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.