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 312 - New York State Public Employees Group Life Insurance › Section 312.1 - Background and determination

Current through Register Vol. 46, No. 28, July 10, 2024
Whereas, Since the inception of the New York State Employees'
				  Retirement System and of the New York State Policemen's and Firemen's
				  Retirement System, an ordinary death benefit has been payable upon the death in
				  service of a member thereof, the authority for such benefit being found in
				  sections 60, 60-a, 60-b, 360, 360-a, 360-b, 448, 508 and
				  606  of the Retirement and Social Security
				  Law; and
Whereas, This benefit represents a valuable and important
				  factor in estate planning by the members, and is very often the most
				  significant or sole asset whereby the member provides for his designated
				  beneficiaries in the event of his death while in service; and
Whereas, Under the provisions of the Internal Revenue Code,
				  the receipt of such benefit may pose unfavorable income tax consequences for
				  beneficiaries; and
Whereas, The Legislature of the State of New York, by the
				  enactment of chapter 336 and 371, Laws of 1969, chapter 581, Laws of 1970,
				  chapters 28 and 909, Laws of 1971, chapter 510, Laws of 1974, and chapter 339,
				  Laws of 1978, has authorized and directed the State Comptroller to take such
				  steps as are necessary to afford the ordinary death benefit provided by the
				  Retirement and Social Security Law in the form of group life insurance, upon a
				  determination by him that to do so would guarantee a more favorable tax
				  treatment of the benefit to beneficiaries of members on whose behalf such
				  benefit is payable, thereby declaring it to be the public policy of the State
				  of New York that members be covered by group life insurance upon such
				  determination; and
Whereas, in 1995 the Comptroller engaged the consulting firm
				  of Peat Marwick LLP to determine whether such favorable tax treatment could
				  also be afforded by paying post-retirement death benefits payable to
				  beneficiaries of members of the New York State and Local Retirement System
				  under sections 448, 508 and
				  606  of the Retirement and Social Security
				  Law in the form of group life insurance, and whereas by letter dated April 27,
				  1995, Peat Marwick determined that the pertinent provisions of the Internal
				  Revenue Code and applicable regulations permitted such treatment of
				  post-retirement death benefits; and
Whereas, Recent studies show that approximately 80 percent of
				  the total United States working force (excluding agricultural and governmental
				  employees) are covered by employer-sponsored group life insurance plans,
				  indicating a strong trend toward this form of employee benefit; it is,
				  therefore, hereby
Determined, That to afford group term life insurance to
				  members of the New York State Employees' Retirement System and the New York
				  State Policemen's and Firemen's Retirement System will guarantee a more
				  favorable tax treatment to the beneficiaries of such members, as appears more
				  particularly from the appended rulings of the Internal Revenue Service dated
				  December 31, 1969 (see Appendix 11, infra), and February 18, 1971, (see
				  Appendix 11-A, infra); and it is hereby
Directed, That group term life insurance shall be provided
				  covering the death of members of the New York State Employee's Retirement
				  System and the New York State Policemen's and Firemen's Retirement System, as
				  provided below.