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Pensions and Benefits
CERTIFYING OFFICER LETTERS 2007
Also available: Archived EPIC E-Messages to Certifying Officers and EPIC Users

Subject Date
Announcement of New State Health Benefits Program (SHBP) Medical Plans - State Biweekly and State Monthly Employers December 20, 2007
Announcement of New State Health Benefits Program (SHBP) Medical Plans - Participating Local Education Employers
December 19, 2007
Announcement of New State Health Benefits Program (SHBP) Medical Plans - Participating Local Government Employers
December 19, 2007
Report of Contributions, 4th Quarter 2007 (October 1st to December 31st) - Certifying Officers, Teachers’ Pension and Annuity Fund, Public Employees’ Retirement System & Police and Firemen’s Retirement System
December 2007
Report of Contributions, 4th Quarter 2007 (October 1st to December 31st) - Certifying Officers, Autonomous State College/University/State Employers
December 2007
Pension Loan Interest Rate and Administrative Processing Fee — Chapter 92, P.L. 2007 - Certifying Officers, Human Resources Representatives, and Benefit Administrators (All Funds)
December 4, 2007
Maximum Age Limits on Hiring and Enrollment into the Police and Firemen’s Retirement System - Certifying Officers of the Police and Firemen’s Retirement System (PFRS),
October 31, 2007
State Health Benefits Program (SHBP) Open Enrollment - Participating Local Government Employers
September 25, 2007
State Health Benefits Program (SHBP) Open Enrollment - Participating Local Education Employers
September 25, 2007
State Health Benefits Program (SHBP) Open Enrollment - State Biweekly Certifying Officers, Human Resource and Benefit Administrators
September 17, 2007
State Health Benefits Program (SHBP) Open Enrollment - State Monthly Agency and Authority, College, and University Certifying Officers, Human Resource and Benefit Administrators
September 17, 2007
State Health Benefits Program (SHBP) Open Enrollment - Part-time Employees - State Biweekly and Monthly Certifying Officers, Human Resource and Benefit Administrators; County College Certifying Officers, Human Resource and Benefit Administrators
September 17, 2007
Disability Retirement Guidelines - Certifying Officers of the Public Employees’ Retirement System (PERS), Teachers’ Pension and Annuity Fund (TPAF), Police and Firemen’s Retirement System (PFRS), and State Police Retirement System (SPRS)
September 17, 2007
Report of Contributions, 3rd Quarter 2007 (July 1st to September 30th) - Certifying Officer - Teachers’ Pension and Annuity Fund, Public Employees’ Retirement System and Police and Firemen’s Retirement System
September 2007
Report of Contributions, 3rd Quarter 2007 (July 1st to September 30th) Autonomous State College/ University/State Employers
September 2007
Open Enrollment For The New Jersey State Employees Tax Savings Program (Tax$ave 2008) - State Biweekly Certifying Officers, Human Resource and Benefit Administrators
August 22, 2007
Open Enrollment For The New Jersey State Employees Tax Savings Program (Tax$ave 2008) - State Monthly Agency and Authority, College, and University Certifying Officers, Human Resource and Benefit Administrators
August 22, 2007
Chapter 92, P.L. 2007 and Chapter 103, P.L. 2007 - Pension Changes for PERS, TPAF, and DCRP - Certifying Officers of the Public Employees’ Retirement System (PERS), Teachers’ Pension and Annuity Fund (TPAF), and Defined Contribution Retirement Plan (DCRP)
August 2007
Chapter 62, P.L. 2007 - Benefits Administrators, Participating SHBP Local Employers; Certifying Officers, State-Administered Retirement Systems
June 25, 2007
Report of Contributions, 2nd Quarter 2007 (April 1st to June 30th) - Certifying Officer - Teachers’ Pension and Annuity Fund, Public Employees’ Retirement System and Police and Firemen’s Retirement System
June 2007
Report of Contributions, 2nd Quarter 2007 (April 1st to June 30th) Autonomous State College/ University/State Employers
June 2007
State Health Benefits Program Plan Changes - State Departmental Certifying Officers; State Human Resources Directors; State Biweekly Human Resources Representatives; State Monthly Certifying Officers; State Monthly Human Resources Representatives
June 2007
Procedural Change - Submission Of Member Pension and Insurance Shortage Payments - Certifying Officers of the Public Employees’ Retirement System (PERS), Teachers’ Pension nd Annuity Fund (TPAF), and Police and Firemen’s Retirement System (PFRS)
May 23, 2007
New Secure File Transfer - Report of Salary Change Instructions (Cycle I) - Certifying Officers of the Public Employees’ Retirement System (PERS), Teachers’ Pension and Annuity Fund (TPAF), and Police and Firemen’s Retirement System (PFRS)
May 1, 2007
New Secure File Transfer - Report of Salary Change Instructions (Cycle II) - Certifying Officers of the Public Employees’ Retirement System (PERS), Teachers’ Pension and Annuity Fund (TPAF), and Police and Firemen’s Retirement System (PFRS)
May 1, 2007
Chapter 381, P.L. 2005 - Mandatory Retirement under the Police and Firemen’s Retirement System (PFRS) - Certifying Officers of the Police and Firemen’s Retirement System (PFRS)
April 17, 2007
Leaves of Absence and SHBP Coverage - State Departmental Certifying Officers; State Human Resources Directors; State Biweekly Human Resources Representatives
April 2007
Report of Contributions, 1st Quarter 2007 (January 1st to March 31st) - Certifying Officers - Teachers’ Pension and Annuity Fund, Public Employees’ Retirement System, and Police and Firemen’s Retirement System
March 2007
Report of Contributions, 1st Quarter 2007 (January 1st to March 31st) - Certifying Officers Autonomous State College/University/State Employers
March 2007
Civil Union Law: Health Benefits and Pension Implications - Certifying Officers, State-Administered Retirement Systems; Benefits Administrators, Participating SHBP Employers
March 8, 2007

CERTIFYING OFFICER LETTERS FROM OTHER YEARS

2014 CO Letters 2013 CO Letters 2012 CO Letters 2011 CO Letters 2010 CO Letters
2009 CO Letters 2008 CO Letters 2007 CO Letters 2006 CO Letters 2005 CO Letters
2004 CO Letters 2003 CO Letters 2002 CO Letters 2001 CO Letters 2000 CO Letters
1999 CO Letters 1998 CO Letters 1997 CO Letters    

Also available Archived E-Messages to Certifying Officers and EPIC Users.


December 20, 2007

TO: State Biweekly and State Monthly SHBP Certifying Officers, Human Resources Representatives, and Benefit Administrators
FROM: Florence J. Sheppard
Deputy Director, Benefit Operations
SUBJECT: Announcement of New State Health Benefits Program (SHBP) Medical Plans

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. 

  • For State Monthly employees and retirees, the effective date for the start of the NJ DIRECT and HMO plans is April 1, 2008. 

  • For State Biweekly employees, the effective date of coverage will be March 29, 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

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.

  • State Employees enrolled in NJ PLUS or the Traditional Plan will be automatically transferred to NJ DIRECT15. 

  • State Employees enrolled in Aetna HMO or CIGNA HMO will remain in the HMO in which they are currently enrolled.

  • All employees enrolled in AmeriHealth, Health Net, or Oxford Health Plans must choose another health plan or they will automatically be transferred to NJ DIRECT15.

  • The Special Open Enrollment is for medical plan changes only.  Members will not be permitted to add dependents to coverage, change coverage levels, or make changes to dental or prescription drug plans. 

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 APPLICATIONSSHBP 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

Reminder: Under the labor agreements of July 2007, most State employees pay a health contribution of 1.5% of salary for SHBP medical plan and/or prescription drug plan coverage regardless of the chosen plan or selected level of coverage.

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

CO Letter in Printable Format - Adobe PDF (86K)


December 20, 2007

TO: Participating Local Education SHBP Certifying Officers, Human Resources Representatives, and Benefit Administrators
FROM: Florence J. Sheppard
Deputy Director, Benefit Operations
SUBJECT: Announcement of New State Health Benefits Program (SHBP) Medical Plans

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.

  • Local Education employees enrolled in the Traditional Plan will be automatically transferred to NJ DIRECT10.

  • Local Education employees enrolled in NJ PLUS will be automatically transferred to NJ DIRECT15.

  • Local Education employees enrolled in Aetna HMO or CIGNA HMO will remain in the HMO in which they are currently enrolled.

  • All employees enrolled in AmeriHealth, Health Net, or Oxford Health Plans must choose another health plan or they will automatically be transferred to NJ DIRECT15.

  • The Special Open Enrollment is for medical plan changes only.  Members will not be permitted to add dependents to coverage, change coverage levels, or make changes to dental or prescription drug plans. 

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 APPLICATIONSSHBP 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

CO Letter in Printable Format - Adobe PDF (84K)


December 20, 2007

TO: Participating Local Government SHBP Certifying Officers, Human Resources Representatives, and Benefit Administrators
FROM: Florence J. Sheppard
Deputy Director, Benefit Operations
SUBJECT: Announcement of New State Health Benefits Program (SHBP) Medical Plans

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.

  • Local Government employees enrolled in the Traditional Plan will be automatically transferred to NJ DIRECT10.

  • Local Government employees enrolled in NJ PLUS will be automatically transferred to NJ DIRECT15.

  • Local Government employees enrolled in Aetna HMO or CIGNA HMO will remain in the HMO in which they are currently enrolled.

  • All employees enrolled in AmeriHealth, Health Net, or Oxford Health Plans must choose another health plan or they will automatically be transferred to NJ DIRECT15.

  • The Special Open Enrollment is for medical plan changes only.  Members will not be permitted to add dependents to coverage, change coverage levels, or make changes to dental or prescription drug plans. 

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 APPLICATIONSSHBP 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

CO Letter in Printable Format Adobe PDF (84K)


December 2007

TO: Certifying Officer - Teachers’ Pension and Annuity Fund, Public Employees’ Retirement System & Police and Firemen’s Retirement System
FROM: John D. Megariotis
Deputy Director, Finance
SUBJECT: Report of Contributions, 4th Quarter 2007 (October 1st to December 31st)

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.

Note: The PERS and TPAF maximum compensation limit does not apply to employees who were already members of the PERS or TPAF prior to July 1, 2007.

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:

  • Annual compensation limit. The maximum amount of annual compensation that can be taken into account for for the purpose of determining benefits and contributions under Code Sec. 401(a)(17) is increased from $225,000 to $230,000.  Retirement plans administered by the Division of Pensions and Benefits affected by this change include the Teachers' Pension and Annuity Fund (TPAF), the Public Employees' Retirement System (PERS), the Police and Firemen's Retirement System (PFRS), the Supplemental Annuity Collective Trust (SACT), the Alternate Benefit Program (ABP), the Additional Contributions Tax-Sheltered (ACTS) program, the Deferred Compensation Retirement Program (DCRP) and the New Jersey State Employees Deferred Compensation Plan.
  • Chapter 113, P.L. 1997.  N.J.S.A. 43:3C-9.3 & 43:3C-9.4 permits higher annual compensation limits for members of TPAF, PERS, PFRS and ABP enrolled prior to July 1, 1996, if, prior to July 1, 1997, the employer certified to the Division Director that the employer will pay the additional cost for not applying the lower Code Sec. 401(a)(17) Annual Compensation Limit to these members.  If you are such an employer, you may report pensionable salary in excess of the Code Sec. 401(a)(17) limits mentioned earlier  for those employees in the affected class.
  • Defined contribution plans. The limitation on the annual additions to a participant's defined contribution account under Code Sec. 415(c)(1)(A) is increased from the lesser of $45,000 or 100% of the participant's compensation to the lesser of $46,000 or 100% of the participant's compensation.  Annual additions are the sum for any year of all employer and employee contributions to the defined contribution plan.  For purposes of applying the limitations all defined contribution plans of an employer are to be treated as one defined contribution plan.  Defined contribution plans include an employee annuity plan described in and an annuity contract described in section 403(b).  Defined contribution plans administered by the Division of Pensions and Benefits affected by this change include the SACT, DCRP, ABP and ACTS programs and the New Jersey State Employees Deferred Compensation Plan.

The following limits are unchanged:

  • Elective deferrals. The limitation under Code Sec. 402(g)(1) on the exclusion for elective deferrals described in Code Sec. 402(g)(3) remains at  the lesser of $15,500 or 100% of the participant's compensation.  Defined contribution plans administered by the Division of Pensions and Benefits affected by this change include the SACT, DCRP, ABP and ACTS programs.
  • Deferred compensation plans. The limit on deferrals under Code Sec. 457(e)(15) concerning deferred compensation plans of state and local governments and tax-exempt organizations remains at  the lesser of $15,500 or 100% of the participant's compensation.  The deferred compensation plan administered by the Division of Pensions and Benefits affected by this change is the New Jersey State Employees Deferred Compensation Plan and is available to Employees of the State and other State chartered commissions, authorities and boards.  Other governmental employers in the State my offer similar, self-administered programs.
  • Catch-up contributions. The dollar limit under Code Sec. 414(v)(2)(B)(i) for catch-up contributions to an applicable employer plan other than a plan described in Code Sec. 401(k)(11) or Code Sec. 408(p) for individuals aged 50 or over remains at $5,000.  Defined contribution plans administered by the Division of Pensions and Benefits affected by this change include the SACT, ABP and ACTS programs.
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 Adobe PDF (80K)


December 2007

TO: Certifying Officer Autonomous State College/University/State Employers
FROM: John D. Megariotis
Deputy Director, Finance
SUBJECT: Report of Contributions, 4th Quarter 2007 (October 1st to December 31st)

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.

Note: The PERS and TPAF maximum compensation limit does not apply to employees who were already members of the PERS or TPAF prior to July 1, 2007.

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:

  • Annual compensation limit. The maximum amount of annual compensation that can be taken into account for for the purpose of determining benefits and contributions under Code Sec. 401(a)(17) is increased from $225,000 to $230,000. Retirement plans administered by the Division of Pensions and Benefits affected by this change include the Teachers' Pension and Annuity Fund (TPAF), the Public Employees' Retirement System (PERS), the Police and Firemen's Retirement System (PFRS), the Supplemental Annuity Collective Trust (SACT), the Alternate Benefit Program (ABP), the Additional Contributions Tax-Sheltered (ACTS) program, the Deferred Compensation Retirement Program (DCRP) and the New Jersey State Employees Deferred Compensation Plan.
  • Chapter 113, P.L. 1997.  N.J.S.A. 43:3C-9.3 & 43:3C-9.4 permits higher annual compensation limits for members of TPAF, PERS, PFRS and ABP enrolled prior to July 1, 1996, if, prior to July 1, 1997, the employer certified to the Division Director that the employer will pay the additional cost for not applying the lower Code Sec. 401(a)(17) Annual Compensation Limit to these members.  If you are such an employer, you may report pensionable salary in excess of the Code Sec. 401(a)(17) limits mentioned earlier  for those employees in the affected class.
  • Defined contribution plans. The limitation on the annual additions to a participant's defined contribution account under Code Sec. 415(c)(1)(A) is increased from the lesser of $45,000 or 100% of the participant's compensation to the lesser of $46,000 or 100% of the participant's compensation.  Annual additions are the sum for any year of all employer and employee contributions to the defined contribution plan. For purposes of applying the limitations all defined contribution plans of an employer are to be treated as one defined contribution plan.  Defined contribution plans include an employee annuity plan described in section 403(a)and an annuity contract described in section 403(b) .  Defined contribution plans administered by the Division of Pensions and Benefits affected by this change include the SACT, DCRP, ABP and ACTS programs and the New Jersey State Employees Deferred Compensation Plan.

The following limits are unchanged:

  • Elective deferrals. The limitation under Code Sec. 402(g)(1) on the exclusion for elective deferrals described in Code Sec. 402(g)(3) remains at  the lesser of $15,500 or 100% of the participant's compensation.  Defined contribution plans administered by the Division of Pensions and Benefits affected by this change include the SACT, DCRP, ABP and ACTS programs.
  • Deferred compensation plans. The limit on deferrals under Code Sec. 457(e)(15) concerning deferred compensation plans of state and local governments and tax-exempt organizations remains at  the lesser of $15,500 or 100% of the participant's compensation.  The deferred compensation plan administered by the Division of Pensions and Benefits affected by this change is the New Jersey State Employees Deferred Compensation Plan and is available to Employees of the State and other State chartered commissions, authorities and boards.  Other governmental employers in the State my offer similar, self-administered programs.
  • Catch-up contributions. The dollar limit under Code Sec. 414(v)(2)(B)(i) for catch-up contributions to an applicable employer plan other than a plan described in Code Sec. 401(k)(11) or Code Sec. 408(p) for individuals aged 50 or over remains at $5,000.  Defined contribution plans administered by the Division of Pensions and Benefits affected by this change include the SACT, ABP and ACTS programs.

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 Adobe PDF (80K)


December 4, 2007

TO: Certifying Officers, Human Resources Representatives, and Benefit Administrators (All Funds)
FROM: Frederick J. Beaver, Director, Division of Pensions and Benefits
SUBJECT: Pension Loan Interest Rate and Administrative Processing Fee — Chapter 92, P.L. 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.

For pension loans taken in 2008, the interest rate will be 4.69% calculated annually on the declining balance of the loan.

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.**

* The five-year Treasury Note is the recommended benchmark because the maximum pension loan repayment period as established by the Internal Revenue Code is also five years.
**The added basis points are necessary because once the interest rate is set, it remains in effect for the entire year.

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.

For pension loans taken in 2008, the administrative processing fee will be $8.00.

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. 

For example, if a member submits a loan request in 2008 for $1,000, the Division will subtract the $8.00 administrative processing fee from the $1,000 loan and the member will receive a check for the balance of $992.  Therefore, when submitting a loan application, a member should always request an amount sufficient to account for the needed loan plus the current administrative processing fee.

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.

  • To assure the most timely submission and fastest processing of loan requests, employers should encourage employees to use the online Loan Application available on the Member Benefits Online System (MBOS).  MBOS loan requests are dated when the member completes and submits the online application.  Therefore, an MBOS loan request received on or before 11:59 p.m. December 31, 2007 will be eligible for the 2007 interest rate.  More information about MBOS and the online Loan Application is available at: www.state.nj.us/treasury/pensions  At the Pensions and Benefits home page, click on “Online Member Services – MBOS“.

  • Mailed Loan Applications must be received in the Division’s mailroom no later than the close of business December 31, 2007.  Postmark dates will have no bearing on the loan interest/fee cutoff — members should allow sufficient time for post office delivery.

  • Members who wish to submit a Loan Application in person must have the application delivered to the Division of Pension and Benefits, Office of Client Services by the close of business December 31, 2007. Members should call before visiting as office hours are subject to change due to inclement weather or other circumstances.

  • All members must meet all other eligibility criteria for taking a pension loan including at least three years of posted service credit; current payroll status with the employer; etc.  Note that any Loan Application received from a member who has already taken two loans in 2007 will be held for the first available loan processing of 2008 regardless of the receipt date of the application.

  • The loan interest rate and addition of an administrative processing fee is determined by the date and time that the Loan Application is received by the Division of Pensions and Benefits and not by the date of the loan check. Valid Loan Applications received in December 2007 may have a check issuance date of January 2008.

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:

  • Mailed or hand-delivered Loan Applications received by the Division of Pension and Benefits after the close of business December 31, 2007 — postmark dates will have no bearing on the loan interest/fee cutoff for mailed Loan Applications.

  • Online Loan Applications received through MBOS at 12:00 a.m. January 1, 2008 or after.

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.


IRS regulations also require that members who have multiple loans outstanding must repay the balance of all loans within a period not to exceed 5 years from the issuance of the first loan taken after January 1, 2004. Some members with multiple outstanding loans may be required to pay more than the minimum deduction, so that repayment of the full outstanding balance will not exceed 5 years from the date of the first loan.

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
Text shown below or click here for printable PDF version Adobe PDF (28K)

CO Letter in Printable Format Adobe PDF (92K)

CHANGES TO PENSION LOANS FOR 2008
(Text of Flier)

  • Effective January 1, 2008 the interest rate on pension loans will be 4.69% calculated annually on the declining balance of the loan.

  • For pension loans taken in 2008, the administrative fee will be $8.00.

  • The administrative fee is not an added charge.  Fees are taken from the requested amount of the loan.  For example, if you submit a loan request in 2008 for $1,000, the Division will subtract the $8.00 administrative fee from the $1,000 loan and you will receive a check for the balance of $992.  When submitting a loan application, always request an amount sufficient to account for the needed loan plus the current administrative fee.

  • The interest rate and administrative fee are subject to change.  Interest and fees are set annually with any changes taking effect on January 1st each year.

  • 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.  Early submission of Loan Applications is strongly encouraged for members who wish to take a pension loan prior to the rate and fee changes.

— For the most timely submission and fastest processing of loan requests, use the online Loan Application available on the Member Benefits Online System (MBOS).  MBOS loan requests are dated when you complete and submit the online application.  An MBOS loan request received on or before 11:59 p.m. December 31, 2007 will be eligible for the 2007 interest rate.  More information about MBOS and the online Loan Application is available at: www.state.nj.us/treasury/pensions  At the Pensions and Benefits home page, click on “Online Member Services – MBOS“.

Mailed Loan Applications must be received in the Division’s mailroom no later than the close of business December 31, 2007.  Postmark dates will have no bearing on the loan interest/fee cutoff — be sure to allow sufficient time for post office delivery.

Hand-delivered Loan Applications must be at the Division of Pension and Benefits, Office of Client Services by the close of business December 31, 2007. Call before visiting as office hours are subject to change due to inclement weather or other circumstances.

You must meet all other eligibility criteria for taking a pension loan.  If you have already taken two loans in 2007 you will not be eligible to borrow and the loan request will be processed for the first available loan of 2008 regardless of the receipt date of the application.

  • 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:

    Online Loan Applications received through MBOS at 12:00 a.m. January 1, 2008 or after.

    Mailed or hand-delivered Loan Applications received by the Division of Pension and Benefits after the close of business December 31, 2007 — postmark dates have no bearing on the loan interest/fee cutoff for mailed Loan Applications.

  • If you have an existing loan and take a new loan on or after January 1, 2008. Your entire outstanding loan balance will be re-certified at the new interest rate.


October 31, 2007

TO: Certifying Officers, Police and Firemen’s Retirement System (PFRS)
FROM: Wendy Jamison, Secretary, PFRS Board of Trustees
SUBJECT: Maximum Age Limits on Hiring and Enrollment into the Police and Firemen’s Retirement System (PFRS)

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:

  • Individuals hired in a PFRS eligible title at a Civil Service location must not be one day past their 35th birthday on the closing date of the examination for the title to establish membership in PFRS.  Individuals meeting this age requirement can be hired at any time from the Civil Service list while it is still active and be enrolled in the PFRS.

  • Individuals hired in a PFRS eligible title at a Non-Civil Service location must not be one day past their 35th birthday on the date of hire to establish membership in the PFRS.

The current language of the statute and Administrative Code is clear and unambiguous that over age hires are not permitted in the PFRS.*

*Limited provisions are provided under N.J.S.A. 38:23A-1 et seq. to offset the PFRS age limit for prior military or police service.  Certain State and County law enforcement officers may be eligible for enrollment into the Public Employees’ Retirement System (PERS) if over age 35.

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) Adobe PDF (33K), 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.

  • Individuals who were over age 35 and hired prior to the reinstatement of the age limits or were hired during the period of time when enforcement of the age limitation was unclear were enrolled because they relied upon prior law when accepting employment.

  • Additionally, the PFRS Board of Trustees recognized that there was continuing confusion between 1997 and 2000 among employers as to the enforcement of the age limitation. Therefore, the Board engaged in a case-by-case analysis in these cases, in which the individual was hired because of confusion as to enforcement of the law, and where the individual demonstrated reliance to his detriment, i.e. a change in employment, commencing work, or were on hiring lists for law enforcement or firefighting positions, equity was applied to permit the enrollment.   

EMPLOYERS SHOULD STRICTLY ENFORCE AGE LIMIT

As it is now 10 years since the reinstatement of the maximum age limit, the PERS Board of Trustees sees no further basis with which to support the use of case-by-case review of over age hires.

At its meting of August 13, 2007, the PFRS Board of Trustees voted to reinforce that it will not entertain requests for review on a “case-by-case basis” due to over age hiring that rely on confusion over the enforcement of the law.  The law will be enforced.

The Board of Trustees and the Division of Pensions and Benefits also expects employers to understand and strictly apply the maximum age limit for enrollment into the PFRS when recruiting police and firefighter positions. A copy of Fact Sheet #8, Enrollment Eligibility and Age Limits (PFRS) Adobe PDF (33K) is enclosed for your guidance.

ADDITIONAL INFORMATION

If you have additional questions regarding any of the information provided in this letter, please write to the Enrollment Bureau, Division of Pensions and Benefits, PO Box 295, Trenton, NJ 08625-0295, or you can 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 — Fact Sheet #8, Enrollment Eligibility and Age Limits (PFRS) Adobe PDF (33K)

CO Letter in Printable Format Adobe PDF (107K)


September 25, 2007

TO: State Health Benefits Program Participating Local Government Employers
FROM: New Jersey State Health Benefits Program (SHBP)
SUBJECT: SHBP Open Enrollment 2007 – Local Government Employers

The State Health Benefits Program (SHBP) Open Enrollment Period for local government employees will begin on October 1, 2007 and end on October 31, 2007.  All changes to coverage made during this open enrollment will be effective on January 1, 2008.

Please Note:  The Fall 2007 Open Enrollment is only for plan changes or enrollment into the current SHBP plans.  These include:

  • SHBP Medical Plans — NJ PLUS, HMO plans (Aetna, AmeriHealth, CIGNA, Health Net, or Oxford), or the Traditional Plan.  Newly contracted PPO plans and HMO plans are being prepared for State, Local Governmental, and Local Educational groups and scheduled to begin service in 2008.  If it is not imperative that an employee make a medical plan change at this time, it may be best for them to wait for the “special” open enrollment scheduled for 2008.

And if your employing location participates:

  • The SHBP Employee Prescription Drug Plan; and/or

  • SHBP Dental Plans — Dental Expense Plan or DPO plans (Aetna DMO, Atlantic Southern Dental, CIGNA Dental Health, Community Dental Associates, Healthplex, Horizon Dental Choice). See the information regarding dental plan terminations.

For changes made at this time, completed employer-certified SHBP Health Benefit and/or Dental Applications should be forwarded to the Health Benefits Bureau as soon as they are received from employees. The last day that certified applications may arrive at the Health Benefits Bureau to be effective for the start of the new plan year is November 5, 2007.

  • Note: Employees who are newly married, or enrolling in the SHBP for the first time during the Open Enrollment, and are enrolling theirspouse as a dependent are required to provide a copy of the marriage certificate at the time of enrollment.  Similarly, if an employee is enrolling a civil union partner or an eligible domestic partner* as a dependent, a copy of the NJ Civil Union Certificate or Certificate of Domestic Partnership is required at the time of enrollment.  To ensure that the documentation submitted is properly matched to the employee’s record, the Health Benefits Bureau is requesting that employers provide the employee’s Social Security number on the copy of the marriage/partnership documentation.

*Domestic partner coverage is only available to employees or retirees of a local public entity if the entity’s governing body adopts the SHBP domestic partner benefit by resolution.  The cost of domestic partner SHBP coverage may also be subject to federal tax. See Fact Sheet #71, Benefits Under the Domestic Partnership Act Adobe PDF (56K), for details.

FOUR DENTAL PLANS TO BE TERMINATED

As of January 1, 2008, the SHBP will terminate the participation of four Dental Plan Organizations (DPOs): Assurant Employee Benefits,  Flagship Health Systems, Inc., Group Dental Health Administrators, Inc., and Dental Group of New Jersey, Inc.

DPO members who are affected by this termination must choose a new plan and return a SHBP Dental Plan Application to their human resources representative by October 31, 2007. The new dental plan will become effective January 1, 2008. If you do not transfer to another plan you will be without dental coverage as of January 1st.

EMPLOYER SHBP RATES FOR 2008

The State Health Benefits Commission has approved plan rates for the 2008 plan year.  Effective January 1, 2008, SHBP medical, prescription drug, and dental plan rates for the Local Government Active Group, will see no change from the 2007 plan year rates.

Rate charts for the 2008 plan year are included with this letter.

SHBP rates are based upon the recommendation of the Commission’s actuarial consultant, Aon Consulting.  Since the SHBP self-funds all of its medical plans, the claims experience used in projecting 2008 costs are based upon the actual claims experience of the group.

MEDICAL AND PRESCRIPTION DRUG PLAN
COPAYMENT AMOUNTS FOR 2008

For NJ PLUS and all HMOs (Aetna, AmeriHealth, CIGNA, Health Net and Oxford), the copayment for primary doctor visits and visits to a specialist remains $10.

The copayments for Local Government Active Group members enrolled in the SHBP Employee Prescription Drug Plan for each 30 day supply purchased at a retail pharmacy remains $3 for generic drugs and $10 for brand name prescription drugs. Mail order copayments for up to a 90-day supply remain $5 for generic drugs and $15 for brand name prescription drugs.

OPEN ENROLLMENT INFORMATIONAL MATERIALS

Please note that the SHBP is not providing health fairs during this open enrollment period.

MILESTONES — Enclosed is a milestone chart that lists the critical dates of the open enrollment period and outlines the efforts being made to educate employees. Please use this chart as a checklist to guide your activities during open enrollment.

RATE CHARTS — Enclosed you will find approved rates for SHBP medical plans.  We have included rate charts for employers with and without prescription drug coverage. Also included are rates for employers who participate in the SHBP Employee Prescription Drug Plan and/or SHBP Dental Plans.

HEALTH CAPSULE — The Health Capsule newsletter announces the SHBP Open Enrollment Period to employees and presents important information about your employees’ benefits.  A sample is enclosed for your review.  The newsletter will be posted to the Division’s Web site and is scheduled for delivery to Local employers in late-September.  Please distribute them to your employees when received. 

HEALTH PLAN CONTACTS — A list of marketing contacts for the various health plans and dental plans is enclosed. Use these contacts to obtain provider directories or other plan specific literature. (These telephone numbers are not for member services. Please do not give these telephone numbers to your employees.)

HEALTH AND DENTAL PLAN APPLICATIONS — The SHBP Medical plans (including prescription drug coverage) and the SHBP Employee Dental Plans use two different applications.  The health and dental applications are available for printing from the SHBP Web site at: www.state.nj.us/treasury/pensions/shbp.htm

SUMMARY PROGRAM DESCRIPTION (SPD) BOOKLET, PLAN HANDBOOKS, AND HEALTH PLAN COMPARISON SUMMARY CHART — With the pending redesign of the SHBP plans in 2008, the SHBP Summary Program Description, SHBP plan Member Handbooks (NJ PLUS, Traditional Plan, HMOs, Dental Plans, and the Employee Prescription Drug Plan), and SHBP Plan Comparison Summary charts will not be revised for the Open Enrollment.

Plan materials will be updated as needed in 2008 based upon the planned implementation of the SHBP Plan redesign.  Until that time, please refer to the 2007 plan year editions of these publications.

ONLINE INFORMATION

The SHBP’s plan comparisons, member handbooks, newsletters, and rate information are available over the Internet at the State Health Benefits Program home page: www.state.nj.us/treasury/pensions/shbp.htm   

Participating provider information for all SHBP medical plans is available in the Unified Provider Directory (UPD).  The UPD is an online service that provides a comprehensive listing of health care providers and facilities that deliver their services through one or more of the SHBP’s health care plans.  Updated monthly, you can access the UPD through the SHBP home page at: www.state.nj.us/treasury/pensions/shbp.htm 

ADDITIONAL INFORMATION

If you have any questions about the SHBP Open Enrollment Period or the information in this letter, please contact our Office of Client Services at (609) 292-7524 to speak with an Employer Group representative.

Thank you for your assistance in making the SHBP Open Enrollment Period a success for your employees.

Enclosures:

2007 SHBP Open Enrollment Milestone Chart
Health Plan Rate Charts — Dental Plan Rate Chart
Health Capsule Newsletter
Marketing Contacts Health Plans / Dental Plans

CO Letter in Printable Format Adobe PDF (253K)


September 25, 2007

TO: State Health Benefits Program Participating Local Education Employers
FROM: New Jersey State Health Benefits Program (SHBP)
SUBJECT: SHBP Open Enrollment 2007 – Local Education Employers

The State Health Benefits Program (SHBP) Open Enrollment Period for local education employees will begin on October 1, 2007 and end on October 31, 2007.  All changes to coverage made during this open enrollment will be effective on January 1, 2008.

Please Note:  The Fall 2007 Open Enrollment is only for plan changes or enrollment into the current SHBP plans.  These include:

  • SHBP Medical Plans — NJ PLUS, HMO plans (Aetna, AmeriHealth, CIGNA, Health Net, or Oxford), or the Traditional Plan.  Newly contracted PPO plans and HMO plans are being prepared for State, Local Government, and Local Education groups and scheduled to begin service in 2008.  If it is not imperative that an employee make a medical plan change at this time, it may be best for them to wait for the “special” open enrollment scheduled for 2008.

And if your employing location participates:

  • The SHBP Employee Prescription Drug Plan; and/or

  • SHBP Dental Plans — Dental Expense Plan or DPO plans (Aetna DMO, Atlantic Southern Dental, CIGNA Dental Health, Community Dental Associates, Healthplex, Horizon Dental Choice). See the information regarding dental plan terminations.

For changes made at this time, completed employer-certified SHBP Health Benefit and/or Dental Applications should be forwarded to the Health Benefits Bureau as soon as they are received from employees. The last day that certified applications may arrive at the Health Benefits Bureau to be effective for the start of the new plan year is November 5, 2007.

  • Note: Employees who are newly married, or enrolling in the SHBP for the first time during the Open Enrollment, and are enrolling theirspouse as a dependent are required to provide a copy of the marriage certificate at the time of enrollment.  Similarly, if an employee is enrolling a civil union partner or an eligible domestic partner* as a dependent, a copy of the NJ Civil Union Certificate or Certificate of Domestic Partnership is required at the time of enrollment.  To ensure that the documentation submitted is properly matched to the employee’s record, the Health Benefits Bureau is requesting that employers provide the employee’s Social Security number on the copy of the marriage/partnership documentation.

*Domestic partner coverage is only available to employees or retirees of a local public entity if the entity’s governing body adopts the SHBP domestic partner benefit by resolution.  The cost of domestic partner SHBP coverage may also be subject to federal tax. See Fact Sheet #71, Benefits Under the Domestic Partnership Act Adobe PDF (56K), for details.

FOUR DENTAL PLANS TO BE TERMINATED

As of January 1, 2008, the SHBP will terminate the participation of four Dental Plan Organizations (DPOs): Assurant Employee Benefits,  Flagship Health Systems, Inc., Group Dental Health Administrators, Inc., and Dental Group of New Jersey, Inc.

DPO members who are affected by this termination must choose a new plan and return a SHBP Dental Plan Application to their human resources representative by October 31, 2007. The new dental plan will become effective January 1, 2008. If you do not transfer to another plan you will be without dental coverage as of January 1st.

EMPLOYER SHBP RATES FOR 2008

The State Health Benefits Commission has approved plan rates for the 2008 plan year.  Effective January 1, 2008, SHBP medical, prescription drug, and dental plan rates for the Local Education Active Group, will see no change from the 2007 plan year rates.

Rate charts for the 2008 plan year are included with this letter.

SHBP rates are based upon the recommendation of the Commission’s actuarial consultant, Aon Consulting.  Since the SHBP self-funds all of its medical plans, the claims experience used in projecting 2008 costs are based upon the actual claims experience of the group.

MEDICAL AND PRESCRIPTION DRUG PLAN
COPAYMENT AMOUNTS FOR 2008

For NJ PLUS and all HMOs (Aetna, AmeriHealth, CIGNA, Health Net and Oxford), the copayment for primary doctor visits and visits to a specialist remains $10.

The copayments for Local Education Active Group members enrolled in the SHBP Employee Prescription Drug Plan for each 30 day supply purchased at a retail pharmacy remains $3 for generic drugs and $10 for brand name prescription drugs. Mail order copayments for up to a 90-day supply remain $5 for generic drugs and $15 for brand name prescription drugs.

OPEN ENROLLMENT INFORMATIONAL MATERIALS

Please note that the SHBP is not providing health fairs during this open enrollment period.

MILESTONES — Enclosed is a milestone chart that lists the critical dates of the open enrollment period and outlines the efforts being made to educate employees. Please use this chart as a checklist to guide your activities during open enrollment.

RATE CHARTS — Enclosed you will find approved rates for SHBP medical plans.  We have included rate charts for employers with and without prescription drug coverage. Also included are rates for employers who participate in the SHBP Employee Prescription Drug Plan and/or SHBP Dental Plans.

HEALTH CAPSULE — The Health Capsule newsletter announces the SHBP Open Enrollment Period to employees and presents important information about your employees’ benefits.  A sample is enclosed for your review.  The newsletter will be posted to the Division’s Web site and is scheduled for delivery to Local employers in late-September.  Please distribute them to your employees when received. 

HEALTH PLAN CONTACTS — A list of marketing contacts for the various health plans and dental plans is enclosed. Use these contacts to obtain provider directories or other plan specific literature. (These telephone numbers are not for member services. Please do not give these telephone numbers to your employees.)

HEALTH AND DENTAL PLAN APPLICATIONS — The SHBP Medical plans (including prescription drug coverage) and the SHBP Employee Dental Plans use two different applications.  The health and dental applications are available for printing from the SHBP Web site at: www.state.nj.us/treasury/pensions/shbp.htm

SUMMARY PROGRAM DESCRIPTION (SPD) BOOKLET, PLAN HANDBOOKS, AND HEALTH PLAN COMPARISON SUMMARY CHART — With the pending redesign of the SHBP plans in 2008, the SHBP Summary Program Description, SHBP plan Member Handbooks (NJ PLUS, Traditional Plan, HMOs, Dental Plans, and the Employee Prescription Drug Plan), and SHBP Plan Comparison Summary charts will not be revised for the Open Enrollment.

Plan materials will be updated as needed in 2008 based upon the planned implementation of the SHBP Plan redesign.  Until that time, please refer to the 2007 plan year editions of these publications.

ONLINE INFORMATION

The SHBP’s plan comparisons, member handbooks, newsletters, and rate information are available over the Internet at the State Health Benefits Program home page: www.state.nj.us/treasury/pensions/shbp.htm   

Participating provider information for all SHBP medical plans is available in the Unified Provider Directory (UPD).  The UPD is an online service that provides a comprehensive listing of health care providers and facilities that deliver their services through one or more of the SHBP’s health care plans.  Updated monthly, you can access the UPD through the SHBP home page at: www.state.nj.us/treasury/pensions/shbp.htm 

ADDITIONAL INFORMATION

If you have any questions about the SHBP Open Enrollment Period or the information in this letter, please contact our Office of Client Services at (609) 292-7524 to speak with an Employer Group representative.

Thank you for your assistance in making the SHBP Open Enrollment Period a success for your employees.

Enclosures:

2007 SHBP Open Enrollment Milestone Chart
Health Plan Rate Charts — Dental Plan Rate Chart
Health Capsule Newsletter
Marketing Contacts Health Plans / Dental Plans

CO Letter in Printable Format Adobe PDF (216K)


September 17, 2007

TO: State Biweekly Certifying Officers
State Departmental Human Resources Directors
State Biweekly Human Resources Representatives
FROM: New Jersey State Health Benefits Program (SHBP)
SUBJECT: SHBP Open Enrollment 2007 – State Biweekly Employers

The State Health Benefits Program (SHBP) Open Enrollment period for all State employees will begin on October 1, 2007 and end on October 31, 2007.  All changes to coverage made during this open enrollment will be effective on January 5, 2008 for State biweekly employees paid through the State Centralized Payroll Unit.

Please Note:  The Fall 2007 Open Enrollment is only for plan changes or enrollment into the current SHBP plans.  These include:

  • SHBP Medical Plans — NJ PLUS, HMO plans (Aetna, AmeriHealth, CIGNA, Health Net, or Oxford), or the Traditional Plan.  Newly contracted PPO plans and HMO plans are being prepared for State, Local Governmental, and Local Educational groups and scheduled to begin service in 2008.  If it is not imperative that an employee make a medical plan change at this time, it may be best for them to wait for the “special” open enrollment scheduled for 2008.

  • The SHBP Employee Prescription Drug Plan; and/or

  • SHBP Dental Plans — Dental Expense Plan or DPO plans (Aetna DMO, Atlantic Southern Dental, CIGNA Dental Health, Community Dental Associates, Healthplex, Horizon Dental Choice)  See the information regarding dental plan terminations.

For changes made at this time, completed employer-certified SHBP Health Benefit and/or Dental Applications should be forwarded to the Health Benefits Bureau as soon as they are received from employees. The last day that certified applications may arrive at the Health Benefits Bureau to be effective for the start of the new plan year is November 5, 2007.

  • Certain State employees hired on or after July 1, 2003 — and determined by union contract or not covered by a labor agreement as per Chapter 119, P.L. 2003 — are not eligible for coverage under the SHBP Traditional Plan.  These employees may choose one of the other plans offered by the SHBP — NJ PLUS or one of the HMO plans (Aetna, AmeriHealth, CIGNA, Health Net, or Oxford).

  • Employees who are newly married, or enrolling in the SHBP for the first time during the Open Enrollment, and are enrolling their spouse as a dependent are required to provide a copy of the marriage certificate at the time of enrollment.  Similarly, if an employee is enrolling a civil union partner or an eligible domestic partner as a dependent, a copy of the New Jersey Civil Union Certificate or Certificate of Domestic Partnership is required at the time of enrollment.  To ensure that the documentation submitted is properly matched to the employee’s record, the Health Benefits Bureau requests that employers provide the employee’s Social Security number on the copy of the marriage/partnership documentation.

FOUR DENTAL PLANS TO BE TERMINATED

As of January 1, 2008, the SHBP will terminate the participation of four Dental Plan Organizations (DPOs): Assurant Employee Benefits,  Flagship Health Systems, Inc., Group Dental Health Administrators, Inc., and Dental Group of New Jersey, Inc.

DPO members who are affected by this termination must choose a new plan and return a SHBP Dental Plan Application to their human resources representative by October 31, 2007. The new dental plan will become effective January 1, 2008. If you do not transfer to another plan you will be without dental coverage as of January 1st.

MEDICAL AND PRESCRIPTION DRUG PLAN COPAYMENT CHANGES

The medical and prescription drug plan changes that effect State Active Group members are as follows:

Copayment Amounts for 2008 — New SHBP medical and prescription drug plan copayment amounts were implemented in July 2007 for most State Active Group members (State employees covered under the CWA, AFSCME, IPFTE, and employees not covered by a labor agreement*). These copayments will remain unchanged into the 2008 plan year. 

  • For NJ PLUS and all HMO plans (Aetna, AmeriHealth, CIGNA, Health Net and Oxford), the State Active Group copayment for primary doctor visits and visits to a specialist is $15.  The copayment for a visit to an emergency room is $50. The emergency room copayment is waived if the member is admitted to the hospital.

  • For State Active Group members enrolled in the SHBP Employee Prescription Drug Plan, the copayments for a 30 day supply purchased at a retail pharmacy are $3 for generic drugs, $10 for brand name prescription drugs without generic equivalents, and a new third tier copayment of $25 for brand name drugs where a generic equivalent is available.  The mail order prescription drug copayments for up to a 90-day supply, are $5 for generic drugs, $15 for brand name drugs without generic equivalents, and a third tier copayment of $40 for brand name drugs where a generic equivalent is available.

*For employees covered under other labor agreements, refer to the information below.

EMPLOYEE CONTRIBUTIONS AND PREMIUM SHARING

In July 2007, most contract agreements for State employees to share 5 percent of an HMO premium, or 25 percent of the Traditional Plan premium, ended.  State employees covered under the CWA, AFSCME, IPFTE, and employees not covered by a labor agreement began to contribute 1.5 percent of annual base salary for SHBP medical plan and/or prescription drug plan coverage regardless of the medical plan, level of coverage selected, salary level, or date of hire.

EMPLOYEES COVERED UNDER OTHER LABOR AGREEMENTS

Current copayment and premium sharing arrangements will remain in effect for employees covered under labor agreements other than those listed above unless and until new contract negotiations establish different arrangements for the sharing of health benefit costs.  For most of these employees the premium sharing arrangement of paying 5 percent of HMO premiums or 25 percent of the Traditional Plan premium remains in effect.  The NJ PLUS and HMO copayment for a primary doctor or specialist is $10 and the emergency room copayment is $25 – waived if admitted.  Employee Prescription Drug Plan copayments for a 30 day supply from a retail pharmacy are $3 for generic drugs and $10 for brand name prescription drugs. Mail order prescription drug copayments for up to a 90-day supply are $5 for generic drugs and $15 for brand name drugs.

EMPLOYER SHBP RATES FOR 2008

The State Health Benefits Commission has approved health, dental, and prescription drug plan rates for the 2008 plan year.  These rates are based upon the recommendation of the Commission’s actuarial consultant, Aon Consulting.  Since the SHBP self-funds all of its medical plans, the claims experience used in projecting 2008 costs are based upon the actual claims experience of the group.

Effective January 5, 2008, SHBP plan rates for the State Active Biweekly Group, will see the following percentage of change:

PLAN TYPE RATE INCREASE/DECREASE
NJ PLUS 0%
Traditional Plan 0%
HMO Plans — AmeriHealth, Health Net 0%
HMO Plans — Aetna, Cigna, Oxford 6.0%
Prescription Drug Plan 0%
Dental Provider Organization (DPO) Plans 0%
Dental Expense Plan 0%

Employees are permitted to waive SHBP medical and prescription coverage to avoid the 1.5 percent contribution from salary — provided the employee has other health care coverage. To waive coverage a SHBP State Waiver form and a SHBP Application must be completed.

Premium sharing agreements regarding SHBP dental plans remain in place for all eligible State employees.

TAX$AVE AND THE SHBP

The State Employees’ Tax Savings Program (Tax$ave) Open Enrollment Period runs concurrent with the SHBP Open Enrollment Period (October 1 – October 31, 2007). Tax$ave is a benefit program available to full-time State employees who are eligible for the SHBP.  Tax$ave can save your employees tax money by paying health and dental benefit premiums and eligible unreimbursed medical and/or dependent care expenses from before-tax dollars. Separate Tax$ave Open Enrollment materials were distributed to employers and contain more information about these valuable benefits.  Please also note the items detailed below that relate to both Tax$ave and SHBP medical and dental plan enrollment.

  • Limitations on Plan Changes if Enrolled in POP — Internal Revenue Service (IRS) rules require that for an employee covered by the Premium Option Plan, payroll deductions for health and dental plan benefits remain the same for the entire plan year.  Therefore, no coverage level changes can be made which result in a change in the amount of an employee’s health and/or dental plan deduction unless a Qualifying Event has occurred.

  • Tax$ave, Civil Unions, and Domestic Partners — SHBP members need to be aware of the possible federal tax implications of adding a civil union partner or domestic partner to SHBP benefits. Since the federal tax code does not view civil union or domestic partners in the same manner as spouses, an employer may have to treat the civil union or domestic partner SHBP benefit as taxable to the employee and withhold federal income, Social Security, and Medicare taxes on its value. Similarly, since the partner's coverage is a federally taxable benefit, an employee who participates in the Tax$ave Premium Option Plan cannot make pre-tax payments for the cost of a civil union or domestic partner's coverage. Pre-tax dollars may still be used to pay for the employee's portion of the cost of his or her own and dependent children's coverage. If an employee wants to claim a federal tax dependency exemption for a civil union or domestic partner, he or she should contact the Internal Revenue Service or see IRS Tax Topic 354 — Dependents for more details.

OPEN ENROLLMENT INFORMATIONAL MATERIALS

Please note that the SHBP is not providing health fairs during this open enrollment period.

MILESTONES — Enclosed is a milestone chart that lists the critical dates of the open enrollment period and outlines the efforts being made to educate employees. Please use this chart as a checklist to guide your activities during open enrollment.

RATE CHARTS — Enclosed you will find rate charts for your use, as well as a sample open enrollment announcement flier that provides a list of medical and dental plans and the dental plan premium sharing costs for your employees. This flier is designed to assist your employees in making informed decisions concerning their health care coverage during this open enrollment period.

On September 14, supplies of the open enrollment announcement flier will be provided to employers through the State’s Centralized Payroll Unit for distribution with paychecks on September 21 to all employees paying the new contribution rate of 1.5 percent of salary.

A rate flier for employees who are still covered under labor agreements requiring the older premium sharing arrangements for HMO or Traditional Plan premiums is included with this mailing.  The SHBP asks employers to make copies of this rate information available to those employees who are still covered by the old arrangement.

HEALTH CAPSULE — The Health Capsule newsletter announces the SHBP Open Enrollment Period to employees and presents important information and changes that may affect their benefit selection.  A sample is enclosed for your review.

Please note that the Health Capsule article addressing duplicate health coverage for dependent children only applies to employees covered under newly ratified labor agreements and employees not covered by a labor agreement.

On September 14, the Health Capsule newsletter will be provided to employers through the State’s Centralized Payroll Unit for distribution with paychecks on September 21 to all employees.

CHECK MESSAGE — On September 21, a heads up paycheck message announcing Open Enrollment to start October 1, 2007, will be provided to employees paid through the State Centralized Payroll Unit.

HEALTH PLAN CONTACTS — A list of marketing contacts for the various health plans and dental plans is enclosed. Use these contacts to obtain provider directories or other plan specific literature. (These telephone numbers are not for member services. Please do not give these telephone numbers to your employees.)

HEALTH AND DENTAL PLAN APPLICATIONS — The SHBP Medical plans (including prescription drug coverage) and the SHBP Employee Dental Plans use two different applications.  The health and dental applications are available for printing from the SHBP Web site at: www.state.nj.us/treasury/pensions/shbp.htm

SUMMARY PROGRAM DESCRIPTION (SPD) BOOKLET, PLAN HANDBOOKS, AND HEALTH PLAN COMPARISON SUMMARY CHART — With the pending redesign of the SHBP plans in 2008, the SHBP Summary Program Description, SHBP plan Member Handbooks (NJ PLUS, Traditional Plan, HMOs, Dental Plans, and the Employee Prescription Drug Plan), and SHBP Plan Comparison Summary charts will not be revised for the Open Enrollment.

Changes regarding medical provider and prescription drug copayments for most State employees have been added to the online versions of the Member Handbooks and comparison charts on the SHBP Web site at: www.state.nj.us/treasury/pensions/shbp.htm

Plan materials will be updated as needed in 2008 based upon the planned implementation of the SHBP Plan redesign.  Until that time, please refer to the 2007 plan year editions of these publications.

ONLINE INFORMATION

The SHBP’s plan comparisons, member handbooks, newsletters, and rate information are available over the Internet at the State Health Benefits Program home page: www.state.nj.us/treasury/pensions/shbp.htm

Participating provider information for all SHBP medical plans is available in the Unified Provider Directory (UPD).  The UPD is an online service that provides a comprehensive listing of health care providers and facilities that deliver their services through one or more of the SHBP’s health care plans.  Updated monthly, you can access the UPD through the SHBP home page at: www.state.nj.us/treasury/pensions/shbp.htm

ADDITIONAL INFORMATION

If you have any questions about the SHBP Open Enrollment Period or the information in this letter, please contact our Office of Client Services at (609) 292-7524 to speak with an Employer Group representative.

Thank you for your assistance in making the SHBP Open Enrollment Period a success for your employees.

Enclosures:

2007 SHBP Open Enrollment Milestone Chart
Health and Dental Plan Rate Charts
Employee SHBP Rate Fliers New Contracts / Old Contracts
Health Capsule Newsletter
Marketing Contacts Health Plans / Dental Plans

CO Letter in Printable Format Adobe PDF (219K)


September 17, 2007

TO: State Monthly Certifying Officers
State Monthly Human Resources Representatives
FROM: New Jersey State Health Benefits Program (SHBP)
SUBJECT: SHBP Open Enrollment 2007 – State Monthly Employers

The State Health Benefits Program (SHBP) Open Enrollment period for all State employees will begin on October 1, 2007 and end on October 31, 2007.  All changes to coverage made during this open enrollment will be effective on January 1, 2008 for employees of State universities, State colleges, and State authorities.

Please Note:  The Fall 2007 Open Enrollment is only for plan changes or enrollment into the current SHBP plans.  These include:

  • SHBP Medical Plans — NJ PLUS, HMO plans (Aetna, AmeriHealth, CIGNA, Health Net, or Oxford), or the Traditional Plan.  Newly contracted PPO plans and HMO plans are being prepared for State, Local Governmental, and Local Educational groups and scheduled to begin service in 2008.  If it is not imperative that an employee make a medical plan change at this time, it may be best for them to wait for the “special” open enrollment scheduled for 2008.

  • The SHBP Employee Prescription Drug Plan; and/or

  • SHBP Dental Plans — Dental Expense Plan or DPO plans (Aetna DMO, Atlantic Southern Dental, CIGNA Dental Health, Community Dental Associates, Healthplex, Horizon Dental Choice)  See the information regarding dental plan terminations.

For changes made at this time, completed employer-certified SHBP Health Benefit and/or Dental Applications should be forwarded to the Health Benefits Bureau as soon as they are received from employees. The last day that certified applications may arrive at the Health Benefits Bureau to be effective for the start of the new plan year is November 5, 2007.

  • Certain State employees hired on or after July 1, 2003 — and determined by union contract or not covered by a labor agreement as per Chapter 119, P.L. 2003 — are not eligible for coverage under the SHBP Traditional Plan.  These employees may choose one of the other plans offered by the SHBP — NJ PLUS or one of the HMO plans (Aetna, AmeriHealth, CIGNA, Health Net, or Oxford).

  • Employees who are newly married, or enrolling in the SHBP for the first time during the Open Enrollment, and are enrolling their spouse as a dependent are required to provide a copy of the marriage certificate at the time of enrollment.  Similarly, if an employee is enrolling a civil union partner or an eligible domestic partner as a dependent, a copy of the New Jersey Civil Union Certificate or Certificate of Domestic Partnership is required at the time of enrollment.  To ensure that the documentation submitted is properly matched to the employee’s record, the Health Benefits Bureau requests that employers provide the employee’s Social Security number on the copy of the marriage/partnership documentation.

FOUR DENTAL PLANS TO BE TERMINATED

As of January 1, 2008, the SHBP will terminate the participation of four Dental Plan Organizations (DPOs): Assurant Employee Benefits,  Flagship Health Systems, Inc., Group Dental Health Administrators, Inc., and Dental Group of New Jersey, Inc.

DPO members who are affected by this termination must choose a new plan and return a SHBP Dental Plan Application to their human resources representative by October 31, 2007. The new dental plan will become effective January 1, 2008. If you do not transfer to another plan you will be without dental coverage as of January 1st.

MEDICAL AND PRESCRIPTION DRUG PLAN COPAYMENT CHANGES

The medical and prescription drug plan changes that effect State Active Group members are as follows:

Copayment Amounts for 2008 — New SHBP medical and prescription drug plan copayment amounts were implemented in July 2007 for most State Active Group members (State employees covered under the CWA, AFSCME, IPFTE, and employees not covered by a labor agreement*). These copayments will remain unchanged into the 2008 plan year. 

  • For NJ PLUS and all HMO plans (Aetna, AmeriHealth, CIGNA, Health Net and Oxford), the State Active Group copayment for primary doctor visits and visits to a specialist is $15.  The copayment for a visit to an emergency room is $50. The emergency room copayment is waived if the member is admitted to the hospital.

  • For State Active Group members enrolled in the SHBP Employee Prescription Drug Plan, the copayments for a 30 day supply purchased at a retail pharmacy are $3 for generic drugs, $10 for brand name prescription drugs without generic equivalents, and a new third tier copayment of $25 for brand name drugs where a generic equivalent is available.  The mail order prescription drug copayments for up to a 90-day supply, are $5 for generic drugs, $15 for brand name drugs without generic equivalents, and a third tier copayment of $40 for brand name drugs where a generic equivalent is available.

*For employees covered under other labor agreements, refer to the information below.

EMPLOYEE CONTRIBUTIONS AND PREMIUM SHARING

In July 2007, most contract agreements for State employees to share 5 percent of an HMO premium, or 25 percent of the Traditional Plan premium, ended.  State employees covered under the CWA, AFSCME, IPFTE, and employees not covered by a labor agreement began to contribute 1.5 percent of annual base salary for SHBP medical plan and/or prescription drug plan coverage regardless of the medical plan, level of coverage selected, salary level, or date of hire.

EMPLOYEES COVERED UNDER OTHER LABOR AGREEMENTS

Current copayment and premium sharing arrangements will remain in effect for employees covered under labor agreements other than those listed above unless and until new contract negotiations establish different arrangements for the sharing of health benefit costs.  For most of these employees the premium sharing arrangement of paying 5 percent of HMO premiums or 25 percent of the Traditional Plan premium remains in effect.  The NJ PLUS and HMO copayment for a primary doctor or specialist is $10 and the emergency room copayment is $25 – waived if admitted.  Employee Prescription Drug Plan copayments for a 30 day supply from a retail pharmacy are $3 for generic drugs and $10 for brand name prescription drugs. Mail order prescription drug copayments for up to a 90-day supply are $5 for generic drugs and $15 for brand name drugs.

EMPLOYER SHBP RATES FOR 2008

The State Health Benefits Commission has approved health, dental, and prescription drug plan rates for the 2008 plan year.  These rates are based upon the recommendation of the Commission’s actuarial consultant, Aon Consulting.  Since the SHBP self-funds all of its medical plans, the claims experience used in projecting 2008 costs are based upon the actual claims experience of the group.

Effective January 5, 2008, SHBP plan rates for the State Active Monthly Group, will see the following percentage of change:

PLAN TYPE RATE INCREASE/DECREASE
NJ PLUS 0%
Traditional Plan 0%
HMO Plans — AmeriHealth, Health Net 0%
HMO Plans — Aetna, Cigna, Oxford 6.0%
Prescription Drug Plan 0%
Dental Provider Organization (DPO) Plans 0%
Dental Expense Plan 0%

Employees are permitted to waive SHBP medical and prescription coverage to avoid the 1.5 percent contribution from salary — provided the employee has other health care coverage. To waive coverage a SHBP State Waiver form and a SHBP Application must be completed.

Premium sharing agreements regarding SHBP dental plans remain in place for all eligible State employees.

TAX$AVE AND THE SHBP

The State Employees’ Tax Savings Program (Tax$ave) Open Enrollment Period runs concurrent with the SHBP Open Enrollment Period (October 1 – October 31, 2007). Tax$ave is a benefit program available to full-time State employees who are eligible for the SHBP.  Tax$ave can save your employees tax money by paying health and dental benefit premiums and eligible unreimbursed medical and/or dependent care expenses from before-tax dollars. Separate Tax$ave Open Enrollment materials were distributed to employers and contain more information about these valuable benefits.  Please also note the items detailed below that relate to both Tax$ave and SHBP medical and dental plan enrollment.

  • Limitations on Plan Changes if Enrolled in POP — Internal Revenue Service (IRS) rules require that for an employee covered by the Premium Option Plan, payroll deductions for health and dental plan benefits remain the same for the entire plan year.  Therefore, no coverage level changes can be made which result in a change in the amount of an employee’s health and/or dental plan deduction unless a Qualifying Event has occurred.

  • Tax$ave, Civil Unions, and Domestic Partners — SHBP members need to be aware of the possible federal tax implications of adding a civil union partner or domestic partner to SHBP benefits. Since the federal tax code does not view civil union or domestic partners in the same manner as spouses, an employer may have to treat the civil union or domestic partner SHBP benefit as taxable to the employee and withhold federal income, Social Security, and Medicare taxes on its value. Similarly, since the partner's coverage is a federally taxable benefit, an employee who participates in the Tax$ave Premium Option Plan cannot make pre-tax payments for the cost of a civil union or domestic partner's coverage. Pre-tax dollars may still be used to pay for the employee's portion of the cost of his or her own and dependent children's coverage. If an employee wants to claim a federal tax dependency exemption for a civil union or domestic partner, he or she should contact the Internal Revenue Service or see IRS Tax Topic 354 — Dependents for more details.

OPEN ENROLLMENT INFORMATIONAL MATERIALS

Please note that the SHBP is not providing health fairs during this open enrollment period.

MILESTONES — Enclosed is a milestone chart that lists the critical dates of the open enrollment period and outlines the efforts being made to educate employees. Please use this chart as a checklist to guide your activities during open enrollment.

RATE CHARTS — Enclosed you will find rate charts for your use, as well as sample open enrollment announcement fliers that provide a list of medical and dental plans and the dental plan premium sharing costs for State employees. These fliers are master copies that can be reproduced for distribution to your employees. The fliers are provided for three different payroll schedules (Monthly, 24 Pay Periods, and 26 Pay Periods). Choose the flier that corresponds to your payroll schedule.

Note that two versions of medical plan rates are provided.

  • The flier without medical plan rates is for distribution to employees paying the new contribution rate of 1.5 percent of salary.

  • The flier containing medical plan rates is for distribution to employees who are still covered under labor agreements requiring the older premium sharing arrangements for HMO or Traditional Plan premiums.

The announcement fliers are designed to assist your employees in making informed decisions concerning their health and dental care.  Please distribute copies of them to your employees prior to the start of the Open Enrollment.

HEALTH CAPSULE — The Health Capsule newsletter announces the SHBP Open Enrollment Period to employees and presents important information and changes that may affect their benefit selection.  A sample is enclosed for your review.  The newsletters are scheduled for delivery to monthly employers in late-September.  Please distribute them to your employees for the open enrollment.

Please note that the Health Capsule article addressing duplicate health coverage for dependent children only applies to employees covered under newly ratified labor agreements and employees not covered by a labor agreement.

HEALTH PLAN CONTACTS — A list of marketing contacts for the various health plans and dental plans is enclosed. Use these contacts to obtain provider directories or other plan specific literature. (These telephone numbers are not for member services. Please do not give these telephone numbers to your employees.)

HEALTH AND DENTAL PLAN APPLICATIONS — The SHBP Medical plans (including prescription drug coverage) and the SHBP Employee Dental Plans use two different applications.  The health and dental applications are available for printing from the SHBP Web site at: www.state.nj.us/treasury/pensions/shbp.htm

SUMMARY PROGRAM DESCRIPTION (SPD) BOOKLET, PLAN HANDBOOKS, AND HEALTH PLAN COMPARISON SUMMARY CHART — With the pending redesign of the SHBP plans in 2008, the SHBP Summary Program Description, SHBP plan Member Handbooks (NJ PLUS, Traditional Plan, HMOs, Dental Plans, and the Employee Prescription Drug Plan), and SHBP Plan Comparison Summary charts will not be revised for the Open Enrollment.

Changes regarding medical provider and prescription drug copayments for most State employees have been added to the online versions of the Member Handbooks and comparison charts on the SHBP Web site at: www.state.nj.us/treasury/pensions/shbp.htm

Plan materials will be updated as needed in 2008 based upon the planned implementation of the SHBP Plan redesign.  Until that time, please refer to the 2007 plan year editions of these publications.

ONLINE INFORMATION

The SHBP’s plan comparisons, member handbooks, newsletters, and rate information are available over the Internet at the State Health Benefits Program home page: www.state.nj.us/treasury/pensions/shbp.htm

Participating provider information for all SHBP medical plans is available in the Unified Provider Directory (UPD).  The UPD is an online service that provides a comprehensive listing of health care providers and facilities that deliver their services through one or more of the SHBP’s health care plans.  Updated monthly, you can access the UPD through the SHBP home page at: www.state.nj.us/treasury/pensions/shbp.htm

ADDITIONAL INFORMATION

If you have any questions about the SHBP Open Enrollment Period or the information in this letter, please contact our Office of Client Services at (609) 292-7524 to speak with an Employer Group representative.

Thank you for your assistance in making the SHBP Open Enrollment Period a success for your employees.

Enclosures:

2007 SHBP Open Enrollment Milestone Chart
Health and Dental Plan Rate Charts
Employee SHBP Rate Fliers New Contracts / Monthly / 24 Pay / 26 Pay
Employee SHBP Rate Fliers Old Contracts / Monthly / 24 Pay / 26 Pay
Health Capsule Newsletter
Marketing Contacts Health Plans / Dental Plans

CO Letter in Printable Format Adobe PDF (263K)


September 2007

TO: State Biweekly Certifying Officers and Benefits Administrators
State Monthly Certifying Officers and Benefits Administrators
County Community College Certifying Officers and Benefits Administrators
FROM: New Jersey State Health Benefits Program (SHBP)
SUBJECT: SHBP Open Enrollment 2007 – Part-Time Employees

The State Health Benefits Program (SHBP) Open Enrollment Period for all eligible part-time employees of the State and part-time faculty at institutions of higher education will be held from October 1, 2007 through October 31, 2007.

These eligible part-time employees may elect to enroll for benefits under NJ PLUS and the Employee Prescription Drug Plan if they did not do so when first eligible.  They may also add any eligible dependents they have not previously.  Enrollments or changes to coverage level made during this open enrollment will be effective on January 1, 2008 for part-time employees.

SHBP APPLICATIONS — Completed employer-certified SHBP Part-time Employee Group Applications should be sent to the Health Benefits Bureau as soon as they are received from employees.  Please write the words, “Open Enrollment”, on the top of the application to help expedite their processing. The last day that certified applications may arrive at the Health Benefits Bureau to be effective for the start of the new plan year is November 5, 2007.

RATE CHARTS — Enclosed you will find Part-time Active and Part-time COBRA Group rates for NJ PLUS and the Employee Prescription Drug Plan.

MORE INFORMATION AVAILABLE ONLINE — The SHBP’s member handbooks, newsletters, and rate information are available over the Internet at the State Health Benefits Program home page: www.state.nj.us/treasury/pensions/shbp.htm

Participating provider information for NJ PLUS is available in the Unified Provider Directory (UPD).  The UPD is an online service that provides a comprehensive listing of health care providers and facilities that deliver their services through one or more of the SHBP’s health care plans.  Updated monthly, you can access the UPD through the SHBP home page at: www.state.nj.us/treasury/pensions/shbp.htm

If you have any questions about the information in this letter, please contact our Office of Client Services at (609) 292-7524.

Thank you for your assistance in making the SHBP Open Enrollment Period a success for your employees.

Enclosures:

2008 SHBP Part-time Active Rates / State / Local
2008 SHBP Part-time COBRA Rates / State / Local

CO Letter in Printable Format Adobe PDF (93K)


September 2007

TO: Certifying Officers of the Public Employees’ Retirement System (PERS), Teachers’ Pension and Annuity Fund (TPAF), Police and Firemen’s Retirement System (PFRS), and State Police Retirement System (SPRS)
FROM: Virginia Martucci, Chief, Retirement Bureau
SUBJECT: Disability Retirement Guidelines

This letter provides guidance regarding changes, resulting from a decision by the Supreme Court of New Jersey1, to the standard definitions and administrative procedures used by the Division of Pensions and Benefits in determining eligibility for disability retirement benefits. 

In its decision, the Court examined the following three areas which are discussed herein:

  1. “traumatic event”;
  2. pre-existing disease; and 
  3. disability from “usual or any other duty.” 

Certifying Officers and their administrative staff who perform duties involving pension and the certification of information for an employee’s retirement should familiarize themselves with the new standards and review the explanations provided for each of the areas discussed.

1Richardson v. Board of Trustees, PFRS, N. J. (2007) (decided July 24, 2007).  While the Richardson case specifically addressed Accidental Disability Retirement in the PFRS, the revised standards are applicable to all State-administered retirement systems with Accidental Disability Retirement benefits (PERS, TPAF, and SPRS). 

Accidental Disability Standards and Traumatic Event

To qualify for an Accidental Disability Retirement, a member must satisfy:

  1. That he or she is permanently and totally disabled;
  2. As a direct result of a “traumatic event” that is
    a. Identifiable as to time and place,
    b. Undesigned and unexpected, and
    c. Caused by a circumstance external to the member (not the result of preexisting disease that is aggravated or accelerated by the work);
  3. That the “traumatic event” occurred during and as a result of the member’s regular or assigned duties;
  4. That the disability was not the result of the member’s willful negligence; and
  5. That the member is mentally or physically incapacitated from performing his usual or any other duty.

Eligibility for Accidental Disability Retirement requires that the member be permanently and totally disabled as a direct result of a “traumatic event.”

Previous standards2 for “traumatic event” required, in part, that the cause of the injury be “a great rush of force or uncontrollable power.”  The Court has now determined that not every case requires the “great rush of force” test. In fact, no particular amount of force is necessary in determining whether a member has met with a “traumatic event.” 

2Defined under the Supreme Court decision, Kane v. Board of Trustees, PFRS, 100 N. J. 651 (1985).

In revising the standards, a member who is injured as a direct result of an “identifiable, undesigned and unexpected” mishap caused by “external circumstances” may now satisfy the “traumatic event” standard.

For example, a policeman can be shot while pursuing a suspect; a librarian can be hit by a falling bookshelf while re-shelving books; a social worker can catch his or her hand in the car door while transporting a child to court.  Each of these examples is “identifiable” as to time and place, and “undesigned and unexpected” in the normal course of work.  Each of these events may meet the “traumatic event” standard, as long as the member also satisfies the remaining requirements for Accidental Disability Retirement; including that the event occurred during the performance of regular or assigned duties, was not the result of the member’s willful negligence or a pre-existing disease or injury (see below), was caused by circumstances external to the member, and that the disability is permanent and total.

An employer’s administrative staff should note this revised standard for “traumatic event” when requested to provide information to the Division’s Disability Review Unit in support of an employee’s Application for Disability Retirement.

Pre-existing Disease and Conditions

While the revised standard for “traumatic event” allows that unexpected injuries when performing ordinary job duties may qualify for Accidental Disability Retirement, it is important to note that some injuries sustained during ordinary work effort will qualify, while others will not. To this end, the Court addressed whether the injury resulted from an event that is “identifiable” as to time and place, an “undesigned and unexpected” event during the regular performance of work, and that it is not the result of pre-existing disease alone or in combination with the work.

Therefore, a "traumatic event” must be an accident or external happening that directly causes the injury and cannot be the result of pre-existing disease alone or disease in combination with the work effort. Under the revised standard, when the normal stress and strain of the job combines with a pre-existing disease to cause injury or degeneration over time, the member is not entitled to an Accidental Disability Retirement benefit. 

For example, a police officer who has a heart attack while chasing a suspect most likely has not experienced a “traumatic event.”  In this case the work effort alone was not the cause of the injury, but rather the combined effect with pre-existing disease.  The same police officer, permanently and totally disabled during the chase because of a fall, may be determined to have suffered a “traumatic event.”

Similarly, a gym teacher who develops arthritis over the years from the repetitive effects of his work most likely has not suffered a “traumatic event.” This disability is the result of degenerative disease and is not related to an event “identifiable” as to time and place.  The same gym teacher who trips over a riser and is injured may be able to satisfy the standard for “traumatic event.”

An employer’s administrative staff should note this revised standard for Accidental Disability Retirements.

Medical documentation required for an Accidental Disability Retirement must include information that addresses the issue of any possible pre-existing disease or a similar condition. All medical documentation must be reviewed by the Independent Medical Examiners and the Medical Review Board to rule out pre-existing disease based upon the revised standard before an Accidental Disability Retirement can be submitted to the Board of Trustees for approval.

Additionally, the Division requests that all Workers’ Compensation documents and related medical reports, including functional capacity evaluations, and any other tests by Workers’ Compensation insurance carriers or in the possession of the employer be provided for review.

Disability from “Usual or any Other Duty”

The third area addressed by the Court is that of “permanent and total disability.”  To qualify for Accidental or Ordinary Disability Retirement benefits a member must be permanently and totally disabled and incapacitated from performing his or her usual duty or “any other job available from his or her employer.”  In all future cases of disability retirement, the Division of Pensions and Benefits will require information from employers about the availability of “other jobs.”

An employer’s administrative staff must now respond in writing (example attached) — by letter, fax, or e-mail — to the Disability Review Unit of the Division of Pensions and Benefits, regarding any other job duty available that the employer is willing to offer to the member. 

If the employer indicates that the employee is employable in the general area of his or her ordinary employment, the Disability Review Unit will request additional information about the position the employer is willing to offer.  This information will be provided to the Independent Medical Examiners and the Medical Review Board to determine if the member is fit to perform the available duty, or would be considered disabled from that duty as well.

No cases for disability retirement will be submitted to the Board of Trustees for approval, until the issue of “any other job” available with the employer is completely resolved.

REVIEW OF CURRENT APPLICATIONS

In light of the new standards for disability retirements, the Division of Pensions and Benefits is reviewing all disability retirement cases that are currently in processing, pending Board of Trustees review or approval, or not yet submitted to the Board of Trustees.

Accidental Disability retirement cases that are within their 45-day appeal rights, or on the docket to be heard before the Office of Administrative Law (OAL), the Appellate Division of the Superior Court of New Jersey, or the Supreme Court of New Jersey may also be reviewed when involving the sole issue of “traumatic event”.

Employers should make their employees aware that these additional levels of review might delay the approval of some pending disability retirements. The Division will do everything it can to expedite review of these cases under the new standards and apologizes for any inconvenience it may cause its members.

The Changes Described Above Do Not Effect

The Division of Pensions and Benefits will not review any case previously denied by the Board of Trustees that has been fully adjudicated.  This includes cases that are past the 45-day right of appeal (that were not appealed in a timely manner) and those that have completed the appeal process.  It also includes any case previously denied by the OAL and/or the Appellate Division of the Superior Court of New Jersey that was not appealed timely to a higher Court.

ADDITIONAL INFORMATION

The Division of Pensions and Benefits is in the process of revising its Application for Disability Retirement, related fact sheets and informational materials, and online Retirement Applications and Certifications. Employers will be informed when these revisions become available.

If you have additional questions regarding 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

CO Letter in Printable Format Adobe PDF (75K)

Enclosures

Sample Letters (2)


(SAMPLE LETTER)
Employer Letterhead

(Date)

Disability Review Unit
Division of Pensions and Benefits
PO Box 297
Trenton, NJ 08625-0297

pensions.nj@treas.state.nj.us

(Name of Employee) is employed by (Name of Employing Location) in the position of (Job Title), is an active member of the (Name of Retirement System) and by filing an application for disability retirement has indicated the he/she can no longer perform his/her assigned duties. 

Since we are unable to provide an alternative position with duties capable of being performed by the employee, we have no objection to (Name of Employee) applying for a disability retirement benefit from the (Name of Retirement System).

Sincerely,
(Signature)
(Name of Certifying Officer)
(Title)

 

 


(SAMPLE LETTER)
Employer Letterhead

(Date)

Disability Review Unit
Division of Pensions and Benefits
PO Box 297
Trenton, NJ 08625-0297

pensions.nj@treas.state.nj.us

(Name of Employee) is employed by (Name of Employing Location) in the position of (Job Title), is an active member of the (Name of Retirement System) and by filing an application for disability retirement has indicated the he/she can no longer perform his/her assigned duties. 

However, an alternative position that may include duties capable of being performed by the employee, (name of the employee) is available.

Title of Position: __________________________________________________

Retirement System:  _______________________________________________

Description: _________________________________________________________

____________________________________________________________________

____________________________________________________________________

    Sincerely,
(Signature)
(Name of Certifying Officer)
(Title)


September 2007

TO: Certifying Officers — Teachers’ Pension and Annuity Fund, Public Employees’ Retirement System & Police and Firemen’s Retirement System
FROM: John D. Megariotis
Deputy Director, Finance
SUBJECT: Report of Contributions, 3rd Quarter 2007 (July 1st to September 30th)

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.

If you have any questions or need assistance in completing the Report, please refer to the section of the Employers' Pensions and Benefits Administration Manual (EPBAM) devoted to the ROC and located on the Division’s Web site at –
www.state.nj.us/treasury/pensions/epbam/finance/roc.htm

Update - Deadline for Filing

Due to the overwhelming popularity of the I-ROC program and the time saved in preparing the report of contributions, the Division is now updating member accounts in a timelier manner. As a result, all reports must be received no later than 5:00 p.m. on Thursday, October 25, 2007. Reports received after this time may not be used to update member accounts.

Please remember that all funds related to your employees’ reported contributions must be remitted to the Division through the Transmittal Electronic Payment System (TEPS) before the ROC may be submitted for processing. The TEPS processing may take up to 2 business days for funds to be transferred so plan your ROC submission accordingly.

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 new 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 November 1, 2007, 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.

CO Letter in Printable Format Adobe PDF (61K)


September 2007

TO: Certifying Officers Autonomous State College/University/State Employers
FROM: John D. Megariotis
Deputy Director, Finance
SUBJECT: Report of Contributions, 3rd Quarter 2007 (July 1st to September 30th)

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 3rd 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 October 10, 2007. Your September 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 October 10, 2007.

With the tape ROC, you must complete and return the Transmittal Summary form for the 3rd 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 tape ROC. 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 tape ROC 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.

If you have any questions or need assistance in completing the Report, please refer to the section of the Employers' Pensions and Benefits Administration Manual (EPBAM) devoted to the ROC and located on the Division’s website at -

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.

CO Letter in Printable Format Adobe PDF (62K)


August 22, 2007

TO: State Biweekly Certifying Officers, State Biweekly Human Resource and Benefit Administrators
FROM: John D. Megariotis
Deputy Director, Finance
SUBJECT: Open Enrollment For The New Jersey State Employees Tax Savings Program (Tax$ave 2008)

The annual open enrollment for the calendar year 2008 New Jersey State Employees Tax Savings Program (Tax$ave 2008) will be conducted from October 1 through October 31, 2007.  Full-time employees of the State who are eligible for participation in the New Jersey State Health Benefits Program (SHBP) may participate in Tax$ave. 

ABOUT TAX$AVE

Tax$ave consists of three components:

1. The Premium Option Plan (POP);

2. The Unreimbursed Medical Flexible Spending Account; and

3. The Dependent Care Flexible Spending Account.

Tax$ave offers eligible employees the opportunity to increase their available income by reducing their federal tax liability.  Each year eligible employees should review their personal financial circumstances and decide if they wish to participate or not.  Open Enrollment offers employees the opportunity to conduct this review and then act on their decision.

Note: Information on the State Health Benefits Program’s Open Enrollment for medical, prescription drug, and dental plans for the 2008 plan year will follow in a separate letter.

Tax savings on commuter mass transit and parking expenses are available at any time as a separate benefit to State employees under the Commuter Tax$ave Program and are not tied to this open enrollment period.  See Fact Sheet #67, Commuter Tax$ave Program Adobe PDF (41K), for details.

PREMIUM OPTION PLAN

Enrollment in the Premium Option Plan is automatic.  This saves your employees tax money by paying health and dental premiums from pre-tax dollars and reducing their tax liability.  If an employee does not wish to take advantage of the Premium Option Plan in 2008 (and therefore pay more in federal, Social Security, and Medicare taxes) he or she should file a Declination of Premium Option Plan (POP) form. 

FLEXIBLE SPENDING ACCOUNTS

New FSA Plan Administrator for 2008 Plan Year — The Division of Pensions and Benefits is pleased to announce the selection of Fringe Benefits Management Company (FBMC) to administer the Tax$ave Unreimbursed Medical and Dependent Care Flexible Spending Accounts (FSA) beginning with the 2008 plan year.  FBMC, a nationally recognized company in employee benefits, brings 30 years of administration experience to New Jersey and the members of Tax$ave’s Flexible Spending Accounts.

The Unreimbursed Medical and/or Dependent Care Flexible Spending Accounts allow employees to set aside money to pay for out-of-pocket medical, dental, and dependent care expenses while saving on taxes because the money contributed to the account is free from federal income, Social Security, and Medicare taxes and remains tax-free when an employee receives it.

Unlike the Premium Option Plan or the health plans of the SHBP, prior participation in a Tax$ave FSA in 2007 does not carry over automatically into 2008.  Employees must enroll each year to participate in an FSA for calendar year 2008. 

Enrolling in a Flexible Spending Account

Employees have three ways of enrolling in the Tax$ave FSA accounts: mail, telephone, and Internet.  FBMC will inform employees currently participating in a Tax$ave FSA plan of this enrollment opportunity through a direct mailing in September.  The Tax$ave publications will provide the following enrollment instructions to employees:

  • Mail: FSA Enrollment Applications must be mailed directly to Fringe Benefits Management Company (FBMC) by the employee.  All enrollment forms must be postmarked no later than October 31, 2007, to be accepted.  Those postmarked after October 31, 2007 will be returned without action.  Benefits offices should not be involved in processing or mailing FSA Enrollment Applications.

  • Telephone: Employees may enroll in the Unreimbursed Medical and/or Dependent Care FSA plans for 2008 over the phone by calling FBMC’s automated Interactive Voice Response system at 1-866-440-7150 1-800-865-FBMC (3262).  This is a great opportunity to quickly and easily go through the enrollment process.  The deadline for enrollment by telephone is midnight, October 31, 2007.
     
  • Internet: Employees have the ability to enroll in the Unreimbursed Medical and/or Dependent Care FSA plans over the Internet.  Go to the FBMC Web page. The deadline for enrollment over the Internet is midnight, October 31, 2007.

Listed below are some additional benefits of FSA participation.

  • NEW!  Increased Medical FSA Maximum — The maximum annual allowance that can be set aside for a Tax$ave Unreimbursed Medical FSA has been increased from $2,000 to $2,500 for the 2008 plan year.  Employees may now save federal income, Medicare and Social Security taxes on up to $2,500 of unreimbursed medical expenses and up to $5,000 on dependent care expenses.  It now makes more sense than ever to enroll and use a Tax$ave FSA plan when paying for doctor and prescription copayments, health plan deductibles, orthodontics, eyeglasses, Lasik surgery, uncovered dental fees, or certain over-the-counter medications. 

  • Many over-the-counter drugs are eligible for reimbursement in the Unreimbursed Medical FSA.  Internal Revenue Service rules permit over-the-counter products/medications deemed for "medical care" to be considered reimbursable.  "Medical care" includes amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease.  While purchases of medicines and drugs for medical care are eligible for reimbursement, expenditures that are merely beneficial to the general health of an individual, such as vitamins and other supplements, are not eligible.  For more information about expenses that are eligible under Unreimbursed Medical and Dependent Care FSAs, please visit the FBMC Web site.

  • Unreimbursed Medical FSAs feature the FBMC EZ REIMBURSE® MasterCard®, that draws on the value of the employee’s annual Medical FSA election amount.  The EZ REIMBURSE Card is included free with the sign up for an FBMC Unreimbursed Medical FSA during Tax$ave Open Enrollment.  Employees can use the EZ REIMBURSE Card for qualifying expenses, such as covered prescription copayments, health plan deductibles, orthodontics, doctor and emergency room copayments, eyeglasses, Lasik surgery, and uncovered dentist or other provider fees.  The EZ REIMBURSE Card can also be used for eligible over-the-counter medical expenses.  In addition, EZ REIMBURSE Card transactions for eligible expenses at Walgreens, Wal-Mart, and Sam’s Club do not require additional documentation.  The EZ REIMBURSE Card also contains a “look back” feature during the 2 ½ month grace period extension that will access any unused 2008 Unreimbursed Medical FSA funds before using funds contributed in the 2009 plan year. For plan year 2008, the grace period extension will run from January 1, 2009 to March 15, 2009 (more about the grace period below).

    Notice To Horizon FSA Members — If you are currently a Tax$ave 2007 FSA member, continue to use the Horizon Benny CardTM that you received at the start of the 2007 plan year until the value of your Benny Card is exhausted.  Tax$ave 2007 FSA members may incur eligible expenses for reimbursement of any funds remaining in a Horizon FSA account until March 15, 2008.  All Tax$ave 2007 FSA claims must be submitted to Horizon no later than April 30, 2008.  If you wish to continue participation in a Medical or Dependent Care FSA plan for the 2008 plan year, Tax$ave members must enroll for FSA participation with FBMC during this Tax$ave Open Enrollment period.

  • Grace Period Extension for Eligible Expenses and Extended Claim Filing Period.  Employees enrolled in the Unreimbursed Medical or Dependent Care FSAs have until March 15 of the following year to incur eligible expenses for the current plan year.  In addition to claiming eligible expenses through March 15 of the following year, the period that employees enrolled in the UMSA or DCSA have for submitting claims for reimbursement has been extended to April 30 of the following year.  While this does not eliminate the use-it-or-lose-it rule completely, employees now have a longer period to obtain reimbursement for eligible expenses and avoid forfeiting unused funds.  Under the Unreimbursed Medical and Dependent Care Flexible Spending Accounts, any contributions that remain unclaimed after the April 30 deadlines are forfeited.

    Please also remember that because of the change in FSA plan administration for the 2008 plan year, claims must be submitted to the appropriate FSA administrator before the expense and claim deadlines for the corresponding Tax$ave benefit year. 

    • For Tax$ave 2007 members, eligible FSA expenses may be incurred until March 15, 2008, and claims must be filed with Horizon Healthcare no later than April 30, 2008.

    • For Tax$ave 2008 members, eligible FSA expenses may be incurred between January 1, 2008 and March 15, 2009.  FSA participants must be enrolled with Fringe Benefits Management Company (FBMC) and claims for expenses must be filed with FBMC no later than April 30, 2009.

For more information about the FSA plans see the Division of Pensions and Benefits’ Tax$ave Web page at: www.state.nj.us/treasury/pensions/taxsave.htm  or contact FBMC Customer Service at 1-800-342-8017.

TAX$AVE AND CIVIL UNION PARTNERS OR DOMESTIC PARTNERS

State employees are able to add a civil union partner or same-sex domestic partner to their SHBP medical and dental insurance coverage.  However, before any payroll contributions or premiums that the employee pays for a partner can be made on a pre-tax basis under the Tax$ave Premium Option Plan, the civil union partner or domestic partner must be able to qualify as a “tax dependent” of the employee for federal tax filing purposes under Internal Revenue Code Section 152.

Similarly, the civil union partner or domestic partner must qualify as the employee’s tax dependent before an out-of-pocket medical expense incurred by the partner can be reimbursed under the Unreimbursed Medical Flexible Spending Account.  See IRS Tax Topic 354 - Dependents for additional information on the requirements for establishing dependent status for federal tax purposes.

If the civil union partner or domestic partner is not a “qualified tax dependent” of the employee, any premium deductions made for the partner’s coverage must be made on an after-tax basis and funds in the Unreimbursed Medical Spending Account cannot be used to cover the partner’s medical expenses.

Additional information about the New Jersey Civil Unions can be found in Fact Sheet #75, Civil Unions Adobe PDF (51K)Information about New Jersey Domestic Partners can be found in Fact Sheet #71, Benefits Under the Domestic Partnership Act Adobe PDF (56K)Both fact sheets are available on the Division of Pensions and Benefits Web site: www.state.nj.us/treasury/pensions

TAX$AVE AND CHILDREN AGE 23 TO 30

Chapter 375, P.L. 2005, permits continued SHBP medical plan coverage for certain children until their 30th birthday.  However, contributions or premiums that an employee pays for coverage of an over age child cannot be made on a pre-tax basis under the Tax$ave Premium Option Plan, nor can an out-of-pocket medical expense incurred by the over age child be reimbursed under the Unreimbursed Medical Flexible Spending Account, unless the child qualifies as a “tax dependent” of the employee for federal tax filing purposes under Internal Revenue Code Section 152.  See IRS Tax Topic 354 - Dependents for additional information on the requirements for establishing dependent status for federal tax purposes. 

For more information about continued coverage for children age 23 to 30, see Fact Sheet #74, SHBP Coverage of Children to Age 30 Under Chapter 375 Adobe PDF (31K).

EMPLOYEE SEMINARS

Upon request, Fringe Benefits Management Company (FBMC) will provide Tax$ave educational seminars, at your workplace, for interested employees.  The seminars are about 60 minutes in duration and include time for questions and answers.  These seminars have proven to be very successful educational tools and we strongly encourage you to make one available to your employees.  Please see the enclosed request form to schedule a seminar with a FBMC representative (please note that we ask for a minimum of 25 employees).

TAX$AVE SUPPORT MATERIALS

The remainder of this letter provides information on the Tax$ave Open Enrollment publications and support available to assist you in explaining this important benefit program to your employees.  Please do your best to make a concerted effort to inform your employees of the open enrollment and to educate them on the valuable benefits that Tax$ave offers them.  We believe that more employees will participate in Tax$ave if they are made aware and understand the value of the tax savings offered by the program

Enclosed is the Tax$ave Open Enrollment Milestones chart that lists the critical dates of the Tax$ave 2008 Annual Open Enrollment and outlines the efforts being made to educate employees.  Please use this chart as a checklist to guide your activities during the open enrollment.

Announcement of the open enrollment to employees paid through Centralized Payroll will be made in a September 7 paycheck message that will be accompanied by three payroll inserts.  These inserts are:

  • The Tax$ave 2008 Open Enrollment News that announces the open enrollment, outlines the components of the program with emphasis on its tax saving advantages, and identifies the October 31, 2007 deadline for submission of all election materials;

  • The Premium Option Plan 2008 pamphlet that explains the advantages and disadvantages of participation; and

  • An FSA pamphlet that describes the Unreimbursed Medical and Dependent Care Flexible Spending Accounts administered by Fringe Benefits Management Company (FBMC).

The September 21 paychecks will carry another Tax$ave 2008 Open Enrollment announcement message and ”reminder messages” will be provided to employees through paycheck messages on October 5 and October 19 (a final November 2 paycheck message will address the Commuter Tax$ave Program).  The text of these check message announcements and preview copies of the Tax$ave publications are enclosed with this letter.

The other open enrollment materials that are available to you are the FSA Reference Guides and the Declination of Premium Option Plan (POP) for Plan Year 2008 form. 

  • A sample of the 2008 FSA Reference Guide will be sent directly to benefits administrators by FBMC, along with information on how to request additional guides.  Please provide the FSA Reference Guides to those employees who request them.

  • This letter includes the Declination of Premium Option Plan (POP) form.  This can be copied for use by those few employees who do not wish to participate in the POP and, therefore, pay more in tax.  Please do not distribute POP declination forms to employees unless they ask for one.  If an employee chooses not to save tax dollars under the Tax$ave Premium Option Plan and wants to pay more federal income, Social Security, and Medicare taxes on the salary used to pay their medical and dental premiums in 2008, they must complete the form declining the federal tax break they could receive.  Employees should request these forms from you.  We will be instructing employees to return the Declination of Premium Option Plan (POP) forms to benefits administrators by October 31, 2007.  Benefits administrators must then forward declination forms to Centralized Payroll by November 9, 2007.

The changes to the Tax$ave program for the 2008 plan year promise to make Tax$ave participation even more rewarding to your employees than it has been in the past.  As we do every year, the Division of Pensions and Benefits appreciates your cooperation in the Open Enrollment.  Your involvement in the Tax$ave Open Enrollment is key to your employees receiving the valuable benefits offered by this program.

If you have any general questions about Tax$ave 2008, the open enrollment, or the Premium Option Plan, visit the Division of Pensions and Benefits’ Tax$ave Internet site at: www.state.nj.us/treasury/pensions/taxsave.htm call the Division’s Office of Client Services at (609) 292-7524, or send e-mail to: pensions.nj@treas.state.nj.us   For more information about the Unreimbursed Medical or Dependent Care Flexible Spending Accounts, contact FBMC  or call FBMC Customer Service at 1-800-342-8017.

Enclosures:

Request for Tax$ave 2008 Employee Seminars
Tax$ave 2008 Open Enrollment Milestones
Open Enrollment Check Messages
Tax$ave 2008 Open Enrollment News (sample)
The Premium Option Plan 2008 Pamphlet (sample)
Tax$ave — FBMC Flexible Savings Accounts Pamphlet (sample)
Tax$ave — FBMC Flexible Savings Accounts Enrollment Form
Declination of Premium Option Plan (POP) for Plan Year 2008

CO Letter in Printable Format Adobe PDF (85K)


August 22, 2007

TO: State Monthly Agency, Authority, College and University Certifying Officers, State Monthly Human Resource and Benefit Administrators
FROM: John D. Megariotis
Deputy Director, Finance
SUBJECT: Open Enrollment For The New Jersey State Employees Tax Savings Program (Tax$ave 2008)

The annual open enrollment for the calendar year 2008 New Jersey State Employees Tax Savings Program (Tax$ave 2008) will be conducted from October 1 through October 31, 2007.  Full-time employees of the State, State authorities, State colleges, and State universities who are eligible for participation in the New Jersey State Health Benefits Program (SHBP) may participate in Tax$ave.

ABOUT TAX$AVE

Tax$ave consists of three components:

1. The Premium Option Plan (POP);

2. The Unreimbursed Medical Flexible Spending Account; and

3. The Dependent Care Flexible Spending Account.

Tax$ave offers eligible employees the opportunity to increase their available income by reducing their federal tax liability.  Each year eligible employees should review their personal financial circumstances and decide if they wish to participate or not.  Open Enrollment offers employees the opportunity to conduct this review and then act on their decision.

Note: Information on the State Health Benefits Program’s Open Enrollment for medical, prescription drug, and dental plans for the 2008 plan year will follow in a separate letter.

Tax savings on commuter mass transit and parking expenses are available at any time as a separate benefit to State employees under the Commuter Tax$ave Program and are not tied to this open enrollment period.  See Fact Sheet #67, Commuter Tax$ave Program Adobe PDF (41K), for details.

PREMIUM OPTION PLAN

Enrollment in the Premium Option Plan is automatic.  This saves your employees tax money by paying health and dental premiums from pre-tax dollars and reducing their tax liability.  If an employee does not wish to take advantage of the Premium Option Plan in 2008 (and therefore pay more in federal, Social Security, and Medicare taxes) he or she should file a Declination of Premium Option Plan (POP) form. 

FLEXIBLE SPENDING ACCOUNTS

New FSA Plan Administrator for 2008 Plan Year — The Division of Pensions and Benefits is pleased to announce the selection of Fringe Benefits Management Company (FBMC) to administer the Tax$ave Unreimbursed Medical and Dependent Care Flexible Spending Accounts (FSA) beginning with the 2008 plan year.  FBMC, a nationally recognized company in employee benefits, brings 30 years of administration experience to New Jersey and the members of Tax$ave’s Flexible Spending Accounts.

The Unreimbursed Medical and/or Dependent Care Flexible Spending Accounts allow employees to set aside money to pay for out-of-pocket medical, dental, and dependent care expenses while saving on taxes because the money contributed to the account is free from federal income, Social Security, and Medicare taxes and remains tax-free when an employee receives it.

Unlike the Premium Option Plan or the health plans of the SHBP, prior participation in a Tax$ave FSA in 2007 does not carry over automatically into 2008.  Employees must enroll each year to participate in an FSA for calendar year 2008. 

Enrolling in a Flexible Spending Account

Employees have three ways of enrolling in the Tax$ave FSA accounts: mail, telephone, and Internet.  FBMC will inform employees currently participating in a Tax$ave FSA plan of this enrollment opportunity through a direct mailing in September.  The Tax$ave publications will provide the following enrollment instructions to employees:

  • Mail: FSA Enrollment Applications must be mailed directly to Fringe Benefits Management Company (FBMC) by the employee.  All enrollment forms must be postmarked no later than October 31, 2007, to be accepted.  Those postmarked after October 31, 2007 will be returned without action.  Benefits offices should not be involved in processing or mailing FSA Enrollment Applications.

  • Telephone: Employees may enroll in the Unreimbursed Medical and/or Dependent Care FSA plans for 2008 over the phone by calling FBMC’s automated Interactive Voice Response system at 1-866-440-7150 1-800-865-FBMC (3262).  This is a great opportunity to quickly and easily go through the enrollment process.  The deadline for enrollment by telephone is midnight, October 31, 2007.
     
  • Internet: Employees have the ability to enroll in the Unreimbursed Medical and/or Dependent Care FSA plans over the Internet.  Go to the FBMC Web page. The deadline for enrollment over the Internet is midnight, October 31, 2007.

Listed below are some additional benefits of FSA participation.

  • NEW!  Increased Medical FSA Maximum — The maximum annual allowance that can be set aside for a Tax$ave Unreimbursed Medical FSA has been increased from $2,000 to $2,500 for the 2008 plan year.  Employees may now save federal income, Medicare and Social Security taxes on up to $2,500 of unreimbursed medical expenses and up to $5,000 on dependent care expenses.  It now makes more sense than ever to enroll and use a Tax$ave FSA plan when paying for doctor and prescription copayments, health plan deductibles, orthodontics, eyeglasses, Lasik surgery, uncovered dental fees, or certain over-the-counter medications. 

  • Many over-the-counter drugs are eligible for reimbursement in the Unreimbursed Medical FSA.  Internal Revenue Service rules permit over-the-counter products/medications deemed for "medical care" to be considered reimbursable.  "Medical care" includes amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease.  While purchases of medicines and drugs for medical care are eligible for reimbursement, expenditures that are merely beneficial to the general health of an individual, such as vitamins and other supplements, are not eligible.  For more information about expenses that are eligible under Unreimbursed Medical and Dependent Care FSAs, please visit the FBMC Web site.

  • Unreimbursed Medical FSAs feature the FBMC EZ REIMBURSE® MasterCard®, that draws on the value of the employee’s annual Medical FSA election amount.  The EZ REIMBURSE Card is included free with the sign up for an FBMC Unreimbursed Medical FSA during Tax$ave Open Enrollment.  Employees can use the EZ REIMBURSE Card for qualifying expenses, such as covered prescription copayments, health plan deductibles, orthodontics, doctor and emergency room copayments, eyeglasses, Lasik surgery, and uncovered dentist or other provider fees.  The EZ REIMBURSE Card can also be used for eligible over-the-counter medical expenses.  In addition, EZ REIMBURSE Card transactions for eligible expenses at Walgreens, Wal-Mart, and Sam’s Club do not require additional documentation.  The EZ REIMBURSE Card also contains a “look back” feature during the 2 ½ month grace period extension that will access any unused 2008 Unreimbursed Medical FSA funds before using funds contributed in the 2009 plan year. For plan year 2008, the grace period extension will run from January 1, 2009 to March 15, 2009 (more about the grace period below).

    Notice To Horizon FSA Members — If you are currently a Tax$ave 2007 FSA member, continue to use the Horizon Benny CardTM that you received at the start of the 2007 plan year until the value of your Benny Card is exhausted.  Tax$ave 2007 FSA members may incur eligible expenses for reimbursement of any funds remaining in a Horizon FSA account until March 15, 2008.  All Tax$ave 2007 FSA claims must be submitted to Horizon no later than April 30, 2008.  If you wish to continue participation in a Medical or Dependent Care FSA plan for the 2008 plan year, Tax$ave members must enroll for FSA participation with FBMC during this Tax$ave Open Enrollment period.

  • Grace Period Extension for Eligible Expenses and Extended Claim Filing Period.  Employees enrolled in the Unreimbursed Medical or Dependent Care FSAs have until March 15 of the following year to incur eligible expenses for the current plan year.  In addition to claiming eligible expenses through March 15 of the following year, the period that employees enrolled in the UMSA or DCSA have for submitting claims for reimbursement has been extended to April 30 of the following year.  While this does not eliminate the use-it-or-lose-it rule completely, employees now have a longer period to obtain reimbursement for eligible expenses and avoid forfeiting unused funds.  Under the Unreimbursed Medical and Dependent Care Flexible Spending Accounts, any contributions that remain unclaimed after the April 30 deadlines are forfeited.

    Please also remember that because of the change in FSA plan administration for the 2008 plan year, claims must be submitted to the appropriate FSA administrator before the expense and claim deadlines for the corresponding Tax$ave benefit year. 

    • For Tax$ave 2007 members, eligible FSA expenses may be incurred until March 15, 2008, and claims must be filed with Horizon Healthcare no later than April 30, 2008.

    • For Tax$ave 2008 members, eligible FSA expenses may be incurred between January 1, 2008 and March 15, 2009.  FSA participants must be enrolled with Fringe Benefits Management Company (FBMC) and claims for expenses must be filed with FBMC no later than April 30, 2009.

For more information about the FSA plans see the Division of Pensions and Benefits’ Tax$ave Web page at: www.state.nj.us/treasury/pensions/taxsave.htm  or contact FBMC Customer Service at 1-800-342-8017.

TAX$AVE AND CIVIL UNION PARTNERS OR DOMESTIC PARTNERS

State employees are able to add a civil union partner or same-sex domestic partner to their SHBP medical and dental insurance coverage.  However, before any payroll contributions or premiums that the employee pays for a partner can be made on a pre-tax basis under the Tax$ave Premium Option Plan, the civil union partner or domestic partner must be able to qualify as a “tax dependent” of the employee for federal tax filing purposes under Internal Revenue Code Section 152.

Similarly, the civil union partner or domestic partner must qualify as the employee’s tax dependent before an out-of-pocket medical expense incurred by the partner can be reimbursed under the Unreimbursed Medical Flexible Spending Account.  See IRS Tax Topic 354 - Dependents for additional information on the requirements for establishing dependent status for federal tax purposes.

If the civil union partner or domestic partner is not a “qualified tax dependent” of the employee, any premium deductions made for the partner’s coverage must be made on an after-tax basis and funds in the Unreimbursed Medical Spending Account cannot be used to cover the partner’s medical expenses.

Additional information about the New Jersey Civil Unions can be found in Fact Sheet #75, Civil Unions Adobe PDF (51K).  Information about New Jersey Domestic Partners can be found in Fact Sheet #71, Benefits Under the Domestic Partnership Act Adobe PDF (56K).  Both fact sheets are available on the Division of Pensions and Benefits Web site: www.state.nj.us/treasury/pensions

TAX$AVE AND CHILDREN AGE 23 TO 30

Chapter 375, P.L. 2005, permits continued SHBP medical plan coverage for certain children until their 30th birthday.  However, contributions or premiums that an employee pays for coverage of an over age child cannot be made on a pre-tax basis under the Tax$ave Premium Option Plan, nor can an out-of-pocket medical expense incurred by the over age child be reimbursed under the Unreimbursed Medical Flexible Spending Account, unless the child qualifies as a “tax dependent” of the employee for federal tax filing purposes under Internal Revenue Code Section 152.  See IRS Tax Topic 354 - Dependents for additional information on the requirements for establishing dependent status for federal tax purposes. 

For more information about continued coverage for children age 23 to 30, see Fact Sheet #74, SHBP Coverage of Children to Age 30 Under Chapter 375 Adobe PDF (31K).

EMPLOYEE SEMINARS

Upon request, Fringe Benefits Management Company (FBMC) will provide Tax$ave educational seminars, at your workplace, for interested employees.  The seminars are about 60 minutes in duration and include time for questions and answers.  These seminars have proven to be very successful educational tools and we strongly encourage you to make one available to your employees.  Please see the enclosed request form to schedule a seminar with a FBMC representative (please note that we ask for a minimum of 25 employees).

TAX$AVE SUPPORT MATERIALS

The remainder of this letter provides information on the Tax$ave Open Enrollment publications and support available to assist you in explaining this important benefit program to your employees.  Please do your best to make a concerted effort to inform your employees of the open enrollment and to educate them on the valuable benefits that Tax$ave offers them.  We believe that more employees will participate in Tax$ave if they are made aware and understand the value of the tax savings offered by the program.

Enclosed is the Tax$ave Open Enrollment Milestones chart that lists the critical dates of the Tax$ave 2008 Annual Open Enrollment and outlines the efforts being made to educate employees.  Please use this chart as a checklist to guide your activities during the open enrollment.

The Division will also provide State Monthly employers, State Colleges, and State Universities with sufficient copies of the Tax$ave 2008 Open Enrollment News and the Premium Option Plan 2008 pamphlet for all eligible employees. FBMC will provide sufficient copies of the FSA pamphlet for distribution to all of your eligible employees.

  • The Tax$ave 2008 Open Enrollment News that announces the open enrollment, outlines the components of the program with emphasis on its tax saving advantages, and identifies the October 31, 2007 deadline for submission of all election materials;

  • The Premium Option Plan 2008 pamphlet that explains the advantages and disadvantages of participation; and

  • An FSA pamphlet that describes the Unreimbursed Medical and Dependent Care Flexible Spending Accounts administered by Fringe Benefits Management Company (FBMC).

These publications will be shipped to employers in September.  Employers should distribute the publications to employees before the Open Enrollment start date on October 1, 2007.  Preview copies of these publications are enclosed with this letter.

We also encourage you to provide your employees with reminders of the Tax$ave Open Enrollment to ensure they don’t allow this opportunity to slip by without action.

The other open enrollment materials that are available to you are the FSA Reference Guides and the Declination of Premium Option Plan (POP) for Plan Year 2008 form.

  • A sample of the 2008 FSA Reference Guide will be sent directly to benefits administrators by FBMC, along with information on how to request additional guides.  Please provide the FSA Reference Guides to those employees who request them.

  • This letter includes the Declination of Premium Option Plan (POP) form. This can be copied for use by those few employees who do not wish to participate in the POP and, therefore, pay more in tax.  Please do not distribute POP declination forms to employees unless they ask for one.  If an employee chooses not to save tax dollars under the Tax$ave Premium Option Plan and wants to pay more federal income, Social Security, and Medicare taxes on the salary used to pay their medical and dental premiums in 2008, they must complete the form declining the federal tax break they could receive.  Employees should request these forms from you.  We will be instructing employees to return the Declination of Premium Option Plan (POP) forms to benefits administrators by October 31, 2007.  Benefits administrators must then forward declination forms to the appropriate representative in their payroll department. 

The changes to the Tax$ave program for the 2008 plan year promise to make Tax$ave participation even more rewarding to your employees than it has been in the past.  As we do every year, the Division of Pensions and Benefits appreciates your cooperation in the Open Enrollment.  Your involvement in the Tax$ave Open Enrollment is key to your employees receiving the valuable benefits offered by this program.

If you have any general questions about Tax$ave 2008, the open enrollment, or the Premium Option Plan, visit the Division of Pensions and Benefits’ Tax$ave Internet site at: www.state.nj.us/treasury/pensions/taxsave.htm call the Division’s Office of Client Services at (609) 292-7524, or send e-mail to: pensions.nj@treas.state.nj.us   For more information about the Unreimbursed Medical or Dependent Care Flexible Spending Accounts, contact FBMC  or call FBMC Customer Service at 1-800-342-8017.

Enclosures:

Request for Tax$ave 2008 Employee Seminars
Tax$ave 2008 Open Enrollment Milestones
Tax$ave 2008 Open Enrollment News (sample)
The Premium Option Plan 2008 Pamphlet (State - sample)
The Premium Option Plan 2008 Pamphlet (College/Univ. - sample)
Tax$ave — FBMC Flexible Savings Accounts Pamphlet (sample)
Tax$ave — FBMC Flexible Savings Accounts Enrollment Form
Declination of Premium Option Plan (POP) for Plan Year 2008 (State)
Declination of Premium Option Plan (POP) for Plan Year 2008 (College/Univ.)

CO Letter in Printable Format Adobe PDF (85K)


August 2007

TO: Certifying Officers of the Public Employees’ Retirement System (PERS), Teachers’ Pension and Annuity Fund (TPAF), and Defined Contribution Retirement Plan (DCRP)
FROM: Florence J. Sheppard
Deputy Director, Benefit Operations
SUBJECT: Chapter 92, P.L. 2007 and Chapter 103, P.L. 2007 Pension Changes for Public Employees’ Retirement System (PERS), Teachers’ Pension and Annuity Fund (TPAF), and Defined Contribution Retirement Program (DCRP)

Governor Corzine recently signed two pieces of legislation into law.

Chapter 92, P.L. 2007, provides for changes to the administration of the Public Employees’ Retirement System (PERS), Teachers’ Pension and Annuity Fund (TPAF) and creates the Defined Contribution Retirement Program (DCRP), a new system in which newly elected and certain appointed officials shall be enrolled beginning July 1, 2007. 

Chapter 103, P.L. 2007, provides additional changes to the administration of the PERS, TPAF, and DCRP.

Changes to pension administration* under the PERS, TPAF, and DCRP are addressed in this letter and provided as initial guidance for employers. This information will continue to be updated and clarified as implementation of the new laws continue.

ELIGIBILITY

Some provisions of Chapter 92 and Chapter 103 apply to all members of the PERS, TPAF, and DCRP while certain provisions affect only new employees. In addition, some provisions have an effective date for new employees and a different effective date for employees already enrolled in the retirement systems. Please watch for these important differences as you read about the changes.

  • A new employee within the meaning of this guidance and the eligibility requirements found in Chapter 92 and Chapter 103 means an employee enrolled in the PERS or TPAF on or after July 1, 2007, or a State or local official who is elected or appointed on or after July 1, 2007.
  • If a PERS or TPAF retiree returns, on or after July 1, 2007, to a position covered by the same retirement system from which they retired, that member is considered a new employee under this law.

Note: Additional information on eligibility is pending.

CONTRIBUTION RATES

Chapter 103 provides for an increase in the employee pension contribution rate for PERS and TPAF members from 5% to 5.5% of salary. 

This increase is to be implemented in two phases.

The first phase applies to:

  • State employees (except Judicial Branch);
  • Employees of an independent State authority, board, commission, corporation, agency, or organization;
  • Employees of a board or commission under the authority of the Commissioner of Education or of the State Board of Education;
  • Employees of a State public institution of higher education (except employees of the University of Medicine and Dentistry of New Jersey - UMDNJ); and
  • Teachers and other employees of a local school district, regional school district, county vocational school district, county special services school district, jointure commission, educational services commission, State-operated school district, charter school, or county college.

— For State employees paid through the State Centralized Payroll Unit who were already enrolled in the PERS or TPAF prior to July 1, 2007, the increase was effective Pay Period #15 beginning July 7, 2007 for the July 27, 2007 check date.

— For all new employees of these employer groups, the increase was effective July 1, 2007.

— For all other employees of these employer groups who were already enrolled in the PERS or TPAF prior to July 1, 2007, the increase was effective July 1, 2007.

The second phase applies to:

  • Employees of the Judicial Branch of State government;
  • Employees of the University of Medicine and Dentistry of New Jersey (UMDNJ); and
  • Employees of Counties, Municipalities, and other local employers not included in phase one:

— For State Judicial Branch employees paid through the State Centralized Payroll Unit who are already enrolled in the PERS or TPAF prior to July 1, 2008, the increase is effective Pay Period #15 beginning July 5, 2008 for the July 25, 2008 check date.

— For employees of these employer groups enrolled on or after July 1, 2008, the increase is effective July 1, 2008.

— For all other employees of these employer groups who were already enrolled in the PERS or TPAF prior to July 1, 2008, the increase is effective July 1, 2008.

Note: An increase in the member contribution rate will also increase the minimum repayment amount for pension loans or the purchase cost for service credit if certified after the member’s effective date of change. (See additional information on pension loans, below.)

PERS AND TPAF RETIREMENT

Revised Early Retirement Benefit for New Employees

Chapter 103 changes certain provisions of PERS and TPAF Early Retirement for new employees enrolled in the PERS and TPAF on or after July 1, 2007.

If a member enrolled on or after July 1, 2007 retires with 25 or more years of service before reaching age 60, the retirement allowance will be reduced 1% per year (1/12 of 1% per month) for each year the member is under age 60 through age 55.  The retirement allowance will also be reduced by 3% per year (1/4 of 1% per month) for each year the member is under age 55 as required under prior law.

Note: There is no change to the Early Retirement provisions for employees who were already enrolled in the PERS or TPAF prior to July 1, 2007.  There will be no reduction to the Early Retirement benefit if these members are age 55 or older at retirement. The retirement allowance will continue to be reduced 3% per year (1/4 of 1% per month) for each year these members are under age 55.

PROFESSIONAL SERVICES CONTRACTS

Effective January 1, 2008, Chapter 92 provides that a person is prohibited from becoming a member of the PERS if employed under a professional services contract or if the person meets the definition of an independent contractor as set forth in regulation or policy of the federal Internal Revenue Service for the purposes of the Internal Revenue Code.

A person performing professional services under a contract established prior to January 1, 2008, who is enrolled in the PERS, may continue to accrue PERS service credit during the term of the existing contract; however, the person will not be eligible for PERS credit for the performance of those services after the contract expires. This limitation on PERS credit includes any extension, modification, or other agreement to continue a professional services contract beyond its current term.

The factors for defining an independent contractor are listed in the “Self Employment Issues” section of Fact Sheet #21, Employment After Retirement – PERS Adobe PDF (40K)

Employers with specific questions regarding professional services contracts and independent contractors should address them in writing — by letter or e-mail — to the Division of Pensions and Benefits. If sending e-mail, list “professional services” as the subject line.

PENSION LOANS

Because the minimum repayment amount on a pension loan is based on the member’s pension contribution rate, the increase under Chapter 103 in the PERS and TPAF contribution rates to 5.5% will require higher minimum repayment amounts for pension loans certified after an employee’s pension contribution rate changes.

In addition, Chapter 92 provides for changes to loan interest rates and the introduction of administrative fees for pension loans taken by members of State-administered retirement systems that include loan privileges. (These changes apply to Public Employees’ Retirement System and Teachers’ Pension and Annuity Fund, as well as the Police and Firemen’s Retirement System, State Police Retirement System, and Judicial Retirement System).

Specific details including interest and fee amounts are yet to be determined. A Certifying Officer Letter detailing pension loan changes, and additional communications for employees, will be made available as soon as it is possible.  Members and employers should also check the Division of Pensions and Benefits Web site for future updates on pending loan changes at: www.state.nj.us/treasury/pensions .

Note: To assure timely submission and faster processing of loan requests, employers should encourage employees to use the online Loan Application available on the Member Benefits Online System (MBOS).  Find out more about MBOS and the online Loan Application at: www.state.nj.us/treasury/pensions; at the Pensions and Benefits home page, click on “Online Member Services – MBOS“.

DEFINED CONTRIBUTION RETIREMENT PROGRAM

Chapter 92 established the Defined Contribution Retirement Program (DCRP) for new Elected and Appointed Officials.
Chapter 103 expands eligibility in the DCRP to include new PERS and TPAF members who earn salary in excess of established maximum compensation amounts.

The DCRP will be administered for the Division of Pensions and Benefits by Prudential Financial.

Elected Officials

An elected official is any individual who holds a State or local (county, municipal, etc.) elected public office.

  • On or after July 1, 2007, a newly elected official will only be enrolled in the DCRP and cannot enroll in the PERS.
  • An elected official who is already enrolled in the PERS prior to July 1, 2007 based on an elected office, will remain a PERS member while in that elected office.
  • If, however, on or after July 1, 2007, there is a break of service in that elected office, or the official is elected to a different elected office, the official will be enrolled in the DCRP and cannot continue with PERS membership under the new elected office.

Appointed Officials

State appointees are individuals appointed by the Governor, including those requiring the advice and consent of the Senate.

Local appointees are individuals appointed by the Governor, including those requiring the advice and consent of the Senate; or individuals appointed in a similar manner by the governing body of a local entity (county, municipality, etc.).

  • On or after July 1, 2007 a newly appointed official who does not have existing PERS account will only be enrolled in the DCRP and cannot enroll in the PERS. 
  • An appointed official who is already enrolled in the PERS prior to July 1, 2007, will remain a PERS member while serving in the appointed position.

Similarly, if an employee is enrolled in the PERS prior to July 1, 2007, and is appointed to a DCRP eligible position on or after July 1, 2007, the newly appointed official will remain a PERS member while in the appointed position.

  • A State appointed official who is already enrolled in the TPAF prior to July 1, 2007, will remain a TPAF member if appointed to certain State educational positions. If the appointee does not have a TPAF account, the appointed official will only be enrolled in the DCRP.

A listing of DCRP eligible appointed positions is being developed for the Division of Pensions and Benefits by the New Jersey Department of Community Affairs and the Department of Education. 

Workers’ Compensation Judges and the DCRP

Chapter 92 provided that the Workers’ Compensation Judges Part of the PERS (WCJ-PERS) be closed to new enrollees. 

  • On or after July 1, 2007, a newly appointed Workers’ Compensation Judge who does not have an existing PERS account will only be enrolled in the DCRP.
  • Workers’ Compensation Judges already enrolled in the WCJ-PERS prior to its closure to new members will remain in the WCJ-PERS.
  • A member who was already enrolled in the PERS prior to July 1, 2007, and who is appointed as a Workers’ Compensation Judge on or after July 1, 2007, will remain a regular PERS member while a Workers’ Compensation Judge.

DCRP Enrollment for Elected or Appointed Officials

Additional minimum DCRP eligibility criteria for a newly elected or appointed official includes a minimum base salary of $1,500.00.

Furthermore, if the elected or appointed official will earn less than $5,000.00 annually, the official may choose to waive participation in the DCRP for that office or position.  Please note, however, that to waive participation is an irrevocable decision for that office or position, and an elected or appointed official who waives participation cannot later choose to enroll based on that same office or position.

Once enrolled, an employee contribution of 5.5% will be deducted from compensation and invested in the DCRP.  The employer contributes an additional 3% to the DCRP based on the annual compensation (base salary).

Chapter 92 also provides that service time from enrollment in the DCRP cannot be used to qualify for State Health Benefits Program coverage at retirement.

Additional information on DCRP eligibility for elected or appointed officials, enrollment forms, and other program information is being developed and will be provided under a separate mailing.

PERS and TPAF Maximum Compensation and the DCRP

Chapter 103 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. 

Note: The PERS and TPAF maximum compensation limit does not apply to employees who were already members of the PERS or TPAF prior to July 1, 2007.

For calendar year 2007, the annual maximum wage is $97,500 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 $97,500 before the end of the year will be enrolled in the DCRP — in addition to the PERS or TPAF.

When enrolled in the DCRP, an employee contribution of 5.5% will be deducted from all compensation in excess of the maximum and invested in the DCRP.  The employer contributes an additional 3% to the DCRP based on the compensation in excess of the maximum.

PERS and TPAF members who also participate in the DCRP will receive service credit in their corresponding PERS or TPAF account, and will be eligible to retire under the rules of the PERS or TPAF — with the final salary at retirement limited to the maximum compensation amounts in effect when the salary is earned. At retirement, additional income will be available to the member based on the investment in the DCRP.

A PERS or TPAF member who is also eligible for the DCRP can choose to waive participation in the DCRP. If a PERS or TPAF member waives participation and later wishes to participate, he or she can apply for DCRP enrollment with membership to be effective January 1 of the following calendar year.

DCRP plan materials, enrollment forms, and other program information are being developed and will be provided under a separate mailing.

OUTSTANDING ISSUES AND ADDITIONAL INFORMATION

The Division of Pensions and Benefits is awaiting further clarification on several aspects of this legislation.

While this letter is intended to provide general information and guidance to employers regarding the changes put into place by Chapter 92 and Chapter 103, updates to the information are expected.When new information becomes available it will be posted to the Division of Pensions and Benefits Web site at: www.state.nj.us/treasury/pensions 

If you have specific questions regarding Chapter 92 or Chapter 103, contact the Division’s Office of Client Services at (609) 292-7524, or e-mail the Division at: pensions.nj@treas.state.nj.us

CO Letter in Printable Format Adobe PDF (83K)


June 25, 2007

TO: Benefits Administrators, Participating SHBP Local Employers
Certifying Officers, State-Administered Retirement Systems
FROM: Florence J. Sheppard
Deputy Director, Benefits Operations
SUBJECT: Chapter 62, P.L. 2007

Governor Corzine recently signed into law Chapter 62, P.L. 2007, which permits local employers that participate in the State Health Benefits Program (SHBP) to negotiate employee contributions to the cost of coverage by bargaining unit.  Chapter 62 also allows the employer to apply the terms of a negotiated agreement concerning employee contributions to SHBP coverage to employees with no majority representation for collective bargaining purposes. Prior to the enactment of this legislation, SHBP employers were required to pay 100 percent of the cost of medical coverage for employees and could only implement certain negotiated premium-share arrangements for the cost of dependent coverage if the arrangements were applicable to all employees. Under the provisions of Chapter 62, these limitations will no longer apply.

Although this provision of this law is already in effect, modification of the New Jersey Administrative Code in regard to the SHBP is several months away. The purpose of this memorandum is to provide guidance to employers in applying those aspects of the law already in effect until the regulation is effective.

Highlights of Chapter 62 concerning employee cost-sharing:

  • Since existing bargaining agreements cannot be unilaterally abandoned by the employer, the benefits of Chapter 62 may not be realized until future contract negotiations. However, should the employer have existing agreements which contain employee cost-sharing arrangements that could not formerly be implemented because of SHBP restrictions, those agreements may now be applicable.

  • An employer can negotiate sharing of the cost of coverage for active employees by bargaining unit. Uniformity for all employees is no longer required.

  • The employer may negotiate with a bargaining unit for the payment of a share of the cost of coverage for an employee’s personal coverage. Previously the employers could require cost sharing only for an employee’s dependent coverage, and had to apply the same percentage to all dependent coverage.

  • An employer can negotiate different cost-sharing by plan. The agreement may include limits on payments by the employer or the employee on the basis of a percentage of the employee’s compensation or the premium or on the basis of a flat dollar amount.

  • The employer can apply the provisions of a specific contract to employees with no majority representation for collective bargaining purposes. It can determine if all nonaligned employees will follow the provisions of the contract covering most employees or of the contract(s) covering employees of a common work area. For example, supervisors in the fire department might be governed by the contract for unionized fire fighters, rather than the contract covering most other employees.

  • Similar to the resolution currently used to notify the SHBP of cost-sharing for dependents, the employer must notify the SHBP of any contract provision or ordinance that changes the conditions of the employees’ health benefits cost-sharing. A new resolution is currently under development and will be available shortly. In the interim, a copy of the bargaining agreement and ordinance will suffice.

  • The employer must notify all employees affected by any change in cost-sharing and allow an employee to change coverage without waiting for an Open Enrollment Period.

At this time the employer cannot, by way of negotiation, exclude employees from a specific health plan. However, the employer may negotiate a contract under which a particular health plan would require a higher cost-sharing than another plan for the employee.

The SHBP will NOT process retroactive enrollments, changes, or terminations to meet the employer’s legal obligations. Further, Chapter 62 did not alter the provisions of N.J.S.A. 34:13A-18 which limits the extent to which arbitration may determine enrollment under the SHBP.

The employer has the responsibility of ensuring that the enrollment of its employees abides by the negotiated agreement or ordinance. The Division of Pensions and Benefits and the SHBP will not assume responsibility for ensuring that the employer’s processing of enrollments matches its legal obligation.

Other provisions of Chapter 62 will be addressed in the future.

CO Letter in Printable Format Adobe PDF (72K)


June 2007

TO: Certifying Officer - Teachers’ Pension and Annuity Fund, Public Employees’ Retirement System and Police and Firemen’s Retirement System
FROM: John D. Megariotis
Deputy Director, Finance
SUBJECT: Report of Contributions, 2nd Quarter 2007 (April 1st to June 30th)

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

DEADLINE FOR FILING UPDATE

Due to the overwhelming popularity of the I-ROC program and the time saved in preparing the report of contributions, the Division is now updating member accounts in a timelier manner. As a result, all reports must be received no later than the close of business on July 25, 2007.  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 new 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 August 1, 2007, 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.

CO Letter in Printable Format Adobe PDF (75K)


June 2007

TO: Certifying Officer Autonomous State College / University/State Employers
FROM: John D. Megariotis
Deputy Director, Finance
SUBJECT: Report of Contributions, 2nd Quarter 2007 (April 1st to June 30th)

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 2nd 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 July 10, 2007. Your June 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 July 10, 2007.

With the tape ROC, you must complete and return the Transmittal Summary form for the 2nd 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 tape ROC.  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 tape ROC 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.

STATEMENTS OF OVERAGES/SHORTAGE

Overage and shortage statements, which affect a member’s Annuity Savings Fund, identify whether or not the pension contributions are subject to the 414(h) provision.  These statements should be reviewed to determine when adjustments are required to your payroll records in calculating year-to-date mandatory pension contributions under 414(h). Please note that all member shortages are to be paid by separate check. Do not remit through TEPS.

CO Letter in Printable Format Adobe PDF (61K)


June 2007

TO: State Departmental Certifying Officers
State Human Resources Directors
State Biweekly Human Resources Representatives
State Monthly Certifying Officers
State Monthly Human Resources Representatives
FROM: Florence J. Sheppard
Deputy Director, Benefit Operations
SUBJECT: State Health Benefits Program Plan Changes

NEW COPAYMENT AND CONTRIBUTION AMOUNTS EFFECTIVE JULY 2007

The State and the CWA, AFSCME, and IFPTE have agreed to new medical and prescription drug plan copayment amounts for their members. In addition, an agreement was reached to require a health care contribution for any employees covered under the labor groups mentioned above and who are enrolled in the SHBP as an employee for health and/or prescription drug coverage. Employees with no majority representation for collective negotiation purposes are also affected by these changes.

The changes are effective July 7, 2007 for State biweekly employees and July 1, 2007 for State monthly employees.  The contribution change is effective September 1, 2007 for employees paid on a 10-month basis. Additional labor bargaining groups may be added to the employees affected by these changes as pending labor contracts are settled. 

The copayment and contribution changes are outlined below.

  • For NJ PLUS and all HMOs (Aetna, AmeriHealth, CIGNA, Health Net and Oxford), the copayment for primary doctor visits and visits to a specialist will be $15. The copayment for a visit to an emergency room will be $50. The emergency room copayment is waived if the member is admitted to the hospital.
  • The structure of the prescription drug benefit has been modified to include a third tier of copayments. The copayment for each 30 day supply when purchased at a retail pharmacy will remain $3 for generic drugs and $10 for brand name prescription drugs without generic equivalents. The new third tier will include a $25 copayment for brand name drugs where a generic equivalent is available for a 30 day supply purchased at a retail pharmacy. The mail order prescription drug copayments, for up to a 90-day supply, will remain $5 for generic drugs and $15 for brand name drugs without generic equivalents. The third tier mail order copayment will be $40 for brand name drugs where a generic equivalent is available.
  • Employees enrolled in the SHBP for health and/or prescription drug coverage will be required to contribute 1.5% of their annual base salary. The contribution amount will change any time there is a change in an employee’s base annual salary. The contribution is the same regardless of the medical plan or level of coverage that is selected.

Employees will be permitted to waive their SHBP medical and prescription coverage to avoid the 1.5% contribution from salary — provided they have other health care coverage. Employees may also add dependents who have lost health coverage to their current coverage through August 31, 2007. An SHBP State Waiver form (enclosed) Adobe PDF (20K) and SHBP Application are required to be submitted through the employer to the SHBP. 

Please note, however; that employees will not be permitted to change medical plans (i.e. from NJ PLUS to the Traditional Plan, etc.). That opportunity will be afforded during the annual open enrollment in October, 2007, with changes effective for January 2008.

NEW CONTRIBUTION AMOUNTS FOR RETIREES

The copayment changes mentioned above for visits to a doctor, a specialist or emergency room, and for prescription drugs will not apply to retirees at this time.

Employees affected by these changes who attain 25 years of pension membership credit on or after July 1, 2007 — or who retire on a disability on or after August 1, 2007 — will be required to contribute 1.5% of their pension allowance for SHBP coverage in retirement regardless of the medical plan or level of coverage selected.

Employees who attained 25 years of pension membership credit on or before June 30, 2007 will premium share for SHBP coverage in retirement based on the labor contract in effect at the time they attained the 25 years of pension membership credit.

NEW SHBP PLAN OFFERINGS

The State Health Benefits Commission has issued a Request for Proposal (RFP) for a new Preferred Provider Organization (PPO) and for HMO plans.  The prospective effective date for the new health plan contracts is April 1, 2008.  As a result, SHBP members should be made aware that there will be a special SHBP Open Enrollment to be held early in 2008. 

Additional information about the plan redesign will be made available later in the RFP process. The RFP is available for viewing at the SHBP Web site at: www.state.nj.us/treasury/pensions/shbp.htm

Enclosure

SHBP State Waiver/Reinstatement form Adobe PDF (20K)

CO Letter in Printable Format Adobe PDF (85K)


May 23, 2007

TO: Certifying Officers — Teachers’ Pension and Annuity Fund, Public Employees’ Retirement System and Police and Firemen’s Retirement System
FROM: Peter Groffie
Supervisor, Audit Billing Section
Division of Pension and Benefits
 
SUBJECT: Procedural Change — Submission Of Member Pension and Insurance Shortage Payments

Effective immediately, submission of member shortage payments to the Division of Pension and Benefits are restricted to 99 shortage statements per check. Should the submission exceed this amount, the check and shortage statements will be returned for corrective action and must be resubmitted, delaying posting of the contributions to the member’s accounts.

Thank you in advance for your cooperation.

CO Letter in Printable Format Adobe PDF (57K)


May 1, 2007

TO: Certifying Officers of the Public Employees’ Retirement System (PERS), Teachers’ Pension and Annuity Fund (TPAF), and Police and Firemen’s Retirement System (PFRS)
FROM: Michael Connolly
Assistant Director, IT and Support Services
 
SUBJECT: New Secure File Transfer — Report of Salary Change Instructions

This letter contains important information concerning submission of your Report of Salary Changes (ROSC) through the Secure File Transfer (SFT) channel of the MyNewJersey portal. Please read this information before you transmit your next ROSC file.

The Division of Pensions and Benefits has enhanced the Secure File Transfer (SFT) system for Report of Salary Changes (ROSC). It will no longer be necessary to e-mail the Division when you transmit your ROSC file. You should send your file as usual through the SFT process. Salary changes will be automatically updated within 24 hours.

To ensure that all salary changes were processed, access the SFT channel on the next business day. Click the “Receive” button on the File Transfer Channel to reveal the “Business Files” that are available. Click on the “Salary Change Report File” to view or download. The file will contain a report informing you that all of your salary changes have been processed or a listing of any unprocessed salary changes with an explanation. Unprocessed salary changes can be reviewed and a new file resubmitted through the normal SFT ROSC process.

The new ROSC process will yield time savings that will allow the Division of Pensions and Benefits to update member accounts in a timely manner. Hence, all salary change files must be received no later than the 1st day of the last month of each quarter. For example, for second quarter processing, the ROSC file is due June 1st. Files not received by the due date may not be used to update your Report of Contributions (ROC).

Should you have any questions or need assistance in completing the Report of Salary Changes, please refer to www.state.nj.us/treasury/pensions/epbam/finance/roc.htm or contact the Division's EPIC Help Desk at (609) 777-0534 or send e-mail to pensions.nj@treas.state.nj.us.

CO Letter in Printable Format Adobe PDF (59K)


May 1, 2007

TO: Certifying Officers of the Public Employees’ Retirement System (PERS), Teachers’ Pension and Annuity Fund (TPAF), and Police and Firemen’s Retirement System (PFRS)
FROM: Michael Connolly
Assistant Director, IT and Support Services
 
SUBJECT: New Secure File Transfer — Report of Salary Change Instructions

This letter contains important information concerning submission of your Report of Salary Changes (ROSC) through the Secure File Transfer (SFT) channel of the MyNewJersey portal. Please read this information before you transmit your next ROSC file.

The Division of Pensions and Benefits has enhanced the Secure File Transfer (SFT) system for Report of Salary Changes (ROSC). It will no longer be necessary to e-mail the Division when you transmit your ROSC file. You should send your file as usual through the SFT process. Salary changes will be automatically updated within 24 hours. 

To ensure that all salary changes were processed, access the SFT channel on the next business day. Click the “Receive” button on the File Transfer Channel to reveal the “Business Files” that are available. Click on the “Salary Change Report File” to view or download. The file will contain a report informing you that all of your salary changes have been processed or a listing of any unprocessed salary changes with an explanation. Unprocessed salary changes can be reviewed and a new file resubmitted through the normal SFT ROSC process.

The new ROSC process will yield time savings that will allow the Division of Pensions and Benefits to update member accounts in a timely manner. Hence, all salary change files must be received no later than the 20th day of the last month of each quarter. For example, for second quarter processing, the ROSC file is due June 20th. Files not received by the due date may not be used to update your Report of Contributions (ROC).

Should you have any questions or need assistance in completing the Report of Salary Changes, please refer to: www.state.nj.us/treasury/pensions/epbam/finance/roc.htm or contact the Division's EPIC Help Desk at (609) 777-0534 or send e-mail to pensions.nj@treas.state.nj.us.

CO Letter in Printable Format Adobe PDF (59K)


April 17, 2007

TO: Certifying Officers of the Police and Firemen’s Retirement System (PFRS)
FROM: Janice F. Nelson
Assistant Director, Board and Trustee Administration
 
SUBJECT: Chapter 381, P.L. 2005 - Mandatory Retirement Under the Police and Firemen’s Retirement System (PFRS)

Chapter 381, P.L. 2005, permits an extension of the Police and Firemen's Retirement System’s (PFRS) mandatory retirement age for certain New Jersey police officers and firefighters. 

This law became effective January 12, 2006, and is being discussed in this letter as a result of the receipt of a clarification of several administrative details from the Office of the New Jersey Attorney General.

ELIGIBILITY

Chapter 381 allows a member who was hired to a PFRS eligible position between July 11, 1984 and March 1, 1987* as a result of the federal prohibition against the enforcement of the PFRS maximum enrollment age, to remain a member of the PFRS until the member attains either age 68 years or 25 years of creditable service, whichever comes first. 

The legislation does not apply to any individual who may have been over the age of 35 as of the date of hire or their enrollment in the Public Employees’ Retirement System (PERS) and who thereafter elected to transfer to the PFRS under the provisions of Chapter 247, P.L. 1993, or Chapter 204, P.L. 1989.

BACKGROUND

For a brief period in the 1980's, federal law prohibited states from imposing a maximum enrollment age or a mandatory retirement requirement based on age. The federal law was amended in 1986 to again permit such requirements. 
At that time the PFRS reinstated New Jersey's mandatory police officer and firefighter maximum enrollment age (age 35) and mandatory retirement age (age 65).

One consequence of the reinstatement of the mandatory retirement age was that police officers and firefighters hired when the maximum appointment age was suspended are today being required to retire due to age without the ability to qualify for certain retirement benefits offered under the PFRS (e.g. Special Retirement at 25 years of service). Chapter 381 provides a limited window of opportunity for those PFRS members to remain in employment in order to qualify for these benefits upon retirement.

ADMINISTRATION

Most members of the PFRS remain subject to mandatory retirement at age 65. While the Division of Pensions and Benefits is attempting to identify those individuals who could qualify to remain in the PFRS under the provisions of Chapter 381, individuals approaching age 65 who will have not established 25 years of service in the PFRS as of the date they attain the age 65, and who believe they may be eligible to remain in employment under the provisions of Chapter 381 should contact the Division of Pensions and Benefits for a determination.

Because the legislation specifies that the extension of retirement is based upon the “date of hire” to the PFRS eligible position, rather than the member’s date of enrollment into the retirement system, proof of a member’s date of hire may be required from the PFRS employer before a final determination of eligibility can be made.

ADDITIONAL INFORMATION

If you have additional questions regarding Chapter 381, 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


*Although the Age Discrimination and Employment Act (ADEA) was amended October 31, 1986 and became effective January 1, 1987, therefore requiring New Jersey to enforce its maximum hiring age of 35 for police and firefighters, pursuant to advice from the Attorney General’s Office, the entry age restrictions in the PFRS were not reinstated by the Division until March 1, 1987.

CO Letter in Printable Format Adobe PDF (51K)


April 2007

TO: State Departmental Certifying Officers
State Human Resources Directors
State Biweekly Human Resources Representatives
FROM: David J. Pointer, CEBS
Chief, State Health Benefits Program
SUBJECT: Leaves of Absence and SHBP Coverage

There is inconsistency across State agencies regarding the health benefit status of employees on a leave of absence (LOA) without pay due to personal illness as well as State Family Leave and the Federal Family and Medical Leave Act. This memorandum will clarify the matter as it relates to the SHBP.

Since 1974, State law has provided up to three months of active employee status coverage while on a LOA without pay due to personal illness. Active employee status coverage refers to coverage provided to an individual as if the individual were still actively at work; the employee is only required to pay the employee’s share of the cost of health coverage. The statutes were later amended to allow State employees to pay the entire cost of the health and prescription drug benefits for an additional nine months.

The State Family Leave Act (C. 261, P.L. 1989) entitles employees to continue 12 weeks of SHBP coverage in any 24-month period at the expense of the employer. The Federal Family and Medical Leave Act is similar to the State’s with the exception that the Federal act also requires that a leave be permitted for the serious illness of the employee of up to 12 weeks in any 12-month period. In cases where the employee on an approved family leave has a deduction for coverage, the employer must make arrangements to receive the direct payments from the employee for the required employee contributions.

It has come to the SHBP’s attention that some employees, upon exhausting the three months of active employee status coverage, are being permitted to return to work for a day or two and then resuming their leave status.  Some agencies are treating this as a new LOA due to illness and are allowing another three months of active employee status coverage.  This is NOT appropriate. 

The extension of the leave based upon the same condition is just that—an extension. It is not another independent LOA.  An employee returning from a LOA must work for at least the equivalent of a biweekly pay period before a subsequent leave would be considered a second LOA, entitling the employee to another three months of active employee status coverage at the expense of the employer. A LOA commencing before the employee has satisfied the 2-week requirement would be considered a continuation of the first leave.  If that employee had used all of the three months of active employee status coverage, that employee must prepay the full cost in order to continue coverage.

This policy should be applied consistently across State agencies.

CO Letter in Printable Format Adobe PDF (91K)


March 2007

TO: Certifying Officers — Teachers’ Pension and Annuity Fund, Public Employees’ Retirement System & Police and Firemen’s Retirement System
FROM: John D. Megariotis
Deputy Director, Finance
SUBJECT: Report of Contributions, 1st Quarter 2007 (January 1st to March 31st)


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

DEADLINE FOR FILING UPDATE

Due to the overwhelming popularity of the I-ROC program and the time saved in preparing the report of contributions, the Division is now updating member accounts in a timelier manner. As a result, all reports must be received no later than the close of business on April 25, 2007.  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 new 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.

Reports of Salary Change (***NEW***)

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 May 1st, 2007, 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.

Most Retirement Plan Limits Increase for 2007

IRS has announced the 2007 cost-of-living adjustments (COLAs) for retirement plans. Many of the limits applicable to pension, and other retirement plans, increase for 2007.

The following plan limits are increased for inflation effective January 1, 2007:

  • Annual compensation limit. The maximum amount of annual compensation that can be taken into account for various qualified plan purposes, under Code Sec. 401(a)(17), is increased from $220,000 to $225,000.  Retirement plans administered by the Division of Pensions and Benefits affected by this change include the Teachers' Pension and Annuity Fund (TPAF), the Public Employees' Retirement System (PERS), the Police and Firemen's Retirement System (PFRS), the Supplemental Annuity Collective Trust (SACT), the Alternate Benefit Program (ABP), the Additional Contributions Tax-Sheltered (ACTS) program and the New Jersey State Employees Deferred Compensation Plan.
  • Chapter 113, P.L. 1997.  N.J.S.A. 43:3C-9.3 & 43:3C-9.4 permits higher annual compensation limits for members of TPAF, PERS, PFRS and ABP enrolled prior to July 1, 1996, if, prior to July 1, 1997, the employer certified to the Division Director that the employer will pay the additional cost for not applying the lower Code Sec. 401(a)(17) Annual Compensation Limit to these members.  If you are such an employer, you may report pensionable salary in excess of the Code Sec. 401(a)(17) limits mentioned earlier for those employees in the affected class.
  • Defined contribution plans. The limitation on the annual additions to a participant's defined contribution account under Code Sec. 415(c)(1)(A) is increased from the lesser of $44,000 or 100% of the participant's compensation to the lesser of $45,000 or 100% of the participant's compensation.  Annual additions are the sum for any year of all employer and employee contributions to the defined contribution plan.  For purposes of applying the limitations all defined contribution plans of an employer are to be treated as one defined contribution plan.  Defined contribution plans include an employee annuity plan described in and an annuity contract described in section 403(b) .  Defined contribution plans administered by the Division of Pensions and Benefits affected by this change include the SACT, ABP and ACTS programs and the New Jersey State Employees Deferred Compensation Plan.
  • Elective deferrals. The limitation under Code Sec. 402(g)(1) on the exclusion for elective deferrals described in Code Sec. 402(g)(3) increases from the lesser of $15,000 or 100% of the participant's compensation to the lesser of $15,500 or 100% of the participant's compensation.  Defined contribution plans administered by the Division of Pensions and Benefits affected by this change include the SACT, ABP and ACTS programs.
  • Deferred compensation plans. The limit on deferrals under Code Sec. 457(e)(15) concerning deferred compensation plans of state and local governments and tax-exempt organizations is increased from the lesser of $15,000 or 100% of the participant's compensation to the lesser of $15,500 or 100% of the participant's compensation.  The deferred compensation plan administered by the Division of Pensions and Benefits affected by this change is the New Jersey State Employees Deferred Compensation Plan and is available to Employees of the State and other State chartered commissions, authorities and boards.   Other governmental employers in the State offer similar, self-administered programs.

The following limit is unchanged:

  • Catch-up contributions. The dollar limit under Code Sec. 414(v)(2)(B)(i) for catch-up contributions to an applicable employer plan other than a plan described in Code Sec. 401(k)(11) or Code Sec. 408(p) for individuals aged 50 or over remains at $5,000.  Defined contribution plans administered by the Division of Pensions and Benefits affected by this change include the SACT, ABP and ACTS programs.

CO Letter in Printable Format Adobe PDF (58K)


March 2007

TO: Certifying Officers Autonomous State College/ University / State Employers
FROM: John D. Megariotis
Deputy Director, Finance
SUBJECT: Report of Contributions, 1st Quarter 2007 (January 1st to March 31st)

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 1st 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 April 10, 2007. Your March 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 April 10, 2007.

With the tape ROC, you must complete and return the Transmittal Summary form for the 1st 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 tape ROC.  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 tape ROC 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.

Statements Of Overages/Shortages

Overage and shortage statements, which affect a member’s Annuity Savings Fund, identify whether or not the pension contributions are subject to the 414(h) provision.  These statements should be reviewed to determine when adjustments are required to your payroll records in calculating year-to-date mandatory pension contributions under 414(h).  Please note that all member shortages are to be paid by separate check.  Do not remit through TEPS.

Most Retirement Plan Limits Increase for 2007

IRS has announced the 2007 cost-of-living adjustments (COLAs) for retirement plans. Many of the limits applicable to pension, and other retirement plans, increase for 2007.

The following plan limits are increased for inflation effective January 1, 2007:

  • Annual compensation limit. The maximum amount of annual compensation that can be taken into account for various qualified plan purposes, under Code Sec. 401(a)(17), is increased from $220,000 to $225,000.  Retirement plans administered by the Division of Pensions and Benefits affected by this change include the Teachers' Pension and Annuity Fund (TPAF), the Judicial Retirement System (JRS), the Public Employees' Retirement System (PERS), the Police and Firemen's Retirement System (PFRS), the State Police Retirement System (SPRS), the Supplemental Annuity Collective Trust (SACT), the Alternate Benefit Program (ABP), the Additional Contributions Tax-Sheltered (ACTS) program and the New Jersey State Employees Deferred Compensation Plan.
  • Chapter 113, P.L. 1997.  N.J.S.A. 43:3C-9.3 & 43:3C-9.4 permits higher annual compensation limits for members of TPAF, JRS, PERS, PFRS, SPRS and ABP enrolled prior to July 1, 1996, if, prior to July 1, 1997, the employer certified to the Division Director that the employer will pay the additional cost for not applying the lower Code Sec. 401(a)(17) Annual Compensation Limit to these members.  If you are such an employer, you may report pensionable salary in excess of the Code Sec. 401(a)(17) limits mentioned earlier  for those employees in the affected class.
  • Defined contribution plans. The limitation on the annual additions to a participant's defined contribution account under Code Sec. 415(c)(1)(A) is increased from the lesser of $44,000 or 100% of the participant's compensation to the lesser of $45,000 or 100% of the participant's compensation.  Annual additions are the sum for any year of all employer and employee contributions to the defined contribution plan.  For purposes of applying the limitations all defined contribution plans of an employer are to be treated as one defined contribution plan.  Defined contribution plans include an employee annuity plan described in and an annuity contract described in section 403(b) .  Defined contribution plans administered by the Division of Pensions and Benefits affected by this change include the SACT, ABP and ACTS programs and the New Jersey State Employees Deferred Compensation Plan.
  • Elective deferrals. The limitation under Code Sec. 402(g)(1) on the exclusion for elective deferrals described in Code Sec. 402(g)(3) increases from the lesser of $15,000 or 100% of the participant's compensation to the lesser of $15,500 or 100% of the participant's compensation.  Defined contribution plans administered by the Division of Pensions and Benefits affected by this change include the SACT, ABP and ACTS programs.
  • Deferred compensation plans. The limit on deferrals under Code Sec. 457(e)(15) concerning deferred compensation plans of state and local governments and tax-exempt organizations is increased from the lesser of $15,000 or 100% of the participant's compensation to the lesser of $15,500 or 100% of the participant's compensation.  The deferred compensation plan administered by the Division of Pensions and Benefits affected by this change is the New Jersey State Employees Deferred Compensation Plan and is available to Employees of the State and other State chartered commissions, authorities and boards.

The following limit is unchanged:

  • Catch-up contributions. The dollar limit under Code Sec. 414(v)(2)(B)(i) for catch-up contributions to an applicable employer plan other than a plan described in Code Sec. 401(k)(11) or Code Sec. 408(p) for individuals aged 50 or over remains at $5,000.  Defined contribution plans administered by the Division of Pensions and Benefits affected by this change include the SACT, ABP and ACTS programs.

CO Letter in Printable Format Adobe PDF (60K)


March 8, 2007

TO: Certifying Officers, State-Administered Retirement Systems
Benefits Administrators, Participating SHBP Employers
FROM: Florence J. Sheppard
Deputy Director, Benefits Operations
SUBJECT: Civil Union Law: Health Benefits and Pension Implications

OVERVIEW

Chapter 103, P.L. 2006, the Civil Union Law, effective February 19, 2007, established “civil unions” between same-sex couples within the State of New Jersey.  Under the law, civil union partners enjoy the same rights and obligations available to a spouse. 

While the Civil Union Law created a new status for same-sex couples within the State of New Jersey, the law is not intended to replace or terminate existing same-sex domestic partnership relationships established under the Domestic Partnership Act (Chapter 246, P.L. 2003). 

Both the Civil Union Law and Domestic Partnership Act are distinct from one another in certain instances as they relate to the State Health Benefits Program and State-administered retirement plans.

This letter describes

(1) State Health Benefits Program (SHBP) and retirement system implications that will be extended to civil union couples of public employers in New Jersey; and the

(2) Responsibilities of public employers in administering these benefits.

This letter should be used as an informational guide to outline how the Civil Union Law relates to or impacts civil union couples within the SHBP and retirement systems. (Please note: Also included are SHBP and retirement system implications relating to Domestic Partnerships as a reference point only.)

PROVISIONS OF THE CIVIL UNION LAW

A few basics things to remember regarding both civil unions and domestic partnerships which will be helpful in avoiding any confusion with the application of either law.

  • A civil union couple is given the same rights and benefits as a married couple, while domestic partners are not afforded identical benefits and protections.
  • The enactment of the Civil Union Law extends health and pension benefits to all civil union couples; therefore, there is no additional resolution or approval required by an employer.  The Domestic Partnership Act still requires a Local Employer to file a resolution through its governing body to extend the benefits of the Act to domestic partners of employees.
  • For health benefits purposes: The Civil Union Law extends SHBP eligibility to a civil union partner in the same manner as a married member’s spouse. 
  • For pensions purposes: There are three main areas that are affected by the Civil Union Law:

(1)  PFRS, SPRS, and JRS (Survivor Benefits)

(2)  PERS and TPAF (Nonspouse Beneficiaries)

(3)  Accidental Death Benefits (PERS, TPAF, PFRS, SPRS)

  • The Civil Union Law provides for the recognition of civil unions formed in New Jersey as well as the states of Connecticut and Vermont.  In addition, New Jersey respects same-sex marriages performed in Massachusetts, Canada, Belgium, the Netherlands, South Africa, and Spain and will extend these relationships the legal protections of a civil union within New Jersey.  Domestic partnerships formed in California (which are substantially equivalent to marriage) are also recognized in New Jersey as a civil union. 

Domestic partnerships established in Hawaii, Maine, or the District of Columbia (as well as those established in New Jersey prior to February 19, 2007) will continue to be accepted for benefits under the provisions of the Domestic Partnership Act.  

  • After February 19, 2007, same-sex couples are permitted to establish a civil union, but may no longer enter into a domestic partnership in New Jersey. However, the Civil Union Law provides that both same-sex and opposite-sex couples 62 years of age or older may still elect to join in a domestic partnership if they choose. Prior to the enactment of the Civil Union Law, opposite-sex domestic partners 62 years of age or older were precluded from pension and/or SHBP benefits. Now both same–sex and opposite-sex domestic partners 62 years of age or older who enter into a New Jersey domestic partnership after February 19, 2007, will not be entitled to pension or SHBP benefits.  The Division of Pensions and Benefits is awaiting advice from the Office of the Attorney General regarding the pension and SHBP eligibility of same-sex domestic partnerships when established by couples 62 years of age or older after February 19, 2007, outside the jurisdiction of New Jersey.  The Division will provide employers with additional details on the eligibility status of these couples when more information becomes available.  

CIVIL UNION LAW: HEALTH BENEFITS

This Civil Union Law extends health benefit eligibility to same-sex civil union partners of employees and retirees enrolled in the State Health Benefits Program (SHBP).  This includes:

  • Employees and retirees of Local Government and Educational employers that participate in the SHBP, and
  • Employees and retirees of State Employers including State employees paid through the State Centralized Payroll Unit, the State colleges and universities, the Palisades Interstate Parkway Commission, the New Jersey Building Authority, the State Library, and the Commerce and Economic Growth Commission

Enrolling a Civil Union Partner for SHBP Coverage

To add a civil union partner to coverage, the employee or retiree must submit the appropriate SHBP enrollment application within 60 days of the date of the civil union.

  • Both employees and retirees must also provide a photocopy of the New Jersey Civil Union Certificate or a valid certification from another jurisdiction that recognizes same-sex civil unions for enrollment. Applications will not be processed until the Civil Union Certificate is received.

If the application is submitted within 60 days of the date of the civil union, the effective date of coverage will be the date of the civil union.  For applications received after the 60 day window, active employees will have to wait to enroll a partner during the next annual Open Enrollment period (during the month of October), while partners of retirees will be enrolled on a timely basis. (Usually the first of the month 60 days after the receipt of the application — see the SHBP Summary Program Description Adobe PDF (555K) for more details on late enrollment. This publication as well as revised applications are available on the SHBP Web site at: www.state.nj.us/treasury/pensions/shbp.htm

Cost of SHBP Coverage for Civil Union Partners

The premium cost for a civil union partner to employers and/or employees/retirees is the same as that for a dependent spouse.

If the employee or retiree is currently required to pay for any portion of the coverage for their dependents, the same costs that would apply to a spouse would also apply for the civil union partner.

However, it is important to note that, because the federal Internal Revenue Code does not view a civil union partner in the same manner as spouse, the cost of a civil union partner’s coverage may be subject to federal tax (similar to the current tax liability of domestic partners).

Taxability of the Civil Union

The civil union partner benefit is not taxable under New Jersey law. However, the federal Internal Revenue Code does not view civil union partners in the same manner as spouses. Therefore, the Internal Revenue Service (IRS) does not automatically consider civil union partners as dependents for tax purposes.  Employer health benefits provided to a civil union partner is normally subject to federal taxes (income, Social Security, and Medicare taxes) and is considered as imputed income. How employers should calculate the value of the civil union partner benefit is described below.

If the civil union partner meets the IRS definition of a “dependent” for tax purposes, then the employer does not have to treat the civil union partner coverage as a taxable benefit. (See IRS Tax Topic 354-Dependents,for information on IRS dependency criteria.)  The IRS has stated in private letter rulings that an employer can rely on an employee’s written certification that the dependent meets the IRS tests for dependency. Employee Tax Certification for Civil Union Partner and Domestic Partner Benefit* Adobe PDF (56K) used for State employees paid through Centralized Payroll is attached for your consideration — payroll officers of local employers should provide their employees with similar tax certification options.  Since an individual’s situation can change, employers should also obtain a new certification each tax year.  

*(The same federal tax implications that were applied for domestic partners are also applicable to civil union partners. A version of the Tax Certification for retirees is available on the Division of Pensions and Benefits Web site: www.state.nj.us/treasury/pensions  or by contacting the Division’s Office of Client Services.)

Calculating the Imputed Income for Active Employees

If an employee adds a civil union partner to coverage and that benefit is deemed to be taxable (which will be the case unless the employee certifies that it is not taxable), the value of the benefit for reporting imputed income will be the cost of Single coverage for the plan or plans in which the employee’s civil union partner is enrolled less any amount that the employee pays for the civil union partner portion of the coverage. If the employee is premium sharing, the amount that the employee pays for the civil union partner portion of the coverage is the difference between the employee share for “Single” coverage and for “Member & Spouse/Civil Union Partner” coverage or the difference between the employee share for “Parent & Children” coverage and for “Family” coverage, whichever is appropriate.  If the employee does not premium share, then the imputed income is the full cost of “Single” coverage.

Example: A local employee with Single coverage in NJ PLUS, the Employee Prescription Drug Plan, and the Dental Expense Plan adds a civil union partner to the coverage of all three plans. The civil union partner benefit is a federally taxable benefit. The monthly imputed income for the NJ PLUS and the Employee Prescription Drug Plan, for which there is no employee premium charge, is the full cost of “Single” coverage, or $377.06 and $120.88, respectively. The monthly imputed income for the Dental Expense Plan, for which the employee does premium share, is $26.09. This is the full cost of “Single” coverage, $41.34, minus the amount that the employee has paid for the civil union partner coverage, $15.25 (the difference between the employee share for “Single” coverage, $20.67, and for “Member & Spouse/Civil Union Partner” coverage, $35.92). The total monthly imputed income attributable to civil union partner coverage for this employee is $539.28, the sum of the imputed incomes for all three plans.

Rate charts which show the imputed income to an employee who adds a civil union partner to coverage will be made available on the Division of Pensions and Benefits Web site at: www.state.nj.us/treasury/pensions/civil-unions.htm.  Where necessary, employers must also take the necessary income tax, Social Security tax, and Medicare tax deductions for the imputed income from the employee’s regular pay and make the required employer contributions to the federal government for the Social Security, Medicare, and Unemployment taxes.

Tax Treatment of Employee Premium Payments

If the civil union partner benefit is taxable to the employee, any premiums that the employee pays for that benefit cannot be made on a pre-tax basis. Therefore, if the employee participates in the Tax$ave Premium Option Plan and normally uses pre-tax dollars to pay the employee share for coverage, the difference between “Single” and “Member & Spouse/Civil Union Partner” coverage has to be made on an after-tax basis.

Example: An employee premium shares for the Traditional Plan and the Dental Expense Plan with “Single” coverage. The monthly employee share is $174.53 and $20.67, respectively and it is made on a pre-tax basis. The employee adds a civil union partner to both plans and the benefit is taxable. The new premium share amounts are $373.56 and $35.92, respectively.  For the new coverage, $174.53 and $20.67 can still be paid using pre-tax dollars, but $199.03 and $15.25, the difference between the employee’s premium share for “Single” and “Member & Spouse/Civil Union Partner” coverage, must be paid using after-tax dollars.

Calculating the Imputed Income for Retirees

The federal government does not distinguish between active employees and retirees with respect to the taxability of employer provided benefits. Therefore, the taxability issues just discussed for employees apply also to any of your retirees receiving the civil union partner benefit.  The Division of Pensions and Benefits will take the required steps to properly report any imputed taxable income to State retirees because of civil union partner coverage.

CIVIL UNION LAW: PENSION IMPLICATIONS

As mentioned earlier, there are three main areas of pension benefits affected by the Civil Union Law.

PFRS, SPRS, and JRS (Survivor Benefits)

Under the Police and Firemen’s Retirement System (PFRS), the State Police Retirement System (SPRS), and Judicial Retirement System (JRS), a civil union partner qualifies for survivor benefits in the same manner as a spouse.  Therefore, the law potentially affects all PFRS, SPRS, and JRS survivor benefits, both active and retired, since the pension beneficiary is established by law, not member choice.  Additionally, if an individual is receiving a PFRS, SPRS, or JRS survivor benefit (with the exception of a survivor of a PFRS or SPRS member’s accidental death in the line of duty), the survivor could potentially lose that pension benefit if the survivor remarries or establishes a civil union or domestic partnership.  A civil union partner’s right to a PFRS or SPRS survivor benefit will also end upon a proper dissolution of the civil union.

Note: If a JRS member wishes to select a joint and survivor retirement option, the IRS restrictions described below under the PERS and TPAF would apply.

PERS and TPAF (Nonspouse Beneficiaries)

The only PERS and TPAF benefit directly affected by the Civil Union Law is the survivor’s benefit in the event of the accidental death of the member while in the performance of duty (see below).  Other PERS and TPAF retirement benefits are not affected since a member may already name anyone as the beneficiary of the pension benefit within the constraints imposed by the Internal Revenue Service (IRS).  The IRS does, however, restrict who a member can name as a beneficiary under Options 2, A and B.  Under Options 2 and A, a member cannot name a nonspouse beneficiary who is more than 10 years younger than the member; under Option B, the nonspouse beneficiary cannot be more than 19 years younger. Since the IRS is a federal agency, it does not view civil union partners in the same manner as spouses.

Accidental Death Benefits (PFRS, SPRS, PERS, TPAF)

Under the Civil Union Law, a civil union partner is eligible for Accidental Death Benefits (along with a surviving spouse or eligible same-sex domestic partner) if the member dies as a result of an accident during the performance of his or her regular or assigned duties.  For PFRS and SPRS survivors this benefit is a lifetime benefit to your survivor.  For PERS and TPAF survivors this benefit is a lifetime benefit to your survivor unless he or she enters into a new civil union, domestic partnership, or marries.

INFORMATION RESOURCES

We are enclosing copies of revised SHBP applications reflecting civil union partner eligibility for coverage.  You may copy and begin to use these forms. The forms are also available on the Division’s Web site at: www.state.nj.us/treasury/pensions

The Division is preparing a new Fact Sheet #75, Civil Unions, that will be made available through our Web site as soon as possible. 

If you have any questions about this letter, write the Division at the address above or e-mail us at: pensions.nj@treas.state.nj.us.

Enclosures
SHBP Enrollment Application
SHBP Dental Plans Application
SHBP Retired Status Application
Employee Tax Certification for Civil Union Partner and Domestic Partner Benefit

CO Letter in Printable Format Adobe PDF (73K)


 
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