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Date: March 12, 2010

Bulletin Number: 974

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Subject

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

Purpose

To notify agencies of the final reduction in employee contributions.

Affected Employees

Contributory employees enrolled in the Optional Retirement Program (ORP) – Retirement Plan 7Z (TIAA/CREF).

Effective Date(s)

Institution paychecks dated April 8, 2010 and Administrative paychecks dated April 14, 2010.

Background

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

Payroll Bulletin No. 809 describes these changes that began in April 2008.

Effective April 1, 2009, affected employees’ contributions were further reduced as outlined in Chapter 617 of the Laws of 2007.

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

Note: Based on a legal review by OSC Counsel, employees who have ten (10) or more years of membership in the ORP are eligible for the reduction in contribution regardless of any break(s) in service.

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

OSC Actions

OSC will automatically implement the contribution rate changes as described below for eligible employees.

New Contribution Percentages
Effective April 1, 2010


Benefit Plan

Rate of Employee Contribution

Rate of Employer Contribution

T6SNYB

0%

12% up to $16,500
15% over $16,500

T7SNYB

0%

11% for 7 years
13% after 7 years

T7CNYB

0%

11% for 7 years
13% after 7 years



Query

Q89_TIAA_TEN_YEAR_REDUCTION
The query Q89_TIAA_TEN_YEAR_REDUCTION has been created to assist agencies with identifying Active (Active, Leave with Pay, Leave without Pay) employees eligible for the final reduction in employee contribution effective 4/1/10.

Questions

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