Provides death benefits and health insurance coverage to eligible survivors of public employees who die while ordered to service in the uniformed services

Summary of provisions

Sections 1, 2, 3, 4 and 5 of this bill amend Sections 60, 60-a, 60-b and 61 of the Retirement and Social Security Law to make provisions relating to the New York State and Local Employees' Retirement System conform to the HEART Act.

Sections 6, 7, 8, 9 and 10 of this bill amend Sections 360, 360-a, 360-b and 361 of the Retirement and Social Security Law to make provisions relating to the New York State and Local police and Fire Retirement System conform to the HEART Act.

Sections 11, 12, 13, 14, 15, 16 and 17 of this bill amend Sections 448, 508, 509, 606, 607, 655 and 656 of the Retirement and Social Security Law to make provisions conform to the HEART Act.

Section 18 of this bill amends Subdivision g of Section 208-f of the General Municipal Law to make provisions relating to making a special accidental death benefit for certain public employees in this state conform to the HEART Act.

Section 19 of this bill amends Section 512 of the Education Law to make provisions relating to the New York State Teachers' Retirement System conform to the HEART Act.

Section 20 of this bill amends Section 2575 of the Education Law to make provisions relating to the New York City Board of Education Retirement System conform to the HEART Act.

Section 21 of this bill amends Section 13-244 of the Administrative Code of the City of New York to make provisions relating to the New York City Police Pension Fund conform to the HEART Act.

Section 22 of this bill amends Section 13-149 of the Administrative Code of the City of New York to make provisions relating to the New York City Employees' Retirement System conform to the HEART Act.

Section 23 of this bill amends Section 13-347 of the Administrative Code of the City of New York to make provisions relating to the New York City Fire Pension Fund conform to the HEART Act.

Section 24 of this bill amends Section 13-544 of the Administrative Code of the City of New York to make provisions relating to the New York City Teachers' Retirement System conform to the HEART Act.

Sections 25, 26 and 27 of this bill amend Sections 3-401, 3-402 and 3-403 of the Administrative Code of the City of New York to make provisions relating to awards to the surviving spouses and domestic partners of members of certain New York City retirement systems conform to the HEART Act.

Section 28 of this bill amends Section 12-126 of the Administrative Code of the City of New York to make provisions relating to health insurance coverage for city employees, persons retired from city employment, and dependents of such employees and retirees conform to the HEART Act.

Section 29 of this bill amends Section 165-a of the Civil Service Law to make provisions relating to the continuation of state health benefit plans for survivors of employees of the state and/or of a political subdivision or of a public authority conform to the HEART Act.

Section 30 of this bill provides for an effective date of immediately.

Prior legislative history

New Bill.

Justification

The Federal Heroes Earnings Assistance and Relief Tax Act of 2008 ("HEART Act") amended section 401 of Title 26 of the US Code to provide that in order to remain a qualified pension plan, the plan must provide a death benefit for a member who dies while performing "qualified military service" as if the member had resumed and then terminated employment on account of death by December 31, 2012. The definition of the term "qualified military service" for HEART Act purposes is the same as used in the Uniformed Services Employment and Reemployment Rights Act ("USERRA") (38 USC §§4301 et seq.) for individuals entitled to re-employment rights thereunder.

Chapter 105 of the Laws of 2005 amended the death benefit provisions of the Retirement and Social Security Law to provide coverage for members who died while serving on "active duty, other than for training purposes, pursuant to Title 10 of the United States Code, with the Armed Forces of the United States." Unfortunately, this coverage excludes some situations that would constitute "qualified military service" under the HEART Act and USERRA. Therefore, we must amend the Retirement and Social Security Law death benefits to provide the more extensive coverage required by the HEART Act or risk that the New York State and New York City pension plans ("Retirement Systems") will no longer be considered qualified governmental pension plans within the meaning of the Internal Revenue Code ("IRC").

While there are other types of qualified plans under the IRC, the Retirement Systems must remain qualified as governmental plans in order to retain their exemption from the requirements of the Employees Retirement Income Security Act ("ERISA"), which is applicable to private pension plans. If the Retirement

Systems were to lose their plan status, they could not function as as qualified plans because their benefit structure would violate ERISA requirements.

By not amending our state laws to comply with the HEART Act, the Retirement Systems could lose their qualified status and exemption from ERISA. Furthermore, the loss of the Retirement Systems' qualified status would result in the loss of the Systems' tax exempt status. Should that occur, the employer contributions to the system as well as the investment income earned on those employer contributions would become taxable to the members.

Budget implications

This bill has no significant fiscal impact.

Effective date

This bill would take effect immediately.