§ 5 — Deferred compensation

New York § 5

• Jurisdiction: New York
• Law STF: State Finance
• Art. 2: General Fiscal Provisions

Text

§ 5. Deferred compensation. 1. The deferred compensation board is\nhereby established, to consist of one member appointed by the governor,\none member appointed by the temporary president of the senate and one\nmember appointed by the speaker of the assembly. The board shall adopt\nrules and regulations regarding the standards and requirements of all\ndeferred compensation plans established pursuant to this section,\nincluding selection of financial organizations for investment purposes.\n 2. a. Notwithstanding any other provision of law, the deferred\ncompensation board shall establish a deferred compensation plan, under\nthe provisions of section four hundred fifty-seven of the internal\nrevenue code and regulations adopted pursuant thereto, for all state\nemployees and shall promulgate rules and regulations as soon as is\nreasonably practicable following the appointment of all members of the\nboard for the appropriate administration of such a plan.\n b. The board shall enter into written agreements with one or more\nfinancial organizations to administer the deferred compensation plan for\nstate employees and to invest funds held pursuant to such plan. Any such\nwritten agreement and deferred compensation plan shall conform with the\nprovisions of section four hundred fifty-seven of the internal revenue\ncode and regulations adopted pursuant thereto.\n c. Within the discretion of the deferred compensation board and in\naccordance with and subject to its fiduciary duty and obligations to the\ndeferred compensation plan for state employees and to the members and\nbeneficiaries of such plan and such other investment limitations as may\nbe prescribed by this chapter, the deferred compensation board is\nauthorized to establish an MWBE asset management and financial\ninstitution strategy including reasonable goals for utilization of MWBE\nasset managers, MWBE financial institutions and MWBE professional\nservice firms, which shall include, but shall not be limited to, the\nfollowing objectives:\n (i) conducting procurement procedures in a manner that will assure the\ninclusion of MWBE asset managers in any request for proposal or search\nprocess for asset management services undertaken in accordance with the\nrules and regulations and of the board;\n (ii) subject to best execution policies, developing a strategy to (1)\nconduct trades of public equity securities with MWBE financial\ninstitutions and (2) conduct trades of fixed-income securities through\nMWBE financial institutions;\n (iii) conducting procurement procedures in a manner that will assure\nthe inclusion of MWBE financial institutions and other MWBE professional\nservice firms in procurements for services that include accounting,\nbanking, financial advisory, insurance, legal, research, valuation and\nother financial and professional services that are undertaken in\naccordance with the rules and regulations of the board;\n (iv) cooperating with other fiduciary controlled entities and state\nagencies and offices to identify MWBE asset managers, MWBE financial\ninstitutions and MWBE professional service firms.\n As used in this section, the terms "MWBE asset manager", "MWBE\nfinancial institutions", "MWBE", "fiduciary-controlled entities" and\n"best execution" shall have the meanings specified in section one\nhundred seventy-six of the retirement and social security law.\n d. The board is also authorized to:\n (i) periodically provide notice of the existence of such strategy so\nthat MWBE asset managers, MWBE financial institutions and other MWBE\nprofessional service firms are made aware of the opportunities made\navailable pursuant to this strategy;\n (ii) within sixty days of the end of each fiscal year following the\neffective date of this paragraph, the board shall report to the\ngovernor, legislature and the chief diversity officer of the state of\nNew York on the participation of MWBE asset managers, MWBE financial\ninstitutions and MWBE professional service providers in investment and\nbrokerage transactions with or as providers of services for the deferred\ncompensation plans, including a comparative analysis of such activity\nrelative to such activity with all asset managers, financial\ninstitutions and professional service providers for the relevant period\nand on the progress and the success of the efforts undertaken during\nsuch period to achieve the goals of such strategy. Each report shall be\nsimultaneously published on the website of the deferred compensation\nplans for not less than sixty days following its release to the governor\nand the other recipients named above;\n (iii) work with the other fiduciary-controlled entities to create a\ndatabase of such MWBE entities; and\n (iv) periodically, but not less than annually, hold a conference to\npromote such strategy in conjunction with the other fiduciary-controlled\nentities.\n e. The rules and regulations promulgated by the board shall establish\nstandards for the selection of financial organizations, authorized to do\nbusiness in this state, to participate in such plans, including, but not\nlimited to, the following criteria:\n (i) rates of commission, brokerage and other fees, administrative\nexpenses and related service charges imposed by the financial\norganization,\n (ii) variety of types of investment opportunities offered by the\nfinancial organization and/or among the financial organizations selected\nand the ability to transfer among such opportunities,\n (iii) the stability of the financial organization as evidenced by\nexperience, reputation, assets and holdings, ability to guarantee\nspecific rates of return,\n (iv) ability to comply with reporting requirements to the board and to\nparticipants in such a plan, and\n (v) such other factors which would be considered by a prudent investor\nin such a plan.\n f. The president of the state civil service commission, subject to the\nrules and regulations of the board, shall provide assistance to any\npublic employer as is appropriate to the provisions of this section.\n g. At the request of a state employee the comptroller shall, by\npayroll deduction, defer the payment of part of the compensation of such\nemployee as provided in a written statement by the employee and transfer\nthe amount so deferred to the authorized financial organization.\n h. The board may hire such employees as it deems necessary and prudent\nto assist in its administration. Such employees may be either:\n (i) in the unclassified service of the state and, notwithstanding any\nother provision of law to the contrary, shall be designated managerial\nand, as such, eligible for benefits provided by subdivision two of\nsection eleven and subdivision (a) of section twelve of chapter four\nhundred sixty of the laws of nineteen hundred eighty-two, as amended;\nsection one hundred fifty-eight of the civil service law; eligible to\nparticipate in the state deferred compensation plan, the New York state\nand local employees' retirement system; the health benefit plan for\nstate employees; and subject to coverage under sections seventeen and\neighteen of the public officers law, or\n (ii) hired not as state employees but hired on a contractual basis.\n 3. a. Notwithstanding any other provision of law, every public\nemployer in the state may provide a deferred compensation plan for its\nemployees in accordance with standards, rules and regulations of the\ndeferred compensation board and the provisions of section four hundred\nfifty-seven of the internal revenue code and regulations adopted\npursuant thereto.\n b. For the purposes of this section, the term "public employer" shall\nmean: a county, city, town, village or any other political subdivision\nas defined in section one hundred thirty-one of the retirement and\nsocial security law or civil division of the state; a school district or\nany governmental entity operating a public school, college or\nuniversity; a public improvement or special district; a public\nauthority, commission or public benefit corporation; any other public\ncorporation, agency or instrumentality or unit of government which\nexercises governmental powers under the laws of the state or any\ninstrumentality jointly created by this state and any other state or\nstates.\n c. Subject to the rules and regulations promulgated by the board, a\npublic employer may establish a deferred compensation plan and enter\ninto written agreements with one or more financial organizations to\nadminister such deferred compensation plan for its employees and to\ninvest the funds held pursuant to such plan or such employer may elect\nparticipation in the deferred compensation plan provided for state\nemployees. At the request of an employee of any such public employer,\nthe chief fiscal officer or other appropriate officer of the public\nemployer shall, by payroll deduction, defer the payment of part of the\ncompensation of such employee, as provided in a written statement by the\nemployee, and transfer the amount so deferred to the authorized\nfinancial organization.\n 4. Notwithstanding the other provisions of this section, state\nemployees, otherwise eligible to participate in the deferred\ncompensation plan, who are in a negotiating unit represented by an\nemployee organization which negotiates pursuant to article fourteen of\nthe civil service law shall not be permitted to participate under the\nprovisions of this section until such time as such participation is\nauthorized pursuant to a collectively negotiated agreement between the\nstate and the employee organization; provided, however, that the state\nneed only negotiate whether or not such employees shall be included in\nsuch plan.\n 5. Should a public employer elect to provide or elect to participate\nin a deferred compensation plan for employees otherwise eligible to\nparticipate in the plan, employees in a negotiating unit represented by\nan employee organization which negotiates pursuant to article fourteen\nof the civil service law shall not be permitted to participate under the\nprovisions of this section until such time as such participation is\nauthorized pursuant to a collectively negotiated agreement between the\npublic employer and the employee organization; provided, however, that\nthe public employer need only negotiate whether or not such employees\nshall be included in such plan.\n 6. To the extent permitted by section four hundred fifty-seven of the\ninternal revenue code and regulations adopted pursuant thereto, any\ncompensation deferred by a state employee or an employee of a public\nemployer under an eligible deferred compensation plan established\npursuant to this section shall be considered part of annual compensation\nby any retirement system or plan to which the state or public employer\ncontributes on behalf of said employee. However, this in no way shall be\nconstrued to supersede the provision of section four hundred thirty-one\nof the retirement and social security law or any other similar provision\nof law which limits the salary base for computing retirement benefits\npayable by a public retirement system.\n 7. Any benefit from a deferred compensation plan established pursuant\nto this section shall be in addition to any retirement benefits provided\na state or public employee under any other provision of law.\n 8. a. The term "financial organization" shall mean an organization\nauthorized to do business in the state of New York and (A) which is an\nauthorized fiduciary to act as a trustee pursuant to the provisions of\nan act of congress entitled "Employee Retirement Income Security Act of\n1974" as such provisions may be amended from time to time, or an\ninsurance company; and (B) (i) is licensed or chartered by the state\ndepartment of financial services, (ii) is chartered by an agency of the\nfederal government, (iii) is subject to the jurisdiction and regulation\nof the securities and exchange commission of the federal government, or\n(iv) is any other entity otherwise authorized to act in this state as a\ntrustee pursuant to the provisions of an act of congress entitled\n"Employee Retirement Income Security Act of 1974" as such provisions may\nbe amended from time to time.\n b. The term "state employee" as used in this section shall mean an\nemployee or officer of the state, whose salary is paid directly by the\nstate and, for the limited purposes of this section shall be deemed to\ninclude officers or employees in positions in the institutions under the\nmanagement and control of Cornell and Alfred universities, as\nrepresentatives of the board of trustees of the state university.\n