Transcribing the hearing in a disciplinary arbitration proceeding

Transcribing the hearing in a disciplinary arbitration proceeding

2014 NY Slip Op 05700, Appellate Division, First Department

In this CPLR Article 75 action Supreme Court’s confirmed the arbitrator’s decision imposing the penalty of termination on an employee [Employee] of the New York City Transit Authority [NYCTA].

Responding to Employee’s appeal, the Appellate Division considered a relatively common issue: “Was the penalty imposed by the arbitrator reasonable?” and an issue less commonly encountered:: "Was a transcript of the hearing in the disciplinary arbitration required?"

Addressing the need to make a transcript of the hearing, the Appellate Division said although it was “troubled by the lack of a transcript to review the record of the arbitration proceeding,” it found no basis to disturb the arbitrator's credibility findings.

Absent a provision in a collective bargaining agreement requiring that the disciplinary hearing be transcribed, having a transcription of an arbitration hearing taken by a hearing reporter is rare.* As the court noted in Jordan v Human Resources Admin. City of New York, 78 AD3d 947, the lack of a transcript of a disciplinary arbitration not fatal to confirming the arbitrator’s award. The Appellate Division ruled that Jordan failed to establish any grounds for vacating the arbitration award and that “under the circumstances here, the fact that the arbitration hearing was not transcribed did not provide a basis for vacating the arbitration award.”

In Rhinestone v NYCTA, 142 A.D.2d 562, the court noted that “A collective bargaining agreement between the [Rhinestone’s] union and the appellant New York City Transit Authority … provides that employee disciplinary grievances shall be resolved by a four-step grievance procedure, the last step of which is a hearing before the contractually designated arbitrator ….” The agreement also provided that “[n]o transcript of the arbitration hearingshall be required.” At the outset of the arbitration step of a grievance filed by the [Rhinestone], [the arbitrator] ruled that, “absent the consent of the Transit Authority, he would not allow stenographic transcription of the hearing, even if [Rhinestone] were to pay for it.”

In contrast, where a disciplinary hearing is conducted pursuant to §75 of the Civil Service Law a transcript of the hearing must be made and a copy provided to the employee without charge. Indeed, in Ligreci v Honors, 162 AD2d 1010, the Appellate Division held that the appointing authority erred by making a determination in a disciplinary action before receiving the transcript of the hearing.**Further, the courts have held that the failure to include transcript of the §75 disciplinary hearing in a judicial challenge to the disciplinary determination or penalty imposed bars any “meaningful appellate review.”

Similarly, with respect to disciplinary actions initiated pursuant to §3020-a of the Education Law, §3020-a.3.c.(D) provides as follows: “An accurate record of the proceedings shall be kept at the expense of the [Education] department at each such hearing in accordance with the regulations of the commissioner. A copy of the record of the hearings shall, upon request, be furnished without charge to the employee and the board of education involved. The department shall be authorized to utilize any new technology or such other appropriate means to transcribe or record such hearings in an accurate, reliable, efficient and cost-effective manner without any charge to the employee or board of education involved.”

As to the penalty imposed by the arbitrator on Employee, termination, the Appellate Division modified the Supreme Court’s confirmation the arbitrator’s decision, vacating the penalty of dismissal and remanded the matter to the arbitrator “for the imposition of a lesser penalty.”

The Appellate Division said that the termination of Employee, a NYCTA bus driver for 15 years with an unblemished record of employment and who had consistently received positive performance evaluations, and had never been disciplined as the sanction “for a single, alleged transgression is grossly excessive and shocks our sense of fairness,” citing Matter of Pell v Board of Educ. of Union Free School Dist. No. 1 of Towns of Scarsdale & Mamaroneck, Westchester County, 34 NY2d 222.

The court also commented that NYCTA ignored a provision in the collective bargaining agreement between the agency and Employee's union that provided that NYCTA "shall be guided by the principle of progressive discipline in the administration of its disciplinary procedures."

* A collective bargaining agreement may include a provision addressing the making of a disciplinary hearing transcript. For example, Article 33.4(c) of the Administrative Services Unit’s collective bargaining agreement between the State and the Civil Service Employees Association, Inc., for the period 2011-2016 provides: “Unless both parties agree, the proceedings in disciplinary arbitrations should not be tape recorded. The use of transcripts is to be discouraged and the fact that a transcript is made should not extend the date the hearing is closed. The party ordering the transcript shall obtain and pay for an expedited or rush transcript. Either party wishing a transcript at a disciplinary arbitration hearing may provide for one at its own expense and shall provide a copy to the arbitrator and the other party.”

**Presumably the appointing authority did not serve as the hearing officer at the disciplinary hearing.

_____________________

A Reasonable Disciplinary Penalty Under the Circumstances - A 442+ page guide to penalties imposed on public employees in New York State found guilty of selected acts of misconduct. For more information, click on http://booklocker.com/books/7401.html

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Background checks for individuals seeking to be elected or appointed as a volunteer firefighter

Background checks for individuals seeking to be elected or appointed as a volunteer firefighter 

Chapter 198 of the Laws of 2014

Governor Andrew M. Cuomo has signed legislation that prohibits an individual registered under the sex offender from being elected or appointed as a volunteer firefighter.

The measure, Chapter 198 of the Laws of 2014, requires individual fire companies to determine if a prospective volunteer member is eligible to be “elected or appointed as a volunteer  member” of the fire company if that person has been convicted of a “registerable sex offense.”

The Act amends Section 837-o of the Executive Law to read as follows “§837-o. Search for arson and sex offense conviction records of volunteer firefighter applicants” [emphasis supplied].

In addition, Chapter 198 amends subdivision 17 of §176-b of the Town Law, subdivision 19 of §10-1006 of the Village Law and §1402(c)(5) of the Not-For-Profit Corporation Law in relation to qualifications to serve as a volunteer firefighter

Further, subdivision (3) of Section 837-o of The Executive Law was amended by adding a new paragraph, paragraph (d), which paragraph reads as follows::

“If a person is denied election or appointment as a volunteer member of a fire company based in whole or in part on the fact that he or she stands convicted of a crime which requires the person to register as a sex offender under article six-C of the correction law, he or she shall be advised by the fire company of the rights to challenge and appeal the information contained in the record of conviction as provided in the rules and regulations of the division, and provided by the fire company with a copy of the criminal history record received by the fire company and with a copy of sections seven hundred fifty-two and seven hundred fifty-three of the correction law.”

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The State University of New York’s Optional Retirement Plan

The State University of New York’s Optional Retirement Plan
Chapter 337 of the Laws of 1964 

Fifty years ago the State University of New York was faced with a dilemma. Undergoing rapid and extensive growth, it was experiencing significant difficulty in recruiting and retaining faculty and professional staff for its new and expanding campuses.

Although the compensation SUNY component units offered was competitive and it offered significant opportunities for career development, candidates proved reluctant to accept appointment to a SUNY position as the State's public retirement systems then required an individual to complete ten years of member service to vest his or her retirement benefits. The reason for such reluctance:   there was great mobility in higher education at the time. It was not unusual for faculty and other staff members to “moved-on” by accepting an appointment at another college or university after three or four years of employment at their college or university and they would lose potential retirement benefits if they were not "vested" when they left.

Colleges and universities in the private sector were not burdened with this "vesting problem" as the majority offered what was referred to as the “national retirement program” for those employed in higher education by participating in the “TIAA-CREF retirement program" offered by the Teachers Insurance and Annuity Association-College Retirement Equities Fund.[i]

In effect, each TIAA-CREF participant had a “personal” TIAA-CREF retirement contract to which the employer and the employee made contribution at rates set by the individual institution. Benefits were paid to participants upon their retirement based on the accumulated value of the “defined contributions” made by the individual and the "participating employer" over his or her  career of service, which would usually encompass employment at a number of colleges and universities. Typically a “new TIAA-CREF private sector enrollee” vested his or her benefits within two or three years of the effective date of his or her initial appointment by the college or university while an individual already having a TIAA-CREF contract in place typically vested the employer’s contributions immediately.

SUNY’s then Director of State University Personnel was assigned the task of creating a solution to the University’s recruitment and retention problem. He drafted a bill that was then enacted into law as Chapter 337 of the Laws of 1964, "The State University Optional Retirement Program," and SUNY became the first public college or university system to participate in TIAA-CRER.

Enacted as Article 8-B of the Education Law, SUNY’s Optional Retirement Program[ii][ORP] is a defined contribution retirement plan[iii] rather than the "defined benefit retirement plan" offered by New York State public retirement systems.

SUNY's ORP provided that newly appointed members of the professional staff[iv] could elect to participate in ORP or, in the alternative, elect to enroll in either the New York State Employees’ Retirement System or the New York State Teachers’ Retirement System.[v]

As to resolving the “vesting problem, §392.4 of the Education Law provides that ”At the end of his [or her] initial year of service, a single contribution in an amount determined pursuant to subdivisions one and two of this section, with interest at the rate of four percentum per annum, shall be made by the state” while subdivision 5 of §392 provides that “The provisions of subdivision four of this section shall not apply to any electing employee other than an employee appointed for a specified period of less than three months who, at the time of initial appointment, owns a contract determined by the board to be similar to those contracts to be purchased under the optional retirement program and issued by the designated insurer or insurers.”

Significantly, §396.of the Education Law provides that “Neither the state, nor state university, nor any electing employer or its local sponsor shall be a party to any contract purchased in whole or in part with contributions made under the optional retirement program established and administered pursuant to this article. No retirement, death, or other benefits shall be payable by the state, or by state university, or by any electing employer or its local sponsor under such optional retirement program. Such benefits shall be paid to electing employees or their beneficiaries by the designated insurer or insurers in accordance with the terms of their contracts.”

To complete the package, the then Director of Personnel [1] drafted legislation authorizing the State University’s “Special Annuity Program"[vi]thereby permitting eligible SUNY staff to participate in a Tax Deferred Annuity plan authorized by §403-b of the Internal Revenue Code and [2] drafted a regulation establishing  a long-term disability insurance program for TIAA-CREF participants[vii]. 

---

[i] TIAA is the successor to the Carnegie Foundation for the Advancement of Teaching and was created in 1918 by the New York State Legislature for the purpose of providing retirement income for college and university faculty through fixed premium guaranteed deferred annuity contracts. CREF was created in 1952 to permit TIAA participants to elect to have all or a portion of the employer's contributions and their contributions for TIAA invested in equities through CREF.

[ii] Education Law §§390-397.

[iii] Similar “optional” plans subsequently were enacted by the State Department of Education for its eligible employees [Education Department Optional Retirement Program, Article 3 Part 5 of the Education Law] and the then City University of New York for its eligible employees [Article 125-A, the Board of Higher Education Optional Retirement Program].

[iv]See Education Law §390.3

[v] When it was established in 1964 then professional employees could continue in their respective State retirement system or elect to participate in ORP. Such an individual electing ORP not yet eligible to vest his or her  State retirement benefits of the time he or she enrolled in ORP would receive "member service credit" for the purposes of vesting his or her benefits in his or her public retirement system during the period of his or her continued uninterrupted service with SUNY in ORP.

[vi] See Article 8-C of the Education Law.

[vii] See 8 NYCRR 309, State University Group Disability Insurance Program.
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The State University of New York’s Optional Retirement Plan

The State University of New York’s Optional Retirement Plan
Chapter 337 of the Laws of 1964 

Fifty years ago the State University of New York was faced with a dilemma. Undergoing rapid and extensive growth, it was experiencing significant difficulty in recruiting and retaining faculty and professional staff for its new and expanding campuses.

Although the compensation SUNY component units offered was competitive and it offered significant opportunities for career development, candidates proved reluctant to accept appointment to a SUNY position as the State's public retirement systems then required an individual to complete ten years of member service to vest his or her retirement benefits. The reason for such reluctance:   there was great mobility in higher education at the time. It was not unusual for faculty and other staff members to “moved-on” by accepting an appointment at another college or university after three or four years of employment at their college or university and they would lose potential retirement benefits if they were not "vested" when they left.

Colleges and universities in the private sector were not burdened with this "vesting problem" as the majority offered what was referred to as the “national retirement program” for those employed in higher education by participating in the “TIAA-CREF retirement program" offered by the Teachers Insurance and Annuity Association-College Retirement Equities Fund.[i]

In effect, each TIAA-CREF participant had a “personal” TIAA-CREF retirement contract to which the employer and the employee made contribution at rates set by the individual institution. Benefits were paid to participants upon their retirement based on the accumulated value of the “defined contributions” made by the individual and the "participating employer" over his or her  career of service, which would usually encompass employment at a number of colleges and universities. Typically a “new TIAA-CREF private sector enrollee” vested his or her benefits within two or three years of the effective date of his or her initial appointment by the college or university while an individual already having a TIAA-CREF contract in place typically vested the employer’s contributions immediately.

SUNY’s then Director of State University Personnel was assigned the task of creating a solution to the University’s recruitment and retention problem. He drafted a bill that was then enacted into law as Chapter 337 of the Laws of 1964, "The State University Optional Retirement Program," and SUNY became the first public college or university system to participate in TIAA-CRER.

Enacted as Article 8-B of the Education Law, SUNY’s Optional Retirement Program[ii] [ORP] is a defined contribution retirement plan[iii] rather than the "defined benefit retirement plan" offered by New York State public retirement systems.

SUNY's ORP provided that newly appointed members of the professional staff[iv] could elect to participate in ORP or, in the alternative, elect to enroll in either the New York State Employees’ Retirement System or the New York State Teachers’ Retirement System.[v]

As to resolving the “vesting problem, §392.4 of the Education Law provides that ”At the end of his [or her] initial year of service, a single contribution in an amount determined pursuant to subdivisions one and two of this section, with interest at the rate of four percentum per annum, shall be made by the state” while subdivision 5 of §392 provides that “The provisions of subdivision four of this section shall not apply to any electing employee other than an employee appointed for a specified period of less than three months who, at the time of initial appointment, owns a contract determined by the board to be similar to those contracts to be purchased under the optional retirement program and issued by the designated insurer or insurers.”

Significantly, §396.of the Education Law provides that “Neither the state, nor state university, nor any electing employer or its local sponsor shall be a party to any contract purchased in whole or in part with contributions made under the optional retirement program established and administered pursuant to this article. No retirement, death, or other benefits shall be payable by the state, or by state university, or by any electing employer or its local sponsor under such optional retirement program. Such benefits shall be paid to electing employees or their beneficiaries by the designated insurer or insurers in accordance with the terms of their contracts.”

To complete the package, the then Director of Personnel [1] drafted legislation authorizing the State University’s “Special Annuity Program"[vi] thereby permitting eligible SUNY staff to participate in a Tax Deferred Annuity plan authorized by §403-b of the Internal Revenue Code and [2] drafted a regulation establishing  a long-term disability insurance program for TIAA-CREF participants[vii]. 

---

[i] TIAA is the successor to the Carnegie Foundation for the Advancement of Teaching and was created in 1918 by the New York State Legislature for the purpose of providing retirement income for college and university faculty through fixed premium guaranteed deferred annuity contracts. CREF was created in 1952 to permit TIAA participants to elect to have all or a portion of the employer's contributions and their contributions for TIAA invested in equities through CREF.

[ii] Education Law §§390-397.

[iii] Similar “optional” plans subsequently were enacted by the State Department of Education for its eligible employees [Education Department Optional Retirement Program, Article 3 Part 5 of the Education Law] and the then City University of New York for its eligible employees [Article 125-A, the Board of Higher Education Optional Retirement Program].

[iv]See Education Law §390.3

[v] When it was established in 1964 then professional employees could continue in their respective State retirement system or elect to participate in ORP. Such an individual electing ORP not yet eligible to vest his or her  State retirement benefits of the time he or she enrolled in ORP would receive "member service credit" for the purposes of vesting his or her benefits in his or her public retirement system during the period of his or her continued uninterrupted service with SUNY in ORP.

[vi] See Article 8-C of the Education Law.

[vii] See 8 NYCRR 309, State University Group Disability Insurance Program.
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.

The State University of New York’s Optional Retirement Plan

The State University of New York’s Optional Retirement Plan
Chapter 337 of the Laws of 1964 

Fifty years ago the State University of New York was faced with a dilemma. Undergoing rapid and extensive growth, it was experiencing significant difficulty in recruiting and retaining faculty and professional staff for its new and expanding campuses.

Although the compensation SUNY component units offered was competitive and it offered significant opportunities for career development, candidates proved reluctant to accept appointment to a SUNY position as the State's public retirement systems then required an individual to complete ten years of member service to vest his or her retirement benefits. The reason for such reluctance:   there was great mobility in higher education at the time. It was not unusual for faculty and other staff members to “moved-on” by accepting an appointment at another college or university after three or four years of employment at their college or university and they would lose potential retirement benefits if they were not "vested" when they left.

Colleges and universities in the private sector were not burdened with this "vesting problem" as the majority offered what was referred to as the “national retirement program” for those employed in higher education by participating in the “TIAA-CREF retirement program" offered by the Teachers Insurance and Annuity Association-College Retirement Equities Fund.[i]

In effect, each TIAA-CREF participant had a “personal” TIAA-CREF retirement contract to which the employer and the employee made contribution at rates set by the individual institution. Benefits were paid to participants upon their retirement based on the accumulated value of the “defined contributions” made by the individual and the "participating employer" over his or her  career of service, which would usually encompass employment at a number of colleges and universities. Typically a “new TIAA-CREF private sector enrollee” vested his or her benefits within two or three years of the effective date of his or her initial appointment by the college or university while an individual already having a TIAA-CREF contract in place typically vested the employer’s contributions immediately.

SUNY’s then Director of State University Personnel was assigned the task of creating a solution to the University’s recruitment and retention problem. He drafted a bill that was then enacted into law as Chapter 337 of the Laws of 1964, "The State University Optional Retirement Program," and SUNY became the first public college or university system to participate in TIAA-CRER.

Enacted as Article 8-B of the Education Law, SUNY’s Optional Retirement Program[ii][ORP] is a defined contribution retirement plan[iii] rather than the "defined benefit retirement plan" offered by New York State public retirement systems.

SUNY's ORP provided that newly appointed members of the professional staff[iv] of the State University of New York, the Community Colleges under the jurisdiction of the State University and the Statutory Contract Colleges at Cornell and Alfred Universities could elect to participate in ORP or, in the alternative, elect to enroll in either the New York State Employees’ Retirement System or the New York State Teachers’ Retirement System.[v]

As to resolving the “vesting problem, §392.4 of the Education Law provides that ”At the end of his [or her] initial year of service, a single contribution in an amount determined pursuant to subdivisions one and two of this section, with interest at the rate of four percentum per annum, shall be made by the state” while subdivision 5 of §392 provides that “The provisions of subdivision four of this section shall not apply to any electing employee other than an employee appointed for a specified period of less than three months who, at the time of initial appointment, owns a contract determined by the board to be similar to those contracts to be purchased under the optional retirement program and issued by the designated insurer or insurers.”

Significantly, §396.of the Education Law provides that “Neither the state, nor state university, nor any electing employer or its local sponsor shall be a party to any contract purchased in whole or in part with contributions made under the optional retirement program established and administered pursuant to this article. No retirement, death, or other benefits shall be payable by the state, or by state university, or by any electing employer or its local sponsor under such optional retirement program. Such benefits shall be paid to electing employees or their beneficiaries by the designated insurer or insurers in accordance with the terms of their contracts.”

To complete the package, the then Director of Personnel [1] drafted legislation authorizing the State University’s “Special Annuity Program"[vi]thereby permitting eligible SUNY staff to participate in a Tax Deferred Annuity plan authorized by §403-b of the Internal Revenue Code and [2] drafted a regulation establishing  a long-term disability insurance program for TIAA-CREF participants[vii]. 

---

[i] TIAA is the successor to the Carnegie Foundation for the Advancement of Teaching and was created in 1918 by the New York State Legislature for the purpose of providing retirement income for college and university faculty through fixed premium guaranteed deferred annuity contracts. CREF was created in 1952 to permit TIAA participants to elect to have all or a portion of the employer's contributions and their contributions for TIAA invested in equities through CREF.

[ii] Education Law §§390-397.

[iii] Similar “optional” plans subsequently were enacted by the State Department of Education for its eligible employees [Education Department Optional Retirement Program, Article 3 Part 5 of the Education Law] and the then City University of New York for its eligible employees [Article 125-A, the Board of Higher Education Optional Retirement Program].

[iv]See Education Law §390.3

[v] When it was established in 1964 then professional employees could continue in their respective State retirement system or elect to participate in ORP. Such an individual electing ORP not yet eligible to vest his or her  State retirement benefits of the time he or she enrolled in ORP would receive "member service credit" for the purposes of vesting his or her benefits in his or her public retirement system during the period of his or her continued uninterrupted service with SUNY in ORP.

[vi] See Article 8-C of the Education Law.

[vii] See 8 NYCRR 309, State University Group Disability Insurance Program.
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The State University of New York’s Optional Retirement Plan

The State University of New York’s Optional Retirement Plan
Chapter 337 of the Laws of 1964 

Fifty years ago the State University of New York was faced with a dilemma. Undergoing rapid and extensive growth, it was experiencing significant difficulty in recruiting and retaining faculty and professional staff for its new and expanding campuses.

Although the compensation SUNY component units offered was competitive and it offered significant opportunities for career development, candidates proved reluctant to accept appointment to a SUNY position as the State's public retirement systems then required an individual to complete ten years of member service to vest his or her retirement benefits. The reason for such reluctance:   there was great mobility in higher education at the time. It was not unusual for faculty and other staff members to “moved-on” by accepting an appointment at another college or university after three or four years of employment at their college or university and they would lose potential retirement benefits if they were not "vested" when they left.

Colleges and universities in the private sector were not burdened with this "vesting problem" as the majority offered what was referred to as the “national retirement program” for those employed in higher education by participating in the “TIAA-CREF retirement program" offered by the Teachers Insurance and Annuity Association-College Retirement Equities Fund.[i]

In effect, each TIAA-CREF participant had a “personal” TIAA-CREF retirement contract to which the employer and the employee made contribution at rates set by the individual institution. Benefits were paid to participants upon their retirement based on the accumulated value of the “defined contributions” made by the individual and the "participating employer" over his or her  career of service, which would usually encompass employment at a number of colleges and universities. Typically a “new TIAA-CREF private sector enrollee” vested his or her benefits within two or three years of the effective date of his or her initial appointment by the college or university while an individual already having a TIAA-CREF contract in place typically vested the employer’s contributions immediately.

SUNY’s then Director of State University Personnel was assigned the task of creating a solution to the University’s recruitment and retention problem. He drafted a bill that was then enacted into law as Chapter 337 of the Laws of 1964, "The State University Optional Retirement Program," and SUNY became the first public college or university system to participate in TIAA-CRER.

Enacted as Article 8-B of the Education Law, SUNY’s Optional Retirement Program[ii] [ORP] is a defined contribution retirement plan[iii] rather than the "defined benefit retirement plan" offered by New York State public retirement systems.

SUNY's ORP provided that newly appointed members of the professional staff[iv] of the State University of New York, the Community Colleges under the jurisdiction of the State University and the Statutory Contract Colleges at Cornell and Alfred Universities could elect to participate in ORP or, in the alternative, elect to enroll in either the New York State Employees’ Retirement System or the New York State Teachers’ Retirement System.[v]

As to resolving the “vesting problem, §392.4 of the Education Law provides that ”At the end of his [or her] initial year of service, a single contribution in an amount determined pursuant to subdivisions one and two of this section, with interest at the rate of four percentum per annum, shall be made by the state” while subdivision 5 of §392 provides that “The provisions of subdivision four of this section shall not apply to any electing employee other than an employee appointed for a specified period of less than three months who, at the time of initial appointment, owns a contract determined by the board to be similar to those contracts to be purchased under the optional retirement program and issued by the designated insurer or insurers.”

Significantly, §396.of the Education Law provides that “Neither the state, nor state university, nor any electing employer or its local sponsor shall be a party to any contract purchased in whole or in part with contributions made under the optional retirement program established and administered pursuant to this article. No retirement, death, or other benefits shall be payable by the state, or by state university, or by any electing employer or its local sponsor under such optional retirement program. Such benefits shall be paid to electing employees or their beneficiaries by the designated insurer or insurers in accordance with the terms of their contracts.”

To complete the package, the then Director of Personnel [1] drafted legislation authorizing the State University’s “Special Annuity Program"[vi] thereby permitting eligible SUNY staff to participate in a Tax Deferred Annuity plan authorized by §403-b of the Internal Revenue Code and [2] drafted a regulation establishing  a long-term disability insurance program for TIAA-CREF participants[vii]. 

---

[i] TIAA is the successor to the Carnegie Foundation for the Advancement of Teaching and was created in 1918 by the New York State Legislature for the purpose of providing retirement income for college and university faculty through fixed premium guaranteed deferred annuity contracts. CREF was created in 1952 to permit TIAA participants to elect to have all or a portion of the employer's contributions and their contributions for TIAA invested in equities through CREF.

[ii] Education Law §§390-397.

[iii] Similar “optional” plans subsequently were enacted by the State Department of Education for its eligible employees [Education Department Optional Retirement Program, Article 3 Part 5 of the Education Law] and the then City University of New York for its eligible employees [Article 125-A, the Board of Higher Education Optional Retirement Program].

[iv]See Education Law §390.3

[v] When it was established in 1964 then professional employees could continue in their respective State retirement system or elect to participate in ORP. Such an individual electing ORP not yet eligible to vest his or her  State retirement benefits of the time he or she enrolled in ORP would receive "member service credit" for the purposes of vesting his or her benefits in his or her public retirement system during the period of his or her continued uninterrupted service with SUNY in ORP.

[vi] See Article 8-C of the Education Law.

[vii] See 8 NYCRR 309, State University Group Disability Insurance Program.
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.

The State University of New York’s Optional Retirement Plan

The State University of New York’s Optional Retirement Plan
Chapter 337 of the Laws of 1964 

Fifty years ago the State University of New York was faced with a dilemma. Undergoing rapid and extensive growth, it was experiencing significant difficulty in recruiting and retaining faculty and professional staff for its new and expanding campuses.

Although the compensation SUNY component units offered was competitive and it offered significant opportunities for career development, candidates proved reluctant to accept appointment to a SUNY position as the State's public retirement systems then required an individual to complete ten years of member service to vest his or her retirement benefits. The reason for such reluctance:   there was great mobility in higher education at the time. It was not unusual for faculty and other staff members to “moved-on” by accepting an appointment at another college or university after three or four years of employment at their college or university and they would lose potential retirement benefits if they were not "vested" when they left.

Colleges and universities in the private sector were not burdened with this "vesting problem" as the majority offered what was referred to as the “national retirement program” for those employed in higher education by participating in the “TIAA-CREF retirement program" offered by the Teachers Insurance and Annuity Association-College Retirement Equities Fund.[i]

In effect, each TIAA-CREF participant had a “personal” TIAA-CREF retirement contract to which the employer and the employee made contribution at rates set by the individual institution. Benefits were paid to participants upon their retirement based on the accumulated value of the “defined contributions” made by the individual and the "participating employer" over his or her  career of service, which would usually encompass employment at a number of colleges and universities. Typically a “new TIAA-CREF private sector enrollee” vested his or her benefits within two or three years of the effective date of his or her initial appointment by the college or university while an individual already having a TIAA-CREF contract in place typically vested the employer’s contributions immediately.

SUNY’s then Director of State University Personnel was assigned the task of creating a solution to the University’s recruitment and retention problem. He drafted a bill that was then enacted into law as Chapter 337 of the Laws of 1964, "The State University Optional Retirement Program," and SUNY became the first public college or university system to participate in TIAA-CRER.

Enacted as Article 8-B of the Education Law, SUNY’s Optional Retirement Program[ii][ORP] is a defined contribution retirement plan[iii] rather than the "defined benefit retirement plan" offered by New York State public retirement systems.

SUNY's ORP provided that newly appointed members of the professional staff[iv] of the State University of New York, the Community Colleges under the jurisdiction of the State University and the Statutory Contract Colleges at Cornell and Alfred Universities could elect to participate in ORP or, in the alternative, elect to enroll in either the New York State Employees’ Retirement System or the New York State Teachers’ Retirement System.[v]

As to resolving the “vesting problem, §392.4 of the Education Law provides that ”At the end of his [or her] initial year of service, a single contribution in an amount determined pursuant to subdivisions one and two of this section, with interest at the rate of four percentum per annum, shall be made by the state” while subdivision 5 of §392 provides that “The provisions of subdivision four of this section shall not apply to any electing employee other than an employee appointed for a specified period of less than three months who, at the time of initial appointment, owns a contract determined by the board to be similar to those contracts to be purchased under the optional retirement program and issued by the designated insurer or insurers.”

Significantly, §396.of the Education Law provides that “Neither the state, nor state university, nor any electing employer or its local sponsor shall be a party to any contract purchased in whole or in part with contributions made under the optional retirement program established and administered pursuant to this article. No retirement, death, or other benefits shall be payable by the state, or by state university, or by any electing employer or its local sponsor under such optional retirement program. Such benefits shall be paid to electing employees or their beneficiaries by the designated insurer or insurers in accordance with the terms of their contracts.”

To complete the package, the then Director of Personnel [1] drafted legislation authorizing the State University’s “Special Annuity Program"[vi]thereby permitting eligible SUNY staff to participate in a Tax Deferred Annuity plan authorized by §403-b of the Internal Revenue Code and [2] drafted a regulation establishing  a long-term disability insurance program for TIAA-CREF participants[vii]. 

---

[i] TIAA is the successor to the Carnegie Foundation for the Advancement of Teaching and was created in 1918 by the New York State Legislature for the purpose of providing retirement income for college and university faculty through fixed premium guaranteed deferred annuity contracts. CREF was created in 1952 to permit TIAA participants to elect to have all or a portion of the employer's contributions and their contributions for TIAA invested in equities through CREF.

[ii] Education Law §§390-397.

[iii] Similar “optional” plans subsequently were enacted by the State Department of Education for its eligible employees [Education Department Optional Retirement Program, Article 3 Part 5 of the Education Law] and the then City University of New York for its eligible employees [Article 125-A, the Board of Higher Education Optional Retirement Program].

[iv]See Education Law §390.3

[v] When it was established in 1964 then professional employees could continue in their respective State retirement system or elect to participate in ORP. Such an individual electing ORP not yet eligible to vest his or her  State retirement benefits of the time he or she enrolled in ORP would receive "member service credit" for the purposes of vesting his or her benefits in his or her public retirement system during the period of his or her continued uninterrupted service with SUNY in ORP.

[vi] See Article 8-C of the Education Law.

[vii] See 8 NYCRR 309, State University Group Disability Insurance Program.
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The State University of New York’s Optional Retirement Plan

The State University of New York’s Optional Retirement Plan
Chapter 337 of the Laws of 1964 

Fifty years ago the State University of New York was faced with a dilemma. Undergoing rapid and extensive growth, it was experiencing significant difficulty in recruiting and retaining faculty and professional staff for its new and expanding campuses.

Although the compensation SUNY component units offered was competitive and it offered significant opportunities for career development, candidates proved reluctant to accept appointment to a SUNY position as the State's public retirement systems then required an individual to complete ten years of member service to vest his or her retirement benefits. The reason for such reluctance:   there was great mobility in higher education at the time. It was not unusual for faculty and other staff members to “moved-on” by accepting an appointment at another college or university after three or four years of employment at their college or university and they would lose potential retirement benefits if they were not "vested" when they left.

Colleges and universities in the private sector were not burdened with this "vesting problem" as the majority offered what was referred to as the “national retirement program” for those employed in higher education by participating in the “TIAA-CREF retirement program" offered by the Teachers Insurance and Annuity Association-College Retirement Equities Fund.[i]

In effect, each TIAA-CREF participant had a “personal” TIAA-CREF retirement contract to which the employer and the employee made contribution at rates set by the individual institution. Benefits were paid to participants upon their retirement based on the accumulated value of the “defined contributions” made by the individual and the "participating employer" over his or her  career of service, which would usually encompass employment at a number of colleges and universities. Typically a “new TIAA-CREF private sector enrollee” vested his or her benefits within two or three years of the effective date of his or her initial appointment by the college or university while an individual already having a TIAA-CREF contract in place typically vested the employer’s contributions immediately.

SUNY’s then Director of State University Personnel was assigned the task of creating a solution to the University’s recruitment and retention problem. He drafted a bill that was then enacted into law as Chapter 337 of the Laws of 1964, "The State University Optional Retirement Program," and SUNY became the first public college or university system to participate in TIAA-CRER.

Enacted as Article 8-B of the Education Law, SUNY’s Optional Retirement Program[ii][ORP] is a defined contribution retirement plan[iii] rather than the "defined benefit retirement plan" offered by New York State public retirement systems.

SUNY's ORP provided that newly appointed members of the professional staff[iv] of the State University of New York, the Community Colleges under the jurisdiction of the State University and the Statutory Contract Colleges at Cornell and Alfred Universities could elect to participate in ORP or, in the alternative, elect to enroll in either the New York State Employees’ Retirement System or the New York State Teachers’ Retirement System.[v]

As to resolving the “vesting problem, §392.4 of the Education Law provides that ”At the end of his [or her] initial year of service, a single contribution in an amount determined pursuant to subdivisions one and two of this section, with interest at the rate of four percentum per annum, shall be made by the state” while subdivision 5 of §392 provides that “The provisions of subdivision four of this section shall not apply to any electing employee other than an employee appointed for a specified period of less than three months who, at the time of initial appointment, owns a contract determined by the board to be similar to those contracts to be purchased under the optional retirement program and issued by the designated insurer or insurers.”

Significantly, §396.of the Education Law provides that “Neither the state, nor state university, nor any electing employer or its local sponsor shall be a party to any contract purchased in whole or in part with contributions made under the optional retirement program established and administered pursuant to this article. No retirement, death, or other benefits shall be payable by the state, or by state university, or by any electing employer or its local sponsor under such optional retirement program. Such benefits shall be paid to electing employees or their beneficiaries by the designated insurer or insurers in accordance with the terms of their contracts.”

To complete the package, the then Director of Personnel [1] drafted legislation authorizing the State University’s “Special Annuity Program"[vi]thereby permitting eligible SUNY staff to participate in a Tax Deferred Annuity plan authorized by §403-b of the Internal Revenue Code and [2] drafted a regulation establishing  a long-term disability insurance program for TIAA-CREF participants[vii]. 

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[i] TIAA is the successor to the Carnegie Foundation for the Advancement of Teaching and was created in 1918 by the New York State Legislature for the purpose of providing retirement income for college and university faculty through fixed premium guaranteed deferred annuity contracts. CREF was created in 1952 to permit TIAA participants to elect to have all or a portion of the employer's contributions and their contributions for TIAA invested in equities through CREF.

[ii] Education Law §§390-397.

[iii] Similar “optional” plans subsequently were enacted by the State Department of Education for its eligible employees [Education Department Optional Retirement Program, Article 3 Part 5 of the Education Law] and the then City University of New York for its eligible employees [Article 125-A, the Board of Higher Education Optional Retirement Program].

[iv]See Education Law §390.3

[v] When it was established in 1964 then professional employees could continue in their respective State retirement system or elect to participate in ORP. Such an individual electing ORP not yet eligible to vest his or her  State retirement benefits of the time he or she enrolled in ORP would receive "member service credit" for the purposes of vesting his or her benefits in his or her public retirement system during the period of his or her continued uninterrupted service with SUNY in ORP.

[vi] See Article 8-C of the Education Law.

[vii] See 8 NYCRR 309, State University Group Disability Insurance Program.
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.

The State University of New York’s Optional Retirement Plan

The State University of New York’s Optional Retirement Plan
Chapter 337 of the Laws of 1964 

Fifty years ago the State University of New York was faced with a dilemma. Undergoing rapid and extensive growth, it was experiencing significant difficulty in recruiting and retaining faculty and professional staff for its new and expanding campuses.

Although the compensation SUNY component units offered was competitive and it offered significant opportunities for career development, candidates proved reluctant to accept appointment to a SUNY position as the State's public retirement systems then required an individual to complete ten years of member service to vest his or her retirement benefits. The reason for such reluctance:   there was great mobility in higher education at the time. It was not unusual for faculty and other staff members to “moved-on” by accepting an appointment at another college or university after three or four years of employment at their college or university and they would lose potential retirement benefits if they were not "vested" when they left.

Colleges and universities in the private sector were not burdened with this "vesting problem" as the majority offered what was referred to as the “national retirement program” for those employed in higher education by participating in the “TIAA-CREF retirement program" offered by the Teachers Insurance and Annuity Association-College Retirement Equities Fund.[i]

In effect, each TIAA-CREF participant had a “personal” TIAA-CREF retirement contract to which the employer and the employee made contribution at rates set by the individual institution. Benefits were paid to participants upon their retirement based on the accumulated value of the “defined contributions” made by the individual and the "participating employer" over his or her  career of service, which would usually encompass employment at a number of colleges and universities. Typically a “new TIAA-CREF private sector enrollee” vested his or her benefits within two or three years of the effective date of his or her initial appointment by the college or university while an individual already having a TIAA-CREF contract in place typically vested the employer’s contributions immediately.

SUNY’s then Director of State University Personnel was assigned the task of creating a solution to the University’s recruitment and retention problem. He drafted a bill that was then enacted into law as Chapter 337 of the Laws of 1964, "The State University Optional Retirement Program," and SUNY became the first public college or university system to participate in TIAA-CRER.

Enacted as Article 8-B of the Education Law, SUNY’s Optional Retirement Program[ii] [ORP] is a defined contribution retirement plan[iii] rather than the "defined benefit retirement plan" offered by New York State public retirement systems.

SUNY's ORP provided that newly appointed members of the professional staff[iv] of the State University of New York, the Community Colleges under the jurisdiction of the State University and the Statutory Contract Colleges at Cornell and Alfred Universities could elect to participate in ORP or, in the alternative, elect to enroll in either the New York State Employees’ Retirement System or the New York State Teachers’ Retirement System.[v]

As to resolving the “vesting problem, §392.4 of the Education Law provides that ”At the end of his [or her] initial year of service, a single contribution in an amount determined pursuant to subdivisions one and two of this section, with interest at the rate of four percentum per annum, shall be made by the state” while subdivision 5 of §392 provides that “The provisions of subdivision four of this section shall not apply to any electing employee other than an employee appointed for a specified period of less than three months who, at the time of initial appointment, owns a contract determined by the board to be similar to those contracts to be purchased under the optional retirement program and issued by the designated insurer or insurers.”

Significantly, §396.of the Education Law provides that “Neither the state, nor state university, nor any electing employer or its local sponsor shall be a party to any contract purchased in whole or in part with contributions made under the optional retirement program established and administered pursuant to this article. No retirement, death, or other benefits shall be payable by the state, or by state university, or by any electing employer or its local sponsor under such optional retirement program. Such benefits shall be paid to electing employees or their beneficiaries by the designated insurer or insurers in accordance with the terms of their contracts.”

To complete the package, the then Director of Personnel [1] drafted legislation authorizing the State University’s “Special Annuity Program"[vi] thereby permitting eligible SUNY staff to participate in a Tax Deferred Annuity plan authorized by §403-b of the Internal Revenue Code and [2] drafted a regulation establishing  a long-term disability insurance program for TIAA-CREF participants[vii]. 

---

[i] TIAA is the successor to the Carnegie Foundation for the Advancement of Teaching and was created in 1918 by the New York State Legislature for the purpose of providing retirement income for college and university faculty through fixed premium guaranteed deferred annuity contracts. CREF was created in 1952 to permit TIAA participants to elect to have all or a portion of the employer's contributions and their contributions for TIAA invested in equities through CREF.

[ii] Education Law §§390-397.

[iii] Similar “optional” plans subsequently were enacted by the State Department of Education for its eligible employees [Education Department Optional Retirement Program, Article 3 Part 5 of the Education Law] and the then City University of New York for its eligible employees [Article 125-A, the Board of Higher Education Optional Retirement Program].

[iv]See Education Law §390.3

[v] When it was established in 1964 then professional employees could continue in their respective State retirement system or elect to participate in ORP. Such an individual electing ORP not yet eligible to vest his or her  State retirement benefits of the time he or she enrolled in ORP would receive "member service credit" for the purposes of vesting his or her benefits in his or her public retirement system during the period of his or her continued uninterrupted service with SUNY in ORP.

[vi] See Article 8-C of the Education Law.

[vii] See 8 NYCRR 309, State University Group Disability Insurance Program.
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