1. Introduction

This guide is intended to provide basic information about the New York State Teachers' Retirement System (the "System" or "NYSTRS") and the way in which the System administers Domestic Relations Orders ("DROs"). The guide is intended to answer commonly posed questions about the benefits the System provides, the impact a DRO might have on a member's benefits, and the procedures the System follows when it receives proposed and final DROs. This guide also provides sample language for a DRO.

This guide is based upon the System's current understanding of the law. It is not intended to be a substitute for New York law or the rules and regulations governing the System, which law and rules may be subject to change.

Questions about the matters discussed in this guide may be directed to the System's Legal Department at (800) 348-7298 or (518) 447-2900, Ext. 2734 or Ext. 2727.

Although this guide is available on the System's Web site and thus may potentially be accessed by System members and their current or former spouses, this guide is not intended to provide legal advice to members and spouses and may not be relied upon for that purpose. Members and spouses are strongly urged to seek the advice of their own attorney or attorneys regarding the matters discussed in this guide.

2. What is NYSTRS?

NYSTRS is a public employee retirement system established and operating pursuant to Article 11 of the Education Law.

NYSTRS provides retirement and death benefits principally to active and retired teachers and administrators in the public schools of New York State (outside of New York City). All full-time teachers in such schools are required to be members of the System. Part-time teachers in such schools have the right, but are not required, to join the System.

Practice Pointer: When a party is a public employee, it is incumbent upon an attorney to verify which entity will be providing the party's retirement benefits. NYSTRS is only one of eight public employee retirement systems in the State of New York. Other public employee pension plans in New York include the New York State and Local Employees' Retirement System, the New York State and Local Police and Fire Retirement System, the New York City Employees' Retirement System, the New York City Teachers' Retirement System, the New York City Police Pension Fund, the New York City Fire Department Pension Fund, and the New York City Board of Education Retirement Fund. New York also has so-called "optional retirement programs" for professional employees of SUNY, CUNY and the State Education Department. Participation in these programs is generally in lieu of participation in one of the eight public employee retirement systems.

3. What type of retirement plan does NYSTRS administer?

NYSTRS is a governmental defined benefit plan.

As a governmental plan, the System is specifically exempt from the provisions of Title I of ERISA, including ERISA §206. See ERISA §4(b)(1), 29 USC §1003(b)(1). As a governmental plan, the System is also exempt from many of the provisions of the Internal Revenue Code applicable to private sector retirement plans. See e.g. IRC §401(a)(last sentence); 26 USC §401(a)(last sentence). Thus, the System is exempt from the provisions of IRC §§401(a)(11) and 417 and ERISA §205 which require private sector plans to provide joint and survivor annuities and pre-retirement survivor annuities.

As a defined benefit plan, the System provides benefits calculated pursuant to benefit formulas established by law which take into account the teacher's credited service and compensation. The System generally does not maintain separate accounts for each participant.

Practice Pointer: Because the System is a governmental defined benefit plan, it may not be like private sector retirement plans an attorney may have encountered in other matrimonial actions. Private sector retirement plans are generally subject to the Employment Retirement Security Act (ERISA) and are subject to various Tax Code provisions applicable only to private sector plans. Additionally, private sector retirement plans are often defined contribution plans, not defined benefit plans. It is, therefore, important for an attorney used to dealing with private sector retirement plans to understand the important legal differences between the System and a typical private sector retirement plan.