Contingent permanent appointments

Contingent permanent appointments

Cruz v New York State Unified Ct. Sys., 2014 NY Slip Op 05640, Appellate Division, Second Department

Two employees of the New York State Unified Court System and New York State Office of Court Administration, John Ferguson and Jocelyn Cruz, were removed from their positions of employment that they held pursuant to a “contingent permanent appointment."

Ferguson had received a notice that he was going to be displaced from his position and replaced by someone on a preferred list and reinstated to a lower-titled permanent position. Cruz had received a similar notice. Ferguson and Cruz brought an Article 78 action challenging their displacement from their contingent permanent positions.

The Appellate Division, noting that “The Chief Judge has plenary Constitutional authority over the administration of the UCS” said that Chief Judge had the authority to establish statewide standards and administrative policies concerning nonjudicial personnel, including job classifications and removal, provided that the standards and policies "shall be consistent with the civil service law."

As to contingent permanent appointments, the court explained that:

“Under the rules promulgated by the Chief Judge, positions left temporarily vacant by the leave of absence of the permanent incumbent may be filled on a contingent permanent basis, (see 22 NYCRR 25.24[a],[d]). When the permanent incumbent's encumbrance on the position, i.e., his or her right to return to that position, expires due to the attainment by the permanent incumbent of nonprobationary, permanent status in a higher title (see 22 NYCRR 25.22[d], 25.24[b][1]), the position then held by the contingent permanent appointee becomes permanently vacant and subject to being permanently filled pursuant to the Rules of the Chief Judge (see 22 NYCRR 25.24[b][8], 25.31[a][1]). The Rules of the Chief Judge require that such a permanent vacancy be filled first by reference to an applicable preferred list (see 22 NYCRR 25.24[c], 25.31[a][1]). The Chief Administrator of the Courts is required to establish statewide preferred lists of the names of those persons who have been demoted or suspended, including those who were demoted or suspended by virtue of a workforce reduction in June 2011 (see 22 NYCRR 25.31[a][1]).”*

If, said the court, ”no preferred list exists for a particular position, then any permanent vacancy in that position is to be filled in accordance with 22 NYCRR 25.24(b)(8), which provides for the selection 'of one of such employees of the promotion unit having such contingent permanent status in such position or a similar position,' provided that, if the eligible list from which the employee acquired the contingent permanent position is still in existence, the employee is then eligible for permanent appointment or promotion from such list.”

Accordingly, the Appellate Division ruled that "the contingent permanent appointments held by Ferguson and Cruz did not mature into permanent appointments by virtue of their completion of probation or the positions becoming unencumbered. Moreover, the use of statewide preferred lists to fill permanently vacant positions is not arbitrary and capricious, even where such use results in the displacement of contingent permanent appointees who were not themselves subject to the workforce reduction.”

The court found that UCS's actions with regard to Ferguson were in compliance with the Rules of the Chief Judge, as the expiration of the permanent incumbent's encumbrance created a permanent vacancy subject to being lawfully filled.

As to Cruz, the Appellate Division noted that UCS conceded that the termination notice had been sent to her in error "since the relevant employment position had not yet become unencumbered, and since application of the Rules of the Chief Judge might indeed result in her permanent appointment." Thus, said the court, Supreme Court properly granted that branch of the petition which was to annul the determination displacing Cruz from her position of employment but Supreme Court erred in permanently enjoining her displacement from the position as Cruz holds her position on a contingent permanent basis, explaining that the record reveals that, during the pendency of this proceeding, the position held by Cruz became unencumbered, and no preferred list exists for the position, “the position must be filled permanently from the existing regular eligible list, in accordance with 22 NYCRR 25.24(b)(8).”

The Rules of Civil Service Commission addressing contingent permanent appointments for employees in the Classified Service of the State as the employer differ from the Rules of the Chief Judge of the State of New York addressing contingent permanent appointments applicable to employees of the Office of Court Administration.

Typically a temporary appointment**is made to a position temporarily vacant or to a position that is not expected to be continued for any extended period of time as generally set out in subdivisions 1, 2 and 3 of  §64 of the Civil Service Law and except as authorized by subdivision 4 of. §64, a temporary appointment cannot mature into “tenure” status. 

Under the Commission’s Rules, however, in the event the appointing authority affirmatively designates the appointment of an individual to a temporary vacancy as a “contingent permanent appointment,” this  “special form of temporary appointment” provides the appointee with many of the benefits that flow from being permanently appointed to the position. 

To effect a permanent contingent appointment, (1) the appointing authority must specifically act to provide for such a “contingent permanent” appointment*** and (2) the appointee must otherwise satisfy the mandates of §61 of the Civil Service Law with respect to permanent appointment to a position in the Classified Service of the State as the employer. Further, a tenured employee may not be reassigned to an encumbered position "unless the employee agrees, in writing, to accept a contingent permanent appointment to such position.” A CPE attains tenure in the title upon his or her being continued in the position beyond maximum period of probation for the title.

As the Court of Appeals indicated in Snyder v Civil Service Commission, 72 NY2d 981, a temporary appointee, even if otherwise eligible for appointment as a contingent permanent employee [CPE] pursuant to Section 64.4, must be appointed specifically as a CPE by the appointing authority, “which status is granted solely at the discretion of the appointing authority and requires that the appointee otherwise satisfies the mandates of §61 of the Civil Service Law."

The New York State Department of Civil Service Career Mobility Office describes a contingent permanent appointment  as follows: “A permanent appointment or promotion to a position left temporarily vacant by the leave of absence of the permanent incumbent of the position; such appointees have the same rights as permanent appointees; a contingent permanent employee may be displaced by the return of the permanent incumbent. (The term contingent permanent is not used in the Civil Service Law or Rules; rather, rule 4.11 refers to "permanent appointments to encumbered positions.") .”

In the event a CPE is to be removed from his or her position upon the permanent incumbent of the position being filled by a CPE upon his or her reinstatement to the position, the CPE shall [1] displace any temporary or provisional employee serving in the same title and work location under the jurisdiction of the same appointing authority; or [2] displace the CPE with the most recent contingent permanent appointment date serving in the same title and work location under the jurisdiction of the same appointing authority or [3] the CPE is to be reinstated to the position from which he or she is on leave, if any, and his or her name is placed on the appropriate reemployment list or roster for the title he or she formerly held on a contingent permanent basis, as the case may be.:

A displaced CPE may request the Civil Service Department to restore his or her name to the eligible list or reemployment roster, if any, from which the contingent permanent appointment was made, if such list or roster is still in existence at the time the request if made.

If a position with same title and work location, and under the jurisdiction of the same appointing authority, becomes vacant, the CPE having the earliest date of contingent permanent appointment willing to accept such appointment is to be permanently appointed to the vacancy should the appointing authority elect to fill the vacancy.

Essentially the Commission’s Rules provide as follows with respect to the status of a CPE having tenure in the title:

1. The CPE may request that his or her name be restored to the eligible list or reemployment roster, if any, from which his or her contingent permanent appointment was made, if such list or roster is still in existence.

2. Should a position with same title and work location, and under the jurisdiction of the same appointing authority, becomes vacant, the CPE having the earliest date of contingent permanent appointment is to be permanently appointed to the vacancy in the event the appointing authority elects to fill the vacancy.

3. In the event the CPE is retained beyond the maximum period of probation set for the position, he or she attains tenure in the title and is subject to removal from the position as required by, and in accordance with, the Rules upon the reinstatement of the permanent incumbent to the position; the abolishment of the position in accordance with relevant provisions of the Civil Service Law; or terminated for cause in accordance with the controlling disciplinary procedure.

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* Section 25.24 Contingent permanent appointments of the Rules of the Chief Judge,. is set out on the Internet at http://www.nycourts.gov/rules/chiefjudge/25.shtml#24   

** A temporary appointment is made to an encumbered position and is distinguished from a “provisional appointment” made pursuant to §65 of the Civil Service Law to a wholly vacant position.

*** As the Court of Appeals indicated in Snyder v Civil Service Commission, 72 NY2d 981, a temporary appointee, even if otherwise eligible for appointment as a contingent permanent employee [CPE] pursuant to Section 64.4, must be appointed specifically as a CPE by the appointing authority, “which status is granted solely at the discretion of the appointing authority and requires that the appointee otherwise satisfies the mandates of §61 of the Civil Service Law. 

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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]. 

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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] 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]. 

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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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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.
.
.

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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