This bill has been amended

Bill S4706-2013

Establishes a defined contribution plan

Establishes a defined contribution plan for all non-civil service appointees and elected officials of the New York state and local employees' retirement system who are not yet vested in a state retirement system or who are hired after the effective date of this section; authorizes elected officials to join such defined contribution plan; defines terms; provides for contributions to such defined contribution plan; authorizes the promulgation of any necessary rules and regulations.

Details

Actions

  • Jan 8, 2014: REFERRED TO CIVIL SERVICE AND PENSIONS
  • Apr 18, 2013: REFERRED TO CIVIL SERVICE AND PENSIONS

Memo

BILL NUMBER:S4706

TITLE OF BILL: An act to amend the retirement and social security law, in relation to establishing a defined contribution plan

PURPOSE: This bill freezes the current retirement tier of all elected officials and non-civil service appointed employees in New York State, and creates a new Defined Contribution Plan for all elected officials and non-civil service appointees in New York State.

SUMMARY OF PROVISIONS: Section 1. Creates the defined contribution plan and allows the comptroller to adopt rules and regulations regarding the standards and requirements of the plan.

Applies the defined contribution plans to all elected officials and non-civil service appointees in the State of New York. Allows the Comptroller to enter into written agreements with financial organizations to administer the defined contribution plan, and establish standards for the selection of financial organizations.

Allows a public employer to provide a, defined contribution plan for its employees in accordance with the rules and regulations determined by the Comptroller.

Establishes that employers will be required to contribute three percent of an elected officials and non-civil-service appointee's salary. All elected officials and non-civil service appointees as of the effective date of the legislation.

Section 2. Provides the effective date.

JUSTIFICATION: This legislation seeks to provide savings to the State and Local Governments by creating a Defined Contribution Plan for all elected officials and non-civil service appointees in New York State. In recent months, the costs of administering Defined Benefit Plans have increased dramatically, and elected officials and non-civil service appointees should lead by example by freezing their current retirement plans, and contributing towards a new Defined Contribution Plan. Going forward, a Defined Contribution Plan for elected officials and non-civil service appointees will unify the interests of public servants and the private sector taxpayer.

PRIOR LEGISLATIVE HISTORY: 2010- A. 6932 - Held in Governmental Employees

LOCAL FISCAL IMPLICATIONS: To be Determined

FISCAL IMPLICATIONS: Pursuant to Legislative Law, Section 50:

This bill would change the retirement plan coverage for existing and future elected officials and non-civil service appointees who are employed by the State of New York or any public employer which participates in the New York State and Local Employees' Retirement System (NYS&LERS). Affected employees and their employers would be required to contribute 3% of annual compensation to a defined contribution plan. The Comptroller shall select one or more financial organizations to administer the plan and to invest the funds held

pursuant to such plan. Pursuant to Chapter 18 of the Laws of 2012, participation is optional in a defined contribution plan for nonunion employees hired on or after July 1, 2013 whose salary is $75,000 or higher.

This legislation would freeze the benefit accruals of current members in the NYS&LERS as of the effective date. If this becomes law, this bill is likely to face a constitutional challenge based upon the guarantee that a member's benefits may not be diminished.

If this bill is enacted, relatively few members would be affected. There will not be a cost to the State or the participating employers in the NYS&LERS.

This estimate, dated February 1, 2012, and intended for use only during the 2013 Legislative Session, is Fiscal Note No. 2013-76, prepared by the Actuary for the New York State and Local Employees' Retirement System.

EFFECTIVE DATE: This act shall take effect on the first of the fiscal year next succeeding the date on which it shall have become a law. Effective immediately, the addition, amendment and/or repeal of any rule or regulation necessary for the implementation of this act on its effective date are authorized and directed to be made and completed on or before such effective date.


Text

STATE OF NEW YORK ________________________________________________________________________ 4706 2013-2014 Regular Sessions IN SENATE April 18, 2013 ___________
Introduced by Sen. LATIMER -- read twice and ordered printed, and when printed to be committed to the Committee on Civil Service and Pensions AN ACT to amend the retirement and social security law, in relation to establishing a defined contribution plan THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. The retirement and social security law is amended by adding a new section 618 to read as follows: S 618. DEFINED CONTRIBUTION PLAN. 1. THE DEFINED CONTRIBUTION PLAN IS HEREBY ESTABLISHED. THE COMPTROLLER SHALL ADOPT RULES AND REGULATIONS REGARDING THE STANDARDS AND REQUIREMENTS OF THE DEFINED CONTRIBUTION PLAN ESTABLISHED PURSUANT TO THIS SECTION, INCLUDING SELECTION OF FINAN- CIAL ORGANIZATIONS FOR INVESTMENT PURPOSES. 2. A. NOTWITHSTANDING ANY OTHER PROVISION OF LAW, THE DEFINED CONTRIBUTION PLAN SHALL BE ESTABLISHED FOR ALL NON-CIVIL SERVICE APPOINTED EMPLOYEES AND ELECTED OFFICIALS EMPLOYED BY THE STATE OF NEW YORK OR ANY PUBLIC EMPLOYER WHICH HAS ELECTED TO PARTICIPATE IN THE NEW YORK STATE AND LOCAL EMPLOYEES' RETIREMENT SYSTEM. B. THE COMPTROLLER SHALL ENTER INTO WRITTEN AGREEMENTS WITH ONE OR MORE FINANCIAL ORGANIZATIONS TO ADMINISTER THE DEFINED CONTRIBUTION PLAN FOR MEMBERS AND TO INVEST FUNDS HELD PURSUANT TO SUCH PLAN. C. THE RULES AND REGULATIONS PROMULGATED BY THE COMPTROLLER SHALL ESTABLISH STANDARDS FOR THE SELECTION OF FINANCIAL ORGANIZATIONS, AUTHORIZED TO DO BUSINESS IN THIS STATE, TO PARTICIPATE IN SUCH PLANS, INCLUDING, BUT NOT LIMITED TO, THE FOLLOWING CRITERIA: (I) RATES OF COMMISSION, BROKERAGE AND OTHER FEES, ADMINISTRATIVE EXPENSES AND RELATED SERVICE CHARGES IMPOSED BY THE FINANCIAL ORGANIZATION; (II) VARIETY OF TYPES OF INVESTMENT OPPORTUNITIES OFFERED BY THE FINANCIAL ORGANIZATION AND/OR AMONG THE FINANCIAL ORGANIZATIONS SELECTED AND THE ABILITY TO TRANSFER AMONG SUCH OPPORTUNITIES; (III) THE STABILITY OF THE FINANCIAL ORGANIZATION AS EVIDENCED BY EXPERIENCE, REPUTATION, ASSETS
AND HOLDINGS, ABILITY TO GUARANTEE SPECIFIC RATES OF RETURN; (IV) ABILI- TY TO COMPLY WITH REPORTING REQUIREMENTS TO THE COMPTROLLER AND TO PARTICIPANTS IN SUCH A PLAN; AND (V) SUCH OTHER FACTORS WHICH WOULD BE CONSIDERED BY A PRUDENT INVESTOR IN SUCH A PLAN. D. THE PRESIDENT OF THE STATE CIVIL SERVICE COMMISSION, SUBJECT TO THE RULES AND REGULATIONS OF THE COMPTROLLER, SHALL PROVIDE ASSISTANCE TO ANY PUBLIC EMPLOYER AS IS APPROPRIATE TO THE PROVISIONS OF THIS SECTION. 3. A PUBLIC EMPLOYER SHALL CONTRIBUTE THREE PERCENT OF SUCH AFFECTED EMPLOYEE'S ANNUAL SALARY TOWARDS SUCH DEFINED CONTRIBUTION PLAN. ALL NON-CIVIL SERVICE APPOINTED EMPLOYEES AND ELECTED OFFICIALS ARE REQUIRED TO CONTRIBUTE THREE PERCENT OF THEIR SALARY TOWARDS THE DEFINED CONTRIB- UTION PLAN. SUCH EMPLOYEES MAY CONTRIBUTE UP TO ONE HUNDRED PERCENT, NOT TO EXCEED SIXTEEN THOUSAND FIVE HUNDRED DOLLARS OF HIS OR HER SALARY TOWARDS THE DEFINED CONTRIBUTION PLAN. 4. THE TERM "FINANCIAL ORGANIZATION" SHALL MEAN AN ORGANIZATION AUTHORIZED TO DO BUSINESS IN THE STATE OF NEW YORK AND (A) WHICH IS AN AUTHORIZED FIDUCIARY TO ACT AS A TRUSTEE PURSUANT TO THE PROVISIONS OF AN ACT OF CONGRESS ENTITLED "EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974" AS SUCH PROVISIONS MAY BE AMENDED FROM TIME TO TIME, OR AN INSUR- ANCE COMPANY; AND (B) (I) IS LICENSED OR CHARTERED BY THE DEPARTMENT OF FINANCIAL SERVICES; (II) IS CHARTERED BY AN AGENCY OF THE FEDERAL GOVERNMENT; (III) IS SUBJECT TO THE JURISDICTION AND REGULATION OF THE SECURITIES AND EXCHANGE COMMISSION OF THE FEDERAL GOVERNMENT; OR (IV) IS ANY OTHER ENTITY OTHERWISE AUTHORIZED TO ACT IN THIS STATE AS A TRUSTEE PURSUANT TO THE PROVISIONS OF AN ACT OF CONGRESS ENTITLED "EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974" AS SUCH PROVISIONS MAY BE AMENDED FROM TIME TO TIME. 5. THE CURRENT RETIREMENT PLANS FOR NON-CIVIL SERVICE APPOINTED EMPLOYEES AND ELECTED OFFICIALS SHALL BE FROZEN AS OF THE EFFECTIVE DATE OF THIS SECTION. NON-CIVIL SERVICE APPOINTED EMPLOYEES AND ELECTED OFFI- CIALS SHALL NO LONGER CONTRIBUTE TO THEIR CURRENT RETIREMENT PLAN, HOWEVER, SUCH PERSONS SHALL RECEIVE THE BENEFITS THEY HAVE ACCRUED UP TO THE EFFECTIVE DATE OF THIS SECTION UPON RETIREMENT. THE MEMBERSHIP OF A NON-CIVIL SERVICE APPOINTED EMPLOYEE OR ELECTED OFFICIAL IN ANY STATE RETIREMENT SYSTEM SHALL REMAIN OPEN IF HE OR SHE BECOMES A MEMBER OF THE DEFINED CONTRIBUTION PLAN. S 2. This act shall take effect on the first of the fiscal year next succeeding the date on which it shall have become a law. Effective imme- diately, the addition, amendment and/or repeal of any rule or regulation necessary for the implementation of this act on its effective date are authorized and directed to be made and completed on or before such effective date. FISCAL NOTE.--Pursuant to Legislative Law, Section 50: This bill would change the retirement plan coverage for certain exist- ing and future elected officials and non-civil service appointees who are employed by the State of New York or any public employer which participates in the New York State and Local Employees' Retirement System (NYS&LERS). Affected employees and their employers would be REQUIRED to contribute 3% of annual compensation to a defined contrib- ution plan. The Comptroller shall select one or more financial organiza- tions to administer the plan and to invest the funds held pursuant to such plan. Pursuant to Chapter 18 of the Laws of 2012, participation is OPTIONAL in a defined contribution plan for non-union employees hired on or after July 1, 2013 whose salary is $75,000 or higher. This legislation would freeze the benefit accruals of current members in the NYS&LERS as of the effective date. If this becomes law, this bill

Comments

Open Legislation comments facilitate discussion of New York State legislation. All comments are subject to moderation. Comments deemed off-topic, commercial, campaign-related, self-promotional; or that contain profanity or hate speech; or that link to sites outside of the nysenate.gov domain are not permitted, and will not be published. Comment moderation is generally performed Monday through Friday.

By contributing or voting you agree to the Terms of Participation and verify you are over 13.

Discuss!

blog comments powered by Disqus