Relates to right of vested members of the New York state teachers' retirement system to withdraw from such system

1 Co-sponsor

• Diane J. Savino

BILL NUMBER:S3401

Title of bill

An act to amend the education law, in relation to the right of vested members to withdraw from the New York state teachers' retirement system

Purpose of the bill

This bill would allow certain Tiers 3, 4 and 5 vested members of the New York State Teachers' Retirement System who have permanently ceased teaching to withdraw from membership in the System.

Summary and justification

Pursuant to section 512(1) of the Education Law, Tier 1 and 2 members of the System have an unrestricted right to terminate their memberships with the System and withdraw their accumulated contributions, if any, from the System. No similar right, however, has been extended to members of the System provided benefits under Articles 14 and 15 of the Retirement and Social Security Law. Once Tier 3, 4 and 5 members have accumulated 10 years of credited service with the system, they are locked into System membership even where it may not be to their advantage.

It is not always to a Tier 3, 4 or 5 member's advantage to have his/her membership in the System continue after he or she has ceased teaching in New York state. Specifically, teachers who have been compelled by circumstances to leave New York state and take up residence in other states may have the opportunity to obtain credit for their New York service in the public employee retirement systems of other states provided they are not entitled to a benefit from the system for that service. Allowing Tiers 3, 4 and 5 members to withdraw from the System in that circumstance so that they can obtain credit for their New York service in another state would make their service portable.

This bill would add a new subdivision g to section 512 of the Education Law. This would allow a member of the system subject to Article 14 or 15 of the Retirement and Social Security Law who has permanently ceased teaching in New York to elect to withdraw his/her accumulated contributions and thereby terminate his/her membership in the System where the purpose of the withdrawal is to enable the member to obtain credit for the teaching service in a public employee retirement system in another state. The retirement system in the other state must certify that the member seeking withdrawal is a member of that system, that the member has at least five years of service credit in that system, and that withdrawal from the System is necessary in order for the member to obtain credit for the member's New York service in the other system. Upon payment of the accumulated contributions to the member, any and all obligations of the System to the member would cease. The System's Retirement Board is expressly authorized to adopt rules and regulations implementing new subdivision g.

Fiscal implications

There are no fiscal implications to the State. The Teachers' Retirement System requested this legislation and stated that a very

limited number of teachers would qualify for a withdrawal from the system.

Effective date

The bill would take effect immediately.