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Date:March 26, 2008
Bulletin Number: 809
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Subject

Elimination of the Mandatory Employee Contribution for Members of the Optional Retirement Program (ORP) with 10 or More Years of Membership

Purpose
To explain the phase-in period, processing changes and revisions to the TIAA/CREF Suspense/NRI page in PayServ.
Affected Employees

Employees who are members of the ORP and have the Retirement Plan Type of 7Z (TIAA/CREF) with ten (10) or more years of membership in the ORP.

Effective Date(s)

Paychecks dated April 2, 2008 (Administration) and April 10, 2008 (Institution).

Background

Chapter 617 of the Laws of 2007 amends NYS Education Law, Article 8-B, Section 392 2(c) and Article 125-A, Section 6252 2(c),  eliminating the mandatory employee contribution for members in the Optional Retirement Program (ORP) who have ten (10) or more years of membership in the ORP.  Members of the ORP who have ten (10) or more years of membership will receive a reduction in employee contributions over a phased-in period, ultimately eliminating the employee contribution.

Effective April 1, 2008, affected employees’ contributions will be reduced by 1% and the employer’s contribution will increase by 1%. Subsequent reductions in employee contributions and increases in employer contributions will be implemented on and after April 1, 2009, resulting in the elimination of the employee contributions on and after April 1, 2010.  

Effective April 1, 2010, any employee who is a member of the ORP, has an active retirement plan row with a Participation Election of “Elect,” has the Retirement Plan Type of 7Z (TIAA/CREF) and has ten (10) or more years of membership will automatically change to a non-contributory status.

Note:  Based on a legal review by OSC Counsel, employees who have ten (10) or more years of membership in the ORP as of April 1, 2008 (those employees with an Election Date prior to April 2, 1998) are eligible for the reduction in contribution regardless of any break(s) in service.

As previously determined by OSC Counsel, a break in service impacts the “continuance in service” provision of section 392(4) of the Education Law, and therefore cannot be included toward the completion of the 366 Day Suspense or 7 year periods.


OSC
Actions

OSC will automatically identify employees in Retirement Plan Type 7Z (TIAA/CREF) whose Participation Election is set to “Elect” and calculate the 10 year membership date based on the Election date.

A row will be inserted into the employee’s Retirement Plan record, assigning a new Benefit Plan with the effective date of the pay period begin date in which the 10 year membership date falls.

Note:  In order for OSC to chart the employee’s new contribution status as referred to in Chapter 617 of the Laws of 2007, five new benefit plans have been created.  The new benefit plans are outlined below.

New Benefit Plans

SUNY/State  Education Department


Current Benefit Plan

New Benefit Plan for Employees with 10 Years of Membership

TSYEDB

T6SNYB

T3SNYB  and T5SNYB

T7SNYB

CUNY


Current Benefit Plan

New Benefit Plan for Employees with 10 Years of Membership

TCUNYA

T6CNYA

TCUNYB

T6CNYB

T3CNYB and T5CNYB

T7CNYB

New Contribution Percentages
Effective April 1, 2008

New Benefit Plan

  Previous
Benefit Plan    

Rate of Employee Contribution

Rate of Employer
Contribution

T6SNYB

    TSYEDB

2%

10% up to $16,500 
13% over $16,500

T7SNYB

    T3SNYB    

2%

 9% for 7 years
11% after 7 years

T7SNYB

T5SNYB

2%

9% for 7 years
11% for 7 years

T6CNYA   

TCUNYA

.5%

11.5% up to $16,500
14.5% over $16,500

T6CNYB

    TCUNYB

.5%

11.5% up to $16,500
14.5% over $16,500

T7CNYB

T3CNYB

2%

9% for 7 years
11% after 7 years

T7CNYB

T5CNYB

2%

9% for 7 years
11% after 7 years

Note:   The above rates will change effective April 1, 2009 and April 1, 2010 at which time update bulletins will be issued.

The 10 year membership date will be populated in a new field created on the TIAA/CREF Suspense/NRI page.   (In the example below, the employee’s election date is 6/5/1996.)  This field cannot be edited, and will update automatically when the Election Date on the Retirement Plans page is entered or changed.

OSC will automatically insert the 10 year membership date for current employees.

Employees newly enrolled in Retirement Plan Type 7Z (TIAA/CREF) will have the 10 year date automatically populated when the Retirement Plans page has been saved.

Agency Actions
Notify affected employees.
Questions

Questions regarding this bulletin may be directed to the Payroll Deductions mailbox.