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. LBD01511-01-3S. 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 alternativeS. 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.