N.Y. Education Law § 114: Reduction of salaries for investment in custodial accounts

§ 114. Reduction of salaries for investment in custodial accounts. 1.

The department, in its discretion, may enter into a written agreement

with any employee to reduce the annual salary otherwise payable by law

to such employee for the purpose of investing in a custodial account, as

permitted by paragraph seven of subdivision (b) of section four hundred

three of the United States internal revenue code, as amended, or in a

tax deferred annuity, as permitted by subdivision (b) of section four

hundred three of the United States internal revenue code, as amended,

for such employee. Any such agreement shall be subject to approval and

filing by the comptroller, and shall specify the amount of such

reduction and the effective date thereof. Any such agreement may be

terminated at any time upon written notice by either such employee or

the department. Such termination shall take effect at the beginning of

the payroll period the first day of which is nearest to the thirtieth

day following the day on which such notification of termination was (a)

received by the department, in the event such termination is initiated

by the employee, or (b) sent to the employee, in the event such

termination is initiated by the department. No more than one such

agreement shall be entered into in any period of twelve successive

calendar months.

2. Upon approval and filing by the comptroller of any such agreement

the comptroller shall reduce an employee's salary pursuant to said

agreement and pay an amount equal to the amount agreed upon for such

salary reduction as an employer contribution to the designated custodian

of the employee's account or the issuer of the employee's annuity.

Notwithstanding the reductions of salary authorized by this section, (a)

the amount of employer and employee contributions otherwise required on

behalf of an employee electing the optional retirement program pursuant

to part five of this article shall continue to be made on the basis of

the salary of such employee without regard to such reduction, or (b) in

the event a member of a public retirement system in this state agrees to

a reduction of salary pursuant to this section, such agreement shall not

cause the employee to lose any benefits under such public retirement

system to which such employee would otherwise be entitled had he or she

not agreed to a reduction in salary for the purpose of establishing a

custodial account or purchasing a tax-deferred annuity, and any required

employer and employee contributions shall continue to be made on the

basis of the salary of such employee without regard to such reduction.

Any survivor's benefit payable pursuant to sections one hundred

fifty-four and one hundred fifty-four-a of the civil service law shall

be based upon the salary of such employee without regard to the

reduction authorized by this section.

3. Any payroll deduction, other than income tax withholdings as

required by law, which may be required or authorized pursuant to law,

contract, agreement, or any other instrument, the amount of which is

determined in relation to an employee's earnings, shall be based on the

salary of such employee without regard to reduction thereof pursuant to

any agreement authorized by this section.

4. Payments for custodial accounts or tax deferred annuities shall be

made by the comptroller to the designated custodian or custodians of

such accounts or the issuers of such annuities out of moneys otherwise

available in accordance with law for salaries of the employees who have

entered into agreements pursuant to this section.

5. Nothing contained in this section shall be construed to diminish or

impair any benefits to which such employee or his legal representatives

or beneficiaries would be otherwise entitled had such salary reduction

agreement not been entered into in accordance with the provisions of

this section.