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a. The actuary shall determine as of July first of each year the number of units represented by the actuarial equivalent of the benefits payable from each of the variable annuity reserve fund and the variable pension reserve fund, on the basis set forth in section 13-578 of this chapter. If the value of such number of units exceeds the assets of the respective fund, there shall be transferred to such fund from the contingency reserve fund an amount equal to such excess. If the value of such number of units is exceeded by the assets of the respective fund, there shall be transferred from such fund to the contingency reserve fund an amount equal to such excess.
b. As of July first of each year, the value of the number of units in the individual accounts in the variable annuity savings fund and the variable pension accumulation fund shall be compared with the value of the assets held in each of such funds. If the value of such number of units exceeds the assets of the respective fund, there shall be transferred to such fund from the contingency reserve fund an amount equal to such excess. If the value of such number of units is exceeded by the assets of the respective fund, there shall be transferred from such fund to the contingency reserve fund an amount equal to such excess.
a. Subject to the provisions of subdivision b of this section, for the purpose of determining the actuarial equivalent of a benefit payable under the variable annuity program to a contributor or his or her beneficiary, (i) the mortality table applied shall be the table applicable to the determination of the contributor's annuity pursuant to paragraph one of subdivision f of section 13-547 or paragraph one of subdivision d of section 13-549, or subdivision two of section 13-554 or subdivision one of section 13-557, or to the determination of the beneficiary's annuity pursuant to subdivision c of section 13-543, respectively, and (ii) the rate of interest applied, definition twenty-two of section 13-501 of this chapter notwithstanding, shall be the uniform rate of four percent.
b. The retirement board may by resolution direct that where any variable annuity program benefit (as defined in subdivision fifty-eight of section 13-501 of the code) which is an actuarial equivalent benefit (as defined in subdivision fifty of such section) is payable to any member or other beneficiary by reason of:
(1) the retirement of a member for service or superannuation or for ordinary or accident disability, where such retirement occurred on or after August first, nineteen hundred eighty-three or hereafter occurs; or
(2) discontinuance of service or termination of employment of a member, where such discontinuance or termination occurred or occurs on or after such August first under such circumstances that such member became or becomes (i) a discontinued member possessing a vested right to receive a retirement allowance pursuant to section 13-556 of the code (and, in the case of a Tier II member, article eleven of the retirement and social security law) or (ii) a Tier III member entitled to a vested benefit or a Tier IV member entitled to a vested benefit; or
(3) the death, on or after such August first, of a member, different computations, based on different mortality tables, shall be used to determine separate portions of such benefit.
A variable annuity, variable pension, or variable designated beneficiary's annuity shall be paid in monthly instalments. The instalment of the variable annuity or variable pension due for the month in which the retired contributor dies, or, if he or she has elected Option II, III, or a joint and survivor form of IV, for the month in which the last survivor of the contributor and his designee dies shall be prorated. The instalment of the variable designated beneficiary's annuity due for the month in which the beneficiary dies shall be prorated.
a. Benefits payable under the variable annuity program shall be in addition to other benefits payable pursuant to this chapter.
b. In the case of a contributor who is a participant in the variable annuity program, an election, pursuant to section 13-523 of this chapter, to leave his or her accumulated deductions with the annuity savings fund and to continue to contribute to such fund shall be deemed to be an election to continue as a participant. If all of his or her accumulated deductions have already been credited to his or her account in the variable annuity savings fund, he or she may, subject to the provisions of such section, elect to continue as a participant.
c. In applying the provisions of paragraphs two, three and four of section 13-525 of this chapter in the case of a participant in the variable annuity program, the value of any units credited to his or her account in the variable annuity savings fund shall, for the purpose of determining his or her entitlement to, and the amount of, a withdrawal, be deemed to be part of his or her accumulated deductions, and the determination of the amount of annuity, pension-providing-for-increased-take-home-pay, and retirement allowance shall be made as if he or she were not a participant.
d. The provisions of section 13-561 of this chapter shall apply in the case of benefits under the variable annuity program.
a. (1) At the time and in the manner prescribed by subdivision e of this section:
(i) a retired member who retired on or after September first, nineteen hundred sixty-seven, and before August first, nineteen hundred sixty-eight; or
(ii) any other member; or
(iii) the designated beneficiary of a member who dies on or after June twenty-second, nineteen hundred sixty-eight; or
(iv) a retired member who retired on or after September first, nineteen hundred sixty-seven and who continues to hold retired member status on or after July first, nineteen hundred seventy-five; may elect, in accordance with this section, to convert a portion, hereinafter referred to as the "convertible amount", of his or her fixed instalments to a variable basis over a period of months, hereinafter referred to as the "conversion period".
(2) In the event such election is made, each instalment payable with respect to such convertible amount after the beginning of the conversion period shall be referred to as a "convertible installment".
(3) (i) During each month of such conversion period each convertible instalment shall be the sum of a fixed portion and a variable portion.
(ii) The amount of such fixed portion payable in the first month of the conversion period shall be the convertible amount reduced by the amount to be converted each month, which is determined by dividing the convertible amount by the number of months in the conversion period.
(iii) Subject to the provisions of subparagraphs (iv) and (v) of this paragraph three, the amount of such fixed portion payable in any such month after the first shall be the previous month's amount thereof, reduced by the amount converted each month. The amount, in units, of the variable portion in any such month will be equal to the number of units in the previous month's variable portion, if any, plus the quotient of (A) the amount of the fixed instalments converted each month and (B) the current month's unit value.
(iv) In any case where, pursuant to any provision of law and/or resolution of the retirement board adopted thereunder, the rate of regular interest and/or mortality tables, which were required to be used in the actuarial determination of such fixed benefit being converted, are different from the rate of regular interest and/or mortality tables which would have been required to be used to determine a like variable benefit as of the same date (hereinafter referred to as the "calculation date") as of which such fixed benefit was required to be determined as an actuarial equivalent, the composition of the variable portion of each convertible instalment for each month of the conversion period shall be determined in the manner prescribed in subparagraph (v) of this paragraph.
(v) The amount, in units, of the variable portion for any such conversion month to which subparagraph (iv) of this paragraph applies will be equal to the number of units in the previous month's variable portion, if any, plus a number of units which is the actuarial equivalent, as of the calculation date, of the fixed portion converted each month. Such actuarial equivalent units for each such month shall be determined on the basis of the unit value for such month, in accordance with a scientific formula which recognizes the difference in the rates of regular interest and/or mortality tables referred to in subparagraph (iv) of this paragraph.
(4) After the conversion period, the amount of each convertible instalment, in units, will be equal to the number at the end of the conversion period.
b. (1) At the time and in the manner prescribed by subdivision e of this section:
(i) a contributor; or
(ii) the designated beneficiary of a member who dies after June twenty-second, nineteen hundred sixty-eight; or
(iii) a retired member who retired on or after September first, nineteen hundred sixty-seven and who continues to hold retired member status on or after July first, nineteen hundred seventy-five; may elect, in accordance with this section, to convert a portion, hereinafter referred to as the "convertible amount", of his or her variable instalments to a fixed basis over a period of months, hereinafter referred to as the "conversion period".
(2) In the event of such election, each instalment payable with respect to such convertible amount after the beginning of the conversion period shall be referred to as a "convertible instalment".
(3) (i) During each month of such conversion period each convertible instalment shall be the sum of a variable portion and a fixed portion.
(ii) The amount in units of such variable portion payable in the first month of the conversion period shall be the number of units in the convertible amount reduced by the number of units to be converted each month, which is determined by dividing the number of units in the convertible amount by the number of months in the conversion period. The amount, in units, of such variable portion payable in any such month after the first shall be the previous month's amount thereof, reduced by the number of units converted each month.
(iii) Subject to the provisions of subparagraphs (iv) and (v) of this paragraph three, the amount of the fixed portion in any such month will be equal to the previous month's fixed portion, if any, plus the product of (A) the number of units converted each month and (B) the current month's unit value.
(iv) in any case where, pursuant to any provision of law and/or any resolution of the retirement board adopted thereunder, the rate of regular interest and/or mortality tables, which were required to be used in the actuarial determination of such variable benefit being converted, are different from the rate of regular interest and/or mortality tables which would have been required to be used to determine a like fixed benefit as of the same date (hereinafter referred to as the "calculation date") as of which such variable benefit was required to be determined as an actuarial equivalent, the composition of the fixed portion of each convertible instalment for each month of the conversion period shall be determined in the manner prescribed in subparagraph (v) of this paragraph.
(v) The amount of the fixed portion for any such conversion month to which subparagraph (iv) of this paragraph applies will be equal to the previous month's fixed portion, if any, plus a fixed amount which is the actuarial equivalent, as of the calculation date, of the number of units converted each month. Such actuarial equivalent fixed amount for each month shall be determined on the basis of the unit value for such month, in accordance with scientific formula which recognizes the difference in the rates of regular interest and/or mortality tables referred to in subparagraph (iv) of this paragraph.
(4) After the conversion period, the dollar amount of each convertible instalment will be equal to the amount at the end of the conversion period.
c. The total dollar amount of the convertible instalment for any month shall be the fixed portion, if any, plus the product of (1) the number of units in the variable portion, if any, and (2) the unit value for the same month.
d. For each conversion made as set forth in subdivision a or b above, the actuarial equivalent value of the instalments converted shall be transferred between the appropriate reserve funds for the variable and fixed instalments.
e. (1) An election of convertible instalments shall not take effect unless written notice thereof is duly filed with the retirement board before the applicable date or within the applicable period set forth below:
(i) In the case of instalments payable to a retired member who retired on or after September first, nineteen hundred sixty-seven and before August first, nineteen hundred sixty-eight: the applicable date shall be September first, nineteen hundred sixty-eight; and
(ii) In the case of instalments payable to any other member electing to convert under subdivision a or b of this section, other than a member described in subparagraph (iii) of this paragraph one: the applicable period shall begin on the date of the filing of the application for retirement and shall end on the date next preceding the date on which the retirement allowance begins; and
(iii) In the case of an applicant for retirement with a deferred payability date (as defined in subdivision thirty-nine of section 13-501 of this chapter): the applicable period shall begin on the date of the filing of his or her application for retirement and end on the date next preceding the date on which his or her retirement allowance begins; provided, however, that any such applicant may, at any time after he or she files such notice of election and before his or her retirement allowance begins, change such election pursuant to rules and regulations established by the retirement board; and
(iv) In the case of instalments payable to the designated beneficiary of a member who dies after June twenty-second, nineteen hundred sixty-eight: the applicable date shall be that on which the first such instalment is paid; and
(v) In the case of a retired member who retired on or after September first, nineteen hundred sixty-seven, the applicable date shall be such date as determined by rules and regulations duly adopted by the retirement board.
(2) In each case the applicable conversion period shall commence on the first day of the month coinciding with or otherwise next following (i) the applicable date or (ii) the date next following the end of the applicable period.
f. (1) An election to convert a portion of fixed instalments to a variable basis made by a member or retired member pursuant to paragraph one of subdivision a of this section shall be subject to the applicable terms and conditions set forth in paragraphs two, three, and four of this subdivision f.
(2) If such member is not a participant in the variable annuity program on the date when he or she makes such election, the election shall provide that such portion as the retirement board may by duly adopted rules and regulations permit of both his or her annuity and his or her pension-providing-for-increased-take-home-pay shall be a convertible amount, to be converted to a variable basis. The convertible instalments pursuant to such election shall be paid from the A funds or the B funds, or from such additional variable annuity fund or funds which may be established pursuant to subdivision c of section 13-567 of this chapter.
(3) If such member is a participant in the variable annuity program on the date when he or she makes such election:
(i) the election, subject to the provisions of subparagraph (ii) of this paragraph three, shall provide that such portion as the retirement board may by duly adopted rules and regulations permit of the fixed instalments of both his or her annuity and his or her pension-providing-for-increased-take-home-pay shall be a convertible amount, to be converted to a variable basis; or
(ii) if a transfer of his or her accumulated deductions and of his or her reserve-for-increased-take-home-pay from a fixed basis to a variable basis pursuant to subdivision b of section 13-568 of this chapter is in process on the date when such member makes his or her election, then in lieu of electing the convertible amount specified in subparagraph (i) of this paragraph three, he or she may elect that the part of his or her fixed instalments provided by such portion of his or her accumulated deductions and of his or her reserve-for-increased-take-home-pay whose transfer has not yet been completed be a convertible amount, to be converted to a variable basis. The convertible instalments pursuant to such election shall be paid from the A funds or the B funds, or from such additional variable annuity fund or funds which may be established pursuant to subdivision c of section 13-567 of this chapter. If he or she chooses funds other than those in which he or she is a participant, the units credited to him or her in such other funds shall be cancelled. Such member shall be credited in the corresponding funds of his or her choice with units equal in value to the value of the cancelled units and an amount equal to the value of such units shall be transferred accordingly.
(4) For the purposes of this subdivision, the election referred to herein shall be deemed to mean, in the case of an applicant for retirement with a deferred payability date (as defined in subdivision thirty-nine of section 13-501 of this chapter), the election to convert accumulated deductions previously transferred to the reserve funds pursuant to sections 13-574 and 13-575 of this chapter. Such elections shall permit transfers between the annuity reserve fund and the variable annuity reserve fund and between the pension reserve fund and the variable pension reserve fund in such a manner as prescribed by rules and regulations to be established by the retirement board. Such elections shall be during such applicable period of time as provided by subparagraph (iii) of paragraph 1 of subdivision e of this section 13-581.
g. A contributor may elect that, if a transfer of funds to a variable basis pursuant to subdivision b of section 13-568 of this chapter is in process on the date of his or her death, (1) the amount of such funds then not yet transferred should be applied to provide fixed instalments for a designated beneficiary pursuant to subdivision c of section 13-543 of this chapter, and (2) such fixed instalments be a convertible amount, to be converted to a variable basis. The convertible instalments pursuant to such election shall be paid from the A funds or the B funds, or from such additional variable annuity fund or funds which may be established pursuant to subdivision c of section 13-567 of this chapter, according to the election pursuant to subdivision b of section 13-568 of this chapter. In the event of the death of a contributor for whom a transfer of funds to a variable basis pursuant to subdivision b of section 13-568 of this chapter was in process on the date of his or her death, and who made no election under the provisions of this subdivision, but who either elected instalments for a designated beneficiary pursuant to subdivision c of section 13-543 of this chapter, or did not prevent the election by his or her designated beneficiary of instalments pursuant to subdivision d of section 13-543 of this chapter, then such designated beneficiary may elect to receive the amount payable upon the death of the contributor paid in the same manner as if the contributor had made the election under the provisions of this section.
h. If a conversion of fixed instalments to a variable basis pursuant to subdivision f of this section is in process for a retired member on the date he or she dies, and if such member or his or her designated beneficiary has elected that the death benefit provided with respect to the instalments not yet converted be applied to provide fixed instalments for such designated beneficiary pursuant to section 13-558 of this chapter, then such member or designated beneficiary making such election may also elect that such fixed instalments provided for such designated beneficiary be a new convertible amount, to be converted to a variable basis.
i. The length of the conversion period for conversion of fixed instalments to a variable basis shall be determined pursuant to rules and regulations adopted by the retirement board.
j. If a member or a retired member or a designated beneficiary commences to receive variable instalments pursuant to subdivision a of section 13-574, subdivision a of section 13-575, item 2 of subdivision a of section 13-576, item 2 of subdivision d of section 13-576, or this section 13-581 of this chapter, the member or retired member or designated beneficiary to whom the variable instalments are payable may elect, at the time such instalments become payable, or before the applicable date or within the applicable period set forth in subdivision e of this section 13-581 of this chapter that such variable instalments be a convertible amount, to be converted to a fixed basis. The length of the conversion period for conversion of such variable instalments to a fixed basis shall be determined pursuant to rules and regulations adopted by the retirement board.
k. Any option elected pursuant to subdivision c or d of section 13-543 of this chapter or pursuant to section 13-558 of this chapter shall apply to the convertible instalments arising from the convertible amount affected by the option. If Option I or Ib has been elected pursuant to section 13-558 of this chapter, or if Option B has been elected pursuant to section 13-543 of this chapter, the death benefit applicable thereto in any month shall be the same multiple of the instalment payable in such month as would have been applicable if no convertible instalments had been elected.
l. If a member or a retired member or a designated beneficiary commences to receive variable instalments pursuant to subdivision a of section 13-574, subdivision a of section 13-575, paragraph two of subdivision a of section 13-576, paragraph two of subdivision d of section 13-576 of this chapter, or this section, the member or retired member or designated beneficiary to whom the variable instalments are payable may elect, at the time such instalments become payable, or before the applicable date or within the applicable period set forth in subdivision e of this section that such variable instalments be a convertible amount, to be converted to a variable basis, with the variable instalments payable from the funds other than those from which the converted variable instalments were payable. The length of the conversion period for such conversion shall be determined pursuant to rules and regulations adopted by the retirement board.
a. Any member for whom a salary reduction agreement is executed pursuant to section three hundred ninety-nine-A or section three thousand one hundred nine-A of the education law shall thereby become a participant in the tax-deferred annuity program. The head of each department shall adjust the salary payments of each participant in accordance with the salary reduction agreement in effect for the participant. Each of such amounts so deducted shall be paid to the retirement system. Such agreement and any change in such agreement shall become effective on the first effective date which follows the filing of such agreement or change by at least thirty days. Effective dates shall be February first, nineteen hundred seventy, and such subsequent dates as may be determined by the retirement board for each calendar year. However, the participant may terminate the agreement as of the first day of any calendar month which commences at least thirty days after appropriate written notice thereof has been filed.
b. A portion of each such payment may be withheld by the retirement board to provide for the additional expenses that are attributable to the tax-deferred annuity program and shall be transferred to the expense fund. The remainder shall be referred to in this section as the participant's tax-deferred annuity net contributions. The portion to be withheld shall be determined in advance in accordance with rules established by the retirement board.
c. A participant in the tax-deferred annuity program, by written notice duly filed with the retirement board, shall elect whether all, none or such portion as the retirement board by duly adopted rules and regulations may permit of such net contributions is to be currently deposited in the variable annuity savings fund and credited to a separate tax-deferred account maintained for him or her in such fund. The balance, if any, of such net contributions shall be currently deposited in the annuity savings fund and credited to a separate tax-deferred account maintained for him or her in such fund. The tax-deferred account established pursuant to this paragraph shall be maintained in the A fund and/or the B fund or in such additional variable annuity fund or funds which may be established pursuant to subdivision c of section 13-567 of this chapter as elected by the participant.
d. 1. Subject to the provisions of paragraph two of this subdivision, interest shall be allowed on the participant's tax-deferred account in the annuity savings fund at the same rate and in accordance with the same rules and procedures applicable to any account in the annuity savings fund, as provided in this chapter.
2. Notwithstanding the provisions of paragraph one of this subdivision, or any other provision of law, or any retirement board rule, regulation or resolution to the contrary, on or after the first business day immediately following the effective date of this paragraph, interest shall be allowed at the rate of seven percent per annum, compounded annually, on the tax-deferred account in the annuity savings fund of participants (i) who hold a position represented by the recognized teacher organization for collective bargaining purposes, or (ii) who held such a position at the time they retired or discontinued service with vested rights to a retirement allowance and elected to defer commencement of distribution of their tax-deferred accounts in accordance with subdivision g of this section.
e. Any deposit or transfer to the variable annuity savings fund pursuant to subdivision c above shall be converted at once into units having a total value equal to such deposit or transfer. The number of units in a participant's tax-deferred account in such fund shall be increased each month in the same manner as any account in the variable annuity savings fund would be increased, as set forth in subdivision g of section 13-570, and the value of a unit shall be determined as set forth in subdivision h thereof.
f. Sections 13-501, 13-503, 13-506, 13-511, 13-512, 13-513, 13-514, 13-520, 13-521, 13-522, 13-523, 13-527, 13-533, 13-535, 13-537, 13-541, 13-542, 13-543, 13-545, 13-550, 13-553, 13-554, 13-556, 13-557, 13-558, 13-560, 13-561, 13-562, 13-563, 13-565, 13-567, 13-569, 13-572, 13-573, 13-574, 13-576, 13-577, 13-578, 13-579, 13-580 and 13-581 of this title, and subdivisions f, h and i of section 13-638.2 of this title (to the extent that such subdivisions apply to this retirement system), as such sections and subdivisions apply to the contributions made by a contributor and the benefits provided thereby, shall apply separately and independently to the tax-deferred annuity net contributions and the benefits provided thereby, except as otherwise specified in this section. Sections 13-534, 13-536 and 13-570, as they apply to the contributions made by a contributor and the benefits provided thereby, shall apply to the tax-deferred annuity net contributions and the benefits provided thereby, except as otherwise specified in this section.
g. 1. If the full amount of the participant's accounts in the annuity savings fund and the variable annuity savings fund, other than the tax-deferred accounts, are paid to him or her pursuant to the provisions of section 13-541, subdivision g of section 13-556 or 13-572, then the full amount of the corresponding tax-deferred accounts must also be paid to him or her. Notwithstanding any other provision of this chapter, any rules or regulations adopted by the retirement board, or any provisions of law to the contrary, a participant in the tax-deferred annuity program who retires pursuant to the provisions of section 13-545, 13-547, 13-550, or 13-551, or who meets all the requirements for vested retirement rights pursuant to section 13-556, may elect, at such time and in such manner as determined by the retirement board, to defer the commencement of the distribution of his or her tax-deferred account to the latest date permitted for the deferral of tax-deferred annuities by the provisions of section 403(b) of the Internal Revenue Code. Should such an election be made, the provisions of section 13-522 would not be applicable as of the participant's retirement date, but would become applicable as of such later date. If, upon making such application, the participant elects that his or her tax-deferred account be distributed under option IV, pursuant to section 13-545, 13-547, 13-550, 13-551, or 13-556 and section 13-558, the maximum period over which the funds held in such account may be distributed shall not exceed the maximum period permitted by the provisions of section 403(b) of the Internal Revenue Code.
2. Notwithstanding any other provision of this chapter, any rules or regulations adopted by the retirement board, or any other provisions of law to the contrary, the beneficiary of a deceased participant in the tax-deferred annuity program who had not, prior to his or her death, selected an option governing the manner in which his or her tax-deferred account would be payable to his or her beneficiary, may, subject to paragraphs three, four, and five of this subdivision, elect, at such time and in such manner as determined by the retirement board, to defer the distribution to him or her from the participant's tax-deferred account to the extent permitted by, and in a manner consistent with, the provisions of section 403(b) of the Internal Revenue Code and the regulations promulgated pursuant to such section. Provided, however, the beneficiary of a deceased participant who dies on or after July first, two thousand twenty-one shall not be allowed to establish a tax-deferred account as provided in this subdivision.
3. Notwithstanding any other provision of this chapter, any rules or regulations adopted by the retirement board, or any other provisions of law to the contrary, a beneficiary's election pursuant to paragraph two of this subdivision shall be in lieu of any options or elections for the distribution to such beneficiary of the deceased participant's tax-deferred account provided in any other provisions of this chapter or of the retirement and social security law.
4. An election pursuant to paragraph two of this subdivision shall be made within six months of the date of death of the participant.
5. If a beneficiary of a deceased participant elects the deferral provided for in paragraph two of this subdivision, the funds held in the tax-deferred account for such beneficiary may be held only in the variable annuity funds provided pursuant to section 13-567.
h. The tax-deferred annuity net contributions shall not be included in determining the amount, if any, that may be withdrawn pursuant to paragraph three of section 13-525.
i. Subject to the following provisions and to such additional terms and conditions and rules and regulations as the retirement board may adopt to accomplish the purpose of the tax-deferred annuity program, a participant may withdraw all or part of his accumulations in the annuity savings fund and variable annuity savings fund arising from tax-deferred annuity net contributions.
1. The amount of any such withdrawal from the variable annuity savings fund shall be based on the value of a unit for the month following the date written request for such withdrawal is filed with the retirement board.
2. If a transfer of the member's tax-deferred accounts has not yet been completed on the date of a partial withdrawal pursuant to this subdivision, then subsequent monthly transfers shall be continued in the same number of dollars or units, as the case may be, until the transfer requested has been completed. In case of a partial withdrawal, the member's tax-deferred account in the annuity savings fund shall be exhausted first before any portion of his or her tax-deferred account in the variable annuity savings fund is so used. Furthermore, if only a portion of the member's tax-deferred account in the annuity savings fund is being transferred, the portion not being transferred shall be exhausted first before the transferable portion is used.
3. The exemption from state and municipal tax provided in section 13-561 for return of contributions shall not apply to withdrawal of tax-deferred annuity net contributions.
j. Nothing contained in this section shall be construed to diminish or impair any benefits to which a member or his legal representatives would be otherwise entitled had such member not participated in the tax-deferred annuity program in accordance with the provisions of this section.
k. 1. As used in this subdivision, the following terms shall have the following meanings, unless a different meaning is plainly required by the context:
(i) "Annuity savings fund". The annuity savings fund under the tax-deferred annuity program.
(ii) "Annuity reserve fund". The annuity reserve fund under the tax-deferred annuity program.
(iii) "Variable annuity reserve fund". The variable annuity reserve fund under the tax-deferred annuity program.
(iv) "Interest allowance".
(A) In the case of the annuity savings fund, such term shall mean the amount of interest required by subdivision d of this section to be credited to such fund with respect to any fiscal year.
(v) "Surplus investment income". The amount, if any, by which the total of all income, interest and dividends derived in any fiscal year by reason of deposits and investments of the assets of the annuity savings fund or the assets of the annuity reserve fund exceeds the amount of the interest allowance required to be credited to such fund in such fiscal year.
2. (i) On the basis of the latest mortality and other tables herein authorized and the valuation rate of interest (as defined in paragraph eleven of subdivision a of section 13-638.2 of this title), the actuary shall determine as of June thirtieth, nineteen hundred ninety-one and each succeeding June thirtieth the liabilities of the annuity reserve fund for benefits.
(ii) If the amount of such liabilities exceeds the assets of such fund, an amount equal to such excess shall be transferred to the annuity reserve fund from the contingent reserve fund of the retirement system.
(iii) If such assets exceed the amount of such liabilities, an amount equal to such excess shall be transferred from the annuity reserve fund to the contingent reserve fund of the retirement system.
3. Any such transfer required to be made on the basis of the actuary's determination of liabilities made as of any such June thirtieth pursuant to paragraph two of this subdivision shall be recognized in the determination of the normal contribution payable to the contingent reserve fund of the retirement system pursuant to section 13-527 of this title with respect to the fiscal year next succeeding such June thirtieth.
4. Any transfer required by subdivision f of this section and subdivision a of section 13-577 of this title to be made to or from the contingent reserve fund of the retirement system pursuant to a determination of the actuary made as of July first, nineteen hundred ninety-one of any subsequent July first shall be recognized in the determination of the normal contribution payable to the contingent reserve fund of the retirement system pursuant to section 13-527 of this title with respect to the fiscal year commencing on such July first.
5. (i) There shall be determined, as of June thirtieth, nineteen hundred ninety-one, the total amount of surplus investment income accumulated and on hand on such June thirtieth. Such amount shall be transferred to the contingent reserve fund of the retirement system.
(ii) There shall be determined as of June thirtieth, nineteen hundred ninety-two, and as of each succeeding June thirtieth, whether surplus investment income was produced in the fiscal year ending on such June thirtieth. Any such surplus on hand as of any such June thirtieth shall be transferred to the contingent reserve fund of the retirement system.
(iii) Except as provided for in subparagraph (iv) of this paragraph any transfer required to be made on the basis of a determination made as of any June thirtieth mentioned in subparagraph (i) or subparagraph (ii) of this paragraph shall be recognized in the determination of the normal contribution payable to the contingent reserve fund of the retirement system pursuant to section 13-527 of this title with respect to the fiscal year next succeeding the June thirtieth as of which the surplus to be transferred was determined.
(iv) Notwithstanding any other provision of law to the contrary, the amount of the normal contribution which would otherwise be payable with respect to the nineteen hundred ninety-six – nineteen hundred ninety-seven fiscal year to the contingent reserve fund of the retirement system pursuant to section 13-527 of this title shall be reduced by a credit equal to the amount of the surplus investment income produced in the fiscal year ending on June thirtieth, nineteen hundred ninety-six.
6. Notwithstanding any other provision of law to the contrary, the amount of the normal contribution which would otherwise be payable, with respect to the nineteen hundred ninety-one – nineteen hundred ninety-two fiscal year, to the contingent reserve fund of the retirement system pursuant to section 13-527 of this title and the provisions of the preceding paragraphs of this subdivision shall be reduced by a credit equal to the amount obtained:
(i) by adding together:
(A) the excess required to be transferred, with respect to such fiscal year, from the annuity reserve fund to the contingent reserve fund under the provisions of subparagraph (iii) of paragraph two of this subdivision; and
(B) the surplus investment income required by subparagraph (i) of paragraph five of this subdivision to be transferred to the contingent reserve fund; and
(ii) by subtracting from such sum computed pursuant to subparagraph (i) of this paragraph the amount required by subdivision f of this section and section 13-577 of this title to be transferred, with respect to such fiscal year, from the contingent reserve fund to the variable annuity reserve fund.
l.* 1. Notwithstanding any other provision of law to the contrary, in the event that a person becomes entitled to a distribution from the tax-deferred annuity program which constitutes an "eligible rollover distribution" within the meaning of paragraph thirty-one of subsection a of section four hundred one of the internal revenue code (as such section is made applicable to the tax-deferred annuity program by paragraph ten of subsection b of section four hundred three of the internal revenue code), such person may elect, subject to any rules and regulations adopted pursuant to paragraph three of this subdivision, to have such distribution, or a portion thereof, paid directly to an "eligible retirement plan" within the meaning of paragraph thirty-one of subsection a of section four hundred one of the internal revenue code.
* Editor's note: there are two divisions designated l in this section.
2. Nothing contained in this section or in section 13-561 of this chapter shall be construed to prohibit a participant in the tax-deferred annuity program from electing to transfer all or a portion of his or her tax-deferred annuity net contributions to another annuity contract described in subsection b of section four hundred three of the internal revenue code where a nontaxable trustee-to-trustee transfer of tax-deferred annuities is permitted by subsection b of section four hundred three of such code or the applicable rules and regulations or rulings promulgated thereunder.
3. The retirement board is authorized to adopt such rules and regulations as it finds to be necessary in administering the provisions of this section, provided that they are not inconsistent with the applicable provisions of the internal revenue code and the rules and regulations thereunder.
l.* Pursuant to section 13-513 of this chapter, the retirement board may establish rules and regulations applicable to similarly situated contributors and/or all beneficiaries with respect to the tax-deferred annuity program including, without limitation, rules and regulations governing:
* Editor's note: there are two divisions designated l in this section.
1. Changes and revocations of elections made pursuant to subdivisions a and c of this section;
2. Loans from monies accumulated in the tax-deferred annuity program;
3. Monies withheld from participants' payments in the tax-deferred annuity program relating to expenses incurred by the retirement board attributable to the tax-deferred annuity program pursuant to subdivision b of this section;
4. Deposits to the tax-deferred annuity program of monies attributable to a contributor who has transferred from the board of education retirement system;
5. Transfers of monies between the variable annuity savings fund tax-deferred account and the annuity savings fund tax-deferred account;
6. Transfers of accumulated contributions among the tax-deferred investment accounts which the retirement board may establish;
7. Withdrawals of all or part of contributors' accumulations in the annuity savings fund and variable annuity savings funds arising from tax-deferred annuity net contributions.
m. In promulgating and administering rules and regulations pursuant to paragraph 1 of this section, the retirement board shall take no action that would render the tax-deferred annuity program in violation of Section 403(b) of the Internal Revenue Code of 1986.
n. Notwithstanding any other provision of law, or any retirement board rule, regulation or resolution to the contrary, the amendment to subdivision d of this section enacted by the chapter of the laws of two thousand nine which added this subdivision shall not affect the rate of interest being charged on new loans from the tax-deferred annuity program, and the rate of interest that was being charged on such loans immediately prior to the effective date of this subdivision shall be used for new loans from the tax-deferred annuity program made on or after the effective date of this subdivision, unless the retirement board, in accordance with its authority pursuant to paragraph two of subdivision l of this section, as added by chapter five hundred seventeen of the laws of nineteen hundred ninety-three, shall amend its rules and regulations governing loans from the tax-deferred annuity program to establish a different rate of interest applicable to such loans.
o. Notwithstanding any other provision of law, or any retirement board rule, regulation or resolution to the contrary, where a participant in the tax-deferred annuity program has elected to transfer all or a portion of the amount credited to his or her tax-deferred account in the annuity savings fund to a tax-deferred account in the variable annuity savings fund, the retirement system shall effectuate such transfer as expeditiously as is administratively feasible.
(Am. 2021 N.Y. Laws Ch. 357, 8/2/2021, eff. 8/2/2021)
a. As used in this section, the following words and phrases shall have the following meanings, unless a different meaning is plainly required by the context:
(1) "Retirement benefits" shall mean benefits payable to a beneficiary by the retirement system which are subject to the limitations imposed by section 415(b) of the Internal Revenue Code.
(2) "Beneficiary" shall mean a person who is receiving retirement benefits from the retirement system.
(3) "Excess benefit plan" shall mean the excess benefit plan established by this section for the sole purpose of paying benefits as permitted under section 415(m) of the Internal Revenue Code.
(4) "Eligible participant" shall mean a beneficiary who is entitled to replacement benefits from the excess benefit plan for a plan year in accordance with subdivisions d and e of this section.
(5) "Replacement benefits" shall mean the benefits payable by the excess benefit plan to an eligible participant as determined pursuant to subdivision e of this section.
(6) "Internal Revenue Code" shall mean the Federal Internal Revenue Code of 1986, as amended.
(7) "Plan year" shall mean the limitation year of the retirement system as provided in section six hundred twenty of the retirement and social security law.
b. There is hereby established an excess benefit plan, the sole purpose of which shall be to provide replacement benefits, as permitted by section 415(m) of the Internal Revenue Code, to beneficiaries whose annual retirement benefits have been reduced because such benefits exceed the limitations imposed by section 415(b) of the Internal Revenue Code. The excess benefit plan shall be administered by the retirement board.
c. There is hereby established a fund to be known as the excess benefit fund which shall be maintained for the sole purpose of providing replacement benefits to eligible participants in the excess benefit plan established by this section, as permitted under section 415(m) of the Internal Revenue Code. Such fund shall consist of such employer contributions as shall be made thereto pursuant to subdivision f of this section. Such contributions to the excess benefit fund shall be held separate and apart from the assets held by the other funds of the retirement system, provided, however, that the assets of the excess benefit fund may be invested with the other retirement system assets, but such excess benefit fund assets shall be accounted for separately from the other retirement system assets.
d. All beneficiaries of the retirement system whose retirement benefits for a plan year are being reduced because of section 415(b) of the Internal Revenue Code shall be eligible participants in the excess benefit plan for that plan year. Participation in the excess benefit plan shall be determined for each plan year. No beneficiary of the retirement system shall be an eligible participant in the excess benefit plan for any plan year for which his or her retirement benefits are not reduced because of section 415(b) of the Internal Revenue Code.
e. (1) For each plan year in which a beneficiary is an eligible participant in the excess benefit plan, such eligible participant shall receive replacement benefits from the excess benefit plan equal to the difference between the full amount of the retirement benefits otherwise payable to the eligible participant for that plan year prior to any reduction because of section 415(b) of the Internal Revenue Code, and the retirement benefits payable to the eligible participant for that plan year as reduced because of section 415(b) of the Internal Revenue Code. No replacement benefits for any plan year shall be paid pursuant to this subdivision to any beneficiary who is not receiving retirement benefits from the retirement system for that plan year.
(2) Replacement benefits pursuant to this section shall be paid at the same time and in the same manner as the retirement benefits which are being replaced. At no time shall an eligible participant be permitted directly or indirectly to defer compensation under the excess benefit plan.
f. (1) The required employer contributions to the excess benefit fund for each plan year shall be an amount, as determined by the actuary, which is necessary to pay the total amount of replacement benefits that are payable pursuant to this section to eligible participants for that plan year.
(2) Such required employer contributions shall be paid into the excess benefit fund from an allocation of the employer contribution amounts paid by the city and other public employers pursuant to sections 13-527 and 13-528 of this chapter and other applicable provisions of law. Such allocation of employer contribution amounts shall be paid into the excess benefit fund at such times and in such amounts as determined by the actuary.
(3) The benefit liabilities of the excess benefit plan shall be funded on a plan year to plan year basis, provided, however, any employer contributions to the excess benefit fund, including any investment earnings on such contributions, which are not used to pay replacement benefits for the current plan year shall be used to pay replacement benefits for future plan years.
g. The right of an eligible participant to receive replacement benefits pursuant to this section, and the replacement benefits received pursuant to this section, shall be exempt from any state or municipal tax, and shall not be subject to execution, garnishment, attachment or any other process whatsoever, and shall be unassignable, except as otherwise specifically provided for benefits payable by the retirement system.