New York Senate Bill S06639

New York 2025-2026 Regular Session

• Introduced: 3/19/25
• Refer: 3/19/25
• Report Pass: 4/8/25
• Refer: 1/7/26

Caption

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

Summary

This bill amends the Retirement and Social Security Law to increase the cap on overtime compensation that may be included in a member’s final average salary calculation from 15 percent to 30 percent of annual wages not classified as overtime. The change applies to overtime used in pension benefit calculations, and the bill defines overtime compensation broadly to include pay for hours worked beyond regular requirements under applicable laws or policies, including Civil Service Law and General Municipal Law overtime provisions. The practical effect is to allow a larger share of overtime earnings to count toward pensionable salary for affected members, particularly Tier 5 and Tier 6 members in the New York State and Local Police and Fire Retirement System. The fiscal note estimates that the change would increase the present value of benefits by about $331 million and raise annual employer contributions by roughly 0.7 percent of billable salary, with estimated annual costs of about $6 million to the state and $27 million to local participating employers. The bill takes effect immediately.

Impact

The bill would amend section 1203 of the Retirement and Social Security Law and directly change how final average salary is calculated for pension purposes by expanding the overtime exclusion threshold from 15 percent to 30 percent. This would affect retirement benefit calculations for members of the New York State and Local Police and Fire Retirement System, increasing pensionable earnings for some employees and increasing employer contribution obligations for the state and participating local governments.

Sentiment

The available voting history suggests strong support for the bill in committee, with the Senate Civil Service and Pensions Committee approving it 7-0. No committee transcript is available, but the unanimous vote indicates broad agreement on advancing the measure. The bill’s sponsor list also suggests cross-party interest in the issue.

Contention

The main point of contention is fiscal impact versus retirement benefit enhancement. Supporters appear to favor improving pension calculations for police and fire members by recognizing more overtime earnings, while the fiscal note highlights significant added costs to the pension system and to public employers. The cost increase to the state and local governments, along with the larger long-term liability for the retirement system, is the principal concern likely to be raised by opponents or budget-focused stakeholders.