New York Laws
Part 1 - General Provisions
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.