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Pensions and Benefits
CERTIFYING OFFICER LETTERS 2011

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

SUBJECT DATE
Report of Contributions, 4th Quarter 2011 (October 1 to December 31) Certifying Officers, Autonomous State College/University/State Employers December 2011
Report of Contributions, 4th Quarter 2011 (October 1 to December 31) Certifying Officers - Teachers’ Pension and Annuity Fund, Public Employees’ Retirement System, and Police and Firemen’s Retirement System December 2011
Chapter 78, P.L. 2011 — Retirement While Serving in Elected Office — Certifying Officers of the Public Employees’ Retirement System and Police and Firemen’s Retirement System December 15, 2011
Applications for Disability Retirement — Certifying Officers of the Public Employees’ Retirement System (PERS), Teachers’ Pension and Annuity Fund (TPAF), Police and Firemen’s Retirement System (PFRS), or State Police Retirement System (SPRS) December 1, 2011
Updates to Reporting through the Internet-based Report of Contributions – PERS – TPAF – PFRS Certifying Officers November 30, 2011
PFRS Notice of Election — Certifying Officers of the Police and Firemen’s Retirement System (PFRS) October 2011
SHBP Open Enrollment (State Biweekly Employers) Certifying Officers, Human Resource Directors, and Benefits Administrators October 2011
SHBP Open Enrollment (State Monthly Employers) State College and University Certifying Officers, Human Resource Directors, and Benefits Administrators; State Monthly Certifying Officers, Human Resource Directors, and Benefits Administrators October 2011
SHBP Open Enrollment (Local Government Employers) Local Government Certifying Officers, Human Resource Directors, and Benefits Administrators participating in the State Health Benefits Program October 2011
SEHBP Open Enrollment (Local Education Employers) Certifying Officers, Human Resource Directors, and Benefits Administrators October 2011
Report of Contributions, 3rd Quarter 2011 (July 1 to September 30) Certifying Officers, Autonomous State College/University/State Employers September 2011
Report of Contributions, 3rd Quarter 2011 (July 1 to September 30) Certifying Officers - Teachers’ Pension and Annuity Fund, Public Employees’ Retirement System, and Police and Firemen’s Retirement System September 2011
Open Enrollment for Tax$ave 2012 — State Department Certifying Officers, State Department Human Resource Directors, State Biweekly Payroll Benefits Administrators September 22, 2011
Open Enrollment for Tax$ave 2012 — State University and College Certifying Officers & Benefits Administrators; State Monthly Certifying Officers & Benefits Administrators September 22, 2011
PERS Notice of ElectionCertifying Officers of the Public Employees' Retirement System (PERS) September 2011
Chapter 78, P.L. 2011 - Pension Changes for the PERS and TPAFCertifying Officers of the Public Employees' Retirement System and the Teachers' Pension and Annuity Fund July 14, 2011
Chapter 78, P.L. 2011 - Pension Changes for the PFRS — Certifying Officers of the Police and Firemen's Retirement System July 14, 2011
Chapter 78, P.L. 2011 - Pension Changes for the SPRS — Certifying Officers of the State Police Retirement System July 14, 2011
Chapter 78, P.L. 2011 - Pension Changes for the JRS — Certifying Officers of the Judicial Retirement System July 14, 2011
Contribution Rate Changes under Chapter 78, P.L. 2011 — Certifying Officers of the State-Administered Retirement Systems for State Employees paid through the State Centralized Payroll Unit July 1, 2011
Contribution Rate Changes under Chapter 78, P.L. 2011 — Local Government and Local Board of Education Certifying Officers for
All State-Administered Retirement Systems
July 1, 2011
Transition to Retirement Programs and Rescinding ABP Retirement — Certifying Officers, State and County Colleges and Universities July 1, 2011
Procedures for PFRS Involuntary Disability Retirement — Certifying Officers of the Police and Firemen’s Retirement System (PFRS) June 22, 2011
Report of Contributions, 2nd Quarter 2011 (April 1 to June 30) Certifying Officers, Autonomous State College/University/State Employers June 21, 2011
Report of Contributions, 2nd Quarter 2011 (April 1 to June 30) Certifying Officers - Teachers’ Pension and Annuity Fund, Public Employees’ Retirement System, and Police and Firemen’s Retirement System June 21, 2011
Required Training under Chapter 52, P.L. 2011 — Certifying Officers of the State-administered Retirement Systems June 17, 2011
Enrollment Certification and Training Requirements Under Chapter 52, P.L. 2011 — Certifying Officers of the State-administered Retirement Systems May 26, 2011
Purchase or Withdrawal Employer Certifications Required Through EPIC — Certifying Officers April 27, 2011
New Redesigned Automated Information System — Certifying Officers April 5, 2011
MBOS and EPIC Update — Logon ID Retrieval — Certifying Officers of the State-administered Retirement Systems April 2011
Report of Contributions, 1st Quarter 2011 (January 1 to March 31) Certifying Officers, Autonomous State College/University/State Employers March 25, 2011
Report of Contributions, 1st Quarter 2011 (January 1 to March 31) Certifying Officers - Teachers’ Pension and Annuity Fund, Public Employees’ Retirement System, and Police and Firemen’s Retirement System March 25, 2011
Online Application Requirement for Purchase of Service Credit Certifying Officers February 23, 2011
Online Application Requirement for Withdrawals Certifying Officers February 23, 2011
Pension Training, Workshops, and Webinars Available in 2011 Certifying Officers of the Public Employees' Retirement System (PERS), Teachers’ Pension and Annuity Fund (TPAF), and Police and Firemen’s Retirement System (PFRS) January 26, 2011
Limits on Prosecutor Employment and Pension Eligibility — Certifying Officers for the Prosecutors Part of the Public Employees’ Retirement System (PERS) January 26, 2011
Retirement Benefits for Members of State Boards and Commissions — Certifying Officers of the Public Employees' Retirement System (PERS) January 26, 2011

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 29, 2011

TO: Certifying Officers of Autonomous State College/University/State Employers
FROM: Joseph Zisa, Manager 1, Fiscal Resources
SUBJECT: REPORT OF CONTRIBUTIONS, 4TH QUARTER 2011 (OCTOBER 1 TO DECEMBER 31)

This memorandum has pertinent information concerning the reporting your employees’ pensionable service and salary and the completion of your quarterly Report of Contributions (ROC). Please review this memorandum before submitting your quarterly pension report.

Should you have any questions or need assistance in completing the Report, please refer to: www.state.nj.us/treasury/pensions/epbam/finance/roc.htm

Contribution Rate Changes Under Chapter 78, P.L. 2011

Pursuant to Chapter 78, P.L. 2011, Pension and Health Benefit Reform, employee pension contribution rates will be increased effective October 1, 2011.

  • For PERS and TPAF members the employee pension contribution rate will gradually increase from 5.5% to 7.5% of salary by July 2018. The increase to the employee contribution rate will be 1% beginning on October 1, 2011. The second 1% increase will be phased in over 7 years beginning July 1, 2012. Therefore, effective October 1, 2011, with your Report of Contributions for the 4th Quarter 2011, the employee contribution rate will increase to 6.5%. After that the employee contribution rate will increase each July 1st over the seven year phase in until the full 7.5% contribution is reached in 2018 (6.64% in July 2012, 6.78% in July 2013, 6.92% in July 2014, 7.06% in July 2015, 7.20%, July 2016, 7.34% in July 2017, and 7.50% July 2018).
  • For PFRS members the employee pension contribution rate will increase from 8.5% to 10% of salary effective October 1, 2011 with your Report of Contributions for the 4th Quarter 2011.

Retirement Plan Limits for 2012

The IRS has announced the cost-of-living adjustments (COLAs) for retirement plans. Many of the limits applicable to pension, and other retirement plans, are changing for 2012 and are noted here for your reference.

  • 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 $245,000 to $250,000. 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, is increased from $360,000 for 2011 to $375,000 for 2012.
  • 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 $49,000 or 100% of the participant's compensation to the lesser of $50,000 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 $16,500 or 100% of the participant's compensation to the lesser of $17,000 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 $16,500 or 100% of the participant's compensation to the lesser of $17,000 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 may 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 unchanged and remains at $5,500. Defined contribution plans administered by the Division of Pensions and Benefits affected by this change include the SACT, ABP and ACTS programs.

TPAF, PERS & PFRS — Maximum Compensation Limits

Lower compensation limits are in place for TPAF and PERS Tier 2 and Tier 3 members enrolled on or after July 1, 2007. Lower compensation limits are also in place for PFRS Tier 2 and Tier 3 members enrolled after May 21, 2010. 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, PERS and PFRS Tier 2 and Tier 3 members is increased from $106,800 for 2011 to $110,100 for 2012. Please refer to P.L. 2007, Chapter 103 and P.L. 2010, Chapter 1 for details.

PERS & TPAF Tier 3 — Minimum Annual Base Salary

As a result of P.L. 2008, Chapter 89, the Director of the Division of Pensions and Benefits shall adjust each year the minimum annual base salary for participation in the Teachers’ Pension and Annuity Fund (TPAF) and the Public Employees’ Retirement System (PERS) for those members in Tier 3 service (Tier 3 service covers those individuals eligible to enroll in TPAF or PERS on or after November 2, 2008). The adjustment is made annually in accordance with changes in the Consumer Price Index, pursuant to N.J.A.C. 17:3-2.1(g) for TPAF membership and N.J.A.C. 17:2-2.1(c) for PERS membership.

Please take note that, pursuant to these provisions, the Division of Pensions and Benefits set the annual base salary for participation in the TPAF and PERS at $7,700 for calendar year 2011. This minimum annual base salary continues in effect through December 31, 2011. The base is being evaluated for revision in 2012 and the results of that analysis will be announced shortly.

Employees who fall below the minimum annual base salary amount in any calendar year may be eligible to participate in the Defined Contribution Retirement Program. Please review Fact Sheet #82, Defined Contribution Retirement Program (DCRP) If Ineligible for PERS or TPAF, Adobe PDF (38K) for additional information.

Reminder — Processing ‘Stop Deductions’ Member Certifications

The Division is issuing Certifications of Payroll Deductions for situations where an employer is required to suspend future pension and related benefit payroll deductions for an employee. These ‘Stop Deduction’ Certifications are typically issued for employees who have been reported as a multiple member (one who works for more than one employer receiving pension credit from each simultaneously) who are no longer eligible for this benefit. This is a required change following reforms contained in P.L. 2010, Chapter 1. 

If you receive a ‘stop deductions’ certification for a member who is on the ROC, you must stop reporting deductions as of the date reflected on the certification. This certification was produced as a result of the employee’s concurrent service with another employer and the Division has taken into consideration employment and pension reporting at your jurisdiction through that date when instructing the other employer on when to begin deductions and the amount of the deduction to be taken. Even though this employee may have continued service with you beyond this date, for purposes of your pension related reporting, please adjust the member’s service and base salary, if applicable, to agree with the date shown on the ‘stop deduction’ certification using an explanation of “terminated” from the drop down box on the IROC or a leave code of ‘2’ on the ROC data file.

If an employee has terminated service with you prior to the date shown on the ‘stop deductions’ certification, immediately contact the Division by forwarding a copy of the certification with detail of the employee’s salary, pension contributions and related deductions since the last period reported on ROC and the date of termination. Information should be directed to the attention of the ‘Adjustment Section’ at the Division’s Trenton NJ address.

ROC Reporting for Members with Multiple Employment

P.L. 2010, Chapter 1, requires that an employee eligible for PERS or TPAF enrollment after May 21, 2010, be eligible for Tier 4 membership based upon only one position and requires the retirement system to designate the position providing the higher or highest compensation for the member from among any concurrently held positions. This position will be used as the basis for eligibility for membership, service credit, the compensation base for pension contributions, and for other pension calculations.

For current PERS or TPAF Tier 1, Tier 2, or Tier 3 multiple members, all concurrent positions held without a break in service from May 21, 2010, will continue to qualify for service credit and the compensation base for pension contributions and calculation of benefits. However, provisions of P.L. 2010, Chapter 1, require that any new, concurrently held position beginning after May 21, 2010, will not qualify for service credit or the compensation base for pension contributions and calculation of retirement for any PERS or TPAF multiple member. Current multiple employer relationships will be terminated following any “break in service” not supported by an employer approved leave of absence (LOA). For this purpose a “break in service” is being defined for employment with any municipality, county, board of education or authority as any one month period without service while not on an approved LOA. The Division may require recertification of these employment relationships following a break in service with an approved leave of absence. As a result, you may be asked to provide additional information before being able to add a multiple member back to your report of contributions following an approved LOA.

Deadline for Filing the Report of Contributions

The Division has been updating member accounts as early as four weeks following the close of the calendar quarter. But to do so we need the support of all our employers. Therefore, all reports and data files are due by January 7. 2012. Should your report not be received by the close of business on January 22, 2012, it may not be used to update member accounts and interest penalties will begin to accrue.

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.

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.

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 date.

Your December 2011 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 no later than January 22, 2012 to avoid the assessment of late fees.

Procedures for Reporting of Retroactive Salary

Any retroactive salary increase paid to employees is subject to the employee contribution rate in effect at the time the retroactive salary would have been paid if the contract had been ratified prior to its effective date. Therefore, any retroactive salary increase paid on or after October 1, 2011 is subject to the prevailing contribution rate for each period of service under the retroactive period covered by the lump sum payment of back wages. For example, for a 12-month retroactive salary increase paid on December 30, 2011, PERS employee pension contributions would be calculated using a rate of 5.5% of base salary covering the period of January 1 through September 30, 2011 and a rate of 6.5% of base salary covering the period of October 1 through December 30, 2011.

Tiers Defined for the TPAF and the PERS

  • Tier 1: Member who were enrolled prior to July 1, 2007.
  • 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 P.L. 2007, Chapter 103.
  • Tier 3: Members who were eligible to enroll on or after November 2, 2008 pursuant to the provisions of P.L. 2010, Chapter 89.
  • Tier 4: Members who were eligible to enroll on or after May 21, 2010 pursuant to the provisions of P.L. 2010, Chapter 1.
  • Tier 5: Members who were eligible to enroll on or after June 28, 2011 pursuant to the provisions of P.L. 2011, Chapter 78.

Changing Banking Information for TEPS

On or after the date that the new checking account becomes effective, a Notice of Changes for TEPS should be faxed to 1-866-568-2495 or mailed to:

New Jersey Department of Treasury
Division of Pensions and Benefits
PO Box 9581
Trenton NJ 08650-9581

Please call the TEPS Helpline 1-888-835-3345 if you have any questions regarding the status of your change or if you have any questions regarding your password or the status of your transmittal payment.

CO Letter in Printable Format Adobe PDF (70K)

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December 29, 2011

TO: Certifying Officers of the Teachers’ Pension and Annuity Fund, Public Employees’ Retirement System, and Police and Firemen’s Retirement System
FROM: Joseph Zisa, Manager 1, Fiscal Resources
SUBJECT: REPORT OF CONTRIBUTIONS, 4TH QUARTER 2011 (OCTOBER 1 TO DECEMBER 31)

This memorandum contains important instructions 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 ROC, please refer to www.state.nj.us/treasury/pensions/epbam/finance/roc.htm

IMPORTANT CHANGE

The 4th Quarter 2011 iROC for TPAF, PERS and PFRS will show the capped base salary and corresponding pension and, when applicable, contributory insurance deductions for members enrolled under Tiers 2 or higher whose earnings for 2011 exceed the maximum allowable compensation of $106,800. Therefore, effective immediately, and retroactively for the entire 4th calendar quarter of 2011, employers should not include Defined Contribution Retirement Program (DCRP) eligible salary on the iROC for members enrolled under membership Tiers 2 or higher, nor should pension and contributory insurance contributions be submitted to the Division of Pensions and Benefits for compensation above the capped amount.

Contribution Rate Changes Under Chapter 78, P.L. 2011

Pursuant to Chapter 78, P.L. 2011, Pension and Health Benefit Reform, employee pension contribution rates will be increased effective October 1, 2011.

  • For PERS and TPAF members the employee pension contribution rate will gradually increase from 5.5% to 7.5% of salary by July 2018. The increase to the employee contribution rate will be 1% beginning on October 1, 2011. The second 1% increase will be phased in over 7 years beginning July 1, 2012. Therefore, effective October 1, 2011, with your Report of Contributions for the 4th Quarter 2011, the employee contribution rate will increase to 6.5%. After that the employee contribution rate will increase each July 1st over the seven year phase in until the full 7.5% contribution is reached in 2018 (6.64% in July 2012, 6.78% in July 2013, 6.92% in July 2014, 7.06% in July 2015, 7.20%, July 2016, 7.34% in July 2017, and 7.50% July 2018).
  • For PERS Prosecutors Part members the employee pension contribution rate will increase from 8.5% to 10% of salary effective October 1, 2011 with your Report of Contributions for the 4th Quarter 2011.
  • For PFRS members the employee pension contribution rate will increase from 8.5% to 10% of salary effective October 1, 2011 with your Report of Contributions for the 4th Quarter 2011.

Retirement Plan Limits for 2012

The IRS has announced the cost-of-living adjustments (COLAs) for retirement plans. Many of the limits applicable to pension, and other retirement plans, are changing for 2012 and are noted here for your reference.

  • 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 $245,000 to $250,000. 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, is increased from $360,000 for 2011 to $375,000 for 2012.
  • 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 $49,000 or 100% of the participant's compensation to the lesser of $50,000 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 $16,500 or 100% of the participant's compensation to the lesser of $17,000 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 $16,500 or 100% of the participant's compensation to the lesser of $17,000 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 may 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 unchanged and remains at $5,500. Defined contribution plans administered by the Division of Pensions and Benefits affected by this change include the SACT, ABP and ACTS programs.

TPAF, PERS & PFRS — Maximum Compensation Limits

Lower compensation limits are in place for TPAF and PERS Tier 2 and Tier 3 members enrolled on or after July 1, 2007. Lower compensation limits are also in place for PFRS Tier 2 and Tier 3 members enrolled after May 21, 2010. 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, PERS and PFRS Tier 2 and Tier 3 members is increased from $106,800 for 2011 to $110,100 for 2012. Please refer to P.L. 2007, Chapter 103 and P.L. 2010, Chapter 1 for details.

Note: Reporting procedures are in place for TPAF, PERS and PFRS members’ who exceed the social security maximum of $106,800 for 2011. Employers should not include DCRP eligible salary on the iROC, nor should pension and contributory insurance contributions be submitted to the Division of Pensions and Benefits for compensation above the capped amounts.

PERS & TPAF Tier 3 — Minimum Annual Base Salary

As a result of P.L. 2008, Chapter 89, the Director of the Division of Pensions and Benefits shall adjust each year the minimum annual base salary for participation in the Teachers’ Pension and Annuity Fund (TPAF) and the Public Employees’ Retirement System (PERS) for those members in Tier 3 service (Tier 3 service covers those individuals eligible to enroll in TPAF or PERS on or after November 2, 2008). The adjustment is made annually in accordance with changes in the Consumer Price Index, pursuant to N.J.A.C. 17:3-2.1(g) for TPAF membership and N.J.A.C. 17:2-2.1(c) for PERS membership.

Please take note that, pursuant to these provisions, the Division of Pensions and Benefits set the annual base salary for participation in the TPAF and PERS at $7,700 for calendar year 2011. This minimum annual base salary continues in effect through December 31, 2011. The base is being evaluated for revision in 2012 and the results of that analysis will be announced shortly.

Employees who fall below the minimum annual base salary amount in any calendar year may be eligible to participate in the Defined Contribution Retirement Program. Please review Fact Sheet #82, Defined Contribution Retirement Program (DCRP) If Ineligible for PERS or TPAF, Adobe PDF (38K) for additional information.

Reminder – Processing ‘Stop Deductions’ Member Certifications

The Division is issuing Certifications of Payroll Deductions for situations where an employer is required to suspend future pension and related benefit payroll deductions for an employee. These ‘Stop Deduction’ Certifications are typically issued for employees who have been reported as a multiple member (one who works for more than one employer receiving pension credit from each simultaneously) who are no longer eligible for this benefit. This is a required change following reforms contained in P.L. 2010, Chapter 1. 

If you receive a ‘stop deductions’ certification for a member who is on the iROC, you must stop reporting deductions as of the date reflected on the certification. This certification was produced as a result of the employee’s concurrent service with another employer and the Division has taken into consideration employment and pension reporting at your jurisdiction through that date when instructing the other employer on when to begin deductions and the amount of the deduction to be taken. Even though this employee may have continued service with you beyond this date, for purposes of your pension related reporting, please adjust the member’s months of service and base salary, if applicable, to agree with the date shown on the ‘stop deduction’ certification using an explanation of “terminated” from the drop down box.

If an employee has terminated service with you prior to the date shown on the ‘stop deductions’ certification, immediately contact the Division by forwarding a copy of the certification with detail of the employee’s salary, pension contributions and related deductions since the last period reported on iROC and the date of termination. Information should be directed to the attention of the ‘Adjustment Section’ at the Division’s Trenton NJ address.

iROC Reporting for Members with Multiple Employment

P.L. 2010, Chapter 1, requires that an employee eligible for PERS or TPAF enrollment after May 21, 2010, be eligible for Tier 4 membership based upon only one position and requires the retirement system to designate the position providing the higher or highest compensation for the member from among any concurrently held positions. This position will be used as the basis for eligibility for membership, service credit, the compensation base for pension contributions, and for other pension calculations.

For current PERS or TPAF Tier 1, Tier 2, or Tier 3 multiple members, all concurrent positions held without a break in service from May 21, 2010, will continue to qualify for service credit and the compensation base for pension contributions and calculation of benefits. However, provisions of P.L. 2010, Chapter 1, require that any new, concurrently held position beginning after May 21, 2010, will not qualify for service credit or the compensation base for pension contributions and calculation of retirement for any PERS or TPAF multiple member. Current multiple employer relationships will be terminated following any “break in service” not supported by an employer approved leave of absence (LOA). For this purpose a “break in service” is being defined for employment with any municipality, county, board of education or authority as any one month period without service while not on an approved LOA. The Division may require recertification of these employment relationships following a break in service with an approved leave of absence. As a result, you may be asked to provide additional information before being able to add a multiple member back to your report of contributions following an approved LOA.

Deadline for Filing the Report of Contributions

The Division has been updating member accounts as early as four weeks following the close of the calendar quarter. But to do so we need the support of all our employers. Therefore, all reports are due by January 7. 2012. Should your report not be received by the close of business on January 22, 2012, it may not be used to update member accounts and interest penalties will begin to accrue.

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.

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.

Reporting of Retroactive Salary Increases

As a result of the establishment of maximum compensation limits for certain members of the Public Employees’ Retirement System (PERS), the Teachers’ Pension and Annuity Fund (TPAF) and the Police and Firemen’s Retirement System (PFRS), the Division of Pension and Benefits has determined that retroactive salary increases can no longer be reported through the Internet-based Report of Contributions (IROC) if they affect reporting periods prior to the current reporting quarter.

Procedures for Reporting of Retroactive Salary

The current procedures in place to allow employers to report retroactive salary increases are as follows:

Once the new contract is received by the Division of Pension and Benefits and reviewed, a spreadsheet will be sent to the employer. This spreadsheet will contain all data submitted for each member for the period of the retroactive salary adjustment. The employer must then supply the new base salary for each quarter affected for members receiving a retroactive salary adjustment. The total additional pension and contributory insurance contribution due will appear at the top of the spreadsheet page. Please submit a check for the necessary contributions, payable to the retirement system, and return the spreadsheet via e-mail to the sending party at the Division of Pensions and Benefits.

Any retroactive salary increase paid to employees is subject to the employee contribution rate in effect at the time the retroactive salary would have been paid if the contract had been ratified prior to its effective date. Therefore, any retroactive salary increase paid on or after October 1, 2011 is subject to the prevailing contribution rate for each period of service under the retroactive period covered by the lump sum payment of back wages. For example, for a 12-month retroactive salary increase paid on December 30, 2011, PERS employee pension contributions would be calculated using a rate of 5.5% of base salary covering the period of January 1 through September 30, 2011 and a rate of 6.5% of base salary covering the period of October 1 through December 30, 2011.

Tiers Defined for the TPAF and the PERS

  • Tier 1: Member who were enrolled prior to July 1, 2007.
  • 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 P.L. 2007, Chapter 103.
  • Tier 3: Members who were eligible to enroll on or after November 2, 2008 pursuant to the provisions of P.L. 2010, Chapter 89.
  • Tier 4: Members who were eligible to enroll on or after May 21, 2010 pursuant to the provisions of P.L. 2010, Chapter 1.
  • Tier 5: Members who were eligible to enroll on or after June 28, 2011 pursuant to the provisions of P.L. 2011, Chapter 78.

Changing Banking Information for TEPS

On or after the date that the new checking account becomes effective, a Notice of Changes for TEPS should be faxed to 1-866-568-2495 or mailed to:

New Jersey Department of Treasury
Division of Pensions and Benefits
PO Box 9581
Trenton NJ 08650-9581

Please call the TEPS Helpline 1-888-835-3345 if you have any questions regarding the status of your change or if you have any questions regarding your password or the status of your transmittal payment.

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December 15, 2011

TO: Certifying Officers of the Public Employees’ Retirement System and Police and Firemen’s Retirement System
FROM: Florence J. Sheppard, Acting Director, Division of Pensions and Benefits
SUBJECT: CHAPTER 78, P.L. 2011 — RETIREMENT WHILE SERVING IN ELECTED OFFICE

Governor Christie recently signed Chapter 78, P.L. 2011, into law which implements changes to the State-administered retirement systems. Chapter 78, P.L. 2011 became effective June 28, 2011.

This letter addresses specific changes to retirement while serving in elected office for members of the Public Employees’ Retirement System (PERS) and the Police and Firemen’s Retirement System (PFRS). 

RETIREMENT FROM THE PERS OR PFRS WHILE IN ELECTED OFFICE

Chapter 78 repealed N.J.S.A. 43:15A-47.2 and 43:16A-5.1.  These provisions permitted members holding an elected public office covered by the PERS or PFRS to retire and collect a retirement allowance while simultaneously continuing to hold and receive salary for the same elected public office provided that the retirement allowance is not based solely on service in the elected office. 

Pursuant to Chapter 78, PERS and PFRS elected officials must now terminate all PERS or PFRS covered positions — including a covered elected office — to be eligible to receive a retirement allowance. 

Note: PERS or PFRS retirees who were granted a retirement allowance under N.J.S.A. 43:15A-47.2 or 43:16A-5.1 prior to effective date of Chapter 78 (June 28, 2011) and are currently serving in the same elective office are permitted to continue to receive their retirement benefit and salary for the elective office.

SERVING IN ELECTED OFFICE AFTER RETIREMENT

It is important to note that Chapter 78 does not affect the provisions of N.J.S.A. 43:3C-3, which permits a member who is already retired from a State-administered retirement system to seek and hold elected office. 

Under N.J.S.A. 43:3C-3 a “bona fide” retiree who is elected to public office may either continue to receive the retirement benefit based on former employment and would not be eligible for enrollment in the new retirement system under the elected position, or may suspend the retirement benefit (and any related health benefits coverage) from former employment and enroll in the new retirement system while serving in the elected office.  In the second scenario, upon termination of the elected office the retirement benefit from the former employment is reinstated.

ADDITIONAL INFORMATION

Included with this letter are revised versions of Fact Sheet #21, Employment After Retirement – PERS Adobe PDF (43K), and Fact Sheet #29, Employment After Retirement – PFRS Adobe PDF (40K), which include the information described above, a definition of “bona fide” retirement, and important information needed when a retiree considers a return to any type of employment. 

If you have questions regarding the information provided in this letter, contact the Division’s Employer Education Unit at (609) 292-7524, or e-mail the Division at: pensions.nj@treas.state.nj.us

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December 1, 2011

TO: Certifying Officers of the Public Employees’ Retirement System (PERS), Teachers’ Pension and Annuity Fund (TPAF), Police and Firemen’s Retirement System (PFRS), or State Police Retirement System (SPRS)
FROM: Marylou Mayoros, Chief, Retirement Bureau, Division of Pensions and Benefits
SUBJECT: APPLICATIONS FOR DISABILITY RETIREMENT

This letter is being distributed to address issues that have arisen with applications and supporting forms for disability retirement received by the Division of Pensions and Benefits.  

Employers and employees should note the following if applying for an Ordinary or Accidental Disability.

  • Due to recent court rulings and changes to the Division policies and procedures, the applications, forms, and supporting information required for review and approval of disability retirements have changed.
  • If applying for a disability retirement, members should apply using the online Retirement Application in the Member Benefits Online System (MBOS).  Applying through MBOS provides the fastest and most efficient processing of all types of retirement applications.

In cases of involuntary retirement applications, employers should apply using the online Retirement Application in the Employers’ Pensions and Benefits Information Connection (EPIC).  Note: Employer resolutions/letters required for involuntary retirements must be forwarded to the Division separately.

  • If applying using the paper Application for Disability Retirement forms, members and employers must submit the most recent versions of the application and supporting forms (physician’s report, medical release. etc.). 

Because of the extent of the changes to the application and forms, older versions can no longer be accepted by the Division. If obsolete versions are received, the member will be sent the correct forms along with a letter indicating that the application and supporting forms must be re-submitted using either the current paper version or through MBOS.

  • Information on registering for and using MBOS, or EPIC, is available on the Division’s Web site at: www.state.nj.us/treasury/pensions  At the home page, click the links under “Online Services.”

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November 30, 2011

TO: Certifying Officers
FROM: Joseph Zisa, Manager 1, Fiscal Resources
SUBJECT: UPDATES TO REPORTING THROUGH THE INTERNET-BASED REPORT OF CONTRIBUTIONS – PERS – TPAF – PFRS

Effective immediately, and retroactively for the entire 4th calendar quarter of 2011, Public Employees’ Retirement System (PERS), Teachers’ Pension and Annuity Fund (TPAF), or Police and Firemen’s Retirement System (PFRS) pension contributions for members who are enrolled under Membership Tiers 2 or higher and earning in excess of the “maximum compensation” limits*, are to be based only on the “maximum compensation” amount on the Internet-based Report of Contributions (iROC).  Employers should not include Defined Contribution Retirement Program (DCRP) eligible salary on the iROC, nor should contributions be submitted to the Division of Pensions and Benefits for compensation above the capped amount.

The Division of Pensions and Benefits has been working with the State’s Office of Information Technology and is pleased to announce the first phase of changes in the way employers will report pension service, compensation, and contributions for members enrolled in PERS, TPAF, and PFRS whose eligible compensation for benefit purposes under those plans is limited following the enactment of pension reforms since 2007. Those reporting changes affect the use of the Internet-based Report of Contributions (iROC) and the remittance of pension contributions to the Division through the Transmittal Electronic Payment System (TEPS).  This will only affect employer reporting of pension data for members of the Public Employees’ Retirement System (PERS), Teachers’ Pension and Annuity Fund (TPAF), or Police and Firemen’s Retirement System (PFRS) who earn in excess of the established annual “maximum compensation” limits* and who may be enrolled into the Defined Contribution Retirement Program (DCRP). 

Employers should no longer include DCRP eligible salary on the iROC, nor should DCRP contributions be submitted to the Division of Pensions and Benefits as has been required in the past.

For employees enrolled in the DCRP, employers should make whatever adjustments are required to their payroll procedures to send the 5.5% employee contribution and the 3% matching employer contribution directly to the administrator of the DCRP — Prudential Retirement is acting as the administrative services provider for the Defined Contribution Retirement Program**. If you have remitted 4th quarter 2011 DCRP contributions to the Division through TEPS for any employee who has already reached the annual “maximum compensation” limit for 2011 please reduce a future TEPS remittance by that amount and forward it to the DCRP through Prudential Retirement.  The Division will still adjust the records for and DCRP contributions remitted under PERS, TPAF, or PFRS up to and including the 3rd quarter of 2011.

Additional information on revised iROC and DCRP reporting will be distributed to employers when the 4th Quarter 2011 iROC becomes available in mid- to late-December 2011.  Questions can also be addressed to the Division’s Employer Education Unit at: pensions.nj@treas.state.nj.us

*For members of the PERS or TPAF enrolled on or after July 1, 2007 or members of the PFRS enrolled after May 21, 2010, the annual “maximum compensation” limits are $106,800 in 2011 and $110,100 in 2012.

**For additional reporting and remittance instructions for the DCRP, please contact Prudential Retirement’s dedicated DCRP employer help center at 1-800-932-0342 ext. 13901 or ext. 13906.

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October 2011

TO: Certifying Officers of the Police and Firemen’s Retirement System (PFRS)
FROM: Wendy Jamison, Board Secretary, Police and Firemen’s Retirement System
SUBJECT: PFRS NOTICE OF ELECTION

Once again, in an effort to support a decrease in administrative costs and to preserve resources, this certifying officer letter and the attached notice for the 2012 Police and Firemen’s Retirement System (PFRS) election is being transmitted to you electronically and will require your electronic response.

We are seeking your assistance in servicing an election for one “Firefighter” Representative position to the PFRS Board of Trustees. A Firefighting representative will be elected for a four-year term as of July 1, 2012.  Candidates for all positions must now qualify by electronic nomination.

We are requesting that you distribute the attached election notice electronically to each PFRS firefighting member employed at your location, as the information will explain the pre-election procedures.  It is most important that each individual active PFRS Firefighting member receives this notice. If you are the certifying officer for multiple locations, you will only receive one certifying officer letter and will be required to distribute the attached election notice to active PFRS Firefighting members at all locations. Your attention to this distribution is required as regulated by N.J.A.C. 17:4-1.4.

We ask that you distribute this notice by the preferred method of distribution, which is electronically.  If you are not able to accommodate electronic distribution, please make copies of the notice and provide to all active PFRS Firefighting employees.  In addition, if you maintain a website for your employees, you may post the notice there and in any other appropriate public place at your location.

It is very important that you confirm distribution of this notice.  To confirm distribution of the notice to your active PFRS employees, please send an e-mail to NJBOT.ELECT@treas.state.nj.us

Thank you for your prompt assistance in the timely response and distribution of this notice.

Attachment:  Election Notice Adobe PDF (28K) 

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DIVISION OF PENSIONS AND BENEFITS - NOTICE OF ELECTION
BOARD OF TRUSTEES OF THE POLICE AND FIREMEN’S RETIREMENT SYSTEM (PFRS)
One State Street Square - 50 West State Street - P.O. BOX 295 - Trenton, NJ 08625-0295 or pensions.nj@treas.state.nj.us

Nominations are now being accepted for one elected “Firefighting” position to the Board of Trustees of the PFRS whose term will expire as of June 30, 2012.* The general responsibility for the operation of the PFRS is vested in the Board of Trustees under the provisions of N.J.S.A. 43:16A-13.  The Board meets monthly at the Division of Pensions and Benefits in Trenton. The statute provides that no employee shall suffer loss of salary or wages because of serving on the Board.  A member who wishes to be a candidate for the position must be an active firefighting member of the PFRS and must be nominated by at least 300 active PFRS firefighter members. 

Only Firefighter members of PFRS may nominate a candidate for the Firefighting Representative position.  

Instructions for the nominating process are available upon receipt of a written request to the Secretary of the PFRS Board of Trustees. Nominations must be registered on or before 4:00 p.m. Friday, December 2, 2011. Election ballots will be mailed to employers on or about March 1, 2012 for prompt distribution to their employee members of the PFRS. All qualified candidates will be invited to attend the drawing by lot for position on the ballot, if necessary, for the Firefighter election on January 9, 2012.

PRESENT MEMBERS - TERM
           
Police Wayne Hall 11-30-15   Gubernatorial Appointments Laurel Brennan
 
John Sierchio 
6-30-14      Vincent Foti
          Sherryl Gordon
Fire  *Richard Mikutsky 6-30-12      Frank Leake
  Michael Postorino  6-30-14     Richard Loccke
           
Retired  Marty Barrett   12-31-12    Ex Officio Member Susanne Culliton, State Treasurer’s Representative

The PFRS Board of Trustees has the responsibility for the proper operation of the Retirement System.  The Board consists of five employee/retired representatives, the State Treasurer, and five private citizens appointed by the Governor with the advice and consent of the Senate.  The Board meets once per month.  Within the limits of legislation, the PFRS Board has a certain amount of discretion in the solution of problems confronting the Retirement System in cases where complications exist that legislation alone cannot properly address.

PFRS BOARD RESPONSIBILITIES

  • Adopt rules and regulations to provide for the payment of benefits and collection of monies as required by the statute.
  • Establish rules and regulation within the limitations of statutes and opinions of the Courts and the Attorney General, designed to prevent injustices and inequities that may arise in the operation of the Retirement System.
  • Resolve individual questions on the merits of each case in terms of statutes, opinions of the Attorney General, advice of the Actuary and cases cited by counsel as deliberated by the Courts.
  • Review monthly and annual reports setting forth data such as assets and liabilities, income and disbursements and statistical summarization of membership as documented by the Actuary.

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October 2011

TO: Certifying Officers, Human Resource Directors, and Benefits Administrators
FROM: NJ Division of Pensions and Benefits
SUBJECT: SHBP OPEN ENROLLMENT (State Biweekly Employers)

The State Health Benefits Program (SHBP) Open Enrollment period for State biweekly employees will begin on October 17, 2011, and end on November 11, 2011.

During the Open Enrollment period employees can make general changes (adding or deleting dependents, changing coverage levels, etc.) or enroll in a different medical or dental plan. All changes to coverage made during this Open Enrollment period will be effective on December 31, 2011 with any required deductions taken beginning with pay period 1 (pay check of December 30, 2011).

Completed employer-certified health benefits and/or dental applications must arrive at the Health Benefits Bureau no later than November 14, 2011, to assure processing for the start of the 2012 plan year.

Note: Due to the short submission deadline, employers should submit completed Health Benefits Applications as they are received from employees rather than holding applications for submission at the end of the Open Enrollment.

NEW PLAN DESIGNS

On October 5, 2011, the State Health Benefits Plan Design Committee approved new medical and prescription drug plans to be offered through the SHBP.

The current NJ DIRECT15, Aetna HMO, and CIGNA HealthCare HMO plans will still be available through the SHBP in plan year 2012. However, additional plan options are now also available.

  • Horizon Blue Cross Blue Shield of New Jersey (BCBSNJ), Aetna, and CIGNA will each offer two additional plan design options, which provide lower premiums in exchange for higher copayments, deductibles, and out-of-pocket amounts on services that are received.
  • Horizon BCBSNJ, Aetna, and CIGNA will each also offer High Deductible Health Plans for employees and certain retirees.
  • Under the active Employee Prescription Drug Plan the copayments will remain the same for the current plans; however, the new plan designs have different copayments. In addition, employees who choose a high deductible health plan cannot be enrolled in the active Employee Prescription Drug Plan. Instead, prescription drugs are covered under the plan and are subject to a deductible.

Premium rate charts for the new plans are being finalized and this information will be sent to employers as soon as possible.

  • Employees may enroll in the new plans during the Open Enrollment period for coverage in the 2012 plan year. Plan rates were approved by the State Health Benefits Commission on October 12, 2011. Rate charts will be posted to the Division of Pensions and Benefits Web site at: www.state.nj.us/treasury/pensions as soon as they are available for release.
  • Employees who are simply adding or deleting a dependent, or changing coverage levels should complete a Health Benefits Application and submit it to their employer any time during the Open Enrollment period.

EMPLOYEE CONTRIBUTIONS FOR SHBP COVERAGE

Pursuant to Chapter 78, P.L. 2011, the Pension and Health Benefit Reform Law, new employee health benefit contribution amounts became effective in October 2011. Employees must pay either a percentage of the medical and prescription plan premium or 1.5% of annual salary, whichever is greater. There will not be another Open Enrollment period before July 1, 2012. Employees should be advised that if they are subject to the 4-year phase-in of Chapter 78 contribution rates, Year One contribution rates will apply for the period of January 1, 2012 through June 30, 2012 and Year Two contribution rates will apply for the period of July 1, 2012 through December 31, 2012.

WAIVING SHBP COVERAGE

State employees are permitted to waive SHBP medical and prescription coverage provided that they have other health care coverage. To waive coverage a SHBP State Waiver form and a Health Benefit Application must be completed and submitted by November 11, 2011. To waive coverage effective January 1st, employees should indicate “Open Enrollment” on the waiver form; otherwise, the waiver will be processed on a timely basis.

DENTAL PLANS AND EMPLOYEE COSTS

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

  • Six DPOs are available: Aetna DMO; BeneCare; CIGNA DHMO; Community Dental Associates; Healthplex; and Horizon Dental Choice. DPOs contract with a network of providers for dental services. When an employee or dependent uses a DPO dentist, diagnostic and preventive services are covered in full. Most other eligible expenses require a small copayment. Providers must participate with the DPO selected to receive coverage. Be sure to confirm that the dentist or dental facility selected is taking new patients and participates with the SHBP Employee Dental Plans, since DPOs also service other organizations.
  • The Dental Expense Plan is changed from an indemnity type plan to a PPO plan that continues to allow 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.

The Dental Expense Plan change from a passive PPO to a true PPO plan is effective January 1, 2012. Under the new design, employees will see no change in benefits provided they use an in-network provider. As outlined below, using an out-of-network provider will increase an employee’s costs and reduces the annual maximum benefit. The new PPO plan does not change the current $50 in-network deductible or $3000 benefit maximum.

 
In-Network
Out-of-Network
Deductible/Calendar Year $50 / Individual
$100 / Family
Waived for Preventive

$75 / Individual
$150 / Family
Waived for Preventive
Deductible applies to innetwork services as well

Coinsurance (as % of R&C) 100% Preventive
80% Basic Restorative
65% Major Restorative
50% Periodontics & Prosthodontics
90% Preventive
70% Basic Restorative
55% Major Restorative
40% Periodontics &
Prosthodontics
Maximum Annual
Benefit/ Individual
$3,000 $2,000 (Maximum of $3,000
combined in and out-of-network)
Orthodontia under age 19 50% to $1,000 lifetime maximum (not subject to
deductible)
(Maximum not combined with Annual Maximum)
40% to $750 lifetime
(maximum of $1,000
combined in and out-ofnetwork) (not subject to deductible)
(Maximum not combined with Annual Maximum)

The employee cost for coverage under a dental plan is 50 percent of the actual dental plan premium. Therefore, the employee cost varies depending on which dental plan an employee chooses; however, the rate for coverage under a DPO remains considerably less expensive than the Dental Expense Plan.

Dental Plan Rates for 2012 were approved by the State Health Benefits Commission on October 12, 2011. Rate charts for dental coverage will be posted to the Division of Pensions and Benefits Web site: www.state.nj.us/treasury/pensions/ as soon as they are available for release.

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, 2011, 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$ave) Open Enrollment Period began October 1, 2011 and has been extended until November 11, 2011 (to coincide with the end of the SHBP Open Enrollment Period). Tax$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 with 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. Employees should consider the Year 2, “phase two” increases effective July 1, 2012 in their 2012 plan selection and Tax$ave decisions.
  • Tax$ave, Civil Unions, and Domestic Partners — SHBP members need to be aware of the possible federal tax implications of adding a civil union partner or domestic partner to SHBP benefits. Since the federal tax code does not view civil union or domestic partners in the same manner as spouses, an employer may have to treat the civil union or domestic partner SHBP benefit as taxable to the employee and withhold federal income, Social Security, and Medicare taxes on its value. Similarly, since the partner's coverage is a federally taxable benefit, an employee who participates in the Tax$ave Premium Option Plan cannot make pre-tax payments for the cost of a civil union or domestic partner's coverage. Pre-tax dollars may still be used to pay for the employee's portion of the cost of his or her own and dependent children's coverage. If an employee wants to claim a federal tax dependency exemption for a civil union or domestic partner, he or she should contact the Internal Revenue Service or see IRS Publication #503, Dependents.

DISTRIBUTION OF OPEN ENROLLMENT MATERIALS

Due to the changes in schedule for this year’s Open Enrollment period, many of the Open Enrollment informational materials, including the Health Benefits Program Application, are still being finalized as of this mailing and will be distributed to employers as soon as they are approved for release.

Most of these Open Enrollment items will be available in electronic format only and distributed via e-mail or provided through links at the Division of Pensions and Benefits Web site: www.state.nj.us/treasury/pensions/

Certifying Officers should watch for further e-mail notification and forward any pertinent information and links to their Human Resources staff, Benefits Administrators, or any other staff members responsible for the communication and administration of health benefits for your employees.

Employers should also inform employees to seek and access the Open Enrollment information online as it becomes available on the Division of Pensions and Benefits Web site.

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 send an e-mail to: pensions.nj@treas.state.nj.us Thank you for your assistance in making the SHBP Open Enrollment Period a success for your employees.

CO Letter in Printable Format Adobe PDF (61K)


October 2011

TO: State College and University Certifying Officers, Human Resource
Directors, and Benefits Administrators; State Monthly Certifying Officers,
Human Resource Directors, and Benefits Administrators
FROM: NJ Division of Pensions and Benefits
SUBJECT: SHBP OPEN ENROLLMENT (State Monthly Employers)

The State Health Benefits Program (SHBP) Open Enrollment period for State monthly employees will begin on October 17, 2011, and end on November 11, 2011.

During the Open Enrollment period employees can make general changes (adding or deleting dependents, changing coverage levels, etc.) or enroll in a different medical or dental plan. All changes to coverage made during this Open Enrollment period will be effective on January 1, 2012.

Completed employer-certified health benefits and/or dental applications must arrive at the Health Benefits Bureau no later than November 14, 2011, to assure processing for the start of the 2012 plan year.

Note: Due to the short submission deadline, employers should submit completed Health Benefits Applications as they are received from employees rather than holding applications for submission at the end of the Open Enrollment.

NEW PLAN DESIGNS

On October 5, 2011, the State Health Benefits Plan Design Committee approved new medical and prescription drug plans to be offered through the SHBP.

The current NJ DIRECT15, Aetna HMO, and CIGNA HealthCare HMO plans will still be available through the SHBP in plan year 2012. However, additional plan options are now also available.

  • Horizon Blue Cross Blue Shield of New Jersey (BCBSNJ), Aetna, and CIGNA will each offer two additional plan design options, which provide lower premiums in exchange for higher copayments, deductibles, and out-of-pocket amounts on services that are received.
  • Horizon BCBSNJ, Aetna, and CIGNA will each also offer High Deductible Health Plans for employees and certain retirees.
  • Under the active Employee Prescription Drug Plan the copayments will remain the same for the current plans; however, the new plan designs have different copayments. In addition, employees who choose a high deductible health plan cannot be enrolled in the active Employee Prescription Drug Plan. Instead, prescription drugs are covered under the plan and are subject to a deductible.

Premium rate charts for the new plans are being finalized and this information will be sent to employers as soon as possible.

  • Employees may enroll in the new plans during the Open Enrollment period for coverage in the 2012 plan year. Plan rates were approved by the State Health Benefits Commission on October 12, 2011. Rate charts will be posted to the Division of Pensions and Benefits Web site at: www.state.nj.us/treasury/pensions as soon as they are available for release.
  • Employees who are simply adding or deleting a dependent, or changing coverage levels should complete a Health Benefits Application and submit it to their employer any time during the Open Enrollment period.

EMPLOYEE CONTRIBUTIONS FOR SHBP COVERAGE

Pursuant to Chapter 78, P.L. 2011, the Pension and Health Benefit Reform Law, new employee health benefit contribution amounts became effective in October 2011. Employees must pay either a percentage of the medical and prescription plan premium or 1.5% of annual salary, whichever is greater. There will not be another Open Enrollment period before July 1, 2012. Employees should be advised that if they are subject to the 4-year phase-in of Chapter 78 contribution rates, Year One contribution rates will apply for the period of January 1, 2012 through June 30, 2012 and Year Two contribution rates will apply for the period of July 1, 2012 through December 31, 2012.

WAIVING SHBP COVERAGE

State employees are permitted to waive SHBP medical and prescription coverage provided they have other health care coverage. To waive coverage a SHBP State Waiver form and a Health Benefit Application must be completed and submitted by November 11, 2011. To waive coverage effective January 1st, employees should indicate “Open Enrollment” on the waiver form; otherwise, the waiver will be processed on a timely basis.

DENTAL PLANS AND EMPLOYEE COSTS

Dental coverage is offered to all eligible State employees through the Employee Dental Plans. 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 DHMO; Community Dental Associates; Healthplex; and Horizon Dental Choice. DPOs contract with a network of providers for dental services. When an employee or dependent uses a DPO dentist, diagnostic and preventive services are covered in full. Most other eligible expenses require a small copayment. Providers must participate with the DPO selected to receive coverage. Be sure to confirm that the dentist or dental facility selected is taking new patients and participates with the SHBP Employee Dental Plans, since DPOs also service other organizations.
  • The Dental Expense Plan is changed from an indemnity type plan to a PPO plan that continues to allow 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.

The Dental Expense Plan change from a passive PPO to a true PPO plan is effective January 1, 2012. Under the new design, employees will see no change in benefits provided they use an in-network provider. As outlined below, using an out-of-network provider will increase an employee’s costs and reduces the annual maximum benefit. The new PPO plan does not change the current $50 in-network deductible or $3000 benefit maximum.

 
In-Network
Out-of-Network
Deductible/Calendar Year $50 / Individual
$100 / Family
Waived for Preventive

$75 / Individual
$150 / Family
Waived for Preventive
Deductible applies to innetwork services as well

Coinsurance (as % of
R&C)
100% Preventive
80% Basic Restorative
65% Major Restorative
50% Periodontics & Prosthodontics
90% Preventive
70% Basic Restorative
55% Major Restorative
40% Periodontics &
Prosthodontics
Maximum Annual
Benefit/ Individual
$3,000 $2,000 (Maximum of $3,000
combined in and out-of-network)
Orthodontia under age 19 50% to $1,000 lifetime maximum (not subject to
deductible)
(Maximum not combined with Annual Maximum)
40% to $750 lifetime
(maximum of $1,000
combined in and out-ofnetwork) (not subject to deductible)
(Maximum not combined with Annual Maximum)

The employee cost for coverage under a dental plan is 50 percent of the actual dental plan premium. Therefore, the employee cost varies depending on which dental plan an employee chooses; however, the rate for coverage under a DPO remains considerably less expensive than the Dental Expense Plan.

Dental Plan Rates for 2012 were approved by the State Health Benefits Commission on October 12, 2011. Rate charts for dental coverage will be posted to the Division of Pensions and Benefits Web site: www.state.nj.us/treasury/pensions/ as soon as they are available for release.

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, 2011, 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$ave) Open Enrollment Period began October 1, 2011 and has been extended until November 11, 2011 (to coincide with the end of the SHBP Open Enrollment Period). Tax$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 with 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. Employees should consider the Year 2, “phase two” increases effective July 1, 2012 in their 2012 plan selection and Tax$ave decisions.
  • Tax$ave, Civil Unions, and Domestic Partners — SHBP members need to be aware of the possible federal tax implications of adding a civil union partner or domestic partner to SHBP benefits. Since the federal tax code does not view civil union or domestic partners in the same manner as spouses, an employer may have to treat the civil union or domestic partner SHBP benefit as taxable to the employee and withhold federal income, Social Security, and Medicare taxes on its value. Similarly, since the partner's coverage is a federally taxable benefit, an employee who participates in the Tax$ave Premium Option Plan cannot make pre-tax payments for the cost of a civil union or domestic partner's coverage. Pre-tax dollars may still be used to pay for the employee's portion of the cost of his or her own and dependent children's coverage. If an employee wants to claim a federal tax dependency exemption for a civil union or domestic partner, he or she should contact the Internal Revenue Service or see IRS Publication #503, Dependents.

DISTRIBUTION OF OPEN ENROLLMENT MATERIALS

Due to the changes in schedule for this year’s Open Enrollment period, many of the Open Enrollment informational materials, including the Health Benefits Program Application, are still being finalized as of this mailing and will be distributed to employers as soon as they are approved for release.

Most of these Open Enrollment items will be available in electronic format only and distributed via e-mail or provided through links at the Division of Pensions and Benefits Web site: www.state.nj.us/treasury/pensions/

Certifying Officers should watch for further e-mail notification and forward any pertinent information and links to their Human Resources staff, Benefits Administrators, or any other staff members responsible for the communication and administration of health benefits for your employees.

Employers should also inform employees to seek and access the Open Enrollment information online as it becomes available on the Division of Pensions and Benefits Web site.

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 send an e-mail to: pensions.nj@treas.state.nj.us Thank you for your assistance in making the SHBP Open Enrollment Period a success for your employees.

CO Letter in Printable Format Adobe PDF (61K)


October 2011

TO: Local Government Certifying Officers, Human Resource Directors, and Benefits Administrators participating in the State Health Benefits Program
FROM: NJ Division of Pensions and Benefits
SUBJECT: SHBP OPEN ENROLLMENT (Local Government Employers)

The State Health Benefits Program (SHBP) Open Enrollment period for Local Government employees will begin on October 17, 2011, and end on November 11, 2011.

During the Open Enrollment period employees can make general changes (adding or deleting dependents, changing coverage levels, etc.) or enroll in a different medical or dental plan. All changes to coverage made during this Open Enrollment period will be effective on January 1, 2012.

Completed employer-certified health benefits and/or dental applications must arrive at the Health Benefits Bureau no later than November 14, 2011, to assure processing for the start of the 2012 plan year.

Note: Due to the short submission deadline, employers should submit completed Health Benefits Applications as they are received from employees rather than holding applications for submission at the end of the Open Enrollment.

NEW PLAN DESIGNS

On October 5, 2011, the State Health Benefits Plan Design Committee approved new medical and prescription drug plans to be offered through the SHBP.

The current NJ DIRECT10, NJ DIRECT15, Aetna HMO, and CIGNA HealthCare HMO plans will still be available through the SHBP in plan year 2012. However, additional plan options are now also available.

  • Horizon Blue Cross Blue Shield of New Jersey (BCBSNJ), Aetna, and CIGNA will each offer two additional plan design options, which provide lower premiums in exchange for higher copayments, deductibles, and out-of-pocket amounts on services that are received.
  • Horizon BCBSNJ, Aetna, and CIGNA will also offer a High Deductible Health Plan for employees and certain retirees.
  • As you know, a local employer can provide prescription drug benefits to its employees in one of three ways: through the freestanding SHBP Freestanding Prescription Drug Plan, through a private vendor or through the medical plan. If prescription drugs are provided through the medical plans for Active employees, the new NJ DIRECT1525 and NJ DIRECT2030 the coinsurance is 15%. The coinsurance under NJ DIRECT10 and NJ DIRECT15 remain at the current level of 10%.
  • Under the active Employee Prescription Drug Plan the copayments will remain the same for the current plans; however, the new plan designs have different copayments. In addition, employees who choose a high deductible health plan cannot be enrolled in another prescription drug plan. Instead, Chapter 78, P.L. 2011 requires an employer to offer employees a minimum of
    three coverage level options (e.g. NJ DIRECT10, NJ DIRECT1525, and NJ DIRECT2030), plus a high deductible health plan.

Premium rate charts for the new plans are being finalized and this information will be sent to employers as soon as possible.

  • Employees may enroll in the new plans during the Open Enrollment period for coverage in the 2012 plan year. Plan rates were approved by the State Health Benefits Commission on October 12, 2011. Rate charts will be posted to the Division of Pensions and Benefits Web site at: www.state.nj.us/treasury/pensions as soon as they are available for release.
  • Employees who are simply adding or deleting a dependent, or changing coverage levels should complete a Health Benefits Application and submit it to their employer any time during the Open Enrollment period.

EMPLOYEE CONTRIBUTIONS FOR SHBP COVERAGE

Pursuant to Chapter 78, P.L. 2011, the Pension and Health Benefit Reform Law, new employee health benefit contribution amounts became effective as soon as administratively feasible, or upon the expiration of current collective negotiations agreements. Many employees must pay either a percentage of the medical and prescription plan premium or 1.5% of annual salary, whichever is greater. There will not be another Open Enrollment period before July 1, 2012.

WAIVING SHBP COVERAGE

Local government employees are permitted to waive SHBP medical and prescription coverage if they have other employer-provided or retiree coverage, or other coverage as a dependent.

Employers are permitted to offer an incentive to employees who waive SHBP coverage. Under Chapter 2, P.L. 2010, the incentive amount for waivers is limited to 25 percent of the amount saved by the employer or $5,000, whichever is less. In addition, because multiple coverage under the SHBP/SEHBP is prohibited, waiver incentives are only payable if the other coverage is through a non-SHBP/SEHBP plan.

To waive coverage a SHBP Waiver Form for Local Employees and a Health Benefit Application must be completed and submitted by November 11, 2011. To waive coverage effective January 1st, employees should indicate “Open Enrollment” on the waiver form; otherwise, the waiver will be processed on a timely basis.

DENTAL PLANS AND EMPLOYEE COSTS

The following information is for local government employers who provide employee dental coverage through the Employee Dental Plans:

Seven different dental plans are offered to eligible employees based on one of two different plan designs — Dental Plan Organizations (DPO) and a Dental Expense Plan (PPO).

  • Six DPOs are available: Aetna DMO; BeneCare; CIGNA DHMO; Community Dental Associates; Healthplex; and Horizon Dental Choice. DPOs contract with a network of providers for dental services. When an employee or dependent uses a DPO dentist, diagnostic and preventive services are covered in full. Most other eligible expenses require a small copayment. Providers must participate with the DPO selected to receive coverage. Be sure to confirm that the dentist or dental facility selected is taking new patients and participates with the SHBP Employee Dental Plans, since DPOs also service other organizations.
  • The Dental Expense Plan is changed from an indemnity type plan to a PPO plan that continues to allow 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.

The Dental Expense Plan change from a passive PPO to a true PPO plan is effective January 1, 2012. Under the new design, employees will see no change in benefits provided they use an in-network provider. As outlined below, using an out-of-network provider will increase an employee’s costs and reduces the annual maximum benefit. The new PPO plan does not change the current $50 in-network deductible or $3000 benefit maximum.

 
In-Network
Out-of-Network
Deductible/Calendar Year $50 / Individual
$100 / Family
Waived for Preventive

$75 / Individual
$150 / Family
Waived for Preventive
Deductible applies to innetwork services as well

Coinsurance (as % of
R&C)
100% Preventive
80% Basic Restorative
65% Major Restorative
50% Periodontics & Prosthodontics
90% Preventive
70% Basic Restorative
55% Major Restorative
40% Periodontics &
Prosthodontics
Maximum Annual
Benefit/ Individual
$3,000 $2,000 (Maximum of $3,000
combined in and out-of-network)
Orthodontia under age 19 50% to $1,000 lifetime maximum (not subject to
deductible)
(Maximum not combined with Annual Maximum)
40% to $750 lifetime
(maximum of $1,000
combined in and out-ofnetwork) (not subject to deductible)
(Maximum not combined with Annual Maximum)

The employee cost for coverage under a dental plan is 50 percent of the actual dental plan premium. Therefore, the employee cost varies depending on which dental plan an employee chooses; however, the rate for coverage under a DPO remains considerably less expensive than the Dental Expense Plan.

Dental Plan Rates for 2012 were approved by the State Health Benefits Commission on October 12, 2011. Rate charts for dental coverage will be posted to the Division of Pensions and Benefits Web site: www.state.nj.us/treasury/pensions/l as soon as they are available for release.

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, 2011, they will not be permitted to change dental plans during this Open Enrollment.

DISTRIBUTION OF OPEN ENROLLMENT MATERIALS

Due to the changes in schedule for this year’s Open Enrollment period, many of the Open Enrollment informational materials, including the Health Benefits Program Application, are still being finalized as of this mailing and will be distributed to employers as soon as they are approved for release.

Most of these Open Enrollment items will be available in electronic format only and distributed via e-mail or provided through links at the Division of Pensions and Benefits Web site: www.state.nj.us/treasury/pensions/l

Certifying Officers should watch for further e-mail notification and forward any pertinent information and links to their Human Resources staff, Benefits Administrators, or any other staff members responsible for the communication and administration of health benefits for your employees.

Employers should also inform employees to access the Open Enrollment information online as it becomes available on the Division of Pensions and Benefits Web site.

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 send an e-mail to: pensions.nj@treas.state.nj.us

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

CO Letter in Printable Format Adobe PDF (59K)


October 2011

TO: Local Education Certifying Officers, Human Resource Directors, and Benefits Administrators participating in the School Employees’ Health Benefits Program
FROM: NJ Division of Pensions and Benefits
SUBJECT: SEHBP OPEN ENROLLMENT (Local Education Employers)

The School Employees’ Health Benefits Program (SEHBP) Open Enrollment period for Local Education employees will begin on October 17, 2011, and end on November 11, 2011.

During the Open Enrollment period employees can make general changes (adding or deleting dependents, changing coverage levels, etc.) or enroll in a different medical or dental plan. All changes to coverage made during this Open Enrollment period will be effective on January 1, 2012.

Completed employer-certified health benefits and/or dental applications must arrive at the Health Benefits Bureau no later than November 14, 2011, to assure processing for the start of the 2012 plan year.

Note: Due to the short submission deadline, employers should submit completed Health Benefits Applications as they are received from employees rather than holding applications for submission at the end of the Open Enrollment period.

NEW PLAN DESIGNS

On October 6, 2011, the School Employees’ Health Benefits Plan Design Committee approved new medical and prescription drug plans to be offered through the SEHBP.

The current NJ DIRECT10, NJ DIRECT15, Aetna HMO, and CIGNA HealthCare HMO plans will still be available through the SEHBP in plan year 2012. However, additional plan options are now also available.

  • Horizon Blue Cross Blue Shield of New Jersey (BCBSNJ), Aetna, and CIGNA will each offer two additional plan design options, which provide lower premiums in exchange for higher copayments, deductibles, and out-of-pocket amounts on services that are received.
  • Horizon BCBSNJ, Aetna, and CIGNA will also offer a High Deductible Health Plan for employees and certain retirees.
  • As you know, a local employer can provide prescription drug benefits to its employees in one of three ways: through the freestanding SEHBP Freestanding Prescription Drug Plan, through a private vendor or through the medical plan. If prescription drugs are provided through the medical plans for Active employees, the new NJ DIRECT1525 and NJ DIRECT2030 the coinsurance is 15%. The coinsurance under NJ DIRECT10 and NJ DIRECT15 remain at the current level of 10%.
  • Under the active Employee Prescription Drug Plan the copayments will remain the same for the current plans; however, the new plan designs have different copayments. In addition, employees who choose a high deductible health plan cannot be enrolled in another prescription drug plan. Instead, prescription drugs are covered under the plan and are subject to a deductible.

Chapter 78, P.L. 2011 requires an employer to offer employees a minimum of three coverage level options (e.g. NJ DIRECT 10, NJ DIRECT 1525, and NJ DIRECT 2030), plus a high deductible health plan.

Premium rate charts for the new plans are being finalized and this information will be sent to employers as soon as possible.

  • Employees may enroll in the new plans during the Open Enrollment period for coverage in the 2012 plan year. Plan rates were approved by the School Employees' Health Benefits Commission on October 12, 2011. Rate charts will be posted to the Division of Pensions and Benefits Web site at:www.state.nj.us/treasury/pensions as soon as they are available for release.
  • Employees who are simply adding or deleting a dependent, or changing coverage levels should complete a Health Benefits Application and submit it to their employer any time during the Open Enrollment period.

EMPLOYEE CONTRIBUTIONS FOR SEHBP COVERAGE

Pursuant to Chapter 78, P.L. 2011, the Pension and Health Benefit Reform Law, new employee health benefit contribution amounts became effective as soon as administratively feasible, or upon the expiration of current collective negotiations agreements. Many employees must pay either a percentage of the medical and prescription plan premium or 1.5% of annual salary, whichever is greater. There will not be another Open Enrollment period before July 1, 2012.

WAIVING SEHBP COVERAGE

Local education employees are permitted to waive SEHBP medical and prescription coverage if they have other employer-provided or retiree coverage, or other coverage as a dependent.

Employers are permitted to offer an incentive to employees who waive SEHBP coverage. Under Chapter 2, P.L. 2010, the incentive amount for waivers is limited to 25 percent of the amount saved by the employer or $5,000, whichever is less. In addition, because multiple coverage under the SHBP/SEHBP is prohibited, waiver incentives are only payable if the other coverage is through a non-SHBP/SEHBP plan.

To waive coverage, a SEHBP Waiver Form for Local Employees and a Health Benefit Application must be completed and submitted by November 11, 2011. To waive coverage effective January 1st, employees should indicate “Open Enrollment” on the waiver form; otherwise, the waiver will be processed on a timely basis.

DENTAL PLANS AND EMPLOYEE COSTS

The following information is for local education employers who provide employee dental coverage through the Employee Dental Plans:

Seven different dental plans are offered to eligible employees based on one of two different plan designs — Dental Plan Organizations (DPO) and a Dental Expense Plan (PPO).

  • Six DPOs are available: Aetna DMO; BeneCare; CIGNA DHMO; Community Dental Associates; Healthplex; and Horizon Dental Choice. DPOs contract with a network of providers for dental services. When an employee or dependent uses a DPO dentist, diagnostic and preventive services are covered in full. Most other eligible expenses require a small copayment. Providers must participate with the DPO selected to receive coverage. Be sure to confirm that the dentist or dental facility selected is taking new patients and participates with the SHBP Employee Dental Plans, since DPOs also service other organizations.
  • The Dental Expense Plan is changed from an indemnity type plan to a PPO plan that continues to allow 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.

The Dental Expense Plan change from a passive PPO to a true PPO plan is effective January 1, 2012. Under the new design, employees will see no change in benefits provided they use an in-network provider. As outlined below, using an out-of-network provider will increase an employee’s costs and reduces the annual maximum benefit. The new PPO plan does not change the current $50 in-network deductible or $3000 benefit maximum.

 
In-Network
Out-of-Network
Deductible/Calendar Year $50 / Individual
$100 / Family
Waived for Preventive

$75 / Individual
$150 / Family
Waived for Preventive
Deductible applies to innetwork services as well

Coinsurance (as % of
R&C)
100% Preventive
80% Basic Restorative
65% Major Restorative
50% Periodontics & Prosthodontics
90% Preventive
70% Basic Restorative
55% Major Restorative
40% Periodontics &
Prosthodontics
Maximum Annual
Benefit/ Individual
$3,000 $2,000 (Maximum of $3,000
combined in and out-of-network)
Orthodontia under age 19 50% to $1,000 lifetime maximum (not subject to
deductible)
(Maximum not combined with Annual Maximum)
40% to $750 lifetime
(maximum of $1,000
combined in and out-ofnetwork) (not subject to deductible)
(Maximum not combined with Annual Maximum)

The employee cost for coverage under a dental plan is 50 percent of the actual dental plan premium. Therefore, the employee cost varies depending on which dental plan an employee chooses; however, the rate for coverage under a DPO remains considerably less expensive than the Dental Expense Plan.

Dental Plan Rates for 2012 were approved by the State Health Benefits Commission on October 12, 2011. Rate charts for dental coverage will be posted to the Division of Pensions and Benefits Web site: www.state.nj.us/treasury/pensions/ as soon as they are available for release.

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, 2011, they will not be permitted to change dental plans during this Open Enrollment.

DISTRIBUTION OF OPEN ENROLLMENT MATERIALS

Due to the changes in schedule for this year’s Open Enrollment period, many of the Open Enrollment informational materials, including the Health Benefits Program Application, are still being finalized as of this mailing and will be distributed to employers as soon as they are approved for release.

Most of these Open Enrollment items will be available in electronic format only and distributed via e-mail or provided through links at the Division of Pensions and Benefits Web site: www.state.nj.us/treasury/pensions/

Certifying Officers should watch for further e-mail notification and forward any pertinent information and links to their Human Resources staff, Benefits Administrators, or any other staff members responsible for the communication and administration of health benefits for your employees.

Employers should also inform employees to access the Open Enrollment information online as it becomes available on the Division of Pensions and Benefits Web site.

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 send an e-mail to: pensions.nj@treas.state.nj.us Thank you for your assistance in making the SEHBP Open Enrollment Period a success for your employees.

CO Letter in Printable Format Adobe PDF (59K)


September 2011

TO: Certifying Officers, Autonomous State College/University/State Employers
FROM: Joseph Zisa, Manager 1, Fiscal Resources
SUBJECT: Report of Contributions, 3rd Quarter 2011 (July 1 to September 30)

This memorandum has pertinent information concerning the reporting your employees’ pensionable service and salary and the completion of your quarterly Report of Contributions (ROC). Please review this memorandum before submitting your quarterly pension report.

Reminder – Contribution Rate Changes Under Chapter 78, P.L. 2011

Pursuant to Chapter 78, P.L. 2011, Pension and Health Benefit Reform, employee pension contribution rates will be increased effective October 1, 2011.

  • For PERS and TPAF members the employee pension contribution rate will gradually increase from 5.5% to 7.5% of salary by July 2018. The increase to the employee contribution rate will be 1% beginning on October 1, 2011. The second 1% increase will be phased in over 7 years beginning July 1, 2012. Therefore, effective October 1, 2011, with your Report of Contributions for the 4th Quarter 2011, the employee contribution rate will increase to 6.5%.  After that the employee contribution rate will increase each July 1st  over the seven year phase in until the full 7.5% contribution is reached in 2018 (6.64% in July 2012, 6.78% in July 2013, 6.92% in July 2014, 7.06% in July 2015, 7.20%, July 2016, 7.34% in July 2017, and 7.50% July 2018).

  • For PFRS members the employee pension contribution rate will increase from 8.5% to 10% of salary effective October 1, 2011 with your Report of Contributions for the 4th Quarter 2011.

Procedures for Reporting of Retroactive Salary

Any retroactive salary increase paid to employees is subject to the employee contribution rate in effect at the time the retroactive salary would have been paid if the contract had been ratified prior to its effective date.  Therefore, any retroactive salary increase paid on or after October 1, 2011 is subject to the prevailing contribution rate for each period of service under the retroactive period covered by the lump sum payment of back wages.  For example, for a 12-month retroactive salary increase paid on December 30, 2011, PERS employee pension contributions would be calculated using a rate of 5.5% of base salary covering the period of January 1 through September 30, 2011 and a rate of 6.5% of base salary covering the period of October 1 through December 30, 2011.

Reminder - Processing ‘Stop Deductions’ Member Certifications

The Division is issuing Certifications of Payroll Deductions for situations where an employer is required to suspend future pension and related benefit payroll deductions for an employee.  These ‘Stop Deduction’ Certifications are typically issued for employees who have been reported as a multiple member (one who works for more than one employer receiving pension credit from each simultaneously) who are no longer eligible for this benefit.  This is a required change following reforms contained in P.L. 2010, Chapter 1. 

If you receive a ‘stop deductions’ certification for a member who is on the ROC, you must stop reporting deductions as of the date reflected on the certification. This certification was produced as a result of the employee’s concurrent service with another employer and the Division has taken into consideration employment and pension reporting at your jurisdiction through that date when instructing the other employer on when to begin deductions and the amount of the deduction to be taken.  Even though this employee may have continued service with you beyond this date, for purposes of your pension related reporting, please adjust the member’s service and base salary, if applicable, to agree with the date shown on the ‘stop deduction’ certification using an explanation of “terminated” from the drop down box on the IROC or a leave code of ‘2’ on the ROC data file.

If an employee has terminated service with you prior to the date shown on the ‘stop deductions’ certification, immediately contact the Division by forwarding a copy of the certification with detail of the employee’s salary, pension contributions and related deductions since the last period reported on ROC and the date of termination.  Information should be directed to the attention of the ‘Adjustment Section’ at the Division’s Trenton NJ address.

ROC Reporting for Members with Multiple Employment

P.L. 2010, Chapter 1, requires that an employee eligible for PERS or TPAF enrollment after May 21, 2010, be eligible for Tier 4 membership based upon only one position and requires the retirement system to designate the position providing the higher or highest compensation for the member from among any concurrently held positions.  This position will be used as the basis for eligibility for membership, service credit, the compensation base for pension contributions, and for other pension calculations.

For current PERS or TPAF Tier 1, Tier 2, or Tier 3 multiple members, all concurrent positions held without a break in service from May 21, 2010, will continue to qualify for service credit and the compensation base for pension contributions and calculation of benefits.  However, provisions of P.L. 2010, Chapter 1,  require that any new, concurrently held position beginning after May 21, 2010, will not qualify for service credit or the compensation base for pension contributions and calculation of retirement for any PERS or TPAF multiple member.  Current multiple employer relationships will be terminated following any “break in service” not supported by an employer approved leave of absence (LOA).  For this purpose a “break in service” is being defined for employment with any municipality, county, board of education or authority as any one month period without service while not on an approved LOA.  The Division may require recertification of these employment relationships following a break in service with an approved leave of absence. As a result, you may be asked to provide additional information before being able to add a multiple member back to your report of contributions following an approved LOA.

PERS & TPAF Tier 3 - Minimum Annual Base Salary

As a result of P.L. 2008, Chapter 89, the Director of the Division of Pensions and Benefits shall adjust each year the minimum annual base salary for participation in the Teachers’ Pension and Annuity Fund (TPAF) and the Public Employees’ Retirement System (PERS) for those members in Tier 3 service (Tier 3 service covers those individuals eligible to enroll in TPAF or PERS on or after November 2, 2008). The adjustment is made annually in accordance with changes in the Consumer Price Index, pursuant to N.J.A.C. 17:3-2.1(g) for TPAF membership and N.J.A.C. 17:2-2.1(c) for PERS membership.

Please take note that, pursuant to these provisions, the Division of Pensions and Benefits set the annual base salary for participation in the TPAF and PERS at $7,700 for calendar year 2011. This minimum annual base salary continues in effect through December 31, 2011.  The base is being evaluated for revision in 2012 and the results of that analysis will be announced shortly.

Employees who fall below the minimum annual base salary amount in any calendar year may be eligible to participate in the Defined Contribution Retirement Program. Please review Fact Sheet #82, Defined Contribution Retirement Program (DCRP) If Ineligible for PERS or TPAF, Adobe PDF (38K) for additional information.

PERS & TPAF Tiers 2 & 3 - Maximum Compensation

P.L. of 2007, Chapter 103, provides that new employees are subject to a maximum compensation limit for PERS or TPAF pension contributions. The maximum compensation is based on the annual maximum wage for Social Security.

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

For calendar year 2011, the annual maximum wage for Social Security is $106,800 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 $106,800 before the end of 2011 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). DCRP plan materials, enrollment forms, and other program information are available at: www.state.nj.us/treasury/pensions/dcrp1.shtml

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.

PFRS – Maximum Compensation

P.L. 2010, Chapter 1, provides that new members eligible to enroll in the Police and Firemen’s Retirement System on or after May 21, 2010 are subject to a maximum compensation limit for PFRS contributions and benefit.  The maximum compensation is based on the annual maximum wage for Social Security.

Tiers Defined for the TPAF and the PERS

  • Tier 1: Member who were enrolled prior to July 1, 2007

  • 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 P.L. 2007, Chapter 103

  • Tier 3: Members who were eligible to enroll on or after November 2, 2008 pursuant to the provisions of P.L. 2010, Chapter 89

  • Tier 4: Members who were eligible to enroll on or after May 21, 2010 pursuant to the provisions of P.L. 2010, Chapter 1

  • Tier 5: Members who were eligible to enroll on or after June 28, 2011 pursuant to the provisions of P.L. 2011, Chapter 78

Reporting and Payment Information

Your 3rd Quarter 2011 IROC or ROC data file applicable to the Teachers’ Pension and Annuity Fund, Public Employees’ Retirement System, and Police and Firemen’s Retirement System is due by October 7, 2011. Your September 2011 remittance, which represents the deductions due for the balance of the quarter, should be made through the Transmittal Electronic Payments System (TEPS). The portion of the remittance for total pension deductions should reflect the sum of normal pension contributions, back deductions, loan payments, and arrears/purchase deductions. Your TEPS remittance is also due by October 7, 2011.

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: www.state.nj.us/treasury/pensions/epbam/finance/roc.htm

Changing Banking Information For TEPS

On or after the date that the new checking account becomes effective, a Notice of Changes for TEPS should be faxed to 1-866-568-2495 or mailed to:

New Jersey Department of Treasury
Division of Pensions and Benefits
PO Box 9581
Trenton NJ 08650-9581

Please call the TEPS Helpline 1-888-835-3345 if you have any questions regarding the status of your change or if you have any questions regarding your password or the status of your transmittal payment.

CO Letter in Printable Format Adobe PDF (68K)


September 2011

TO: Certifying Officers - Teachers’ Pension and Annuity Fund, Public Employees’ Retirement System, and Police and Firemen’s Retirement System
FROM: Joseph Zisa, Manager 1, Fiscal Resources
SUBJECT: Report of Contributions, 3rd Quarter 2011 (July 1 to September 30)

This memorandum contains important instructions 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 ROC, please refer to www.state.nj.us/treasury/pensions/epbam/finance/roc.htm

Reminder – Contribution Rate Changes Under Chapter 78, P.L. 2011

Pursuant to Chapter 78, P.L. 2011, Pension and Health Benefit Reform, employee pension contribution rates will be increased effective October 1, 2011.

  • For PERS and TPAF members the employee pension contribution rate will gradually increase from 5.5% to 7.5% of salary by July 2018. The increase to the employee contribution rate will be 1% beginning on October 1, 2011. The second 1% increase will be phased in over 7 years beginning July 1, 2012. Therefore, effective October 1, 2011, with your Report of Contributions for the 4th Quarter 2011, the employee contribution rate will increase to 6.5%. After that the employee contribution rate will increase each July 1st  over the seven year phase in until the full 7.5% contribution is reached in 2018 (6.64% in July 2012, 6.78% in July 2013, 6.92% in July 2014, 7.06% in July 2015, 7.20%, July 2016, 7.34% in July 2017, and 7.50% July 2018).

  • For PERS Prosecutors Part members the employee pension contribution rate will increase from 8.5% to 10% of salary effective October 1, 2011 with your Report of Contributions for the 4th Quarter 2011.

  • For PFRS members the employee pension contribution rate will increase from 8.5% to 10% of salary effective October 1, 2011 with your Report of Contributions for the 4th Quarter 2011.

Reminder – Processing ‘Stop Deductions’ Member Certifications

The Division is issuing Certifications of Payroll Deductions for situations where an employer is required to suspend future pension and related benefit payroll deductions for an employee.  These ‘Stop Deduction’ Certifications are typically issued for employees who have been reported as a multiple member (one who works for more than one employer receiving pension credit from each simultaneously) who are no longer eligible for this benefit.  This is a required change following reforms contained in P.L. 2010, Chapter 1. 

If you receive a ‘stop deductions’ certification for a member who is on the iROC, you must stop reporting deductions as of the date reflected on the certification. This certification was produced as a result of the employee’s concurrent service with another employer and the Division has taken into consideration employment and pension reporting at your jurisdiction through that date when instructing the other employer on when to begin deductions and the amount of the deduction to be taken.  Even though this employee may have continued service with you beyond this date, for purposes of your pension related reporting, please adjust the member’s months of service and base salary, if applicable, to agree with the date shown on the ‘stop deduction’ certification using an explanation of “terminated” from the drop down box.

If an employee has terminated service with you prior to the date shown on the ‘stop deductions’ certification, immediately contact the Division by forwarding a copy of the certification with detail of the employee’s salary, pension contributions and related deductions since the last period reported on iROC and the date of termination.  Information should be directed to the attention of the ‘Adjustment Section’ at the Division’s Trenton NJ address.

iROC Reporting for Members with Multiple Employment

P.L. 2010, Chapter 1, requires that an employee eligible for PERS or TPAF enrollment after May 21, 2010, be eligible for Tier 4 membership based upon only one position and requires the retirement system to designate the position providing the higher or highest compensation for the member from among any concurrently held positions.  This position will be used as the basis for eligibility for membership, service credit, the compensation base for pension contributions, and for other pension calculations. 

For current PERS or TPAF Tier 1, Tier 2, or Tier 3 multiple members, all concurrent positions held without a break in service from May 21, 2010, will continue to qualify for service credit and the compensation base for pension contributions and calculation of benefits.  However, provisions of P.L. 2010, Chapter 1,  require that any new, concurrently held position beginning after May 21, 2010, will not qualify for service credit or the compensation base for pension contributions and calculation of retirement for any PERS or TPAF multiple member.  Current multiple employer relationships will be terminated following any “break in service” not supported by an employer approved leave of absence (LOA).  For this purpose a “break in service” is being defined for employment with any municipality, county, board of education or authority as any one month period without service while not on an approved LOA.  The Division may require recertification of these employment relationships following a break in service with an approved leave of absence. As a result, you may be asked to provide additional information before being able to add a multiple member back to your report of contributions following an approved LOA.

Deadline for Filing the Report of Contributions

The Division has been updating member accounts as early as four weeks following the close of the calendar quarter.  But to do so we need the support of all our employers. Therefore, all reports are due by October 7, 2011.  Should your report not be received by the close of business on October 22, 2011, it may not be used to update member accounts and interest penalties will begin to accrue.

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. 

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.

PERS & TPAF Tier 3 - Minimum Annual Base Salary

As a result of P.L. 2008, Chapter 89, the Director of the Division of Pensions and Benefits shall adjust each year the minimum annual base salary for participation in the Teachers’ Pension and Annuity Fund (TPAF) and the Public Employees’ Retirement System (PERS) for those members in Tier 3 service (Tier 3 service covers those individuals eligible to enroll in TPAF or PERS on or after November 2, 2008). The adjustment is made annually in accordance with changes in the Consumer Price Index, pursuant to N.J.A.C. 17:3-2.1(g) for TPAF membership and N.J.A.C. 17:2-2.1(c) for PERS membership.

Please take note that, pursuant to these provisions, the Division of Pensions and Benefits set the annual base salary for participation in the TPAF and PERS at $7,700 for calendar year 2011. This minimum annual base salary continues in effect through December 31, 2011.  The base is being evaluated for revision in 2012 and the results of that analysis will be announced shortly.

Employees who fall below the minimum annual base salary amount in any calendar year may be eligible to participate in the Defined Contribution Retirement Program. Please review Fact Sheet #82, Defined Contribution Retirement Program (DCRP) If Ineligible for PERS or TPAF, Adobe PDF (38K) for additional information.

PERS & TPAF Tiers 2 & 3 - Maximum Compensation

P.L. of 2007, Chapter 103, 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.  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 2011, the annual maximum wage for Social Security is $106,800 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 $106,800 before the end of 2011 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).  DCRP plan materials, enrollment forms, and other program information are available at www.state.nj.us/treasury/pensions/dcrp1.shtml

Note:  Until reporting procedures are developed for PERS and TPAF members’ who exceed the social security maximum of $106,800 for 2011, continue to report the pension and contributory insurance (if applicable) 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.

PFRS – Maximum Compensation

P.L. 2010, Chapter 1, provides that new members eligible to enroll in the Police and Firemen’s Retirement System on or after May 21, 2010 are subject to a maximum compensation limit for PFRS contributions and benefit.  The maximum compensation is based on the annual maximum wage for Social Security.

Note:  Until reporting procedures are developed for PFRS members’ who exceed the social security maximum of $106,800 for 2011, continue to report the pension for the excess salary as you have in the past. The Division will forward the pension contributions to the DCRP carrier.  Any excess pension payments will be refunded to the employee.

Reporting of Retroactive Salary Increases

As a result of the establishment of maximum compensation limits for certain members of the Public Employees’ Retirement System (PERS), the Teachers’ Pension and Annuity Fund (TPAF) and the Police and Firemen’s Retirement System (PFRS), the Division of Pension and Benefits has determined that retroactive salary increases can no longer be reported through the Internet-based Report of Contributions (IROC) if they affect reporting periods prior to the current reporting quarter.

Procedures for Reporting of Retroactive Salary

The current procedures in place to allow employers to report retroactive salary increases are as follows:

Once the new contract is received by the Division of Pension and Benefits and reviewed, a spreadsheet will be sent to the employer. This spreadsheet will contain all data submitted for each member for the period of the retroactive salary adjustment. The employer must then supply the new base salary for each quarter affected for members receiving a retroactive salary adjustment. The total additional pension and contributory insurance contribution due will appear at the top of the spreadsheet page.  Please submit a check for the necessary contributions, payable to the retirement system, and return the spreadsheet via e-mail to the sending party at the Division of Pensions and Benefits.

Any retroactive salary increase paid to employees is subject to the employee contribution rate in effect at the time the retroactive salary would have been paid if the contract had been ratified prior to its effective date.  Therefore, any retroactive salary increase paid on or after October 1, 2011 is subject to the prevailing contribution rate for each period of service under the retroactive period covered by the lump sum payment of back wages.  For example, for a 12-month retroactive salary increase paid on December 30, 2011, PERS employee pension contributions would be calculated using a rate of 5.5% of base salary covering the period of January 1 through September 30, 2011 and a rate of 6.5% of base salary covering the period of October 1 through December 30, 2011.

Addition to IROC

Due to the implementation of P.L. 2007, Chapter 103, P.L. 2008, Chapter 89, and P.L. 2010, Chapter 1, a new column has been added to the IROC to identify any members affected by these laws. The column heading is “TIER”. P.L.,2007 Chapter 103 members will be identified as Tier 2;  P.L. 2008, Chapter 89, members will be identified as Tier 3; and P.L. 2010, Chapter 1 members will be identified as Tier 4.  

Tiers Defined for the TPAF and the PERS

  • Tier 1: Member who were enrolled prior to July 1, 2007.

  • 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 P.L. 2007, Chapter 103.

  • Tier 3: Members who were eligible to enroll on or after November 2, 2008 pursuant to the provisions of P.L. 2010, Chapter 89.

  • Tier 4: Members who were eligible to enroll on or after May 21, 2010 pursuant to the provisions of P.L. 2010, Chapter 1.

  • Tier 5: Members who were eligible to enroll on or after June 28, 2011 pursuant to the provisions of P.L. 2011, Chapter 78.

Changing Banking Information for TEPS

On or after the date that the new checking account becomes effective, a Notice of Changes for TEPS should be faxed to 1-866-568-2495 or mailed to:

New Jersey Department of Treasury
Division of Pensions and Benefits
PO Box 9581
Trenton NJ 08650-9581

Please call the TEPS Helpline 1-888-835-3345 if you have any questions regarding the status of your change or if you have any questions regarding your password or the status of your transmittal payment.

CO Letter in Printable Format Adobe PDF (71K)


September 22 , 2011

TO: State Department Certifying Officers, State Department Human Resource Directors, State Biweekly Payroll Benefits Administrators
FROM: John D. Megariotis, Deputy Director, Finance
Division of Pensions and Benefits
SUBJECT: Open Enrollment for the New Jersey State Employees Tax Savings Program (Tax$ave 2012)

The annual open enrollment for the calendar year 2012 New Jersey State Employees Tax Savings Program (Tax$ave 2012) will be conducted from October 1 through October 31, 2011.  A benefit program available under Section 125 of the Federal Internal Revenue Code, Tax$ave offers eligible employees the opportunity to increase their available income by reducing their federal tax liability.

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.

Note: Chapter 78, P.L. 2011, the Pension and Health Benefit Reform Law, requires local government and local education employers to offer Section 125 plans to their employees. Because Tax$ave is only available to State employees, local employers are required establish their own Section 125 programs. Local government and local education employees can contact their human resources office or benefits administrator to determine the specific plans and benefits that are available.

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. 

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.

PREMIUM OPTION PLAN

Enrollment in the Premium Option Plan is automatic.  This plan saves your employees 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 2012 (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.  Fringe Benefits Management Company, a Division of WageWorks, administers the Tax$ave Unreimbursed Medical and Dependent Care FSAs for the Division of Pensions and Benefits.

Unlike the Premium Option Plan or the health plans of the SHBP, prior participation in a Tax$ave FSA in 2011 does not carry over automatically into 2012.  Employees must enroll each year to participate in an FSA for calendar year 2012.

Some of the benefits of FSA participation include:

  • $2,500 Medical FSA Maximum and $5,000 Dependent Care FSA Maximum.  For the Tax$ave 2012 plan year, the maximum annual allowance that can be set aside for an Unreimbursed Medical FSA is $2,500 and the maximum annual allowance that can be set aside for a Dependent Care FSA is $5,000.  Employees may save federal income, Medicare and Social Security taxes on up to $7,500 of combined unreimbursed medical and dependent care expenses.  It makes sense to enroll and use a Tax$ave FSA plan when paying for doctor and prescription copayments, health plan deductibles, orthodontics, eyeglasses, Lasik surgery, uncovered dental fees, certain over-the-counter items (see below), or dependent care. 

  • Medical FSA Eligibility includes Adult Children until Age 26.  Qualified out-of-pocket medical expenses incurred by eligible adult children can be reimbursed through the Unreimbursed Medical FSA.  Coverage applies until the end of the year in which a child turns age 26, regardless of the child’s marital or student status. However, until 2014, the coverage requirement applies only if the adult child is not eligible to enroll in other employer-based coverage (aside from coverage through the parent).

  • 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 extends to April 30 of the following year.  While this does not eliminate the use-it-or-lose-it rule completely, employees have an extended 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 extended deadline are forfeited.

  • Unreimbursed Medical FSAs feature the myFBMC Card® Visa® Card that draws on the value of the employee’s annual Medical FSA election amount.  The myFBMC Card is included free when you sign up for the 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 certain eligible over-the-counter medical expenses (see below) at grocery stores, drugstores, and discount stores that are IIAS (Inventory Information Approval Systems) certified merchants.  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 2011 Unreimbursed Medical FSA funds to reimburse eligible expense incurred prior to March 15, 2012 before using funds contributed in the 2012 plan year.

Prescription Required for Reimbursement of Over-the-Counter Items.

The federal Patient Protection and Affordable Care Act requires a prescription for any eligible Over-the-Counter (OTC) drug or medicine (except diabetic supplies) before it will qualify for reimbursement under the Unreimbursed Medical FSA.  This includes OTC items like: allergy drugs, pain relievers, cold and cough medicines, sleep aids, digestive aids, anti-gas medications, baby rash creams, and insect bite treatments.  To be reimbursed for these types of OTC items through the Unreimbursed Medical FSA, you must submit a copy of your doctor’s prescription along with your Claim Form for verification (eligible items requiring a prescription may be purchased using the myFBMC Card if the prescription is used to purchase it).  OTC items like eyeglasses, wrist splints, and bandages, as well as durable medical items such as crutches and canes continue to be reimbursed without a prescription.  For an updated list of expenses that are eligible under the FSA, please visit: www.myFBMC.com

Enrolling in a Flexible Spending Account

Employees have four ways of enrolling in the Tax$ave FSA accounts during the Open Enrollment: mail, fax, telephone, and Internet.  Fringe Benefits Management Company, a Division of WageWorks, will inform employees currently participating in a Tax$ave FSA plan of this enrollment opportunity through a direct mailing in September.  The Tax$ave publications also provide the following enrollment instructions to employees:

  • Internet: Employees can enroll in the Unreimbursed Medical and/or Dependent Care FSA plans over the Internet at: www.myFBMC.com  The deadline for enrollment over the Internet is midnight, October 31, 2011.

  • Telephone: Employees may enroll in the Unreimbursed Medical and/or Dependent Care FSA plans over the phone by calling Fringe Benefits Management Company’s automated Interactive Voice Response system at 1-866-440-7150.  This is a great opportunity to quickly and easily go through the enrollment process.  The deadline for enrollment by telephone is midnight, October 31, 2011. 

  • Fax: FSA Enrollment Forms may be faxed by the employee to 1-850-514-5806.  The deadline for accepting faxed enrollment forms is midnight, October 31, 2011. 

  • Mail: FSA Enrollment Forms can be mailed by the employee directly to Fringe Benefits Management Company, a Division of WageWorks.  To be accepted, enrollment forms must be postmarked no later than October 31, 2011.  Forms postmarked after October 31, 2011 will be returned without action.  Employer benefits offices should not be involved in processing or mailing FSA Enrollment Forms.

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.shtml  or contact Fringe Benefits Management Company Customer Service at 1-800-342-8017.

Special Rules for Enrolling Newly Hired Employees — New employees can enroll in Tax$ave FSA plans when hired but must complete an FSA Enrollment Form within 30 days of the date of hire to participate in either the Unreimbursed Medical FSA or the Dependent Care FSA. 

  • There is a 60 day waiting period for Unreimbursed Medical FSA eligibility. 

  • There is a 30 day waiting period for Dependent Care FSA eligibility. 

The effective date will be the first day of the month following eligibility.  If the employee misses the 30 day enrollment window, they must wait to enroll during the Tax$ave Open Enrollment.

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.

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.
See IRS Publication #503, Dependents, at: www.irs.gov for information on the requirements for establishing dependent status for federal tax purposes.

  • Information about 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 (57K)

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 26 TO 31

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 Publication #503, Dependents, at: www.irs.gov for information on the requirements for establishing dependent status for federal tax purposes.

Information about continued coverage for children age 26 to 31, can be found in Fact Sheet #74, Health Benefits Coverage of Children Until Age 31 Under Chapter 375 Adobe PDF (28K).

EMPLOYEE SEMINARS

Upon request, Fringe Benefits Management Company, a Division of WageWorks, will provide educational employee seminars about the Tax$ave Flexible Spending Accounts.  A notice about the seminars and the Tax$ave Seminar Request Form was forwarded to employers in a separate mailing on July 15, 2011.

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 2012 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.

Check Messages

Announcement of the open enrollment to employees paid through Centralized Payroll will be made with a paycheck message on the September 30 payroll statement.

An additional “reminder message” will be provided to employees through a paycheck message on October 28. 

The text of the check message announcements and preview copies of the Tax$ave publications are enclosed with this letter.

Online Distribution of Tax$ave Newsletter and Open Enrollment Fliers

In compliance with State initiatives to provide paperless services, the Tax$ave 2012 Newsletter, Premium Option Plan (POP) Flier, and FSA Plan Flier are only available in electronic format for this year’s Open Enrollment. 

  • The Tax$ave 2012 Open Enrollment News announces the open enrollment, outlines the components of the program with an emphasis on its tax saving advantages, and identifies the October 31, 2011 deadline for submission of all enrollment materials;

  • The Premium Option Plan 2012 flier explains the advantages and disadvantages of participation; and

  • The FSA Plan Flier describes the Unreimbursed Medical and Dependent Care Flexible Spending Accounts administered by Fringe Benefits Management Company, a Division of WageWorks.

Access to the Tax$ave publications is available through links at the Division of Pensions and Benefits Web site: www.state.nj.us/treasury/pensions/taxsave.shtml or as PDF attachments provided with the distribution of this letter.

Employers should inform employees to access the Open Enrollment information online or provide the PDF versions via e-mail attachment or your Departmental Intranet.

For cases where online or e-mail notification is not possible, a paper flier giving instructions on accessing the Open Enrollment publications is provided with this letter and can be copied and distributed as required.

Other open enrollment materials available to you are the FSA Reference Guides and the Declination of Premium Option Plan (POP) form. 

  • A sample of the 2012 FSA Reference Guide will be sent directly to benefits administrators by Fringe Benefits Management Company, a Division of WageWorks. Also included will be instructions 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 — which 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 2012, they must complete the form declining the federal tax break they could receive.  Employees should request these forms from benefits administrators and return the Declination of Premium Option Plan (POP) forms to benefits administrators by October 31, 2011.  Benefits administrators must then forward declination forms to Centralized Payroll by November 10, 2011. 

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$ave 2012, the open enrollment, or the Premium Option Plan, visit the Division of Pensions and Benefits’ Tax$ave Internet site at: www.state.nj.us/treasury/pensions/taxsave.shtml  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 Fringe Benefits Management Company, a Division of WageWorks at: www.myFBMC.com  or call FBMC Customer Service at 1-800-342-8017.

Enclosures:

Tax$ave 2012 Open Enrollment Milestones Adobe PDF (10K)
Open Enrollment Check Messages Adobe PDF (13K)
Tax$ave 2012 Open Enrollment News Adobe PDF (104K)
The Premium Option Plan 2012 Flier Adobe PDF (43K)
Tax$ave — FBMC Flexible Savings Accounts Pamphlet Adobe PDF (349K)
Open Enrollment Flier for Online Access to Publications Adobe PDF (32K)
Tax$ave — FBMC Flexible Savings Accounts Enrollment Form Adobe PDF (134K)
Declination of Premium Option Plan (POP) for Plan Year 2012 Adobe PDF (16K)

CO Letter in Printable Format Adobe PDF (81K)

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September 22, 2011

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
Division of Pensions and Benefits
SUBJECT: Open Enrollment for the New Jersey State Employees Tax Savings Program (Tax$ave 2012)

The annual open enrollment for the calendar year 2012 New Jersey State Employees Tax Savings Program (Tax$ave 2012) will be conducted from October 1 through October 31, 2011.  A benefit program available under Section 125 of the Federal Internal Revenue Code, Tax$ave offers eligible employees the opportunity to increase their available income by reducing their federal tax liability.

Full-time employees of the State or a State college or university who are eligible for participation in the New Jersey State Health Benefits Program (SHBP) may participate in Tax$ave.

Note: Chapter 78, P.L. 2011, the Pension and Health Benefit Reform Law, requires local government and local education employers to offer Section 125 plans to their employees. Because Tax$ave is only available to State employees, local employers are required establish their own Section 125 programs. Local government and local education employees can contact their human resources office or benefits administrator to determine the specific plans and benefits that are available.

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. 

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.

PREMIUM OPTION PLAN

Enrollment in the Premium Option Plan is automatic.  This plan saves your employees 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 2012 (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.  Fringe Benefits Management Company, a Division of WageWorks, administers the Tax$ave Unreimbursed Medical and Dependent Care FSAs for the Division of Pensions and Benefits.

Unlike the Premium Option Plan or the health plans of the SHBP, prior participation in a Tax$ave FSA in 2011 does not carry over automatically into 2012.  Employees must enroll each year to participate in an FSA for calendar year 2012.

Some of the benefits of FSA participation include:

  • $2,500 Medical FSA Maximum and $5,000 Dependent Care FSA Maximum.  For the Tax$ave 2012 plan year, the maximum annual allowance that can be set aside for an Unreimbursed Medical FSA is $2,500 and the maximum annual allowance that can be set aside for a Dependent Care FSA is $5,000.  Employees may save federal income, Medicare and Social Security taxes on up to $7,500 of combined unreimbursed medical and dependent care expenses.  It makes sense to enroll and use a Tax$ave FSA plan when paying for doctor and prescription copayments, health plan deductibles, orthodontics, eyeglasses, Lasik surgery, uncovered dental fees, certain over-the-counter items (see below), or dependent care. 

  • Medical FSA Eligibility includes Adult Children until Age 26.  Qualified out-of-pocket medical expenses incurred by eligible adult children can be reimbursed through the Unreimbursed Medical FSA.  Coverage applies until the end of the year in which a child turns age 26, regardless of the child’s marital or student status. However, until 2014, the coverage requirement applies only if the adult child is not eligible to enroll in other employer-based coverage (aside from coverage through the parent).

  • 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 extends to April 30 of the following year.  While this does not eliminate the use-it-or-lose-it rule completely, employees have an extended 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 extended deadline are forfeited.

  • Unreimbursed Medical FSAs feature the myFBMC Card® Visa® Card that draws on the value of the employee’s annual Medical FSA election amount.  The myFBMC Card is included free when you sign up for the 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 certain eligible over-the-counter medical expenses (see below) at grocery stores, drugstores, and discount stores that are IIAS (Inventory Information Approval Systems) certified merchants.  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 2011 Unreimbursed Medical FSA funds to reimburse eligible expense incurred prior to March 15, 2012 before using funds contributed in the 2012 plan year.

Prescription Required for Reimbursement of Over-the-Counter Items.

The federal Patient Protection and Affordable Care Act requires a prescription for any eligible Over-the-Counter (OTC) drug or medicine (except diabetic supplies) before it will qualify for reimbursement under the Unreimbursed Medical FSA.  This includes OTC items like: allergy drugs, pain relievers, cold and cough medicines, sleep aids, digestive aids, anti-gas medications, baby rash creams, and insect bite treatments.  To be reimbursed for these types of OTC items through the Unreimbursed Medical FSA, you must submit a copy of your doctor’s prescription along with your Claim Form for verification (eligible items requiring a prescription may be purchased using the myFBMC Card if the prescription is used to purchase it).  OTC items like eyeglasses, wrist splints, and bandages, as well as durable medical items such as crutches and canes continue to be reimbursed without a prescription.  For an updated list of expenses that are eligible under the FSA, please visit: www.myFBMC.com

Enrolling in a Flexible Spending Account

Employees have four ways of enrolling in the Tax$ave FSA accounts during the Open Enrollment: mail, fax, telephone, and Internet.  Fringe Benefits Management Company, a Division of WageWorks, will inform employees currently participating in a Tax$ave FSA plan of this enrollment opportunity through a direct mailing in September.  The Tax$ave publications also provide the following enrollment instructions to employees:

  • Internet: Employees can enroll in the Unreimbursed Medical and/or Dependent Care FSA plans over the Internet at: www.myFBMC.com  The deadline for enrollment over the Internet is midnight, October 31, 2011.

  • Telephone: Employees may enroll in the Unreimbursed Medical and/or Dependent Care FSA plans over the phone by calling Fringe Benefits Management Company’s automated Interactive Voice Response system at 1-866-440-7150.  This is a great opportunity to quickly and easily go through the enrollment process.  The deadline for enrollment by telephone is midnight, October 31, 2011. 

  • Fax: FSA Enrollment Forms may be faxed by the employee to 1-850-514-5806.  The deadline for accepting faxed enrollment forms is midnight, October 31, 2011. 

  • Mail: FSA Enrollment Forms can be mailed by the employee directly to Fringe Benefits Management Company, a Division of WageWorks.  To be accepted, enrollment forms must be postmarked no later than October 31, 2011.  Forms postmarked after October 31, 2011 will be returned without action.  Employer benefits offices should not be involved in processing or mailing FSA Enrollment Forms.

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.shtml  or contact Fringe Benefits Management Company Customer Service at 1-800-342-8017.

Special Rules for Enrolling Newly Hired Employees — New employees can enroll in Tax$ave FSA plans when hired but must complete an FSA Enrollment Form within 30 days of the date of hire to participate in either the Unreimbursed Medical FSA or the Dependent Care FSA. 

  • There is a 60 day waiting period for Unreimbursed Medical FSA eligibility. 

  • There is a 30 day waiting period for Dependent Care FSA eligibility. 

The effective date will be the first day of the month following eligibility.  If the employee misses the 30 day enrollment window, they must wait to enroll during the Tax$ave Open Enrollment.

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.

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.
See IRS Publication #503, Dependents, at: www.irs.gov for information on the requirements for establishing dependent status for federal tax purposes.

  • Information about 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 (57K)

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 26 TO 31

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 Publication #503, Dependents, at: www.irs.gov for information on the requirements for establishing dependent status for federal tax purposes.

Information about continued coverage for children age 26 to 31, can be found in Fact Sheet #74, Health Benefits Coverage of Children Until Age 31 Under Chapter 375 Adobe PDF (28K).

EMPLOYEE SEMINARS

Upon request, Fringe Benefits Management Company, a Division of WageWorks, will provide educational employee seminars about the Tax$ave Flexible Spending Accounts.  A notice about the seminars and the Tax$ave Seminar Request Form was forwarded to employers in a separate mailing on August 1, 2011.

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 2012 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.

Online Distribution of Tax$ave Newsletter and Open Enrollment Fliers

In compliance with State initiatives to provide paperless services, the Tax$ave 2012 Newsletter, Premium Option Plan (POP) Flier, and FSA Plan Flier are only available in electronic format for this year’s Open Enrollment. 

  • The Tax$ave 2012 Open Enrollment News announces the open enrollment, outlines the components of the program with an emphasis on its tax saving advantages, and identifies the October 31, 2011 deadline for submission of all enrollment materials;

  • The Premium Option Plan 2012 flier explains the advantages and disadvantages of participation; and

  • The FSA Plan Flier describes the Unreimbursed Medical and Dependent Care Flexible Spending Accounts administered by Fringe Benefits Management Company, a Division of WageWorks.

Access to the Tax$ave publications is available through links at the Division of Pensions and Benefits Web site: www.state.nj.us/treasury/pensions/taxsave.shtml or as PDF attachments provided with the distribution of this letter.

Employers should inform employees to access the Open Enrollment information online or provide the PDF versions via e-mail attachment or your Departmental Intranet.

For cases where online or e-mail notification is not possible, a paper flier giving instructions on accessing the Open Enrollment publications is provided with this letter and can be copied and distributed as required.

Other open enrollment materials available to you are the FSA Reference Guides and the Declination of Premium Option Plan (POP) form. 

  • A sample of the 2012 FSA Reference Guide will be sent directly to benefits administrators by Fringe Benefits Management Company, a Division of WageWorks. Also included will be instructions 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 — which 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 2012, they must complete the form declining the federal tax break they could receive.  Employees should request these forms from benefits administrators and return the Declination of Premium Option Plan (POP) forms to benefits administrators by October 31, 2011.  Benefits administrators must then forward declination forms to Centralized Payroll by November 10, 2011. 

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$ave 2012, the open enrollment, or the Premium Option Plan, visit the Division of Pensions and Benefits’ Tax$ave Internet site at: www.state.nj.us/treasury/pensions/taxsave.shtml  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 Fringe Benefits Management Company, a Division of WageWorks at: www.myFBMC.com  or call FBMC Customer Service at 1-800-342-8017.

Enclosures:

Tax$ave 2012 Open Enrollment Milestones Adobe PDF (10K)
Tax$ave 2012 Open Enrollment News Adobe PDF (104K)
The Premium Option Plan 2012 Flier (College Version) Adobe PDF (43K)
The Premium Option Plan 2012 Flier (State Version) Adobe PDF (43K)
Tax$ave — FBMC Flexible Savings Accounts Pamphlet Adobe PDF (349K)
Open Enrollment Flier for Online Access to Publications Adobe PDF (32K)
Tax$ave — FBMC Flexible Savings Accounts Enrollment Form Adobe PDF (134K)
Declination of Premium Option Plan (POP) for Plan Year 2012 (College Version) Adobe PDF (16K)
Declination of Premium Option Plan (POP) for Plan Year 2012 (State Version) Adobe PDF (16K)

CO Letter in Printable Format Adobe PDF (81K)

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September 2011

TO: Certifying Officers of the Public Employees' Retirement System (PERS)
FROM: Kathleen Coates, Board Secretary, Public Employees' Retirement System
SUBJECT: PERS NOTICE OF ELECTION

Once again, in an effort to support a decrease in administrative costs and to preserve resources, this certifying officer letter and the attached notice for the 2012 Public Employees' Retirement System (PERS) elections are being transmitted to you electronically and will require your electronic response.

We are seeking your assistance in servicing an election for one “State” Representative position, and one “Municipal” Representative position to the PERS Board of Trustees. A State representative will be elected for a three-year term as of July 1, 2012.  However, the Municipal representative will be elected for a one-year remaining term, effective July 1, 2012, to fill a position that is currently vacant and expires June 30, 2013. Candidates for all positions must qualify by nomination.

We are requesting that you distribute the attached election notice electronically to each PERS member employed at your location, as the information will explain the pre-election procedures. It is most important that each individual active PERS member receives this notice.  If you are the certifying officer for multiple locations, you will only receive one certifying officer letter and will be required to distribute the attached election notice to active PERS members at all locations.  Your attention to this distribution is required as regulated by N.J.A.C. 17:2-1.4.

We ask that you distribute this notice by the preferred method of distribution, which is electronically.  If you are not able to accommodate electronic distribution, please make copies of the notice and provide to all active PERS employees.  In addition, if you maintain a website for your employees, you may post the notice there and in any other appropriate public place at your location.

It is very important that you confirm distribution of this notice.  To confirm distribution of the notice to your active PERS employees, please send an e-mail to NJBOT.ELECT@treas.state.nj.us

Thank you for your prompt assistance in the timely response and distribution of this notice.

Attachment: Election Notice Adobe PDF (18K) 

CO Letter in Printable Format Adobe PDF (58K)


DIVISION OF PENSIONS AND BENEFITS - NOTICE OF ELECTION
BOARD OF TRUSTEES OF THE PUBLIC EMPLOYEES' RETIREMENT SYSTEM (PERS)
One State Street Square - 50 West State Street - P.O. BOX 295 - Trenton, NJ 08625-0295 or Pensions.NJ@treas.state.nj.us

Nominations are now being received for one elected “State” position to the Board of Trustees of the PERS, whose term will expire as of June 30, 2012* and the remaining term of one elected “Municipal” position to the Board of Trustees of the PERS, which term will expire as of June 30, 2013.**  The general responsibility for the operation of the PERS is vested in the Board of Trustees under the provisions of N.J.S.A. 43:15A-17.  The Board meets monthly at the Division of Pensions and Benefits in Trenton.  The statute provides that no employee shall suffer loss of salary or wages because of serving on the Board.  A member who wishes to be a candidate for one of the above positions must be an active or retired member of the PERS and must be nominated by at least 500 active PERS members.  Only State employees may petition for State Representative and only Municipal employees may petition for Municipal Representative.  Instructions for the nominating process are available upon receipt of a written request to the Secretary of the PERS Board of Trustees.  Nominations must be registered on or before 4:00 p.m. Friday, January 13, 2012.  Election ballots will be mailed to employers on or about April 2, 2012 for prompt distribution to their employee members of the PERS.  All qualified candidates will be invited to attend the drawing by lot for position on the ballot, if necessary, on February 15, 2012.

PRESENT MEMBERS - TERM:

State  Thomas Bruno 6-30-13   County Suzanna Buriani-DeSantis 6-30-14
  William O’Brien 6-30-14      
  *Peter Maurer 6-30-12    
      Gubernatorial Appointments Edward Thomson, III
Ronald Winthers
           
Municipal Leon Flanagan 
**Vacant     
6-30-14
6-30-13
Ex Officio Member   Susanne Culliton,
State Treasurer’s Representative
       
           

The PERS Board of Trustees has the responsibility for the proper operation of the Retirement System.  The Board consists of six employee representatives, the State Treasurer, and two private citizens appointed by the Governor with the advice and consent of the Senate. The Board meets once per month. Within the limits of legislation, the PERS Board has a certain amount of discretion in the solution of problems confronting the Retirement System in cases where complications exist that legislation alone cannot properly address.

PERS BOARD RESPONSIBILITIES

  • Adopt rules and regulations to provide for the payment of benefits and collection of monies as required by the statute.
  • Establish rules and regulation within the limitations of statutes and opinions of the Courts and the Attorney General, designed to prevent injustices and inequities that may arise in the operation of the Retirement System.
  • Resolve individual questions on the merits of each case in terms of statutes, opinions of the Attorney General, advice of the Actuary and cases cited by counsel as deliberated by the Courts.
  • Review monthly and annual reports setting forth data such as assets and liabilities, income and disbursements and statistical summarization of membership as documented by the Actuary.

Attachment: Election Notice Adobe PDF (18K) 

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July 14, 2011

TO: Certifying Officers of the Public Employees' Retirement System and the Teachers' Pension and Annuity Fund
FROM: Florence J. Sheppard, Acting Director,
Division of Pensions and Benefits
SUBJECT: Chapter 78, P.L. 2011 - Pension Changes for the Public Employees' Retirement System (PERS) and the Teachers' Pension and Annuity Fund (TPAF)

Governor Christie recently signed Chapter 78, P.L. 2011, into law which implements changes to the State-administered retirement systems. This letter addresses the changes specific to the Public Employees’ Retirement System (PERS) and the Teachers’ Pension and Annuity Fund (TPAF). Chapter 78, P.L. 2011 became effective June 28, 2011.

Note: This letter addresses pension-related changes under Chapter 78, P.L. 2011. Information about changes to employee health benefits will be provided through separate correspondence.

PERS AND TPAF EMPLOYEE CONTRIBUTION RATES

Under the provisions of Chapter 78, P.L. 2011, PERS and TPAF employee pension contribution rates will increase from 5.5% to 6.5% of salary.  An additional increase to be phased over the next 7 years will bring the total pension contribution rate to 7.5% of salary.

For PERS Prosecutors Part members the employee pension contribution rate will increase immediately from 8.5% to 10% of salary.

The increases under Chapter 78 are effective immediately but begin upon implementation of necessary administrative changes. The first year increases shall begin as indicated below and subsequent years shall be effective each July.

  • For State employees paid through the State Centralized Payroll Unit and State Colleges and Universities reporting on a biweekly payroll schedule, the first phase of the increase to 6.5% is to become effective with Pay Period #21 (begins September 24, 2011 and reflected in the October 14, 2011 check date).

  • For all other employees, the increase to 6.5% is to be effective with the first payroll amount to be paid on or after October 1, 2011 (which is reported to the Division of Pensions and Benefits as compensation during the 4th calendar quarter of 2011).

  • The second phase of the contribution rate increase from 6.5% to 7.5% is to be phased in equally over a 7-year period beginning July 2012.  The contribution rate will increase by 0.14% each year* with the first payroll of July until the 7.5% contribution rate is reached in July 2018. 

    *For example, 6.64% in July 2012, 6.78% in July 2013, 6.92% in July 2014, etc. until it reaches 7.5% in 2018.

The increase in the PERS or TPAF employee contribution rate will also increase the minimum repayment amount for pension loans or the cost for a purchase of service credit if certified after the employee’s increased contribution becomes effective.

NEW PERS AND TPAF MEMBERSHIP TIER

Tier 5 Membership — Chapter 78 establishes new retirement criteria for employees enrolled in the PERS or TPAF on or after June 28, 2011. The new category of membership will be referenced in the Division’s publications as Tier 5 Membership.

The enrollment criteria and maximum salary limits for PERS and TPAF Tier 5 members are identical to those of PERS and TPAF Tier 4 members (established under the provisions of Chapter 1 and 3, P.L. 2010 — a chart which compares PERS and TPAF Membership Tiers Adobe PDF (42K) is enclosed for reference).

IT IS IMPORTANT TO NOTE that the enrollment and retirement provisions for current employees enrolled in PERS or TPAF Tier 1, 2, 3, or 4 membership remain unchanged by the provisions of Chapter 78, P.L. 2011.

PERS AND TPAF RETIREMENT

The following changes were made to retirement benefits for PERS and TPAF Tier 5 members:

Service Retirement — The Service Retirement age for PERS or TPAF Tier 5 members is increased to age 65.  The Service Retirement formula is: 

The Annual Benefit  =  Years of Service / 60 X Final Average Salary

Final Average Salary for a PERS or TPAF Tier 5 member is the same as that for a Tier 4 member — the average salary for the 60 months (50 months for employees with 10 month contracts) immediately preceding retirement or the five highest fiscal years (July -June) of salary.

Deferred Retirement — This type of retirement uses the Service Retirement age and formula (above).  Therefore, a PERS or TPAF Tier 5 member, with at least 10 years of service, who terminates covered employment and applies for a Deferred Retirement would become eligible to receive a benefit starting the 1st of the month after reaching age 65.

Early Retirement — Available to PERS and TPAF Tier 5 members who have at least 30 years of service credit. The Early Retirement benefit uses the Service Retirement formula (above) but is permanently reduced by 3% for each year (1/4 of 1% per month) that the Tier 5 member is under age 65 at the time of retirement.

Veteran Retirement — Chapter 78 did not make any changes to PERS or TPAF Veteran Retirement. For more information about this type of retirement, see the PERS or TPAF Member Handbook.

TRANSFER OF PERS OR TPAF MEMBERSHIP AND
RETURN TO EMPLOYMENT FROM RETIREMENT

A PERS or TPAF member enrolled before June 28, 2011, who transfers employment within the PERS or TPAF, respectively, will retain his or her original membership tier status provided that there has not been a break in membership (two years or more without a pension contribution and/or the member has not withdrawn his or her PERS or TPAF account).

If there has been a break in membership, the member has withdrawn his or her account, or the member is a PERS or TPAF retiree who is returning to PERS or TPAF covered employment (except for disability retirees approved for return to active employment), upon meeting the eligibility requirements, the member will be regarded as a new enrollee; whereupon, the provisions of Chapter 78, P.L. 2011, will apply and the employee will be reenrolled in the PERS or TPAF membership tier in effect at the time of reenrollment (currently Membership Tier 5).

COLA SUSPENDED FOR ALL RETIREES

Under a provision of Chapter 78, P.L. 2011, Cost-of-Living Adjustments (COLA) are suspended for all current and future retirees of all retirement systems — including the PERS and TPAF.  There is no reduction to any COLA increases that were already added to retiree benefits prior to the effective date of the law.

Chapter 78 also provides for the establishment of Pension Committees which may consider reinstating the COLA when the retirement system reaches a “target funded ratio” established by the law.  At that time, the Pension Committees are to give the reactivation of the COLA priority consideration.

Note: “Target funded ratio” means a ratio of the value of assets against the accrued liabilities of 75% and increasing annually by equal increments over seven fiscal years to a ratio of 80%.

ADDITIONAL INFORMATION

This letter is intended to provide employers with a general overview of the changes put into place by Chapter 78, P.L. 2011.  Additional administrative information will become available as the Division of Pensions and Benefits completes the procedural and programming changes needed to implement the provisions of this legislation. 

When available, revised publications and forms will be posted to the Division of Pensions and Benefits Web site at: www.state.nj.us/treasury/pensions

If you have general questions regarding Chapter 78, P.L. 2011, or any of the information provided in this letter, contact the Division’s Employer Education Unit at (609) 292-7524, or e-mail the Division at: pensions.nj@treas.state.nj.us

Enclosure: PERS and TPAF Membership Tier Enrollment and Retirement Chart Adobe PDF (42K)

CO Letter in Printable Format Adobe PDF (104K)


July 14, 2011

TO: Certifying Officers of the Police and Firemen's Retirement System
FROM: Florence J. Sheppard, Acting Director,
Division of Pensions and Benefits
SUBJECT: Chapter 78, P.L. 2011 - Pension Changes for the Police and Firemen's Retirement System (PFRS)

Governor Christie recently signed Chapter 78, P.L. 2011, into law which implements changes to the State-administered retirement systems. This letter addresses the changes specific to the Police and Firemen’s Retirement System (PFRS).  Chapter 78, P.L. 2011 became effective June 28, 2011.

Note: This letter addresses pension-related changes under Chapter 78, P.L. 2011. Information about changes to employee health benefits will be provided through separate correspondence.

PFRS EMPLOYEE CONTRIBUTION RATE

Under the provisions of Chapter 78, P.L. 2011, PFRS employee pension contribution rates will increase from 8.5% to 10% of salary.

For State employees paid through the State Centralized Payroll Unit and State Colleges and Universities reporting on a biweekly payroll schedule, the increase is effective with Pay Period #21 (begins September 24, 2011 and reflected in the October 14, 2011 check date).

For all other employees, the increase is effective with the first payroll amount to be paid on or after October 1, 2011 (which is reported to the Division of Pensions and Benefits as compensation during the 4th calendar quarter of 2011).

The increase in the PFRS employee contribution rate will also increase the minimum repayment amount for pension loans or the cost for a purchase of service credit if certified after the employee’s effective date of change.

PFRS MEMBERSHIP AND RETIREMENT

Tier 3 Membership — Chapter 78 establishes new retirement criteria for employees enrolled in the PFRS after June 28, 2011. The new category of membership will be referenced in the Division’s publications as Tier 3 Membership. The enrollment criteria and maximum salary limits for PFRS Tier 3 members are identical to those of PFRS Tier 2 members (established under the provisions of Chapter 1, P.L. 2010 — a chart which compares PFRS Membership Tiers Adobe PDF (36K) is enclosed for reference).

Tier 3 membership differs from the other PFRS Membership Tiers in the calculation of Special Retirement benefits.

Special Retirement — The benefit calculation for a PFRS Tier 3 Special Retirement is changed to 60% of Final Compensation for 25 years of service plus 1% of Final Compensation for each year of creditable service over 25 years but not to exceed 30 years. The maximum Tier 3 benefit is therefore 65% of Final Compensation.

Note: Final Compensation for PFRS Tier 3 membership is unchanged from the average annual compensation for any three fiscal years established for PFRS Tier 2 membership under Chapters 1, P.L. 2010.

TRANSFER OF PFRS MEMBERSHIP AND
RETURN TO EMPLOYMENT FROM RETIREMENT

A PFRS member enrolled on or before June 28, 2011, who transfers employment within the PFRS, will retain his or her original membership tier status provided that there has not been a break in membership (two years or more without a pension contribution and/or the member has not withdrawn his or her PFRS account).

If there has been a break in membership, the member has withdrawn his or her account, or the member is a PFRS retiree who is returning to PFRS covered employment (except for disability retirees approved for return to active employment), upon meeting the eligibility requirements, the member will be regarded as a new enrollee; whereupon, the provisions of Chapter 78, P.L. 2011, will apply and the employee will be reenrolled in the PFRS with Tier 3 membership status.

COLA SUSPENDED FOR ALL RETIREES

Under a provision of Chapter 78, P.L. 2011, Cost-of-Living Adjustments (COLA) are suspended for all current and future retirees of all retirement systems — including the PFRS.  There is no reduction to any COLA increases that were already added to retiree benefits prior to the effective date of the law.

Chapter 78 also provides for the establishment of Pension Committees which may consider reinstating the COLA when the retirement system reaches a “target funded ratio” established by the law.  At that time, the Pension Committees are to give the reactivation of the COLA priority consideration.

Note: “Target funded ratio” means a ratio of the value of assets against the accrued liabilities of 75% and increasing annually by equal increments over seven fiscal years to a ratio of 80%.

ADDITIONAL INFORMATION

This letter is intended to provide employers with a general overview of the changes put into place by Chapter 78, P.L. 2011.  Additional administrative information will become available as the Division of Pensions and Benefits completes the procedural and programming changes needed to implement the provisions of this legislation. 

When available, revised publications and forms will be posted to the Division of Pensions and Benefits Web site at: www.state.nj.us/treasury/pensions

If you have general questions regarding Chapter 78, P.L. 2011, or any of the information provided in this letter, contact the Division’s Employer Education Unit at (609) 292-7524, or e-mail the Division at: pensions.nj@treas.state.nj.us

Enclosure: PFRS Membership Tier Enrollment and Retirement Chart   Adobe PDF (36K)

CO Letter in Printable Format Adobe PDF (81K)


July 14, 2011

TO: Certifying Officers of the State Police Retirement System
FROM: Florence J. Sheppard, Acting Director,
Division of Pensions and Benefits
SUBJECT: Chapter 78, P.L. 2011 - Pension Changes for the State Police Retirement System (SPRS)

Governor Christie recently signed Chapter 78, P.L. 2011, into law which implements changes to the State-administered retirement systems.  This letter addresses the changes specific to the State Police Retirement System (SPRS).  Chapter 78, P.L. 2011 became effective June 28, 2011.

Note: This letter addresses pension-related changes under Chapter 78, P.L. 2011. Information about changes to employee health benefits will be provided through separate correspondence.

SPRS EMPLOYEE CONTRIBUTION RATE

Under the provisions of Chapter 78, P.L. 2011, SPRS employee pension contribution rates will increase from 7.5% to 9% of salary.

For SPRS members the increase is effective with Pay Period #21 (begins September 24, 2011 and reflected in the October 14, 2011 check date).

The increase in the SPRS employee contribution rate will also increase the minimum repayment amount for pension loans or the cost for a purchase of service credit if certified after the employee’s effective date of change.

NO CHANGES TO SPRS RETIREMENT OR FINAL COMPENSATION

Chapter 78, P.L. 2011, did not change any of the requirements for retirement or the calculation of Final Compensation* used for the SPRS.  A SPRS member who is enrolled after the effective date of Chapter 78, June 28, 2011, is to be enrolled under current SPRS Tier 2 Membership.  Specific details about SPRS Membership Tiers are available in the SPRS Member Handbook. Adobe PDF (229K)

*Tier 2 Final Compensation is based on the average annual compensation for any three fiscal years of membership (plus maintenance) that provides the largest possible benefit to the member or the member’s beneficiary.

COLA SUSPENDED FOR ALL RETIREES

Under a provision of Chapter 78, P.L. 2011, Cost-of-Living Adjustments (COLA) are suspended for all current and future retirees of all retirement systems — including the SPRS.  There is no reduction to any COLA increases that were already added to retiree benefits prior to the effective date of the law.

Chapter 78 also provides for the establishment of a Pension Committee which may consider reinstating the COLA when the retirement system reaches a “target funded ratio” established by the law.  At that time, the Pension Committee shall give the reactivation of the COLA priority consideration.

Note: “Target funded ratio” means a ratio of the value of assets against the accrued liabilities of 75% and increasing annually by equal increments over seven fiscal years to a ratio of 80%.

ADDITIONAL INFORMATION

This letter is intended to provide employers with a general overview of the changes put into place by Chapter 78, P.L. 2011.  Additional administrative information will become available as the Division of Pensions and Benefits completes the procedural and programming changes needed to implement the provisions of this legislation. 

When available, revised publications and forms will be posted to the Division of Pensions and Benefits Web site at: www.state.nj.us/treasury/pensions

If you have general questions regarding Chapter 78, P.L. 2011, or any of the information provided in this letter, contact the Division’s Employer Education Unit at (609) 292-7524, or e-mail the Division at: pensions.nj@treas.state.nj.us

CO Letter in Printable Format Adobe PDF (52K)


July 14, 2011

TO: Certifying Officers of the Judicial Retirement System
FROM: Florence J. Sheppard, Acting Director,
Division of Pensions and Benefits
SUBJECT: Chapter 78, P.L. 2011 — Pension Changes for the Judicial Retirement System (JRS)

Governor Christie recently signed Chapter 78, P.L. 2011, into law which implements changes to the State-administered retirement systems.  This letter addresses the changes specific to the Judicial Retirement System (JRS).  Chapter 78, P.L. 2011 became effective June 28, 2011.

Note: This letter addresses pension-related changes under Chapter 78, P.L. 2011. Information about changes to employee health benefits will be provided through separate correspondence.

JRS EMPLOYEE CONTRIBUTION RATE CHANGES

Under the provisions of Chapter 78, P.L. 2011, the JRS employee pension contribution rate will see a phased increase of an additional 9% of salary over 7 years with the first increase beginning October 2011.  Subsequently, the contribution rate will increase by 1.28% each year with the first payroll of July until the additional 9% contribution rate is reached in July 2017.

The increase in the JRS pension contributions will be calculated in one of two different ways depending upon when an individual was enrolled into the JRS.

  • For JRS members enrolled into the retirement system on or after January 1, 1996, the initial increase in October to the pension contribution will be calculated at a rate of 4.28% of all compensation.  That rate will increase by 1.28% with the first payroll of July 2012 and each first payroll in July thereafter until a total rate of 12% is reached in July 2017.

  • For JRS members enrolled into the retirement system before January 1, 1996, the current 3% contribution will continue to be calculated as it currently is. However, the additional 9% contribution required under Chapter 78 is applied to all compensation and phased in over the seven-year period.  Thus, the initial increase in October to the pension contribution will be calculated separately using one rate for the salary of that member’s current position as of January 18, 1982, and a separate rate for the balance of the member’s compensation in excess of that January 18, 1982, compensation.  The rate applied to the compensation equal to the member’s current position as of January 18, 1982, will be the phased in 9% contribution only.  The rate applied to the excess of that January 18, 1982, compensation will be 3% plus the phased in 9% contribution.  So, beginning in October 2011, the rates for this group will be 1.28% for the compensation as of January 18, 1982, and 4.28% on any compensation exceeding that January 18, 1982, compensation.

The increase in the JRS employee contribution rate will also increase the minimum repayment amount for pension loans or the cost for a purchase of service credit if certified after the employee’s effective date of change.

JRS RETIREMENT

Chapter 78, P.L. 2011, did not change any of the retirement provisions of the JRS.  These benefits are discussed in detail in Fact Sheet #61, JRS Survivor Benefits and Pension Options, Adobe PDF (28K) or in the JRS Member Handbook — the handbook is being thoroughly revised and expected to be reissued on the Division’s Web site in the near future. 

COLA SUSPENDED FOR ALL RETIREES

Under a provision of Chapter 78, P.L. 2011, Cost-of-Living Adjustments (COLA) are suspended for all current and future retirees of all retirement systems — including the JRS.  There is no reduction to any COLA increases that were already added to retiree benefits prior to the effective date of the law.

Chapter 78 also permits the State House Commission to consider reinstating the COLA when the retirement system reaches a “target funded ratio” established by the law.  At that time, the State House Commission is to give the reactivation of the COLA priority consideration.

Note: “Target funded ratio” means a ratio of the value of assets against the accrued liabilities of 75% and increasing annually by equal increments over seven fiscal years to a ratio of 80%.

ADDITIONAL INFORMATION

This letter is intended to provide employers with a general overview of the changes put into place by Chapter 78, P.L. 2011.  Additional administrative information will become available as the Division of Pensions and Benefits completes the procedural and programming changes needed to implement the provisions of this legislation. 

When available, revised publications and forms will be posted to the Division of Pensions and Benefits Web site at: www.state.nj.us/treasury/pensions

If you have general questions regarding Chapter 78, P.L. 2011, or any of the information provided in this letter, contact the Division’s Employer Education Unit at (609) 292-7524, or e-mail the Division at: pensions.nj@treas.state.nj.us

CO Letter in Printable Format Adobe PDF (59K)


July 1, 2011

TO: Certifying Officers of the State-Administered Retirement Systems for State Employees paid through the State Centralized Payroll Unit
FROM: Florence J. Sheppard, Acting Director,
Division of Pensions and Benefits
SUBJECT: Contribution Rate Changes under Chapter 78, P.L. 2011

This letter contains information about changes to employee pension contribution rates under the provisions of Chapter 78, P.L. 2011. 

Information about other benefit changes under Chapter 78 — including retirement ages, benefit formulas, or changes to employee health benefits — will be provided through separate correspondence. 

EMPLOYEE CONTRIBUTION RATE CHANGES

Under the provisions of Chapter 78, P.L. 2011, employee pension contribution rates will be adjusted by the following amounts:

  • For Public Employees' Retirement System (PERS) and Teachers' Pension and Annuity Fund (TPAF) members the employee pension contribution rate will increase from 5.5% to 6.5% of salary. An additional increase to be phased over the next 7 years will bring the total pension contribution rate to 7.5% of salary.

    For PERS Prosecutors Part members the employee pension contribution rate will increase from 8.5% to 10% of salary.
  • For Police and Firemen's Retirement System (PFRS) members the employee pension contribution rate will increase from 8.5% to 10% of salary.
  • For State Police Retirement System (SPRS) members the employee pension contribution rate will increase from 7.5% to 9% of salary.
  • For Judicial Retirement System (JRS) members the employee pension contribution rate will see a phased increase of an additional 9% of salary over 7 years.

Note: An increase in the member contribution rate will also increase the minimum repayment amount for pension loans or the cost for a purchase of service credit if certified after the member’s effective date of change.

EMPLOYER IMPLEMENTATION

Chapter 78 provides for the increases to be implemented in two phases.  Employers should take whatever actions are necessary to apply the new contribution percentages to employee payroll within the indicated time frames.

The first phase applies to all employees who are members of PERS, TPAF, PFRS, SPRS, and JRS employed in all covered service including:

  • State employees;
  • 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;
  • Employees of counties, municipalities, and other local employers; and
  • Teachers and other employees of a local school district, regional school district, county vocational school district, county special services school district, jointure commission, educational services commission, State-operated school district, charter school, or county college.

For State employees paid through the State Centralized Payroll Unit and State Colleges and Universities reporting on a biweekly payroll schedule, the increase is effective with Pay Period #21 (begins September 24, 2011 and reflected in the October 14, 2011 check date).

For all other employees, the increase is effective with the first payroll amount to be paid on or after October 1, 2011 (which is reported to the Division of Pensions and Benefits as compensation during the 4th calendar quarter of 2011).

The second phase applies to PERS, TPAF, and JRS members:

  • For PERS and TPAF members, the employee contribution increase from 6.5% to 7.5% to be phased in equally over a 7-year period beginning July 2012.  The contribution rate will increase by 0.14% each year* with the first payroll of July until the 7.5% contribution rate is reached in July 2018. 

    *For example, 6.64% in July 2012, 6.78% in July 2013, 6.92% in July 2014, etc. until it reaches 7.5% in 2018.
  • For JRS members the employee pension contribution rate will see a phased increase of an additional 9% of salary over 7 years beginning October 2011**.  Subsequently, the contribution rate will increase by 1.28% each year with the first payroll of July until the additional 9% contribution rate is reached in July 2017.

    **The increase in JRS pension contributions will be calculated in one of two different ways depending upon when an individual was enrolled into the JRS:
    • For JRS members enrolled into the retirement system on or after January 1, 1996, the initial increase in October to the pension contribution will be calculated at a rate of 4.28% of all compensation.  That rate will increase by 1.28% with the first payroll of July 2012 and each first payroll in July thereafter until a total rate of 12% is reached in July 2017.


    • For JRS members enrolled into the retirement system before January 1, 1996, the initial increase in October to the pension contribution will be calculated separately using one rate for the salary of that member’s current position as of January 18, 1982, and a separate rate for the balance of the member’s compensation in excess of that January 18, 1982, compensation.  The rate applied to the compensation equal to the member’s current position as of January 18, 1982, will be the phased in 9% contribution only.  The rate applied to the excess of that January 18, 1982, compensation will be 3% plus the phased in 9% contribution.  So, beginning in October 2011, the rates for this group will be 1.28% for the compensation equal to the member’s current position as of January 18, 1982, and 4.28% on any compensation exceeding that January 18, 1982, compensation.

ADDITIONAL INFORMATION

If you have questions regarding the information provided in this letter, contact the Division’s Employer Education Unit at (609) 292-7524, or e-mail the Division at: pensions.nj@treas.state.nj.us

CO Letter in Printable Format Adobe PDF (61K)


July 1, 2011

TO: Local Government and Local Board of Education Certifying Officers for
All State-Administered Retirement Systems
FROM: Florence J. Sheppard, Acting Director,
Division of Pensions and Benefits
SUBJECT: Contribution Rate Changes Under Chapter 78, P.L. 2011

This letter contains information about changes to employee pension contribution rates under the provisions of Chapter 78, P.L. 2011. 

Information about other benefit changes under Chapter 78 — including retirement ages, benefit formulas, or changes to employee health benefits — will be provided through separate correspondence.

  EMPLOYEE CONTRIBUTION RATE CHANGES

Under the provisions of Chapter 78, P.L. 2011, employee pension contribution rates will be increased by the following amounts:

  • For Public Employees' Retirement System (PERS) and Teachers' Pension and Annuity Fund (TPAF) members the employee pension contribution rate will increase from 5.5% to 6.5% of salary. An additional increase to be phased over the next 7 years will bring the total pension contribution rate to 7.5% of salary.

    For PERS Prosecutors Part members the employee pension contribution rate will increase from 8.5% to 10% of salary.
  • For Police and Firemen's Retirement System (PFRS) members the employee pension contribution rate will increase from 8.5% to 10% of salary.

Note: An increase in the member contribution rate will also increase the minimum repayment amount for pension loans or the cost for a purchase of service credit if certified after the member’s effective date of change.

EMPLOYER IMPLEMENTATION

Chapter 78 provides for the increases to be implemented in two phases.  Employers should take whatever actions are necessary to apply the new contribution percentages to employee payroll within the indicated time frames.

The first phase applies to all employees who are members of PERS, TPAF and PFRS, employed in all covered service including:

  • State employees;
  • 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;
  • Employees of Counties, Municipalities, and other local employers; and
  • Teachers and other employees of a local school district, regional school district, county vocational school district, county special services school district, jointure commission, educational services commission, State-operated school district, charter school, or county college.

For Local Government employees, Local Board of Education employees, and State employees who are not paid through the State Centralized Payroll Unit or not reported on a biweekly payroll schedule, the increase is effective with the first payroll amount to be paid on or after October 1, 2011 (which is reported to the Division of Pensions and Benefits as compensation during the 4th calendar quarter of 2011).

The second phase of the employee contribution increase from 6.5% to 7.5% applies to PERS and TPAF members. This increase is to be phased in equally over a 7-year period beginning July 2012.  The contribution rate will increase by 0.14% each year* with the first payroll of July until the 7.5% contribution rate is reached in July 2018. 

*For example, 6.64% in July 2012, 6.78% in July 2013, 6.92% in July 2014, etc. The final increase in July 2018 will be 0.16% to reach 7.5%.

ADDITIONAL INFORMATION

If you have questions regarding the information provided in this letter, contact the Division’s Employer Education Unit at (609) 292-7524, or e-mail the Division at: pensions.nj@treas.state.nj.us

CO Letter in Printable Format Adobe PDF (66K)


July 1, 2011

TO: Certifying Officers, State and County Colleges and Universities
FROM: Joseph Zisa, Manager 1, Fiscal Resources
SUBJECT: Transition to Retirement Programs and Rescinding ABP Retirement

The Division has recently become aware of a practice at some, if not all, of the State’s public colleges and universities (including county colleges) of a program referred to as “Transition to Retirement”.  Under this program, employees, typically faculty members, were permitted to retire from their full-time position with the institution, begin collecting retirement benefits from New Jersey Alternate Benefit Program (ABP), and continue employment with the institution in a reduced capacity, typically as an adjunct or part-time instructor.  In some situations this practice may have been memorialized in an employment agreement.

These “Transition to Retirement” programs have been reviewed by the Governor's Office of Employee Relations and the Office of the Attorney General and it has been determined that these programs are contrary to law and should not be utilized to qualify an employee for retirement benefits from the ABP.

Specifically, following this review it has been determined that participation in such a program is not considered a bona fide retirement under the ABP, which is a State retirement program. The program as applied to ABP members, as well as other members in State-administered retirement systems such as PERS, violates N.J.A.C. 17:7-3.10(a) which prohibits withdrawals from accounts funded by mandatory contributions prior to the member's separation from employment.  A reduction in work hours is not considered a termination of employment.  Thus, the program is contrary to law because it violates the regulation promulgated by the Director of the Division of Pensions under authority of the statute governing the ABP.

Any ABP member who has previously elected to retire under a “Transition to Retirement” program who wishes to rescind that retirement and continue participation under the ABP will be permitted to do so by completing the following four steps:

  1. The member provides a written confirmation of the rescinding of the retirement request to their employer;
  1. The employer confirms in writing that the retirement is rescinded and employment will continue;
  1. The member, working through their ABP service provider, cancels any request for benefit payment or, in the case of an account that has been withdrawn or is otherwise in payment status, returns the funds that were distributed to their investment provider to re-establish the ABP retirement account, and;
  1. The Division receives copies of the member’s and employer’s written confirmation of rescinding of retirement and the ABP service provider’s confirmation of cancelation or return of benefits.

This corrective procedure is only available to employees who have begun receiving benefits during calendar year 2011.  Additionally, all four steps, including the return of funds to the service provider, must be completed within 60 days from the date of this notice.  Employers are responsible for the notification of their employees who have invoked their option under the “Transition to Retirement” to receive retirement benefits and the corrective procedure explained here.

ADDITIONAL INFORMATION

If an employer has a specific question concerning this matter it may be directed to the Division of Pensions and Benefits, Defined Benefit & Contribution Plans Reporting Bureau, 50 West State Street, PO Box 295, Trenton, New Jersey, 08625-0295.

CO Letter in Printable Format Adobe PDF (54K)


June 22, 2011

TO: Certifying Officers of the Police and Firemen’s Retirement System (PFRS)
FROM: Wendy Jamison, Board Secretary, PFRS Board of Trustees
SUBJECT: Procedures for PFRS Involuntary Disability Retirement

Under the provisions of N.J.S.A. 43:16A-6(3), a Police and Firemen’s Retirement System (PFRS) employer may apply for an Involuntary Disability Retirement on the behalf of an employee it believes to be "totally and permanently disabled" from fulfilling his or her job duties.  The PFRS Board of Trustees is issuing this letter to clarify the procedures required for full compliance with the law and administrative code when an employer submits an involuntary application to the Division of Pensions and Benefits. 

  • The application for Involuntary Disability Retirement cannot be initiated by the employee.  Involuntary Disability Retirement is required to be an employer initiated action. 
  • The action must be officially sanctioned by the employing entity.  N.J.A.C. 17:1-7.8 specifies that applications for Involuntary Disability Retirement from a local employer must be accompanied by a resolution of the governing body or in the case of a State employer the application must be accompanied by a letter from the Department’s highest authority (see enclosed samples). In either instance, the resolution or letter must certify that the employee is "totally and permanently disabled" and unable to perform the employee‘s regular or assigned duties. (Employers should also include copies of all pertinent medical records.)
  • The employee must meet all other requirements for either Ordinary or Accidental Disability Retirement.
  • Upon approval by the PFRS Board of Trustees, the member cannot cancel or change the date of retirement of an Involuntary Disability Retirement.

After receipt of an application initiated by the employer; and upon approval by the PFRS Board of Trustees, the employee/retiree becomes eligible for a disability retirement benefit as follows:

  • If the PFRS employee has at least 4 years of New Jersey service, but less than 20 years, the Ordinary Disability Retirement allowance is 40 percent of Final Compensation1 or 1.5 percent of Final Compensation for each year of service, whichever is higher.
  • If the PFRS employee has 20 or more years of service, the Ordinary Disability Retirement allowance equal to 50 percent* of Final Compensation plus 3 percent of Final Compensation for every year of service over 20 up to a maximum of 25 years.

*Without an employer initiated application, the Ordinary Disability Retirement allowance is equal to 40 percent of Final Compensation or 1.5 percent of Final Compensation for each year of service, whichever is higher.

  • In cases where the PFRS Board of Trustees determines the employee was “totally and permanently disabled as a direct result of a traumatic event” it may award an Accidental Disability Retirement benefit equal to 2/3 of the salary at the time of the “traumatic event” or at the time of retirement, whichever is higher.

It is important to note that the submission of an application for Involuntary Disability Retirement when initiated by the employer does not guarantee approval by the PFRS Board of Trustees. In all cases, the employee must meet all of the requirements for either Ordinary or Accidental Disability Retirement as defined in statute and to the satisfaction of the Board of Trustees. If the disability retirement is denied due to the employee not being disabled, the Board of Trustees will inform the employee of any other retirement benefit they may be entitled to collect — in addition to other available actions such as the withdrawal of contributions or procedures for an appeal.  Any continuation of, or return to, active PFRS employment is at the discretion of the employer in accordance with any applicable laws, rules or labor agreements.

ADDITIONAL INFORMATION

A copy of Fact Sheet #16, Disability Retirement Benefits – PFRS, Adobe PDF (72K) is enclosed with this letter for your reference. 

For detailed information on PFRS retirement and other benefits, see the PFRS Member Handbook which can be viewed or printed from the Division of Pensions and Benefits Web site at: www.state.nj.us/treasury/pensions

If you have questions regarding 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

1For PFRS Tier 1 members enrolled on or before May 21, 2010, Final Compensation means the salary upon which pension contributions were based in the last 12 months of creditable service preceding retirement.  For PFRS Tier 2 members enrolled after May 21, 2010, Final Compensation means the average salary upon which pension contributions were based for any three fiscal years (July-June) of membership preceding retirement that provides the largest possible benefit.

Enclosures
Sample Involuntary Disability Resolution and Letter (Local Employers) Adobe PDF (12K)
Sample Involuntary Disability Letter (State Employers) Adobe PDF (13K)
Fact Sheet #16, Disability Retirement Benefits – PFRS Adobe PDF (72K)

CO Letter in Printable Format Adobe PDF (154K)



SAMPLE RESOLUTION

AUTHORIZATION FOR THE <<NAME OF EMPLOYING ENTITY>> STAFF TO
PROCESS AN INVOLUNTARY DISABILITY RETIREMENT APPLICATION

WHEREAS the <<NAME OF EMPLOYING ENTITY>> has employed <<NAME OF PFRS EMPLOYEE>> as a <<TITLE OF EMPLOYEE>> at its <<EMPLOYMENT LOCATION>> and

WHEREAS the <<NAME OF PFRS EMPLOYEE>> is an active member of the PFRS; and

WHEREAS the <<NAME OF PFRS EMPLOYEE>> has <<NUMBER OF YEARS AND MONTHS>> of PFRS Service Credit, meeting the minimum service credit requirement of at least 4 years for PFRS members; and

WHEREAS the <<NAME OF EMPLOYING ENTITY>> staff is of the opinion that the <<NAME OF PFRS EMPLOYEE>> is totally and permanently disabled and no longer can perform his or her assigned duties based on the documentation supplied by professionals retained by the <<NAME OF EMPLOYING ENTITY>>; and

WHEREAS the <<NAME OF EMPLOYING ENTITY>> is unable to provide an alternative to the PFRS covered position with duties capable of being performed by said <<NAME OF PFRS EMPLOYEE>>; and

WHEREAS the <<NAME OF HIGHEST AUTHORITY AT EMPLOYING ENTITY>> has consented to the processing of the Involuntary Disability Retirement application;

NOW, THEREFORE, BE IT RESOLVED BY the governing body of this location that the administrator of <<NAME OF EMPLOYING ENTITY>> process an Involuntary Disability Retirement application for <<NAME OF PFRS EMPLOYEE>> at its <<EMPLOYING LOCATION>> and

BE IT FURTHER RESOLVED that certified copies of this Resolution shall be forwarded to all parties involved in the administration of this action.

Certified as a true copy of the Resolution adopted by the <<NAME OF EMPLOYING ENTITY>> on the <<DAY>> of <<MONTH>>, <<YEAR>>.

<<INCLUDE RECORD OF VOTE>>



SAMPLE LETTER

<<EMPLOYER LETTERHEAD>>

<<DATE>>

Retirement Bureau
Division of Pensions and Benefits
PO Box 295
Trenton, NJ 08625-0295

To the Assistant Chief of the Retirement Bureau:

<<NAME OF PFRS EMPLOYEE>> is employed by <<NAME OF EMPLOYING ENTITY>> in the position of <<TITLE>>, and is an active member of the Police and Firemen’s Retirement System (PFRS). As of <<DATE OF LAST REPORT OF CONTRIBUTIONS>>, the latest date for which we have figures available, this member had <<NUMBER OF YEARS AND MONTHS>> of credited service.

Based on medical documentation (enclosed) regarding his/her <<DESCRIBE DISABILITY>>, we believe that <<NAME OF PFRS EMPLOYEE>> can no longer perform <<HIS/HER>> assigned duties.  Since we are unable to provided an alternative PFRS-covered position with duties capable of being performed by <<NAME OF PFRS EMPLOYEE>>, he or she should be approved for an Involuntary Disability Retirement benefit from the PFRS, effective <<DATE OF INVOLUNTARY DISABILITY RETIREMENT>>.

Sincerely,

 

<<SIGNATURE AND PRINTED NAME OF HIGHEST AUTHORITY AT EMPLOYING STATE ENTITY>>

<<TITLE>>


June 2011

TO: Certifying Officers, Autonomous State College/University/State Employers
FROM: Joseph Zisa, Manager 1, Fiscal Resources
SUBJECT: Report of Contributions, 2nd Quarter 2011 (April 1 to June 30)

This memorandum has pertinent information concerning the reporting your employees’ pensionable service and salary and the completion of your quarterly Report of Contributions (ROC). Please review this memorandum before submitting your quarterly pension report.

Reminder - Processing ‘Stop Deductions’ Member Certifications

The Division is issuing Certifications of Payroll Deductions for situations where an employer is required to suspend future pension and related benefit payroll deductions for an employee.  These ‘Stop Deduction’ Certifications are typically issued for employees who have been reported as a multiple member (one who works for more than one employer receiving pension credit from each simultaneously) who are no longer eligible for this benefit.  This is a required change following reforms contained in P.L. 2010, Chapter 1. 

If you receive a ‘stop deductions’ certification for a member who is on the ROC, you must stop reporting deductions as of the date reflected on the certification. This certification was produced as a result of the employee’s concurrent service with another employer and the Division has taken into consideration employment and pension reporting at your jurisdiction through that date when instructing the other employer on when to begin deductions and the amount of the deduction to be taken.  Even though this employee may have continued service with you beyond this date, for purposes of your pension related reporting, please adjust the member’s service and base salary, if applicable, to agree with the date shown on the ‘stop deduction’ certification using an explanation of “terminated” from the drop down box on the iROC or a leave code of ‘2’ on the ROC data file.

If an employee has terminated service with you prior to the date shown on the ‘stop deductions’ certification, immediately contact the Division by forwarding a copy of the certification with detail of the employee’s salary, pension contributions and related deductions since the last period reported on ROC and the date of termination.  Information should be directed to the attention of the ‘Adjustment Section’ at the Division’s Trenton NJ address.

ROC Reporting For Members With Multiple Employment

P.L. 2010, Chapter 1, requires that an employee eligible for PERS or TPAF enrollment after May 21, 2010, be eligible for Tier 4 membership based upon only one position and requires the retirement system to designate the position providing the higher or highest compensation for the member from among any concurrently held positions.  This position will be used as the basis for eligibility for membership, service credit, the compensation base for pension contributions, and for other pension calculations. 

For current PERS or TPAF Tier 1, Tier 2, or Tier 3 multiple members, all concurrent positions held without a break in service from May 21, 2010, will continue to qualify for service credit and the compensation base for pension contributions and calculation of benefits.  However, provisions of P.L. 2010, Chapter 1,  require that any new, concurrently held position beginning after May 21, 2010, will not qualify for service credit or the compensation base for pension contributions and calculation of retirement for any PERS or TPAF multiple member.  Current multiple employer relationships will be terminated following any “break in service” not supported by an employer approved leave of absence (LOA).  For this purpose a “break in service” is being defined for employment with any municipality, county, board of education or authority as any one month period without service while not on an approved LOA.  The Division may require recertification of these employment relationships following a break in service with an approved leave of absence. As a result, you may be asked to provide additional information before being able to add a multiple member back to your report of contributions following an approved LOA.

PERS & TPAF Tier 3 - Minimum Annual Base Salary

As a result of P.L. 2008, Chapter 89, the Director of the Division of Pensions and Benefits shall adjust each year the minimum annual base salary for participation in the Teachers’ Pension and Annuity Fund (TPAF) and the Public Employees’ Retirement System (PERS) for those members in Tier 3 service (Tier 3 service covers those individuals eligible to enroll in TPAF or PERS on or after November 2, 2008). The adjustment is made annually in accordance with changes in the Consumer Price Index, pursuant to N.J.A.C. 17:3-2.1(g) for TPAF membership and N.J.A.C. 17:2-2.1(c) for PERS membership.

Please take note that, pursuant to these provisions, the Division of Pensions and Benefits is making no change to the annual base salary for participation in the TPAF and PERS from $7,700. This minimum annual base salary continues in effective through January 1, 2012. 

Employees who fall below the minimum annual base salary amount in any calendar year may be eligible to participate in the Defined Contribution Retirement Program. Please review Fact Sheet #82, Defined Contribution Retirement Program (DCRP) If Ineligible for PERS or TPAF, Adobe PDF (38K) for additional information.

PERS & TPAF Tiers 2 & 3 - Maximum Compensation

P.L. of 2007, Chapter 103, provides that new employees are subject to a maximum compensation limit for PERS or TPAF pension contributions. The maximum compensation is based on the annual maximum wage for Social Security.

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

For calendar year 2011, the annual maximum wage for Social Security is $106,800 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 $106,800 before the end of 2011 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). DCRP plan materials, enrollment forms, and other program information are available at www.state.nj.us/treasury/pensions/dcrp1.shtml

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.

PFRS – Maximum Compensation

P.L. 2010, Chapter 1, provides that new members eligible to enroll in the Police and Firemen’s Retirement System on or after May 21, 2010 are subject to a maximum compensation limit for PFRS contributions and benefit.  The maximum compensation is based on the annual maximum wage for Social Security.

Tiers Defined for the TPAF and the PERS

  • Tier 1: Member who were enrolled prior to July 1, 2007
  • 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 P.L. 2007, Chapter 103
  • Tier 3: Members who were eligible to enroll on or after November 2, 2008 pursuant to the provisions of P.L. 2010, Chapter 89,.
  • Tier 4: Members who were eligible to enroll on or after May 21, 2010 pursuant to the provisions of P.L. 2010, Chapter 1,.

Reporting and Payment Information

Your 2nd Quarter 2011 iROC or ROC data file applicable to the Teachers’ Pension and Annuity Fund, Public Employees’ Retirement System, and Police and Firemen’s Retirement System is due by July 7, 2011. Your June 2011 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 7, 2011.

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

Changing Banking Information For TEPS

On or after the date that the new checking account becomes effective, a Notice of Changes for TEPS should be faxed to (866) 568-2495 or mailed to:

New Jersey Department of Treasury
Division of Pensions and Benefits
PO Box 9581
Trenton NJ 08650-9581

Please call the TEPS Helpline (888) 835-3345 if you have any questions regarding the status of your change or if you have any questions regarding your password or the status of your transmittal payment.

CO Letter in Printable Format Adobe PDF (64K)


June 2011

TO: Certifying Officers - Teachers’ Pension and Annuity Fund, Public Employees’ Retirement System, and Police and Firemen’s Retirement System
FROM: Joseph Zisa, Manager 1, Fiscal Resources
SUBJECT: Report of Contributions, 2nd Quarter 2011 (April 1 to June 30)

This memorandum contains important instructions 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 ROC, please refer to www.state.nj.us/treasury/pensions/epbam/finance/roc.htm

Reminder – Processing ‘Stop Deductions’ Member Certifications

The Division is issuing Certifications of Payroll Deductions for situations where an employer is required to suspend future pension and related benefit payroll deductions for an employee.  These ‘Stop Deduction’ Certifications are typically issued for employees who have been reported as a multiple member (one who works for more than one employer receiving pension credit from each simultaneously) who are no longer eligible for this benefit.  This is a required change following reforms contained in P.L. 2010, Chapter 1. 

If you receive a ‘stop deductions’ certification for a member who is on the iROC, you must stop reporting deductions as of the date reflected on the certification. This certification was produced as a result of the employee’s concurrent service with another employer and the Division has taken into consideration employment and pension reporting at your jurisdiction through that date when instructing the other employer on when to begin deductions and the amount of the deduction to be taken.  Even though this employee may have continued service with you beyond this date, for purposes of your pension related reporting, please adjust the member’s months of service and base salary, if applicable, to agree with the date shown on the ‘stop deduction’ certification using an explanation of “terminated” from the drop down box.

If an employee has terminated service with you prior to the date shown on the ‘stop deductions’ certification, immediately contact the Division by forwarding a copy of the certification with detail of the employee’s salary, pension contributions and related deductions since the last period reported on iROC and the date of termination.  Information should be directed to the attention of the ‘Adjustment Section’ at the Division’s Trenton NJ address.

iROC Reporting for Members with Multiple Employment

P.L. 2010, Chapter 1, requires that an employee eligible for PERS or TPAF enrollment after May 21, 2010, be eligible for Tier 4 membership based upon only one position and requires the retirement system to designate the position providing the higher or highest compensation for the member from among any concurrently held positions.  This position will be used as the basis for eligibility for membership, service credit, the compensation base for pension contributions, and for other pension calculations. 

For current PERS or TPAF Tier 1, Tier 2, or Tier 3 multiple members, all concurrent positions held without a break in service from May 21, 2010, will continue to qualify for service credit and the compensation base for pension contributions and calculation of benefits.  However, provisions of P.L. 2010, Chapter 1,  require that any new, concurrently held position beginning after May 21, 2010, will not qualify for service credit or the compensation base for pension contributions and calculation of retirement for any PERS or TPAF multiple member.  Current multiple employer relationships will be terminated following any “break in service” not supported by an employer approved leave of absence (LOA).  For this purpose a “break in service” is being defined for employment with any municipality, county, board of education or authority as any one month period without service while not on an approved LOA.  The Division may require recertification of these employment relationships following a break in service with an approved leave of absence. As a result, you may be asked to provide additional information before being able to add a multiple member back to your report of contributions following an approved LOA.

Deadline for Filing the Report of Contributions

The Division has been updating member accounts as early as four weeks following the close of the calendar quarter.  But to do so we need the support of all our employers. Therefore, all reports are due by July 7, 2011.  Should your report not be received by the close of business on July 22, 2011, it may not be used to update member accounts and interest penalties will begin to accrue.

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. 

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.

Closure of the Prosecutors Part of the PERS

P.L. 2010, Chapter 1, closes the Prosecutors Part of the PERS to new members.  Prosecutors taking office after May 21, 2010, will be enrolled as “regular” Tier 4 members of the PERS — except that a county prosecutor who is appointed by the Governor with the advice and consent of the Senate will be enrolled in the DCRP (or regular PERS if a Tier 1 member is continuously employed since July 1, 2007).

Prosecutors who were enrolled in the Prosecutors Part of the PERS between its opening in 2001 and its closure on May 21, 2010, will be permitted to continue as members of the Prosecutors Part and receive Prosecutors Part benefits, provided that they continue in eligible Prosecutors Part service.

PERS & TPAF Tier 3 - Minimum Annual Base Salary

As a result of P.L. 2008, Chapter 89, the Director of the Division of Pensions and Benefits shall adjust each year the minimum annual base salary for participation in the Teachers’ Pension and Annuity Fund (TPAF) and the Public Employees’ Retirement System (PERS) for those members in Tier 3 service (Tier 3 service covers those individuals eligible to enroll in TPAF or PERS on or after November 2, 2008). The adjustment is made annually in accordance with changes in the Consumer Price Index, pursuant to N.J.A.C. 17:3-2.1(g) for TPAF membership and N.J.A.C. 17:2-2.1(c) for PERS membership.

Please take note that, pursuant to these provisions, the Division of Pensions and Benefits is making no change to the annual base salary for participation in the TPAF and PERS from $7,700. This minimum annual base salary continues in effective through January 1, 2012. 

Employees who fall below the minimum annual base salary amount in any calendar year may be eligible to participate in the Defined Contribution Retirement Program. Please review Fact Sheet #82, Defined Contribution Retirement Program (DCRP) If Ineligible for PERS or TPAF, Adobe PDF (38K) for additional information.

PERS & TPAF Tiers 2 & 3 - Maximum Compensation

P.L. of 2007, Chapter 103, 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  2011, the annual maximum wage for Social Security is $106,800 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 $106,800 before the end of 2011 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).  DCRP plan materials, enrollment forms, and other program information are available at www.state.nj.us/treasury/pensions/dcrp1.shtml

Note:  Until reporting procedures are developed for PERS and TPAF members’ who exceed the social security maximum of $106,800 for 2011, continue to report the pension and contributory insurance (if applicable) 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.

PFRS – Maximum Compensation

P.L. 2010, Chapter 1, provides that new members eligible to enroll in the Police and Firemen’s Retirement System on or after May 21, 2010 are subject to a maximum compensation limit for PFRS contributions and benefit.  The maximum compensation is based on the annual maximum wage for Social Security.

Note:  Until reporting procedures are developed for PFRS members’ who exceed the social security maximum of $106,800 for 2011, continue to report the pension and contributory insurance for the excess salary as you have in the past. The Division will forward the pension contributions to the DCRP carrier.  Any excess pension and contributory insurance payments will be refunded to the employee.

Reporting of Retroactive Salary Increases

As a result of the establishment of maximum compensation limits for certain members of the Public Employees’ Retirement System (PERS), the Teachers’ Pension and Annuity Fund (TPAF) and the Police and Firemen’s Retirement System (PFRS), the Division of Pension and Benefits has determined that retroactive salary increases can no longer be reported through the Internet-based Report of Contributions (iROC) if they affect reporting periods prior to the current reporting quarter.

Procedures for Reporting of Retroactive Salary

The current procedures in place to allow employers to report retroactive salary increases are as follows:

Once the new contract is received by the Division of Pension and Benefits and reviewed, a spreadsheet will be sent to the employer. This spreadsheet will contain all data submitted for each member for the period of the retroactive salary adjustment. The employer must then supply the new base salary for each quarter affected for members receiving a retroactive salary adjustment. The total additional pension and contributory insurance contribution due will appear at the top of the spreadsheet page.  Please submit a check for the necessary contributions, payable to the retirement system, and return the spreadsheet via e-mail to the sending party at the Division of Pensions and Benefits.

Addition to iROC

Due to the implementation of P.L. 2007, Chapter 103, P.L.2008, Chapter 89, and P.L. 2010, Chapter 1, a new column has been added to the iROC to identify any members affected by these laws. The column heading is “TIER”. P.L.,2007 Chapter 103members will be identified as Tier 2;  P.L. 2008, Chapter 89, members will be identified as Tier 3; and P.L. 2010, Chapter 1 members will be identified as Tier 4.  

Tiers Defined for the TPAF and the PERS

  • Tier 1: Member who were enrolled prior to July 1, 2007
  • 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 P.L. 2007, Chapter 103.
  • Tier 3: Members who were eligible to enroll on or after November 2, 2008 pursuant to the provisions of P.L. 2010, Chapter 89.
  • Tier 4: Members who were eligible to enroll on or after May 21, 2010 pursuant to the provisions of P.L. 2010, Chapter 1.

Changing Banking Information for TEPS
On or after the date that the new checking account becomes effective, a Notice of Changes for TEPS should be faxed to (866) 568-2495 or mailed to:

New Jersey Department of Treasury
Division of Pensions and Benefits
PO Box 9581
Trenton NJ 08650-9581

Please call the TEPS Helpline (888) 835-3345 if you have any questions regarding the status of your change or if you have any questions regarding your password or the status of your transmittal payment.

CO Letter in Printable Format Adobe PDF (68K)


June 17, 2011

TO: Certifying Officers of the State-administered Retirement Systems
FROM: Florence J. Sheppard, Acting Director
Division of Pensions and Benefits

SUBJECT: Required Training under Chapter 52, P.L. 2011

This letter contains new information about required employer training under the provisions of Chapter 52, P.L. 20111.  Please carefully review the following procedures to assure that you, and other staff affected by this law, are able to access the required training.

EMPLOYER TRAINING REQUIREMENT

Effective June 19, 2011, before a new Enrollment Application or Report of Transfer form can be submitted to the Division of Pensions and Benefits Chapter 52 requires that both the Certifying Officer2and the immediate Supervisor of the Certifying Officer3 must complete required training on eligibility for enrollment in the retirement system(s) and certify eligibility of the enrollment.

The enrollment training presentations are currently being prepared by the Division and will soon be available over the Internet at no charge to employers. Access will be through the eLearning program designed by the State of New Jersey’s Human Resources Development Institute (HRDI).

  • In order for the Division to properly identify — and provide training to — the Certifying Officer and the Supervisor of the Certifying Officer, employers were previously asked to return the Employer Database Update Form before the deadline of June 10, 2011. If you have not yet returned the Employer Database Update Form, please do so immediately so the Division may schedule you for the required training.

Once the Certifying Officer and the Supervisor of the Certifying Officer have been properly identified to the Division, these individuals will receive two (2) e-mail notifications from  NJ.eLearningApplication@treas.state.nj.us  with detailed instructions on how to access HRDI eLearning through the State of New Jersey official Web site, myNewJersey.   

  • The first e-mail confirms that an HRDI Training Account has been established for you.
     
  • The second e-mail contains instructions on how to access HRDI eLearning through a new or existing myNewJersey portal account. PLEASE DO NOT DELETE THIS E-MAIL as it will contain your unique Authorization Code that is needed to access HRDI eLearning and complete this important training program.

Note: If you already have a myNewJersey account to access the Division of Pensions and Benefits through EPIC, MBOS, or other State resources, please do not create another portal account. You will only need to add the HRDI eLearning link to your existing portal account by using your unique Authorization Code.  Under no circumstance should you give your Authorization Code to another user — it is unique to your account and can be used only once.

  • Employers will have up to 30 days to access HRDI eLearning and complete the required enrollment training. 

  • The online training has embedded video so you must have headphones or speakers for your PC or laptop to participate in the course. 

Because of the differences in the retirement systems, if you are the Certifying Officer or the Supervisor of the Certifying Officer for more than one retirement system, separate enrollment training will be required for each retirement system.  However, you will only need to authorize HRDI eLearning access through your myNewJersey portal account one time, after which you can view enrollment training for all applicable retirement systems (based upon your administrative profile).

Note: Enrollment Applications and/or Transfer Forms received after June 19, 2011 will not be accepted for processing until both the Certifying Officer and the Supervisor of the Certifying Officer for the employing location have completed the required training.

ENROLLMENT CERTIFICATION REQUIREMENTS

After the Certifying Officer and the Supervisor of the Certifying Officer have completed training, all enrollments and/or transfers into a New Jersey State-administered retirement system — whether by online application or a paper form — must be certified by both the Certifying Officer and the Supervisor of the Certifying Officer prior to being submitted to the Division.

  • Online Enrollments — Access to the online Enrollment Applications in EPIC will be restored with the understanding that the Certifying Officer and the Supervisor of the Certifying Officer acknowledge responsibility for all enrollments pending programming changes that will require specific action from the Certifying Officer and the Supervisor of the Certifying Officer. 

    Note:
    Please hold any enrollments that would normally be submitted online until your EPIC access is restored.
  • Paper Enrollments and Transfers — For employees who require manual enrollment or transfer processing, paper Enrollment Applications and Transfer Forms will be accepted when they bear the designated signatures of both the Certifying Officer and the Supervisor of the Certifying Office. 

Note: Enrollment Applications and/or Transfer Forms received after June 19, 2011, that do not have signatures from both the Certifying Officer and the Supervisor of the Certifying Officer — or bear signatures that are not of the designated Certifying Officer and/or Supervisor of the Certifying Officer — will not be accepted for processing. In addition, do not substitute paper applications for enrollments that are required to be submitted online through EPIC.

  • Annual Certification — Chapter 52 requires the Certifying Officer and the Supervisor of the Certifying Officer to annually certify for each member of the retirement system, that the person enrolled is eligible for enrollment in the retirement system in accordance with the statutes and regulations of the retirement system.  The Division of Pensions and Benefits will provide this annual certification online and is currently in the process of developing the programming needed to produce and certify an annual roster of employees.  Additional details on this process will be provided when the programming nears completion.

Under Chapter 52, the certification process requires acknowledgement that any person who knowingly makes a false statement, or falsifies or permits to be falsified any record, application, form, or report of a pension fund or retirement system, in an attempt to defraud the fund or system will be guilty of a crime of the fourth degree.

ADDITIONAL INFORMATION

If you have questions regarding the information provided in this letter, contact the Division’s Employer Education Unit at (609) 292-7524, or e-mail the Division at: pensions.nj@treas.state.nj.us


1Chapter 52, P.L. 2011, (N.J.S.A. 43:3C-15) establishes new procedures and employer training requirements for the enrollment and/or transfer of employees into the State-administered retirement systems. Information about the specific changes contained within the law and guidance to employers for meeting the new requirements were provided in the Division’s Certifying Officer Letter Enrollment Certification and Training Requirements Under Chapter 52, P.L. 2011, of May 26, 2011.

2“Certifying Officer” is defined in the law to mean an officer or employee of the State or of an employer other than the State who is responsible for submitting information to and performing the duties relating to matters concerning the retirement system with respect to each of the employees of the employing location, as required by law, the board of trustees or commission, and the Division of Pensions and Benefits.

3“Supervisor of the Certifying Officer” is designated by the employing location and is required to be the immediate supervisor of the Certifying Officer as defined above.

Enclosure

Employer Database Update Form – with Certification Required under N.J.S.A. 43:3C-15

CO Letter in Printable Format Adobe PDF (121K)

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May 26, 2011

TO: Certifying Officers of the State-administered Retirement Systems
FROM: Florence J. Sheppard, Acting Director
Division of Pensions and Benefits

SUBJECT: Enrollment Certification and Training Requirements Under Chapter 52, P.L. 2011

Chapter 52, P.L. 2011, (N.J.S.A. 43:3C-15) establishes new procedures and employer training requirements for the enrollment and/or transfer of employees into the State-administered retirement systems.  This letter outlines the changes contained within the law and provides guidance to employers for meeting the new requirements. 

The provisions of Chapter 52, P.L. 2011, become effective June 19, 2011. Because of the brief implementation time frame, immediate actions are required from employing locations. Please see the “Immediate Employer Actions” section on page 2 and return the enclosed Employer Database Update Form before the deadline of June 10, 2011.

ENROLLMENT CERTIFICATION REQUIREMENTS

Chapter 52 requires that all enrollments and/or transfers into a New Jersey State-administered retirement system — whether by online application or a paper form — must be certified as follows:

  • At the time of the enrollment and/or transfer of any employee, the Certifying Officer1 must certify that the person is eligible for enrollment in accordance with the statutes and regulations of the retirement system.
  • Upon the certification of an enrollment and/or transfer, the immediate Supervisor of the Certifying Officer2 must approve the enrollment and/or transfer before the application or form may be submitted to the Division of Pensions and Benefits.

The law also requires the Certifying Officer and the immediate Supervisor of the Certifying Officer to annually certify for each member of the retirement system, that the person enrolled is eligible for enrollment in the retirement system in accordance with the statutes and regulations of the retirement system.

Note: Additional information and guidance on completing the certification processes are addressed in the “Future Employer Actions” section of this letter.

Under Chapter 52, the certification process requires acknowledgement that any person who knowingly makes a false statement, or falsifies or permits to be falsified any record, application, form, or report of a pension fund or retirement system, in an attempt to defraud the fund or system will be guilty of a crime of the fourth degree.

EMPLOYER TRAINING REQUIREMENT

Effective June 19, 2011, before either a new enrollment application or an annual certification can be submitted to the Division of Pensions and Benefits, the law requires that both the Certifying Officer and the Supervisor of the Certifying Officer must complete required training on eligibility for enrollment in the retirement system(s). Training will be provided over the Internet and accessed through a link on the Division of Pensions and Benefits Web site. (Update: Training is through the eLearning program of the State's Human Resources Development Institute. Employers will receive direct e-mails with logon and access information - see details here.)

Note: Additional information and guidance on completing the training requirements are addressed in the “Future Employer Actions” section of this letter.

IMPLEMENTATION BY THE DIVISION

The Division of Pensions and Benefits is taking a number of actions to implement the provisions of the law.  These include, but are not limited to:

  • Verifying and/or identifying the Certifying Officers and Supervisors of the Certifying Officer for all employing locations.
  • Producing and providing access to the required online training for the designated Certifying Officers and the Supervisors of the Certifying Officer.
  • Revising the paper Enrollment Applications and Transfer Forms for all retirement systems.
  • Developing programming in the Employer Pensions and Benefits Information Connection (EPIC) to identify and update Certifying Officers and Supervisors of the Certifying Officer; verify the completion of training; provide for the certification of online enrollments; and allow the annual certification of enrolled employees.  

The next sections of this letter describe short-term actions that are required immediately from employers for the efficient implementation of Chapter 52, as well as pending changes that will allow for full employer compliance in the long-term.

IMMEDIATE EMPLOYER ACTIONS REQUIRED FOR IMPLEMENTATION

Immediate action is required from employers to identify or designate the employing location’s Certifying Officer and the immediate Supervisor of the Certifying Officer and provide this information to the Division of Pensions and Benefits.

In order to comply with the June 19, 2011 effective date of Chapter 52, the identification of the Certifying Officer and the Supervisor of the Certifying Officer must be done using the Employer Database Update Form which is included with this letter (or printable from the Division’s Web site). 

  • Complete all of the information requested on the Employer Database Update Form;
  • Have the Certifying Officer and the Supervisor of the Certifying Officer sign the form — thereby agreeing to the conditions of Chapter 52, P.L. 2011 (on second page of form); and
  • Fax the form before June 10, 2011, to the Division of Pensions and Benefits at (609) 633-9297.

By completing and returning the Employer Database Update Form before the June 10, 2011 deadline the Certifying Officer and the Supervisor of the Certifying Officer acknowledge and agree to the certification requirements included with the form. This will allow the Division to identify the individuals whose certifications are required on any online or paper Enrollment Applications or Transfer Forms, provide these individuals access to the required training, and permit the certification and submission of future enrollments and/or transfers.

Until the Certifying Officer and the Supervisor of the Certifying Officer are properly identified to the Division and trained, enrollments and/or transfers received from the employing location after June 19, 2011, will not be accepted for processing.

Programming changes are being made to the Demographic Information application in EPIC that will allow for future updates of the Certifying Officer and the Supervisor of the Certifying Officer to be made online. Additional details of this process will be provided when the programming nears completion.

FUTURE EMPLOYER ACTIONS TO BE REQUIRED

Online Training — Once identified by the Division, the Certifying Officer and the Supervisor of the Certifying Officer must complete the required online training.  The enrollment training presentations will be provided over the Internet — at no charge to employers — and accessed through a link on the Division of Pensions and Benefits Web site.

Enrollment training is currently in development by the Division with its technical partners.  In the immediate future, when the online training becomes available, employers will receive a follow-up letter with detailed instructions and will have up to 30 days to access and complete the training.

Because of the differences in the retirement systems, if you are the Certifying Officer or the Supervisor of the Certifying Officer for more than one retirement system, separate enrollment training will be required for each retirement system.

Enrollment and Transfer — Upon the completion of training being confirmed by the Division of Pensions and Benefits, both the Certifying Officer and the Supervisor of the Certifying Officer will be required to sign/approve all enrollments or transfers prior to being submitted to the Division. 

  • Online Enrollments — The online Enrollment applications in EPIC will be temporarily disabled as of June 19, 2011. Upon receipt of the Employer Database Update Form by the Division and completion of training by both the Certifying Officer and the Supervisor of the Certifying Officer, access to the Enrollment applications in EPIC will be restored. 

This restoration of access will be with the understanding that the Certifying Officer and the Supervisor of the Certifying Officer acknowledge responsibility for all enrollments pending programming changes that will require specific action from the Certifying Officer and the Supervisor of the Certifying Officer. 

Note: Please hold any enrollments that would normally be submitted online until your EPIC access is restored.

Upon completion of programming, assigned staff will be permitted EPIC access to enter employee information into the online Enrollment applications; however, direct online certification by the Certifying Officer and the Supervisor of the Certifying Officer will be required in order to submit the online enrollment to the Division. This certification and submit function will only be available to designated and trained Certifying Officer and the Supervisor of the Certifying Officer.

  • Paper Enrollments and Transfers — Updated paper Enrollment Applications and Transfer Forms – requiring 2 signatures -- are available on Division’s Web site in the Employers’ Pensions and Benefits Administration Manual (EPBAM) for employees that require manual processing (please hold enrollments that would normally be submitted online until your EPIC access is restored as paper applications submitted in these cases will be returned). 

    Note: Enrollment Applications and/or Transfer Forms received after June 19, 2011, that do not have signatures from both the Certifying Officer and the Supervisor of the Certifying Officer — or bear signatures that are not of the designated Certifying Officer and/or Supervisor of the Certifying Officer — will not be accepted for processing.

Annual Certification — Chapter 52 requires the Certifying Officer and the Supervisor of the Certifying Officer to annually certify for each member of the retirement system, that the person enrolled is eligible for enrollment in the retirement system in accordance with the statutes and regulations of the retirement system.  The Division of Pensions and Benefits will provide this annual certification online and is currently in the process of developing the programming needed to produce and certify an annual roster of employees. Additional details on this process will be provided when the programming nears completion.

ADDITIONAL INFORMATION

If you have questions regarding the information provided in this letter, contact the Division’s Employer Education Unit at (609) 292-7524, or e-mail the Division at: pensions.nj@treas.state.nj.us


1“Certifying Officer” is defined in the law to mean an officer or employee of the State or of an employer other than the State who is responsible for submitting information to and performing the duties relating to matters concerning the retirement system with respect to each of the employees of the employing location, as required by law, the board of trustees or commission, and the Division of Pensions and Benefits.

2“Supervisor of the Certifying Officer” is designated by the employing location and is required to be the immediate supervisor of the Certifying Officer as defined above.

Enclosures

Employer Database Update Form – with Certification Required Under N.J.S.A. 43:3C-15

Chapter 52, P.L. 2011

CO Letter in Printable Format Adobe PDF (101K)


April 27, 2011

TO: Certifying Officers
FROM: Division of Pensions and Benefits
SUBJECT: Purchase or Withdrawal Employer Certifications Required Through EPIC

The Division of Pensions and Benefits recently announced the requirement that all member applications for the Purchase of Service Credit or for Withdrawal must be submitted using the Member Benefits Online System (MBOS).

Similarly, it is expected of employers that the required Employment Verification Form for purchase or the Employer’s Certification for Withdrawal must be submitted whenever possible* using the online certification applications accessible through the Employer Pension and Benefit Information Connection (EPIC).

The Employment VerificationPurchase Certification application in EPIC allows online submission of the employment information required by the Division when processing an employee’s request to purchase service credit — replacing the need for a paper Employment Verification Form.

The Employer’s Certification for Withdrawal application in EPIC allows online submission of the last day and final salary information of terminated employees who wish to withdraw from the retirement system.

*The online EPIC Certifications are required from all employers except where the submission of additional hard-copy documentation is required such as copies of contracts, resolutions, or settlement agreements.

COMPLETING A CERTIFICATION

When a certification is required, the Certifying Officer receives e-mail notification from the Division of Pensions and Benefits. After signing-on to EPIC and entering the certification application, a list of all requested employee certifications is presented. Employers may submit certifications for the listed members or can enter a new certification for a member who is known to require a Certification.

Upon successful completion of a certification the employer sees an on-screen confirmation of the submission, and an e-mail confirmation is sent to both the employer and the member.

To access the certification applications, log on to EPIC and click the "Purchase Certification" or “Withdrawal Certification” button on the EPIC home page  (the applications must be assigned to registered users by the EPIC Security Officer, see below).

EPIC APPLICATION ACCESS AND HELP

Your designated EPIC Security Officer must assign access to new applications to EPIC users registered through your employing location. (Note: the Certifying Officer can assign the applications to the Security Officer.) 

For information about how to assign access to new applications, see the EPIC Security Help Page at: www.state.nj.us/treasury/pensions/epic-security.htm    A link to the EPIC Security Help Page is also found in the EPIC User’s Guide.

APPLICATION HELP AND ONLINE TUTORIALS

CO Letter in Printable Format Adobe PDF (86K)


April 5, 2011

TO: Certifying Officers
FROM: Division of Pensions and Benefits
SUBJECT: New Redesigned Automated Information System

The Division of Pensions and Benefits is pleased to announce the launch of its newly redesigned Automated Information System.  With a call to (609) 292-7524, from a touch-tone telephone, pension and health benefit program members have immediate access to more account information than ever before — 24 hours-a-day!  7 days-a-week!

In addition to getting personal account information such as enrollment date, total service credit, or total pension contributions, employees who call the Automated Information System can now also apply for a pension loan, obtain an estimate of the cost to purchase service credit or an estimate of retirement benefits; check the status of a pending purchase or retirement application — to mention only a few new services now available.

Retired pension members who call, can perform account related functions such as changing direct deposit accounts, changing income tax withholding amounts, requesting a duplicate Form 1099R, or obtaining letters such as statement of account and mortgage verification information — all right over the phone!

AUTOMATED INFORMATION SYSTEM FLIER

Attached with this letter is a flier that can be posted or distributed to inform employees about the new and improved Automated Information System.*

The Division thanks you for your anticipated cooperation in making this information available to your employees and any other staff who would assist employees in Pension and/or health benefits matters.

If you have questions regarding the information provided in this letter, contact the Division’s Office of Client Services at (609) 292-7524 or you can e-mail the Division at: pensions.nj@treas.state.nj.us

* Note: Pension members can also access the same information and applications over the Internet through the Member Benefits Online System (MBOS). To log on or register for MBOS, go to: www.state.nj.us/treasury/pensions/mbosregister.shtml  

Enclosure
Automated Information System Flier

CO Letter in Printable Format Adobe PDF (76K)

Automated Information System Flier Adobe PDF (33K)


April 2011

TO: Certifying Officers of the State-administered Retirement Systems
FROM: Division of Pensions and Benefits
SUBJECT: MBOS and EPIC Update Logon ID Retrieval

A new option has been added to the MyNewJersey Portal to allow users who cannot remember their Logon ID to automatically request that it be e-mailed to them.  The MyNewJersey Portal is the access point through which State-administered retirement system members sign on to the Member Benefits Online System (MBOS) or the Employer Pensions and Benefits Information Connection (EPIC).

The Logon ID retrieval option, along with the option that allows registered users to reset their MyNewJersey Password, should eliminate a significant number of help desk calls — and the associated wait times — from users who cannot remember their Logon ID (in addition to inquiries if the member had already created one). 

The Logon ID retrieval process is similar to the password reset feature and uses the same user-defined challenge question, response, and e-mail address for confirmation and contact.*

Please share this information with your employees in addition to any other staff members who assist employees with MBOS access or use of MBOS applications.

ADDITIONAL INFORMATION

For additional information about MyNewJersey, or to contact the MyNewJersey Support Staff, visit:  www.nj.gov/mynj/myNJRestrHelp.html

For questions about registering for or using the Member Benefits Online System (MBOS), visit:  www.state.nj.us/treasury/pensions/mbosregister.shtml  or call the Division’s MBOS Help Desk at (609) 777-0534.

*Note: Any registered user who has multiple (valid) Logon IDs that use the same e-mail address but are associated to different systems (such as one Logon for MBOS and another Logon for another online system) will not be able to use this new Logon ID retrieval feature.  These users will receive an error message that they must contact the Help Desk because the system does not know which Logon ID to send. 

Additionally, users who have changed their e-mail address but not updated it with MyNewJersey, will not be able to use this feature. In this case, click “Help” from the MyNewJersey log-on page and use the “Contact MyNewJersey” link to provide the correct address to MyNewJersey.

CO Letter in Printable Format Adobe PDF (56K)


March 2011

TO: Certifying Officers, Autonomous State College/University/State Employers
FROM: Joseph Zisa, Manager 1, Fiscal Resources
SUBJECT: Report of Contributions, 1st Quarter 2011 (January 1 to March 31)

This memorandum has pertinent information concerning the reporting your employees’ pensionable service and salary and the completion of your quarterly Report of Contributions (ROC). Please review this memorandum before submitting your quarterly pension report.

New - Processing ‘Stop Deductions’ Member Certifications

The Division is issuing Certifications of Payroll Deductions for situations where an employer is required to suspend future pension and related benefit payroll deductions for an employee.  These ‘Stop Deduction’ Certifications are typically issued for employees who have been reported as a multiple member (one who works for more than one employer receiving pension credit from each simultaneously) who are no longer eligible for this benefit.  This is a required change following reforms contained in P.L. 2010, Chapter 1. 

If you receive a ‘stop deductions’ certification for a member who is on the ROC, you must stop reporting deductions as of the date reflected on the certification. This certification was produced as a result of the employee’s concurrent service with another employer and the Division has taken into consideration employment and pension reporting at your jurisdiction through that date when instructing the other employer on when to begin deductions and the amount of the deduction to be taken.  Even though this employee may have continued service with you beyond this date, for purposes of your pension related reporting, please adjust the member’s service and base salary, if applicable, to agree with the date shown on the ‘stop deduction’ certification using an explanation of “terminated” from the drop down box on the iROC or a leave code of ‘2’ on the ROC data file.

If an employee has terminated service with you prior to the date shown on the ‘stop deductions’ certification, immediately contact the Division by forwarding a copy of the certification with detail of the employee’s salary, pension contributions and related deductions since the last period reported on ROC and the date of termination.  Information should be directed to the attention of the ‘Adjustment Section’ at the Division’s Trenton NJ address.

ROC Reporting For Members With Multiple Employment

P.L. 2010, Chapter 1, requires that an employee eligible for PERS or TPAF enrollment after May 21, 2010, be eligible for Tier 4 membership based upon only one position and requires the retirement system to designate the position providing the higher or highest compensation for the member from among any concurrently held positions.  This position will be used as the basis for eligibility for membership, service credit, the compensation base for pension contributions, and for other pension calculations. 

For current PERS or TPAF Tier 1, Tier 2, or Tier 3 multiple members, all concurrent positions held without a break in service from May 21, 2010, will continue to qualify for service credit and the compensation base for pension contributions and calculation of benefits.  However, provisions of P.L. 2010, Chapter 1,  require that any new, concurrently held position beginning after May 21, 2010, will not qualify for service credit or the compensation base for pension contributions and calculation of retirement for any PERS or TPAF multiple member.  Current multiple employer relationships will be terminated following any “break in service” not supported by an employer approved leave of absence (LOA).  For this purpose a “break in service” is being defined for employment with any municipality, county, board of education or authority as any one month period without service while not on an approved LOA.  The Division may require recertification of these employment relationships following a break in service with an approved leave of absence. As a result, you may be asked to provide additional information before being able to add a multiple member back to your report of contributions following an approved LOA.

PERS & TPAF Tier 3 - Minimum Annual Base Salary

As a result of P.L. 2008, Chapter 89, the Director of the Division of Pensions and Benefits shall adjust each year the minimum annual base salary for participation in the Teachers’ Pension and Annuity Fund (TPAF) and the Public Employees’ Retirement System (PERS) for those members in Tier 3 service (Tier 3 service covers those individuals eligible to enroll in TPAF or PERS on or after November 2, 2008). The adjustment is made annually in accordance with changes in the Consumer Price Index, pursuant to N.J.A.C. 17:3-2.1(g) for TPAF membership and N.J.A.C. 17:2-2.1(c) for PERS membership.

Please take note that, pursuant to these provisions, the Division of Pensions and Benefits is making no change to the annual base salary for participation in the TPAF and PERS from $7,700. This minimum annual base salary continues in effective through January 1, 2012. 

Employees who fall below the minimum annual base salary amount in any calendar year may be eligible to participate in the Defined Contribution Retirement Program. Please review Fact Sheet #82, Defined Contribution Retirement Program (DCRP) If Ineligible for PERS or TPAF, Adobe PDF (38K) for additional information.

PERS & TPAF Tiers 2 & 3 - Maximum Compensation

P.L. of 2007, Chapter 103, provides that new employees are subject to a maximum compensation limit for PERS or TPAF pension contributions. The maximum compensation is based on the annual maximum wage for Social Security.

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

For calendar year 2011, the annual maximum wage for Social Security is $106,800 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 $106,800 before the end of 2011 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). DCRP plan materials, enrollment forms, and other program information are available at www.state.nj.us/treasury/pensions/dcrp1.shtml

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.

PFRS – Maximum Compensation

P.L. 2010, Chapter 1, provides that new members eligible to enroll in the Police and Firemen’s Retirement System on or after May 21, 2010 are subject to a maximum compensation limit for PFRS contributions and benefit.  The maximum compensation is based on the annual maximum wage for Social Security.

Tiers Defined for the TPAF and the PERS

  • Tier 1: Member who were enrolled prior to July 1, 2007
  • 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 P.L. 2007, Chapter 103
  • Tier 3: Members who were eligible to enroll on or after November 2, 2008 pursuant to the provisions of P.L. 2010, Chapter 89,.
  • Tier 4: Members who were eligible to enroll on or after May 21, 2010 pursuant to the provisions of P.L. 2010, Chapter 1,.

Reporting and Payment Information

Your 1st Quarter 2011 iROC or ROC data file applicable to the Teachers’ Pension and Annuity Fund, Public Employees’ Retirement System, and Police and Firemen’s Retirement System is due by April 7, 2011. Your March 2011 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 7, 2011.

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

Changing Banking Information For TEPS

On or after the date that the new checking account becomes effective, a Notice of Changes for TEPS should be faxed to (866) 568-2495 or mailed to:

New Jersey Department of Treasury
Division of Pensions and Benefits
PO Box 9581
Trenton NJ 08650-9581

Please call the TEPS Helpline (888) 835-3345 if you have any questions regarding the status of your change or if you have any questions regarding your password or the status of your transmittal payment.

Retirement Plan Limits for 2011

The IRS has announced the cost-of-living adjustments (COLAs) for retirement plans. Many of the limits applicable to pension, and other retirement plans, are unchanged from 2010 to 2011 but are noted here for your reference.

  • 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 unchanged and remains at $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.
  • P.L. 1997, Chapter 113,. 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 P.L. 1997, Chapter 113, is $360,000 for 2011.
  • Defined contribution plans. The limitation on the annual additions to a participant's defined contribution account under Code Sec. 415(c)(1)(A) is unchanged and remains at 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 unchanged and remains at 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 unchanged and remains at 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 unchanged and remains at $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 is unchanged and remains at $106,800 for 2011. Please refer to P.L. 2007, Chapter 103, for details.

CO Letter in Printable Format Adobe PDF (74K)


March 2011

TO: Certifying Officers - Teachers’ Pension and Annuity Fund, Public Employees’ Retirement System, and Police and Firemen’s Retirement System
FROM: Joseph Zisa, Manager 1, Fiscal Resources
SUBJECT: Report of Contributions, 1st Quarter 2011 (January 1 to March 31)

This memorandum contains important instructions 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 ROC, please refer to www.state.nj.us/treasury/pensions/epbam/finance/roc.htm

New – Processing ‘Stop Deductions’ Member Certifications

The Division is issuing Certifications of Payroll Deductions for situations where an employer is required to suspend future pension and related benefit payroll deductions for an employee.  These ‘Stop Deduction’ Certifications are typically issued for employees who have been reported as a multiple member (one who works for more than one employer receiving pension credit from each simultaneously) who are no longer eligible for this benefit.  This is a required change following reforms contained in P.L. 2010, Chapter 1. 

If you receive a ‘stop deductions’ certification for a member who is on the iROC, you must stop reporting deductions as of the date reflected on the certification. This certification was produced as a result of the employee’s concurrent service with another employer and the Division has taken into consideration employment and pension reporting at your jurisdiction through that date when instructing the other employer on when to begin deductions and the amount of the deduction to be taken.  Even though this employee may have continued service with you beyond this date, for purposes of your pension related reporting, please adjust the member’s months of service and base salary, if applicable, to agree with the date shown on the ‘stop deduction’ certification using an explanation of “terminated” from the drop down box.

If an employee has terminated service with you prior to the date shown on the ‘stop deductions’ certification, immediately contact the Division by forwarding a copy of the certification with detail of the employee’s salary, pension contributions and related deductions since the last period reported on iROC and the date of termination.  Information should be directed to the attention of the ‘Adjustment Section’ at the Division’s Trenton NJ address.

iROC Reporting for Members with Multiple Employment

P.L. 2010, Chapter 1, requires that an employee eligible for PERS or TPAF enrollment after May 21, 2010, be eligible for Tier 4 membership based upon only one position and requires the retirement system to designate the position providing the higher or highest compensation for the member from among any concurrently held positions.  This position will be used as the basis for eligibility for membership, service credit, the compensation base for pension contributions, and for other pension calculations. 

For current PERS or TPAF Tier 1, Tier 2, or Tier 3 multiple members, all concurrent positions held without a break in service from May 21, 2010, will continue to qualify for service credit and the compensation base for pension contributions and calculation of benefits.  However, provisions of P.L. 2010, Chapter 1,  require that any new, concurrently held position beginning after May 21, 2010, will not qualify for service credit or the compensation base for pension contributions and calculation of retirement for any PERS or TPAF multiple member.  Current multiple employer relationships will be terminated following any “break in service” not supported by an employer approved leave of absence (LOA).  For this purpose a “break in service” is being defined for employment with any municipality, county, board of education or authority as any one month period without service while not on an approved LOA.  The Division may require recertification of these employment relationships following a break in service with an approved leave of absence. As a result, you may be asked to provide additional information before being able to add a multiple member back to your report of contributions following an approved LOA.

Deadline for Filing the Report of Contributions

The Division has been updating member accounts as early as four weeks following the close of the calendar quarter.  But to do so we need the support of all our employers. Therefore, all reports are due by April 7, 2011.  Should your report not be received by the close of business on April 22, 2011, may not be used to update member accounts and interest penalties will begin to accrue.

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. 

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.

Closure of the Prosecutors Part of the PERS

P.L. 2010, Chapter 1, closes the Prosecutors Part of the PERS to new members.  Prosecutors taking office after May 21, 2010, will be enrolled as “regular” Tier 4 members of the PERS — except that a county prosecutor who is appointed by the Governor with the advice and consent of the Senate will be enrolled in the DCRP (or regular PERS if a Tier 1 member is continuously employed since July 1, 2007).

Prosecutors who were enrolled in the Prosecutors Part of the PERS between its opening in 2001 and its closure on May 21, 2010, will be permitted to continue as members of the Prosecutors Part and receive Prosecutors Part benefits, provided that they continue in eligible Prosecutors Part service.

PERS & TPAF Tier 3 - Minimum Annual Base Salary

As a result of P.L. 2008, Chapter 89, the Director of the Division of Pensions and Benefits shall adjust each year the minimum annual base salary for participation in the Teachers’ Pension and Annuity Fund (TPAF) and the Public Employees’ Retirement System (PERS) for those members in Tier 3 service (Tier 3 service covers those individuals eligible to enroll in TPAF or PERS on or after November 2, 2008). The adjustment is made annually in accordance with changes in the Consumer Price Index, pursuant to N.J.A.C. 17:3-2.1(g) for TPAF membership and N.J.A.C. 17:2-2.1(c) for PERS membership.

Please take note that, pursuant to these provisions, the Division of Pensions and Benefits is making no change to the annual base salary for participation in the TPAF and PERS from $7,700. This minimum annual base salary continues in effective through January 1, 2012. 

Employees who fall below the minimum annual base salary amount in any calendar year may be eligible to participate in the Defined Contribution Retirement Program. Please review Fact Sheet #82, Defined Contribution Retirement Program (DCRP) If Ineligible for PERS or TPAF, Adobe PDF(38K) for additional information.

PERS & TPAF Tiers 2 & 3 - Maximum Compensation

P.L. of 2007, Chapter 103, 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  2011, the annual maximum wage for Social Security is $106,800 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 $106,800 before the end of 2011 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).  DCRP plan materials, enrollment forms, and other program information are available at www.state.nj.us/treasury/pensions/dcrp1.shtml

Note:  Until reporting procedures are developed for PERS and TPAF members’ who exceed the social security maximum of $106,800 for 2011, continue to report the pension and contributory insurance (if applicable) 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.

PFRS – Maximum Compensation

P.L. 2010, Chapter 1, provides that new members eligible to enroll in the Police and Firemen’s Retirement System on or after May 21, 2010 are subject to a maximum compensation limit for PFRS contributions and benefit.  The maximum compensation is based on the annual maximum wage for Social Security.

Note:  Until reporting procedures are developed for PFRS members’ who exceed the social security maximum of $106,800 for 2011, continue to report the pension and contributory insurance for the excess salary as you have in the past. The Division will forward the pension contributions to the DCRP carrier.  Any excess pension and contributory insurance payments will be refunded to the employee.

Reporting of Retroactive Salary Increases

As a result of the establishment of maximum compensation limits for certain members of the Public Employees’ Retirement System (PERS), the Teachers’ Pension and Annuity Fund (TPAF) and the Police and Firemen’s Retirement System (PFRS), the Division of Pension and Benefits has determined that retroactive salary increases can no longer be reported through the Internet-based Report of Contributions (iROC) if they affect reporting periods prior to the current reporting quarter.

Procedures for Reporting of Retroactive Salary

The current procedures in place to allow employers to report retroactive salary increases are as follows:

Once the new contract is received by the Division of Pension and Benefits and reviewed, a spreadsheet will be sent to the employer. This spreadsheet will contain all data submitted for each member for the period of the retroactive salary adjustment. The employer must then supply the new base salary for each quarter affected for members receiving a retroactive salary adjustment. The total additional pension and contributory insurance contribution due will appear at the top of the spreadsheet page.  Please submit a check for the necessary contributions, payable to the retirement system, and return the spreadsheet via e-mail to the sending party at the Division of Pensions and Benefits.

Addition to iROC

Due to the implementation of P.L. 2007, Chapter 103, P.L.2008, Chapter 89, and P.L. 2010, Chapter 1, a new column has been added to the iROC to identify any members affected by these laws. The column heading is “TIER”. P.L.,2007 Chapter 103members will be identified as Tier 2;  P.L. 2008, Chapter 89, members will be identified as Tier 3; and P.L. 2010, Chapter 1 members will be identified as Tier 4.  

Tiers Defined for the TPAF and the PERS

  • Tier 1: Member who were enrolled prior to July 1, 2007
  • 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 P.L. 2007, Chapter 103.
  • Tier 3: Members who were eligible to enroll on or after November 2, 2008 pursuant to the provisions of P.L. 2010, Chapter 89.
  • Tier 4: Members who were eligible to enroll on or after May 21, 2010 pursuant to the provisions of P.L. 2010, Chapter 1

Changing Banking Information For TEPS
On or after the date that the new checking account becomes effective, a Notice of Changes for TEPS should be faxed to (866) 568-2495 or mailed to:

New Jersey Department of Treasury
Division of Pensions and Benefits
PO Box 9581
Trenton NJ 08650-9581

Please call the TEPS Helpline (888) 835-3345 if you have any questions regarding the status of your change or if you have any questions regarding your password or the status of your transmittal payment.

Retirement Plan Limits for 2011

The IRS has announced the cost-of-living adjustments (COLAs) for retirement plans. Many of the limits applicable to pension, and other retirement plans, are unchanged from 2010 to 2011 but are noted here for your reference.

  • 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 unchanged and remains at $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, is - $360,000 for 2011.
  • Defined contribution plans. The limitation on the annual additions to a participant's defined contribution account under Code Sec. 415(c)(1)(A) is unchanged and remains at 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 unchanged and remains at 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 unchanged and remains at 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 unchanged and remains at $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 is unchanged and remains at $106,800 for 2011. Please refer to Chapter 103, P.L. 2007 for details.

CO Letter in Printable Format Adobe PDF (75K)


February 23, 2011

TO: Certifying Officers
FROM: Florence J. Sheppard, Acting Director,
Division of Pensions and Benefits
SUBJECT: Online Application Requirement for Purchase of Service Credit

The Division of Pensions and Benefits is implementing significant changes to the application procedures for the purchase of service credit 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 PURCHASE APPLICATION REQUIRED

Effective April 1, 2011, an eligible member who wishes to purchase service credit into a pension account, must submit the purchase request online using the Purchase Application accessible through a personal account with the Member Benefits Online System (MBOS).

  • The Application to Purchase Service Credit will no longer be available as a printed form or through the Division’s Web site. 
  • Paper Applications to Purchase Service Credit that are received by mail as of April 1, 2011, will be returned to members with instructions on submitting the purchase request through MBOS (see below for specific exceptions). 

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 purchase request.  Confirmation of receipt of an application is provided to the member on screen and by e-mail.
  • Employees who are already registered MBOS users currently have access to the online Purchase 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 is a key element for a smooth transition to requiring Purchase 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 Purchase Application change using any in-house communication channels.
  • As we near the April 1, 2011, implementation date, the Division will provide State employees with pay check messages through centralized payroll. 
  • All employers should also make the attached fliers, or similar messages, available to employees to inform them of the pending change. 

Exceptions to Online Purchase Application

While the majority of purchase requests will require processing through MBOS, a limited number of members will not be able to use the MBOS Purchase Application. These member groups are: 

  • Members applying for the purchase of Military Service after Enrollment under the provisions of the Uniformed Services Employment and Reemployment Rights Act (USERRA). To purchase this service the employer must submit the Request for USERRA Eligible Service form within the time frames required under the law.  See Fact Sheet #36, Military Service after Enrollment and USERRA, Adobe PDF (38K) for additional information.
  • Members of the Judicial Retirement System (JRS).  Please follow the purchase instructions outlined in the JRS Member Handbook.

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 a paper application for a purchase request. 

ADDITIONAL INFORMATION

For additional information about the purchase of service credit, see:

Fact sheets and handbooks are available for viewing or printing on the Division of Pensions and Benefits Web site at: www.state.nj.us/treasury/pensions

For assistance registering with or using MBOS, contact 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

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

CO Letter in Printable Format Adobe PDF (302K)

Purchase Application Flier Adobe PDF (33K)


February 23, 2011

TO: Certifying Officers
FROM: Florence J. Sheppard, Acting Director,
Division of Pensions and Benefits
SUBJECT: Online Application Requirement for Withdrawals

The Division of Pensions and Benefits is implementing significant changes to withdrawal 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 WITHDRAWAL APPLICATION REQUIRED

Effective April 1, 2011, an eligible member who terminates employment and chooses to withdraw from a pension account, must submit the withdrawal application online using the Application for Withdrawal that is accessible through a personal account with the Member Benefits Online System (MBOS).

  • The Application for Withdrawal will no longer be available as a printed form or through the Division’s Web site. 
  • Paper Applications for Withdrawal received by mail as of April 1, 2011, will be returned to members with instructions on submitting the withdrawal request through MBOS (see below for specific exception). 

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 withdrawal.  Confirmation of receipt of the application is provided to the member on screen and by e-mail.
  • Retirement system members who were registered for MBOS while employed will have access to the online Application for Withdrawal through their MBOS account for up to two years after leaving payroll.
  • Retirement system members who are new to MBOS can register and access MBOS for up to two years after leaving payroll. Registration is free and requires registration with both the MyNewJersey Web site and MBOS. 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, a member 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 withdrawal 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 application change using any in-house communication channels.
  • As we near the April 1, 2011, implementation date, the Division will provide State employees with pay check messages through centralized payroll. 
  • All employers should also make the attached fliers, or similar messages, available to employees to inform them of the pending change. 

Exceptions to Online Withdrawal Application

While the majority of withdrawal requests will require processing through MBOS, a limited number of members will not be able to access the MBOS Application for Withdrawal. These are members who have been off payroll for two years or more and whose accounts have been designated as “expired.”

  • Members with expired accounts can still withdraw their contributions, but must write or send e-mail to the Withdrawal Section of the Division of Pensions and Benefits. Members should include in any correspondence their full name, pension membership number or Social Security number, and current mailing address and e-mail address. Our staff will determine the status of the account and provide additional instructions to the member for completing the withdrawal.

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 a paper application for a withdrawal. 

ADDITIONAL INFORMATION

For additional information about withdrawals see Fact Sheet #24, Withdrawal from the Retirement System, Adobe PDF (27K) which is available for viewing or printing on the Division of Pensions and Benefits Web site at: www.state.nj.us/treasury/pensions

For assistance registering with or using MBOS, contact 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

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

CO Letter in Printable Format Adobe PDF (297K)

Withdrawal Application Flier Adobe PDF (28K)


January 26, 2011

TO: Certifying Officers of the Public Employees’ Retirement System, Teachers’ Pension and Annuity Fund, and Police and Firemen’s Retirement System
FROM: NJ Division of Pensions and Benefits
SUBJECT: Pension Training, Workshops, and Webinars Available in 2011

The Division of Pensions and Benefits is committed to providing excellent educational opportunities for the employers and members who we serve.  However, like other government entities, the Division must take a budget conscious approach when providing our educational offerings.  As a result; we can currently only provide these services in limited live group sessions in Mercer County or via online meetings and webinars.

EMPLOYER TRAINING

We offer the following educational opportunities for Certifying Officers and other employer personnel who are responsible for pension and benefits administration for employing locations:

Pension Processing Classes — With updated content to include new laws and rule changes, these classes are available as a live classroom session or online as a webinar.  For local employers, training is provided in two separate sessions that complement each other.  For state employers, there is a single session.  Visit our Web site for more information or to register: www.state.nj.us/treasury/pensions/training-intro.shtml

Individual Employer Training — While fiscal constraints prevent our Education Staff from visiting individual locations, we have developed strategies that allow us to once again provide one-on-one employer training.

We have acquired a service called GoToMeetingTM that recreates the experience of having one of our Education Staff visit your location through an online meeting. GoToMeeting requires no set up on your part, is easy to use, and utilizes online screen sharing and a voice hook-up to provide virtual on-site training.  You can use this service for quick problem solving or for comprehensive training for a new Certifying Officer or other staff members.

In addition, if your staff members are able to come to us, we can provide one-on-one or small group training at our offices in Trenton.  This training format is ideal for larger locations with multiple staff members who have responsibility for pension and benefit administration.  It also allows for us to help pinpoint the administrative issues of a particular employer.

RETIREMENT WORKSHOPS AND WEBINARS FOR MEMBERS

Retirement Workshops — Available at the NJ Forensic Science Technology Center in Hamilton, N.J. our Retirement Workshops take a step-by-step approach to the retirement process and explain what happens after you submit your retirement application.

A member of our Education Staff will explain your retirement benefits, beneficiary options, group life insurance, loan repayment provisions, and the taxability of your pension.  There is also a brief discussion of State Health Benefits Program and/or School Employees’ Health Benefits Program coverage in retirement.  If time permits, the workshop concludes with a question and answer period.  Visit our Web site for Workshop dates or to register: www.state.nj.us/treasury/pensions/workshop-intro.shtml

Retirement Made Easy Webinars — Hosted online by GoToMeeting, these Webinars are for members of the Public Employees' Retirement System or Teachers' Pension and Annuity Fund who will retire within the next year and do not wish to travel to Mercer County. The program covers the same information that is addressed during our live Retirement Workshops or counseling appointments.

During each Webinar a member of our Education Staff will explain your retirement benefits, beneficiary options, group life insurance, loan repayment provisions, and the taxability of your pension. Presenters take a step-by-step approach to help you file your retirement application and explain what happens after you submit your application. There is also a brief discussion of State Health Benefits Program and/or School Employees’ Health Benefits Program coverage in retirement. Questions can be submitted and answers will be posted after the Webinar.  Visit our Web site for Webinar dates or to register: www.state.nj.us/treasury/pensions/retirement-made-easy.shtml

Group Retirement Counseling Sessions — These sessions are available at the Division's office at 50 West State Street, Trenton, New Jersey.  We have developed the Group Counseling Sessions for members of the Public Employees' Retirement System or Teachers' Pension and Annuity Fund who plan to visit our office to obtain retirement information and file their application for retirement.

During each session a member of our Counseling Staff will explain your retirement benefits, beneficiary options, group life insurance, loan repayment provisions, and the taxability of your pension.  State Health Benefits Program and/or School Employees’ Health Benefits Program coverage in retirement is also addressed. There is a brief opportunity for questions and answers at the end of the session.

Group Counseling Sessions are limited to 15 attendees to ensure that our staff can provide a high level of personal service.  Visit our Web site to register for a group counseling session at:  www.state.nj.us/treasury/pensions/workshop-intro.shtml

CO Letter in Printable Format Adobe PDF (52K)


January 26, 2011

TO: Certifying Officers for the Prosecutors Part of the Public Employees’ Retirement System (PERS)
FROM: Joseph Zisa, Manager 1, Fiscal Resources
SUBJECT: Limits on Prosecutor Employment and Pension Eligibility

Chapter 285, P.L. 2009, amended N.J.S.A. C.2A:158-15.1b which limits outside employment by assistant prosecutors.  Included in the provisions of the law is the limitation that an assistant prosecutor may not “engage in limited outside employment or provide services as an independent contractor” if the employment or services would “qualify the assistant prosecutor for membership in any State-administered pension system.”

Certifying Officers for Assistant County Prosecutors enrolled under the PERS are asked to do the following:

  1. Inform all Assistant County Prosecutors of the limitations on outside employment — including pension-eligible outside employment. Both Prosecutor Part members and any Assistant Prosecutors enrolled as regular PERS members1 must be notified

  1. Complete and return the attached Certification of Compliance for Pension-Eligible Outside Employment Adobe PDF (76K) as verification that all Assistant County Prosecutor employees are in compliance with the statute.

The Division of Pensions and Benefits will request employer certification of Assistant Prosecutors’ compliance with rules concerning outside employment each year.  Annual certification is intended to assist both the Division and participating employers in assuring future compliance with the law and can also serve as an annual reminder for employers to notify employees of the limitations on outside employment. The exact form of any notice to employees is the sole responsibility of the employer.

ADDITIONAL INFORMATION

If you have additional questions regarding 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

Note: the provisions of N.J.S.A. C.2A:158-15.1b apply to all Assistant Prosecutors.  Employers should already be aware that Chapter 1, P.L. 2010, closed the Prosecutors Part of the PERS to new members. Assistant Prosecutors taking office after May 21, 2010, are to be enrolled in “regular” Tier 4 membership of the PERS.  Assistant Prosecutors who were enrolled in the Prosecutors Part of the PERS between its opening in 2001 and May 21, 2010, are permitted to continue as members of the Prosecutors Part and receive Prosecutors Part benefits, provided that they continue in eligible Prosecutors Part employment.

Enclosures (atached to PDF file of Letter)

Certification of Compliance for Pension-Eligible Outside Employment – Prosecutors Adobe PDF (76K)

Chapter 285, P.L. 2009 Adobe PDF (76K)

CO Letter in Printable Format Adobe PDF (76K)


January 26, 2011

TO: Certifying Officers of the Public Employees' Retirement System (PERS)
FROM: Joseph Zisa, Manager 1, Fiscal Resources
SUBJECT: Retirement Benefits for Members of State Boards and Commissions

Pension benefit accrual in the Public Employees’ Retirement System (PERS) is contingent upon eligible employees providing a minimum amount of service through their government employment.  Recent changes to the PERS under Chapter 1, P.L. 2010, require a specific minimum number of work hours per week in order for an individual to qualify for enrollment in the PERS. However, for individuals enrolled in PERS prior to May 21, 2010, eligibility is determined by earning a minimum salary or compensation amount per year.  As a result of these minimum compensation requirements, some members of State boards and commissions earn enough compensation to accrue PERS retirement benefits for meeting just once a month.

The State Fiscal Budget for 2011 has eliminated this retirement benefit accrual for many State commission and board members by reducing the compensation for a number of boards and commissions. The affected boards and commissions are the:

  • Real Estate Commission;

  • Civil Service Commission;

  • Pilot Commissioners;

  • State Athletic Control Board;

  • Board of Mediation;

  • Council on Affordable Housing;

  • New Jersey Racing Commission;

  • Council on Local Mandates; Garden State Preservation Trust;

  • Various State professional boards;

  • Public Employment Relations Commission and Appeal Board; and

  • Certified Psychoanalysts Advisory Committee and the Audiology and Speech-Language Pathology Advisory Committee in the Department of Law and Public Safety

The amounts appropriated to these boards and commissions are now subject to the following conditions:

  • The base salary, per diem salary, or any other form of compensation (including expenses) for the board members or commissioners paid out of State funds shall not exceed $100 per month; and

  • No State monies shall be used to pay for participation of board members or commissioners in the State Health Benefits Program.

  • No other compensation shall be paid.

Division of Pensions and Benefits and the State Centralized Payroll Unit are in communication to the payroll offices responsible for the various boards and commissions about changes to payroll processing needed for pension and health coverage purposes.

Basically through a combination of the required minimum salary not being met and proper coding of the payroll record, no pension deduction will be taken by Centralized Payroll and no accrual of pension service credit or salary will occur following the Second Calendar Quarter of 2010.

These provisions do not apply to the Commissioner/Chief Executive Officer of the State Athletic Control Board, the Chairman/Chief Executive Officer of the Civil Service Commission, the Chairman of the Public Employment Relations Commission, and any commissioner or board member of any other State board, commission, or independent authority who, in addition to being a member of the board or commission also holds a full time staff position for such entity.

ADDITIONAL INFORMATION

If you have additional questions regarding the information provided in this letter, contact the Division’s Office of Client Services at (609) 292-7524, or e-mail the Division at: pensions.nj@treas.state.nj.us

CO Letter in Printable Format Adobe PDF (61K)


 
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