Bill Text: NY A07204 | 2021-2022 | General Assembly | Introduced
Bill Title: Provides that a beneficiary of a deceased participant in the NYC teachers' retirement system who dies on or after July 1, 2021 may not establish a tax deferred account.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2021-05-25 - substituted by s5728a [A07204 Detail]
Download: New_York-2021-A07204-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 7204 2021-2022 Regular Sessions IN ASSEMBLY April 29, 2021 ___________ Introduced by M. of A. ABBATE -- read once and referred to the Committee on Governmental Employees AN ACT to amend the administrative code of the city of New York, in relation to the tax-deferred annuity program of the New York city teachers' retirement system The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Paragraph 2 of subdivision g of section 13-582 of the 2 administrative code of the city of New York, as added by chapter 677 of 3 the laws of 2003, is amended to read as follows: 4 2. Notwithstanding any other provision of this chapter, any rules or 5 regulations adopted by the retirement board, or any other provisions of 6 law to the contrary, the beneficiary of a deceased participant in the 7 tax-deferred annuity program who had not, prior to his or her death, 8 selected an option governing the manner in which his or her tax-deferred 9 account would be payable to his or her beneficiary, may, subject to 10 paragraphs three, four, and five of this subdivision, elect, at such 11 time and in such manner as determined by the retirement board, to defer 12 the distribution to him or her from the participant's tax-deferred 13 account to the extent permitted by, and in a manner consistent with, the 14 provisions of section 403(b) of the Internal Revenue Code and the regu- 15 lations promulgated pursuant to such section. Provided, however, the 16 beneficiary of a deceased participant who dies on or after July first, 17 two thousand twenty-one shall not be allowed to establish a tax-deferred 18 account as provided in this subdivision. 19 § 2. This act shall take effect immediately. FISCAL NOTE.--Pursuant to Legislative Law, Section 50: SUMMARY OF BILL: This proposed legislation (see Appendix), would amend Section 13-582 of the Administrative Code of the City of New York (ACCNY), to end allowing for beneficiaries of deceased participants in the Tax-Deferred Annuity (TDA) Program of the New York City Teachers' EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD10516-03-1A. 7204 2 Retirement System (TRS), who die on or after July 1, 2021, to create their own TDA account. Authorization for TDA beneficiaries to create accounts was originally enacted pursuant to Chapter 677 of the Laws of 2003. Effective Date: Upon enactment. IMPACT ON BENEFITS: Currently, upon the death of a TRS member who participated in the TRS TDA Program and had a TDA account balance, a beneficiary is permitted, under certain circumstances, to defer the distribution of such TDA account balances. The proposed legislation would require beneficiaries to either roll over or take a full distribution of the TDA account balance, unless payment by way of an annuitization of the balance is permitted and elected. FINANCIAL IMPACT- SUMMARY: The enactment of this proposed legislation is expected to have minimal to no impact on employer contributions. TDA beneficiaries are only entitled to invest in the variable funds and administrative costs are paid for by participants. Therefore, the enact- ment of this proposed legislation would not be expected to have any material impact on the assets or liabilities of TRS. RISK AND UNCERTAINTY: The costs presented in this Fiscal Note depend highly on the realization of the actuarial assumptions used, as well as certain demographic characteristics of TRS, and other exogenous factors such as investment, contribution, and other risks. If actual experience deviates from actuarial assumptions, the actual costs could differ from those presented herein. Costs are also dependent on the actuarial meth- ods used, and therefore different actuarial methods could produce different results. Quantifying these risks is beyond the scope of this Fiscal Note. Not measured in this Fiscal Note are the following: * The potential increase in annuitization of TDA account balances. * The initial, additional administrative costs to implement the proposed legislation. STATEMENT OF ACTUARIAL OPINION: I, Sherry S. Chan, am the Chief Actu- ary for, and independent of, the New York City Retirement Systems and Pension Funds. I am a Fellow of the Society of Actuaries, an Enrolled Actuary under the Employee Retirement Income and Security Act of 1974, a Member of the American Academy of Actuaries, and a Fellow of the Confer- ence of Consulting Actuaries. I meet the Qualification Standards of the American Academy of Actuaries to render the actuarial opinion contained herein. To the best of my knowledge, the results contained herein have been prepared in accordance with generally accepted actuarial principles and procedures and with the Actuarial Standards of Practice issued by the Actuarial Standards Board. FISCAL NOTE IDENTIFICATION: This Fiscal Note 2021-17 dated April 2, 2021 was prepared by the Chief Actuary for the New York City Teachers' Retirement System. This estimate is intended for use only during the 2021 Legislative Session.
