Bill Text: NY S00274 | 2023-2024 | General Assembly | Introduced

---

Bill Title: Provides protection to certain retirees from de-risking pension transactions.

Spectrum: Partisan Bill (Democrat 3-0)

Status: (Introduced) 2024-01-03 - REFERRED TO INSURANCE [S00274 Detail]

Download: New_York-2023-S00274-Introduced.html

---

                STATE OF NEW YORK
        ________________________________________________________________________

                                           274

                               2023-2024 Regular Sessions

                    IN SENATE

                                       (Prefiled)

                                     January 4, 2023
                                       ___________

        Introduced by Sen. GOUNARDES -- read twice and ordered printed, and when
          printed to be committed to the Committee on Insurance

        AN  ACT  to amend the insurance law, in relation to providing protection
          to certain retirees from pension de-risking transactions; and to amend
          the civil practice law and rules, in relation  to  statutorily  exempt
          payments

          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:

     1    Section 1. The insurance law is amended by adding a new section 3219-a
     2  to read as follows:
     3    § 3219-a. Pension de-risking transactions with  an  annuity.  (a)  For
     4  purposes  of  this  section:  (1) "Employer" means any person engaged in
     5  business in this state who has two  or  more  employees,  but  does  not
     6  include the state or any political subdivision thereof;
     7    (2) "Employee pension benefit plan" means an "employee pension benefit
     8  plan", as defined in 29 USC 1002(2)(A); and
     9    (3)  "Pension  de-risking  transaction"  means  any  transaction  that
    10  involves the transfer of pension benefits  (not  including  health  care
    11  benefits)  from  a  pension plan protected under the Employee Retirement
    12  Income Security Act ("ERISA") to a substitute pension  benefit  provider
    13  such as an insurance company licensed and regulated under state law.
    14    (b)  Any  insurer  issuing  an  allocated or unallocated group annuity
    15  contract to an employer or an employee defined pension benefit  plan  on
    16  behalf  of an employer, for the purpose of providing retirement benefits
    17  to employees or former employees ("retirees")  of  the  employer,  which
    18  annuity  benefits will no longer be protected under the federal Employee
    19  Retirement Income Security Act of 1974 ("ERISA") and the federal Pension
    20  Benefit Guaranty Corporation ("PBGC") shall provide the following infor-
    21  mation to the retirees pursuant to regulations  adopted  by  the  super-
    22  intendent:

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD01511-01-3
        S. 274                              2

     1    (1)  a  clear  statement  that payments to annuitants under an annuity
     2  contract issued pursuant to this section are exempt from the  claims  of
     3  creditors;
     4    (2) a statement that the retirees will no longer have protection under
     5  ERISA and the PBGC;
     6    (3)  the  identity  and  contact information for the New York Life and
     7  Health Insurance Guaranty Association, or any substitute or  replacement
     8  guaranty  association  that  provides coverage to annuitants residing in
     9  New York in the event of the insurer's financial impairment or insolven-
    10  cy, as set forth on a publicly available website  such  as  the  website
    11  maintained  by  the  Life  Insurance Company Guaranty Corporation of New
    12  York (www.nylifega.org); and
    13    (4) mandatory annual disclosures to all retirees  whose  benefits  are
    14  transferred  to an insurance company or alternative benefit provider for
    15  the purpose of providing retirement benefits, of the following:  funding
    16  levels  of all assets relative to expected liabilities under the assumed
    17  pension benefit  schedules,  investment  performance  summary  by  asset
    18  class, investment performance detail by asset class, expenses associated
    19  with  any  group annuity contract, and changes in actuarial assumptions,
    20  if any.
    21    (c) No allocated or unallocated group annuity contract  issued  by  an
    22  insurer  to  an  employer or an employee defined pension benefit plan on
    23  behalf of an employer, for the purpose of providing retirement  benefits
    24  to employees or former employees of the employer, which annuity benefits
    25  will no longer be protected under the federal Employee Retirement Income
    26  Security  Act  of  1974  and the federal Pension Benefit Guaranty Corpo-
    27  ration may be further transferred or assumed by another insurer  without
    28  confirmation  by  the superintendent that the insurer assuming the obli-
    29  gations of such allocated or unallocated group annuity contract has  the
    30  financial  strength to fulfill its obligations under such contract.  The
    31  appropriate standard to be applied by the superintendent shall  be  400%
    32  of  company  action  level  risk based capital with no negative trend as
    33  defined by the 2012 NAIC risk-based capital  (RBC)  for  insurers  model
    34  act.
    35    (d)  The  proceeds  of  any  allocated  or  unallocated  group annuity
    36  contract issued by an insurer to an  employer  or  an  employee  defined
    37  pension  benefit  plan  on  behalf  of  an  employer, for the purpose of
    38  providing retirement benefits to retirees of the employer, which annuity
    39  benefits will no longer be protected under ERISA and  the  federal  PBGC
    40  shall  be exempt from application to the satisfaction of money judgments
    41  under section fifty-two hundred five  of  the  civil  practice  law  and
    42  rules.
    43    § 2. Paragraph 2 of subdivision (l) of section 5205 of the civil prac-
    44  tice  law  and  rules, as amended by chapter 107 of the laws of 2021, is
    45  amended to read as follows:
    46    2. For purposes of this article, "statutorily exempt  payments"  means
    47  any  personal  property exempt from application to the satisfaction of a
    48  money judgment under any provision of state or federal  law.  Such  term
    49  shall include, but not be limited to, payments from any of the following
    50  sources: social security, including retirement, survivors' and disabili-
    51  ty  benefits,  supplemental  security  income or child support payments;
    52  veterans administration benefits; public  assistance;  workers'  compen-
    53  sation;  unemployment  insurance;  public  or private pensions; railroad
    54  retirement; black lung benefits; and emergency relief funds.   "Statuto-
    55  rily  exempt  payments" shall specifically include any annuity  proceeds
    56  whose benefits are transferred to an insurance  company  or  alternative
        S. 274                              3

     1  benefit  provider   for the   purpose   of providing retirement benefits
     2  pursuant to section three thousand two  hundred  nineteen-a    of    the
     3  insurance  law  in  a  pension de-risking transfer.
     4    § 3. This act shall take effect on the one hundred twentieth day after
     5  it shall have become a law and shall apply to all policies and contracts
     6  issued, renewed, modified, altered, or amended on or after such date.