NY State Fin L § 5 (2021)
2021 New York Laws STF - State Finance Article 2 - General Fiscal Provisions 5 - Deferred Compensation.

§  5.  Deferred  compensation.  1.  The deferred compensation board is hereby established, to consist of one member appointed by the  governor, one  member  appointed  by the temporary president of the senate and one member appointed by the speaker of the assembly. The board  shall  adopt rules  and  regulations  regarding the standards and requirements of all deferred  compensation  plans  established  pursuant  to  this  section, including selection of financial organizations for investment purposes.   2.  a.  Notwithstanding  any  other  provision  of  law,  the deferred compensation board shall establish a deferred compensation  plan,  under the  provisions  of  section  four  hundred  fifty-seven of the internal revenue code and regulations adopted pursuant  thereto,  for  all  state employees  and  shall  promulgate  rules  and  regulations as soon as is reasonably practicable following the appointment of all members  of  the board for the appropriate administration of such a plan.   b.  The  board  shall  enter  into written agreements with one or more financial organizations to administer the deferred compensation plan for state employees and to invest funds held pursuant to such plan. Any such written agreement and deferred compensation plan shall conform with  the provisions  of  section four hundred fifty-seven of the internal revenue code and regulations adopted pursuant thereto.   c. Within the discretion of the deferred  compensation  board  and  in accordance with and subject to its fiduciary duty and obligations to the deferred  compensation  plan  for state employees and to the members and beneficiaries of such plan and such other investment limitations as  may be  prescribed  by  this  chapter,  the  deferred  compensation board is authorized  to  establish  an  MWBE  asset  management   and   financial institution  strategy including reasonable goals for utilization of MWBE asset  managers,  MWBE  financial  institutions  and  MWBE  professional service  firms,  which  shall  include, but shall not be limited to, the following objectives:  (i) conducting procurement procedures in a manner that will assure the inclusion of MWBE asset managers in any request for proposal  or  search process  for asset management services undertaken in accordance with the rules and regulations and of the board;  (ii) subject to best execution policies, developing a strategy to  (1) conduct   trades   of  public  equity  securities  with  MWBE  financial institutions and (2) conduct trades of fixed-income  securities  through MWBE financial institutions;  (iii)  conducting  procurement procedures in a manner that will assure the inclusion of MWBE financial institutions and other MWBE professional service firms in procurements  for  services  that  include  accounting, banking,  financial  advisory, insurance, legal, research, valuation and other  financial  and  professional  services  that  are  undertaken  in accordance with the rules and regulations of the board;  (iv)  cooperating  with  other fiduciary controlled entities and state agencies and offices to identify MWBE  asset  managers,  MWBE  financial institutions and MWBE professional service firms.   As  used  in  this  section,  the  terms  "MWBE  asset manager", "MWBE financial institutions",  "MWBE",  "fiduciary-controlled  entities"  and "best  execution"  shall  have  the  meanings  specified  in section one hundred seventy-six of the retirement and social security law.   d. The board is also authorized to:  (i) periodically provide notice of the existence of such  strategy  so that  MWBE  asset  managers,  MWBE financial institutions and other MWBE professional service firms are made  aware  of  the  opportunities  made available pursuant to this strategy;  (ii)  within  sixty  days of the end of each fiscal year following the effective date  of  this  paragraph,  the  board  shall  report  to  the  governor,  legislature  and  the chief diversity officer of the state of New York on the participation of MWBE  asset  managers,  MWBE  financial institutions  and  MWBE professional service providers in investment and brokerage transactions with or as providers of services for the deferred compensation  plans,  including  a comparative analysis of such activity relative  to  such  activity  with   all   asset   managers,   financial institutions  and professional service providers for the relevant period and on the progress and the success of  the  efforts  undertaken  during such  period to achieve the goals of such strategy. Each report shall be simultaneously published on the website  of  the  deferred  compensation plans for not less than sixty days following its release to the governor and the other recipients named above;  (iii)  work  with  the other fiduciary-controlled entities to create a database of such MWBE entities; and  (iv) periodically, but not less than annually, hold  a  conference  to promote such strategy in conjunction with the other fiduciary-controlled entities.   e.  The rules and regulations promulgated by the board shall establish standards for the selection of financial organizations, authorized to do business in this state, to participate in such plans, including, but not limited to, the following criteria:  (i) rates of commission,  brokerage  and  other  fees,  administrative expenses   and   related   service  charges  imposed  by  the  financial organization,  (ii) variety of types  of  investment  opportunities  offered  by  the financial organization and/or among the financial organizations selected and the ability to transfer among such opportunities,  (iii)  the  stability  of  the  financial organization as evidenced by experience,  reputation,  assets  and  holdings,  ability  to  guarantee specific rates of return,  (iv) ability to comply with reporting requirements to the board and to participants in such a plan, and  (v) such other factors which would be considered by a prudent investor in such a plan.   f. The president of the state civil service commission, subject to the rules  and  regulations  of  the  board, shall provide assistance to any public employer as is appropriate to the provisions of this section.   g. At the request of  a  state  employee  the  comptroller  shall,  by payroll deduction, defer the payment of part of the compensation of such employee as provided in a written statement by the employee and transfer the amount so deferred to the authorized financial organization.   h. The board may hire such employees as it deems necessary and prudent to assist in its administration. Such employees may be either:  (i)  in the unclassified service of the state and, notwithstanding any other provision of law to the contrary, shall be  designated  managerial and,  as  such,  eligible  for  benefits  provided by subdivision two of section eleven and subdivision (a) of section  twelve  of  chapter  four hundred  sixty  of  the laws of nineteen hundred eighty-two, as amended; section one hundred fifty-eight of the civil service  law;  eligible  to participate  in the state deferred compensation plan, the New York state and local employees' retirement system;  the  health  benefit  plan  for state  employees;  and  subject to coverage under sections seventeen and eighteen of the public officers law, or  (ii) hired not as state employees but hired on a contractual basis.   3. a.  Notwithstanding  any  other  provision  of  law,  every  public employer  in  the state may provide a deferred compensation plan for its employees in accordance with standards, rules  and  regulations  of  the deferred  compensation  board and the provisions of section four hundred  fifty-seven  of  the  internal  revenue  code  and  regulations  adopted pursuant thereto.   b.  For the purposes of this section, the term "public employer" shall mean: a county, city, town, village or any other  political  subdivision as  defined  in  section  one  hundred  thirty-one of the retirement and social security law or civil division of the state; a school district or any  governmental  entity  operating  a  public   school,   college   or university;   a   public  improvement  or  special  district;  a  public authority, commission or public benefit corporation;  any  other  public corporation,  agency  or  instrumentality  or  unit  of government which exercises governmental powers  under  the  laws  of  the  state  or  any instrumentality  jointly  created  by  this state and any other state or states.   c. Subject to the rules and regulations promulgated by  the  board,  a public  employer  may  establish  a deferred compensation plan and enter into written agreements with one  or  more  financial  organizations  to administer  such  deferred  compensation  plan  for its employees and to invest the funds held pursuant to such plan or such employer  may  elect participation  in  the  deferred  compensation  plan  provided for state employees. At the request of an employee of any  such  public  employer, the  chief  fiscal  officer  or  other appropriate officer of the public employer shall, by payroll deduction, defer the payment of part  of  the compensation of such employee, as provided in a written statement by the employee,  and  transfer  the  amount  so  deferred  to  the  authorized financial organization.   4.  Notwithstanding  the  other  provisions  of  this  section,  state employees,   otherwise   eligible   to   participate   in  the  deferred compensation plan, who are in  a  negotiating  unit  represented  by  an employee  organization  which negotiates pursuant to article fourteen of the civil service law shall not be permitted to  participate  under  the provisions  of  this  section  until  such time as such participation is authorized pursuant to a collectively negotiated agreement  between  the state  and  the employee organization; provided, however, that the state need only negotiate whether or not such employees shall be  included  in such plan.   5.  Should  a public employer elect to provide or elect to participate in a deferred compensation plan  for  employees  otherwise  eligible  to participate  in the plan, employees in a negotiating unit represented by an employee organization which negotiates pursuant to  article  fourteen of the civil service law shall not be permitted to participate under the provisions  of  this  section  until  such time as such participation is authorized pursuant to a collectively negotiated agreement  between  the public  employer  and the employee organization; provided, however, that the public employer need only negotiate whether or  not  such  employees shall be included in such plan.   6.  To the extent permitted by section four hundred fifty-seven of the internal revenue code and  regulations  adopted  pursuant  thereto,  any compensation  deferred  by  a  state employee or an employee of a public employer  under  an  eligible  deferred  compensation  plan  established pursuant to this section shall be considered part of annual compensation by  any  retirement system or plan to which the state or public employer contributes on behalf of said employee. However, this in no way shall be construed to supersede the provision of section four hundred  thirty-one of the retirement and social security law or any other similar provision of  law  which  limits the salary base for computing retirement benefits payable by a public retirement system.    7. Any benefit from a deferred compensation plan established  pursuant to this section shall be in addition to any retirement benefits provided a state or public employee under any other provision of law.   8.  a.  The  term  "financial organization" shall mean an organization authorized to do business in the state of New York and (A) which  is  an authorized  fiduciary  to act as a trustee pursuant to the provisions of an act of congress entitled "Employee Retirement Income Security Act  of 1974"  as  such  provisions  may  be  amended  from  time to time, or an insurance company; and (B) (i) is licensed or  chartered  by  the  state department  of financial services, (ii) is chartered by an agency of the federal government, (iii) is subject to the jurisdiction and  regulation of  the securities and exchange commission of the federal government, or (iv) is any other entity otherwise authorized to act in this state as  a trustee  pursuant  to  the  provisions  of  an  act of congress entitled "Employee Retirement Income Security Act of 1974" as such provisions may be amended from time to time.   b. The term "state employee" as used in this  section  shall  mean  an employee  or  officer of the state, whose salary is paid directly by the state and, for the limited purposes of this section shall be  deemed  to include officers or employees in positions in the institutions under the management   and   control   of  Cornell  and  Alfred  universities,  as representatives of the board of trustees of the state university.