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Certifying Officer Letters 2007 See also: Archived EPIC E-Messages
Also available: Archived E-Messages to Certifying Officers and EPIC Users.
December 20, 2007
Recent labor agreements and Chapter 103, P.L. 2007, required that new medical plans be offered to active and retired members of the New Jersey State Health Benefits Program (SHBP). This letter outlines the new plan designs for State active employees and State retirees. NEW MEDICAL PLANS The SHBP is offering two types of medical plans, Preferred Provider Organizations (PPO) and Health Maintenance Organizations (HMO). The new PPO plans will be known as NJ DIRECT10, which is the successor plan to the Traditional Plan, and NJ DIRECT15 which replaces NJ PLUS. (Please note that certain labor agreements have not been settled and others do not expire until 2008; for employees covered by these groups, the Traditional Plan and NJ PLUS will continue until the agreements are ratified.) In May 2007, the SHBP released a Request for Proposal to obtain bids for the administration of the new plans. In November 2007, the bidding process concluded with the PPO contract awarded to Horizon Blue Cross Blue Shield of New Jersey and HMO contracts awarded to Aetna and CIGNA.
Additional dates significant to the rollout of the NJ DIRECT and HMO plans are discussed later in this letter. NJ DIRECT and the HMOs are managed-care plans. Managed-care plans provide coverage for preventive care such as annual checkups and screening tests, well-baby visits, and immunizations, in the hope of avoiding serious illness and more costly treatment. Services are monitored for medical necessity and appropriate levels of care. Plan Rates Most State employees, as required under recent labor agreements, pay a health contribution of 1.5% of salary for SHBP medical and/or prescription drug plan coverage. Therefore, the payroll deduction of a State employee is the same regardless of which plan is chosen or the level of coverage that is selected. Premium rates will be released in January 2008 after approval by the State Health Benefits Commission. The SHBP will contact retirees directly to provide them with information about the new plans and retired group rates when it is available. Employers should watch the SHBP Web site at: www.state.nj.us/treasury/pensions/shbp.htm for retiree rate information. EMPLOYEE ELIGIBILITY State Active employees covered under labor agreements effective July 2007 are eligible for enrollment in NJ DIRECT15, Aetna HMO, or CIGNA HMO. Most State retirees are eligible to enroll in either NJ DIRECT 10, NJ DIRECT 15, Aetna HMO, or CIGNA HMO. Plan design details will be provided in January. Participating Providers NJ DIRECT and both HMOs are available nationwide. Employees should check with the medical plans to determine provider participation. The SHBP is also in the process of updating the online Unified Provider Directory with information about providers in New Jersey and neighboring states who participate in the new plans. The Unified Provider Directory is available from a link on the SHBP home page. Provider directories will not be available in printed form but are available online at the plan administrator Web sites. PLAN IMPLEMENTATION The SHBP and Division of Pensions and Benefits will provide State Employers with follow-up mailings as new information becomes available. Employer informational seminars are also being scheduled for early January 2008 (see “Employer Support Materials and Information” below). SPECIAL OPEN ENROLLMENT The SHBP will hold a Special Open Enrollment for employees from January 28 through February 15, 2008. Detailed plan information for distribution to employees will be shipped to employers by the end of January. The current SHBP plans — NJ PLUS, the Traditional Plan, and three HMO plans: AmeriHealth, Health Net, and Oxford Health Plans — will no longer be available to employees effective March 28, 2008 for Biweekly State employees and March 31, 2008 for State Monthly employees and retirees. As noted previously, certain labor agreements have not been settled and others do not expire until 2008. For employees covered by these groups, the Traditional Plan and NJ PLUS will continue until the agreements are ratified. However, AmeriHealth, Health Net, and Oxford Health Plans will terminate for ALL employees and retirees effective March 31, 2008 (March 28th for State Biweekly employees) regardless of union affiliation. Due to the large subscriber population in the SHBP, the SHBP is planning a passive open enrollment. Current subscribers will be automatically transferred to the new plan offerings as outlined below unless they submit a SHBP Application choosing another plan.
Please note: completed SHBP Applications are due from employers to the Division of Pensions and Benefits no later than Friday, February 22, 2008. Retiree Communications Information about plan changes for retirees, applicable retiree rates, and an SHBP Retired Status Application will be mailed directly to SHBP retired group members when retiree plan details are complete. EMPLOYER SUPPORT MATERIALS AND INFORMATION The following information and resources are available to employers to assist with the Special Open Enrollment. MILESTONES — Enclosed is a milestone chart that lists the critical dates of the Special Open Enrollment. Please use this chart as a checklist to guide your activities during open enrollment. INFORMATIONAL SEMINARS FOR EMPLOYERS — The SHBP will be providing seminars to introduce the new SHBP medical plans to employers and address questions about the changes. Seminars for State employers will be scheduled for early January 2008. Employer representatives can find seminar dates, locations, and can register using the Division of Pensions and Benefits’ online Seminar Registration System. At the Seminars page, select “SHBP Employer Seminars” from the drop menu to see seminar dates and locations. INFORMATIONAL SEMINARS FOR EMPLOYEES — During the Special Open Enrollment the SHBP will provide regional seminars to familiarize employees with the new SHBP medical plans. Seminars will be held at locations around the State. Employees can find seminar dates, locations, and can register using the Division of Pensions and Benefits’ online Seminar Registration System. At the Seminars page, select “SHBP Employee Seminars” from the drop menu to see seminar dates and locations. SHBP WEB LINKS AND ONLINE PRESENTATIONS — Links to SHBP news, forms, and other Open Enrollment or plan information, including online video presentations, will be available on the SHBP Web site at: www.state.nj.us/treasury/pensions/shbp.htm At the SHBP home page click on the link for “SHBP News” and look for the “Special Open Enrollment” information and presentations (Webex or Flash Player download may be required for video presentations). GUIDE TO CHOOSING AN SHBP PLAN — The publication, A Guide to Choosing an SHBP Plan, details the design of the new SHBP medical plans, lists plan contact information, and offers suggestions on how to choose a plan. By the end of January, each employer will be shipped a sufficient supply of the Guide for distribution to all employees. SHBP APPLICATIONS — SHBP Applications are being revised for use with NJ DIRECT, Aetna HMO, and CIGNA HMO and will be made available to employers when ready. The revised applications will also be available for printing from the SHBP Web site at: www.state.nj.us/treasury/pensions/shbp.htm RATE CHARTS — The State Health Benefits Commission will determine final plan rates early in January 2008. Employer and retiree rate charts will be made available at that time and posted to the SHBP Web site at: www.state.nj.us/treasury/pensions/shbp.htm
MEDICAL PLAN COMPARISON SUMMARY Charts — Comparison charts for use with NJ DIRECT, Aetna HMO, and CIGNA HMO are being prepared and expected to be available for the Special Open Enrollment. Employers should watch their e-mail or the SHBP Web site for updates. MEDICAL PLAN MEMBER HANDBOOKS — these publications are in the process of being updated for the new medical plans and will be available online when coverage begins in April 2008. ADDITIONAL INFORMATION Information about SHBP plans and the Special Open Enrollment will be available to members and employers on the Division of Pensions and Benefits Web site at: www.state.nj.us/treasury/pensions. At the home page click on “State Health Benefits Program” then select “SHBP News” in the right-hand column. If you have additional questions regarding the SHBP, the Special Open Enrollment, or any of the information provided in this letter, contact the Division’s Office of Client Services at (609) 292-7524, or e-mail the Division at: pensions.nj@treas.state.nj.us Enclosure — Special Open Enrollment Milestone Chart - PDF size 9K - requires Acrobat Reader available free from Adobe. CO Letter in Printable Format - PDF size 85K - requires Acrobat Reader available free from Adobe. December 20, 2007
Chapter 103, P.L. 2007, required that new medical plans be offered to active and retired members of the New Jersey State Health Benefits Program (SHBP). This letter outlines the new plan designs for active employees and retirees of Local Education Employers. NEW MEDICAL PLANS The SHBP is offering two types of medical plans, Preferred Provider Organizations (PPO) and Health Maintenance Organizations (HMO). The new PPO plans will be known as NJ DIRECT10, which is the successor plan to the Traditional Plan, and NJ DIRECT15 which replaces NJ PLUS. In May 2007, the SHBP released a Request for Proposal to obtain bids for the administration of the new plans. In November 2007, the bidding process concluded with the PPO contract awarded to Horizon Blue Cross Blue Shield of New Jersey and HMO contracts awarded to Aetna and CIGNA. For all Local Education employees and retirees, the effective date for the start of the NJ DIRECT and HMO plans is April 1. 2008. Additional dates significant to the rollout of the NJ DIRECT and HMO plans are discussed later in this letter. NJ DIRECT and the HMOs are managed-care plans. Managed-care plans provide coverage for preventive care such as annual checkups and screening tests, well-baby visits, and immunizations, in the hope of avoiding serious illness and more costly treatment. Services are monitored for medical necessity and appropriate levels of care. Plan Rates Premium rates will be released in January 2008 after approval by the State Health Benefits Commission. Employers should watch for future e-mails with announcements of rate information. SHBP rates will also be posted on the SHBP Web site at: www.state.nj.us/treasury/pensions/shbp.htm Retirees will be contacted directly by the SHBP with information about the new plans and retired group rates when it becomes available. EMPLOYEE ELIGIBILITY Local Education employees and retirees are eligible to enroll in either NJ DIRECT10, NJ DIRECT15, Aetna HMO, or CIGNA HMO. Plan design details will be provided in January. Participating Providers NJ DIRECT and both HMOs are available nationwide. Employees should check with the medical plans to determine provider participation. The SHBP is also in the process of updating the online Unified Provider Directory with information about providers in New Jersey and neighboring states who participate in the new plans. The Unified Provider Directory is available from a link on the SHBP home page. Provider directories will not be available in printed form but are available online at the plan administrator Web sites. PLAN IMPLEMENTATION The SHBP and Division of Pensions and Benefits will provide Local Education Employers with follow-up mailings as new information becomes available. Informational seminars are also being scheduled for January 2008 and after (see “Employer Support Materials and Information” below). SPECIAL OPEN ENROLLMENT The SHBP will hold a Special Open Enrollment for employees from January 28 through February 15, 2008. Detailed plan information for distribution to employees will be shipped to employers by the end of January. The current SHBP plans — NJ PLUS, the Traditional Plan, and three HMO plans: AmeriHealth, Health Net, and Oxford Health Plans — will no longer be available to employees or retirees effective March 31, 2008. Due to the large subscriber population in the SHBP, the SHBP is planning a passive open enrollment. Current subscribers will be automatically transferred to the new plan offerings as outlined below unless they submit a SHBP Application choosing another plan.
Please note: completed SHBP Applications are due from employers to the Division of Pensions and Benefits no later than Friday, February 22, 2008. Retiree Communications Information about plan changes for retirees, applicable retiree rates, and an SHBP Retired Status Application will be mailed directly to SHBP retired group members when retiree plan details are complete. EMPLOYER SUPPORT MATERIALS AND INFORMATION The following information and resources are available to employers to assist with the Special Open Enrollment. MILESTONES — Enclosed is a milestone chart that lists the critical dates of the Special Open Enrollment. Please use this chart as a checklist to guide your activities during open enrollment. INFORMATIONAL SEMINARS FOR EMPLOYERS — The SHBP will be providing seminars to introduce the new SHBP medical plans to employers and address questions about the changes. Seminars for Local Education Employers will be scheduled for mid-January 2008. Employer representatives can find seminar dates, locations, and can register using the Division of Pensions and Benefits’ online Seminar Registration System. At the Seminars page, select “SHBP Employer Seminars” from the drop menu to see seminar dates and locations. INFORMATIONAL SEMINARS FOR EMPLOYEES — During the Special Open Enrollment the SHBP will provide regional seminars to familiarize employees with the new SHBP medical plans. Seminars will be held at locations around the State. Employees can find seminar dates, locations, and can register using the Division of Pensions and Benefits’ online Seminar Registration System. At the Seminars page, select “SHBP Employee Seminars” from the drop menu to see seminar dates and locations. SHBP WEB LINKS AND ONLINE PRESENTATIONS — Links to SHBP news, forms, and other Open Enrollment or plan information, including online video presentations, will be available on the SHBP Web site at: www.state.nj.us/treasury/pensions/shbp.htm At the SHBP home page click on the link for “SHBP News” and look for the “Special Open Enrollment” information and presentations (Webex or Flash Player download may be required for video presentations). GUIDE TO CHOOSING A SHBP PLAN — The publication, A Guide to Choosing a SHBP Plan, details the design of the new SHBP medical plans, lists plan contact information, and offers suggestions on how to choose a plan. By the end of January, each employer will be shipped a sufficient supply of the Guide for distribution to all employees. SHBP APPLICATIONS — SHBP Applications are being revised for use with NJ DIRECT, Aetna HMO, and CIGNA HMO and will be made available to employers when ready. The revised applications will also be available for printing from the SHBP Web site at: www.state.nj.us/treasury/pensions/shbp.htm RATE CHARTS — The State Health Benefits Commission will determine final plan rates early in January 2008. Employer and retiree rate charts will be made available at that time and posted to the SHBP Web site at: www.state.nj.us/treasury/pensions/shbp.htm MEDICAL PLAN COMPARISON SUMMARY Charts — Comparison charts for use with NJ DIRECT, Aetna HMO, and CIGNA HMO are being prepared and expected to be available for the Special Open Enrollment. Employers should watch their e-mail or the SHBP Web site for updates. MEDICAL PLAN MEMBER HANDBOOKS — these publications are in the process of being updated for the new medical plans and will be available online when coverage begins in April 2008. ADDITIONAL INFORMATION Information about SHBP plans and the Special Open Enrollment will be available to members and employers on the Division of Pensions and Benefits Web site at: www.state.nj.us/treasury/pensions. At the home page click on “State Health Benefits Program” then select “SHBP News” in the right-hand column. If you have additional questions regarding the SHBP, the Special Open Enrollment, or any of the information provided in this letter, contact the Division’s Office of Client Services at (609) 292-7524, or e-mail the Division at: pensions.nj@treas.state.nj.us Enclosure — Special Open Enrollment Milestone Chart - PDF size 9K - requires Acrobat Reader available free from Adobe. CO Letter in Printable Format - PDF size 86K - requires Acrobat Reader available free from Adobe. December 20, 2007
Chapter 103, P.L. 2007, required that new medical plans be offered to active and retired members of the New Jersey State Health Benefits Program (SHBP). This letter outlines the new plan designs for active employees and retirees of Local Government Employers. NEW MEDICAL PLANS The SHBP is offering two types of medical plans, Preferred Provider Organizations (PPO) and Health Maintenance Organizations (HMO). The new PPO plans will be known as NJ DIRECT10, which is the successor plan to the Traditional Plan, and NJ DIRECT15 which replaces NJ PLUS. In May 2007, the SHBP released a Request for Proposal to obtain bids for the administration of the new plans. In November 2007, the bidding process concluded with the PPO contract awarded to Horizon Blue Cross Blue Shield of New Jersey and HMO contracts awarded to Aetna and CIGNA. For all Local Government employees and retirees, the effective date for the start of the NJ DIRECT and HMO plans is April 1. 2008. Additional dates significant to the rollout of the NJ DIRECT and HMO plans are discussed later in this letter. NJ DIRECT and the HMOs are managed-care plans. Managed-care plans provide coverage for preventive care such as annual checkups and screening tests, well-baby visits, and immunizations, in the hope of avoiding serious illness and more costly treatment. Services are monitored for medical necessity and appropriate levels of care. Plan Rates Premium rates will be released in January 2008 after approval by the State Health Benefits Commission. Employers should watch for future e-mails with announcements of rate information. SHBP rates will also be posted on the SHBP Web site at: www.state.nj.us/treasury/pensions/shbp.htm Retirees will be contacted directly by the SHBP with information about the new plans and retired group rates when it becomes available. EMPLOYEE ELIGIBILITY Local Government employees and retirees are eligible to enroll in either NJ DIRECT10, NJ DIRECT15, Aetna HMO, or CIGNA HMO. Plan design details will be provided in January. Participating Providers NJ DIRECT and both HMOs are available nationwide. Employees should check with the medical plans to determine provider participation. The SHBP is also in the process of updating the online Unified Provider Directory with information about providers in New Jersey and neighboring states who participate in the new plans. The Unified Provider Directory is available from a link on the SHBP home page. Provider directories will not be available in printed form but are available online at the plan administrator Web sites. PLAN IMPLEMENTATION The SHBP and Division of Pensions and Benefits will provide Local Government Employers with follow-up mailings as new information becomes available. Informational seminars are also being scheduled for January 2008 and after (see “Employer Support Materials and Information” below). SPECIAL OPEN ENROLLMENT The SHBP will hold a Special Open Enrollment for employees from January 28 through February 15, 2008. Detailed plan information for distribution to employees will be shipped to employers by the end of January. The current SHBP plans — NJ PLUS, the Traditional Plan, and three HMO plans: AmeriHealth, Health Net, and Oxford Health Plans — will no longer be available to employees or retirees effective March 31, 2008. Due to the large subscriber population in the SHBP, the SHBP is planning a passive open enrollment. Current subscribers will be automatically transferred to the new plan offerings as outlined below unless they submit a SHBP Application choosing another plan.
Please note: completed SHBP Applications are due from employers to the Division of Pensions and Benefits no later than Friday, February 22, 2008. Retiree Communications Information about plan changes for retirees, applicable retiree rates, and an SHBP Retired Status Application will be mailed directly to SHBP retired group members when retiree plan details are complete. EMPLOYER SUPPORT MATERIALS AND INFORMATION The following information and resources are available to employers to assist with the Special Open Enrollment. MILESTONES — Enclosed is a milestone chart that lists the critical dates of the Special Open Enrollment. Please use this chart as a checklist to guide your activities during open enrollment. INFORMATIONAL SEMINARS FOR EMPLOYERS — The SHBP will be providing seminars to introduce the new SHBP medical plans to employers and address questions about the changes. Seminars for Local Government Employers will be scheduled for mid-January 2008. Employer representatives can find seminar dates, locations, and can register using the Division of Pensions and Benefits’ online Seminar Registration System. At the Seminars page, select “SHBP Employer Seminars” from the drop menu to see seminar dates and locations. INFORMATIONAL SEMINARS FOR EMPLOYEES — During the Special Open Enrollment the SHBP will provide regional seminars to familiarize employees with the new SHBP medical plans. Seminars will be held at locations around the State. Employees can find seminar dates, locations, and can register using the Division of Pensions and Benefits’ online Seminar Registration System. At the Seminars page, select “SHBP Employee Seminars” from the drop menu to see seminar dates and locations. SHBP WEB LINKS AND ONLINE PRESENTATIONS — Links to SHBP news, forms, and other Open Enrollment or plan information, including online video presentations, will be available on the SHBP Web site at: www.state.nj.us/treasury/pensions/shbp.htm At the SHBP home page click on the link for “SHBP News” and look for the “Special Open Enrollment” information and presentations (Webex or Flash Player download may be required for video presentations). GUIDE TO CHOOSING A SHBP PLAN — The publication, A Guide to Choosing a SHBP Plan, details the design of the new SHBP medical plans, lists plan contact information, and offers suggestions on how to choose a plan. By the end of January, each employer will be shipped a sufficient supply of the Guide for distribution to all employees. SHBP APPLICATIONS — SHBP Applications are being revised for use with NJ DIRECT, Aetna HMO, and CIGNA HMO and will be made available to employers when ready. The revised applications will also be available for printing from the SHBP Web site at: www.state.nj.us/treasury/pensions/shbp.htm RATE CHARTS — The State Health Benefits Commission will determine final plan rates early in January 2008. Employer and retiree rate charts will be made available at that time and posted to the SHBP Web site at: www.state.nj.us/treasury/pensions/shbp.htm MEDICAL PLAN COMPARISON SUMMARY Charts — Comparison charts for use with NJ DIRECT, Aetna HMO, and CIGNA HMO are being prepared and expected to be available for the Special Open Enrollment. Employers should watch their e-mail or the SHBP Web site for updates. MEDICAL PLAN MEMBER HANDBOOKS — these publications are in the process of being updated for the new medical plans and will be available online when coverage begins in April 2008. ADDITIONAL INFORMATION Information about SHBP plans and the Special Open Enrollment will be available to members and employers on the Division of Pensions and Benefits Web site at: www.state.nj.us/treasury/pensions. At the home page click on “State Health Benefits Program” then select “SHBP News” in the right-hand column. If you have additional questions regarding the SHBP, the Special Open Enrollment, or any of the information provided in this letter, contact the Division’s Office of Client Services at (609) 292-7524, or e-mail the Division at: pensions.nj@treas.state.nj.us Enclosure — Special Open Enrollment Milestone Chart - PDF size 9K - requires Acrobat Reader available free from Adobe. CO Letter in Printable Format - PDF size 84K - requires Acrobat Reader available free from Adobe. December 2007
This memorandum has pertinent information concerning the completion of your Report of Contributions (ROC). Please read this memorandum before you make any changes to the ROC. Should you have any questions or need assistance in completing the Report, please refer to http://www.state.nj.us/treasury/pensions/epbam/finance/roc.htm NEW LEGISLATION ALERT – PERS and TPAF Maximum Compensation Chapter 103, PL of 2007, provides that new employees are subject to a maximum compensation limit for PERS or TPAF pension contributions. The maximum compensation is based on the annual maximum wage for Social Security.
For calendar year 2008, the annual maximum wage for Social Security is $102,000 and is subject to change at the start of each calendar year. Therefore, a new employee enrolled in the PERS or TPAF on or after July 1, 2007 who earns in excess of $102,000 before the end of 2008 will have his or her TPAF or PERS base salary capped – limiting the amount used to calculate benefits and contributions to TPAF or PERS for pension or contributory insurance. Pension benefits may be available to these individuals for base salary paid in excess of the annual compensation limit under the newly created Defined Contribution Retirement Program (DCRP). DCRP plan materials, enrollment forms, and other program information are being developed and will be provided under a separate mailing. Deadline for Filing the Report of Contributions Due to the overwhelming popularity of the I-ROC program and the time saved in preparing the report of contributions, the Division is updating member accounts as early as four weeks following the close of the calendar quarter. All reports are due by January 10, 2008. Should your report not be received by the close of business on January 25, 2008, interest penalties will begin to accrue and reports received after this date may not be used to update member accounts. Delays in receiving reports affect the timeliness of the Division providing services to ALL pension plan members, not just your employees and retirees. Unfortunately, we continue to experience delays associated with employer late reporting. This policy, of strict adherence to the established reporting deadline, will alleviate that problem. When you receive your quarterly ROC, you should review it immediately. If you think you will have a problem in meeting the filing deadline, or if there is anything you do not understand, contact the Audit/Billing Section at (609) 292-3630. Normally, reporting inquiries can be resolved with a telephone call. If other arrangements need to be made to assist you in the completion of your ROC, the sooner you communicate that fact to the Division the better for everyone involved. Procedure Change Reminder – Reports of Salary Change The Division of Pension and Benefits is no longer providing to you reports of salary change. Now that the majority of employers are reporting through the I-ROC, we recommend that you use the “Projected Salary” field on the Member Update screen to submit these changes for the next calendar quarter. Should you need an alternative approach for reporting salary changes, please call (609) 292-3630 and speak with a representative. This request should be made no later than February 1, 2008, to allow for processing time. TEPS - Transmittal Electronic Payment System Please note that the only payments that should be submitted through TEPS are for monthly transmittal and annual appropriation payments. Employee shortages are not to be submitted through TEPS. The fax number and address that you use to submit the Employer Authorization Forms to the Division of Pensions and Benefits is (866) 568-2495 or it may be mailed to State of New Jersey, Department of Treasury, Division of Pensions and Benefits, P.O. Box 9581, Trenton, NJ 08650‑9581. Retirement Plan Limits for 2008 The IRS has announced the cost-of-living adjustments (COLAs) for retirement plans. Many of the limits applicable to pension, and other retirement plans, increase for 2008. The following plan limits are increased for inflation effective January 1, 2008:
The following limits are unchanged:
CO Letter in Printable Format - Requires Acrobat Reader available free from Adobe. December 2007
NEW LEGISLATION ALERT - PERS and TPAF Maximum Compensation Chapter 103, PL of 2007, provides that new employees are subject to a maximum compensation limit for PERS or TPAF pension contributions. The maximum compensation is based on the annual maximum wage for Social Security.
For calendar year 2008, the annual maximum wage for Social Security is $102,000 and is subject to change at the start of each calendar year. Therefore, a new employee enrolled in the PERS or TPAF on or after July 1, 2007 who earns in excess of $102,000 before the end of 2008 will have his or her TPAF or PERS base salary capped – limiting the amount used to calculate benefits and contributions to TPAF or PERS for pension or contributory insurance. Pension benefits may be available to these individuals for base salary paid in excess of the annual compensation limit under the newly created Defined Contribution Retirement Program (DCRP). DCRP plan materials, enrollment forms, and other program information are being developed and will be provided under a separate mailing. Notice To Delinquent Report Of Contribution Filers In the past I have written explaining the importance of all employers providing to the Division of Pensions and Benefits their quarterly Report of Contributions (ROC) in a timely fashion. As stated in the past, delays in receiving these reports affect the timeliness of the Division providing services to ALL pension plan members, not just your employees and retirees. Unfortunately, we continue to experience delays associated to employer late reporting. I must again ask for your help in avoiding these delays at all costs and remind you that the Division will utilize everything at its disposal in order to solicit timely reporting by the employers we work with to provide benefit services to the State’s public employees. Reporting And Payment Information Your 4th quarter 2007 tape ROC applicable to the Teachers’ Pension and Annuity Fund, Public Employees’ Retirement System, and Police and Firemen’s Retirement System is due by January 10, 2008. Your December, 2007 transmittal remittance, which represents the deductions due for the balance of the quarter, should be made through the Transmittal Electronic Payments System (TEPS). The portion of the remittance for total pension deductions should reflect the sum of normal pension contributions, back deductions, loan payments, and arrears/purchase deductions. Your TEPS remittance is also due by January 10, 2008. With the ROC data file, you must complete and return the Transmittal Summary form for the 4th quarter 2007. This document is used to assist your office and this Division in reconciling your transmittal remittances to the quarterly ROC. The Control and Certification form must also accompany your quarterly ROC data file. This is essential as it attests to the accuracy and validity of the submitted documentation. If your quarterly ROC and total contributions are not received in a timely manner, we cannot update the pension accounts of your employees. This may adversely affect any claim for benefits, including loan applications, filed by your employees. Also, any delay affects our scheduling in posting contributions to all members’ accounts as well as the mailing of ROC for the following quarter. A ROC data file will be considered received when it is submitted in an acceptable format, passes all data processing edits, and can be used to update members’ accounts. Interest will be assessed, as prescribed by statute and administrative code, when monthly transmittal remittances and the quarterly ROC are not received within fifteen days of the due dates. Should you have any questions or need assistance in completing the Report, please refer to http://www.state.nj.us/treasury/pensions/epbam/finance/roc.htm SACT Tax-Sheltered Annuity – Remittance Of 403(b) Contributions Chapter 247, P.L. 1999 requires 403(b) salary reductions on behalf of an employee to be transmitted and credited within five business days from the pay date. Members of the Public Employees’ Retirement System, Teachers’ Pension and Annuity Fund and Police and Firemen’s Retirement System in the Supplemental Annuity (SACT) Tax Sheltered Annuity Program are required to have 403(b) salary reductions remitted to the Division of Pensions and Benefits within the timeframes prescribed by law. Contributions for these members will be made through the Transmittal Electronic Payments System (TEPS). Please note that the full quarterly SUPPLEMENTAL ANNUITY contribution must be submitted prior to the processing of your ROC. If the full contribution is not submitted, it may be necessary to refund any supplemental annuity contributions sent in for the quarter. This could adversely affect your employees’ retirement savings. TEPS – Transmittal Shortage Payments The Division sends transmittal shortage statements when the sum of the transmittal remittances does not equal the due figure on the quarterly ROC. Transmittal shortage statement payments can only be paid through TEPS. Checks received for payment of transmittal shortages will be returned. If you have questions related to TEPS, contact the TEPS Helpline at (888) 835-3345 or FAX your inquiries to the Audit/Billing Section at (609) 633-1708. Changing Banking Information For TEPS Notice of Changes for TEPS should be submitted to the Division of Pensions and Benefits on or after the date that the new checking account becomes effective. Every Notice of Change is verified to ensure that the Division has the correct banking information. This normally takes 12 to 15 days. Retirement Plan Limits for 2008 The IRS has announced the cost-of-living adjustments (COLAs) for retirement plans. Many of the limits applicable to pension, and other retirement plans, increase for 2008. The following plan limits are increased for inflation effective January 1, 2008:
The following limits are unchanged:
Lower compensation limits are in place for TPAF and PERS members enrolled on or after July 1, 2007 - see Ch. 103, P.L. 2007 for details. CO Letter in Printable Format - Requires Acrobat Reader available free from Adobe. December 4, 2007
Chapter 92, P.L. 2007, required changes to the pension loan interest rate and the introduction of an administrative fee for pension loans. These changes apply to all loans taken by members of State-administered retirement systems that include loan privileges — the Public Employees’ Retirement System, Teachers’ Pension and Annuity Fund, Police and Firemen’s Retirement System, State Police Retirement System, and Judicial Retirement System. LOAN INTEREST RATE Under Chapter 92, pension loan interest rates are to be set annually by the New Jersey State Treasurer at a commercially reasonable rate. Interest rates will be announced each December with any rate change taking effect on January 1st of the new year.
This interest rate was determined using the average closing yield of five-year U.S. Treasury Notes* on the run as of the last business days of September, October, and November 2007. Seventy-five basis points were then added to compensate for credit risk.**
ADMINISTRATIVE PROCESSING FEE Chapter 92 also authorized the charging of an administrative processing fee on all pension loans taken on or after January 1. 2008.
The administrative processing fee is established by the Division of Pensions and Benefits and is set to recover the actual costs of administering the pension loan program. The administrative processing fee is subject to change annually with any change in the fee taking effect on January 1st each year. Note that the administrative processing fee is not an added charge, but is taken from the requested amount of the loan.
TIPS ON APPLYING FOR A PENSION LOAN The Division asks that employers assist by informing employees about the new loan rate and fee. An information sheet is included with this letter and can be used as a hand-out or posted in a common area for employees. We also offer the following guidance for loan procedures at the end of 2007 and as we begin 2008. Loans in 2007 All Loan Applications received by the Division of Pensions and Benefits on or before midnight December 31, 2007 will be eligible for the current annual interest rate of 4% with no administrative fee. Because a heavy volume of loan applications is anticipated in December, early submission of the loan request is strongly encouraged for members who wish to take a pension loan prior to the rate and fee changes.
Loans in 2008 All Loan Applications received by the Division of Pensions and Benefits on or after January 1, 2008 will be processed for the new annual interest rate of 4.69% and charged the $8.00 administrative fee. This includes:
Please also note that if a member has an existing loan and takes a new loan on or after January 1, 2008. The entire outstanding loan balance will be re-certified at the new interest rate. LOAN REPAYMENT The minimum repayment amount on a pension loan is based on the member’s pension contribution rate.
Furthermore, under state law, loan repayments cannot exceed 25 percent of base salary. If a loan cannot be fully repaid within the five years when paid at 25 percent of base salary, the loan request may be denied or the member may be issued a loan in a smaller amount than originally requested. Members are notified in writing should the Division deny a loan as the result of the minimum repayment exceeding 25 percent of the member’s base salary. ADDITIONAL INFORMATION Information about pension loans is available to members and employers on the Division of Pensions and Benefits Web site at: www.state.nj.us/treasury/pensions. At the home page click on either “Links for Active Employees” or “Links for Employers,” then select “Loan and Account posting information’ from the “Quick Links” drop-menu. If you have additional questions regarding Pension Loans or any of the information provided in this letter, contact the Division’s Office of Client Services at (609) 292-7524, or e-mail the Division at: pensions.nj@treas.state.nj.us Enclosure — Loan Information Flier CO Letter in Printable Format - Requires Acrobat Reader available free from Adobe.
October 31, 2007
Individuals hired to full-time positions as police officers or firefighters with State, County or Municipal government are eligible for enrollment into the Police and Firemen’s Retirement System (PFRS) provided that they can meet training, medical, and maximum age requirements. This letter is being distributed to employers to clarify the current rules and limits regarding the maximum age for hiring and enrollment into the PFRS. PFRS MAXIMUM AGE LIMITS New Jersey Statute; N.J.S.A. 43:16A-3, and the New Jersey Administrative Code; N.J.A.C. 17:4-2.5, requires that:
The current language of the statute and Administrative Code is clear and unambiguous that over age hires are not permitted in the PFRS.*
PAST LEGISLATION AND CASE-BY-CASE REVIEW Past conflicts between state and federal legislation from 1984 through 1997 led to variations in the PFRS eligibility requirements concerning age limits and confusion regarding their application. When PFRS age limits were eventually deemed fully enforceable by the New Jersey Attorney General in an opinion of February 25, 1997, the Division of Pensions and Benefits issued a Certifying Officers’ Letter on March 28, 1997 that confirmed the reinstatement of the age limits. This letter was later followed with the release in May 2000 of Fact Sheet #8, Enrollment Eligibility and Age Limits (PFRS), to clarify to employers and members the rules of PFRS enrollment that concern age limits. Throughout this period of adjustment, the PFRS Board of Trustees also took a number of actions to ensure a smooth and fair application of the reinstated age limits.
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