2023 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.