S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   6932
 
                        2025-2026 Regular Sessions
 
                           I N  A S S E M B L Y
 
                              March 18, 2025
                                ___________
 
 Introduced  by  M.  of  A. FITZPATRICK -- Multi-Sponsored by -- M. of A.
   BLANKENBUSH, DiPIETRO, FRIEND, HAWLEY, TAGUE -- read once and referred
   to the Committee on Governmental Employees
 
 AN ACT to amend the retirement and social security law, in  relation  to
   establishing  a  defined  contribution program for which elected offi-
   cials are deemed mandatory members
 
   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 article 22-A to read as follows:
                               ARTICLE 22-A
                       DEFINED CONTRIBUTION PROGRAM
 SECTION 1250. DEFINITIONS.
         1251. DEFINED CONTRIBUTION PROGRAMS ESTABLISHED.
         1252. RATES OF CONTRIBUTION.
         1253. ENROLLMENT.
         1254. DEATH BENEFIT.
         1255. INCONSISTENT PROVISIONS OF OTHER ACTS SUPERSEDED.
   § 1250. DEFINITIONS. WHEREVER USED IN THIS ARTICLE THE FOLLOWING TERMS
 SHALL HAVE THE FOLLOWING MEANINGS:
   A. THE TERM "PUBLIC RETIREMENT SYSTEM OF THE STATE" SHALL MEAN THE NEW
 YORK STATE AND LOCAL EMPLOYEES' RETIREMENT SYSTEM, THE  NEW  YORK  STATE
 TEACHERS'  RETIREMENT  SYSTEM,  THE  NEW YORK STATE AND LOCAL POLICE AND
 FIRE RETIREMENT SYSTEM, THE NEW YORK CITY EMPLOYEES' RETIREMENT  SYSTEM,
 THE  NEW  YORK CITY TEACHERS' RETIREMENT SYSTEM, THE NEW YORK CITY BOARD
 OF EDUCATION RETIREMENT SYSTEM, THE NEW YORK CITY POLICE  PENSION  FUND,
 AND THE NEW YORK CITY FIRE PENSION FUND.
   B.  THE  TERMS  "OPTIONAL  MEMBER"  AND  "OPTIONAL MEMBERS" MEAN THOSE
 EMPLOYEES WHO ARE MEMBERS OF A PUBLIC RETIREMENT SYSTEM OF THE STATE WHO
 FIRST BECAME MEMBERS OF SUCH SYSTEMS ON OR AFTER APRIL FIRST, TWO  THOU-
 SAND  TWENTY-SIX  AND  MAKE AN ELECTION TO JOIN THE DEFINED CONTRIBUTION
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD08996-02-5
              

 A. 6932                             2
 
 PROGRAM ESTABLISHED PURSUANT TO THIS ARTICLE PURSUANT TO THE  PROVISIONS
 OF SECTION TWELVE HUNDRED FIFTY-THREE OF THIS ARTICLE.
   C.    THE  TERMS "MANDATORY MEMBER" AND "MANDATORY MEMBERS" MEAN THOSE
 ELECTED OFFICIALS WHO ARE MEMBERS OF A PUBLIC RETIREMENT SYSTEM  OF  THE
 STATE  WHO FIRST BECAME MEMBERS OF SUCH SYSTEMS ON OR AFTER APRIL FIRST,
 TWO THOUSAND TWENTY-SIX PURSUANT TO THE  PROVISIONS  OF  SECTION  TWELVE
 HUNDRED FIFTY-THREE OF THIS ARTICLE.
   D.  THE  TERMS  "PROGRAM  PARTICIPANT" AND "PROGRAM PARTICIPANTS" MEAN
 THOSE EMPLOYEES ELECTING TO  PARTICIPATE  IN  THE  DEFINED  CONTRIBUTION
 PROGRAM.
   E.  THE  TERM  "DEFINED  CONTRIBUTION  PROGRAM"  MEANS  THE RETIREMENT
 PROGRAM ESTABLISHED PURSUANT TO THIS ARTICLE.
   F. THE TERM "WAGES" SHALL MEAN REGULAR COMPENSATION EARNED BY AND PAID
 TO A MEMBER BY A PUBLIC EMPLOYER, EXCEPT THAT THE FOLLOWING ITEMS  SHALL
 NOT  BE  INCLUDED  IN THE DEFINITION OF WAGES: (I) OVERTIME COMPENSATION
 PAID UNDER ANY LAW OR POLICY UNDER WHICH EMPLOYEES ARE PAID  AT  A  RATE
 GREATER  THAN  THEIR  STANDARD  RATE  FOR  ADDITIONAL  HOURS BEYOND THAT
 REQUIRED, INCLUDING SECTION ONE HUNDRED THIRTY-FOUR OF THE CIVIL SERVICE
 LAW AND SECTION NINETY OF THE  GENERAL  MUNICIPAL  LAW,  (II)  WAGES  IN
 EXCESS  OF  THE  ANNUAL  SALARY PAID TO THE GOVERNOR PURSUANT TO SECTION
 THREE OF ARTICLE FOUR OF THE STATE CONSTITUTION, (III) LUMP SUM PAYMENTS
 FOR DEFERRED COMPENSATION, SICK LEAVE,  ACCUMULATED  VACATION  OR  OTHER
 CREDITS  FOR  TIME NOT WORKED, (IV) ANY FORM OF TERMINATION PAY, AND (V)
 ANY ADDITIONAL COMPENSATION PAID IN ANTICIPATION OF RETIREMENT.
   § 1251. DEFINED CONTRIBUTION PROGRAMS  ESTABLISHED.  THERE  IS  HEREBY
 ESTABLISHED A DEFINED CONTRIBUTION PROGRAM WITHIN EACH PUBLIC RETIREMENT
 SYSTEM  OF  THE STATE WHICH SHALL PROVIDE FOR RETIREMENT BENEFITS FOR OR
 ON BEHALF OF PROGRAM PARTICIPANTS.  UNDER SUCH PROGRAM  THE  STATE,  THE
 CITY  OF  NEW  YORK AND OTHER PARTICIPATING EMPLOYERS AND SUCH EMPLOYEES
 SHALL CONTRIBUTE, TO THE EXTENT AUTHORIZED OR REQUIRED, TO SUCH  DEFINED
 CONTRIBUTION ACCOUNTS. THE PROGRAMS SHALL BE ADMINISTERED BY THE RETIRE-
 MENT  SYSTEM  IN WHICH THE PROGRAM PARTICIPANT IS A MEMBER.  EACH PUBLIC
 RETIREMENT SYSTEM OF THE STATE IS  AUTHORIZED  TO  PROMULGATE  ALL  SUCH
 RULES  AND  REGULATIONS AS MAY BE NECESSARY OR REQUIRED TO IMPLEMENT THE
 DEFINED CONTRIBUTION PROGRAMS  ESTABLISHED  PURSUANT  TO  THIS  ARTICLE,
 INCLUDING  SUCH RULES AND REGULATIONS AS MAY BE NECESSARY TO COMPLY WITH
 THE APPLICABLE PROVISIONS OF TITLE TWENTY-SIX OF THE UNITED STATES  CODE
 RELATING TO DEFINED CONTRIBUTION PLANS AND THEIR QUALIFICATION AND OPER-
 ATION AND ALL SUCH RULES AND REGULATIONS AS MAY BE NECESSARY OR REQUIRED
 REGARDING  THE  COLLECTION OF EMPLOYER AND MEMBER CONTRIBUTIONS, INVEST-
 MENT OF CONTRIBUTIONS, WITHDRAWALS AND DISTRIBUTION OF MEMBER  ACCOUNTS,
 NOMINATION  OF BENEFICIARIES, THE ASSESSMENT AND COLLECTION FROM EMPLOY-
 ERS OF COSTS AND EXPENSES INCURRED IN THE ESTABLISHMENT AND OPERATION OF
 THE PLAN, AND ALL OTHER MATTERS PERTAINING THERETO. EACH PUBLIC  RETIRE-
 MENT  SYSTEM  OF  THE  STATE IS AUTHORIZED TO ENTER INTO SUCH AGREEMENTS
 WITH QUALIFIED PROVIDERS AS  MAY  BE  NECESSARY  OR  DESIRABLE  FOR  THE
 INVESTMENT  OF  MEMBER  ACCOUNTS  AND  THE GENERAL ADMINISTRATION OF THE
 PLAN.
   § 1252. RATES OF  CONTRIBUTION.  A.  1.  THE  EMPLOYER  SHALL  MAKE  A
 CONTRIBUTION  EQUAL TO FOUR PERCENT OF EACH PROGRAM PARTICIPANT'S WAGES.
 SUCH CONTRIBUTIONS SHALL BE KNOWN AS "BASIC EMPLOYER CONTRIBUTIONS".
   2. THE EMPLOYER SHALL CONTRIBUTE AN AMOUNT EQUAL TO  THE  CONTRIBUTION
 MADE BY EACH PROGRAM PARTICIPANT, PROVIDED HOWEVER, THAT SUCH ADDITIONAL
 CONTRIBUTIONS  SHALL  NOT  EXCEED  THREE PERCENT OF EACH PROGRAM PARTIC-
 IPANT'S WAGES. SUCH CONTRIBUTIONS SHALL BE KNOWN AS  "MATCHING  EMPLOYER
 CONTRIBUTIONS".
 A. 6932                             3
 
   B. IN THE CASE OF ANY PROGRAM PARTICIPANTS, EMPLOYEES SHALL BE ALLOWED
 TO CONTRIBUTE AN AMOUNT UP TO THE MAXIMUM ALLOWABLE AMOUNT, INCLUSIVE OF
 BASIC  AND  MATCHING EMPLOYER CONTRIBUTIONS, PERMITTED BY FEDERAL LAW IN
 26 U.S.C. 401 ET SEQ. AND THE RULES AND REGULATIONS OF THE UNITED STATES
 DEPARTMENT OF THE TREASURY PROMULGATED THEREUNDER.
   C. NO CONTRIBUTIONS PURSUANT TO SUBDIVISION A OF THIS SECTION SHALL BE
 MADE BY THE EMPLOYER UNTIL THE PROGRAM PARTICIPANT COMPLETES ONE YEAR OF
 SERVICE  AND  CONTINUES  IN  SERVICE THEREAFTER. AT THE END OF A PROGRAM
 PARTICIPANT'S INITIAL YEAR OF  SERVICE,  A  SINGLE  CONTRIBUTION  IN  AN
 AMOUNT DETERMINED PURSUANT TO SUBDIVISION A OF THIS SECTION, WITH INTER-
 EST  AT  THE  RATE  OF  FOUR  PER CENTUM PER ANNUM, SHALL BE MADE BY THE
 EMPLOYER, ON BEHALF OF SUCH PROGRAM PARTICIPANT CONTINUED IN SERVICE.
   § 1253. ENROLLMENT.  A. EMPLOYEES WHO FIRST BECOME MEMBERS OF A PUBLIC
 RETIREMENT SYSTEM OF THE STATE ON OR AFTER  APRIL  FIRST,  TWO  THOUSAND
 TWENTY-SIX,  WITHIN  THIRTY DAYS OF THEIR ENTRY INTO SERVICE, SHALL HAVE
 THE ABILITY TO ELECT THE DEFINED CONTRIBUTION PROGRAM ESTABLISHED PURSU-
 ANT TO THIS ARTICLE. SUCH ELECTION SHALL BE IN WRITING,  SHALL  BE  DULY
 EXECUTED AND FILED WITH THE RETIREMENT SYSTEM OF WHICH THEY ARE A MEMBER
 AND  SHALL BE IRREVOCABLE AS LONG AS SUCH PERSON IS A MEMBER OF A PUBLIC
 RETIREMENT SYSTEM OF THE STATE. ALL ELIGIBLE  EMPLOYEES  WHO  ELECT  THE
 DEFINED  CONTRIBUTION  PROGRAM SHALL NOT ACCRUE CREDITED SERVICE FOR ANY
 PURPOSE UNDER ANY OTHER ARTICLE OF THIS CHAPTER OR ANY OTHER  APPLICABLE
 LAW.
   B.  ALL  PROGRAM  PARTICIPANTS  ENROLLED  IN  THE DEFINED CONTRIBUTION
 PROGRAM SHALL NOT ACCRUE CREDITED SERVICE TO BE  USED  FOR  ANY  PURPOSE
 UNDER ANY OTHER ARTICLE OF THIS CHAPTER OR ANY OTHER APPLICABLE LAW.
   C.  ANY ELECTED OFFICIAL OR ELECTED OFFICIALS WHO FIRST BECOME MEMBERS
 OF A PUBLIC RETIREMENT SYSTEM OF THE STATE ON OR AFTER APRIL FIRST,  TWO
 THOUSAND  TWENTY-SIX,  SHALL BE A MANDATORY MEMBER OR MANDATORY MEMBERS,
 REQUIRED TO PARTICIPATE IN THE DEFINED CONTRIBUTION PROGRAM  ESTABLISHED
 PURSUANT  TO  THIS  ARTICLE.  FOR ALL SUCH ELECTED OFFICIALS THE DEFINED
 CONTRIBUTION PROGRAM SHALL NOT ACCRUE CREDITED SERVICE FOR  ANY  PURPOSE
 UNDER ANY OTHER ARTICLE OF THIS CHAPTER OR ANY OTHER APPLICABLE LAW.
   §  1254.  DEATH  BENEFIT.  A.  PROGRAM  PARTICIPANTS SHALL RECEIVE THE
 FOLLOWING FINANCIAL PROTECTION IN THE EVENT OF DEATH IN SERVICE: A BENE-
 FIT UPON THE DEATH OF A MEMBER IN SERVICE EQUAL TO THE  MEMBER'S  SALARY
 UPON  THEIR  COMPLETION  OF  ONE YEAR OF SERVICE, TWO YEARS' SALARY UPON
 COMPLETION OF TWO  YEARS  OF  SERVICE,  AND  THREE  YEARS'  SALARY  UPON
 COMPLETION OF THREE YEARS OF SERVICE.
   B. FOR THE PURPOSES OF THIS SECTION:
   1.  THE  DEATH  BENEFIT PAYABLE SHALL BE IN LIEU OF THE PAYMENT OF THE
 BASIC EMPLOYER CONTRIBUTIONS AND MATCHING  EMPLOYER  CONTRIBUTIONS  MADE
 PURSUANT  TO  THIS ARTICLE, BUT SHALL NOT BE LESS THAN THE VALUE OF SUCH
 CONTRIBUTIONS AND
   2. THE VALUE OF THE EMPLOYEE CONTRIBUTIONS SHALL BE PAYABLE  IN  ADDI-
 TION TO THE DEATH BENEFIT PAYABLE PURSUANT TO THIS SECTION.
   §  1255.  INCONSISTENT PROVISIONS OF OTHER ACTS SUPERSEDED. INSOFAR AS
 THE PROVISIONS OF THIS ARTICLE ARE INCONSISTENT WITH THE  PROVISIONS  OF
 ANY  OTHER ACT, GENERAL OR SPECIAL, THE PROVISIONS OF THIS ARTICLE SHALL
 BE CONTROLLING.
   § 2. This act shall take effect April 1, 2026.
   FISCAL NOTE.--Pursuant to Legislative Law, Section 50:
   This bill would provide new members who first join  public  retirement
 systems  in  New  York  State  on  or  after April 1, 2026 the option of
 defined contribution plan membership in lieu  of  defined  benefit  plan
 membership.  Defined contribution plan membership would be mandatory for
 A. 6932                             4
 
 elected officials. 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  contrib-
 ution plan.
   Insofar  as  this bill affects the New York State and Local Employees'
 Retirement System and the New York  State  and  Local  Police  and  Fire
 Retirement  System,  the  significant design features of the new defined
 contribution plan  (the  plan)  include  the  following:  (1)  mandatory
 employer  contributions  of 4 percent of wages, with additional matching
 contributions up to 3 percent of wages, subject to limitations in feder-
 al law, (2) a benefit payable upon death equal to the accumulated  value
 of  all  member  contributions  plus either the accumulated value of all
 employer contributions, or up to three times salary, whichever is great-
 er, (3) no benefit payable upon disability, (4) irrevocable membership.
   The long-term expected  annual  employer  contribution  rate  for  all
 members  who  choose  the  plan  would  be  approximately 7.7 percent of
 payroll.
   The administrative expense to NYSLRS to establish the plan is current-
 ly estimated at $5 to $10 million. This does not  include  the  cost  to
 participating employers related to the modification of the state payroll
 system,  currently  estimated  at  $1 million. In addition, members will
 incur management and investment expenses for their plan  accounts  esti-
 mated to average 0.5 percent of the account balance annually.
   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 7, 2025, and intended for use only during
 the 2025 Legislative Session, is Fiscal Note No. 2025-85. 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.