Relates to transfer of retirement membership for SUNY employees within the professional, scientific and technical bargaining unit

Justification

Employees of SUNY are eligible for membership in different pension plans depending on their job title and bargaining unit Employees who have faculty positions have an option to choose either the New York State and Local Employees Retirement System or the Teachers Retirement system or the Optional Retirement Program. SUNY employees in non-faculty positions are generally eligible for membership only in New York State and Local Employees Retirement. System and do not have the option to join the Optional Retirement Program.

During the years 1994 through 2000 certain employees in nursing titles were hired by SUNY in temporary job titles and were misinformed regarding their retirement options. These employees were told that they had to opt for membership in the Optional Retirement Program. These employees were later placed into permanent nursing job titles in SUNY that are in the professional, scientific, and technical bargaining unit. Positions in the professional, scientific, and technical bargaining unit in SUNY are eligible for membership in NYSLERS but are not eligible for membership in the Optional Retirement Program. However, when these employees attempted to enroll as members of NYSLERS they were prevented from doing so because Education Law Section 393 contains a provision that says that once a SUNY employee has elected to join the Optional Retirement Program, that employee cannot become a member of NYSLERS or TRS as long as that person is employed by SUNY. As a result, these employees continue to be members of the Optional Retirement Program despite the fact that they are employed in job titles that make them eligible for membership in NYSLERS.

This bill is intended to correct an error that occurred with regard to these employees who were directed to enroll in the Optional Retirement Program when they were hired by SUNY, although they should have been given an option to join NYSLERS. The bill would apply to a limited group of employees who were hired during a specified time period and who are currently in titles that make them eligible for NYSLERS. It would not create an open-ended opportunity to switch between retirement plans.

Employees who become members of NYSLERS who want to purchase credit for prior service would be required to pay an amount equal to the full

cost of such service credit. This would prevent any member from getting a duplicate benefit for the same period of service.

Legislative history

New bill.

Fiscal implications

This bill will allow employees of the State University of New York (SUNY) in a position within the Professional, Scientific and Technical bargaining unit, who first became employed with SUNY between January 1, 1994 and December 31, 2000, and who enrolled in the Optional Retirement Program to terminate their membership in the Optional Retirement Program and to apply to become members of the New York State and Local Employees' Retirement System (NYSLERS) as of such date of application.

Affected members will have to pay the entire past service cost as determined by Comptroller in order to get retirement service credit for the service rendered before their dates of membership.

If this bill is enacted, the number of employees who may be affected by this legislation cannot be readily determined. For every employee who does so elect, there will be an annual cost to the State of New York of approximately 9.2% of salary for the fiscal year ending March 31, 2011.

In addition to the annual cost above, for every member who elects this benefit, there will be a past service cost that will depend on the age, service and salary of the member. The members will be able to offset this cost by the transfer of funds from their Optional Retirement Program balances. For an individual member, if the amount transferred from the Optional Retirement Program is less than the past service cost, the member will have to make up the difference either as a one-time payment or by making a series of payments over a period of five (5) years.

Effective date

Immediate.