New York Assembly Bill A06914

New York 2025-2026 Regular Session

• Introduced: 3/18/25
• Refer: 3/18/25
• Refer: 1/7/26

Caption

Establishes a defined contribution plan for all non-civil service appointees and elected officials of the New York state and local employees' retirement system who are not yet vested in a state retirement system or who are hired after the effective date of this section; authorizes elected officials to join such defined contribution plan; defines terms; provides for contributions to such defined contribution plan; authorizes the promulgation of any necessary rules and regulations.

Impact

This bill would freeze the current retirement plans of affected members, preventing them from accruing additional benefits under the existing pension system. Existing benefits accrued prior to the implementation of the bill would be retained, but no further contributions to these plans would be allowed. This change could potentially lead to considerable cost savings for the state and public employers while shifting the investment risk to individual employees, who would need to manage their own retirement savings within the defined contribution framework.

Summary

Bill A06914 proposes to establish a defined contribution plan for all non-civil service appointed employees and elected officials within the New York State and Local Employees' Retirement System who are not yet vested in a state retirement system or who are hired after the bill's effective date. The move to a defined contribution plan is a significant departure from traditional pension plans, which are defined benefit plans that guarantee a specific payout upon retirement. Under the new system, both participants and their employers would be mandated to contribute a fixed percentage of annual salary to the defined contribution plan, specifically set at three percent.

Contention

While proponents of A06914 argue that transitioning to a defined contribution plan offers greater flexibility and could provide a more sustainable financial path for the state, critics raise concerns over the potential downsides for employees. There is apprehension regarding the guarantee that current benefits may not be diminished, suggesting that this shift could face constitutional challenges. Additionally, administrative complications are anticipated as the state adopts new regulations and structures for managing the defined contribution plans, which may incur significant costs during the implementation phase.