The Need for State Legislation
Enactment of legislation at the state level is critical to replace the protections lost by retirees in pension de-risking transactions.
Pension de-risking through the purchase of a group annuity contract is of paramount concern because Retirees lose all of the uniform protections intended by Congress under ERISA and their rights become subject to non-uniform state laws.
The insurance industry spends millions of dollars each year lobbying state legislators and Congress seeking to avoid any regulation in this area.
Retirees need advocates like Retirees for Justice to tell their side of the story.
New York – 2024
On January 3, 2024, Senator Andrew Gounardes and Senator Brad Hoylman-Sigal sponsored pension de-risking legislation, Senate Bill 274, entitled “AN ACT to amend the insurance law, in relation to providing protection to certain retirees from pension de-risking transactions; and to amend the civil practice law and rules, in relation to statutorily exempt payments.” New York’s proposed legislation will provide basic financial disclosures, protections of annuity benefits from creditors, and reasonable restrictions on subsequent transfers. Senate Bill 274 has been referred to the insurance committee for review. A “same as” bill, Assembly Bill 7150, has been introduced in the New York Assembly by Assemblywoman Stacey Pheffer Amato. In New York State, both the Senate and Assembly must pass a bill before the Governor can sign the legislation into law.
Both of these bills, Senate Bill 274 and Assembly Bill 7150 are bills that were rolled over from 2023. On behalf of various retiree organizations, Retirees for Justice’s Executive Director Edward Stone, has been working with New York legislators for many years, seeking to pass legislation designed to protect retirees in pension de-risking transfers. Each year, the legislation is referred to the respective insurance committees, and then dies before being brought to the floor for a vote.
State legislation is vital to protecting retirees. When a defined benefit plan sponsor chooses to purchase a group annuity contract and transfer its pension liabilities to an insurance company, retirees lose all of the protections intended by Congress under ERISA and their rights become subject to non-uniform state laws.
If you are a New York retiree and are interested in contacting your local legislators, asking them to support this important legislation, please contact our Advocacy Associate, Samantha Brener, at sbrener@retireesforjustice.org. Now is the time to act!
Virginia – 2018
On July 1, 2018 legislation went into effect in Virginia providing protections to retirees in pension de-risking transfers. Senate Bill SB755 introduced by Senator Glen Sturtevant (R-Midlothian) with support from Delegate Dawn Adams (D-Richmond) received unanimous support in both the Virginia House and Senate.
Virginia law now provides that (1) amounts payable to a participant under an annuity providing retirement benefits are exempt from creditors’ claims, and (2) subsequent transfers of group annuity contracts funding retirement benefits are prohibited without the prior written approval of the State Corporation Commission. The complete text of the legislation is available here: SB755 – Amending Section 38.2-3125 of the Virginia Code.
Connecticut – 2015
Ground breaking legislation was passed in Connecticut in 2015 providing protections to Retirees in pension de-risking transfers. On June 3, 2015 the Connecticut legislature unanimously passed H.B. 6772 providing creditor protections to retirees in pension de-risking transfers. On July 2, 2015 then Governor Dannel P. Malloy (D) signed Public Act 15-167 into law restoring creditor protections to Connecticut retirees impacted by pension de-risking transfers.
Without this legislation, creditors were able to garnish annuity payments designed for retirement. Follow-up legislation proposed additional protections for Retirees in pension de-risking transactions was introduced in 2016 and 2017, but despite overwhelming support from the Insurance and Real Estate Committee the bills were not brought to the floor of the House for a vote.
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