Bill Text: NY A07490 | 2011-2012 | General Assembly | Introduced
Bill Title: Establishes a defined contribution retirement plan.
Spectrum: Partisan Bill (Republican 9-0)
Status: (Introduced - Dead) 2012-05-01 - held for consideration in governmental employees [A07490 Detail]
Download: New_York-2011-A07490-Introduced.html
S T A T E O F N E W Y O R K
________________________________________________________________________
7490
2011-2012 Regular Sessions
I N A S S E M B L Y
May 6, 2011
___________
Introduced by M. of A. JORDAN, McLAUGHLIN, MONTESANO, CROUCH, CALHOUN,
HAWLEY, LOSQUADRO -- Multi-Sponsored by -- M. of A. SAYWARD -- read
once and referred to the Committee on Governmental Employees
AN ACT to amend the retirement and social security law, in relation to
establishing a defined contribution retirement plan
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 article 23 to read as follows:
3 ARTICLE 23
4 DEFINED CONTRIBUTION RETIREMENT PLAN
5 SECTION 1207. APPLICABILITY.
6 1208. DEFINITIONS.
7 1209. ESTABLISHMENT OF A DEFINED CONTRIBUTION PLAN.
8 1210. CONTRIBUTIONS TO THE DEFINED CONTRIBUTION PLAN.
9 1211. ESTABLISHMENT OF 403(B) PLAN FOR CERTAIN MEMBERS.
10 1212. OVERTIME FOR EXISTING MEMBERS.
11 1213. PAYMENTS UPON SEPARATION FROM EMPLOYMENT.
12 1214. TRANSFERABILITY UPON SEPARATION OF EMPLOYMENT.
13 1215. TRANSFERABILITY OF PRIOR TAX-DEFERRED ANNUITY INTO TRUST.
14 1216. INCOME TAX EXEMPTION FOR CERTAIN PAYMENTS.
15 1217. SEVERABILITY CLAUSE.
16 S 1207. APPLICABILITY. NOTWITHSTANDING ANY PROVISION OF LAW TO THE
17 CONTRARY, THE PROVISIONS OF THIS ARTICLE SHALL BE APPLICABLE TO ALL
18 EMPLOYEES IN THE NEW YORK STATE RETIREMENT SYSTEM OR NEW YORK CITY
19 RETIREMENT SYSTEM, AS DEFINED IN SECTION TWELVE HUNDRED EIGHT OF THIS
20 ARTICLE, WHO FIRST JOINED SUCH SYSTEM ON OR AFTER JANUARY FIRST, TWO
21 THOUSAND TWELVE. HOWEVER, THE PROVISIONS OF SECTION TWELVE HUNDRED
22 TWELVE OF THIS ARTICLE SHALL BE APPLICABLE TO CURRENT MEMBERS AND
23 EMPLOYEES WHO FIRST JOINED SUCH SYSTEM PRIOR TO JANUARY FIRST, TWO THOU-
24 SAND TWELVE. UNDER NO CIRCUMSTANCES SHALL AN EMPLOYEE WHO JOINS A NEW
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD09651-05-1
A. 7490 2
1 YORK STATE RETIREMENT SYSTEM OR A NEW YORK CITY RETIREMENT SYSTEM AFTER
2 JANUARY FIRST, TWO THOUSAND TWELVE, BE ELIGIBLE FOR PARTICIPATION IN A
3 DEFINED BENEFIT RETIREMENT PLAN, AS ESTABLISHED UNDER ARTICLE EIGHT,
4 ELEVEN, FOURTEEN, FIFTEEN OR TWENTY-TWO OF THIS CHAPTER, ARTICLE ELEVEN
5 OF THE EDUCATION LAW OR TITLE THIRTEEN OF THE ADMINISTRATIVE CODE OF THE
6 CITY OF NEW YORK.
7 S 1208. DEFINITIONS. FOR THE PURPOSES OF THIS ARTICLE THE TERMS: A.
8 "NEW YORK STATE RETIREMENT SYSTEM" SHALL MEAN THE NEW YORK STATE AND
9 LOCAL EMPLOYEES' RETIREMENT SYSTEM, NEW YORK STATE AND LOCAL POLICE AND
10 FIRE RETIREMENT SYSTEM, AND THE NEW YORK STATE TEACHERS' RETIREMENT
11 SYSTEM.
12 B. "NEW YORK CITY RETIREMENT SYSTEM" SHALL MEAN THE NEW YORK CITY
13 EMPLOYEES' RETIREMENT SYSTEM, NEW YORK CITY TEACHERS' RETIREMENT SYSTEM,
14 NEW YORK CITY BOARD OF EDUCATION RETIREMENT SYSTEM, NEW YORK CITY POLICE
15 DEPARTMENT PENSION FUND, AND THE NEW YORK CITY FIRE DEPARTMENT PENSION
16 FUND.
17 C. "TRUSTEE" SHALL BE: (1) THE NEW YORK STATE COMPTROLLER FOR THE NEW
18 YORK STATE AND LOCAL EMPLOYEES' RETIREMENT SYSTEM OR THE NEW YORK STATE
19 AND LOCAL POLICE AND FIRE RETIREMENT SYSTEM;
20 (2) THE BOARD OF TRUSTEES FOR THE NEW YORK STATE TEACHERS' RETIREMENT
21 SYSTEM;
22 (3) THE BOARD OF TRUSTEES FOR THE NEW YORK CITY TEACHERS' RETIREMENT
23 SYSTEM;
24 (4) THE BOARD OF TRUSTEES FOR THE NEW YORK CITY RETIREMENT SYSTEM.
25 D. "EMPLOYEES' RETIREMENT SYSTEM" SHALL MEAN THE NEW YORK STATE AND
26 LOCAL EMPLOYEES' RETIREMENT SYSTEM AND THE NEW YORK CITY EMPLOYEES'
27 RETIREMENT SYSTEM.
28 E. "TEACHERS' RETIREMENT SYSTEM" SHALL MEAN THE NEW YORK STATE TEACH-
29 ERS' RETIREMENT SYSTEM, THE NEW YORK CITY TEACHERS' RETIREMENT SYSTEM
30 AND THE NEW YORK CITY BOARD OF EDUCATION RETIREMENT SYSTEM.
31 F. "PARTICIPATING EMPLOYER" SHALL MEAN AN EMPLOYER PARTICIPATING IN A
32 NEW YORK STATE RETIREMENT SYSTEM OR A NEW YORK CITY RETIREMENT SYSTEM.
33 G. "FINANCIAL ORGANIZATION" SHALL MEAN AN ORGANIZATION AUTHORIZED TO
34 DO BUSINESS IN THE STATE OF NEW YORK AND:
35 (1) IS AN AUTHORIZED FIDUCIARY TO ACT AS A TRUSTEE PURSUANT TO THE
36 PROVISIONS OF AN ACT OF CONGRESS ENTITLED "EMPLOYEE RETIREMENT INCOME
37 SECURITY ACT OF 1974" AS SUCH PROVISIONS MAY BE AMENDED FROM TIME TO
38 TIME, OR AN INSURANCE COMPANY; AND
39 (2)(A) IS LICENSED OR CHARTERED BY THE STATE INSURANCE DEPARTMENT; (B)
40 IS LICENSED OR CHARTERED BY THE STATE BANKING DEPARTMENT; (C) IS CHAR-
41 TERED BY AN AGENCY OF THE FEDERAL GOVERNMENT; (D) IS SUBJECT TO THE
42 JURISDICTION AND REGULATION OF THE SECURITIES AND EXCHANGE COMMISSION OF
43 THE FEDERAL GOVERNMENT; OR (E) IS ANY OTHER ENTITY OTHERWISE AUTHORIZED
44 TO ACT IN THIS STATE AS A TRUSTEE PURSUANT TO THE PROVISIONS OF AN ACT
45 OF CONGRESS ENTITLED "EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974"
46 AS SUCH PROVISIONS MAY BE AMENDED FROM TIME TO TIME.
47 S 1209. ESTABLISHMENT OF A DEFINED CONTRIBUTION PLAN. A. FOR EACH
48 EMPLOYEE WHO JOINS A NEW YORK STATE RETIREMENT SYSTEM OR A NEW YORK CITY
49 RETIREMENT SYSTEM ON OR AFTER JANUARY FIRST, TWO THOUSAND TWELVE, THE
50 TRUSTEE OF SUCH SYSTEM SHALL ESTABLISH A TRUST PURSUANT TO SECTION
51 457(B) OF TITLE 26 OF THE UNITED STATES CODE, PROVIDED THAT SUCH EMPLOY-
52 EE ELECTS TO CONTRIBUTE TO SUCH TRUST. THE TRUSTEE SHALL PROMULGATE THE
53 RULES AND REGULATIONS BY WHICH AN EMPLOYEE CAN ELECT TO PARTICIPATE OR
54 DECLINE TO PARTICIPATE IN A SECTION 457(B) PLAN, INCLUDING THE FORM BY
55 WHICH THE ELECTION MUST BE MADE, PROVIDED THAT THE RULES AND REGULATIONS
A. 7490 3
1 REMAIN CONSISTENT WITH SECTION 457 OF THE UNITED STATES CODE AND THIS
2 ARTICLE.
3 B. THE TRUSTEE OF THE RETIREMENT SYSTEM SHALL ESTABLISH A LIST OF
4 INVESTMENT FUNDS MANAGED BY APPROVED FINANCIAL ORGANIZATIONS IN WHICH
5 THE EMPLOYEE CAN CHOOSE TO INVEST CONTRIBUTIONS MADE PURSUANT TO SECTION
6 TWELVE HUNDRED TEN OF THIS ARTICLE.
7 (1) THE TRUSTEE SHALL PROMULGATE THE RULES AND REGULATIONS THAT SHALL
8 ESTABLISH STANDARDS FOR THE SELECTION OF FINANCIAL ORGANIZATIONS,
9 AUTHORIZED TO DO BUSINESS IN THIS STATE, TO PARTICIPATE IN SUCH PLANS,
10 INCLUDING BUT NOT LIMITED TO, THE FOLLOWING CRITERIA: (A) RATES OF
11 COMMISSION, BROKERAGE AND OTHER FEES, ADMINISTRATIVE EXPENSES AND
12 RELATED SERVICE CHARGES IMPOSED BY THE FINANCIAL ORGANIZATION; (B) VARI-
13 ETY OF TYPES OF INVESTMENT OPPORTUNITIES OFFERED BY THE FINANCIAL ORGAN-
14 IZATION AND/OR AMONG THE FINANCIAL ORGANIZATIONS SELECTED AND THE ABILI-
15 TY TO TRANSFER AMONG SUCH OPPORTUNITIES; (C) THE STABILITY OF THE
16 FINANCIAL ORGANIZATION AS EVIDENCED BY EXPERIENCE, REPUTATION, ASSETS
17 AND HOLDINGS, ABILITY TO GUARANTEE SPECIFIC RATES OF RETURN; (D) ABILITY
18 TO COMPLY WITH REPORTING REQUIREMENTS TO THE COMPTROLLER AND TO PARTIC-
19 IPATES IN SUCH A PLAN; AND (E) SUCH OTHER FACTORS WHICH WOULD BE CONSID-
20 ERED BY A PRUDENT INVESTOR IN SUCH A PLAN.
21 (2) THE TRUSTEE SHALL PROVIDE SUCH INFORMATION ABOUT EACH APPROVED
22 FINANCIAL ORGANIZATION TO ALL MEMBERS FOR WHOM A TRUST IS ESTABLISHED
23 PURSUANT TO THIS ARTICLE UPON THE ESTABLISHMENT OF THE TRUST AND ON A
24 YEARLY BASIS THEREAFTER.
25 C. THE EMPLOYEE SHALL HAVE THE AUTHORITY TO DIRECT THE MANAGEMENT OF
26 ALL CONTRIBUTIONS MADE TO HIS OR HER TRUST BY ONE OR ALL OF THE FINAN-
27 CIAL ORGANIZATIONS APPROVED BY THE TRUSTEE OR THE EMPLOYEE CAN DESIGNATE
28 THE TRUSTEE TO DIRECT SUCH CONTRIBUTIONS ON BEHALF OF THE EMPLOYEE. IN
29 THE EVENT THE TRUSTEE IS DESIGNATED TO DIRECT CONTRIBUTIONS ON THE
30 EMPLOYEE'S BEHALF, SUCH INVESTMENTS SHALL BE MADE WITH THE LEVEL OF RISK
31 THE TRUSTEE DEEMS APPROPRIATE CONSIDERING THE EMPLOYEE'S EXPECTED AGE OF
32 RETIREMENT. IN THE EVENT THE EMPLOYEE DESIGNATES THE TRUSTEE TO INVEST
33 SUCH CONTRIBUTIONS AND FAILS TO PROVIDE AN EXPECTED AGE OF RETIREMENT,
34 THE TRUSTEE SHALL ASSUME THE EXPECTED RETIREMENT AGE IS SIXTY YEARS OF
35 AGE.
36 D. UNDER NO CIRCUMSTANCE, EXCEPT WHERE A COURT OF COMPETENT JURISDIC-
37 TION DETERMINES THAT THE TRUSTEE ACTED IN BAD FAITH, SHALL THE TRUSTEE
38 BE HELD LIABLE FOR ANY LOSSES INCURRED IN THE TRUST.
39 S 1210. CONTRIBUTIONS TO THE DEFINED CONTRIBUTION PLAN. A. FOR EACH
40 EMPLOYEE ON BEHALF OF WHOM A TRUST IS ESTABLISHED PURSUANT TO SECTION
41 TWELVE HUNDRED NINE OF THIS ARTICLE, THE EMPLOYER SHALL CONTRIBUTE AN
42 AMOUNT EQUAL TO ONE HUNDRED PERCENT OF THE EMPLOYEE'S CONTRIBUTION UP TO
43 THREE PERCENT OF THE EMPLOYEE'S TOTAL COMPENSATION IN THE PAY PERIOD FOR
44 WHICH CONTRIBUTIONS ARE BEING MADE.
45 B. THE EMPLOYEE CAN CHOOSE, BUT NOT BE REQUIRED, TO CONTRIBUTE UP TO
46 ONE HUNDRED PERCENT OF THEIR TOTAL COMPENSATION TO THE TRUST.
47 C. IN THE EVENT THE CONTRIBUTIONS MADE PURSUANT TO THIS SECTION WOULD
48 EXCEED THE LIMITATIONS IMPOSED BY SECTION 457(B) OF TITLE 26 OF THE
49 UNITED STATES CODE, THE EMPLOYEE'S CONTRIBUTION SHALL BE REDUCED UNTIL
50 THE SUM OF THE EMPLOYEE'S CONTRIBUTION AND THE EMPLOYER'S CONTRIBUTION
51 MEET SUCH LIMITATIONS. IN THE EVENT THE EMPLOYER'S CONTRIBUTION IS LESS
52 THAN THREE PERCENT OF THE EMPLOYEE'S TOTAL COMPENSATION AND THE EMPLOYEE
53 CONTRIBUTES TO A SECTION 403(B) TRUST PURSUANT TO SECTION TWELVE HUNDRED
54 ELEVEN OF THIS ARTICLE, THE DIFFERENCE BETWEEN THREE PERCENT AND THE
55 EMPLOYER'S CONTRIBUTION TO THE EMPLOYEE'S SECTION 457(B) TRUST SHALL BE
A. 7490 4
1 CONTRIBUTED TO THE EMPLOYEE'S SECTION 403(B) TRUST, PROVIDED THAT THE
2 EMPLOYEE'S CONTRIBUTION EQUALS OR EXCEEDS SUCH CONTRIBUTION.
3 S 1211. ESTABLISHMENT OF 403(B) PLAN FOR CERTAIN MEMBERS. A. EMPLOYEES
4 WHO ARE MEMBERS OF A TEACHERS' RETIREMENT SYSTEM OR EMPLOYEES' RETIRE-
5 MENT SYSTEM MAY CHOOSE TO HAVE AN ADDITIONAL TRUST ESTABLISHED PURSUANT
6 TO SECTION 403(B) OF TITLE 26 OF THE UNITED STATES CODE IF THE FOLLOWING
7 CRITERIA ARE MET:
8 (1) SUCH EMPLOYEE IS ELIGIBLE FOR PARTICIPATION IN BOTH A SECTION
9 457(B) PLAN AND A SECTION 403(B) PLAN.
10 (2) THE EMPLOYER'S CONTRIBUTION TO THE SECTION 457(B) PLAN MEETS THE
11 MAXIMUM LIMITATIONS IMPOSED BY SECTION 457(B) OF TITLE 26 OF THE UNITED
12 STATES CODE, OR THE SUM OF THE EMPLOYER'S AND EMPLOYEE'S CONTRIBUTION
13 MEETS THE MAXIMUM LIMITATIONS IMPOSED BY THE CODE.
14 (3) THE EMPLOYEE FILES WRITTEN NOTIFICATION TO HIS OR HER RETIREMENT
15 SYSTEM IN A FORM TO BE DETERMINED BY THE TRUSTEE OF THE SYSTEM STATING
16 THAT HE OR SHE CHOOSES TO PARTICIPATE IN A SECTION 403(B) PLAN.
17 B. AN EMPLOYEE ON WHOSE BEHALF A TRUST IS ESTABLISHED PURSUANT TO THIS
18 SECTION MAY CONTRIBUTE UP TO ONE HUNDRED PERCENT OF THEIR TOTAL COMPEN-
19 SATION, SUBJECT TO THE LIMITATIONS OF SECTION 403(B) OF TITLE 26 OF THE
20 UNITED STATES CODE.
21 C. UNDER NO CIRCUMSTANCES, EXCEPT FOR THOSE PROVIDED IN SECTION TWELVE
22 HUNDRED TEN OF THIS ARTICLE, SHALL AN EMPLOYER MAKE ANY CONTRIBUTIONS TO
23 A TRUST ESTABLISHED PURSUANT TO THIS SECTION.
24 D. ANY TRUST ESTABLISHED PURSUANT TO THIS SECTION SHALL OTHERWISE BE
25 GOVERNED PURSUANT TO THE PROVISIONS OF SECTION TWELVE HUNDRED NINE OF
26 THIS ARTICLE.
27 S 1212. OVERTIME FOR EXISTING MEMBERS. A. THE TRUSTEE OF EACH NEW YORK
28 STATE RETIREMENT SYSTEM AND NEW YORK CITY RETIREMENT SYSTEM SHALL ESTAB-
29 LISH A TRUST PURSUANT TO SECTION 457(B) OF TITLE 26 OF THE UNITED STATES
30 CODE FOR EACH EMPLOYEE WHO BECAME A MEMBER OF SUCH SYSTEM BEFORE JANUARY
31 FIRST, TWO THOUSAND TWELVE, WHO IS ELIGIBLE TO RECEIVE OVERTIME COMPEN-
32 SATION, AND WHO ELECTS TO CONTRIBUTE TO SUCH TRUST.
33 (1) THE TRUSTEE SHALL PROMULGATE THE RULES AND REGULATIONS BY WHICH AN
34 EMPLOYEE CAN ELECT TO PARTICIPATE OR DECLINE TO PARTICIPATE IN A SECTION
35 457(B) PLAN, INCLUDING THE FORM BY WHICH THE ELECTION MUST BE MADE,
36 PROVIDED THAT THE RULES AND REGULATIONS REMAIN CONSISTENT WITH SECTION
37 457 OF THE UNITED STATES CODE AND THIS ARTICLE.
38 (2) IN THE CASE IN WHICH AN EMPLOYEE ELECTS TO MAKE CONTRIBUTIONS, IT
39 SHALL BE THE RESPONSIBILITY OF THE EMPLOYER TO DETERMINE AND TO REPORT
40 TO THE TRUSTEE, THE AMOUNT OF SUCH EMPLOYEE'S WAGES THAT ARE PAID AS
41 OVERTIME COMPENSATION IN THE PAY PERIOD FOR WHICH CONTRIBUTIONS ARE
42 BEING MADE.
43 B. FOR EACH EMPLOYEE ON BEHALF OF WHOM A TRUST IS ESTABLISHED PURSUANT
44 TO THIS SECTION THE EMPLOYER SHALL CONTRIBUTE AN AMOUNT EQUAL TO ONE
45 HUNDRED PERCENT OF THE EMPLOYEE'S CONTRIBUTION UP TO THREE PERCENT OF
46 THE EMPLOYEE'S TOTAL OVERTIME COMPENSATION IN THE PAY PERIOD FOR WHICH
47 CONTRIBUTIONS ARE BEING MADE.
48 C. THE EMPLOYEE CAN CHOOSE, BUT NOT BE REQUIRED, TO CONTRIBUTE UP TO
49 ONE HUNDRED PERCENT OF THEIR TOTAL OVERTIME COMPENSATION TO THE TRUST.
50 D. IN THE EVENT THE CONTRIBUTIONS MADE PURSUANT TO THIS SECTION WOULD
51 EXCEED THE LIMITATIONS IMPOSED BY SECTION 457(B) OF TITLE 26 OF THE
52 UNITED STATES CODE, THE EMPLOYEE'S CONTRIBUTION SHALL BE REDUCED UNTIL
53 THE SUM OF THE EMPLOYEE'S CONTRIBUTION AND THE EMPLOYER'S CONTRIBUTION
54 MEET SUCH LIMITATIONS.
A. 7490 5
1 E. ANY TRUST ESTABLISHED PURSUANT TO THIS SECTION SHALL OTHERWISE BE
2 GOVERNED ACCORDING TO THE PROVISIONS OF SECTION TWELVE HUNDRED NINE OF
3 THIS ARTICLE.
4 F. UNDER NO CIRCUMSTANCES SHALL OVERTIME COMPENSATION, FOR SERVICES
5 PERFORMED BY AN EMPLOYEE ON OR AFTER THE EFFECTIVE DATE OF THIS SECTION,
6 BE REPORTABLE AS WAGES TO THE TRUSTEE OF SUCH SYSTEM FOR THE PURPOSE OF
7 DETERMINING AN EMPLOYEE'S CONTRIBUTION TO THEIR DEFINED BENEFIT PLAN OR
8 FOR THE INCLUSION OF SUCH WAGES IN THE COMPUTATION OF THE EMPLOYEE'S
9 FINAL AVERAGE SALARY OR FINAL COMPENSATION FOR DETERMINING SUCH EMPLOY-
10 EE'S PENSION BENEFIT.
11 S 1213. PAYMENTS UPON SEPARATION FROM EMPLOYMENT. A. UPON THE SEPA-
12 RATION FROM EMPLOYMENT OF AN EMPLOYEE FOR WHOM A TRUST IS ESTABLISHED,
13 ONE HUNDRED AND THREE PERCENT OF THE CURRENT VALUE OF ALL ACCRUED VACA-
14 TION TIME SHALL BE CONTRIBUTED BY THE EMPLOYER INTO A TRUST ESTABLISHED
15 ON BEHALF OF THE EMPLOYEE, PROVIDED THAT THE TOTAL AMOUNT OF ACCRUED
16 VACATION TIME IS NOT TO EXCEED THIRTY DAYS. SUCH CONTRIBUTIONS SHALL BE
17 SUBJECT TO THE LIMITATIONS IMPOSED BY SECTION 457(B) OF TITLE 26 OF THE
18 UNITED STATES CODE, AND IN THE CASE OF AN EMPLOYEE FOR WHOM AN ADDI-
19 TIONAL TRUST IS ESTABLISHED PURSUANT TO SECTION TWELVE HUNDRED ELEVEN OF
20 THIS ARTICLE, SUCH CONTRIBUTION SHALL BE SUBJECT TO THE LIMITATIONS
21 IMPOSED BY SECTION 403(B) OF TITLE 26 OF THE UNITED STATES CODE.
22 B. AN EMPLOYEE MAY CHOOSE TO RECEIVE A LUMP-SUM PAYMENT OF ACCRUED
23 VACATION TIME OR ANY PROPORTION OF ACCRUED VACATION TIME OWED TO THE
24 EMPLOYEE PURSUANT TO SUBDIVISION A OF THIS SECTION IN LIEU OF A CONTRIB-
25 UTION OF THE VALUE OF SUCH TIME TO THE TRUST ESTABLISHED ON BEHALF OF
26 THE EMPLOYEE. SUCH OPTION IS TO BE CHOSEN BY WRITTEN AFFIRMATION TO THE
27 EMPLOYER. IN THE EVENT THE EMPLOYEE DOES NOT PROVIDE SUCH AFFIRMATION,
28 THE PAYMENT OF ACCRUED VACATION TIME SHALL BE MADE PURSUANT TO SUBDIVI-
29 SION A OF THIS SECTION.
30 C. FOR AN EMPLOYEE WHO RE-ENTERS PUBLIC EMPLOYMENT AFTER HAVING
31 RECEIVED PAYMENTS OR CONTRIBUTIONS UNDER THIS SECTION, ANY FUTURE
32 PAYMENT OR CONTRIBUTION MADE UNDER THIS SECTION SHALL BE REDUCED BY ONE
33 HUNDRED PERCENT OF ALL PAYMENTS OR CONTRIBUTIONS PREVIOUSLY RECEIVED. IN
34 THE EVENT THAT PRIOR PAYMENTS OR CONTRIBUTIONS EQUAL OR EXCEED THE
35 AMOUNT OF ANY SUBSEQUENT PAYMENT OR CONTRIBUTION THE EMPLOYEE SHALL BE
36 INELIGIBLE FOR A PAYMENT OR CONTRIBUTION UNDER THIS SECTION.
37 D. SUBDIVISIONS A, B AND C OF THIS SECTION SHALL NOT APPLY TO ANY
38 EMPLOYEE FOR WHOM A TRUST IS ESTABLISHED PURSUANT TO SECTION TWELVE
39 HUNDRED TWELVE OF THE ARTICLE.
40 E. UNDER NO CIRCUMSTANCE SHALL AN EMPLOYEE BE ELIGIBLE FOR COMPEN-
41 SATION OR FOR A CONTRIBUTION TOWARDS ANY TRUST FOR ANY ACCRUED TIME THAT
42 IS NOT AUTHORIZED BY THIS SECTION.
43 S 1214. TRANSFERABILITY UPON SEPARATION OF EMPLOYMENT. A. UPON THE
44 SEPARATION OF EMPLOYMENT WITH A PARTICIPATING EMPLOYER, AN EMPLOYEE FOR
45 WHOM A TRUST IS ESTABLISHED SHALL BE PERMITTED TO TRANSFER THE ASSETS OF
46 THEIR TRUST IN ANY MANNER CONSISTENT WITH SECTION 457(B) OF TITLE 26 OF
47 THE UNITED STATES CODE, OR IN THE CASE OF A TRUST ESTABLISHED PURSUANT
48 TO SECTION TWELVE HUNDRED ELEVEN OF THIS ARTICLE, ANY MANNER CONSISTENT
49 WITH SECTION 403(B) OF TITLE 26 OF THE UNITED STATES CODE. THE TRUSTEE
50 OF THE RETIREMENT SYSTEM OF WHICH THE EMPLOYEE IS A MEMBER SHALL PROMUL-
51 GATE THE RULES AND REGULATIONS GOVERNING THE TRANSFER OF SUCH ASSETS.
52 B. UPON THE TRANSFER OF SUCH ASSETS TO ANY PERSON OR TRUST THAT IS NOT
53 GOVERNED BY THE PROVISIONS OF THIS ARTICLE ANY OBLIGATIONS OF THE TRUS-
54 TEE TO THE EMPLOYEE SHALL CEASE.
55 S 1215. TRANSFERABILITY OF PRIOR TAX-DEFERRED ANNUITY INTO TRUST. THE
56 TRUSTEE OF THE RETIREMENT SYSTEM SHALL ACCEPT INTO A TRUST ESTABLISHED
A. 7490 6
1 PURSUANT TO THIS ARTICLE ALL ASSETS OF A TAX-DEFERRED ANNUITY ESTAB-
2 LISHED BY A PRIOR NON-PARTICIPATING EMPLOYER UPON THE ELECTION OF THE
3 EMPLOYEE, PROVIDED THAT SUCH TRANSFER REMAINS CONSISTENT WITH SECTION
4 457(B) OF TITLE 26 OF THE UNITED STATES CODE OR IN THE CASE OF A TRUST
5 ESTABLISHED PURSUANT TO SECTION TWELVE HUNDRED ELEVEN OF THIS ARTICLE,
6 SUCH TRANSFER REMAINS CONSISTENT WITH SECTION 403(B) OF TITLE 26 OF THE
7 UNITED STATES CODE.
8 A. AN EMPLOYEE SHALL ONLY BE PERMITTED TO MAKE A TRANSFER OF ASSETS
9 UNDER THIS SECTION ONCE DURING EACH PERIOD OF EMPLOYMENT WITH A PARTIC-
10 IPATING EMPLOYER.
11 B. THE TRUSTEE OF THE RETIREMENT SYSTEM OF WHICH THE EMPLOYEE IS A
12 MEMBER SHALL PROMULGATE THE RULES AND REGULATIONS GOVERNING THE TRANSFER
13 OF SUCH ASSETS.
14 S 1216. INCOME TAX EXEMPTION FOR CERTAIN PAYMENTS. A. NO PAYMENT MADE
15 FROM A TAX-DEFERRED ANNUITY TO A RETIREE PREVIOUSLY EMPLOYED FOR AT
16 LEAST FIVE YEARS WITH A PARTICIPATING EMPLOYER OR PARTICIPATING EMPLOY-
17 ERS SHALL BE CONSIDERED TAXABLE INCOME FOR THE PURPOSES OF ARTICLE TWEN-
18 TY-TWO OF THE TAX LAW, PROVIDED THAT SUCH PAYMENT IS MADE FROM CONTRIB-
19 UTIONS AND INTEREST ON CONTRIBUTIONS MADE PURSUANT TO SECTIONS TWELVE
20 HUNDRED TEN, TWELVE HUNDRED ELEVEN AND TWELVE HUNDRED TWELVE OF THIS
21 ARTICLE AND THAT SUCH PAYMENT IS MADE ON OR AFTER THE EMPLOYEE REACHES
22 SIXTY YEARS OF AGE.
23 B. IN THE EVENT A RETIREE'S TAX DEFERRED ANNUITY CONTAINS CONTRIB-
24 UTIONS MADE DURING PERIODS OF EMPLOYMENT WITH EMPLOYERS NOT PART OF A
25 PARTICIPATING RETIREMENT SYSTEM THE ACTUARY OF THE PARTICIPATING RETIRE-
26 MENT SYSTEM IN WHICH THE EMPLOYEE LAST PARTICIPATED SHALL DETERMINE THE
27 PROPORTION OF ASSETS IN THE RETIREE'S ANNUITY THAT ARE SUBJECT TO THE
28 PROVISIONS OF SUBDIVISION A OF THIS SECTION. SUCH DETERMINATION SHALL BE
29 MADE ON THE ACTUAL PROPORTION OF ASSETS AND INTEREST ON ASSETS THAT CAN
30 BE ATTRIBUTED TO CONTRIBUTIONS MADE BY THE EMPLOYEE AND THE EMPLOYER
31 DURING PERIODS OF EMPLOYMENT WITH A PARTICIPATING EMPLOYER.
32 S 1217. SEVERABILITY CLAUSE. IF ANY CLAUSE, SENTENCE, PARAGRAPH OR
33 PART OF THIS ARTICLE OR THE APPLICATION THEREOF TO ANY PERSON OR CIRCUM-
34 STANCES, SHALL, FOR ANY REASON, BE ADJUDGED BY A COURT OF COMPETENT
35 JURISDICTION TO BE INVALID, SUCH JUDGMENT SHALL NOT AFFECT, IMPAIR OR
36 INVALIDATE THE REMAINDER OF THIS ARTICLE.
37 S 2. This act shall take effect immediately, provided, however, that
38 section 1212 of the retirement and social security law, as added by
39 section one of this act, shall take effect on the sixtieth day after it
40 shall have become a law.
FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
This bill would change the retirement plan coverage for future members
of public retirement systems by requiring that they and their employers
each contribute 3% of the members' annual compensation into a defined
contribution plan pursuant to Section 457-b on the Internal Revenue
Code. Members would be allowed to contribute up to the limit provided in
Internal Revenue Code Section 457(b), which is currently $16,500.
Members must select whether the funds will be invested by the Trustee or
by an approved financial organization selected from a list of approved
investment funds provided by the Trustee.
For current members in the defined benefit plan, this bill would also
require that overtime pay be excluded from the definition of wages.
If this becomes law, the overtime provision of this bill is likely to
face a constitutional challenge based upon the guarantee that a current
member's benefits may not be diminished.
A. 7490 7
If this bill is enacted, insofar as it would affect the New York State
and Local Employees' Retirement System (ERS) and the New York State and
Local Police and Fire Retirement System (PFRS), there would be decreases
in the average long term expected annual contribution rate for future
members of approximately 6.4% and 15.0% of payroll for ERS and PFRS,
respectively.
If this bill withstands any constitutional challenges regarding the
inclusion of overtime pay in the definition of wages, there would be
further decreases in the average long term expected annual contribution
rates for current members of approximately 0.1% and 0.7% of payroll for
ERS and PFRS, respectively.
Finally, there would be significant administrative costs to implement
and maintain the defined contribution plan. The legislation does not
identify who will pay these costs.
This estimate, dated April 26, 2011, and intended for use only during
the 2011 Legislative Session, is Fiscal Note No. 2011-152, prepared by
the Actuary for the ERS and the PFRS.
