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.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A6914
SPONSOR: Fitzpatrick (MS) TITLE OF BILL:
An act to amend the retirement and social security law, in relation to
establishing a defined contribution plan
PURPOSE OR GENERAL IDEA OF BILL:
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 comp-
troller 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 Comp-
troller 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/
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.
DIFFERENCE BETWEEN ORIGINAL AND AMENDED VERSION (IF APPLICABLE):
JUSTIFICATION:
This legislation seeks to provide savings to the State and Local Govern-
ments 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 dramat-
ically, and elected officials and non-civil service appointees should
lead by example by freezing their current retirement plans and contrib-
uting 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:
2024 - A6449 - Referred to governmental employees
2022 - A9550 - Referred to governmental employees
2020 - A5393 - Held in Governmental Employees
2018 - A4523 - Held in Governmental Employees
2016 - A4285 - Held in Governmental Employees
2014 - A5105A - Held in Governmental Employees
2010 - A6932 - Held in Governmental Employees
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
See bill draft.
EFFECTIVE DATE:
This act shall take effect on the first of the fiscal year next succeed-
ing the date on which it shall have become a law. Effective immediate-
ly, 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 date.
STATE OF NEW YORK
________________________________________________________________________
6914
2025-2026 Regular Sessions
IN ASSEMBLY
March 18, 2025
___________
Introduced by M. of A. FITZPATRICK, BLANKENBUSH, DiPIETRO, HAWLEY, TAGUE
-- Multi-Sponsored by -- M. of A. MANKTELOW, MORINELLO, PAULIN, SMUL-
LEN -- read once and referred to the Committee on Governmental Employ-
ees
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 contrib-
9 ution plan shall be established for all non-civil service appointed
10 employees and elected officials employed by the state of New York or any
11 public employer which has elected to participate in the New York state
12 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
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD08997-03-5
A. 6914 2
1 ability to transfer among such opportunities; (iii) the stability of the
2 financial organization as evidenced by experience, reputation, assets
3 and holdings, ability to guarantee specific rates of return; (iv) abili-
4 ty to comply with reporting requirements to the comptroller and to
5 participants in such a plan; and (v) such other factors which would be
6 considered by a prudent investor in such a plan.
7 d. The president of the state civil service commission, subject to the
8 rules and regulations of the comptroller, shall provide assistance to
9 any public employer as is appropriate to the provisions of this section.
10 3. A public employer shall contribute three percent of such affected
11 employee's annual salary towards such defined contribution plan. All
12 non-civil service appointed employees and elected officials are required
13 to contribute three percent of their salary towards the defined contrib-
14 ution plan. Such employees may contribute up to one hundred percent,
15 not to exceed twenty-three thousand five hundred dollars of their salary
16 towards the defined contribution plan.
17 4. The term "financial organization" shall mean an organization
18 authorized to do business in the state of New York and (a) which is an
19 authorized fiduciary to act as a trustee pursuant to the provisions of
20 an act of congress entitled "Employee Retirement Income Security Act of
21 1974" as such provisions may be amended from time to time, or an insur-
22 ance company; and (b) (i) is licensed or chartered by the department of
23 financial services; (ii) is chartered by an agency of the federal
24 government; (iii) is subject to the jurisdiction and regulation of the
25 securities and exchange commission of the federal government; or (iv) is
26 any other entity otherwise authorized to act in this state as a trustee
27 pursuant to the provisions of an act of congress entitled "Employee
28 Retirement Income Security Act of 1974" as such provisions may be
29 amended from time to time.
30 5. The current retirement plans for non-civil service appointed
31 employees and elected officials shall be frozen as of the effective date
32 of this section. Non-civil service appointed employees and elected offi-
33 cials shall no longer contribute to their current retirement plan,
34 however, such persons shall receive the benefits they have accrued up to
35 the effective date of this section upon retirement. The membership of a
36 non-civil service appointed employee or elected official in any state
37 retirement system shall remain open if they become a member of the
38 defined contribution plan.
39 § 2. This act shall take effect on the first of the fiscal year next
40 succeeding the date on which it shall have become a law. Effective imme-
41 diately, the addition, amendment and/or repeal of any rule or regulation
42 necessary for the implementation of this act on its effective date are
43 authorized 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
employed by the State of New York or any public employer which partic-
ipates in the New York State and Local Employees' Retirement System
(NYSLERS). Affected employees and their employers would be required to
contribute three percent of annual compensation to a defined contrib-
ution plan. The Comptroller shall select one or more financial organiza-
tions to administer the defined contribution plan and to invest the fund
assets pursuant to such plan. Pursuant to Chapter 18 of the Laws of
2012, non-union employees hired on or after July 1, 2013 whose salary is
at least $75,000 currently have the option to participate in a defined
contribution plan.
A. 6914 3
This legislation would freeze the benefit accruals of current affected
members in NYSLERS as of the effective date. If enacted into law, this
bill is likely to face a constitutional challenge based upon the guaran-
tee that a member's benefits may not be diminished.
Further, we anticipate additional administrative costs to implement
the provisions of this legislation.
Summary of relevant resources:
Membership data as of March 31, 2024 was used in measuring the impact
of the proposed change, the same data used in the April 1, 2024 actuari-
al valuation. Distributions and other statistics can be found in the
2024 Report of the Actuary and the 2024 Annual Comprehensive Financial
Report. The actuarial assumptions and methods used are described in the
2024 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, 2024 New York State and Local Retirement System Financial Statements
and Supplementary Information.
This fiscal note does not constitute a legal opinion on the viability
of the proposed change nor is it intended to serve as a substitute for
the professional judgment of an attorney.
This estimate, dated March 10, 2025, and intended for use only during
the 2025 Legislative Session, is Fiscal Note No. 2025-86. As Chief Actu-
ary of the New York State and Local Retirement System, I, Aaron Schottin
Young, hereby certify that this analysis complies with applicable Actu-
arial Standards of Practice as well as the Code of Professional Conduct
and Qualification Standards for Actuaries Issuing Statements of Actuari-
al Opinion of the American Academy of Actuaries, of which I am a member.
