New York Codes, Rules and Regulations › Title 2 - DEPARTMENT OF AUDIT AND CONTROL › Chapter VI - New York State and Local Employees' Retirement System and New York State and Local Police and Fire Retirement System › Part 354 - Restoration To Membership Of Tier 3 And 4 Service Retirees Of The New York State And Local Employees' Retirement System › Section 354.1 - Background

Current through Register Vol. 46, No. 28, July 10, 2024
Section 500  of the Retirement and Social Security
				  Law provides that the provisions of article 14 of such law shall apply to all
				  members of the New York State and Local Employees' Retirement System who join
				  or rejoin such system on or after July 1, 1976. The pivotal date is now July
				  27, 1976, in accordance with the Court of Appeals decision in
Civil
				  Service Employees Association, Inc. et al.
v.
Regan, 71 NY2d
				  653, 529 NYS2d 461.
Article 15 of such law was originally intended to
				  replace and supercede article 14 which, by its own terms, purported to provide
				  that it was to expire on August 31, 1983. However, the Court of Appeals has
				  held that the State Constitution protects members of public retirement systems
				  who were subject to the provisions of article 14 from diminution of rights
				  provided thereunder by subsequent legislation, and, accordingly, that the
				  provisions of article 15 may not be constitutionally applied to individuals who
				  joined such a public retirement system before the September 1, 1983 effective
				  date of article 15 to the extent that such application would diminish or impair
				  rights in and/or benefits from the Retirement System. Accordingly, individuals
				  who last joined the New York State and Local Employees' Retirement System
				  between July 27, 1976 and August 31, 1983 are covered by provisions of both
				  article 14 and article 15. Such individuals are commonly and herein referred to
				  as "Tier 3 members", whereas individuals who last joined the New York State and
				  Local Employees' Retirement System on or after September 1, 1983 are subject to
				  the provisions of article 15 (but not article 14) and are commonly and herein
				  referred to as "Tier 4" members. Retirement and Social Security Law sections
				  519 (article 14) and 614 (article 15) both provide that individuals who were
				  last enrolled as members prior to the date which, at the time of their
				  respective enactments, was considered to be the last date an individual could
				  join and thereby achieve Tier 2 member status, shall be entitled, upon
				  re-enrollment to membership after retirement, to all of the rights and
				  privileges of Tier 2 members. In view of the fact that article 15 was
				  originally intended to replace and supercede article 14 with respect to
				  exclusively covering all members who joined the Retirement System after the
				  last date on which they would have been eligible to join as a Tier 2 member, it
				  is clear that section 614(b)(i) is best interpreted to require that Tier 3
				  members who retire and subsequently rejoin the New York State and Local
				  Employees' Retirement System be accorded all of the rights and benefits of Tier
				  3 membership. This Part is hereby promulgated to so provide. Sections 519 and
				  614 further provide that procedural provisions of earlier articles of the
				  Retirement and Social Security Law regarding reemployment of retired members
				  shall apply to members covered by articles 14 and 15. Accordingly, the rules
				  provided herein pertaining to the calculation of benefits upon the retirement
				  of restored members are based on the provisions of section 101 to the extent
				  that such provisions are consistent with the provisions of articles 14 and 15.
				  Sections 517-c and 613-b  of the Retirement and Social Security Law, which were
				  enacted pursuant to chapter 920 of the Laws of 1990, establish identical
				  programs under which Tier 3 and Tier 4 members of the New York State and Local
				  Employees' Retirement System may borrow against their accumulated
				  contributions. Neither these sections nor any other provisions of articles 14
				  and 15 expressly provide how benefits should be calculated in situations where
				  a Tier 3 or 4 member retires with an outstanding loan balance, is subsequently
				  restored to membership and later retires with an outstanding loan balance from
				  a loan taken prior to the first retirement. Sections 517-c and 613-b authorize
				  the Comptroller to promulgate regulations pertaining to the administration of
				  the Tier 3 and Tier 4 loan programs, respectively, and sections 519 and 614
				  authorize the Comptroller to promulgate regulations pertaining to the
				  administration of the provisions of articles 14 and 15, respectively. In view
				  of the above, this Part is promulgated to provide the rules pertaining to
				  restoration of Tier 3 and Tier 4 pensioners and the procedures to be used to
				  calculate benefits upon the subsequent retirement of Tier 3 and Tier 4
				  pensioners. It also specifically addresses such calculations with respect to
				  restored members who retire with outstanding loan balances from loans taken
				  before the first retirement, during post-retirement restoration of membership
				  or both.