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S01358 Summary:

BILL NOS01358
 
SAME ASSAME AS A07071
 
SPONSORAVELLA
 
COSPNSRADDABBO, COMRIE, HOYLMAN, KRUEGER, MARCHIONE, MURPHY, SAVINO
 
MLTSPNSR
 
Add 3219-a, Ins L; amd 5205, CPLR
 
Provides protection to certain retirees from de-risking pension transactions.
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S01358 Actions:

BILL NOS01358
 
01/09/2017REFERRED TO INSURANCE
01/03/2018REFERRED TO INSURANCE
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S01358 Memo:

Memo not available
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S01358 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          1358
 
                               2017-2018 Regular Sessions
 
                    IN SENATE
 
                                     January 9, 2017
                                       ___________
 
        Introduced by Sens. AVELLA, ADDABBO, COMRIE, HOYLMAN, KRUEGER, SAVINO --
          read  twice  and  ordered printed, and when printed to be committed to
          the Committee on Insurance
 
        AN ACT to amend the insurance law, in relation to  providing  protection
          to certain retirees from pension de-risking transactions; and to amend
          the  civil  practice  law and rules, in relation to statutorily exempt
          payments
 
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
 
     1    Section 1. The insurance law is amended by adding a new section 3219-a
     2  to read as follows:
     3    §  3219-a.  Pension  de-risking  transactions with an annuity. (a) For
     4  purposes of this section: (1) "Employer" means  any  person  engaged  in
     5  business  in  this  state  who  has  two or more employees, but does not
     6  include the state or any political subdivision thereof;
     7    (2) "Employee pension benefit plan" means an "employee pension benefit
     8  plan", as defined in 29 USC 1002(2)(A); and
     9    (3)  "Pension  de-risking  transaction"  means  any  transaction  that
    10  involves  the  transfer  of  pension benefits (not including health care
    11  benefits) from a pension plan protected under  the  Employee  Retirement
    12  Income  Security  Act ("ERISA") to a substitute pension benefit provider
    13  such as an insurance company licensed and regulated under state law.
    14    (b) Any insurer issuing an  allocated  or  unallocated  group  annuity
    15  contract  to  an employer or an employee defined pension benefit plan on
    16  behalf of an employer, for the purpose of providing retirement  benefits
    17  to  employees  or  former  employees ("retirees") of the employer, which
    18  annuity benefits will no longer be protected under the federal  Employee
    19  Retirement Income Security Act of 1974 ("ERISA") and the federal Pension
    20  Benefit Guaranty Corporation ("PBGC") shall provide the following infor-
    21  mation  to  the  retirees  pursuant to regulations adopted by the super-
    22  intendent:
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD00811-01-7

        S. 1358                             2
 
     1    (1) a clear statement that payments to  annuitants  under  an  annuity
     2  contract  issued  pursuant to this section are exempt from the claims of
     3  creditors;
     4    (2) a statement that the retirees will no longer have protection under
     5  ERISA and the PBGC;
     6    (3)  the  identity  and  contact information for the New York Life and
     7  Health Insurance Guaranty Association, or any substitute or  replacement
     8  guaranty  association  that  provides coverage to annuitants residing in
     9  New York in the event of the insurer's financial impairment or insolven-
    10  cy, as set forth on a publicly available website  such  as  the  website
    11  maintained  by  the  Life  Insurance Company Guaranty Corporation of New
    12  York (www.nylifega.org); and
    13    (4) mandatory annual disclosures to all retirees  whose  benefits  are
    14  transferred  to an insurance company or alternative benefit provider for
    15  the purpose of providing retirement benefits, of the following:  funding
    16  levels  of all assets relative to expected liabilities under the assumed
    17  pension benefit  schedules,  investment  performance  summary  by  asset
    18  class, investment performance detail by asset class, expenses associated
    19  with  any  group  annuity contract, changes in actuarial assumptions, if
    20  any.
    21    (c) No allocated or unallocated group annuity contract  issued  by  an
    22  insurer  to  an  employer or an employee defined pension benefit plan on
    23  behalf of an employer, for the purpose of providing retirement  benefits
    24  to employees or former employees of the employer, which annuity benefits
    25  will no longer be protected under the federal Employee Retirement Income
    26  Security  Act  of  1974  and the federal Pension Benefit Guaranty Corpo-
    27  ration may be further transferred or assumed by another insurer  without
    28  confirmation  by  the superintendent that the insurer assuming the obli-
    29  gations of such allocated or unallocated group annuity contract has  the
    30  financial  strength to fulfill its obligations under such contract.  The
    31  appropriate standard to be applied by the superintendent shall  be  400%
    32  of  company  action  level  risk based capital with no negative trend as
    33  defined by the 2012 NAIC risk-based capital  (RBC)  for  insurers  model
    34  act.
    35    (d)  The  proceeds  of  any  allocated  or  unallocated  group annuity
    36  contract issued by an insurer to an  employer  or  an  employee  defined
    37  pension  benefit  plan  on  behalf  of  an  employer, for the purpose of
    38  providing retirement benefits to retirees of the employer, which annuity
    39  benefits will no longer be protected under ERISA and  the  federal  PBGC
    40  shall  be exempt from application to the satisfaction of money judgments
    41  under section fifty-two hundred five  of  the  civil  practice  law  and
    42  rules.
    43    § 2. Paragraph 2 of subdivision (l) of section 5205 of the civil prac-
    44  tice  law  and  rules,  as amended by chapter 24 of the laws of 2009, is
    45  amended to read as follows:
    46    2. For purposes of this article, "statutorily exempt  payments"  means
    47  any  personal  property exempt from application to the satisfaction of a
    48  money judgment under any provision of state or federal  law.  Such  term
    49  shall include, but not be limited to, payments from any of the following
    50  sources: social security, including retirement, survivors' and disabili-
    51  ty  benefits,  supplemental  security  income or child support payments;
    52  veterans administration benefits; public  assistance;  workers'  compen-
    53  sation;  unemployment  insurance;  public  or private pensions; railroad
    54  retirement; and black lung  benefits.    "Statutorily  exempt  payments"
    55  shall  specifically  include  any  annuity  proceeds  whose benefits are
    56  transferred to an insurance company or alternative benefit provider  for

        S. 1358                             3
 
     1  the  purpose  of providing retirement benefits pursuant to section three
     2  thousand two hundred nineteen-a  of  the  insurance  law  in  a  pension
     3  de-risking transfer.
     4    § 3. This act shall take effect on the one hundred twentieth day after
     5  it shall have become a law and shall apply to all policies and contracts
     6  issued, renewed, modified, altered, or amended on or after such date.
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