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A06914 Summary:

BILL NOA06914
 
SAME ASNo Same As
 
SPONSORFitzpatrick (MS)
 
COSPNSRBlankenbush, DiPietro, Hawley, Tague
 
MLTSPNSRManktelow, Morinello, Paulin, Smullen
 
Add §618, R & SS L
 
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.
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A06914 Actions:

BILL NOA06914
 
03/18/2025referred to governmental employees
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A06914 Memo:

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.
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A06914 Text:



 
                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.
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