DROP Study

 
LAWS OF NEW YORK, 2005
CHAPTER 522
1       AN  ACT  directing  the  state  comptroller to study deferred retirement
2         option plans and partial lump sum options for members of the state and
3         local retirement plans and state police and fire retirement plans  who
4         are eligible to retire regardless of age
5
6           Became a law August 16, 2005, with the approval of the Governor.
7                 Passed by a majority vote, three-fifths being present.
8
9         The  People of the State of New York, represented in Senate and Assem-
10       bly, do enact as follows:
11
12         Section 1. Study of deferred retirement option plans and partial  lump
13       sum  option plans for members of the state and local retirement plan and
14       the state police and fire retirement plan who  are  eligible  to  retire
15       regardless  of  age.  a. The comptroller shall engage the services of an
16       actuary and may employ such other necessary technical and administrative
17       assistance as he or she may require to  prepare  and  convey  a  written
18       report  by  April  1,  2006  to the governor, temporary president of the
19       senate and speaker of the assembly evaluating the feasibility of  offer-
20       ing  a  deferred  retirement  option  and  a partial lump sum option for
21       members enrolled in the state and local retirement system  provided  for
22       in section 10 of the retirement and social security law and the New York
23       state policemen's and firemen's retirement system under article 8 of the
24       retirement and social security law.
25         1.  For the purposes of this act the term "deferred retirement option"
26       shall mean an option which a member may elect  upon  eligibility  for  a
27       full  service  retirement  benefit undiminished by statutory penalty, to
28       maintain full employment for a term of years thereafter  and  receive  a
29       salary for such service provided such member agrees to forego any credit
30       in  the retirement system for such additional term of service and agrees
31       that any service pension calculation he  or  she  subsequently  receives
32       shall  be  based upon the term of years then credited to such member and
33       further that for the duration of such additional service, the retirement
34       benefit to which such member would have been entitled  had  such  member
35       ceased  employment  or a portion thereof, is accumulated but retained by
36       the retirement system for the duration of such  additional  service  for
37       distribution,  together with accumulated interest thereon, to the member
38       as a lump sum at the conclusion of such additional service.
39         2. For the purposes of this act the term  "partial  lump  sum  option"
40       shall  mean an option that a member may select upon retirement that will
41       provide the member with a lump sum, one time payment of a portion of the
42       actuarial reserves in the retirement system held on his  or  her  behalf
43       provided  any  periodic pension payments to which the member is entitled
44       are actuarially reduced commensurate with the payment of  the  lump  sum
45       from such reserves.
46         b.  The written report required by subdivision a of this section shall
47       include but not be limited to:
48         (1) a description of the various types of deferred  retirement  option
49       plans (DROPs) and partial lump sum option plans (PLOPs);
50
51       EXPLANATION--Matter in italics is new; matter in brackets [ ] is old law
52                                    to be omitted.
1       CHAP. 522                          2
2
3         (2) what programs are available in other states;
4         (3) other states' experience with offering these types of plans;
5         (4)  the  advantages and disadvantages of these plans from an employer
6       and employee perspective; and
7         (5) an estimation of  the  costs  associated  with  implementing  such
8       plans.
9         § 2. This act shall take effect immediately.
10
11       The Legislature of the STATE OF NEW YORK ss:
12         Pursuant  to  the authority vested in us by section 70-b of the Public
13       Officers Law, we hereby jointly certify that  this  slip  copy  of  this
14       session law was printed under our direction and, in accordance with such
15       section, is entitled to be read into evidence.
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17          JOSEPH L. BRUNO                                     SHELDON SILVER
18       Temporary President of the Senate                Speaker of the Assembly