Bill Text: NY S03761 | 2017-2018 | General Assembly | Introduced
Bill Title: 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.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2017-01-26 - REFERRED TO CIVIL SERVICE AND PENSIONS [S03761 Detail]
Download: New_York-2017-S03761-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 3761 2017-2018 Regular Sessions IN SENATE January 26, 2017 ___________ 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: 1 Section 1. The retirement and social security law is amended by adding 2 a new section 618 to read as follows: 3 § 618. Defined contribution plan. 1. The defined contribution plan is 4 hereby established. The comptroller shall adopt rules and regulations 5 regarding the standards and requirements of the defined contribution 6 plan established pursuant to this section, including selection of finan- 7 cial organizations for investment purposes. 8 2. a. Notwithstanding any other provision of law, the defined 9 contribution plan shall be established for all non-civil service 10 appointed employees and elected officials employed by the state of New 11 York or any public employer which has elected to participate in the New 12 York state and local employees' retirement system. 13 b. The comptroller shall enter into written agreements with one or 14 more financial organizations to administer the defined contribution plan 15 for members and to invest funds held pursuant to such plan. 16 c. The rules and regulations promulgated by the comptroller shall 17 establish standards for the selection of financial organizations, 18 authorized to do business in this state, to participate in such plans, 19 including, but not limited to, the following criteria: (i) rates of 20 commission, brokerage and other fees, administrative expenses and 21 related service charges imposed by the financial organization; (ii) 22 variety of types of investment opportunities offered by the financial 23 organization and/or among the financial organizations selected and the 24 ability to transfer among such opportunities; (iii) the stability of the 25 financial organization as evidenced by experience, reputation, assets EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD00923-02-7S. 3761 2 1 and holdings, ability to guarantee specific rates of return; (iv) abili- 2 ty to comply with reporting requirements to the comptroller and to 3 participants in such a plan; and (v) such other factors which would be 4 considered by a prudent investor in such a plan. 5 d. The president of the state civil service commission, subject to the 6 rules and regulations of the comptroller, shall provide assistance to 7 any public employer as is appropriate to the provisions of this section. 8 3. A public employer shall contribute three percent of such affected 9 employee's annual salary towards such defined contribution plan. All 10 non-civil service appointed employees and elected officials are required 11 to contribute three percent of their salary towards the defined contrib- 12 ution plan. Such employees may contribute up to one hundred percent, 13 not to exceed sixteen thousand five hundred dollars of his or her salary 14 towards the defined contribution plan. 15 4. The term "financial organization" shall mean an organization 16 authorized to do business in the state of New York and (a) which is an 17 authorized fiduciary to act as a trustee pursuant to the provisions of 18 an act of congress entitled "Employee Retirement Income Security Act of 19 1974" as such provisions may be amended from time to time, or an insur- 20 ance company; and (b) (i) is licensed or chartered by the department of 21 financial services; (ii) is chartered by an agency of the federal 22 government; (iii) is subject to the jurisdiction and regulation of the 23 securities and exchange commission of the federal government; or (iv) is 24 any other entity otherwise authorized to act in this state as a trustee 25 pursuant to the provisions of an act of congress entitled "Employee 26 Retirement Income Security Act of 1974" as such provisions may be 27 amended from time to time. 28 5. The current retirement plans for non-civil service appointed 29 employees and elected officials shall be frozen as of the effective date 30 of this section. Non-civil service appointed employees and elected offi- 31 cials shall no longer contribute to their current retirement plan, 32 however, such persons shall receive the benefits they have accrued up to 33 the effective date of this section upon retirement. The membership of a 34 non-civil service appointed employee or elected official in any state 35 retirement system shall remain open if he or she becomes a member of the 36 defined contribution plan. 37 § 2. This act shall take effect on the first of the fiscal year next 38 succeeding the date on which it shall have become a law. Effective imme- 39 diately, the addition, amendment and/or repeal of any rule or regulation 40 necessary for the implementation of this act on its effective date are 41 authorized and directed to be made and completed on or before such 42 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 currently optional in a defined contribution plan for non-union employ- ees 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 billS. 3761 3 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, and there would be a small administrative cost to the System. Summary of relevant resources: The membership data used in measuring the impact of the proposed change was the same as that used in the March 31, 2016 actuarial valu- ation. Distributions and other statistics can be found in the 2016 Report of the Actuary and the 2016 Comprehensive Annual Financial Report. The actuarial assumptions and methods used are described in the 2015 and 2016 Annual Report to the Comptroller on Actuarial Assumptions, and the Codes Rules and Regulations of the State of New York: Audit and Control. The Market Assets and GASB Disclosures are found in the March 31, 2016 New York State and Local Retirement System Financial Statements and Supplementary Information. 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 January 19, 2017, and intended for use only during the 2017 Legislative Session, is Fiscal Note No. 2017-27, prepared by the Actuary for the New York State and Local Retirement System.
