Assembly Bill A6914

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   6914
 
                        2025-2026 Regular Sessions
 
                           I N  A S S E M B L Y
 
                              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:
 
   Section 1. The retirement and social security law is amended by adding
 a new section 618 to read as follows:
   § 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 CONTRIB-
 UTION  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
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD08997-03-5
              

 A. 6914                             2
 
 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 TWENTY-THREE THOUSAND FIVE HUNDRED DOLLARS OF THEIR 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  THEY BECOME A MEMBER OF THE
 DEFINED CONTRIBUTION PLAN.
   § 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 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.