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.

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

section seventeen 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.