Section 13-582. Tax-deferred annuity program

a. Any member for whom a salary
  reduction  agreement  is  executed  pursuant  to  section  three hundred
  ninety-nine-A or section  three  thousand  one  hundred  nine-A  of  the
  education  law  shall  thereby  become a participant in the tax-deferred
  annuity program. The head of each department  shall  adjust  the  salary
  payments  of  each  participant  in accordance with the salary reduction
  agreement in effect  for  the  participant.  Each  of  such  amounts  so
  deducted  shall be paid to the retirement system. Such agreement and any
  change in such agreement shall become effective on the  first  effective
  date  which  follows  the filing of such agreement or change by at least
  thirty days. Effective dates shall be February first,  nineteen  hundred
  seventy,  and  such  subsequent  dates  as  may  be  determined  by  the
  retirement board for each calendar year. However,  the  participant  may
  terminate  the agreement as of the first day of any calendar month which
  commences at least thirty days after appropriate written notice  thereof
  has been filed.
    b.  A  portion  of each such payment may be withheld by the retirement
  board to provide for the additional expenses that  are  attributable  to
  the tax-deferred annuity program and shall be transferred to the expense
  fund.  The  remainder  shall  be  referred  to  in  this  section as the
  participant's tax-deferred annuity net contributions. The portion to  be
  withheld  shall  be  determined  in  advance  in  accordance  with rules
  established by the retirement board.
    c. A participant in  the  tax-deferred  annuity  program,  by  written
  notice  duly  filed  with the retirement board, shall elect whether all,
  none or such portion as the retirement board by duly adopted  rules  and
  regulations  may  permit  of  such  net contributions is to be currently
  deposited in the  variable  annuity  savings  fund  and  credited  to  a
  separate  tax-deferred  account  maintained for him or her in such fund.
  The balance, if any,  of  such  net  contributions  shall  be  currently
  deposited  in  the  annuity  savings  fund  and  credited  to a separate
  tax-deferred account maintained  for  him  or  her  in  such  fund.  The
  tax-deferred  account  established  pursuant  to this paragraph shall be
  maintained in the A fund  and/or  the  B  fund  or  in  such  additional
  variable  annuity  fund  or  funds  which may be established pursuant to
  subdivision c of section 13-567  of  this  chapter  as  elected  by  the
  participant.
    d. Interest shall be allowed on the participant's tax-deferred account
  in  the annuity savings fund at the same rate and in accordance with the
  same rules and procedures applicable  to  any  account  in  the  annuity
  savings fund, as provided in this chapter.
    e.  Any  deposit  or  transfer  to  the  variable annuity savings fund
  pursuant to subdivision c above shall be converted at  once  into  units
  having  a  total  value equal to such deposit or transfer. The number of
  units in a participant's tax-deferred account  in  such  fund  shall  be
  increased  each  month in the same manner as any account in the variable
  annuity savings fund would be increased, as set forth in  subdivision  g
  of  section  13-570,  and the value of a unit shall be determined as set
  forth in subdivision h thereof.
    f. Sections 13-501, 13-503, 13-506, 13-511,  13-512,  13-513,  13-514,
  13-520,  13-521, 13-522, 13-523, 13-527, 13-533, 13-535, 13-537, 13-541,
  13-542, 13-543, 13-545, 13-550, 13-553, 13-554, 13-556, 13-557,  13-558,
  13-560,  13-561, 13-562, 13-563, 13-565, 13-567, 13-569, 13-572, 13-573,
  13-574, 13-576, 13-577, 13-578, 13-579, 13-580 and 13-581 of this title,
  and subdivisions f, h and i of section 13-638.2 of this  title  (to  the
  extent  that such subdivisions apply to this retirement system), as such
  sections  and  subdivisions  apply  to  the  contributions  made  by   a
  contributor  and  the  benefits provided thereby, shall apply separately

  and independently to the tax-deferred annuity net contributions and  the
  benefits  provided  thereby,  except  as  otherwise  specified  in  this
  section. Sections 13-534, 13-536  and  13-570,  as  they  apply  to  the
  contributions  made  by a contributor and the benefits provided thereby,
  shall apply to  the  tax-deferred  annuity  net  contributions  and  the
  benefits  provided  thereby,  except  as  otherwise  specified  in  this
  section.
    g. 1. If the full amount of the participant's accounts in the  annuity
  savings  fund  and  the  variable  annuity  savings fund, other than the
  tax-deferred accounts, are paid to him or her pursuant to the provisions
  of section 13-541, subdivision g of section 13-556 or 13-572,  then  the
  full amount of the corresponding tax-deferred accounts must also be paid
  to  him or her. Notwithstanding any other provision of this chapter, any
  rules or regulations adopted by the retirement board, or any  provisions
  of  law  to  the  contrary,  a  participant  in the tax-deferred annuity
  program who retires  pursuant  to  the  provisions  of  section  13-545,
  13-547,  13-550, or 13-551, or who meets all the requirements for vested
  retirement rights pursuant to section 13-556, may elect,  at  such  time
  and  in  such manner as determined by the retirement board, to defer the
  commencement of the distribution of his or her tax-deferred  account  to
  the  latest date permitted for the deferral of tax-deferred annuities by
  the provisions of section 403(b) of the Internal  Revenue  Code.  Should
  such  an election be made, the provisions of section 13-522 would not be
  applicable as of the participant's retirement  date,  but  would  become
  applicable  as of such later date. If, upon making such application, the
  participant elects that his or her tax-deferred account  be  distributed
  under  option IV, pursuant to section 13-545, 13-547, 13-550, 13-551, or
  13-556 and section 13-558, the maximum period over which the funds  held
  in  such  account may be distributed shall not exceed the maximum period
  permitted by the provisions of section 403(b) of  the  Internal  Revenue
  Code.
    2.  Notwithstanding  any other provision of this chapter, any rules or
  regulations adopted by the retirement board, or any other provisions  of
  law  to  the  contrary, the beneficiary of a deceased participant in the
  tax-deferred annuity program who had not, prior to  his  or  her  death,
  selected an option governing the manner in which his or her tax-deferred
  account  would  be  payable  to  his or her beneficiary, may, subject to
  paragraphs three, four, and five of this  subdivision,  elect,  at  such
  time  and in such manner as determined by the retirement board, to defer
  the distribution to him  or  her  from  the  participant's  tax-deferred
  account to the extent permitted by, and in a manner consistent with, the
  provisions  of  section  403(b)  of  the  Internal  Revenue Code and the
  regulations promulgated pursuant to such section.
    3. Notwithstanding any other provision of this chapter, any  rules  or
  regulations  adopted by the retirement board, or any other provisions of
  law to the contrary, a beneficiary's election pursuant to paragraph  two
  of this subdivision shall be in lieu of any options or elections for the
  distribution   to   such   beneficiary  of  the  deceased  participant's
  tax-deferred account provided in any other provisions of this chapter or
  of the retirement and social security law.
    4. An election pursuant to paragraph two of this subdivision shall  be
  made within six months of the date of death of the participant.
    5.  If  a  beneficiary  of  a deceased participant elects the deferral
  provided for in paragraph two of this subdivision, the funds held in the
  tax-deferred account for such  beneficiary  may  be  held  only  in  the
  variable annuity funds provided pursuant to section 13-567.

    h. The tax-deferred annuity net contributions shall not be included in
  determining  the  amount,  if  any,  that  may  be withdrawn pursuant to
  paragraph three of section 13-525.
    i.  Subject  to  the following provisions and to such additional terms
  and conditions and rules and regulations as  the  retirement  board  may
  adopt  to  accomplish the purpose of the tax-deferred annuity program, a
  participant may withdraw all or part of his accumulations in the annuity
  savings fund and variable annuity savings fund arising from tax-deferred
  annuity net contributions.
    1. The amount of any such withdrawal from the variable annuity savings
  fund shall be based on the value of a unit for the month  following  the
  date  written  request  for such withdrawal is filed with the retirement
  board.
    2. If a transfer of the member's tax-deferred  accounts  has  not  yet
  been  completed  on  the  date  of a partial withdrawal pursuant to this
  subdivision, then subsequent monthly transfers shall be continued in the
  same number of dollars or units, as the case may be, until the  transfer
  requested  has  been  completed.  In  case  of a partial withdrawal, the
  member's tax-deferred account in  the  annuity  savings  fund  shall  be
  exhausted first before any portion of his or her tax-deferred account in
  the  variable  annuity  savings  fund is so used. Furthermore, if only a
  portion of the member's tax-deferred account in the annuity savings fund
  is being  transferred,  the  portion  not  being  transferred  shall  be
  exhausted first before the transferable portion is used.
    3.  The  exemption  from  state  and municipal tax provided in section
  13-561 for return of contributions shall  not  apply  to  withdrawal  of
  tax-deferred annuity net contributions.
    j. Nothing contained in this section shall be construed to diminish or
  impair any benefits to which a member or his legal representatives would
  be   otherwise   entitled  had  such  member  not  participated  in  the
  tax-deferred annuity program in accordance with the provisions  of  this
  section.
    k.  1. As used in this subdivision, the following terms shall have the
  following meanings, unless a different meaning is  plainly  required  by
  the context:
    (i)  "Annuity  savings  fund".  The  annuity  savings  fund  under the
  tax-deferred annuity program.
    (ii) "Annuity reserve  fund".  The  annuity  reserve  fund  under  the
  tax-deferred annuity program.
    (iii)  "Variable  annuity  reserve fund". The variable annuity reserve
  fund under the tax-deferred annuity program.
    (iv) "Interest allowance". (A) In the  case  of  the  annuity  savings
  fund,   such  term  shall  mean  the  amount  of  interest  required  by
  subdivision d of this section to be credited to such fund  with  respect
  to any fiscal year.
    (B)  In the case of the annuity reserve fund, such term shall mean the
  amount  of  interest  required  by  section   13-535   of   this   title
  (incorporated  by  reference  by  subdivision  f  of  this  section) and
  subdivision i of section 13-638.2 thereof to be credited  to  such  fund
  with respect to any fiscal year.
    (v)  "Surplus  investment  income".  The  amount, if any, by which the
  total of all income, interest and dividends derived in any  fiscal  year
  by  reason  of  deposits  and  investments  of the assets of the annuity
  savings fund or the assets of  the  annuity  reserve  fund  exceeds  the
  amount of the interest allowance required to be credited to such fund in
  such fiscal year.
    2.  (i)  On  the basis of the latest mortality and other tables herein
  authorized and the valuation rate of interest (as defined  in  paragraph

  eleven  of subdivision a of section 13-638.2 of this title), the actuary
  shall determine as of June thirtieth, nineteen  hundred  ninety-one  and
  each  succeeding  June  thirtieth the liabilities of the annuity reserve
  fund for benefits.
    (ii)  If  the  amount  of  such liabilities exceeds the assets of such
  fund, an amount equal to such excess shall be transferred to the annuity
  reserve fund from the contingent reserve fund of the retirement system.
    (iii) If such assets exceed the amount of such liabilities, an  amount
  equal  to such excess shall be transferred from the annuity reserve fund
  to the contingent reserve fund of the retirement system.
    3. Any such transfer required to be made on the basis of the actuary's
  determination of liabilities made as of any such June thirtieth pursuant
  to paragraph  two  of  this  subdivision  shall  be  recognized  in  the
  determination  of  the  normal  contribution  payable  to the contingent
  reserve fund of the retirement system pursuant to section 13-527 of this
  title with  respect  to  the  fiscal  year  next  succeeding  such  June
  thirtieth.
    4.  Any  transfer  required  by  subdivision  f  of  this  section and
  subdivision a of section 13-577 of this title to be made to or from  the
  contingent   reserve  fund  of  the  retirement  system  pursuant  to  a
  determination of the actuary made as of  July  first,  nineteen  hundred
  ninety-one  or  any  subsequent  July  first  shall be recognized in the
  determination of the  normal  contribution  payable  to  the  contingent
  reserve fund of the retirement system pursuant to section 13-527 of this
  title with respect to the fiscal year commencing on such July first.
    5.  (i)  There  shall  be  determined,  as of June thirtieth, nineteen
  hundred ninety-one,  the  total  amount  of  surplus  investment  income
  accumulated  and  on  hand  on such June thirtieth. Such amount shall be
  transferred to the contingent reserve fund of the retirement system.
    (ii) There shall be determined as of June thirtieth, nineteen  hundred
  ninety-two,  and  as  of each succeeding June thirtieth, whether surplus
  investment income was produced in the fiscal year ending  on  such  June
  thirtieth.  Any such surplus on hand as of any such June thirtieth shall
  be transferred to the contingent reserve fund of the retirement system.
    (iii) Except as provided for in subparagraph (iv)  of  this  paragraph
  any transfer required to be made on the basis of a determination made as
  of any June thirtieth mentioned in subparagraph (i) or subparagraph (ii)
  of this paragraph shall be recognized in the determination of the normal
  contribution  payable  to  the contingent reserve fund of the retirement
  system pursuant to section 13-527 of this  title  with  respect  to  the
  fiscal  year  next succeeding the June thirtieth as of which the surplus
  to be transferred was determined.
    (iv) Notwithstanding any other provision of law to the  contrary,  the
  amount  of the normal contribution which would otherwise be payable with
  respect   to   the   nineteen   hundred   ninety-six--nineteen   hundred
  ninety-seven   fiscal  year  to  the  contingent  reserve  fund  of  the
  retirement system pursuant to section 13-527  of  this  title  shall  be
  reduced by a credit equal to the amount of the surplus investment income
  produced  in  the fiscal year ending on June thirtieth, nineteen hundred
  ninety-six.
    6. Notwithstanding any other provision of law  to  the  contrary,  the
  amount of the normal contribution which would otherwise be payable, with
  respect  to the nineteen hundred ninety-one--nineteen hundred ninety-two
  fiscal year, to the contingent reserve fund  of  the  retirement  system
  pursuant  to  section  13-527  of  this  title and the provisions of the
  preceding paragraphs of this subdivision shall be reduced  by  a  credit
  equal to the amount obtained:
    (i) by adding together:

    (A) the excess required to be transferred, with respect to such fiscal
  year, from the annuity reserve fund to the contingent reserve fund under
  the   provisions   of  subparagraph  (iii)  of  paragraph  two  of  this
  subdivision; and
    (B)  the  surplus  investment  income  required by subparagraph (i) of
  paragraph five of this subdivision to be transferred to  the  contingent
  reserve fund; and
    (ii)  by  subtracting  from such sum computed pursuant to subparagraph
  (i) of this paragraph the amount  required  by  subdivision  f  of  this
  section and section 13-577 of this title to be transferred, with respect
  to  such  fiscal  year, from the contingent reserve fund to the variable
  annuity reserve fund.
    * l. 1. Notwithstanding any other provision of law to the contrary, in
  the event that a person becomes entitled  to  a  distribution  from  the
  tax-deferred  annuity  program  which  constitutes an "eligible rollover
  distribution" within the meaning of paragraph thirty-one of subsection a
  of section four hundred one  of  the  internal  revenue  code  (as  such
  section  is  made  applicable  to  the  tax-deferred  annuity program by
  paragraph ten of subsection b of  section  four  hundred  three  of  the
  internal  revenue code), such person may elect, subject to any rules and
  regulations adopted pursuant to paragraph three of this subdivision,  to
  have  such  distribution,  or  a  portion  thereof,  paid directly to an
  "eligible retirement plan" within the meaning of paragraph thirty-one of
  subsection a of section four hundred one of the internal revenue code.
    2. Nothing contained in this section or  in  section  13-561  of  this
  chapter shall be construed to prohibit a participant in the tax-deferred
  annuity program from electing to transfer all or a portion of his or her
  tax-deferred  annuity  net  contributions  to  another  annuity contract
  described in subsection b of section four hundred three of the  internal
  revenue   code   where   a  nontaxable  trustee-to-trustee  transfer  of
  tax-deferred annuities is permitted by  subsection  b  of  section  four
  hundred  three  of  such code or the applicable rules and regulations or
  rulings promulgated thereunder.
    3. The  retirement  board  is  authorized  to  adopt  such  rules  and
  regulations  as it finds to be necessary in administering the provisions
  of this section, provided  that  they  are  not  inconsistent  with  the
  applicable  provisions  of  the  internal revenue code and the rules and
  regulations thereunder.
    * NB There are 2 sub l's
    * l. Pursuant to section 13-513 of this chapter, the retirement  board
  may  establish  rules  and  regulations applicable to similarly situated
  contributors and/or all beneficiaries with respect to  the  tax-deferred
  annuity  program  including,  without  limitation, rules and regulations
  governing:
    1. Changes and revocations of elections made pursuant to  subdivisions
  a and c of this section;
    2. Loans from monies accumulated in the tax-deferred annuity program;
    3.  Monies  withheld  from  participants' payments in the tax-deferred
  annuity program relating to expenses incurred by  the  retirement  board
  attributable to the tax-deferred annuity program pursuant to subdivision
  b of this section;
    4. Deposits to the tax-deferred annuity program of monies attributable
  to  a  contributor  who  has  transferred  from  the  board of education
  retirement system;
    5. Transfers of monies  between  the  variable  annuity  savings  fund
  tax-deferred account and the annuity savings fund tax-deferred account;
    6.  Transfers  of  accumulated  contributions  among  the tax-deferred
  investment accounts which the retirement board may establish;

    7. Withdrawals of all or part of contributors'  accumulations  in  the
  annuity  savings  fund  and  variable annuity savings funds arising from
  tax-deferred annuity net contributions.
    * NB There are 2 sub l's
    m. In promulgating and administering rules and regulations pursuant to
  paragraph  1  of this section, the retirement board shall take no action
  that would render the  tax-deferred  annuity  program  in  violation  of