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.
Impact
This bill would freeze the current retirement plans of affected members, preventing them from accruing additional benefits under the existing pension system. Existing benefits accrued prior to the implementation of the bill would be retained, but no further contributions to these plans would be allowed. This change could potentially lead to considerable cost savings for the state and public employers while shifting the investment risk to individual employees, who would need to manage their own retirement savings within the defined contribution framework.
Summary
Bill A06914 proposes to establish a defined contribution plan for all non-civil service appointed employees and elected officials within 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 bill's effective date. The move to a defined contribution plan is a significant departure from traditional pension plans, which are defined benefit plans that guarantee a specific payout upon retirement. Under the new system, both participants and their employers would be mandated to contribute a fixed percentage of annual salary to the defined contribution plan, specifically set at three percent.
Contention
While proponents of A06914 argue that transitioning to a defined contribution plan offers greater flexibility and could provide a more sustainable financial path for the state, critics raise concerns over the potential downsides for employees. There is apprehension regarding the guarantee that current benefits may not be diminished, suggesting that this shift could face constitutional challenges. Additionally, administrative complications are anticipated as the state adopts new regulations and structures for managing the defined contribution plans, which may incur significant costs during the implementation phase.
Employer eligibility to participate in the public employees retirement system defined contribution retirement plan, employer contribution requirements for the defined benefit and defined contribution retirement plans, and employee eligibility to elect to transfer to the defined contribution retirement plan; to provide for retroactive application; and to declare an emergency.
Relates to the definition of additional member contributions and basic member contributions for certain retirement system members to allow such contributions to be used as offsets
Modifies the definition of additional member contributions and basic member contributions for certain New York city employees' retirement system members who are subject to the twenty-five year retirement program for fire protection inspector members under Article 15 of the retirement and social security law, to allow such additional member contributions to be used to offset a deficit of basic member contributions, or to allow an excess of basic member contributions to offset a deficit of additional member contributions.
AN ACT to amend and reenact sections 54-52-02.1, 54-52-06, 54-52.6-01, 54-52.6-02.2, 54-52.6-05, and 54-52.6-09.5 of the North Dakota Century Code, relating to employer eligibility to participate in the public employees retirement system defined contribution retirement plan, employer contribution requirements for the defined benefit and defined contribution retirement plans, and employee eligibility to elect to transfer to the defined contribution retirement plan; to provide for retroactive application; and to declare an emergency.