S T A T E O F N E W Y O R K
________________________________________________________________________
2679--B
Cal. No. 1180
2023-2024 Regular Sessions
I N S E N A T E
January 24, 2023
___________
Introduced by Sen. BRESLIN -- read twice and ordered printed, and when
printed to be committed to the Committee on Insurance -- committee
discharged, bill amended, ordered reprinted as amended and recommitted
to said committee -- reported favorably from said committee, ordered
to first and second report, ordered to a third reading, amended and
ordered reprinted, retaining its place in the order of third reading
AN ACT in relation to authorizing and empowering CREF to combine with
TIAA, with TIAA continuing in existence as the surviving entity
following such combination and with CREF ceasing to be a corporate
entity; and to repeal chapter 124 of the laws of 1952, relating to
incorporating College Retirement Equities Fund for the benefit of the
teaching profession
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Chapter 124 of the laws of 1952, relating to incorporating
College Retirement Equities Fund for the benefit of the teaching profes-
sion, is REPEALED.
§ 2. Definitions. For purposes of this act the following terms shall
have the following meanings:
(a) "Attorney General" shall mean the attorney general of the State of
New York;
(b) "CREF" shall mean the College Retirement Equities Fund, formed
pursuant to chapter 124 of the laws of 1952 as a companion organization
to TIAA for the issuance of variable annuity contracts;
(c) "CREF Board of Governors" shall mean the individuals designated as
governors of CREF, pursuant to chapter 124 of the laws of 1952, who are
the sole members of CREF;
(d) "CREF Board of Trustees" shall mean, collectively, the trustees of
CREF as appointed in accordance with applicable law and the organiza-
tional documents of CREF;
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD07358-04-3
S. 2679--B 2
(e) "Plan of Combination" shall mean, collectively, the agreement and
plan of combination of TIAA and CREF adopted and approved in accordance
with the provisions of this act to effectuate the combination;
(f) "Superintendent" shall mean the superintendent of the New York
state department of financial services;
(g) "TIAA" shall mean the Teachers Insurance and Annuity Association
of America, an insurance company formed pursuant to the laws of New
York;
(h) "TIAA Board of Governors" shall mean the corporation formed pursu-
ant to chapter 880 of the laws of 1937, which is the sole owner of the
issued and outstanding stock of TIAA;
(i) "TIAA Board of Trustees" shall mean, collectively, the trustees of
TIAA as appointed in accordance with applicable law and the organiza-
tional documents of TIAA; and
(j) "TIAA Separate Account" shall mean the separate account of TIAA
created in connection with the Plan of Combination.
§ 3. (a) Subject to the provisions of this act and the terms set
forth in the Plan of Combination, CREF is hereby authorized and
empowered to combine with TIAA, with TIAA continuing in existence as the
surviving entity following such combination and with CREF ceasing to be
a corporate entity. TIAA shall continue to be an insurance company
established pursuant to the insurance law of the State of New York,
operating without profit to TIAA or its stockholders. The TIAA Separate
Account shall be subject to the insurance law of the State of New York,
and shall also operate without profit to itself, TIAA, or TIAA's stock-
holders. Notwithstanding the foregoing, neither the combination nor any
transactions contemplated by the Plan of Combination shall cause TIAA,
as the surviving entity, or the TIAA Separate Account, to be or become
subject to the not-for-profit corporation law. The TIAA Board of Gover-
nors shall remain subject to the not-for-profit corporation law.
(b) Such combination shall be deemed a merger under the laws of the
state of New York, including any laws applicable to insurance companies
or not-for-profit corporations.
(c) The following procedures shall apply with respect to the review
and approval of the Plan of Combination:
(1) The Plan of Combination shall contain the proposed terms of the
combination, including any allocation of anticipated tax benefits of the
combination, and, to the extent applicable to the combination, informa-
tion which would be included in a plan of merger pursuant to paragraph
(a) of section 902 of the not-for-profit corporation law.
(2) Prior to adopting the Plan of Combination, the TIAA Board of Trus-
tees and the CREF Board of Trustees shall each make an independent
determination that the proposed combination is fair, reasonable and in
their respective corporation's best interest.
(3) The TIAA Board of Trustees and the CREF Board of Trustees, upon
approving the Plan of Combination, shall submit such Plan of Combination
to a stockholder or member vote, as follows:
(i) In the case of CREF, the Plan of Combination shall be approved by
the vote of two-thirds of the individual governors of the CREF Board of
Governors, as the members of CREF, in accordance with the procedures set
forth in section 903 of the not-for-profit corporation law;
(ii) In the case of TIAA, the Plan of Combination shall be approved by
the TIAA Board of Governors, as the sole stockholder of TIAA, by the
vote of two-thirds of the individual governors of the TIAA Board of
Governors; and
S. 2679--B 3
(iii) Notice of the meeting at which the vote on the Plan of Combina-
tion will take place shall be provided to each individual governor of
the CREF Board of Governors and to the TIAA Board of Governors, as sole
stockholder of TIAA. A copy of the Plan of Combination shall accompany
such notice.
(4) Following the receipt of the approval of the members of CREF and
the sole stockholder of TIAA, TIAA and CREF shall submit to the Attorney
General the following documents:
(i) a certified copy of the adopted Plan of Combination;
(ii) an affidavit from a duly authorized officer of each of TIAA and
CREF certifying that all necessary board approvals to adopt the Plan of
Combination have been obtained, which shall include a statement affirm-
ing (A) that the Plan of Combination was approved at a meeting of the
Board of Trustees duly called and held by the vote required under the
applicable corporation's charter, by-laws or other governing instrument,
(B) the number of trustees present at such meeting, (C) the total number
of trustees on the board, (D) the requirements for quorum, and (E) the
final vote count for and against adoption of the Plan of Combination at
such meeting. A copy of the resolution approving the Plan of Combination
shall be attached as an exhibit to the affidavit;
(iii) an affidavit from a duly authorized officer of each of TIAA and
CREF certifying that all necessary stockholder or member approvals have
been obtained, including (A) in the case of CREF, a statement that the
Plan of Combination has been approved by the vote of not less than two-
thirds of the individual governors of the CREF Board of Governors, as
the members of CREF, together with a copy of the resolution of the
members approving the Plan of Combination; (B) in the case of TIAA, a
statement that the Plan of Combination has been approved by the TIAA
Board of Governors, as the sole stockholder of TIAA, by a vote of not
less than two-thirds of the individual governors, together with a copy
of the stockholder resolution approving the Plan of Combination; and (C)
in the case of each of TIAA and CREF, a statement whether any votes
against adoption of the resolution approving the Plan of Combination
were cast at the meeting at which each such resolution was adopted;
(iv) copies of the charters, by-laws and any other governing instru-
ments, including amendments, for each of TIAA and CREF; and
(v) a statement that neither TIAA nor CREF, respectively, has any
charitable funds or other charitable assets, whether restricted or unre-
stricted, that will be required to be returned, transferred or conveyed
to any third party by reason of the combination.
(d) If it shall appear, to the satisfaction of the Attorney General,
that (i) the terms and conditions of the combination are fair and
reasonable to CREF (as the non-surviving corporation) and to the annui-
tants, certificate-holders and participants of both TIAA and CREF, and
(ii) the procedural requirements set forth in subdivision (c) of this
section have been satisfied, the Attorney General shall approve the Plan
of Combination.
(e) Upon obtaining the respective approvals of the members of CREF and
the sole stockholder of TIAA, the Plan of Combination shall be submitted
to the Superintendent, for review and approval in accordance with the
procedures set forth in section 7105 of the insurance law.
(f) Thereafter, once all other required regulatory approvals to effec-
tuate the combination have been obtained, TIAA shall file a certified
copy of the Plan of Combination, with the approvals of the Superinten-
dent and the Attorney General affixed thereto, in the office of the
S. 2679--B 4
clerk of the county of New York. Upon the completion of such filing, the
combination shall become effective.
§ 4. (a) At the effective time of and pursuant to the Plan of Combina-
tion, all assets and liabilities of CREF including causes of action and
defenses thereto, shall vest by operation of law in TIAA, and all vari-
able annuity contracts and certificates issued by CREF and in force at
the effective time of the combination, shall be and become TIAA variable
annuity contracts and certificates as of the effective time of the
combination; provided, however, that at the effective time of the combi-
nation: (i) without further act or deed, the assets and liabilities of
CREF relating to the outstanding variable annuity contracts and certif-
icates of CREF shall immediately be assets and liabilities of and allo-
cated to the TIAA Separate Account without such assets becoming general
account assets of TIAA; and (ii) each investment account of CREF imme-
diately prior to the combination shall comprise an investment sub-ac-
count of the TIAA Separate Account, with the assets and liabilities of
each such investment account vesting immediately and directly in that
investment sub-account.
(b) At the effective time, TIAA shall assume the obligations of all
CREF contracts and certificates, and all holders of CREF contracts and
certificates shall be notified of the combination.
(c) At all times the assets of the TIAA Separate Account, and of each
investment sub-account, shall be segregated from the assets of the
general account of TIAA and any other TIAA separate account and invest-
ment sub-account. That portion of the assets of the TIAA Separate
Account, and of each investment sub-account, not exceeding the reserves
and other contract liabilities with respect to the TIAA Separate Account
and each investment sub-account, shall not be chargeable with liabil-
ities arising out of any other business of TIAA. The income, gains and
losses, whether or not realized, from assets allocated to the TIAA Sepa-
rate Account, and each investment sub-account, shall be credited to or
charged against the TIAA Separate Account and each investment sub-ac-
count without regard to other income, gains or losses of TIAA.
(d) Any tax benefits realized as a result of the Plan of Combination
shall be utilized for the financial benefit of TIAA and TIAA Separate
Account participants and shall not be used to determine, pay or increase
the amount of compensation paid to officers, trustees, or employees.
§ 5. This act shall take effect immediately; provided, however, that
section one of this act shall take effect at the effective time of the
combination of TIAA and CREF pursuant to this act; and provided further,
that the superintendent of the New York state department of financial
services shall notify the legislative bill drafting commission upon the
occurrence of such effective time in order that the commission may main-
tain an accurate and timely effective database of the official text of
the laws of the State of New York in furtherance of effectuating the
provisions of section 44 of the legislative law and section 70-b of the
public officers law.
