21/25
• Refer: 1/7/26

Caption

Increases the limitation of overtime compensation in final average salary calculations from fifteen percent to thirty percent.

Impact

By enabling a higher percentage of overtime to be included in the final average salary, the bill is projected to substantially increase the present value of benefits by approximately $331 million. This would not only alter the benefits received by the eligible members, but it would also necessitate an increase in contributions required from all participating employers in NYSLPFRS. The rise in employer contributions is estimated at around $6 million for the state and approximately $27 million for local participating employers. Such financial implications underscore the bill's potential effects on state and local budgets.

Summary

Bill A08574 proposes an amendment to the retirement and social security law, specifically adjusting the limitation of overtime compensation that can be factored into the final average salary calculations for members of the New York State and Local Police and Fire Retirement System (NYSLPFRS). The bill seeks to increase this limit from the current fifteen percent to thirty percent of an employee's annual wages that are not classified as overtime. This amendment is particularly relevant for Tier 5 and 6 members of the NYSLPFRS, setting a significant precedence in how public safety employees' pensions might be calculated.

Contention

The discussions surrounding Bill A08574 indicate varying views on its implications. Proponents of the bill may argue that adjusting the overtime limit could help in attracting and retaining capable personnel within essential public safety services, ensuring that their retirement benefits more appropriately reflect their overall compensation. However, opponents may counter that this reform could impose a heavier financial burden on state and local budgets, potentially diverting funds from other critical services or necessitating tax increases. Consequently, the bill not only touches on retirement and compensation matters but also raises broader questions about fiscal sustainability and priority given to public safety sector employees.