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Pensions and Benefits
CERTIFYING OFFICER LETTERS 2008

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


Subject Date
Report of Contributions, 4th Quarter 2008 (October 1st to December 31st) - Certifying Officers - Teachers’ Pension and Annuity Fund, Public Employees’ Retirement System & Police and Firemen’s Retirement System December 2008
Report of Contributions, 4th Quarter 2008 (October 1st to December 31st) - Certifying Officers - Autonomous State College/University/State Employers December 2008
Training Requirements for PFRS Eligibility and Enrollment - Certifying Officers, Police and Firemen’s Retirement System (PFRS) December 15, 2008
Chapter 89, P.L. 2008, Public Employee Benefits Reform Act of 2008 - Certifying Officers, Public Employees' Retirement System, Teachers' Pension and Annuity Fund, and Defined Contribution Retirement Program December 5, 2008
Dependent Eligibility Verification Audit - State Health Benefits Program and School Employees’ Health Benefits Program Participating Employers December 5, 2008
Pension Eligibility — Adjunct Faculty and Part-Time Instructors — Supplemental Questions and Answers - Certifying Officers, State and County Colleges and Universities December 1, 2008
Pension Eligibility — Adjunct Faculty and Part-Time Instructors - Certifying Officers, State and County Colleges and Universities October 28, 2008
Enrollment of Elected Officials in the DCRP, exceptions for PERS members, and PERS waiver by Non-Veteran Elected Officials - Local Certifying Officers of the Public Employees’ Retirement System October 28, 2008
Report of Contributions, 3rd Quarter 2008 (July 1st to September 30th) - Certifying Officer - Teachers’ Pension and Annuity Fund, Public Employees’ Retirement System & Police and Firemen’s Retirement System September 2008
Open Enrollment For The New Jersey School Employees' Health Benefits Program - School Employees' Health Benefits Program Participating Local Education Employers September 26, 2008
Open Enrollment For The New Jersey State Health Benefits Program - State Health Benefits Program Participating Local Government Employers September 15, 2008
Open Enrollment For The New Jersey State Health Benefits Program - State Departmental Certifying Officers, State Human Resources Directors, State Biweekly Human Resources Representatives  September 15, 2008
Open Enrollment For The New Jersey State Health Benefits Program - State Monthly Certifying Officers, Human Resource and Benefit Administrators September 15, 2008
Online Application Requirement for Pension Loans - Certifying Officers September 8, 2008
Open Enrollment For The New Jersey State Employees Tax Savings Program(Tax$ave 2009) - State Biweekly Certifying Officers, Human Resource and Benefit Administrators August 18, 2008
Open Enrollment For The New Jersey State Employees Tax Savings Program (Tax$ave 2009) - State Monthly Agency and Authority, College, and University Certifying Officers, Human Resource and Benefit Administrators August 18, 2008
Defined Contribution Retirement Program (DCRP) for PERS and TPAF Members - Certifying Officers (distribution limited to employing locations with qualifying employees) July 2008
Retirement Incentive Programs - Certifying Officers, Local Employers June 2008
Report of Contributions, 2nd Quarter 2008 (April 1st to June 30th) - Certifying Officers - Teachers’ Pension and Annuity Fund, Public Employees’ Retirement System & Police and Firemen’s Retirement System June 2008
Report of Contributions, 2nd Quarter 2008 (April 1st to June 30th) - Certifying Officers - Autonomous State College/University/State Employers June 2008
2008 State Early Retirement Incentive Program - State Department Human Resource Personnel June 2008
Independent Contractors and Professional Services Contracts under Chapter 92, P.L. 2007 - Certifying Officers Local Employers May 6, 2008
Prosecutors Part of the PERS - Member Pension Contribution Rate Change July 1, 2008 - Local Government Certifying Officers of the Public Employees’ Retirement System (PERS) May 1, 2008
Member Contribution Rate Change under Chapter 103, P.L. 2007 - Certifying Officers of the Public Employees’ Retirement System (PERS) April 23, 2008
Report of Contributions, 1st Quarter 2008 (January 1st to March 31, 2008) - Certifying Officers - Teachers’ Pension and Annuity Fund, Public Employees’ Retirement System & Police and Firemen’s Retirement System March 2008
Report of Contributions, 1st Quarter 2008 (January 1st to March 31, 2008) - Certifying Officers - Autonomous State College/University/State Employers March 2008
Defined Contribution Retirement Program (DCRP) Enrollment Guidelines - for Elected or Appointed Officials March 20, 2008
Defined Contribution Retirement Program (DCRP) Enrollment Guidelines - for PERS or TPAF Members March 20, 2008
New State Health Benefits Program (SHBP) Medical Plans and Rates - State Biweekly and State Monthly SHBP Certifying Officers, Human Resources Representatives, and Benefit Administrators January 2008
New State Health Benefits Program (SHBP) Medical Plans and Rates - Participating Local Government SHBP Certifying Officers, Human Resources Representatives, and Benefit Administrators January 2008
New State Health Benefits Program (SHBP) Medical Plans and Rates - Participating Local Education SHBP Certifying Officers, Human Resources Representatives, and Benefit Administrators January 2008

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 2008

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, 4th Quarter 2008 (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 - ADDITION TO IROC

Due to the implementation of Chapter 103, PL 2007, and Chapter 89, PL 2008, a new column has been added to the IROC to identify any members affected by these laws. The column heading will be “TIER”, Ch. 103, PL 2007, members will be identified as Tier 2 and Ch. 89, PL 2008, members will be identified as Tier 3. A letter from the Division dated December 5, 2008 defined what each TIER means, assisting you to properly prepare the IROC.

>>NEW - IROC PREPARATION TIP

Please be advised that when preparing the IROC, the projected salary for next quarter does not need to be used unless the member’s base salary is changing. If next quarter’s salary will be the same as the current salary, no entry is necessary. This will save you time and aid you in submitting the report in a timely manner.

Reminder for Employers – Treatment of Retirees Returning to Employment

The Division is becoming increasingly aware of public employees returning to employment under circumstances that would make these individuals ineligible for continuing the receipt of their retirement benefit. We want to take this opportunity to review the employer’s responsibilities when making offers of employment to retirees from any of the State’s retirement systems.

Retirees may not return to any State or Local government level public employment unless the retiree has at least a 30-day break in service after his or her retirement date or the date the retirement is approved by the respective Board of Trustees, whichever is the later. If you should employ a retiree prior to the end of this 30-day period, you must advise the retiree that his or her retirement may be considered invalid and notify the Division immediately of the re-employment. If after review by the Division it is determined the retirement is invalid, the retiree’s retirement system account will be reactivated and the retiree notified. Employers should ask the retiree to see the retiree’s Board Approval Letter, which is sent to all new retirees, to determine the individual’s board approval date.

If a retiree is re-employed subsequent to the 30-day break in service in a public position covered by the same retirement system from which he or she retired, the retiree will be subject to earnings limits. If the annual salary from public employment (or any combination of public employers) exceeds the limit, the retiree will be required to suspend his or her pension and re-enroll in the retirement system. If you should employ a retiree and his or her salary exceeds the annual limit, you must advise the retiree that his or her retirement may need to be suspended and notify the Division immediately for a review.

We request that employers notify the Division in writing when there is a question concerning a re-employed retiree and his or her eligibility for continued retirement benefits. Documentation provided by the employer should include the retiree’s name, employment title (both current and former, if known), current job description and place of employment (both current and former, if known). This information should be mailed to:

NJ Division of Pensions & Benefits
Attn: Enrollment Bureau
PO Box 295
Trenton, NJ 08625-0295

For additional information, please refer to Fact Sheet #21, Employment after Retirement (Public Employees' Retirement System), Fact Sheet #28, Employment after Retirement (Teachers’ Pension and Annuity Fund) and Fact Sheet #29, Employment after Retirement (Police and Firemen’s Retirement System).

NEW LEGISLATION ALERT - PERS and TPAF Maximum Compensation

Chapter 103, P.L. of 2007, provides that new members of PERS and TPAF are subject to a maximum compensation limit for PERS or TPAF pension contributions and benefits. 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. These individuals with earnings over the Social Security maximum wage base are also eligible for benefits under the Defined Contribution Retirement Program (DCRP). Note:  Until reporting procedures are developed for PERS and TPAF members’ who exceed the social security maximum of $102,000 for 2008, continue to report the pension and contributory insurance for the excess salary as you did in the past. The Division will forward the pension contributions to the DCRP carrier.  Excess contributory insurance payments will be refunded to the employee.

Pension benefits may be available to these individuals for base salary paid in excess of the annual compensation limit under the newly created 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, 2009. Should your report not be received by the close of business on January 24, 2009, 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, 2009 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, and payment should be made to the address on the shortage statement only.

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 2009

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 2009.

The following plan limits are increased for inflation effective January 1, 2009:

  • Annual compensation limit. The maximum amount of annual compensation that can be taken into account for the purpose of determining benefits and contributions under Code Sec. 401(a)(17) is increased from $230,000 to $245,000. 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 up to the higher limit permitted for members of TPAF, PERS, PFRS and ABP enrolled prior to July 1, 1996, under the provisions of Chapter 113, P.L. 1997, which increases from $345,000 to $360,000 for 2009.
  • 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 $46,000 or 100% of the participant's compensation to the lesser of $49,000 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.
  • Elective deferrals. The limitation under Code Sec. 402(g)(1) on the exclusion for elective deferrals described in Code Sec. 402(g)(3) is increased from the lesser of $15,500 or 100% of the participant's compensation to the lesser of $16,500 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 is increased from the lesser of $15,500 or 100% of the participant's compensation to the lesser of $16,500 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 is increased from $5,000 to $5,500.  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 Tier 2 and Tier 3 members enrolled on or after July 1, 2007.  These members’ annual base salary is limited and may not exceed the amount of the Social Security Taxable Wage Base. The Social Security Taxable Wage Base and the compensation limit for TPAF and PERS Tier 2 and Tier 3 members will be increasing from $102,000 for 2008 to $106,800 for 2009. Please refer to Ch. 103, P.L. 2007 for details.

CO Letter in Printable Format Adobe PDF (64K)


December 2008

TO: Certifying Officer
Autonomous State College/University/State Employers
FROM: John D. Megariotis
Deputy Director, Finance
SUBJECT: Report of Contributions, 4th Quarter 2008 (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 2008 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, 2009.  Your December,2009 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, 2009.

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 2009

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 2009.

The following plan limits are increased for inflation effective January 1, 2009:

  • Annual compensation limit. The maximum amount of annual compensation that can be taken into account for the purpose of determining benefits and contributions under Code Sec. 401(a)(17) is increased from $230,000 to $245,000.  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 up to the higher limit permitted for members of TPAF, PERS, PFRS and ABP enrolled prior to July 1, 1996, under the provisions of Chapter 113, P.L. 1997, which increases from $345,000 to $360,000 for 2009.
  • 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 $46,000 or 100% of the participant's compensation to the lesser of $49,000 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.
  • Elective deferrals. The limitation under Code Sec. 402(g)(1) on the exclusion for elective deferrals described in Code Sec. 402(g)(3) is increased from the lesser of $15,500 or 100% of the participant's compensation to the lesser of $16,500 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 is increased from the lesser of $15,500 or 100% of the participant's compensation to the lesser of $16,500 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 is increased from $5,000 to $5,500.  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 Tier 2 and Tier 3 members enrolled on or after July 1, 2007.  These members’ annual base salary is limited and may not exceed the amount of the Social Security Taxable Wage Base.  The Social Security Taxable Wage Base and the compensation limit for TPAF and PERS Tier 2 and Tier 3 members will be increasing from $102,000 for 2008 to $106,800 for 2009.  Please refer to Ch. 103, P.L. 2007 for details.

CO Letter in Printable Format Adobe PDF (61K)


December 15, 2008

TO: Certifying Officers, Police and Firemen’s Retirement System (PFRS)
FROM: Wendy Jamison
Secretary, PFRS Board of Trustees
SUBJECT: Training Requirements for PFRS Eligibility and Enrollment

The Board of Trustees for the Police and Firemen’s Retirement System (PFRS) has adopted amendments to the New Jersey Administrative Code (N.J.A.C.).  This letter details a new rule within the amendments, N.J.A.C. 17:4-2.4, that addresses “training requirements” for police officers and firefighters, and may also affect the eligibility of some current members of the PFRS. 

For a position to be eligible for participation in PFRS it must meet the statutory definition of a “police officer” or “firefighter” including the mandate that a candidate for a PFRS position must successfully complete specific training requirements.* All police officers enrolled in the PFRS must be certified in the basic training course for police officers as prescribed by the Police Training Commission (PTC).  Similarly, firefighters enrolled in the PFRS must complete and receive Firefighter 1 certification through the New Jersey Department of Community Affairs, Division of Fire Safety. 

In addressing the training requirements for PFRS applicants, N.J.A.C. 17:4-2.4, further specifies that any current PFRS police members or firefighting members who have not successfully completed the PTC or Firefighter 1 certification within eighteen (18) months after the final adoption of the regulation will be removed from participation in the PFRS.

This means that employers — and PFRS members without the required training — have 18 months (December 31, 2008 through June 30, 2010) to establish that all PFRS employees have the required PTC or Firefighter 1 training and certification.  As of July 1, 2010, all PFRS members must be fully trained with PTC or Firefighter 1 certification in order to remain in PFRS membership. Any PFRS members without the required certification will face removal from PFRS membership.

In certain circumstances, police officer members may substitute comparable federal, state, or county training if approved by the PTC and the PFRS Board of Trustees.  Employers may submit proof of other police officer certification along with a written request for consideration to the PFRS Board and Trustee Administration, Division of Pensions and Benefits, PO Box 295, Trenton, NJ, 08625-0295.

For fire fighter members, no other training can be substituted for the Firefighter 1 certification.

ADDITIONAL INFORMATION

If you have additional questions about 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


*As prescribed for police positions in N.J.S.A. 43:16A-1 and 52:17B-66 et seq.; and for firefighter positions in N.J.S.A. 43:16A-1 and 52:17B-66 et seq.

CO Letter in Printable Format Adobe PDF (51K)


December 5, 2008

TO: Certifying Officers, Public Employees' Retirement System, Teachers' Pension and Annuity Fund, and Defined Contribution Retirement Program
FROM: Florence J. Sheppard,
Deputy Director, Division of Pensions and Benefits
SUBJECT: Chapter 89, P.L. 2008, Public Employee Benefits Reform Act of 2008

Governor Corzine recently signed into law Chapter 89, P.L. 2008, the Public Employee Benefits Reform Act of 2008.  This law, effective November 2008, implements several recommendations made by the Joint Legislative Committee on Public Employee Benefits Reform, and impacts the Public Employees' Retirement System (PERS), Teachers' Pension and Annuity Fund (TPAF), Defined Contribution Retirement Program (DCRP), and Alternate Benefit Program (ABP). The following information details important changes to these retirement systems brought about by this new legislation.

As a result of the passage of reform legislation in 2007 and 2008, there are some differences in PERS and TPAF enrollment and retirement criteria for individuals enrolled after certain dates.  For ease of communication, in this and future communications we will refer to these differences as “membership tiers.”

ENROLLMENT

Enrollment periods for the membership tiers of the PERS and TPAF are as follows: 

  • Membership Tier 1: Members who enrolled prior to July 1, 2007.

  • Membership Tier 2: Members who were eligible to enroll on or after July 1, 2007 and prior to November 2, 2008 — pursuant to the provisions of Chapter 103, P.L. 2007.

  • Membership Tier 3: Members who were eligible to enroll on or after November 2, 2008 — pursuant to the provisions of Chapter 89, P.L. 2008.

Changes in Salary Requirements for Enrollment in Membership Tier 3

Chapter 89 established a new minimum base salary requirement for Tier 3 eligibility in the PERS or TPAF.  Salary requirements for the different tiers of the PERS and TPAF are as follows:

  • Membership Tier 1: The minimum base salary requirement for enrollment remains $1,500 per year for the PERS and $500 for the TPAF.1

  • Membership Tier 2: The minimum base salary requirement for enrollment remains $1,500 per year for the PERS and $500 for the TPAF.1  However, Chapter 103, P.L. 2007, established a maximum wage limit for PERS or TPAF pension contributions, which is subject to adjustment annually.  Currently, the maximum wage limit for 2008 is $102,000 and will adjust to $106,800 for 2009.  Tier 2 members who earn in excess of the annual maximum wage will be enrolled in the DCRP — in addition to the PERS or TPAF.  See Fact Sheet #79, Defined Contribution Retirement Program for PERS and TPAF Members Adobe PDF (35K), for more information.

  • Membership Tier 3: The minimum base salary requirement for enrollment in the PERS or TPAF is increased to $7,500.  The minimum base salary amount is subject to adjustment annually in accordance with changes in the Consumer Price Index (with any adjustment limited to a maximum of four percent per year).  Tier 3 members must continue to meet the minimum annual salary threshold each year in order to continue participation in the PERS or TPAF.2  If an employee’s salary does not meet the annual minimum requirement for Tier 3 enrollment, the employee will be eligible for enrollment in the DCRP provided the annual salary is $1,500 or more.

    The maximum wage limit for PERS or TPAF pension contributions established for Membership Tier 2 remains for Membership Tier 3.  Therefore, Tier 3 members who earn in excess of the annual maximum wage ($102,000 for 2008 or $106,800 for 2009) will be enrolled in the DCRP — in addition to the PERS or TPAF.  See Fact Sheet #79, Defined Contribution Retirement Program for PERS and TPAF Members Adobe PDF (35K), for more information.

A chart showing the PERS and TPAF salary Adobe PDF (29K) required for enrollment under each membership tier is included with this letter.

1For a member who is paid on a part-time hourly, on-call or per diem basis and who does not have an annual contractual base salary, pension and contributory insurance deductions shall be calculated using actual creditable salary earned. If a member’s actual creditable salary should drop below one-twelfth (for 12-month employees; one-tenth for 10-month employees) of the minimum threshold salary required for enrollment into the retirement system, pension contributions shall not be deducted from that member‘s creditable salary, and pension credit shall not be earned, for that month.  For PERS Membership Tier 1 or Tier 2 individuals the monthly minimum to receive service and salary credit is $125 or $150 for 12-month and 10-month members respectively.

2For Membership Tier 3 individuals the monthly minimum salary to receive service and salary credit during the remainder of calendar year 2008 and all of 2009 is $625 or $750 for 12-month and 10-month members respectively. This amount may be adjusted in subsequent calendar years.

Multiple Membership

When a member is employed in positions at two or more PERS employers, or two or more TPAF employers, the member is considered a “multiple member.”  Employment in positions with the additional employers will count toward the multiple member’s PERS or TPAF account, provided that the salary from each additional employer meets the minimum salary required for enrollment.  Salaries from two or more employers cannot be combined to meet the minimum salary required for PERS or TPAF eligibility.

  • Tier 1 and Tier 2: Multiple members retain their original tier status for any PERS or TPAF eligible position with an additional employer, and must meet the minimum base salary of $1,500 per year from each PERS eligible position; or $500 per year from each TPAF eligible position.

  • Tier 3: Multiple members must meet the minimum base salary of $7,500 (subject to adjustment annually) from each PERS or TPAF eligible position.

If a Tier 3 multiple member’s salary from a position with an additional employer does not meet the annual minimum requirement, the member is eligible for enrollment in the DCRP for the salary from that employer, provided the salary is $1,500 or more per year.  Therefore, it is possible for a Tier 3 member to be enrolled in the PERS or TPAF for some employment while enrolled in the DCRP for other employment.

TRANSFERS AND REEMPLOYMENT

Employees enrolled in any New Jersey State-administered retirement system (PERS, TPAF, PFRS, SPRS, or JRS), who transfer employment to the PERS or TPAF (or transfer within the PERS or TPAF) are eligible for membership based on the employee’s original date of enrollment provided that there is no break in service or that any break in service is 24 months or less.3  If this is the case, PERS or TPAF members will maintain eligibility under their original membership tier, while PFRS, SPRS, or JRS members will be enrolled under the PERS or TPAF membership tier that corresponds to the original date of enrollment in the prior retirement system.

Since retirement system membership generally expires after 24 months of inactivity (or with retirement or withdrawal, see below), any individual who obtains public employment following a break in service of more than 24 months will be enrolled under the PERS or TPAF membership tier in effect at the time of reemployment.  The 24-month limitation on return to a membership tier applies regardless of any prior retirement system membership, even if the individual is vested in a former PERS or TPAF account.

If an individual has withdrawn their accountor is a PERS or TPAF retiree reemployed in a position under the same retirement system from which they retired — the individual will be enrolled under the PERS or TPAF membership tier in effect at the time of reemployment, regardless of the length of the break in service.  All other conditions of PERS or TPAF enrollment when returning from retirement will apply — including suspension of the member’s retirement allowance.

3In accordance with either N.J.S.A. 43:15A-7(e) or N.J.S.A. 18A:66-7(a).

Defined Contribution Retirement Program (DCRP) Enrollment

An employee who otherwise qualifies for PERS or TPAF Tier 3 membership, but does not meet the $7,500 minimum salary requirement, is eligible for enrollment in the DCRP provided that the base salary is at least $1,500 annually.

  • An employee whose salary is between $1,500 and $5,000 can voluntarily decline enrollment in the DCRP by signing an irrevocable waiver.  When a DCRP eligible employee waives enrollment, it applies only to the specific position held at that time.  The employee can choose to participate in the DCRP if he or she assumes another DCRP covered position at a later date with either the same or a different employer.  The option to waive DCRP enrollment is not available to employees if the salary is more than $5,000.

Adjunct Faculty ABP Enrollment Eligibility

An adjunct faculty member or part-time instructor at a public institution of higher education in the State whose employment begins after November 1, 2008, will be eligible for membership in the Alternate Benefit Program (ABP), instead of the PERS.

Adjunct faculty members and part-time instructors currently enrolled in the PERS who enter into a new employment agreement after November 1, 2008, must choose to either waive their benefits under the ABP and continue their participation in the PERS, or waive their benefits under the PERS and transfer their accumulated pension service, contributions, and any available employer contributions under PERS to the ABP. 

An individual accepting an adjunct faculty or part-time instructor position who currently holds employment with another public employer which requires membership in either the TPAF or PERS may leave that existing TPAF or PERS membership intact and enroll into a separate ABP account as a result of the new adjunct faculty or part-time instructor position.  This portion of Chapter 89 is further explained in the Certifying Officer letter dated October 28, 2008 (Pension Eligibility, Adjunct Faculty, and Part-time Instructors).

PURCHASE OF SERVICE CREDIT

Out-of-State and U.S. Government Purchase of Service Credit

For all membership tiers in the PERS and TPAF, pension service credit for Out-of-State or U.S. Government civilian service (or for service with a bi-state or multi-state agency in the case of a member of PERS) that is requested for purchase on or after November 1, 2008, will no longer be used to qualify for any State-paid or employer-paid health benefits in retirement.

The purchase of Out-of-State or U.S. Government civilian service will continue to apply for retirement purposes.

RETIREMENT

Changes in Retirement Age for Membership Tier 3

Chapter 89 raised the Service, Deferred, and Early Retirement age requirements for members of Tier 3.  Service, Deferred, and Early Retirement age provisions for the different membership tiers of the PERS and TPAF are as follows:

  • Tier 1 Membership: The retirement age is 60 for a Service or Deferred Retirement.  For an Early Retirement, a member must have at least 25 years of service credit; however, if a member is under the age of 55 at the time of retirement, the retirement allowance is reduced 3 percent per year (1/4 of 1 percent per month) for each year the member is under age 55.

  • Tier 2 Membership: The retirement age is 60 for a Service or Deferred Retirement.  For an Early Retirement a member must have at least 25 years of service credit; however, if a member is under the age of 60 at the time of retirement, the retirement allowance is reduced 1 percent per year (1/12 of 1 percent per month) for each year the member is under age 60 but over age 55, and 3 percent per year (1/4 of 1 percent per month) for each year the member is under age 55.

  • Tier 3 Membership: The retirement age is 62 for a Service or Deferred Retirement.  For an Early Retirement a member must have at least 25 years of service credit; however, if a member is under the age of 62 at the time of retirement, the retirement allowance is reduced 1 percent per year (1/12 of 1 percent per month) for each year the member is under age 62 but over age 55, and 3 percent per year (1/4 of 1 percent per month) for each year the member is under age 55.

Retirement provisions for Veteran Retirement, Ordinary Disability, or Accidental Disability Retirement remain unchanged for all PERS and TPAF members (see enclosed retirement benefits chart Adobe PDF (29K).

ADDITIONAL INFORMATION

As employers apply the provisions of the laws discussed in this letter, there may be situations where the correct action to take with an employee’s enrollment, transfer, or retirement is unclear.  To assist employers and members, the Division of Pensions and Benefits is in the process of revising the administrative procedures provided in the Employers’ Pensions and Benefits Administration Manual (EPBAM) and is planning a set of Frequently Asked Questions and Answers for its Web site at: www.state.nj.us/treasury/pensions

Employers may also contact the Division regarding the information provided in this letter, or for further assistance with the provisions of the laws discussed.  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 (90K)


December 5, 2008

TO: State Health Benefits Program and School Employees’ Health Benefits Program Participating Employers
FROM: Florence J. Sheppard,
Deputy Director, Division of Pensions and Benefits
SUBJECT: Dependent Eligibility Verification Audit

Chapter 89, P.L. 2008, mandated that the State Health Benefits Program (SHBP) and School Employees’ Health Benefits Program (SEHBP) “shall conduct a continuous review of the various public employers participating in the State Health Benefits Program for the purpose of ensuring that only eligible employees and retirees, and their dependents, are receiving health care coverage under the program.” Furthermore, under this Act, any person who knowingly enrolls, or attempts to enroll, individuals that they know are ineligible are guilty of a crime and subject to prosecution.  Accordingly, the SHBP/SEHBP will be performing an audit to verify the eligibility of dependents participating in both programs.

The SHBP/SEHBP has retained Aon Consulting to perform a Dependent Eligibility Verification Audit (DEVA). Each employee/retiree who covers a dependent under their health plan will receive a letter from Aon with specific instructions. They will have until a specified date to furnish Aon with the required legal documentation confirming that their dependents are eligible for coverage under the programs.

Since ineligible dependents are one reason health care costs are increasing, this audit is a way to verify that those listed as dependents in the Programs meet the definition of “dependent” as described in N.J.A.C. 17:9-3.1.

Providing ineligible dependents with health coverage is not always intentional on the part of the employee/retiree. For this reason, as part of the DEVA, the SHBP/SEHBP is allowing an amnesty period during which employees/retirees will have the opportunity to voluntarily identify any ineligible dependents and therefore avoid any penalties or other legal action. After the close of the amnesty period, there will be legal consequences as outlined under Chapter 89, P.L. 2008 for employees/retirees who are found to have knowingly enrolled, or attempted to enroll ineligible dependents under the programs.

The DEVA will be conducted in phases with State employees and retirees being audited beginning in January 2009.  School employees and retirees will follow in mid-2009 and local government employees and retirees starting in late 2009.

You as an employer have no responsibilities in connection with the DEVA. However, in order to maintain the integrity of the DEVA, any health benefit application submitted on or after January 1, 2009 from an existing or new employee adding a dependent for coverage will be rejected by the Division of Pensions and Benefits unless proper legal documentation is submitted confirming the dependents relationship to the employee.

The attached chart Adobe PDF (36K) outlines the necessary documentation required to be submitted with the health benefit application for each classification of dependent.

We appreciate your cooperation in contributing to the SHBP/SEHBP’s efforts to continue to provide quality health care at a reasonable cost.

Enclosure Adobe PDF (36K)

CO Letter in Printable Format - Adobe PDF (64K)


December 1, 2008

TO: Certifying Officers, State and County Colleges and Universities
FROM: Joseph Zisa, Manager 1, Fiscal Resources
Division of Pensions and Benefits
SUBJECT: Pension Eligibility — Adjunct Faculty and Part-Time Instructors — Supplemental Questions and Answers

As part of the Division’s continuing response to implementation of pension reform legislation signed into law by Governor Corzine on September 29, 2008, this document will serve as a supplement to information contained in the October 28, 2008, letter to Certifying Officers concerning the pension eligibility of adjunct faculty and part-time instructors.  The information is presented in the form of questions and answers and addresses many of the questions the Division has been presented with following the signing of this legislation.

QUESTIONS AND ANSWERS

1.
  Question. After November 1, 2008, what retirement program(s) are available to adjunct faculty and part-time instructors?
     


Answer.
After November 1, 2008, adjunct faculty and part-time instructors are eligible to participate in the New Jersey Alternate Benefit Program (ABP). 

If any individual accepts employment in an ABP eligible position, the default retirement system is ABP.  But, under certain circumstances an individual may participate in the Public Employees' Retirement System (PERS).

N.J.S.A. 18A:66-170 states in part:

“Any person required to participate in the alternate benefit program by reason of employment, who at the time of such employment is a member of the Teachers' Pension and Annuity Fund, shall be permitted to transfer his membership in said fund to the Public Employees' Retirement System, by waiving all rights and benefits which would otherwise be provided by the alternate benefit program. Any such new employee who is a member of the Public Employees' Retirement System will be permitted to continue his membership in that system, by waiving all rights and benefits which would otherwise be provided by the alternate benefit program. Such waivers shall be accomplished by filing forms satisfactory to the Division of Pensions within 30 days of the beginning date of employment.”

So, adjunct faculty and part-time instructors with existing TPAF and PERS membership at the time of accepting a new employment agreement should consider all their retirement program options before making any decision regarding enrollment into the ABP.


2.
 
Question.
If an individual accepts an ABP eligible position and is already a member of TPAF or PERS, must that individual waive their benefits under TPAF, PERS or ABP and enroll into ABP or PERS as a result of that employment?
     


Answer.
No, a current TPAF or PERS member may leave an existing TPAF or PERS account intact and enroll into a separate ABP account.

While TPAF and PERS members are “permitted” to make an election to waive benefits and consolidate retirement credit under either PERS or ABP as a result of the provisions of N.J.S.A. 18A:66-170, it is not a requirement.  Nothing prevents the TPAF or PERS member from leaving the TPAF or PERS account open in a non-contributory state; perhaps with the expectation of returning to TPAF or PERS eligible employment before that retirement account expires as a result of inactivity.  But the member must make this election within 30 days of beginning employment in an ABP eligible position or lose the ability to make the permitted election.

Also, in some situations, it may be necessary for the individual to keep a TPAF or PERS account open and enroll into the ABP.  This is required if the individual continues to render service through employment with a second employer in a TPAF or PERS eligible position.  This may be more common with adjunct faculty and part-time instructors since those individual may hold full-time positions with other public employers while holding these teaching positions.


3.
 
Question.
What should happen with adjunct faculty or part-time instructors receiving a new employment agreement who are currently members of PERS or TPAF?
     


Answer.
If an adjunct faculty or part-time instructor is in PERS or TPAF and elects ABP coverage and waives benefits under PERS or TPAF, the employer will need to secure the following in order to complete the transfer of funds from one pension system to another:

  • complete an ABP Enrollment on-line through EPIC or with a paper ABP Enrollment Application,
  • acquire from the employee an application for withdrawal from PERS or TPAF with the corresponding employer's certification, and
  • acquire from the employee an Election of Retirement Coverage Form

4.
 
Question.
Is the salary paid to adjunct faculty and part-time instructors for teaching in Winter or Summer term pensionable for ABP?
     


Answer.
They are considered 10-month employees and in PERS the salary is not pensionable except for Spring and Fall semesters.

For ABP, adjunct faculty and part-time instructors will be considered 10-month employees. Salary is reportable and service will be accrued for teaching only during the Spring and Fall semester.  Six months of service credit will be earned for teaching a minimum of one – 3 credit hour course for the full semester.  Additional teaching responsibilities over this minimum during the Spring or Fall semester will also be pensionable.  Teaching assignments outside of the Spring or Fall semesters or below the minimum will not accrue ABP service credit and related salary is not pensionable.


5.
 
Question.
The Employers' Pensions and Benefits Administration Manual (EPBAM) states that if an employee does not file an election form, he or she must remain in PERS.  The October 28, 2008, Certifying Officer Letter – Pension Eligibility — Adjunct Faculty and Part-Time Instructors - Footnote #2 states:

“Individuals with existing TPAF or PERS membership at the time of ABP enrollment, who do not make an election to waive benefits under one of the two retirement systems, will lose the right to have all retirement credit consolidated under one retirement account and may lose those benefits which have not vested."

The footnote in the October 28, 2008, Certifying Officer Letter would indicate that it is not required that the individual make an election and that the default pension system would then be ABP.  This seems to be in conflict with the EPBAM.  Which approach is correct?

     


Answer.
The EPBAM was incorrect and has been updated.


6.
 
Question.
What is the period for a new employment agreement?  Is it each semester or the academic year?
     


Answer.
This will be fact specific and may differ from campus-to-campus or from individual-to-individual.  You must review the manner in which your campus retains the services of adjunct faculty and part-time instructors.

It is the Division’s understanding that it is customary for these instructional services to be retained on a semester-by-semester basis with an offer for employment delivered to the adjunct faculty and part-time instructor prior to the semester starting date and the offer in some fashion being accepted by the individual.  The Division views this practice of offer and acceptance as a new employment agreement.  Under these circumstances the first new employment period in which adjunct faculty and part-time instructors may be eligible to enroll into the ABP as a result of Chapter 89, P.L. 2008, will be for the Spring semester of 2009.

If, however, a college or university follows the practice of entering into employment agreements with their adjunct faculty and part-time instructors for a longer period of time, the opportunity for one of these instructors to enroll into the ABP will be when a new employment agreement is executed.


7.
 
Question.
Several NJ public colleges and universities offer a Winter or Summer semester (inter-semester period) programs.  For example, one of these inter-semester programs may start on January 5, 2009 and end on January 16, 2009.  Does teaching only this short semester make an adjunct faculty or part-time instructor eligible for enrollment into the ABP?  Does the employer need to enroll adjunct faculty and part-time instructors in the ABP based on teaching for only an inter-semester period?
     
Answer.
For ABP, adjunct faculty and part-time instructors will be considered 10-month employees. Salary is reportable and service will be accrued for teaching only during the Spring and Fall semester.  Six months of service credit will be earned for teaching a minimum of one – 3 credit hour course for the full semester.  Additional teaching responsibilities over this minimum during the Spring or Fall semester will also be pensionable.  Teaching assignments outside of the Spring or Fall semesters or below the minimum will not accrue ABP service credit and related salary is not pensionable.

8.
 
Question.
Are there minimum earnings to be eligible for ABP?
     


Answer.
There is no minimum earnings amount for ABP eligibility.

While there is a minimum earnings requirement under PERS, which for anyone becoming eligible to enroll in PERS after November 1, 2008, is $7,500 (adjusted annually) and $1,500 for anyone participating in PERS prior to that date, there is no similar requirement under ABP.


9.
 
Question.
Will the State be reimbursing for the employer ABP 8% contribution for Adjunct Faculty and Part-Time Instructors as a result of Chapter 89, P.L. 2008, at county colleges?  Does the plan work the same as full-time employees and, because adjunct faculty and part-time instructors is the 8% employer contribution reimbursable?
     
Answer.
We have sought advice on this matter and are not in a position to respond to this question at this time.  Additional information will follow when it becomes available.

10.
 
Question.
Will adjunct faculty and part-time instructors have a choice of carriers?
     


Answer.
Yes, they will be members of ABP and have all the benefits of an ABP member, including their choice of carriers.


11.
 
Question.
How is vesting calculated for adjunct faculty and part-time instructors who only teach every Fall semester?
     


Answer.
For ABP, vesting occurs following 12 months of eligible employment.  Adjunct faculty and part-time instructors will be considered 10-month employees. Service will be accrued for teaching only during the Spring and Fall semester.  Six months of service credit will be earned for teaching a minimum of one – 3 credit hour course for the full semester.  Teaching assignments outside of the Spring or Fall semesters or below the minimum will not accrue ABP service credit.

Therefore, adjunct faculty and part-time instructors will vest once they begin working and receive ABP pensionable compensation in their third Spring and/or Fall semester.


12.
 
Question.
Adjunct faculty and part-time instructors are constantly withdrawing and reentering PERS — it is extremely difficult to communicate with this group as it is so transient, it may be difficult to prevent them from withdrawing from ABP thus eliminating their ability to reenter any pension system.
     


Answer.
It will be up to the employer to ensure that adjunct faculty and part-time instructors are provided with all information pertaining to the ABP including the circumstances surrounding withdrawing funds if they should terminate employment.  The Division provides information on its website and also provides telephone counseling.

ADDITIONAL INFORMATION

If you have additional questions regarding the ABP or any of the information in this letter, contact the Defined Contribution Plans Unit at (609) 292-3605 or e-mail the Unit at: typabp1@treas.state.nj.us.

CO Letter in Printable Format Adobe PDF (61K)


October 28, 2008

TO: Certifying Officers, State and County Colleges and Universities
FROM: Joseph Zisa, Manager 1, Fiscal Resources
Division of Pensions and Benefits
SUBJECT: Pension Eligibility — Adjunct Faculty and Part-Time Instructors

As a result of pension reform legislation, Chapter 89, Public Laws of 2008, recently passed by the State Legislature and signed into law by Governor Corzine on September 29, 2008, any adjunct faculty member or part-time instructor whose employment agreement begins after October 31, 2008 is eligible to participate in the Alternate Benefit Program (ABP).

Among the reforms contained in that law was a change in the definition of "member" or "participant" under the ABP.  Effective November 1, 2008, any new adjunct faculty member or a new part-time instructor entering service under a new employment agreement will be required to participate in the ABP and is no longer eligible to participate in the Public Employees' Retirement System (PERS). Additionally, any existing adjunct faculty member or a part-time instructor employed under an agreement which took effect prior to November 1, 2008, will become eligible to participate in the ABP once a new employment agreement is executed and the individual enters service under that agreement. 

Enrollment of adjunct faculty members and part-time instructors in the ABP should begin immediately upon the commencement of employment and not after the completion of 12 months of service as was the case for enrollment into PERS prior to this change in law. 

Adjunct faculty members and part-time instructors already enrolled in the PERS who enter into a new employment agreement after October 31, 2008, must choose to either:

A) Irrevocably waive their benefits under the ABP and continue their participation in the PERS, or

B) Irrevocably waive their benefits under the PERS and transfer their accumulated pension service, contributions and any available employer contributions
1 under PERS to the ABP.

Each adjunct faculty member or part-time instructor participating in the PERS must make this election by completing an Election of Retirement Coverage Adobe PDF (36K) form within 30 days following commencement of employment in the ABP eligible position2.

If after reviewing this information you have additional questions regarding the ABP or any of the information in this letter, contact the Defined Contribution Plans Unit at (609) 292-3605 or e-mail the Unit at: typabp1@treas.state.nj.us.


1Transfers of employee TPAF or PERS contributions occur upon election to waive TPAF or PERS coverage.  Transfers of employer contributions occur after the member has accrued ten years of non-concurrent service credit under TPAF, PERS and ABP.

2Individuals with existing TPAF or PERS membership at the time of ABP enrollment, who do not make an election to waive benefits under one of the two retirement systems, will lose the right to have all retirement credit consolidated under one retirement account and may lose those benefits which have not vested.

CO Letter in Printable Format - Adobe PDF (51K)


October 2008

 
TO: Local Certifying Officers of the Public Employees’ Retirement System

FROM: Florence J. Sheppard,
Deputy Director, Division of Pensions and Benefits
SUBJECT: Enrollment of Elected Officials in the DCRP, exceptions for PERS members, and PERS waiver by Non-Veteran Elected Officials
 

This letter is being sent to remind employers of recent changes in the enrollment of elected officials and to address certain exceptions for officials who were in elected office prior to July 2007.

DCRP ENROLLMENT REQUIRED

 As of July 1, 2007, Chapter 92, P.L. 2007, made State and local elected officials eligible for enrollment in the Defined Contribution Retirement Program (DCRP).  Upon taking office, all newly elected officials earning an annual base salary of $1,500 or more are to be enrolled in the DCRP.  Enrollment is done through the employer by submitting a DCRP Enrollment Application to the Division of Pensions and Benefits.    
  • DCRP Waiver — in cases where the annual salary for the elected position is less than $5,000, the elected official may choose to waive enrollment by submitting a DCRP Waiver of Retirement Program Participation within 30 days of the date that they become eligible for enrollment in the DCRP.

If the annual salary is $5,000 or more, the elected official must be enrolled in the DCRP unless any of the following exceptions apply.

DCRP Enrollment Exception for Retirees

If the elected official is also a retired member of a State-administered retirement system (PERS, TPAF, PFRS, etc.), the elected official may either:

  • Continue to receive the retirement benefit from the other retirement system but cannot be enrolled in the DCRP; or
  • Suspend the retirement benefit from the other retirement system and enroll in the DCRP while serving in the elected office (upon termination of the elected office, the retirement benefit from the other retirement system would be reinstated). If the retiree chooses to enroll in the DCRP, the employer should begin the process of submitting a DCRP Enrollment Application to the Division of Pensions and Benefits.

DCRP Enrollment Exception for PERS Members

An elected official who was a member of the Public Employees’ Retirement System (PERS) prior to July 1, 2007 based on service in an elected office, is eligible to remain a PERS member while continuously serving in the same elected office. If there is any break of service in that office, or if the official is elected to a different office, the official is required to be enrolled in the DCRP and cannot continue with PERS membership under the new elected office.

Employers should monitor the status of any elected official continuing under the PERS to assure that any re-election is to the same office. If the official is elected to a different office, upon taking office, the employer should begin the process of submitting a DCRP Enrollment Application to the Division of Pensions and Benefits (or offer the official the option to waive DCRP participation if the annual salary is less than $5,000).

DCRP Enrollment Exception for Non-Veterans

Prior to July 2007, PERS enrollment rules required mandatory enrollment for any elected official who was also a veteran and earned an annual base salary of $1,500 or more.  However, if the elected official was not a veteran, PERS enrollment was optional.

Under the provisions of Chapter 92 and the establishment of the DCRP, the optional enrollment provision for a non-veteran elected official no longer applies.  Furthermore, if a non-veteran official serving in an office prior to July 2007 had declined PERS enrollment, the official is currently not a PERS member and therefore does not meet the requirements for the DCRP enrollment exception for PERS members. 

Any elected official who declined PERS membership because he or she was a non-veteran — and who is not a retiree — is required to enroll in the DCRP if re-elected to the same office after June 30, 2007 or if newly elected to a different office.  
The Division of Pensions and Benefits is seeking the help of employers to identify any non-veteran elected officials who are not currently enrolled in either the PERS or the DCRP.

First, employers are asked to identify these officials, list them on the enclosed Non-Veteran Elected Officials Roster, and return that information to the Division.

Second, employers are asked to contact these officials and explain the following enrollment choices. 

  • If the official was serving in an elected office prior to July 2007, and continues to serve in the same term for that same elected office, the official may either enroll in the PERS or complete the enclosed PERS Optional Enrollment Waiver form and return it to the Division of Pensions and Benefits. 

    If enrolled in the PERS, the elected official will be eligible for the PERS exception to DCRP enrollment described earlier, and may continue in PERS membership while serving in the same office.  (PERS membership will end if elected to a different office and the official will become eligible for DCRP enrollment.)

    If PERS enrollment is waived, the official is not covered under the PERS exception.  If re-elected to the same office, the official now becomes eligible for DCRP enrollment in the same way as any newly elected official.  Similarly, if the official is elected to a different office, the official will become eligible for DCRP enrollment.
  • If the official was serving in an elected office prior to July 2007, and has subsequently been re-elected to a new term in that same office (or a different elected office) on or after July 1, 2007, the official is not covered under the PERS exception and considered a new official for DCRP eligibility. If this is the case, the employer should begin the process of submitting a DCRP Enrollment Application to the Division of Pensions and Benefits based on the date when the new term of office began (or offer the official the option to waive DCRP participation if the annual salary is less than $5,000).

The situations listed above are the only exceptions to DCRP enrollment of an elected official. If any current elected official is not a retiree and was newly elected to office on or after July 1, 2007, the employer should immediately begin the process of submitting a DCRP Enrollment Application to the Division of Pensions and Benefits if DCRP enrollment has not already occurred (or offer the official the option to waive DCRP participation if the annual salary is less than $5,000).

ADDITIONAL INFORMATION

To find out more about the DCRP, see Fact Sheet #80, DCRP for Elected and Appointed OfficialsAdobe PDF (34K). The fact sheet is available for viewing or printing on our Web site at: www.state.nj.us/treasury/pensions/fact80.htm

The forms listed are enclosed with this letter or can be obtained online from the Employers’ Pensions and Benefits Administration Manual (EPBAM) at: www.state.nj.us/treasury/pensions/epbam/index.htm

If you have any other questions about the information provided in this letter, you can contact the Division of Pensions and Benefits Office of Client Services at (609) 292-7524 or send e-mail to: pensions.nj@treas.state.nj.us

Enclosures

Non-Veteran Elected Officials Roster Adobe PDF (36K)
PERS Enrollment Application Adobe PDF (40K)
PERS Optional Enrollment Waiver Adobe PDF (24K)
DCRP Enrollment Application Adobe PDF (38K)
DCRP Waiver of Retirement Program Participation Adobe PDF (33K)
Fact Sheet #80, DCRP for Elected and Appointed Officials Adobe PDF (34K)

CO Letter in Printable Format Adobe PDF (191K)


September 2008

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, 3rd Quarter 2008 (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.

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*** IROC PREPARATION TIP

Please be advised that when preparing the IROC, the projected salary for next quarter does not need to be keyed in, if next quarters salary is the same as the current salary. This will save you time and aid you in submitting the report in a timely manner.

Reminder for Employers – Treatment of Retirees Returning to Employment

The Division is becoming increasingly aware of public employees returning to employment under circumstances that would make these individuals ineligible for continuing the receipt of their retirement benefit.  We want to take this opportunity to review the employer’s responsibilities when making offers of employment to retirees from the any of the State’s retirement systems.

Retirees may not return to any State or Local government level public employment unless the retiree has at least a 30-day break in service after his or her retirement date or the date the retirement is approved by the respective Board of Trustees, whichever is the later. If you should employ a retiree prior to the end of this 30-day period, you must advise the retiree that his or her retirement may be considered invalid and notify the Division immediately of the re-employment.  If after review by the Division it is determined the retirement is invalid, the retiree’s retirement system account will be reactivated and the retiree notified.  Employers should ask the retiree to see the retiree’s Board Approval Letter, which is sent to all new retirees, to determine the individual’s board approval date.

If a retiree is re-employed subsequent to the 30-day break in service in a public position covered by the same retirement system from which he or she retired, the retiree will be subject to earnings limits.  If the annual salary from public employment (or any combination of public employers) exceeds the limit, the retiree will be required to suspend his or her pension and re-enroll in the retirement system.  If you should employ a retiree and his or her salary exceeds the annual limit, you must advise the retiree that his or her retirement may need to be suspended and notify the Division immediately for a review.

We request that employers notify the Division in writing when there is a question concerning a re-employed retiree and his or her eligibility for continued retirement benefits.  Documentation provided by the employer should include the retiree’s name, employment title (both current and former, if known), current job description and place of employment (both current and former, if known).  This information should be mailed to:

NJ Division of Pensions and Benefits
Attn: Enrollment Bureau
PO Box 295
Trenton, NJ 08625-0295

For additional information, please refer to Fact Sheet #21, Employment After Retirement (Public Employees' Retirement System) Adobe PDF (40K), Fact Sheet #28, Employment After Retirement (Teachers’ Pension and Annuity Fund) Adobe PDF (39K) and Fact Sheet #29, Employment After Retirement (Police and Firemen’s Retirement System) Adobe PDF (33K).

NEW LEGISLATION ALERT - PERS and TPAF Maximum Compensation

Chapter 103, P.L. of 2007, provides that new members of PERS and TPAF are subject to a maximum compensation limit for PERS or TPAF pension contributions and benefits. 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.  These individuals with earnings over the Social Security maximum wage base are also eligible for benefits under the Defined Contribution Retirement Program (DCRP). Note:  Until reporting procedures are developed for PERS and TPAF members’ who exceed the social security maximum of $102,000 for 2008, continue to report the pension and contributory insurance for the excess salary as you did in the past. The Division will forward the pension contributions to the DCRP carrier.  Excess contributory insurance payments will be refunded to the employee.

Pension benefits may be available to these individuals for base salary paid in excess of the annual compensation limit under the newly created 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 October 10, 2008.  Should your report not be received by the close of business on October 24, 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 November 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, and payment should be made to the address on the shortage statement only.

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 (53K)


September 26, 2008

TO: School Employees' Health Benefits Program Participating Local Education Employers
FROM: New Jersey School Employees' Health Benefits Program
SUBJECT: SEHBP Open Enrollment 2008 — Local Education Employers

Chapter 103, P.L. 2007, established the School Employees’ Health Benefits Program (SEHBP) to provide medical and prescription drug coverage to qualified school employees, retirees, and eligible dependents — who were formerly covered under the State Health Benefits Program (SHBP). The School Employees' Health Benefits Commission is the executive body established by statute to be responsible for operation of the SEHBP.

OPEN ENROLLMENT

The SEHBP Open Enrollment Period for local education employees will begin on October 1, 2008 and end on October 31, 2008.  All changes to coverage made during this open enrollment will be effective on January 1, 2009.

For changes made during this Open Enrollment, completed employer-certified Health Benefit Applications and/or Dental Plan 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 7, 2008.

Employees who are newly married, or enrolling in the SEHBP 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 Adobe PDF (51K) partner or an eligible domestic partner Adobe PDF (56K) as a dependent, a copy of the NJ Civil Union Certificate, or a Certificate of Domestic Partnership dated prior to February 19, 2007, 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. In addition, employees adding dependent children to coverage must submit legal documentation verifying the child’s relationship to the employee.

Please note that in the fall of 2009 the SEHBP’s health consultant, Aon Consulting, will be conducting a full legal documentation audit of all subscribers who cover dependents. Subscribers will be required to provide legal documentation verifying a dependent’s relationship to the subscriber. This open enrollment period may be a good opportunity for employees to review the individuals covered under their medical plan and make any necessary updates.

2009 SEHBP RATES FOR EMPLOYERS

On September 23, 2008, the School Employees’ Health Benefits Commission approved health and prescription drug plan rates for the 2009 plan year. These rates are based upon the recommendation of the Commission’s actuarial consultant, Aon Consulting.

Effective January 1, 2009, SEHBP plan rates for the Local Education Active Group will see the following percentage of change.

PLAN TYPE
RATE INCREASE
NJ DIRECT10 7%
NJ DIRECT15 7%
Aetna HMO 9%
CIGNA HealthCare HMO 9%
Prescription Drug Plan 2%

MEDICAL AND PRESCRIPTION DRUG PLANS AND COPAYMENTS

The SEHBP currently offers local education employees a choice of one of four medical plans.

  • NJ DIRECT10 — a Preferred Provider Organization administered by Horizon Blue Cross Blue Shield of New Jersey that offers a selection of both in-network coverage with a $10 copayment and out-of-network coverage subject to deductibles and coinsurance; or

  • NJ DIRECT15 — a Preferred Provider Organizations administered by Horizon Blue Cross Blue Shield of New Jersey that offers a selection of both in-network coverage with a $15 copayment and out-of-network coverage subject to deductibles and coinsurance; or

  • Aetna HMO or CIGNA HealthCare HMO — standard Health Maintenance Organization (HMO) plans offering in-network coverage through a primary care physician for a $10 copayment.

A side-by-side comparison of medical plan benefits is available in the Plan Comparison Summary for Local Education Employees, available for viewing or printing at the Health Benefits Web site: www.state.nj.us/treasury/pensions/sehbp.htm

If your employing entity does not offer a freestanding prescription drug plan, the SEHBP medical plan includes prescription drug coverage as part of the medical plan. When included in the medical plan:

  • NJ DIRECT10 and NJ DIRECT15 provide reimbursement of prescription drug costs at 90% for prescriptions filled by an in-network pharmacy or 80% (NJ DIRECT10) or 70% (NJ DIRECT15) for prescriptions filled by an out-of-network pharmacy.

  • Aetna HMO or CIGNA HealthCare HMO provide a three tier copayment benefit. Copayments for a 30 day supply when purchased at a retail pharmacy are $5 for generic drugs, $10 for preferred brand name drugs, and $20 for all other brand name drugs. Mail order copayments for up to a 90-day supply are $5 for generic drugs, $15 for preferred brand name drugs, and $25 for all other brand name drugs.

The Employee Prescription Drug Plan is offered to local education employers as a freestanding prescription drug plan.  If your employing entity has chosen to participate:

  • Copayments for a 30 day supply when purchased at a retail pharmacy are $3 for generic drugs, $10 for brand name prescription drugs.

  • Mail order prescription drug copayments for up to a 90-day supply, are $5 for generic drugs, $15 for brand name drugs.

Employer rate charts for medical plans — with and without prescription coverage — as well as Employee Prescription Drug Plan rates are included in this mailing. Rate information is also available on the Web site at: www.state.nj.us/treasury/pensions/sehbp.htm. Please note that “with prescription drug coverage” means that the employer is providing a separate prescription drug card plan such as the Employee Prescription Drug Plan or other private plan; “without prescription drug coverage” means that prescription drugs are provided through the member’s SEHBP medical plan.

EMPLOYEE DENTAL PLANS

The Employee Dental Plans are offered to local education employers as a freestanding dental plan.  If your employing entity has chosen to participate there are seven different dental plans offered based on one of two different plan designs — Dental Plan Organizations (DPO) and a Dental Expense Plan.

  • Six DPOs are available: Aetna DMO; BeneCare; CIGNA Dental Health; Community Dental Associates; Healthplex; and Horizon Dental Choice.  DPOs contract with a network of providers for dental services. When you use a DPO dentist, diagnostic and preventive services are covered in full. Most other eligible expenses require a small copayment. You must use providers participating with the DPO you select to receive coverage. Be sure you confirm that the dentist or dental facility you select is taking new patients and participates with the SHBP Employee Dental Plans, since DPOs also service other organizations.

  • The Dental Expense Plan is an indemnity type plan administered by Aetna that allows members to obtain services from any dentist. After satisfying an annual deductible (no deductible for preventive services), members are reimbursed a percentage of the reasonable and customary charges for most services.

A side-by-side comparison of dental plan benefits is available in Fact Sheet #37, Employee Dental Plans Adobe PDF (44K), which is available on the SHBP Web site at: www.state.nj.us/treasury/pensions/fact37.htm

Employees must remain enrolled in a dental plan for a minimum of 12 months before they will be allowed to change plans. This means that if an employee was not enrolled in a dental plan as of January 1, 2008, they will not be permitted to change dental plans during this Open Enrollment.

Rates for the Dental Plan Organizations will increase an aggregate amount of 2.4% for Plan Year 2009. Dental Expense Plan rates will remain the same for Plan Year 2009. Employer rate charts for the Employee Dental Plans are included in this mailing. Dental plan rate information is also available on the SHBP Web site at: www.state.nj.us/treasury/pensions/shbp.htm

OPEN ENROLLMENT INFORMATIONAL MATERIALS

Please note that the SEHBP 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 employer rates for medical, prescription drug, and dental plans. Rate information is also posted to the SEHBP Web site: www.state.nj.us/treasury/pensions/sehbp.htm 

HEALTH CAPSULE — The Health Capsule newsletter announces the SEHBP Open Enrollment Period to employees and presents important information and changes that may affect their benefit selection. A supply of the local education edition of the newsletter will be shipped to employers for distribution to employees during the Open Enrollment.

HEALTH PLAN CONTACTS — A list medical and dental plan telephone contact information and Web site addresses for employees is provided.

A separate list of employer marketing contacts for the medical and dental plans is also enclosed. Use these contacts to obtain 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 medical plans (including prescription drug coverage) and the Employee Dental Plans use two different applications.  The health and dental applications are available for printing from the SEHBP Web site at: www.state.nj.us/treasury/pensions/sehbp.htm 

SUMMARY PROGRAM DESCRIPTION (SPD) BOOKLET, PLAN HANDBOOKS, AND HEALTH PLAN COMPARISON SUMMARY CHARTS — The health benefits Summary Program Description, medical plan Member Handbooks (NJ DIRECT, Aetna HMO, CIGNA HealthCare HMO), and Plan Comparison Summary charts have been revised for the Open enrollment and will be available as online publications on the health benefits Web site at: www.state.nj.us/treasury/pensions/sehbp.htm  Please encourage your employees to access these materials online.  Bulk supplies of printed copies are no longer available.

UNIFIED PROVIDER DIRECTORY — Participating medical plan provider information is available in the Unified Provider Directory (UPD), an online service that provides a comprehensive listing of health care providers and facilities that deliver their services through one or more of the SEHBP’s plans in New Jersey and adjacent counties in Pennsylvania, New York and Delaware. Updated monthly, employees can access the UPD through the health benefits Web site at: www.state.nj.us/treasury/pensions/sehbp.htm 

Since all plans have nationwide coverage and only three plan options remain, the UPD will not be available after January 1, 2009. Employees will still be able check if their provider participates with any or all of the health plans by accessing that information through the health plan’s Web site. The Web site links are located on the health benefits home page at: www.state.nj.us/treasury/pensions/sehbp.htm.

ADDITIONAL INFORMATION

If you have any questions about the SEHBP 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 or e-mail the Office of Client Services

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

Enclosures:

SEHBP Open Enrollment Milestone Chart
Medical Plan and Dental Plan Rates
Health Capsule Newsletter
Medical/Dental Plan Employee Contact Information
Medical/Dental Plan Marketing Contacts

CO Letter in Printable Format - Adobe PDF (196K)


September 15, 2008

TO: State Health Benefits Program Participating Local Government Employers
FROM: New Jersey State Health Benefits Program
SUBJECT: SHBP Open Enrollment 2008 — Local Government Employers

The State Health Benefits Program (SHBP) Open Enrollment Period for local government employees will begin on October 1, 2008 and end on October 31, 2008.  All changes to coverage made during this open enrollment will be effective on January 1, 2009.

For changes made during this Open Enrollment, completed employer-certified Health Benefit Applications and/or Dental Plan 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 7, 2008.

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 Adobe PDF (51K) partner or an eligible domestic partner Adobe PDF (56K) as a dependent, a copy of the NJ Civil Union Certificate, or a Certificate of Domestic Partnership dated prior to February 19, 2007, 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. In addition, employees adding dependent children to coverage must submit legal documentation verifying the child’s relationship to the employee.

Please note that in the Fall of 2009 the SHBP’s health consultant, Aon Consulting, will be conducting a full legal documentation audit of all subscribers who cover dependents. Subscribers will be required to provide legal documentation verifying a dependent’s relationship to the subscriber. This open enrollment period may be a good opportunity for employees to review the individuals covered under their medical plan and make any necessary updates.

2009 SHBP RATES FOR EMPLOYERS

The State Health Benefits Commission has approved health, dental, and prescription drug plan rates for the 2009 plan year.  These rates are based upon the recommendation of the Commission’s actuarial consultant, Aon Consulting.

Effective January 1, 2009, SHBP plan rates for the Local Government Active Group will see the following percentage of change.

PLAN TYPE
RATE INCREASE
NJ DIRECT10 3%
NJ DIRECT15 3%
Aetna HMO 6%
CIGNA HealthCare HMO 6%
Prescription Drug Plan 2%
Dental Expense Plan 0%
Dental Provider Organization (DPO) Plans 2.4%

MEDICAL AND PRESCRIPTION DRUG PLANS AND COPAYMENTS

The SHBP currently offers local government employees a choice of one of four medical plans.

  • NJ DIRECT10 — a Preferred Provider Organization administered by Horizon Blue Cross Blue Shield of New Jersey that offers a selection of both in-network coverage with a $10 copayment and out-of-network coverage subject to deductibles and coinsurance; or

  • NJ DIRECT15 — a Preferred Provider Organizations administered by Horizon Blue Cross Blue Shield of New Jersey that offers a selection of both in-network coverage with a $15 copayment and out-of-network coverage subject to deductibles and coinsurance; or

  • Aetna HMO or CIGNA HealthCare HMO — standard Health Maintenance Organization (HMO) plans offering in-network coverage through a primary care physician for a $10 copayment.

A side-by-side comparison of medical plan benefits is available in the Plan Comparison Summary for Local Government Employees, available for viewing or printing at the SHBP Web site: www.state.nj.us/treasury/pensions/shbp.htm

If your employing entity does not offer a freestanding prescription drug plan, the SHBP medical plan includes prescription drug coverage as part of the medical plan. When included in the medical plan:

  • NJ DIRECT10 and NJ DIRECT15 provide reimbursement of prescription drug costs at 90% for prescriptions filled by an in-network pharmacy or 80% (NJ DIRECT10) or 70% (NJ DIRECT15) for prescriptions filled by an out-of-network pharmacy.

  • Aetna HMO or CIGNA HealthCare HMO provide a three tier copayment benefit. Copayments for a 30 day supply when purchased at a retail pharmacy are $5 for generic drugs, $10 for preferred brand name drugs, and $20 for all other brand name drugs. Mail order copayments for up to a 90-day supply are $5 for generic drugs, $15 for preferred brand name drugs, and $25 for all other brand name drugs.

The Employee Prescription Drug Plan is offered to local government employers as a freestanding prescription drug plan.  If your employing entity has chosen to participate:

  • Copayments for a 30 day supply when purchased at a retail pharmacy are $3 for generic drugs, $10 for brand name prescription drugs. 

  • Mail order prescription drug copayments for up to a 90-day supply, are $5 for generic drugs, $15 for brand name drugs.

Employer rate charts for medical plans — with and without prescription coverage — as well as Employee Prescription Drug Plan rates are included in this mailing. Rate information is also available on the SHBP Web site: www.state.nj.us/treasury/pensions/shbp.htm. Please note that “with prescription drug coverage” means that the employer is providing a separate prescription drug card plan such as the Employee Prescription Drug Plan or other private plan; “without prescription drug coverage” means that prescription drugs are provided through the member’s SHBP medical plan.

EMPLOYEE DENTAL PLANS

The Employee Dental Plans are offered to local government employers as a freestanding dental plan. If your employing entity has chosen to participate there are  seven different dental plans offered based on one of two different plan designs — Dental Plan Organizations (DPO) and a Dental Expense Plan.

  • Six DPOs are available: Aetna DMO; BeneCare; CIGNA Dental Health; Community Dental Associates; Healthplex; and Horizon Dental Choice.  DPOs contract with a network of providers for dental services. When you use a DPO dentist, diagnostic and preventive services are covered in full. Most other eligible expenses require a small copayment. You must use providers participating with the DPO you select to receive coverage. Be sure you confirm that the dentist or dental facility you select is taking new patients and participates with the SHBP Employee Dental Plans, since DPOs also service other organizations.

  • The Dental Expense Plan is an indemnity type plan administered by Aetna that allows members to obtain services from any dentist. After satisfying an annual deductible (no deductible for preventive services), members are reimbursed a percentage of the reasonable and customary charges for most services.

A side-by-side comparison of dental plan benefits is available in Fact Sheet #37, Employee Dental Plans Adobe PDF (44K), which is available on the SHBP Web site at: www.state.nj.us/treasury/pensions/fact37.htm

Employer rate charts for the Employee Dental Plans are included in this mailing. Dental plan rate information is also available on the SHBP Web site at: www.state.nj.us/treasury/pensions/shbp.htm

Employees must remain enrolled in a dental plan for a minimum of 12 months before they will be allowed to change plans. This means that if an employee was not enrolled in a dental plan as of January 1, 2008, they will not be permitted to change dental plans during this Open Enrollment.

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 employer rates for medical, prescription drug, and dental plans. Rate information is also posted to the SHBP Web site: www.state.nj.us/treasury/pensions/shbp.htm 

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 supply of the local government edition of the newsletter will be shipped to employers for distribution to employees prior to the start of the Open Enrollment.

HEALTH PLAN CONTACTS — A list medical and dental plan telephone contact information and Web site addresses for employees is provided.

A separate list of employer marketing contacts for the medical and dental plans is also enclosed. Use these contacts to obtain 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 medical plans (including prescription drug coverage) and the 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 CHARTS — The health benefits Summary Program Description, medical plan Member Handbooks (NJ DIRECT, Aetna HMO, CIGNA HealthCare HMO), and Plan Comparison Summary charts have been revised for the Open enrollment and will be available as online publications on the SHBP Web site at: www.state.nj.us/treasury/pensions/shbp.htm  Please encourage your employees to access these materials online.  Bulk supplies of printed copies are no longer available.

UNIFIED PROVIDER DIRECTORY — Participating medical plan provider information is available in the Unified Provider Directory (UPD), 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 plans in New Jersey and adjacent counties in Pennsylvania, New York and Delaware.  Updated monthly, employees can access the UPD through the SHBP home page at: www.state.nj.us/treasury/pensions/shbp.htm 

Since all plans have nationwide coverage and only three plan options remain, the UPD will not be available after January 1, 2009. Employees will still be able check if their provider participates with any or all of the health plans by accessing that information through the health plan’s Web site. The Web site links are located on 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 or e-mail the Office of Client Services

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

Enclosures:

SHBP Open Enrollment Milestone Chart
Medical Plan and Dental Plan Rates
Health Capsule Newsletter
Medical/Dental Plan Employee Contact Information
Medical/Dental Plan Marketing Contacts

CO Letter in Printable Format Adobe PDF (197K)


September 15, 2008

TO: State Departmental Certifying Officers, State Human Resources Directors, State Biweekly Human Resources Representatives 
FROM: New Jersey State Health Benefits Program
SUBJECT: SHBP Open Enrollment 2008 — State Biweekly Employers

The State Health Benefits Program (SHBP) Open Enrollment period for all State employees will begin on October 1, 2008 and end on October 31, 2008.  All changes to coverage made during this open enrollment will be effective on January 3, 2009 for State biweekly employees paid through the State Centralized Payroll Unit.

For changes made during this Open Enrollment, completed employer-certified Health Benefit Applications and/or Dental Plan 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 7, 2008.

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 Adobe PDF (51K) partner or an eligible domestic partner Adobe PDF (56K) as a dependent, a copy of the NJ Civil Union Certificate, or a Certificate of Domestic Partnership that is dated prior to February 19, 2007, 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. In addition, employees adding dependent children to coverage must submit legal documentation verifying the child’s relationship to the employee.

Please note that starting in January 2009 the SHBP’s health consultant, Aon Consulting, will be conducting a full legal documentation audit of all subscribers who cover dependents. Subscribers will be required to provide legal documentation verifying a dependent’s relationship to the subscriber. This open enrollment period may be a good opportunity for employees to review the individuals covered under their medical plan and make any necessary updates.

2009 SHBP RATES FOR EMPLOYERS

The State Health Benefits Commission has approved health, dental, and prescription drug plan rates for the 2009 plan year.  These rates are based upon the recommendation of the Commission’s actuarial consultant, Aon Consulting.

Effective January 3, 2009, SHBP plan rates for the State Active Biweekly Group will see the following percentage of change.

PLAN TYPE
RATE INCREASE
NJ DIRECT15 2%
Aetna HMO 8%
CIGNA HealthCare HMO 8%
NJ PLUS* 7%
Traditional Plan* 7%
Prescription Drug Plan 2%
Dental Expense Plan 0%
Dental Provider Organization (DPO) Plans 2.4%
* NJ PLUS and Traditional Plan only available to certain State employees covered by labor contracts that are not yet ratified (see note below)

MEDICAL AND PRESCRIPTION DRUG PLANS AND EMPLOYEE COSTS

Since July 2007, most State employees 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 (see note below).

The SHBP currently offers these State employees a choice of one of three medical plans.

  • NJ DIRECT15 — a Preferred Provider Organization administered by Horizon Blue Cross Blue Shield of New Jersey that offers a selection of both in-network coverage with a $15 copayment and out-of-network coverage subject to deductibles and coinsurance; or

  • Aetna HMO or CIGNA HealthCare HMO — standard Health Maintenance Organization (HMO) plans that offer in-network coverage through a primary care physician for a $15 copayment.

  • For each of the medical plans, 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.

A side-by-side comparison of medical plan benefits is available in the Plan Comparison Summary for State Employees, available for viewing or printing at the SHBP Web site: www.state.nj.us/treasury/pensions/shbp.htm

Note: Certain State employees covered by labor contracts that are not yet ratified remain in the Traditional Plan, NJ PLUS, Aetna HMO or CIGNA HealthCare HMO until new contracts are settled and may only make changes within these plans at this time. Any former premium sharing agreements also remain in place for these employee groups which include State Police (law enforcement officers), certain Department of Corrections employees and certain State Judiciary employees.  Rate information for these employees will be posted to the Web site and forwarded to the appropriate Human Resources personnel prior to the Open Enrollment.

Prescription drug coverage is offered to most eligible State employees through the Employee Prescription Drug Plan.  The plan has a three tier copayment design.

  • Copayments for a 30 day supply when purchased at a retail pharmacy are $3 for generic drugs, $10 for brand name prescription drugs without generic equivalents, and $25 for brand name drugs where a generic equivalent is available

  • 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 $40 for brand name drugs where a generic equivalent is available.

Waiving SHBP Coverage

State employees are permitted to waive SHBP medical and prescription coverage to avoid the 1.5 percent health contribution from salary — provided the employee has other health care coverage. To waive coverage a SHBP State Waiver form and a Health Benefits Application must be completed and submitted by October 31, 2008.

DENTAL PLANS AND EMPLOYEE COSTS

Dental coverage is offered to all eligible State employees through the Employee Dental Plans.  For plan year 2009, seven different dental plans are offered based on one of two different plan designs — Dental Plan Organizations (DPO) and a Dental Expense Plan.

  • Six DPOs are available: Aetna DMO; BeneCare; CIGNA Dental Health; Community Dental Associates; Healthplex; and Horizon Dental Choice.  DPOs contract with a network of providers for dental services. When you use a DPO dentist, diagnostic and preventive services are covered in full. Most other eligible expenses require a small copayment.  You must use providers participating with the DPO you select to receive coverage. Be sure you confirm that the dentist or dental facility you select is taking new patients and participates with the SHBP Employee Dental Plans, since DPOs also service other organizations.

  • The Dental Expense Plan is an indemnity type plan administered by Aetna that allows members to obtain services from any dentist. After satisfying an annual deductible (no deductible for preventive services), members are reimbursed a percentage of the reasonable and customary charges for most services.

Premium sharing agreements regarding SHBP dental plans remain in place for all eligible State employees. Rate information will be published in the Health Capsule newsletter to be distributed with paychecks on September 19 and posted to the SHBP Web site: www.state.nj.us/treasury/pensions/shbp.htm

A side-by-side comparison of dental plan benefits is available in the Open Enrollment issue of the Health Capsule newsletter or in Fact Sheet #37, Employee Dental Plans Adobe PDF (44K), which is available on the SHBP Web site: www.state.nj.us/treasury/pensions/fact37.htm

Employees must remain enrolled in a dental plan for a minimum of 12 months before they will be allowed to change plans.  This means that if an employee was not enrolled in a dental plan as of January 5, 2008, they will not be permitted to change dental plans during this Open Enrollment.

TAX$AVE AND THE SHBP

The State Employees Tax Savings Program (Tax$ave) Open Enrollment Period runs concurrent with the SHBP Open Enrollment Period (October 1 – October 31, 2008). Tax$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$ave, Civil Unions, and Domestic Partners — SHBP members need to be aware of the possible federal tax implications of adding a civil union Adobe PDF (51K) partner or domestic partner Adobe PDF (56K) to SHBP benefits. Since the federal tax code does not view civil union or domestic partners in the same manner as spouses, an employer may have to treat the civil union or domestic partner SHBP benefit as taxable to the employee and withhold federal income, Social Security, and Medicare taxes on its value. Similarly, since the partner's coverage is a federally taxable benefit, an employee who participates in the Tax$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 employer rates for medical, prescription drug, and dental plans.  Because most State employees pay a contribution of 1.5 percent of salary rather than a set premium, employee rates for medical plans and the Prescription Drug Plan are no longer provided. Dental premiums are being published in the Health Capsule newsletter (to be distributed September 19), provided with dental plan information in this mailing, and posted to the SHBP Web site: www.state.nj.us/treasury/pensions/shbp.htm 

The SHBP will also provide medical plan and Prescription Drug Plan rate information to employers with employees who are still covered under labor agreements requiring premium sharing for an HMO or the Traditional Plan. These employers should watch for this information to be e-mailed, prior to the start of the Open Enrollment, and provide copies to employees covered by the old arrangements.

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.
On September 12, the Health Capsule newsletter will be provided to employers through the State’s Centralized Payroll Unit for distribution to employees with paychecks on September 19. 

CHECK MESSAGES — Beginning September 5, and extending until the end of the Open Enrollment, paycheck messages will be provided to employees paid through the State Centralized Payroll Unit.  A copy of the message text is enclosed.

HEALTH PLAN CONTACTS — A list of medical and dental plans, telephone contact information, Web site addresses, and service areas is enclosed.  Please copy and provide this information to your employees.

A separate list of employer marketing contacts for the medical and dental plans is also enclosed. Use these contacts to obtain 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 medical plans (including prescription drug coverage) and the 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 CHARTS — The health benefits Summary Program Description, medical plan Member Handbooks (NJ DIRECT, Aetna HMO, CIGNA HealthCare HMO), and Plan Comparison Summary charts have been revised for the Open Enrollment and will be available as online publications on the SHBP Web site at: www.state.nj.us/treasury/pensions/shbp.htm  Please encourage your employees to access these materials online.  Bulk supplies of printed copies are no longer available.

UNIFIED PROVIDER DIRECTORY — Participating medical plan provider information is available in the Unified Provider Directory (UPD), 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 plans in New Jersey and adjacent counties in Pennsylvania, New York and Delaware.  Updated monthly, employees can access the UPD through the SHBP home page at: www.state.nj.us/treasury/pensions/shbp.htm  

Since all plans have nationwide coverage and only three plan options remain, the UPD will not be available after January 1, 2009. Employees will still be able check if their provider participates with any or all of the health plans by accessing that information through the health plan’s Web site. The Web site links are located on 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 or e-mail the Office of Client Services.

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

Enclosures:

SHBP Open Enrollment Milestone Chart
Medical Plan and Dental Plan Rates
Health Capsule Newsletter
Open Enrollment Check Messages
Medical/Dental Plan Employee Contact Information
Medical/Dental Plan Marketing Contacts

CO Letter in Printable Format Adobe PDF (265K)


September 15, 2008

TO: State Monthly Certifying Officers, State Monthly Human Resources Representatives
FROM: New Jersey State Health Benefits Program
SUBJECT: SHBP Open Enrollment 2008 — State Monthly Employers

The State Health Benefits Program (SHBP) Open Enrollment period for all State employees will begin on October 1, 2008 and end on October 31, 2008.  All changes to coverage made during this open enrollment will be effective on January 1, 2009 for State monthly employees.

For changes made during this Open Enrollment, completed employer-certified Health Benefit Applications and/or Dental Plan 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 7, 2008.

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 Adobe PDF (51K) partner or an eligible domestic partner Adobe PDF (56K) as a dependent, a copy of the NJ Civil Union Certificate, or a Certificate of Domestic Partnership dated prior to February 19, 2007, 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. In addition, employees adding dependent children to coverage must submit legal documentation verifying the child’s relationship to the employee.

Please note that starting in January 2009 the SHBP’s health consultant, Aon Consulting, will be conducting a full legal documentation audit of all subscribers who cover dependents. Subscribers will be required to provide legal documentation verifying a dependent’s relationship to the subscriber. This open enrollment period may be a good opportunity for employees to review the individuals covered under their medical plan and make any necessary updates.

2009 SHBP RATES FOR EMPLOYERS

The State Health Benefits Commission has approved health, dental, and prescription drug plan rates for the 2009 plan year.  These rates are based upon the recommendation of the Commission’s actuarial consultant, Aon Consulting.

Effective January 1, 2009, SHBP plan rates for the State Active Monthly Group will see the following percentage of change.

PLAN TYPE
RATE INCREASE
NJ DIRECT15 2%
Aetna HMO 8%
CIGNA HealthCare HMO 8%
Prescription Drug Plan 2%
Dental Expense Plan 0%
Dental Provider Organization (DPO) Plans 2.4%

MEDICAL AND PRESCRIPTION DRUG PLANS AND EMPLOYEE COSTS

Since July 2007,most State employees 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.
The SHBP currently offers State employees a choice of one of three medical plans.

  • NJ DIRECT15 — a Preferred Provider Organization administered by Horizon Blue Cross Blue Shield of New Jersey that offers a selection of both in-network coverage with a $15 copayment and out-of-network coverage subject to deductibles and coinsurance; or

  • Aetna HMO or CIGNA HealthCare HMO — standard Health Maintenance Organization (HMO) plans that offer in-network coverage through a primary care physician for a $15 copayment.

  • For each of the medical plans, 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.

A side-by-side comparison of medical plan benefits is available in the Plan Comparison Summary for State Employees, available for viewing or printing at the SHBP Web site: www.state.nj.us/treasury/pensions/shbp.htm

Note: Certain State employees covered by labor contracts that are not yet ratified remain in the Traditional Plan, NJ PLUS, Aetna HMO or CIGNA HealthCare HMO until new contracts are settled and may only make changes within these plans at this time. Any former premium sharing agreements also remain in place for these employee groups.  Rate information for these employees will be posted to the Web site and forwarded to the appropriate Human Resources personnel prior to the Open Enrollment.

Prescription drug coverage is offered to most eligible State employees through the Employee Prescription Drug Plan.  The plan has a three tier copayment design.

  • Copayments for a 30 day supply when purchased at a retail pharmacy are $3 for generic drugs, $10 for brand name prescription drugs without generic equivalents, and $25 for brand name drugs where a generic equivalent is available

  • 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 $40 for brand name drugs where a generic equivalent is available.

Waiving SHBP Coverage

State employees are permitted to waive SHBP medical and prescription coverage to avoid the 1.5 percent health contribution from salary — provided the employee has other health care coverage. To waive coverage a SHBP State Waiver form and a Health Benefits Application must be completed and submitted by October 31, 2008.

DENTAL PLANS AND EMPLOYEE COSTS

Dental coverage is offered to all eligible State employees through the Employee Dental Plans.  For plan year 2009, seven different dental plans are offered based on one of two different plan types — Dental Plan Organizations (DPO) and a Dental Expense Plan.

  • Six DPOs are available: Aetna DMO; BeneCare; CIGNA Dental Health; Community Dental Associates; Healthplex; and Horizon Dental Choice.  DPOs contract with a network of providers for dental services. When you use a DPO dentist, diagnostic and preventive services are covered in full. Most other eligible expenses require a small copayment.  You must use providers participating with the DPO you select to receive coverage. Be sure you confirm that the dentist or dental facility you select is taking new patients and participates with the SHBP Employee Dental Plans, since DPOs also service other organizations.

  • The Dental Expense Plan is an indemnity type plan administered by Aetna that allows members to obtain services from any dentist. After satisfying an annual deductible (no deductible for preventive services), members are reimbursed a percentage of the reasonable and customary charges for most services.

Premium sharing agreements regarding SHBP dental plans remain in place for all eligible State employees. Rate information will be published in the Health Capsule newsletter and posted to the SHBP Web site: www.state.nj.us/treasury/pensions/shbp.htm 

A side-by-side comparison of dental plan benefits is available in the Open Enrollment issue of the Health Capsule newsletter or in Fact Sheet #37, Employee Dental Plans Adobe PDF (44K) which is available on the SHBP Web site: www.state.nj.us/treasury/pensions/fact37.htm

Employees must remain enrolled in a dental plan for a minimum of 12 months before they will be allowed to change plans.  This means that if an employee was not enrolled in a dental plan as of January 1, 2008, they will not be permitted to change dental plans during this Open Enrollment.

TAX$AVE AND THE SHBP

The State Employees Tax Savings Program (Tax$ave) Open Enrollment Period runs concurrent with the SHBP Open Enrollment Period (October 1 – October 31, 2008). Tax$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$ave, Civil Unions, and Domestic Partners — SHBP members need to be aware of the possible federal tax implications of adding a civil union Adobe PDF (51K) partner or domestic partner Adobe PDF (56K) to SHBP benefits. Since the federal tax code does not view civil union or domestic partners in the same manner as spouses, an employer may have to treat the civil union or domestic partner SHBP benefit as taxable to the employee and withhold federal income, Social Security, and Medicare taxes on its value. Similarly, since the partner's coverage is a federally taxable benefit, an employee who participates in the Tax$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 employer rates for medical, prescription drug, and dental plans.  Because most State employees pay a contribution of 1.5 percent of salary rather than a set premium, employee rates for medical plans and the Prescription Drug Plan are no longer provided.  Dental premiums are being published in the Health Capsule newsletter (see below), provided with dental plan information in this mailing, and posted to the SHBP Web site: www.state.nj.us/treasury/pensions/shbp.htm 

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 supply of the newsletter will be shipped to employers for distribution to employees prior to the start of the Open Enrollment. A sample is enclosed for your review.

HEALTH PLAN CONTACTS — A list of medical and dental plans, telephone contact information, Web site addresses, and service areas is enclosed.  Please copy and provide this information to your employees.

A separate list of employer marketing contacts for the medical and dental plans is also enclosed. Use these contacts to obtain 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 medical plans (including prescription drug coverage) and the 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 CHARTS — The health benefits Summary Program Description, medical plan Member Handbooks (NJ DIRECT, Aetna HMO, CIGNA HealthCare HMO), and Plan Comparison Summary charts have been revised for the Open enrollment and will be available as online publications on the SHBP Web site at: www.state.nj.us/treasury/pensions/shbp.htm  Please encourage your employees to access these materials online.  Bulk supplies of printed copies are no longer available.

UNIFIED PROVIDER DIRECTORY — Participating medical plan provider information is available in the Unified Provider Directory (UPD), 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 plans in New Jersey and adjacent counties in Pennsylvania, New York and Delaware.  Updated monthly, employees can access the UPD through the SHBP home page at: www.state.nj.us/treasury/pensions/shbp.htm

Since all plans have nationwide coverage and only three plan options remain, the UPD will not be available after January 1, 2009. Employees will still be able check if their provider participates with any or all of the health plans by accessing that information through the health plan’s Web site. The Web site links are located on 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 or e-mail the Office of Client Services

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

Enclosures:

SHBP Open Enrollment Milestone Chart
Medical Plan and Dental Plan Rates
Health Capsule Newsletter
Medical/Dental Plan Employee Contact Information
Medical/Dental Plan Marketing Contacts

CO Letter in Printable Format Adobe PDF (284K)


September 8, 2008

TO: Certifying Officers
FROM: Frederick J. Beaver, Director,
Division of Pensions and Benefits
SUBJECT: Online Application Requirement for Pension Loans

The Division of Pensions and Benefits is implementing significant changes to pension loan application procedures for members 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).

ONLINE LOAN APPLICATION REQUIRED

Effective November 1, 2008, an eligible member who wishes to borrow against their pension account, must submit the loan request online using the Pension Loan Application accessible through a personal account with the Member Benefits Online System (MBOS).

  • The Loan Application will no longer be available as a printed form or through the Division’s Web site. 
  • Paper Loan Applications that are received by mail as of November 1, 2008, will be returned to members with instructions on submitting the loan request through MBOS (see page 2 for specific exceptions). 
  • The Loan Fax number, which has been phased out of use since the introduction of loans through MBOS, will be completely disabled.

MBOS ACCESS

The Member Benefits Online System (MBOS) is a set of Internet applications that allow registered retirement system members access to their pension account information. 

  • MBOS provides members with the fastest, most efficient method for requesting a pension loan. Confirmation of a completed application is provided to the member on screen and by e-mail. Under normal circumstances, a loan application submitted through MBOS before the close of business (4:30 p.m.) on a Friday is processed and mailed on the following Wednesday.
  • Employees who are already registered MBOS users currently have access to the online loan application through their MBOS account.
  • Employees who are new to MBOS can access MBOS after they register with both the MyNewJersey Web site and MBOS. Registration is free; however, the registration process requires several steps and new users should carefully follow the MBOS Registration Instructions (see attachment).

If, after following the MBOS Registration Instructions, an employee still needs assistance registering for or using MBOS, they should call the MBOS Help Desk at (609) 777-0534 or send an e-mail with the subject line "MBOS E-mail" to:pensions.nj@treas.state.nj.us

EMPLOYER PARTICIPATION

Early and frequent communication with employees will be key elements to a smooth transition to requiring loan applications through MBOS. The Division expects participating employers to play a significant role in assisting with the change.

  • Employers should take all available opportunities to inform employees of the coming loan application change using any in-house communication channels.
  • As we near the November 1, 2008, implementation date, the Division will provide State employees with pay check messages and payroll inserts through centralized payroll (see attachments). 
  • Local employers should also make the attached announcement, or similar messages, available to employees to inform them of the pending change. 

Exceptions to Online Loan Application

While the majority of member loan requests will require processing through MBOS, a limited number of members are not able to access the MBOS Loan Application.  These member groups include: 

  • Judicial Retirement System (JRS) members who should continue to use the paper JRS Loan Application;
  • Retirement system members who have established a security freeze on their accounts due to an instance of ID theft (these members must contact the ID Theft Coordinator to request a loan); and
  • Employees shown in the loan processing system as inactive from payroll, including:

    — Employees who apply for a loan within 6 months of returning from a leave of absence;

    — Employees who apply for a loan within 6 months of transferring within the same retirement system to a new      employer;

    — Employees whose employer was late in submitting the Report of Contributions for the quarterly posting; and

    — State employees who are paid on a supplemental payroll schedule.

Members shown as inactive from payroll may still be able to borrow, but a Certified Loan Request form must be submitted by the employer to verify the employee’s active pay status. (Employees from a late-reporting location, after certification, may only borrow amounts based on the previously posted quarter.)  A sample of the Certified Loan Request form is attached. Please do not begin using this form until the November 1, 2008, implementation date when it will be available to employers through the online Employers Pensions and Benefits Administration Manual (EPBAM).

Employers and members should also note that limited access to a computer or a member’s reluctance to use MBOS will not be considered sufficient circumstances to allow manual loan processing. 

OTHER PENSION LOAN PROVISIONS

Other provisions of the pension loan program remain unchanged. These include:

  • Eligibility — Members must have at least three years of pension service credit posted to their retirement system account. Pension contributions and credit are posted to accounts on a quarterly basis and normally takes 45 days from the end of a quarter to be posted. For example, if a member was enrolled in the pension fund on January 1, 2006, the member would not have three years posted to the account until the posting in February 2009.
  • Loan Amount — Eligible members may borrow amounts between $50 up to one-half of the posted contributions or a maximum loan balance of $50,000, whichever is less. Loans are made in increments of $10.
  • Interest Rate — Interest is charged on the declining balance of all loans at a commercially reasonable rate set annually by the New Jersey State Treasurer. For loan applications received in 2008, the interest rate is 4.69% on the declining balance of the loan.
  • Administrative Fee — Chapter 92, P.L. 2007, established an administrative processing fee on all pension loans.  For loan applications received in 2008, the administrative processing fee is $8.00. The administrative processing fee is not an added charge, but is taken from the requested amount of the loan to recover the actual costs of administering the pension loan program. The administrative processing fee is subject to change annually with any change announced in December and the new fee taking effect the first of January. 
  • Five Year Repayment Rule — IRS regulations 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.

    This means that some members who take multiple loans may be required to pay substantially higher repayment amounts, 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 if a loan repayment will significantly increase or the Division must deny a loan as the result of the minimum repayment exceeding 25 percent of the member’s base salary.

ADDITIONAL INFORMATION

For assistance registering with or using MBOS, contact the MBOS Help Desk at (609) 777-0534 or send e-mail with the subject line "MBOS E-mail" to: pensions.nj@treas.state.nj.us

If you have questions regarding any of the other 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

Enclosures
MBOS Loan Flier Adobe PDF (23K)
MBOS Registration Instructions Adobe PDF (15K)
Certified Loan Request (sample) Adobe PDF (38K)

CO Letter in Printable Format Adobe PDF (231K)



August 18, 2008

TO: State Department Certifying Officers
State Department Human Resource Directors
State Biweekly Payroll Locations Benefits Administrators
FROM: John D. Megariotis
Deputy Director, Finance
SUBJECT: Open Enrollment for the New Jersey State Employees Tax Savings Program (Tax$ave 2009)

The annual open enrollment for the calendar year 2009 New Jersey State Employees Tax Savings Program (Tax$ave 2009) will be conducted from October 1 through October 31, 2008.  Full-time employees of the State who are eligible for participation in the New Jersey State Health Benefits Program (SHBP) may participate in Tax$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 2009 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 2009 (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

The Unreimbursed Medical and/or Dependent Care Flexible Spending Accounts (FSA) 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 2008 does not carry over automatically into 2009.  Employees must enroll each year to participate in an FSA for calendar year 2009. 

Enrolling in a Flexible Spending Account

Employees have four ways of enrolling in the Tax$ave FSA accounts: mail, fax, telephone, and Internet.  Fringe Benefits Management Company (FBMC) — which begins its second year administering the Tax$ave Unreimbursed Medical and Dependent Care FSAs — 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, 2008, to be accepted.  Those postmarked after October 31, 2008 will be returned without action.  Benefits offices should not be involved in processing or mailing FSA Enrollment Applications.

  • Fax: FSA Enrollment Applications may be faxed directly to FBMC by the employee at 1-850-514-5806.  The deadline for accepting faxed enrollment forms is midnight, October 31, 2008. 

  • Telephone: Employees may enroll in the Unreimbursed Medical and/or Dependent Care FSA plans for 2009 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, 2008. 

  • 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: www.myFBMC.com  The deadline for enrollment over the Internet is midnight, October 31, 2008.

Listed below are some additional benefits of FSA participation.

  • $2,500 Medical FSA Maximum.  The maximum annual allowance that can be set aside for a Tax$ave Unreimbursed Medical FSA is $2,500 for the 2009 plan year.  Employees may save federal income, Medicare and Social Security taxes on up to $2,500 of unreimbursed medical expenses and up to $5,000 on dependent care expenses.  It makes sense to enroll and use a Tax$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: www.myFBMC.com

  • Unreimbursed Medical FSAs feature the myFBMC CardSM Visa® Card that draws on the value of the employee’s annual Medical FSA election amount.  The myFBMC Card is included free with the sign up for an FBMC Unreimbursed Medical FSA during Tax$ave Open Enrollment.  Employees can use the myFBMC 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 myFBMC Card can also be used for eligible over-the-counter medical expenses. Effective January 1, 2009, all grocery stores, drugstores, and discount stores must implement a certified IIAS (Inventory Information Approval Systems) program in order to accept the myFBMC Card for Medical FSA expenses — myFBMC Card transactions for eligible expenses at a certified IIAS merchant do not require additional documentation. A list of IIAS certified merchants is available at www.myFBMC.com.
  • Look Back Feature. The myFBMC Card also contains a “look back” feature during the 2 ½ month grace period extension that will access any unused 2009 Unreimbursed Medical FSA funds before using funds contributed in the 2010 plan year. For plan year 2009, the grace period extension will run from January 1, 2010 to March 15, 2010 (more about the grace period below).

  • 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.

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 31st 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 2009 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 5 paycheck message that will be accompanied by two payroll inserts. 

  • The Premium Option Plan 2009 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 19 paychecks will carry another Tax$ave 2009 Open Enrollment announcement message and will be accompanied by an additional payroll insert.

  • The Tax$ave 2009 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, 2008 deadline for submission of all election materials;

Additional ”reminder messages” will be provided to employees through paycheck messages on October 3, October 17, and October 31 (a final November 14 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 2009 form. 

  • A sample of the 2009 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 2009, 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, 2008.  Benefits administrators must then forward declination forms to Centralized Payroll by November 7, 2008. 

The Tax$ave program for the 2009 plan year promises to make Tax$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$ave 2009, the open enrollment, or the Premium Option Plan, visit the Division of Pensions and Benefits’ Tax$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 at: www.myFBMC.com  or call FBMC Customer Service at 1-800-342-8017.

Enclosures:

Request for Tax$ave 2009 Employee Seminars
Tax$ave 2009 Open Enrollment Milestones
Open Enrollment Check Messages
Tax$ave 2009 Open Enrollment News (sample)
The Premium Option Plan 2009 Pamphlet (sample)
Tax$ave — FBMC Flexible Savings Accounts Pamphlet (sample)
Tax$ave — FBMC Flexible Savings Accounts Enrollment Form
Declination of Premium Option Plan (POP) for Plan Year 2009

CO Letter in Printable Format - Adobe PDF (1008K)


August 18, 2008

TO: State University and College Certifying Officers
State University and College Benefits Administrators
State Monthly Certifying Officers
State Monthly Benefits Administrators
FROM: John D. Megariotis
Deputy Director, Finance
SUBJECT: Open Enrollment for the New Jersey State Employees Tax Savings Program (Tax$ave 2009)

The annual open enrollment for the calendar year 2009 New Jersey State Employees Tax Savings Program (Tax$ave 2009) will be conducted from October 1 through October 31, 2008.  Full-time employees of the State, State authorities, State universities, and State colleges who are eligible for participation in the New Jersey State Health Benefits Program (SHBP) may participate in Tax$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 2009 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 2009 (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

The Unreimbursed Medical and/or Dependent Care Flexible Spending Accounts (FSA) 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 2008 does not carry over automatically into 2009.  Employees must enroll each year to participate in an FSA for calendar year 2009. 

Enrolling in a Flexible Spending Account

Employees have four ways of enrolling in the Tax$ave FSA accounts: mail, fax, telephone, and Internet.  Fringe Benefits Management Company (FBMC) — which begins its second year administering the Tax$ave Unreimbursed Medical and Dependent Care FSAs — 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, 2008, to be accepted.  Those postmarked after October 31, 2008 will be returned without action.  Benefits offices should not be involved in processing or mailing FSA Enrollment Applications.

  • Fax: FSA Enrollment Applications may be faxed directly to FBMC by the employee at 1-850-514-5806.  The deadline for accepting faxed enrollment forms is midnight, October 31, 2008. 

  • Telephone: Employees may enroll in the Unreimbursed Medical and/or Dependent Care FSA plans for 2009 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, 2008. 

  • 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: www.myFBMC.com  The deadline for enrollment over the Internet is midnight, October 31, 2008.

Listed below are some additional benefits of FSA participation.

  • $2,500 Medical FSA Maximum.  The maximum annual allowance that can be set aside for a Tax$ave Unreimbursed Medical FSA is $2,500 for the 2009 plan year.  Employees may save federal income, Medicare and Social Security taxes on up to $2,500 of unreimbursed medical expenses and up to $5,000 on dependent care expenses.  It makes sense to enroll and use a Tax$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: www.myFBMC.com

  • Unreimbursed Medical FSAs feature the myFBMC CardSM Visa® Card that draws on the value of the employee’s annual Medical FSA election amount.  The myFBMC Card is included free with the sign up for an FBMC Unreimbursed Medical FSA during Tax$ave Open Enrollment.  Employees can use the myFBMC 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 myFBMC Card can also be used for eligible over-the-counter medical expenses. Effective January 1, 2009, all grocery stores, drugstores, and discount stores must implement a certified IIAS (Inventory Information Approval Systems) program in order to accept the myFBMC Card for Medical FSA expenses — myFBMC Card transactions for eligible expenses at a certified IIAS merchant do not require additional documentation. A list of IIAS certified merchants is available at: www.myFBMC.com.
  • Look Back Feature. The myFBMC Card also contains a “look back” feature during the 2 ½ month grace period extension that will access any unused 2009 Unreimbursed Medical FSA funds before using funds contributed in the 2010 plan year. For plan year 2009, the grace period extension will run from January 1, 2010 to March 15, 2010 (more about the grace period below).

  • 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.

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 31st 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 2009 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 Universities, and State Colleges with sufficient copies Open Enrollment materials for distribution to your eligible employees.  These items include: 

  • The Tax$ave 2009 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, 2008 deadline for submission of all election materials;

  • The Premium Option Plan 2009 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, 2008.  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.

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 2009 form. 

  • A sample of the 2009 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 2009, 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, 2008.  Benefits administrators must then forward declination forms to the appropriate representative in their payroll department. 

The Tax$ave program for the 2009 plan year promises to make Tax$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$ave 2009, the open enrollment, or the Premium Option Plan, visit the Division of Pensions and Benefits’ Tax$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 at: www.myFBMC.com  or call FBMC Customer Service at 1-800-342-8017.

 

Enclosures:

Request for Tax$ave 2009 Employee Seminars
Tax$ave 2009 Open Enrollment Milestones
Tax$ave 2009 Open Enrollment News (sample)
The Premium Option Plan 2009 Pamphlet (sample)
Tax$ave — FBMC Flexible Savings Accounts Pamphlet (sample)
Tax$ave — FBMC Flexible Savings Accounts Enrollment Form
Declination of Premium Option Plan (POP) for Plan Year 2009

CO Letter in Printable Format Adobe PDF (1004K)


July 2008

TO: Certifying Officers
FROM: Joseph Zisa, Manager 1, Fiscal Resources
Division of Pensions and Benefits
SUBJECT: Retirement Incentive Programs

The Division of Pensions and Benefits has identified the attached list of employee(s) at your location as potentially eligible for participation in the Defined Contribution Retirement Program (DCRP) based upon salaries that have been reported to the Division.  If salaries paid to these individuals continue as expected, we project that they will exceed the Social Security maximum of $102,000 during the 2008 calendar year.

This letter outlines the procedures for employers to report contributions for PERS/TPAF members like these who are eligible for participation in the DCRP due to salaries exceeding the Social Security maximum as required under P.L. 2007, Chapter 103 (N.J.S.A. 43:15C-1 et seq.), and as noted in prior communications from the Division.  However, these procedures are only an interim measure.  We continue to work with our technology partners to update our reporting and recordkeeping system so that we may properly administer benefits for these and other retirement program members into the future.  However, these modifications are not yet complete.  So, I am asking that you follow these interim reporting procedures until further notice.

We ask that employers maintain payroll records which separately identify pensionable salary, pension contributions, and contributory insurance contributions for PERS or TPAF and DCRP for individuals subject to the PERS/TPAF salary limit.  But, until the Division is prepared to accept salary information for the PERS, TPAF or the DCRP, we instruct you to report salary and remit contributions as follows:

Contribution Deduction & Reporting:

  • Continue reporting FULL member salary, not the capped salary amount, and the contributions due on that FULL salary to the Division through your current quarterly reporting method.

  • It is still your responsibility to track employees affected by the pensionable salary limit who will earn base salaries that will exceed the Social Security maximum for the calendar year. When the employee reaches the Social Security Maximum, you are to cease deducting, remitting and reporting Contributory Insurance contributions ONLY.  Contributory Insurance deductions should resume at the start of the new calendar year.

  • The DCRP employer-matching contribution of 3% of base salary in excess of the Social Security Maximum is to be remitted to Prudential.  We are notifying Prudential of the employee(s) eligibility for DCRP.  Prudential will promptly contact you via email and/or telephone to provide instructions on the remittance process for your employer obligation.

Waiver of Participation

Participants who wish to waive participation in the DCRP may do so by completing a DCRP Waiver of Retirement Program Participation Adobe PDF (33K) form within (30) days of the pay date that they become eligible for participation.  This form must be submitted to the Division’s Defined Contribution Plans Unit via mail or by fax to: (609) 984-5990.  Forms can be obtained from the Division of Pensions and benefits or by visiting the Web site:
www.state.nj.us/treasury/pensions/epbam/exhibits/pdf/fl0787.pdf Adobe PDF (33K)

Additional Information

If after reviewing this information you have additional questions regarding the DCRP or any of the information in this letter, contact the Defined Contribution Plans Unit at (609) 292-3605 or e-mail the Unit at: njdcrp@treas.state.nj.us 

Attachment

CO Letter in Printable Format Adobe PDF (54K)


June 2008

TO: Certifying Officers
Local Employers
FROM: Frederick J. Beaver
Director, Division of Pensions and Benefits
SUBJECT: Retirement Incentive Programs

Over the past few months, the Division of Pensions and Benefits (Division) has become aware of efforts by local government units to offer incentives to their employees which in many cases encourage early retirement. Local officials should be aware that the Division is required to review these proposed Separation of Employment Agreements, regardless of what they are called, to determine whether they are early retirement incentives, and if so, to determine if they are authorized by law. 

As you should know, local employers are not authorized to offer early retirement incentive programs for their employees unless they are specifically authorized by State law. The law on this subject is clearly set forth in Fair Law Ed. Assn. v. Fair Lawn Bd. of Education, 79 N.J. 574 (1979), in which the Supreme Court of New Jersey held invalid an early retirement plan because it posed a potential for financial harm to the State administered retirement system and was not authorized by State Law.

In reviewing such matters, the Division takes into account not only the expressed conditions of eligibility  under which  employees can participate in the program, but also the substantive certainty as to those willing to participate.  For example, a separation proposal can be structured wherein all employees could be eligible for participation. However, it is rare to find an employee willing to take the incentive unless that employee is eligible for retirement. The Division’s review takes into account these factors.  Therefore, even though a municipality’s program does not set a service threshold, the Division may reject the proposal based on the actual participation statistics. This is especially true if the members of PERS or PFRS eligible to take advantage of the separation program are those with enough service credit to make them eligible for retirement. 

The Division of Pensions and Benefits’ Fact Sheet #52, Retirement Incentive Programs Adobe PDF (30K), discusses legislation that authorizes Early Retirement Incentive Programs for municipalities, counties, local authorities, and fire districts.  It also discusses the procedure to have an Early Retirement Incentive approved first, by the Department of Community Affairs – and secondly, by the Division.  The fact sheet is online at www.state.nj.us/treasury/pensions/fact52.htm.

CO Letter in Printable Format Adobe PDF (48K)


June 2008

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 2008 (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.

NEW*** IROC PREPARATION TIP

Please be advised that when preparing the IROC, the projected salary for next quarter does not need to be entered if next quarter’s salary is the same as the current quarter’s salary. This should reduce your report completion time, and aid you in submitting the report in a timely manner.

NEW LEGISLATION ALERT - PERS and TPAF Maximum Compensation

Chapter 103, PL of 2007, provides that new members of PERS and TPAF are subject to a maximum compensation limit for PERS or TPAF pension contributions and benefits. 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, contributory insurance or the Supplemental Annuity Collective Trust. These individuals with earnings over the Social Security maximum wage base are also eligible for benefits under the Defined Contribution Retirement Program (DCRP).

Note:  Until reporting procedures are developed for PERS and TPAF members’ who exceed the social security maximum of $102,000 for 2008, if you have any employees affected by the salary cap you must continue to collect and report the pension and contributory insurance for the excess salary as you did in the past. The Division will forward the pension contributions to the DCRP carrier. Excess contributory insurance payments will be refunded to the employee.

Benefits may be available to these individuals for base salary paid in excess of the annual compensation limit under the DCRP. DCRP information has been distributed to certifying officers earlier and is available on the Division’s website at www.state.nj.us/treasury/pensions/dcrp1.htm

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 July 10, 2008. Should your report not be received by the close of business on July 25, 2008, interest penalties will begin to accrue and reports received after this date may not be used to update member accounts which will delay the processing of benefits to your employees.

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 August 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, and payment should be made to the address on the shortage statement only.

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 (52K)


June 2008

TO: Certifying Officer Autonomous State College/University/State Employers
FROM: John D. Megariotis
Deputy Director, Finance
SUBJECT: Report of Contributions, 2nd Quarter 2008 (April 1st to June 30th)

NEW LEGISLATION ALERT - PERS and TPAF Maximum Compensation

Chapter 103, PL of 2007, provides that new members of PERS and TPAF are subject to a maximum compensation limit for PERS or TPAF pension contributions and benefits. 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, contributory insurance or the Supplemental Annuity Collective Trust. These individuals with earnings over the Social Security maximum wage base are also eligible for benefits under the Defined Contribution Retirement Program (DCRP).

Note:  Until reporting procedures are developed for PERS and TPAF members’ who exceed the social security maximum of $102,000 for 2008, if you have any employees affected by the salary cap you must continue to collect and report the pension and contributory insurance for the excess salary as you did in the past. The Division will forward the pension contributions to the DCRP carrier. Excess contributory insurance payments will be refunded to the employee.

Benefits may be available to these individuals for base salary paid in excess of the annual compensation limit under the DCRP. DCRP information has been distributed to certifying officers earlier and is available on the Division’s website at www.state.nj.us/treasury/pensions/dcrp1.htm.

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 2008 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, 2008. Your July 2008 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, 2008.

With the ROC data file, you must complete and return the Transmittal Summary form for the 2nd quarter 2008. 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.

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 (52K)


June 2008

TO: State Department Human Resource Personnel
FROM: Frederick J. Beaver, Director
Division of Pensions and Benefits
SUBJECT: 2008 State Early Retirement Incentive Program

A bill has been introduced to the New Jersey Legislature to provide an Early Retirement Incentive (ERI) program for
certain full-time employees of the Executive Branch or the Judicial Branch of New Jersey State government.

The proposed ERI is only in draft legislative form (A2802 and S2044); this letter describes the proposal and is offered only as guidance. There is no commitment to an ERI until it is enacted and signed into law.

DEPARTMENTS AND AGENCIES EXCLUDED FROM THE ERI

The proposed ERI program will not include employees of certain State Departments and State Agencies. The employees in those departments and agencies are not eligible for the ERI program because the proposed ERI program is designed to ensure continuing budget savings through a reduction in the size of the State government workforce. This is to be achieved through a strict limit on the filling of vacancies resulting from the ERI so that departments and agencies do not replace those who retire under an ERI with new employees because that practice results in a program that increases liability and eliminates budget savings. To meet these goals, the proposal excludes employees in departments or agencies whose mission is principally related to the provision of direct care, or when the nature of their operations otherwise does not permit the imposition of a strict limit on the filling of vacancies.

Employees of the following State Departments and Agencies are excluded from participation in the ERI.

  • Department of Corrections
  • Department of Children and Families
  • Department of Human Services
  • Department of Military & Veterans Affairs
  • Juvenile Justice Commission
  • New Jersey Independent State Authorities and Commissions
  • New Jersey State Colleges and/or Universities
  • Office of the Public Defender
  • PERS members enrolled in the Prosecutors subgroup
  • PERS members enrolled in the Workers’ Compensation Judges subgroup.

In addition, employees of a Local Government or Local Educational employer are not eligible for the ERI.

STATE ERI PROGRAM PROVISIONS

The proposed State ERI Program is available to full-time employees of included agencies of the Executive Branch or the Judicial Branch of New Jersey State government, who are enrolled in the Public Employees’ Retirement System (PERS) or Teachers’ Pension and Annuity Fund (TPAF), and who are eligible for State Health Benefits Program coverage provided by the employer1.

The proposal requires that the eligible employee must retire no later than August 1, 2008; submit an ERI Application for Retirement Allowance on or before the retirement date but no later than the ERI application deadline on July 15, 2008; and must meet the additional criteria shown below as of their date of retirement.

STATE ERI PROGRAM REQUIREMENTS

CATEGORY
ELIGIBILITY CRITERIA INCENTIVE
1 Age 58 or older with 25 years or more of credited service in the Public Employees' Retirement System (PERS), or Teachers' Pension and Annuity Fund (TPAF). Service and Early Retirements: 3 additional years of service credit (an additional 5.45% of Final Average Salary).Veteran Retirement:* 3/55 of Final Salary added to retirement allowance. (An additional 5.45% of Final Salary.)
2 Age 60 or older with at least
20, but less than 25 years of credited service in the PERS or TPAF.
Paid State Health Benefits Program (SHBP) post-retirement medical benefits. Certain retirees may be subject to a health contribution of 1.5% of the retirement allowance unless the retiree participates in the Retiree Wellness Program.
3 Age 60 or older with at least
10, but less than 20 years of credited service in the PERS or TPAF.
$500 per month for 24 months after retirement, paid in a separate check from the retirement allowance.
*Veteran Retirement Eligibility Criteria for PERS and TPAF
  • Age 60 with 20 years of membership credit (only applicable to Category 2 of ERI)
  • Age 55 with 25 years of membership credit (must be at least age 58 for ERI eligibility)
  • Age 55 with 35 years of membership credit (must be at least age 58 for ERI eligibility)
Judicial Branch employees are only eligible for Category 1 benefits.

TERMS AND CONDITIONS OF THE ERI

When applying for and accepting retirement through the 2008 State Early Retirement Incentive, an eligible State employee must agree to the following ERI Terms and Conditions of Retirement.

  • Retirement under the ERI is irrevocable seven days after the ERI Application for Retirement Allowance is received by the Division of Pensions and Benefits. This means that seven days after the Division receives the application, the employee cannot decide to cancel the retirement and return to State employment.
  • A State ERI retiree cannot work for the State of New Jersey Executive Branch in any capacity for a period of three years from the retirement date. Similarly, a Judicial ERI retiree cannot work for the State of New Jersey Judicial Branch in any capacity for a period of three years from the retirement date. The following situations are covered under these conditions: as an employee; as a result of an appointment; as a contractor for professional services; or as part of a contract awarded to a third party.
  • Each department or agency shall have the right to require an eligible employee who accepts retirement through the ERI to extend employment for up to one year. This decision is at the option of the employer and is subject to approval by the State Treasurer for Executive Branch employees or by the Chief Justice for Judicial Branch employees.

IMPLEMENTATION AND NOTIFICATION TO ELIGIBLE EMPLOYEES

The Division of Pensions and Benefits is identifying eligible employees, preparing notification materials, and doing the programming necessary to generate retirement estimates and to process retirements. Legislation is required, however, before we have the legal authority to process any retirements under this incentive program. Changes to the proposed program are also possible during the legislative process; if changes are made, we will adjust the ERI information accordingly.

To assist Human Resources Representatives and Benefit Administrators with their duties involving the ERI, the Division of Pensions and Benefits will provide employers with the following:

  • This letter that explains the proposed ERI program;
  • A list of your eligible employees under the ERI (to be provided under separate cover);
  • A sample of the ERI Eligibility Letters that will be mailed to eligible employees (to be provided under separate cover);
  • ERI Employer Seminars — information on mandatory employer seminars has been mailed to State Human Resources staff. (Employee Seminars are also being established within certain State departments.);

A special State ERI Web page has also been established for ERI news and general information. The ERI Web page emphasizes self-help options through the Internet and our automated systems — soon this will include an online ERI retirement estimate calculator available through the Member Benefits Online System (MBOS).  Look for the ERI links on the Division of Pensions and Benefits Internet home page at: www.state.nj.us/treasury/pensions

REQUESTS TO EXTEND ERI RETIREMENT DATES

The Governor's ERI package allows employers to request an extension for up to one year of the ERI retirement date of eligible employees.  Requests should include a detailed justification for the extension and must be submitted to the State Treasurer for approval of extensions for Executive Branch employees or to the Chief Justice for Judicial Branch employees.

Because approvals will be on a limited basis, an eligible employee must still formally file an Application for Retirement Allowance no later than July 15, 2008, with a retirement effective date no later than August 1, 2008.

  • If the extension is denied, the employee must retire as of the ERI retirement date.  
  • If the extension is approved, the retirement date may be extended for up to one year, but can be no later than July 1, 2009. The approving authority will notify both the requesting office and the Division of Pensions and Benefits and the retirement date will be adjusted. Additional PERS or TPAF service and salary earned during the extension will be considered in the final calculations of the retirement benefits.

PURCHASE OF SERVICE CREDIT

The current wording of the proposed ERI requires that for any purchase of service credit to be applied toward ERI eligibility, the purchase must have been completed as of the date of enactment of the ERI legislation. 
Changes to the legislation are being considered that may permit additional purchases to be valid for eligibility under the ERI.  Eligible members should check the Division of Pensions and Benefits Web site for updates to the purchase information as well as any other changes to the ERI upon enactment into law. Go to: www.state.nj.us/treasury/pensions  and click on the “2008 State Early Retirement Incentive” link at the top of the home page.

QUESTIONS OR CONCERNS

Questions about eligibility for, or implementation of, the State ERI program can be directed to the Division of Pensions and Benefits, Office of Client Services at (609) 292-7524, or by e-mail to: pensions.nj@treas.state.nj.us


1Employees enrolled in the SHBP under the provisions of Chapter 172, P.L. 2003 are not eligible.

CO Letter in Printable Format Adobe PDF (64K)


May 6, 2008

TO: Certifying Officers Local Employers
FROM: John D. Megariotis
Deputy Director, Finance
SUBJECT: Independent Contractors and Professional Services Contracts under Chapter 92, P.L. 2007

Chapter 92, P.L. 2007, addressed several areas of pension and health benefit law1, including prohibitions on enrollment and/or continued participation for certain individuals in any public retirement system. This letter outlines the criteria and procedures for employers when addressing continued eligibility and enrollment of employees for membership in the Public Employees’ Retirement System (PERS) or the Teacher Pension and Annuity Fund (TPAF), specifically: (a) individuals performing service pursuant to a professional services contract and (b) independent contractors. 

The provisions of Chapter 92 present significant and ongoing responsibilities for local officials when hiring employees and enrolling eligible pension members. Careful attention must be given to the provisions of Chapter 92 to ensure the local public employer is in compliance with the law. For employers operating under the supervision of the Division of Local Government Services, this letter supplements information provided in Local Finance Notices 2007-28 and 2008-10. 

PROFESSIONAL SERVICE CONTRACTS

A professional service is one that meets the definition in the Local Public Contracts Law at N.J.S.A. 40A:11-2 and is entered into without public bidding (i.e., exempt from public bidding). 

The term “professional” or “professional services” further refers to the definition of professional services as follows:

"Professional services" means services rendered or performed by a person authorized by law to practice a recognized profession, whose practice is regulated by law, and the performance of which services requires knowledge of an advanced type in a field of learning acquired by a prolonged formal course of specialized instruction and study as distinguished from general academic instruction or apprenticeship and training. 

Professional services may also mean services rendered in the provision or performance of goods or services that are original and creative in character in a recognized field of artistic endeavor.”

Typically these positions include attorneys, engineers, architects, planners, public health professionals; but exclude for example, construction and fire code officials. (These professions are used for example and are not an exhaustive list of positions.) 

Effective January 1, 2008, Chapter 92 provides that if a person is employed under a professional services contract, membership in the PERS, TPAF or the DCRP is prohibited with regards to that service. Individuals enrolled in the PERS or TPAF who are performing professional services pursuant to a contract entered into prior to January 1, 2008, will continue to accrue pension credit for the remainder of that contract year. However, the individual will not be eligible for any further retirement system credit for the performance of those services after that contract period expires. 

This prohibition applies to any extension, modification, or other agreement to continue a professional services contract beyond its current term. It is also important to consider that State contracting laws do not permit professional service contracts to be for more than one year and they cannot be extended. Therefore, for local governing bodies operating on a calendar year basis, no individual holding a professional services contract with these locations should have contributed to the retirement system after December 31, 2007. Similarly, entities operating on a fiscal basis may have contracts which extend to the end of the fiscal year; the latest allowable date for reporting of retirement system service would be June 30, 2008.

Further, there are specific exceptions related to DCRP membership pursuant to N.J.S.A. 43:15C-2(a) and (b), whereas an individual who holds a state issued license or certificate to perform and is serving in any of the following capacities, the person is qualified to join or remain in PERS: certified health officer; tax collector; chief financial officer; construction code official; qualified purchasing agent; tax assessor; municipal planner; registered municipal clerk; licensed uniform sub-code inspector; and certified public works manager.

As can be seen, pension eligibility — or ineligibility — under Chapter 92 may be highly fact sensitive. For example, a full-time in-house counsel may be providing professional services to a public entity pursuant to a professional services contract and the individual’s eligibility for PERS service credit is guided by the professional services analysis herein. A full-time in-house counsel, however, may be eligible to continue in the PERS if the counsel was a member of the PERS prior to July 1, 2007, the employment is not tied to a professional services contract, and the individual does not meet the independent contractor test as set forth later in this letter. 

Employers with specific questions regarding professional services contracts or independent contractors should address them in writing — by letter or e-mail — to the Division of Pensions and Benefits. If sending an e-mail, list “professional services” as the subject line. If an employer has reported service or salary to the retirement system in error with regards to an individual covered by a professional services contract which commenced on or after January 1, 2008, the employer must contact the Division of Pensions and Benefits - Audit Section to initiate the correction.

INDEPENDENT CONTRACTORS

In addition to prohibiting retirement system membership for certain professionals that perform services under a professional service contract, Chapter 92 also requires elimination of independent contractors from membership in either the PERS or TPAF. Further, these individuals are not eligible for membership in the DCRP. This should be considered when local employers make decisions on hiring and contracting.

The law also brings into play Internal Revenue Service (IRS) rules on determining if an individual is an employee or independent contractor. The Certifying Officer of each local employer must review their current and future professional employees and use the IRS criteria (below) to determine if the individual meets the requirements of an employee and thus membership in the PERS, TPAF, or DCRP. If the individual fails the employee test, the individual is considered to be a contractor. This requires termination of pension reporting for the individual from that employer location, termination of related benefits, and affects federal employment taxing requirements.

While Chapter 92 specifies the elimination of independent contractors who perform professional services from retirement system membership, please note that independent contractors have historically been ineligible for retirement system membership, as an employee/employer relationship has always been one of the conditions of retirement system membership. 

IRS TEST FOR INDEPENDENT CONTRACTOR

The Division uses the IRS test to determine whether an individual is an independent contractor.  All of the factors listed below must be evaluated to render a determination2. They are:

A) Behavioral Control – Included in this test are instructions and training. 

    (1) Instructions – if the individual receives extensive instructions on how work is to be done, this suggests an employee relationship exists. Ask how, when, or where the person is asked to do the work; what and who owns the tools or equipment used; what assistants are hired to help with the work and where and by whom supplies and services are purchased. If one receives less extensive instructions about what should be done, but not how it should be done, the person may be an independent contractor. Each of these factors will vary dependent upon the actual position.

    (2) Training – If the business provides training about required procedures and methods, this indicates that the business wants the work done in a certain way, and that suggests that the individual may be an employee.

B) Financial Control – Included in this test are facts which would reveal whether there is a right to direct or control the business part of the work. Examples are:

    (1) If the individual has made a significant investment in a position, this may qualify as an independent contractor.

    (2) If the individual is not reimbursed for some or all business expenses, then he or she may qualify as an independent contractor, especially if unreimbursed business expenses are high.

    (3) If the individual can realize a profit or incur a loss, this suggests that the person is in business for themselves and may be an independent contractor.

C)  Relationship to Parties – These are facts that illustrate how the business and the worker perceive their relationship. For example:

(1)  Does the person receive benefits such as paid leave or insurance?  This may indicate employee status.

(2)  Written contracts – A written contract may show what both the individual and the employer intend.

No one of these factors is controlling and the response to all factors must be weighed together, under the common law definition of "employment." However, one of the most important factors for consideration is whether the employer has the right to instruct and control the employee with respect to the details of the work that is performed by the employee. 

Since the Division of Pensions and Benefits uses the established IRS Employee Test (commonly known as Revenue Ruling 87-41) as the basis for determining employee or independent contractor status, local employers have a standard assessment tool and the opportunity for formal guidance. There are several IRS documents that discuss how to evaluate the individual circumstance. These are:

  • IRS Publication 15a, about employees and the employer-employee relationship which includes examples of employees and contractors.  It also discusses employee tax liability issues.  It is available from the IRS at: www.irs.gov/pub/irs-pdf/p15a.pdf Adobe PDF (113K)
  • IRS Publication 963, the “Federal-State Reference Guide”, a comprehensive reference source for Social Security and Medicare coverage and Federal Insurance Contributions Act (FICA) tax withholding issues.  Chapter 4 of this document provides details on determining worker status.  It is available from the IRS at: www.irs.gov/pub/irs-pdf/p963.pdf Adobe PDF (951K)

As part of its services to employers, the IRS will also look at individual circumstances and provide a determination for the purposes of federal employment taxes and income tax withholding.  Because these two issues are at the heart of the IRS assessment, local employers can contact the IRS to obtain a definitive answer if local analysis is inconclusive.  IRS Form SS-8 can be used to request a determination.  The form is available online at: www.irs.gov/pub/irs-pdf/fss8.pdf Adobe PDF (359K)

In summary:

  • By applying the IRS Employee Test, the local employer’s Certifying Officer must document that all professionals are not independent contractors. If they fail the test (and are considered a contractor), appropriate actions should be taken (i.e., canceling pension system membership).
  • Special circumstances will require careful legal analysis to ensure compliance.

Because of the importance of the criteria used to apply the independent contractor test, it is suggested that the Certifying Officer analyze the facts, document the analysis, and keep it with the employee’s personnel file.  This may become important if the local employer is audited by the Division of Pensions and Benefits, and is an important internal control that is subject to testing by the local unit’s auditor.

Individuals whose pension system membership is ending as a result of the above provisions (prohibition of further retirement system credit for individuals holding professional services contracts or retained as independent contractors), may take one of the following actions:

  1. Retire, if eligible;
  1. Withdraw their pension contributions; or
  1. Obtain other PERS or TPAF eligible employment within two years of the last eligible retirement system contribution to continue to accrue service in PERS or TPAF. 

Members who will no longer be eligible for continuing their membership in the pension system may view additional pension information at the Division’s Web site: www.state.nj.us/treasury/pensions


1Chapter 92, P.L. 2007, also established a new retirement program, the Defined Contribution Retirement Program (DCRP), for certain elected and appointed public officials.  DCRP eligibility and enrollment is addressed in a separate Certifying Officer Letter of March 20, 2008.

2 The IRS test factors listed in this letter replace the 20 factor test set previously used by the IRS to determine independent contractor or employee status. The 20 factors included: degree of control; right to discharge; right to delegate work; right to hire and fire assistants; payment by the hour; furnishing of training; skill; duration of relationship; control over hours of work; independent trade; furnishing tools; place of work; profit and loss; intent of the parties; principal in business; sequence of work; reports required; same work as others classified as employees; integration; and industry custom.

CO Letter in Printable Format Adobe PDF (69K)


May 1, 2008

TO: Local Government Certifying Officers of the Public Employees’ Retirement System (PERS)

FROM: John D. Megariotis
Deputy Director, Finance
SUBJECT: Prosecutors Part of the PERS - Member Pension Contribution Rate Change July 1, 2008


At the meeting held on March 19, 2008, the Board of Trustees of the Public Employees’ Retirement System, per the recommendation of the system’s actuary, Buck Consultants, adopted an increase in the contribution rate for those members covered under Chapter 366, P.L. 2001 - Prosecutors Part. This action is being taken as authorized by N.J.S.A. 43:15A-157(b) and required by N.J.A.C. 17:2-8.3(b) which states that the “rate of contribution shall be reviewed by the System's actuaries periodically and adjusted by the Board as necessary.”

Effective with any salary reported after June 30, 2008, the member contribution rate will increase from the current rate of 7.50% to 8.50% for local government employees enrolled in the Prosecutors Part of the PERS.

Retroactive increases in base salary paid on or after July 1, 2008, must have corresponding pension contributions deducted at the 8.50% rate; including any portion of the retroactive salary that covered a period prior to July 1, 2008.

If you have questions regarding any of the information contained 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 (51K)


April 23, 2008

TO: Certifying Officers of the Public Employees’ Retirement System (PERS)
FROM: John D. Megariotis
Deputy Director, Finance
SUBJECT: Member Contribution Rate Change under Chapter 103, P.L. 2007

Under Chapter 103, P.L. 2007, employee pension contribution rates were increased from 5% to 5.5% of salary for members of the Public Employees’ Retirement System (PERS) and Teachers’ Pension and Annuity Fund (TPAF). 

The increase in the contribution rate was designed to be implemented in two phases. This letter is being sent as a reminder to employers that the second phase of increases is due to take effect as of July 2008.

EFFECTED EMPLOYEE GROUPS

The first phase of contribution increases became effective in July 2007 for most State employees and most State and Local educational employees*.

The second phase is now due to take effect and 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.

IMPLEMENTATION SCHEDULE

  • For State Judicial Branch employees paid through the State Centralized Payroll Unit who are enrolled in the PERS, the increase is effective as of Pay Period #15 beginning July 5, 2008 for the July 25, 2008 check date.
  • For PERS employees of the University of Medicine and Dentistry of New Jersey (UMDNJ), the increase is effective with UMDNJ’s Pay Period #14 of 2008.
  • For all other PERS employees of these employer groups, the increase is effective July 1, 2008.

Local and State Monthly employers should coordinate with their payroll administrators and/or any contracted payroll processing agencies to assure that the second phase of contribution rate increases are effective for salary reporting after June 30, 2008. 

Please also note that the increase in the member contribution rate will also increase the minimum repayment amount for any pension loans or the purchase cost for service credit if certified after the member’s effective date of change.

ADDITIONAL INFORMATION

If you have specific questions regarding any of the information contained 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


*The first phase of contribution increases applied 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.

CO Letter in Printable Format Adobe PDF (59K)


March 20, 2008

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, 1st Quarter 2008 (January 1st to March 31, 2008)

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 members of PERS and TPAF are subject to a maximum compensation limit for PERS or TPAF pension contributions and benefits. 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.  These individuals with earnings over the Social Security maximum wage base are also eligible for benefits under the Defined Contribution Retirement Program (DCRP).

Note: Until reporting procedures are developed for PERS and TPAF members’ who exceed the social security maximum of $102,000 for 2008, continue to report the pension and contributory insurance for the excess salary as you did in the past. The Division will forward the pension contributions to the DCRP carrier. Excess contributory insurance payments will be refunded to the employee.

Pension benefits may be available to these individuals for base salary paid in excess of the annual compensation limit under the newly created 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 April 10, 2008. Should your report not be received by the close of business on April 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 May 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, and payment should be made to the address on the shortage statement only.

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 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 (59K)


March 2008

TO: Certifying Officer Autonomous State College/University/State Employers
FROM: John D. Megariotis
Deputy Director, Finance
SUBJECT: Report of Contributions, 1st Quarter 2008 (January 1st to March 31st)

NEW LEGISLATION ALERT - PERS and TPAF Maximum Compensation

Chapter 103, PL of 2007, provides that new members of PERS and TPAF are subject to a maximum compensation limit for PERS or TPAF pension contributions and benefits. 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. These individuals with earnings over the Social Security maximum wage base are also eligible for benefits under the Defined Contribution Retirement Program (DCRP).

Note:  Until reporting procedures are developed for PERS and TPAF members’ who exceed the social security maximum of $102,000 for 2008, continue to report the pension and contributory insurance for the excess salary as you did in the past. The Division will forward the pension contributions to the DCRP carrier. Excess contributory insurance payments will be refunded to the employee.

Pension benefits may be available to these individuals for base salary paid in excess of the annual compensation limit under the newly created 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 1st quarter 2008 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, 2008. Your March, 2008 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, 2008.

With the ROC data file, you must complete and return the Transmittal Summary form for the 1st quarter 2008.  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 the purpose of determining benefits and contributions under Code Sec. 401(a)(17) is increased from $225,000 to $230,000.1 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.

1 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 (62K)


March 20, 2008

TO: Certifying Officers
FROM: John D. Megariotis, Deputy Director, Finance
Division of Pensions and Benefits
SUBJECT: Defined Contribution Retirement Program (DCRP) for Elected or Appointed Officials

This letter outlines the procedures for employers when addressing eligibility and enrollment of elected or appointed officials in the Defined Contribution Retirement Program (DCRP).*

The DCRP was established July 1, 2007, under the provisions of Chapter 92, P.L. 2007 and Chapter 103, P.L. 2007, and provides eligible members with a tax-sheltered, defined contribution retirement benefit, along with life insurance and disability coverage.  The DCRP is jointly administered by the Division of Pensions and Benefits and Prudential Financial.  The implementation date for the DCRP will be April 1, 2008.

*DCRP enrollment procedures for eligible PERS or TPAF Adobe PDF (168K) members are addressed in a separate letter.

DCRP ELIGIBILITY FOR ELECTED OR APPOINTED OFFICIALS

Chapter 92, P.L. 2007, established the Defined Contribution Retirement Program (DCRP) for elected or appointed officials (as defined below). 

State and Local Officials who are elected or appointed on or after July 1, 2007 — with a minimum base salary of $1,500 or more — may no longer enroll in the Public Employees’ Retirement System (PERS) and are only eligible for enrollment in the DCRP.

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 continuously serving in that elected office.

    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.
    (Service in either House of the State Legislature is considered a single elected public office.)
  • If the elected official is also a retired member of a State-administered retirement system (PERS, TPAF, PFRS, etc.), the elected official may either:

    a.) continue to receive the retirement benefit from the other retirement system but cannot be enrolled in the DCRP; or 
    b.) suspend the retirement benefit from the other retirement system and enroll in the DCRP while serving in the elected office (upon termination of the elected office, the retirement benefit from the other retirement system would be reinstated). 

Appointed Officials

State appointees are individuals appointed by the Governor, including those requiring the advice and consent of the Senate, or pursuant to an appointment by the Governor to serve at the pleasure of the Governor only during his or her term of office.

Local appointees are individuals appointed by the Governor, including those requiring the advice and consent of the Senate; or individuals appointed in a substantially 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 an existing PERS account will only be enrolled in the DCRP and cannot enroll in the PERS. 

  • An appointed official who is already serving in the appointed position and enrolled in the PERS prior to July 1, 2007, will remain a PERS member while serving in the appointed position.

    Similarly, a regular employee enrolled in the PERS prior to July 1, 2007, who is appointed — without a break in membership — 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.
  • An appointed official serving in a position that is otherwise eligible for membership in the TPAF, PFRS, SPRS, or JRS will not be enrolled in the DCRP.  In these instances, application should be made to enroll in that other retirement system regardless of former retirement system affiliations.

Chapter 92 excludes certain appointees from DCRP enrollment if the individual holds a professional license or certificate and is appointed as a certified health officer, tax assessor, tax collector, municipal planner, chief financial officer, registered municipal clerk, construction code official, licensed uniform subcode inspector, qualified purchasing agent, or certified public works manager. 

The New Jersey Department of Community Affairs Local Finance Board and the Department of Education have a significant role in guiding local employers and the Division of Pensions and Benefits in determining what additional positions and individuals are required to be part of the DCRP.  The Local Finance Board and the Department of Education are in the process of issuing specific guidance on enrollment policies. In the meantime, local employers should consider the text of the law, the exceptions listed above, and recognize that final decisions on the eligibility of some appointees may be delayed until additional guidance is issued.

DCRP ENROLLMENT FOR ELECTED OR APPOINTED OFFICIALS

Enrollment Application and Online Enrollment

The employer — using the guidance and policies issued by the New Jersey Department of Community Affairs Local Finance Board — is responsible for enrolling an eligible elected or appointed official as of the starting date in the elected or appointed office.  Enrollment is accomplished by the employer submitting a DCRP Enrollment Application Adobe PDF (38K) to the Division of Pensions and Benefits (a copy is included with this letter) or by using the online DCRP enrollment application now available to employers through the Employer Pensions and Benefits Connection (EPIC).  Elected and appointed officials who wish to establish, or maintain their investment account may contact Prudential Financial by calling 1-866-NJDCRP1 (1-866-653-2771) to speak with a representative or by logging on to: www.prudential.com/njdcrp.

Note: Due to the delay in implementing the DCRP, elected or appointed officials with starting dates prior to April 1, 2008 should have DCRP Enrollment Applications Adobe PDF (38K) submitted to the Division of Pensions and Benefits no later than April 15, 2008.

Designation of Beneficiary

After submitting either a paper DCRP Enrollment Application or enrolling online, the new member will be asked to submit a DCRP Designation of Beneficiary form.  A copy of the DCRP Designation of Beneficiary form is included with this letter and is available on the Division of Pensions and Benefits Web site at: www.state.nj.us/treasury/pensions/ 

Additional work is underway to make the online Designation of Beneficiary application in the Member Benefits Online System (MBOS) available to DCRP members.  Watch your e-mail for further announcements about this online application.

Optional Waiver of DCRP Enrollment

If the elected or appointed official will earn less than $5,000 annually, the official may choose to voluntarily waive participation in the DCRP for that office or position.  To waive enrollment, the DCRP eligible official must submit a DCRP Waiver of Retirement Program Participation Adobe PDF (33K)within 30 days of the date that they become eligible for enrollment in the DCRP.

Note: Due to the delay in implementing the DCRP, elected or appointed officials with starting dates prior to April 1, 2008 who wish to waive participation should submit a DCRP Waiver of Retirement Program Participation Adobe PDF (33K) to the Division of Pensions and Benefits no later than April 30, 2008.

The waiver of DCRP 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. (Service in either House of the State Legislature is considered a single elected public office.)

Required Contributions

The DCRP is intended to be a tax-qualified defined contribution money purchase pension plan under Internal Revenue Code (IRC) § 401(a) et seq., and is further intended to be a “governmental plan” within the meaning of IRC § 414(d).  Therefore, required contributions under the DCRP carry the same tax treatment as do required contributions under the PERS — all mandatory pension contributions to the DCRP are federally tax deferred.  However, these contributions will not be reported to the Division of Pensions and Benefits in the same manner as are contributions for the PERS.

Once enrolled the elected or appointed official contributes 5.5% of the base salary to a tax-deferred investment account established with Prudential Financial, which administers the DCRP investments for the Division of Pensions and Benefits.  Member contributions are matched by a 3% employer contribution.  Employer and employee contribution amounts for each pay period shall be transmitted to Prudential Financial not later than the fifth business day after the date on which the employee is paid for that pay period.

As employees are enrolled into the DCRP by each employer, that employer will receive specific instructions on reporting and transmitting DCRP employer and employee contributions to Prudential Financial.  Specific procedures for the submission of DCRP contributions to Prudential are also being published to the Employer Pensions and Benefits Administration Manual (EPBAM) at: www.state.nj.us/treasury/pensions

Vesting

If a newly elected or appointed official is a member of another State-administered retirement system, the official is immediately vested in the DCRP.  A vested member has a right to a benefit at retirement based on both the employee and employer contributions to the DCRP.

If a newly elected or appointed official does not qualify for immediate vesting in the DCRP, the employee and employer contributions are held during the initial year of membership.  Upon commencing the second year of DCRP membership, the member is fully vested.  However, if a member is not eligible to continue in the DCRP for a second year of membership, the member may apply for a refund of the employee contributions from the DCRP, while the employer contributions will revert back to the employer.

Health Benefits

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

Other Benefits

Additional information about DCRP retirement, group life insurance, long term disability benefits, and other topics are found in Fact Sheet #80, Defined Contribution Retirement Program — Elected or Appointed Officials Adobe PDF (34K)

SUPPORT MATERIALS AND ADDITIONAL INFORMATION

A DCRP Enrollment click-through Q&A program has been made available for employers to assist with determining the DCRP or PERS eligibility of elected or appointed officials.  The link to the click-through Q&A is found on the DCRP home page of the Division of Pensions and Benefits Web site at: www.state.nj.us/treasury/pensions   At the home page click on either “Links for Employers” or “Links for Active Employees,” then select “Defined Contribution Retirement Program” from the “Retirement Systems” drop-menu.

Fact Sheet #80 Adobe PDF (34K), the DCRP Enrollment Application Adobe PDF (38K), Designation of Beneficiary, and Waiver of Participation Adobe PDF (33K) can also be found on the DCRP home page of the Division‘s Web site.

Administrative information for employers is also being posted to the Employer Pensions and Benefits Administration Manual (EPBAM) at: www.state.nj.us/treasury/pensions

An online DCRP enrollment application is available to employers through the Employer Pensions and Benefits Connection (EPIC).  An online designation of beneficiary application will also soon be available to DCRP members through the Member Benefits Online System (MBOS).

If after reviewing this information you have additional questions regarding the DCRP 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

Enclosures

Fact Sheet #80, Defined Contribution Retirement Program — Elected or Appointed Officials Adobe PDF (34K)

DCRP Enrollment Application for Elected or Appointed Officials Adobe PDF (38K)

DCRP Designation of Beneficiary

DCRP Waiver of Retirement Program Participation for Elected or Appointed Officials Adobe PDF (33K)

CO Letter in Printable Format Adobe PDF (228K)


March 20, 2008

TO: Certifying Officers
FROM: John D. Megariotis, Deputy Director, Finance
Division of Pensions and Benefits
SUBJECT: Defined Contribution Retirement Program (DCRP) for PERS and TPAF Members

This letter outlines procedures for employers when addressing eligibility and enrollment of certain Public Employees' Retirement System (PERS) or Teachers' Pension and Annuity Fund (TPAF) members into the Defined Contribution Retirement Program (DCRP).*

The DCRP was established July 1, 2007, under the provisions of Chapter 92, P.L. 2007 and Chapter 103, P.L. 2007, and provides eligible members with a tax-sheltered, defined contribution retirement benefit, along with life insurance and disability coverage.  The DCRP is jointly administered by the Division of Pensions and Benefits and Prudential Financial.  The implementation date for the DCRP will be April 1, 2008.

*DCRP enrollment procedures for elected or appointed officials are addressed in a separate letter.

DCRP ELIGIBILITY FOR PERS AND TPAF

Chapter 92 established the Defined Contribution Retirement Program (DCRP).  Chapter 103 expanded DCRP eligibility to employees enrolled in the PERS or TPAF on or after July 1, 2007, who earn salary in excess of established “maximum compensation” limits for PERS or TPAF pension contributions. The maximum compensation is based on the annual maximum wage for Social Security and is subject to change at the start of each calendar year.

For calendar year 2007, the annual maximum wage was $97,500.

For calendar year 2008, the annual maximum wage is $102,000.

Therefore, an employee enrolled in a PERS or TPAF eligible position on or after July 1, 2007 who will earn in excess of the maximum compensation limit in a calendar year will be enrolled in the DCRP — in addition to the PERS or TPAF.

  • PERS and TPAF members who also participate in the DCRP will receive service credit in their 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.

  • Additional retirement income will be available to the member based on contributions from salary in excess of the maximum compensation limit invested in the DCRP.

  • Certain Local employees hired between June 17, and June, 30, 2007 and enrolled in the PERS or TPAF as of July 1, 2007 are not subject to DCRP enrollment.

DCRP ENROLLMENT FOR PERS OR TPAF MEMBERS

Eligible PERS and TPAF members are enrolled in the DCRP when the annual salary exceeds the maximum compensation limit. This may occur in one of two ways:

  • Upon enrollment into the PERS or TPAF, when an annual base salary amount is reported on the PERS or TPAF Enrollment Application Adobe PDF (40K) that will exceed the maximum compensation; or

  • When a PERS or TPAF member’s annual salary increases to where it will exceed the maximum compensation and it is reported by the employer to the Division of Pensions and Benefits (either by directly contacting the Division, or when submitted on the Quarterly Report of Contributions).

Once the Division becomes aware that an employee’s salary will exceed the maximum compensation, the employee will be automatically enrolled into the DCRP (unless a DCRP Waiver form is submitted, see below).  Employees meeting these criterions who wish to establish, or maintain their investment account may contact Prudential Financial by calling 1-866-NJDCRP1 (1-866-653-2771) to speak with a representative or by logging on to: www.prudential.com/njdcrp.

Transfers

Employees who transfer into the PERS or TPAF on or after July 1, 2007 will not be subject to maximum compensation limits or DCRP enrollment if the employee was a member of the PERS or TPAF on or before June 30, 2007 and any of the following situations apply:

  • The member is transferring to a PERS or TPAF eligible position without a break in service; or

  • Any break in service is 24 months or less from the date of the last PERS or TPAF pension contribution and the account has not been withdrawn; or

  • Any break in service is 24 months or less from the end of an approved leave of absence; or

  • The member is returning from a break in service that was the result of an involuntary layoff or reduction in force and the return is within 10 years of the date of the last PERS or TPAF pension contribution and the account has not been withdrawn.

If a member transfers into the PERS or TPAF on or after July 1, 2007 after a break in service that falls beyond the 24 month or 10 year exceptions described above, the member will be subject to the maximum compensation rules and DCRP enrollment.

Required Contributions

The DCRP is intended to be a tax-qualified defined contribution money purchase pension plan under Internal Revenue Code (IRC) § 401(a) et seq., and is further intended to be a “governmental plan” within the meaning of IRC § 414(d).  Therefore, required contributions under the DCRP carry the same tax treatment as do required contributions under the PERS or TPAF — all mandatory pension contributions to the DCRP are federally tax deferred.  However, these contributions will not be reported to the Division of Pensions and Benefits in the same manner as are contributions for the PERS and TPAF.

When enrolled in the DCRP, members contribute 5.5% of the base salary in excess of the maximum compensation limit to a tax-deferred investment account established with Prudential Financial, which administers the DCRP investments for the Division of Pensions and Benefits. Member contributions are matched by a 3% employer contribution based on the salary in excess of the maximum compensation limit.  Employer and employee contribution amounts for each pay period shall be transmitted to Prudential Financial not later than the fifth business day after the date on which the employee is paid for that pay period.

As employees are enrolled into the DCRP, the employer will receive specific instructions on reporting and transmitting DCRP employer and employee contributions to Prudential Financial. Specific procedures for the submission of DCRP contributions to Prudential are also being published to the Employer Pensions and Benefits Administration Manual (EPBAM) at: www.state.nj.us/treasury/pensions/epbam/

The employer is responsible for informing any employee who has salary that will exceed the maximum compensation that he or she will be subject to DCRP enrollment.  If the employee does not voluntarily waive DCRP enrollment (see below), payroll deductions will be forwarded to the DCRP investment account when the employee’s salary reaches the maximum compensation, and the employer will be assessed the 3% contribution on the excess salary.

Optional Waiver of DCRP Enrollment

A PERS or TPAF member who is also eligible for the DCRP can choose to voluntarily waive participation in the DCRP, by submitting a DCRP Waiver of Retirement Program Participation Adobe PDF (33K) within 30 days of the date they become eligible for enrollment into the DCRP. 

Note: Due to the delay in implementing the DCRP, PERS or TPAF members who become eligible for the DCRP prior to April 1, 2008 and wish to waive participation should submit a DCRP Waiver of Retirement Program Participation Adobe PDF (33K) to the Division of Pensions and Benefits no later than April 30, 2008.

Reinstatement

If a PERS or TPAF member waives DCRP participation and later wishes to participate, he or she can submit a DCRP Election to Participate Adobe PDF (41K) form.  DCRP membership will become effective January 1 of the following calendar year.

Designation of Beneficiary

After enrollment into the PERS or TPAF is completed — either online or by submitting a paper Enrollment Application — the new member is asked to submit a Designation of Beneficiary form.  Upon the death of a DCRP eligible PERS or TPAF member, the Division of Pensions and Benefits will pay DCRP death benefits using the beneficiary information on file for the PERS or TPAF account.

Changing a PERS or TPAF beneficiary(ies), therefore, also changes the DCRP beneficiary(ies) on file.

  • To change a beneficiary, PERS and TPAF members are encouraged to use the online Designation of Beneficiary application in the Member Benefits Online System (MBOS). 

  • A printable Designation of Beneficiary form is available on the Division of Pensions and Benefits Web site. (Note: Effective February 1, 2013, paper Designation of Beneficiary forms are no longer accepted by the Division. Verify or update your beneficiary information using MBOS.)
Vesting

A PERS or TPAF member who becomes eligible and is enrolled in the DCRP is immediately vested in the DCRP.  A vested member has the right to a benefit at retirement based on both the employee and employer contributions to the DCRP.

Health Benefits

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

However, PERS and TPAF members who also participate in the DCRP through earnings in excess of the maximum wage earn concurrent PERS or TPAF credit.  The PERS or TPAF credit can be applied to eligibility for retired group SHBP coverage, if otherwise eligible through that PERS or TPAF employment.

Other Benefits

Additional information about DCRP retirement, group life insurance, long term disability benefits, and other topics are found in Fact Sheet #79, Defined Contribution Retirement Program for PERS and TPAF Members Adobe PDF (35K).

SUPPORT MATERIALS AND ADDITIONAL INFORMATION

Fact Sheet #79 Adobe PDF (35K), the Designation of Beneficiary, Waiver of Participation Adobe PDF (33K), and DCRP Election to Participate Adobe PDF (41K) forms can be found on the DCRP home page of the Division‘s Web site at: www.state.nj.us/treasury/pensions/   At the home page click on either “Links for Employers” or “Links for Active Employees,” then select “Defined Contribution Retirement Program” from the “Retirement Systems” drop-menu.

Administrative information for employers is also being posted to the Employer Pensions and Benefits Administration Manual (EPBAM) at: www.state.nj.us/treasury/pensions

The Online Designation of Beneficiary application is available for PERS and TPAF members on the Member Benefits Online System (MBOS).

If after reviewing this information you have additional questions regarding the DCRP 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

Enclosures

Fact Sheet #79, Defined Contribution Retirement Program for PERS and TPAF Members Adobe PDF (35K)

DCRP Waiver Form for PERS and TPAF Members Adobe PDF (33K)

DCRP Election to Participate Form  (for PERS or TPAF employees who previously waived DCRP enrollment) Adobe PDF (41K)


CO Letter in Printable Format
Adobe PDF (168K)


January 2008

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

The State Health Benefits Program (SHBP) Special Open Enrollment for State biweekly and State monthly employees will begin on January 28, 2008 and end on February 15, 2008.  All changes to coverage made during this open enrollment will be effective on March 29, 2008 for State biweekly employees and April 1, 2008 for State monthly employees.

Completed employer-certified SHBP Applications should be forwarded to the Health Benefits Bureau as soon as they are received from employees. Due to the expected large volume of applications, please do not hold applications or send them in at one time. The last day that certified applications may arrive at the Health Benefits Bureau is February 22, 2008.

As outlined in our letter of December 20, 2007, members will be automatically transferred from their existing plans into the corresponding new plans as of March 29, 2008 or April 1, 2008 as appropriate.  Please remember that members do not need to submit an application if they are satisfied with the automatic transfer outlined in that letter. See “Additional Information” below for more details.

Our earlier letter also indicated that the SHBP would be conducting regional employee informational seminars. Unfortunately due to time constraints and limited staff, the SHBP will not be able to conduct these seminars; however, online presentations linked from the SHBP Home page will be available to employees (Webex player download may be required).  The SHBP will be offering a health fair on February 8, 2008 from 11:00 a.m. to 2:30 p.m. at Thomas Edison State College, Prudence Hall, 101 West State Street, Trenton. In addition, plan administrators will be able to participate in health fairs on a limited basis. Employers must have at least 150 participating members to schedule a fair. Please contact your plan representatives directly to schedule participation.

MEDICAL PLANS

The SHBP is offering two types of medical plans, a Preferred Provider Organization (PPO) and Health Maintenance Organizations (HMO).

The new PPO will offer two options known as NJ DIRECT10 and NJ DIRECT15. Only NJ DIRECT15 is available to active State employees. 

  • NJ DIRECT15 is similar in design to the current NJ PLUS plan, providing in-network and out-of-network medical care. NJ DIRECT15 differs from NJ PLUS in that NJ DIRECT15 is available nationwide, members are not required to choose a primary care physician, and do not need a referral for in-network services. The copayment for most NJ DIRECT15 in-network services is $15.  Most out-of-network services are reimbursed at 70% of the “reasonable and customary” allowance after annual deductibles are met.

If treatment for an illness or injury was provided during the last three months of 2007 (assuming the member did not reach the deductible in 2007) or the first three months of 2008 in either NJ PLUS or the Traditional Plan, the eligible charges that were applied toward the annual deductibles may be counted toward meeting the out-of-network deductible under NJ DIRECT for 2008. In addition, the annual and lifetime accumulations as well as the 2008 out-of-pocket balances from NJ PLUS and the Traditional Plan will carry forward into NJ DIRECT.

  • Two HMO plans, Aetna HMO and CIGNA HealthCare, are available to all employees.  Both HMOs have expanded networks and provide services nationwide. When an employee enrolls in an HMO he or she selects a Primary Care Physician (PCP) from a group of participating providers contracted by the HMO. All services, except emergencies, are coordinated through the PCP.  The copayment for most HMO in-network services is $15.  There is no option in an HMO for out-of-network care (except for emergencies).

An informational brochure, A Guide to Choosing a SHBP Health Plan Adobe PDF (45K), describes the new medical plans in additional detail, see “Additional Information” below.

RATES FOR 2008

The State Health Benefits Commission approved new health and prescription drug plan rates for the period April 1, 2008 through December 31, 2008. These rates are based upon the recommendation of the Commission’s actuarial consultant, Aon Consulting, and represent an overall increase of 3% for the State active group and an 11% decrease for the State retiree group.  Since the SHBP self-funds all of its medical plans, the claims experience used in projecting these costs are based upon the actual claims experience of the groups.

Rate charts are included with this letter and can also be accessed on the Division’s Web site at: www.state.nj.us/treasury/pensions/shbp.htm

ADDITIONAL INFORMATION

An informational brochure, A Guide to Choosing a SHBP Health Plan Adobe PDF (45K) was included with State biweekly employee paychecks dated January 25, 2008. The Guide outlines the plan designs of all SHBP medical plans and describes the automatic transfer of members to the new plans.  State monthly employers are being shipped supplies of the guide, and it is also available on the Division’s Web site at:www.state.nj.us/treasury/pensions/shbp.htm.  

By the start of the Open Enrollment period (January 28th), each medical plan will have a SHBP dedicated Web site available with plan information.  Plan telephone numbers are now operational.  See A Guide to Choosing a SHBP Health Plan Adobe PDF (45K) for telephone and Web site information.

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 within the New Jersey area 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.

A copy of the revised New Jersey State Health Benefit Program Application is enclosed for your use. Please remember that employees do not need to submit an application if they are satisfied with the automatic transfer outlined in the Guide to Choosing a SHBP Health Plan Adobe PDF (45K).

The revised SHBP Plan Comparison Summary is also enclosed. This redesigned and easily printed document is available on our Web site, and printed copies will be available and distributed to employers in February.

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

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

Enclosures
Health Plan Rate Charts:
State Biweekly Employees; State Monthly Employees
SHBP Application
Plan Comparison Summary - Active
Plan Comparison Summary - Retired

CO Letter in Printable Format Adobe PDF (78K)


January 2008

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

The State Health Benefits Program (SHBP) Special Open Enrollment for local government employees will begin on January 28, 2008 and end on February 15, 2008.  All changes to coverage made during this open enrollment will be effective on April 1, 2008.

Completed employer-certified SHBP Applications should be forwarded to the Health Benefits Bureau as soon as they are received from employees. Due to the expected large volume of applications, please do not hold applications or send them in at one time. The last day that certified applications may arrive at the Health Benefits Bureau is February 22, 2008.

As outlined in our letter of December 20, 2007, members will be automatically transferred from their existing plans into the corresponding new plans as of April 1, 2008.  Please remember that members do not need to submit an application if they are satisfied with the automatic transfer outlined in that letter. See “Additional Information” below for more details.

Our earlier letter also indicated that the SHBP would be conducting regional employee informational seminars. Unfortunately due to time constraints and limited staff, the SHBP will not be able to conduct these seminars; however, online presentations linked from the SHBP Home page will be available to employees (Webex player download may be required).  In addition, plan administrators will be able to participate in health fairs on a limited basis. Employers must have at least 150 participating members to schedule a fair. Please contact your plan representatives directly to schedule participation.

MEDICAL PLANS

The SHBP is offering two types of medical plans, a Preferred Provider Organization (PPO) and Health Maintenance Organizations (HMO).

The new PPO will offer two options known as NJ DIRECT10 and NJ DIRECT15.

NJ DIRECT10 and NJ DIRECT15 are both similar in design to the current NJ PLUS plan, providing in-network and out-of-network medical care.  NJ DIRECT differs from NJ PLUS in that NJ DIRECT is available nationwide, members are not required to choose a primary care physician, and do not need a referral for in-network services.

  • The copayment for NJ DIRECT10 in-network primary doctor visits and visits to a network specialist is $10.  Most out-of-network services are reimbursed at 80% of the “reasonable and customary” allowance after annual deductibles are met.
  • The copayment for NJ DIRECT15 in-network primary doctor visits and visits to a network specialist is $15.  Most out-of-network services are reimbursed at 70% of the “reasonable and customary” allowance after annual deductibles are met.

If treatment for an illness or injury was provided during the last three months of 2007 (assuming the member did not reach the deductible in 2007) or the first three months of 2008 in either NJ PLUS or the Traditional Plan, the eligible charges that were applied toward the annual deductibles may be counted toward meeting the out-of-network deductible under NJ DIRECT for 2008. In addition, the annual and lifetime accumulations as well as the 2008 out-of-pocket balances from NJ PLUS and the Traditional Plan will carry forward into NJ DIRECT.

Since the benefit design of NJ DIRECT10 and NJ DIRECT15 are identical except for copayment and out-of-network reimbursement amounts, a local government employer is permitted, through the negotiation process, to offer one or the other of the NJ DIRECT options. A resolution by the governing board must be submitted to the SHBP 60 days prior to the effective date of the change.

The two HMO plans, Aetna HMO and CIGNA HealthCare, are available to all employees.  Both HMOs have expanded networks and provide services nationwide. When an employee enrolls in an HMO he or she selects a Primary Care Physician (PCP) from a group of participating providers contracted by the HMO. All services, except emergencies, are coordinated through the PCP.

  • The copayment for HMO in-network primary doctor visits and visits to a referred specialist is $10.

There is no option in an HMO for out-of-network care (except for emergencies).

An informational brochure, A Guide to Choosing a SHBP Health Plan Adobe PDF (45K) describes the new medical plans in additional detail, see “Additional Information” below.

RATES FOR 2008

The State Health Benefits Commission has approved new health and prescription drug plan rates for the period April 1, 2008 through December 31, 2008. These rates are based upon the recommendation of the Commission’s actuarial consultant, Aon Consulting and represent an overall decrease of 5% for the local government group.  Since the SHBP self-funds all of its medical plans, the claims experience used in projecting these costs are based upon the actual claims experience of the group.

Rate charts are included with this letter and can also be accessed on the Division’s Web site at:www.state.nj.us/treasury/pensions/shbp.htm

ADDITIONAL INFORMATION

An informational brochure, A Guide to Choosing a SHBP Health Plan,Adobe PDF (45K) will be delivered to local government employers by January 28, 2008. The Guide outlines the plan designs of all SHBP medical plans and describes the automatic transfer of members to the new plans.  The Guide is also available on the Division’s Web site at:
www.state.nj.us/treasury/pensions/shbp.htm.

By the start of the Open Enrollment period (January 28th), each medical plan will have a SHBP dedicated Web site available with plan information.  Plan telephone numbers are now operational.  See A Guide to Choosing a SHBP Health Plan Adobe PDF (45K) for telephone and Web site information.

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 within the New Jersey area 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.

A copy of the revised New Jersey State Health Benefit Program Application is enclosed for your use.  Please remember that employees do not need to submit an application if they are satisfied with the automatic transfer outlined in the Guide to Choosing a SHBP Health Plan Adobe PDF (45K).

The revised SHBP Plan Comparison Summary is also enclosed. This redesigned and easily printed document is available on our Web site, and printed copies will be available and distributed to employers in February.

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

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

Enclosures:
Health Plan Rate Charts (County and Municipal Government)
SHBP Application
Plan Comparison Summary - Local Government
Plan Comparison Summary - Retired

CO Letter in Printable Format Adobe PDF (78K)


January 2008

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

The State Health Benefits Program (SHBP) Special Open Enrollment for local education employees will begin on January 28, 2008 and end on February 15, 2008.  All changes to coverage made during this open enrollment will be effective on April 1, 2008.

Completed employer-certified SHBP Applications should be forwarded to the Health Benefits Bureau as soon as they are received from employees.  Due to the expected large volume of applications, please do not hold applications or send them in at one time.  The last day that certified applications may arrive at the Health Benefits Bureau is February 22, 2008.

As outlined in our letter of December 20, 2007, members will be automatically transferred from their existing plans into the corresponding new plans as of April 1, 2008.  Please remember that members do not need to submit an application if they are satisfied with the automatic transfer outlined in that letter. See “Additional Information” below for more details.

Our earlier letter also indicated that the SHBP would be conducting regional employee informational seminars. Unfortunately due to time constraints and limited staff, the SHBP will not be able to conduct these seminars; however, online presentations linked from the SHBP Home page will be available to employees (Webex player download may be required).  In addition, plan administrators will be able to participate in health fairs on a limited basis. Employers must have at least 150 participating members to schedule a fair. Please contact your plan representatives directly to schedule participation.

MEDICAL PLANS

The SHBP is offering two types of medical plans, a Preferred Provider Organization (PPO) and Health Maintenance Organizations (HMO).

The new PPO will offer two options known as NJ DIRECT10 and NJ DIRECT15.

NJ DIRECT10 and NJ DIRECT15 are both similar in design to the current NJ PLUS plan, providing in-network and out-of-network medical care. NJ DIRECT differs from NJ PLUS in that NJ DIRECT is available nationwide, members are not required to choose a primary care physician, and do not need a referral for in-network services.

  • The copayment for NJ DIRECT10 in-network primary doctor visits and visits to a network specialist is $10.  Most out-of-network services are reimbursed at 80% of the “reasonable and customary” allowance after annual deductibles are met.
  • The copayment for NJ DIRECT15 in-network primary doctor visits and visits to a network specialist is $15.  Most out-of-network services are reimbursed at 70% of the “reasonable and customary” allowance after annual deductibles are met.

If treatment for an illness or injury was provided during the last three months of 2007 (assuming the member did not reach the deductible in 2007) or the first three months of 2008 in either NJ PLUS or the Traditional Plan, the eligible charges that were applied toward the annual deductibles may be counted toward meeting the out-of-network deductible under NJ DIRECT for 2008. In addition, the annual and lifetime accumulations as well as the 2008 out-of-pocket balances from NJ PLUS and the Traditional Plan will carry forward into NJ DIRECT.

Since the benefit design of NJ DIRECT10 and NJ DIRECT15 are identical except for copayment and out-of-network reimbursement amounts, a local education employer is permitted, through the negotiation process, to offer one or the other of the NJ DIRECT options. A resolution by the governing board must be submitted to the SHBP 60 days prior to the effective date of the change.

The two HMO plans, Aetna HMO and CIGNA HealthCare, are available to all employees.  Both HMOs have expanded networks and provide services nationwide. When an employee enrolls in an HMO he or she selects a Primary Care Physician (PCP) from a group of participating providers contracted by the HMO. All services, except emergencies, are coordinated through the PCP. 

  • The copayment for HMO in-network primary doctor visits and visits to a referred specialist is $10. 

There is no option in an HMO for out-of-network care (except for emergencies).

An informational brochure, A Guide to Choosing a SHBP Health Plan Adobe PDF (45K), describes the new medical plans in additional detail, see “Additional Information” below.

RATES FOR 2008

The State Health Benefits Commission has approved new health and prescription drug plan rates for the period April 1, 2008 through December 31, 2008. These rates are based upon the recommendation of the Commission’s actuarial consultant, Aon Consulting and represent an overall decrease of 10% for the local education group.  Since the SHBP self-funds all of its medical plans, the claims experience used in projecting these costs are based upon the actual claims experience of the group.

Rate charts are included with this letter and can also be accessed on the Division’s Web site at: www.state.nj.us/treasury/pensions/shbp.htm. 

ADDITIONAL INFORMATION

An informational brochure, A Guide to Choosing a SHBP Health Plan Adobe PDF (45K) will be delivered to Local Education Employers by January 28, 2008. The Guide outlines the plan designs of all SHBP medical plans and describes the automatic transfer of members to the new plans. The Guide is also available on the Division’s Web site at:
www.state.nj.us/treasury/pensions/shbp.htm.

By the start of the Open Enrollment period (January 28th), each medical plan will have a SHBP dedicated Web site available with plan information. Plan telephone numbers are now operational. See A Guide to Choosing a SHBP Health Plan Adobe PDF (45K) for telephone and Web site information.

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 within the New Jersey area 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.

A copy of the revised New Jersey State Health Benefit Program Application is enclosed for your use. Please remember that employees do not need to submit an application if they are satisfied with the automatic transfer outlined in the Guide to Choosing a SHBP Health Plan Adobe PDF (45K).

The revised SHBP Plan Comparison Summary is also enclosed. This redesigned and easily printed document is available on our Web site, and printed copies will be available and distributed to employers in February.

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

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

Enclosures
Health Plan Rate Charts (Local Boards of Education)
SHBP Application
Plan Comparison Summary - Active
Plan Comparison Summary - Retired

CO Letter in Printable Format Adobe PDF (78K)


 
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