N.Y. State Finance Law 99-AA – Retiree health benefit trust fund
§ 99-aa. Retiree health benefit trust fund. 1. There is hereby established in the joint custody of the commissioner of the department of civil service and the state comptroller a special investment trust fund to be known as the retiree health benefit trust fund, which shall be classified as a fiduciary fund type.
Terms Used In N.Y. State Finance Law 99-AA
- Appropriation: The provision of funds, through an annual appropriations act or a permanent law, for federal agencies to make payments out of the Treasury for specified purposes. The formal federal spending process consists of two sequential steps: authorization
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Attachment: A procedure by which a person's property is seized to pay judgments levied by the court.
- Contract: A legal written agreement that becomes binding when signed.
- Fiduciary: A trustee, executor, or administrator.
- Indemnification: In general, a collateral contract or assurance under which one person agrees to secure another person against either anticipated financial losses or potential adverse legal consequences. Source: FDIC
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Statute: A law passed by a legislature.
- Trustee: A person or institution holding and administering property in trust.
2. For purposes of this section: (a) "commissioner" shall mean the commissioner of the department of civil service;
(b) "state" shall mean the state of New York;
(c) "fund", or "trust", or "trust fund" shall mean the retiree health benefit trust fund created by this section; and
(d) "retiree health benefits" shall mean benefits, except pensions or other benefits funded through a public retirement system, provided or to be provided by the state as compensation, whether pursuant to statute, contract or other lawful authority, to its current or former officers or employees, or their families or beneficiaries, after service to the state has ended, including, but not limited to, health care benefits.
3. (a) Notwithstanding any provision of law to the contrary, the retiree health benefit trust fund is established for the exclusive benefit of retired state employees and their dependents.
(b) The sole purpose of the trust fund established pursuant to subdivision one of this section shall be to fund the retiree health benefits of retired state employees and their dependents.
4. (a) Payments into and from the trust fund established pursuant to subdivision one of this section shall be made in accordance with this section.
(b) Contributions to the trust, and any interest or other income or earnings on contributions, shall be irrevocable before all liabilities of the state government for retiree health benefits have been satisfied and shall be solely dedicated to, and used solely for, providing retiree health benefits and paying appropriate and reasonable expenses of administering the trust. No assets, income, earnings or distributions of the trust shall be subject to any claim of creditors of the state, or to assignment or execution, attachment or any other claim enforcement process initiated by or on behalf of such creditors. Except as otherwise provided in subdivision eight of this section, the commissioner shall not be responsible for the adequacy of the assets of the trust to meet any other post-employment benefit. The trust may be terminated only when all liabilities of the state for retiree health benefits have been satisfied and there is no present or future obligation, contingent or otherwise, of the state to provide such retiree health benefits. Upon such termination, any remaining trust assets, after any proper expenses of the trust have been paid, shall revert to the state.
(c) At the request of the director of the budget, the state comptroller shall transfer monies from the general fund to the trust fund up to and including an amount equivalent to one and fifty one-hundredths of one per centum of the total actuarial accrued liability included in the state of New York comprehensive annual financial report.
(d) Any use of funds for retiree health benefits from such trust fund shall not be subject to an appropriation and shall be transferred by the state comptroller, at the request of the director of the budget, to the extent funds are available in such trust fund, to the health insurance fund for the sole and exclusive purpose of funding retiree health benefits. The director of the budget shall notify both houses of the legislature in writing thirty days prior to initiating transfers pursuant to this authorization.
5. Investments. (a) The commissioner may establish a trust in joint custody with the state comptroller for the purpose of accumulating assets to fund the cost of providing retiree health benefits.
(b) The commissioner is hereby declared to be the trustee of the trust established pursuant to subdivision one of this section, and the commissioner shall delegate responsibility for managing the investments of the trust fund established pursuant to subdivision one of this section to the state comptroller. The state comptroller shall manage the investments of the trust fund established pursuant to subdivision one of this section in a careful and prudent manner consistent with the guidelines and provisions of section ninety-eight this article.
(c) Any interest or other income or earnings resulting from the investment of assets of the trust shall accrue to and become part of the assets of the trust.
6. In accordance with paragraph (b) of subdivision five of this section, the state comptroller shall develop, in consultation with the state health insurance council, a written investment policy for selecting investment options in a manner consistent with the investment options prescribed in section ninety-eight of this article so that the state comptroller may be able to invest fund monies in accordance with such policy. Such policy shall include a statement of investment objectives addressing, in the following order of priority, the ability to timely meet disbursement requests without forced sale of assets, safety of principal and attainment of market rates of return.
7. Neither the state nor the commissioner shall be liable for any loss or expense suffered by the trust in the absence of bad faith, willful misconduct or intentional wrongdoing. The commissioner shall be considered to be acting as an officer of the state for purposes of § 17 of the public officers law, provided, however, that the costs of any defense or indemnification of the commissioner arising from the exercise of the functions of trustee shall be payable from the assets of the trust.
8. Nothing contained in this section shall be interpreted or construed to: (a) create any obligation in, impose any obligation on, or alter any obligation of the state to provide retiree health benefits;
(b) limit or restrict the authority of the state to modify or eliminate retiree health benefits;
(c) assure or deny retiree health benefits; or
(d) require the state to fund its liability for retiree health benefits.