This bill has been amended

Bill S5608-2013

Relates to the form of payment of retirement benefits for certain public retirees and beneficiaries

Relates to the form of payment of retirement benefits for certain public retirees and beneficiaries; requires the payment of retirement benefits by the New York state and local employees' retirement system and the New York state and local police and fire retirement system by direct deposit or debit card.

Details

Actions

  • Jan 8, 2014: REFERRED TO CIVIL SERVICE AND PENSIONS
  • Jun 21, 2013: RECOMMITTED TO RULES
  • Jun 17, 2013: ORDERED TO THIRD READING CAL.1400
  • Jun 17, 2013: COMMITTEE DISCHARGED AND COMMITTED TO RULES
  • May 24, 2013: REFERRED TO CIVIL SERVICE AND PENSIONS

Votes

VOTE: COMMITTEE VOTE: - Rules - Jun 17, 2013
Ayes (22): Skelos, Libous, Bonacic, Carlucci, Farley, Flanagan, Fuschillo, Hannon, LaValle, Marcellino, Maziarz, Nozzolio, Seward, Valesky, Stewart-Cousins, Breslin, Dilan, Hassell-Thompson, Krueger, Perkins, Espaillat, Gianaris
Ayes W/R (1): Montgomery
Excused (1): Parker

Memo

BILL NUMBER:S5608

TITLE OF BILL: An act to amend the retirement and social security law, in relation to the form of payment of retirement benefits for certain public retirees and beneficiaries

PURPOSE: To require the payment of retirement benefits by the New York State and Local Retirement System by direct deposit or debit card, with the transition to the new method of payment being made incrementally.

SUMMARY OF PROVISIONS: Section 1 of this bill would amend Section 100 of the Retirement and Social Security Law so retirement benefits shall be paid to retirees and beneficiaries of the New York State and Local Employees' Retirement System by direct deposit or debit card. The comptroller shall determine when the provisions of this bill shall take effect but it will be no sooner than January 1, 2016 for all current and future retirees and beneficiaries of the New York State and Local Employees' Retirement System. Additionally, this section allows a retiree or beneficiary of the New York State and Local Employees' Retirement System to submit a request for exemption from this requirement from such System.

Section 2 of this bill would amend Section 400 of the Retirement and Social Security Law so retirement benefits shall be paid to retirees and beneficiaries of the New York State and Local Police and Fire Retirement System by direct deposit or debit card. The comptroller shall determine when the provisions of this bill shall take effect but it will be no sooner than January 1, 2016 for all current and future retirees and beneficiaries of the New York State and Local Police and Fire Retirement System. Additionally, this section allows a retiree or beneficiary of the New York State and Local Police and Fire Retirement System to submit a request for exemption from this requirement from such System.

PRIOR LEGISLATIVE HISTORY: New bill.

JUSTIFICATION: As of May 1, 2011, the United States Department of the Treasury requires recipients of federal nontax payments, including social security payments, to receive payment by electronic funds transfer (EFT). Additionally, many states, including Florida and Ohio, already require the payment of retirement benefits by EFT. EFT benefits recipients by eliminating the risks of theft, non-delivery, or loss of checks. EFT funds are securely transferred with no risk of delay or loss.

The New York State and Local Retirement System has heard from numerous retirees and beneficiaries about the hardships they faced when a retirement check has been lost or misdirected through the mail. The most recent examples came in the aftermath of Hurricane Sandy, when many checks were lost. These payment-related problems for check recipients would have been avoided had such recipients received their

retirement benefits by EFT. Additionally, there are extra costs to the New York State and Local Retirement System associated with payments to retirees and beneficiaries by paper check.

For persons who may not have access to a bank account, this legislation authorizes payment of benefits by means of a debit card. The benefit recipient would be able to access their funds through an automatic teller machine or other device that accepts debit cards.

Because of the financial advantages and added convenience, most New York State and Local Retirement System members already use direct deposit. In recognition of the fact that there may be certain situations where a paper check is warranted, this legislation allows a retiree or beneficiary of the New York State and Local Retirement System to submit a request to such System for a waiver from the requirement to be paid by EFT.

The State Comptroller urges the passage of this proposed legislation.

FISCAL IMPLICATIONS FOR STATE: This bill would result in a modest financial savings to the New York State and Local Retirement System.

EFFECTIVE DATE: This act shall take effect on the one hundred eightieth day after it shall have become a law.


Text

STATE OF NEW YORK ________________________________________________________________________ 5608 2013-2014 Regular Sessions IN SENATE May 24, 2013 ___________
Introduced by Sen. GALLIVAN -- (at request of the State Comptroller) -- 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 the form of payment of retirement benefits for certain public retirees and beneficiaries THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Section 100 of the retirement and social security law is amended to read as follows: S 100. Payment of retirement allowances. A. Retirement allowances shall be payable on the first day of each and every month beginning on the first day of the month following the effective date of retirement. Upon the death of a retired member, however, the retirement allowance due for that part of the month prior to his OR HER death shall be paid forthwith. B. 1. BEGINNING ON A DATE TO BE DETERMINED BY THE COMPTROLLER, BUT NO SOONER THAN JANUARY FIRST, TWO THOUSAND SIXTEEN, ANY RETIREMENT BENEFIT PAID IN REGULAR PERIODIC INSTALLMENTS TO A PERSON WHO IS A RETIREE OR BENEFICIARY OF THE RETIREMENT SYSTEM PRIOR TO, ON OR AFTER THE EFFECTIVE DATE OF THIS SUBDIVISION SHALL BE MADE BY DIRECT DEPOSIT OR DEBIT CARD, AS ELECTED BY SUCH RETIREE OR BENEFICIARY, AND ADMINISTERED ELECTRON- ICALLY, IN ACCORDANCE WITH SUCH GUIDELINES AS MAY BE SET FORTH BY THE RETIREMENT SYSTEM. THE RETIREMENT SYSTEM SHALL NOTIFY ANY OF ITS RETI- REES AND BENEFICIARIES THAT ARE CURRENTLY NOT RECEIVING THEIR RETIREMENT PAYMENT BY DIRECT DEPOSIT OF THE PROVISIONS OF THIS PARAGRAPH PRIOR TO SUCH PARAGRAPH BEING IMPLEMENTED. 2. A RETIREE OR BENEFICIARY MAY SUBMIT A REQUEST FOR EXEMPTION FROM PARAGRAPH ONE OF THIS SUBDIVISION ON A FORM PROVIDED BY THE RETIREMENT SYSTEM. THE RETIREMENT SYSTEM MAY APPROVE SUCH REQUEST PURSUANT TO REGU- LATIONS PROMULGATED BY THE COMPTROLLER UPON A DEMONSTRATION OF HARDSHIP.
S 2. Section 400 of the retirement and social security law, as added by chapter 1000 of the laws of 1966, is amended to read as follows: S 400. Payment of retirement allowances. A. Retirement allowances shall be payable on the first day of each and every month beginning on the first day of the month following the effective date of retirement. Upon the death of a retired member, however, the retirement allowance due for that part of the month prior to his OR HER death shall be paid forthwith. B. 1. BEGINNING ON A DATE TO BE DETERMINED BY THE COMPTROLLER, BUT NO SOONER THAN JANUARY FIRST, TWO THOUSAND SIXTEEN, ANY RETIREMENT BENEFIT PAID IN REGULAR PERIODIC INSTALLMENTS TO A PERSON WHO IS A RETIREE OR BENEFICIARY OF THE RETIREMENT SYSTEM PRIOR TO, ON OR AFTER THE EFFECTIVE DATE OF THIS SUBDIVISION SHALL BE MADE BY DIRECT DEPOSIT OR DEBIT CARD, AS ELECTED BY SUCH RETIREE OR BENEFICIARY, AND ADMINISTERED ELECTRON- ICALLY, IN ACCORDANCE WITH SUCH GUIDELINES AS MAY BE SET FORTH BY THE RETIREMENT SYSTEM. THE RETIREMENT SYSTEM SHALL NOTIFY ANY OF ITS RETI- REES AND BENEFICIARIES THAT ARE CURRENTLY NOT RECEIVING THEIR RETIREMENT PAYMENT BY DIRECT DEPOSIT OF THE PROVISIONS OF THIS PARAGRAPH PRIOR TO SUCH PARAGRAPH BEING IMPLEMENTED. 2. A RETIREE OR BENEFICIARY MAY SUBMIT A REQUEST FOR EXEMPTION FROM PARAGRAPH ONE OF THIS SUBDIVISION ON A FORM PROVIDED BY THE RETIREMENT SYSTEM. THE RETIREMENT SYSTEM MAY APPROVE SUCH REQUEST PURSUANT TO REGU- LATIONS PROMULGATED BY THE COMPTROLLER UPON A DEMONSTRATION OF HARDSHIP. S 3. This act shall take effect on the one hundred eightieth day after it shall have become a law. Effective immediately the comptroller is authorized to promulgate any rules and regulations and take any other measures necessary to implement this act on its effective date. FISCAL NOTE.--Pursuant to Legislative Law, Section 50: This bill would require the payment of retirement benefits by the New York State and Local Employees' Retirement System (ERS) and the New York State and Local Police and Fire Retirement System (PFRS) by direct deposit or debit card, beginning on a date to be determined by the comp- troller, but no sooner than January 1, 2016. A retiree or beneficiary of these Systems prior to, on or after the effective date of this bill shall elect either form of payment. Additionally this bill would allow a retiree or beneficiary to submit a request for exemption from this requirement. If this bill is enacted, we anticipate that the printing and postage savings will exceed the small initial administrative costs. Summary of relevant resources: Data: March 31, 2012 Actuarial Year End File with distributions of membership and other statistics displayed in the 2012 Report of the Actuary and 2012 Comprehensive Annual Financial Report. Assumptions and Methods: 2010, 2011 and 2012 Annual Report to the Comptroller on Actuarial Assumptions, Codes Rules and Regulations of the State of New York: Audit and Control. Market Assets and GASB Disclosures: March 31, 2012 New York State and Local Retirement System Financial Statements and Supplementary Informa- tion. Valuations of Benefit Liabilities and Actuarial Assets: summarized in the 2012 Actuarial Valuations report. I am a member of the American Academy of Actuaries and meet the Quali- fication Standards to render the actuarial opinion contained herein. This estimate, dated April 26, 2013, and intended for use only during the 2013 Legislative Session, is Fiscal Note No. 2013-131, prepared by the Actuary for the ERS and PFRS.

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