Employers' Pensions and Benefits Administration Manual (EPBAM)

 

 

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Background

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State Health Benefits Program

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Related Government Programs

Tax$ave (Sect 125)
POP
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SSA Agreement

UI/TDI

Long Term Care

 

Employer Financial Services

Reporting Contributions

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Forms Index
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Enrolling in the
Public Employees' Retirement System
(PERS)



Table of Contents

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Required Employer Training, Enrollment ProceduresNEW!

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General Eligibility Criteria
 

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PERS Membership Tiers

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PERS Ineligibility

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Optional Enrollments

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Civil Service vs. Non-Civil Service
 

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Civil Service Employing Locations
 

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Non-Civil Service Employing Locations

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Part-time Hourly Employees

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Part-time Crossing Guards

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On-Call Employees
 

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Monitoring Employment
 

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Use Estimated Salary for Enrollment
 

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Report Actual Salary after Enrollment

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Long Term Substitutes and Replacement Teachers

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Elected Officials

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Appointed Officials

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DCRP Enrollment for Officials Elected/Appointed on or after July 1, 2007

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DCRP Enrollment for Employees Enrolled on or after July 1, 2007 Whose Salaries Exeed SSA Maximum

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Intermittent Employees

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Adjunct Faculty Members

 

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Enroll in ABP or PERS?

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Veteran Status

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PERS Eligibility When Employed in a PFRS Title

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Law Enforcement Officers (LEOs)
 

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LEO Eligibility
 

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Required Forms
 

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Compulsory Retirement, LEO Covered Positions
 

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LEO Covered Titles under PERS

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Multiple Membership

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Volunteer Firefighters and Pension Eligibility

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Contribution Rate
 

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PERS is a "Qualified" Pension Plan
 

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PERS Deductions are Tax-Deferred
 

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Temporary Reductions in Employee Contribution Rate (Historical)

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Required Form

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PERS Enrollment Application

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Instructions for Completing Enrollment Application

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Interfund Transfer Form (for Download)

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Instructions for Completing Interfund Transfer Form

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Report of Transfer Form (for Download)

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Instructions for Completing Report of Transfer

Employer Training - NEW!

Effective June 19, 2011, all employers, including Certifying Officers and their immediate supervisors, are expected to complete board approved training on proper Enrollment procedures. This training will be made available over the State Web site. Additional information about this required training is available in the Certifying Officer Letter of May 26, 2011, Enrollment Certification and Training Requirements under Chapter 52, P.L. 2011.

General Eligibility Criteria

The general rules for membership in the Public Employees' Retirement System (PERS) are listed below. Please note that legislation enacted between 2007 and 2011 calls for eligibility for PERS enrollment to be based in part on the PERS "Membership Tiers" outlined below.

PERS Membership Tiers

PERS members are now classified by enrollment date, as five laws, Chapter 92, P.L. 2007, Chapter 103, P.L. 2007, Chapter 89, P.L. 2008, Chapter 1, P.L. 2010, and Chapter 78, P.L. 2011 make the eligibility requirements for PERS enrollment and retirement different for five distinct enrollment periods. The “membership tiers” by enrollment date are:

  • Tier 1 Membership, for members who were enrolled prior to July 1, 2007.
  • Tier 2 Membership, for embers who were eligible to enroll on or after July 1, 2007 and prior to November 2, 2008.
  • Tier 3 Membership, for members eligible to enroll on or after November 2, 2008 and on or before May 21, 2010.
  • Tier 4 Membership, for members eligible to enroll after May 21, 2010 but before June 28, 2011.
  • Tier 5 Membership, for members eligible to enroll on or after June 28, 2011.

In addition, an employee must be enrolled in the PERS if:

  1. The employee eligible for Tier 1 or Tier 2 membership (based on enrollment date) has an annual salary of $1,500 or more, or;

    The employee eligible for Tier 3 membership has an annual salary meets or exceeds the minimum salary set for the current calendar year, subject to future adjustment. The Tier 3 minimum salary for 2011 is $7,800.

    The employee eligible for Tier 4 and Tier 5 membership works at least the minimum number of hours per week required for enrollment (35 hours for State employees, or 32 hours for local government or State education or local education employees);

  2. The employee's wages are subject to Social Security taxes;

  3. The employee is not required to be a member of any other State or local government retirement system on the basis of the same position;

  4. The employee is receiving a monthly retirement allowance from the PERS and is also working more than the minimum number of hours per week
    required for PERS Tier 4 enrollment and earning more than $15,000 annually, in aggregate, from all PERS-covered employment (see “Exceptions” and "Special Rules for Disability Retirees Restored to Active Service” ).

  5. The employee is in a permanent position or has had 12 months of continuous temporary or provisional service.

Eligibility determinations are then decided based on whether or not the employer uses Civil Service (NJ Department of Personnel) for hiring.

Visa Holders and PERS Membership Eligibility

J-1 and F-1 visa holders are not eligible for membership in the PERS; nor are M-1 or Q-1 visa holders.

Employees working under other visa types whose earnings are subject to Social Security withholding may be eligible for PERS enrollment. If you are unsure about whether or not to enroll a visa holder in the PERS, please contact the Division of Pensions and Benefits.

PERS Ineligibility

General rules concerning those who are ineligible for membership in the PERS are as follows:

  1. Persons who are retired from a NJ State-administered retirement system other than the PERS (e.g., TPAF), or from a local New Jersey retirement system, are not eligible for PERS enrollment, but may assume a PERS-covered position and receive the full salary without consequence to any existing retirement allowance. (See Fact Sheet #21, Employment after Retirement, PERS, Fact Sheet #28, Employment after Retirement, TPAF, Fact Sheet #29, Employment after Retirement, PFRS, or Fact Sheet #57, Employment after Retirement, SPRS.)

  2. Employees who are eligible for Tier 1 or Tier 2 membership based on date of enrollment but do not earn at least $1,500 annually.

  3. Employees who are eligible for Tier 3 membership based on date of enrollment but whose salary does not meet or exceed the minimum salary set for Tier 3 enrollment for the current calendar year.

  4. Employees who qualify for Tier 4 or Tier 5 enrollment in all respects but do not work the minimum number of hours required for PERS Tier 4 or Tier 5 membership.

  5. Retired PERS members who return to public employment and earn $15,000 or less per year from all PERS-covered employment are ineligible for PERS enrollment. (See Fact Sheet 21, Employment ater Retirement, PERS.)

  6. PERS disability retirees who have been approved to return to PERS-covered employment but do not earn the minimum annual salary for enrollment under their original PERS membership tier.

  7. Employees whose positions are not covered by Social Security.

  8. Certain students employed at the school, college or university in which they are enrolled and regularly attend classes may be ineligible for PERS membership, effective June 30, 2000. Federal and State legislation excludes many of these students from FICA and Medicare taxes. Since PERS membership is dependent on wages being subject to Social Security withholding, these student employees are not eligible. Revenue Procedure 98-16, 1998-5 I.R.B, IRC Sec(s). 3121, available from the Internal Revenue Service, sets forth some generally applicable standards for determining if services performed by student employees are eligible for this exclusion.

  9. Provisional or temporary employees covered by Civil Service with less than 12 months of continuous service.

  10. Those employees hired under the Job Partnership Training Act (JPTA) or the Workforce Investment Act of 1998, or one of its successors (See N.J.S.A 43:15A-7h).

  11. Intermittent employees, who are defined as those whose work schedule is unpredictable in nature and who do not meet the normal criteria for regular, year-round employment.

  12. Persons employed under a "Professional Services Contract" and persons whose services are engaged as consultants, self-employed independent contractors, or other similar titles, who do not qualify as "employees" of an employing agency, are likewise ineligible to enroll in any State-administered retirement system. The stringent guidelines published by the Internal Revenue Service are used to determine if a person is considered an independent contractor. The actual nature of the relationship between an employer and a person who provides paid services is of central importance, not the title of "contractor" or "consultant" itself. See "Self Employment Issues."

  13. Seasonal employees, who are defined as those who work occasionally in a position that the employer does not expect will lead to permanent employment, and whose work periods do not extend beyond six consecutive months for employing locations that report on a 12-month basis, or five months for employing locations that report on a 10-month basis. Further, the employer/employee relationship is severed at the end of the employment period, and such breaks in service last at least 30 days (See N.J.A.C. 17:2-2.3(a)5).

  14. Newly elected State or local officials (see DCRP Enrollments).

  15. Newly appointed State or local officials who do not have an existing PERS account (see DCRP Enrollments).

  16. Employees who received a lump-sum retirement distribution
    from the Alternate Benefit Program (ABP) or Defined Contribution Retirement Program (DCRP).

  17. Those employed under the Job Training Partnership Act (JTPA) or its successor program established under the Workforce Investment Act of 1998 (WIA) who are paid directly from federal JTPA or WIA funds.

Optional Enrollments

Enrollment is presently optional for:

  • Special service employees hired under the federal Older American Community Service Employment Act.
  • Employees hired prior to September 10, 1991 who are receiving monthly retirement
    allowances from another state.
  • Full-time non-veterans hired prior to July 1, 1966 or the date of adoption of the retirement system by the employer, whichever is earlier.

For Tier 1, Tier 2, and Tier 3 membership:

  • Part-time non-veterans hired prior to July 1, 1966 also had the option to enroll in the PERS, provided that this option was made available on or before May 21, 2010;

If a member's enrollment is optional and he or she chooses to join the retirement system, that member cannot withdraw his or her funds until ending his or her employment.

Please note that prior to July 1, 2007, elected officials who qualified as veterans were required to enroll in the PERS, and enrollment was optional for non-veteran elected officials (see discussion on "Elected Officials" below; see also N.J.S.A. 43:15A-47.2). However, under Chapter 92, P.L. 2007 and Chapter 103, P.L. 2007, the enrollment rules for all elected officials have changed. Those officials newly elected on or after July 1, 2007 who do not currently have membership in the PERS may be eligible for enrollment in the Defined Contribution Retirement Program (DCRP). They are not eligible to enroll in the PERS.

Please see the August 2007 Certifying Officer Letter, "Chapter 92, P.L. 2007 and Chapter 103, P.L. 2007, Pension Changes for the PERS, TPAF, and DCRP" for more information, or click here.

Civil Service vs. Non-Civil Service

Civil Service Employers

If a person is regularly appointed to a classified position by a Civil Service employer, the PERS enrollment date will also be his/her date of regular appointment.

If an employee is provisionally appointed to a position, the enrollment date will be the beginning of the 13th month of continuous employment or the date of regular appointment, whichever comes first.

An employee in a regularly budgeted, unclassified position is eligible for enrollment as of the date of hire.

Non-Civil Service Employers

Employees at non-Civil Service locations who are hired into regularly budgeted positions should be enrolled effective their date of hire.

If hired into positions that are not regularly budgeted, employees may be considered temporary within the first year of employment, for pension purposes. If otherwise eligible and employment continues into the second year, the compulsory enrollment date will be the first of the 13th month of continuous employment.

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Part-time Hourly Employees

Anyone employed on a part-time hourly basis prior to May 21, 2010 was eligible to belong to and make contributions to the PERS, provided all general eligibility requirements were met.

  • If the position was regularly budgeted, then the part-time hourly employee was enrolled on the date of hire.
  • If the position was not regularly budgeted, then the part-time hourly employee was eligible for PERS enrollment at the beginning of the 13th month of continuous employment.

However, those who accept employment covered by the PERS on or after May 21, 2010 must now meet the requirements for Tier 4 PERS membership, including the minimum hours required weekly, in order to become a member of the PERS: 35 hours for State employees, or 32 hours for local government or State education or local education employees.

Those employees who begin employment after May 21, 2010, who work less than the minimum number of hours required for Tier 4 PERS enrollment, are ineligible for membership in the PERS.

Reporting and Certifying Salaries of Part-time Hourly Employees
(Tier 1, Tier 2, and Tier 3 only)

In the past, the salary of a part-time, hourly employee was reported to the Division of Pensions and Benefits based upon an estimate of what the employee was expected to earn in coming quarters, made by the employer, but effective January 1, 2000, employers are instructed to report actual earnings for all part-time, hourly employees on the Quarterly Report of Contributions. This applies to Tier 1, Tier 2, and Tier 3 employees only; part-time employees who begin employment after May 21, 2010 are ineligible for membership in the PERS because they do not meet the requirements for Tier 4 PERS membership—working at least the minimum number of hours per week required for enrollment.

Part-time Crossing Guards

Crossing guards are considered part-time if they work fewer hours than other full-time (non-crossing guard) employees. Part-time crossing guards hired after May 21, 2010 are ineligible for enrollment in the PERS, as they do not work the minimum number of hours per week required for Tier 4 PERS membership.

Prior to May 21, 2010, enrollment of part-time crossing guards depended on several factors.

  • Enrollment was optional if the part-time crossing guard is receiving retirement benefits through any other pension system, including the federal government (whether military, civilian, or Social Security benefits).
  • A crossing guard who had previously retired from any public retirement system in New Jersey, other than the PERS, was ineligible for enrollment, though he or she could still be employed in the crossing guard position.
  • If a crossing guard was retired from the PERS, and earned more than $15,000 total from PERS employment, then enrollment was mandatory. (If this is the case, please see "Mandatory Reenrollment" in the "Employment after Retirement" section of this manual to find out more.)

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On-call Employees

On-call employees, such as substitute teachers, bedside instructors, or home bound instructors, who are hired on or after May 21, 2010 must now meet the requirements for Tier 4 PERS membership, including the minimum hours required weekly, in order to become a member of the PERS: 35 hours for State employees, or 32 hours for local government or State education or local education employees.

Those on-call employees hired on or after May 21, 2010 who do not meet the requirements for Tier 4 PERS membership are ineligible for PERS enrollment. On-call employees may be eligible for enrollment in the Defined Contribution Retirement Program (DCRP).

Monitoring of On-Call Employees after Enrollment
(Tier 1, Tier 2, and Tier 3 Only)

On-call employees with Tier 1, Tier 2 or Tier 3 PERS membership were enrolled in the PERS based on the number of days worked. Once an on-call employee had worked 100 days in a one-year period, the employer enrolled the employee in the PERS on the first of the 13th month of employment.

For on-call employees with Tier 1, Tier 2 or Tier 3 PERS membership, the employer does not need to monitor the number of days worked once enrollment has occurred.

Instead, the employer must monitor the employee's monthly salary, because the employee must earn a minimum monthly salary for pension service credit and salary to be reported by the employer (see below).

On-call employees who being employment after May 21, 2010 are generally ineligible for rmembership in the PERS, unless they can achieve the minimum number of hours required for PERS Tier 4 membership.

Earliest Enrollment Date for On-call Employees

The first day of the thirteenth month of employment was previously the earliest that on-call employees could be enrolled in the PERS.

For example, an on-call, ten-month employee was hired on February 1, 2008 and worked, on average, 20 days per month and accumulated 100 total days of service as of the end of June 2008. Even though this employee had reached 100 days of on-call employment with one employer by June 2008, the employee was not yet eligible for enrollment. Only when the employee returned to work in September 2008 and worked through January 2009 could the employee be enrolled in the PERS on the first of the 13th month — February 1, 2009.

Report Actual Salary after Enrollment, PERS Tier 1, Tier 2, or Tier 3 ONLY

Once an on-call member in Tier 1, Tier 2, or Tier 3 of the PERS has established his or her enrollment in the system and pension deductions have begun, the employer should report the member's actual salary.

There is a minimum monthly salary that must be earned each month for pension service credit and salary to be reported.

For Tier 1 and Tier 2:

  • When a 10-month member has a monthly reportable salary of $150 (one-tenth of $1,500) or more, the employer should deduct pension contributions and report one month of service credit for the member for that month.
  • For a 12-month member, the employer should deduct pension contributions and report one month of service credit for the member for that month if the member has a monthly reportable salary of $125 (one-twelfth of $1,500) or more.

For Tier 3:

  • When a 10-month member has a monthly reportable salary equal to one-tenth of the minimum salary required for Tier 3 enrollment for the current year or more, the employer should deduct pension contributions and report one month of service credit for the member for that month.
  • For a 12-month member, the employer should deduct pension contributions and report one month of service credit for the member for that month if the member has a monthly reportable salary of one-twelfth of the minimum salary required for Tier 3 enrollment for the current year or or more.

All months of service and salary must be reported from the date that payroll deductions are certified to begin.

If a member's salary falls below the minimum level for membership for a month, then that month's service and salary are not reported on the Quarterly Report of Contributions. Click here for more information.

Please note that once a Tier 1, Tier 2 or Tier 3 member has established his or her enrollment in the retirement system, the employer does not need to monitor the number of days worked.

Long Term Substitutes and Replacement Teachers

A replacement teacher is an employee who assumes the duties of a teacher in a regularly-budgeted position for the length of time that teacher is on an approved leave of absence. Replacement teachers are eligible for PERS enrollment on the first day of the 13th month after the commencement of continuous service.

If a replacement teacher is replacing a teacher on terminal leave, he or she is eligible for TPAF membership.

A permanent, long-term substitute in a regularly budgeted position is eligible for PERS enrollment on the date of hire.

Elected Officials

Elected Officials Whose Enrollment Occurs on or after July 1, 2007

Elected officials whose term begins on or after July 1, 2007, must be enrolled into the Defined Contribution Retirement Program, or DCRP, under Chapter 92, P.L. 2007, not the PERS. Under this law, their enrollment into the DCRP will not be optional.

Elected Officials Enrolled prior to July 1, 2007

The information below applies ONLY to elected and appointed officials whose enrollment in the PERS occurred before July 1, 2007. For elected officials and certain appointed officials whose enrollment occurs on or after July 1, 2007, click here.

Prior to July 1, 2007, elected officials who qualified as veterans were required to enroll in the PERS if basic PERS eligibility criteria were met.

Non-veteran elected officials had the option to enroll in the PERS (or not) when they assume officed, as long as the basic eligibility criteria were met: $1,500 per year minimum salary subject to Social Security withholding.

If they chose not to enroll at the start of their elected term, but then decided to enroll at a later date, their PERS enrollment date was the first of the month closest to the date the decision to enroll was made.

These members may continue to receive PERS service credit while
serving continuously in the same elected office.
If, however, an individual is elected to a different elected office, PERS membership will end and the newly elected official may only be eligible for membership in the DCRP.

Please Note: Service in either House of the State Legislature is considered a single elected public office — see additional information in the PERS Handbook Addendum for the Legislative Retirement System (LRS).

In addition, any non-veteran elected official who was elected prior to July 1, 2007, and opted not to enroll in the PERS, will immediately become eligible for membership in the DCRP upon re-election to the same elected office or if elected to a different elected office on or after July 1, 2007.

Elected Officials Who Have Retired from the PERS

Previously, retired PERS members had the option to reenroll in the PERS if elected to public office if their minimum salary was more than $15,000.

However, since elected officials must now be enrolled in the DCRP, not the PERS, retired PERS members newly elected to public office are not permitted to reenroll in the PERS.

They are also not eligible to enroll in the DCRP because persons who are retired from one NJ State-administered retirement system, or from a local New Jersey retirement system, are not eligible to enroll in any other NJ State-administered retirement system; however, they may assume a PERS-covered position and receive the full salary without consequence to any existing retirement allowance.

There is one exception: Those retirees whose PERS service was comprised entirely of elected service must reenroll if the new elected position pays in excess of $15,000 per year.

Please note: Veteran status is not a factor in the enrollment of retired members who are subsequently elected to public office, as it is with active members elected to public office.

Retirees of Another State-administered Retirement System Elected to Public Office

If a retired member of another State-administered retirement system is elected to public office, the elected official may either continue to receive the retirement benefit from the former employment and would not be eligible for the DCRP, or he or she could choose to suspend the retirement benefit from the former employment and enroll in the DCRP while in the elected office. (Upon termination of the elected office, the retirement benefit from the former employment would be reinstated).

If a PERS retiree reenrolls:

  • The first retirement allowance is cancelled and a new membership account is created.
  • If the member retires again, the first pension allowance is reinstated and a second pension allowance is calculated for the second period of service, added to the first and each benefit is paid in a separate retirement check.
  • If the member should die during the second membership, only active death benefits from the second membership are payable--no death benefits are payable from the first retirement allowance.

For a discussion of the consequences of reenrollment after retirement, see "Employment after Retirement—PERS" or Fact Sheet 21, Employment after Retirement, PERS..

Enrolling Elected Officials Who Are Considering or in the Process of Retirement

If an elected official is retiring from the PERS or the PFRS on basis of his or her elected position plus other, non-elected, position(s), the official may retire and receive a retirement allowance. In this case, both salaries will be used for the calculation of retirement benefits due.

Under Chapter 78, P.L. 2011, effective as of June 28, 2011, an elected official who chooses to retire from other PERS or PFRS-covered positions must also retire from the elected official position held on the same date. The retiree may not continue as an elected official after retirement from other PERS or PFRS covered positions held.

If an elected official is retiring from PERS, and his or her PERS career is composed entirely of service in elected positions, then the official must also terminate all elected positions before retirement.

The Date of Enrollment for Elected Officials

The date of enrollment for elected officials will be the date when the person elected assumes the duties of his/her elected office.

Appointed Officials

An "appointed official" is someone whose employment is through an appointment by an "appointing authority."

A State or local official who is newly appointed by the Governor on or after July 1, 2007 — including those requiring the advice and consent of the Senate; pursuant to an appointment by the Governor to serve at the pleasure of the Governor only during his or her term of office; or in a substantially similar manner by the governing body of a local entity (county, municipality, etc.) — is ineligible for enrollment in the PERS. Newly appointed officials are eligible for enrollment in the DCRP.

If the State or local appointee was a PERS member prior to July 1, 2007, the individual may continue to receive PERS service credit while serving in the same or any new or subsequent appointment, provided that there has not been a break in PERS service of more than 2 consecutive years prior to the appointment.

In addition, an appointee may be enrolled in the PERS if the individual holds a professional license or certificate and is appointed to one of the following titles that are excluded from DCRP enrollment: Certified Health Officer, Tax Assessor, Tax Collector, Municipal Planner, Chief Financial Officer, Registered Municipal Clerk, Construction Code Official, Licensed Uniform Subcode Inspector, Qualified Purchasing Agent, or Certified Public Works Manager. If a member has the option and chooses to join the retirement system, the member cannot withdraw his or her funds until the member ends his or her employment.

An appointed official who is excluded from DCRP enrollment and may thus enroll in the PERS must follow the same PERS enrollment eligibility rules and laws as any other PERS employee. See the General Eligibility Criteria above.

Intermittent Employment

An "intermittent employee" is one who does not work continuously throughout the year: Service with an employer is not continuous, is not full time or part time, and there are significant breaks between service periods [N.J.A.C.17:2-2.3(a)8)].

Example: An employee is hired in a municipal tax office to provide help during peak work times. This person works 30 hours per week during tax season, but does not work at other, less busy times. This person is not eligible for enrollment because the service is not continuous and, therefore, intermittent.

Similarly, if you hire an employee who has already established membership in the pension system for intermittent employment, do not complete a Report of Transfer form to enroll them at your location as a "multiple" member. The salary earned by an intermittent employee would not be reported for pension credit.

Adjunct Faculty Members

An adjunct faculty member is a faculty member who teaches part-time at a public institution of higher education.

ABP Eligibility Requirements for Adjunct Faculty Members
(Chapter 89, P.L. 2008)

Any adjunct faculty member or part-time instructor whose employment agreement begins after October 31, 2008 is required to participate in the ABP, under Chapter 89, P.L. 2008, not the Public Employees' Retirement System, or PERS.

Enrollment is to begin within 30 days of commencing employment in the ABP-eligible position, not after completion of 12 months of service, as was the case for enrollment of adjunct faculty members into the PERS prior to this change in law.

For additional information, please consult:

Adjunct Faculty Members with Prior PERS Membership

Adjunct faculty members and part-time instructors who were employed under an agreement that took effect prior to November 1, 2008 will become eligible to participate in the ABP once they sign and begin service under a new employment agreement. An adjunct faculty member or part-time instructor already enrolled in the Public Employees' Retirement System (PERS), who enters into a new employment agreement after October 31, 2008, must complete the form, Election of Retirement Coverage - Transfer from PERS/TPAF , within 30 days of commencing employment in an ABP-eligible position, in order to choose to either:

  • Irrevocably waive their statutory right to participate in the ABP and continue their participation in the PERS;

    OR

  • Irrevocably waive their right to remain in the PERS and transfer their pension contributions to the ABP.*

*Members who irrevocably waive their right to remain in the PERS are permitted to leave an existing PERS account intact and enroll into a separate ABP account; or they may consolidate the PERS retirement credit under the ABP.

TPAF members must either transfer to the Alternate Benefit Program or transfer to the PERS. Continuation of membership in the TPAF by adjunct faculty members is not permitted. If the choice is made to enroll in the ABP, the member may choose to enroll in a separate ABP account and leave the existing TPAF account intact.

Resources are available to help members make this choice, see below.

To determine whether the adjunct faculty member is eligible for PERS enrollment, and at what point in time enrollment should occur, a number of factors must be considered.

  • If an adjunct faculty member is already enrolled in the PERS through other employment, he or she is eligible for enrollment in the PERS OR ABP for the adjunct faculty position at the start of employment in that position, see above;
  • A full-time faculty member at a public institution of higher education who is enrolled in the Alternate Benefit Program and who assumes an adjunct faculty position with the same employer, is not eligible for enrollment in the PERS for the adjunct faculty position.

ABP vs. PERS

For faculty members and employees of the State colleges and universities who have a choice of enrolling in either the ABP or the PERS, several resources are available to help them select the retirement system that best meets their needs. The ABP is a defined contribution plan, while PERS is a defined benefit plan. To learn more about the differences in benefits and administration, plus information sources available to your employees, you may visit any of the following links:

Alternate Benefit Program Member Handbook

Choosing Between the PERS and ABP

Request for PERS and ABP Retirement Income Illustrations (Allows PERS members thinking of participating in the ABP to compare retirement benefits under the PERS with retirement income available under any of the approved ABP investment providers.)

ABP Information Page — Common Questions and Answers

Enrolling in the ABP

Fact Sheet #38, The Alternate Benefit Program

PERS Eligibility When Employed in a PFRS Title

Prior to April 17, 2000, individuals could not participate in any pension system until they were permanently appointed to a PFRS position. Effective April 17, 2000, the following rule change took effect.

  • Any full-time employee hired on a provisional or temporary basis in an eligible PFRS title who is under the age of 35 must enroll in the PERS after completion of 12 months of continuous service.
  • Upon permanent appointment to a PFRS title, the individual may be required to cease membership in the PERS and enroll in the PFRS. All PFRS eligibility criteria, including age, must be met. The individual may be eligible to interfund transfer the PERS membership to the PFRS.

Important Note: At State and county locations, all individuals who are age 35 or over upon permanent appointment to PFRS positions will continue membership in PERS.

At municipalities, all individuals who are one day or more past their 35th birthday upon permanent appointment cannot enroll in the PFRS. These individuals are not permitted to continue participation in the PERS. Therefore, these individuals cannot remain in the PFRS-eligible position because participation in a State-administered pension system (PERS or PFRS) is a condition of employment.

Law Enforcement Officers (LEOs)

Chapter 257, PL 1955, established the Law Enforcement Officer (LEO) category as a special group of the Public Employees' Retirement System that includes employees at State and county employing locations. The LEO group is eligible for enhanced retirement benefits not available to regular PERS members. See Fact Sheet #46, LEO: Law Enforcement Officers and the Public Employees' Retirement System.

LEO Eligibility

Individuals who do not meet the age or medical requirements for entry into the Police and Firemen's Retirement System (PFRS) as a result of employment in the titles listed below, are eligible to participate in the LEO category or as a regular member of the PERS.

Any person employed in an eligible job title who meets the enrollment criteria will be enrolled in the LEO category of PERS membership unless the member specifically signs a Law Enforcement Officers - Waiver Form within 90 days of receiving a LEO Eligibility Notification Letter.

A LEO-eligible individual who signs the waiver form will be enrolled as a non-law enforcement officer in the regular PERS category of membership.

Forms Required for PERS LEO Membership

1. The printed PERS/TPAF Enrollment Application, completed in its entirety, is required for each new employee.

Please note that PERS LEO members MAY NOT be enrolled in the PERS via the Employer Pensions and Benefits Information Connection (EPIC). The regular paper PERS/TPAF Enrollment Application must be used to enroll PERS LEO members.

2. The Law Enforcement Officers - Waiver Form is required only if the member chooses to waive the enhanced retirement benefits he or she would be eligible for under the LEO category.

All employees holding LEO-eligible titles, regardless of whether they waive the right to participate in the LEO category, are subject to Compulsory Retirement, as described below. You may want to discuss this factor with an employee who is contemplating waiving LEO enrollment.

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Compulsory Retirement under LEO-Eligible Positions

Non-veterans must retire by the first day of the calendar month after attaining age 65. However, veterans who lack 20 years of PERS service credit at age 65 must retire as soon as they have 20 years of such service credit or on attainment of 70 years of age, whichever is earlier.

LEO Covered Titles under the PERS

  Currently, new employees in LEO titles may choose to participate in the LEO category of PERS, or as a regular member of the PERS. The following titles are covered by the LEO designation:
  Division of Fish and Game
    Conservation Officer
  Office of County Prosecutor
    County Detective
Lieutenant of County Detectives
Captain of County Detectives
Chief of County Detectives
County Investigator
  Office of County Sheriff
    Sheriff's Officer
Sergeant Sheriff's Officer
Lieutenant Sheriff's Officer
Captain Sheriff's Officer
Chief Sheriff's Officer
Sheriff's Investigator
  Palisades Interstate Park Commission
    Patrolman
Police Officer

Volunteer Firefighters and Pension System Eligibility

Police and firefighters must meet stringent age criteria in order to be eligible for enrollment in the PFRS. Those who have passed their 35th birthday cannot be enrolled in the PFRS. Those over the age of 35 who are employees of the State or of a county can still be hired in PFRS titles, but are enrolled in the PERS. However, State law prohibits the hiring of municipal police officers and firefighters over age 35.

There are two exceptions for municipal firefighters:

N.J.S.A. 40A:14-44 allows individuals who are over age 35 in a "part-paid" fire department (some of the department's firefighters are paid, the others are volunteers), to be hired to paid positions up to age 40 as long as they have served for at least two years as a volunteer in the same fire department immediately prior to the appointment. They are eligible for enrollment in the PERS, not the PFRS.

N.J.S.A 40A:14-56 allows individuals who are over age 35 in a "part-paid" fire department (some of the department's firefighters are paid, the others are volunteers), to be hired to paid positions up to age 40, if they are able to obtain an "Exempt Firefighter Certificate". Obtaining the "Exempt Firefighter Certificate" requires such individuals to meet a number of conditions. For more information, including a list of the conditions which must be met to qualify and a sample "Exempt Firefighter Certificate", please see the Municipal Volunteer Firefighter Exempt Certificate and Conditions. Please note that individuals who qualify for this exemption are eligible for enrollment in the PERS, not the PFRS.

Multiple Membership in the PERS

A PERS multiple member is someone who is employed by more than one PERS participating employer and enrolled in the PERS through more than one employer— that is, more than one employer reports to the PERS for that employee concurrently.

In the past, an employee already holding PERS membership through one PERS-covered position, could become a "multiple member" when taking (an) additional PERS-covered postion(s). That employee had to enroll in the PERS for the new position(s) immediately, as of the date of hire, regardless of the member's employment status, as long as salary and Social Security eligibility requirements for the PERS were met.

However, Chapter 1, P.L. 2010, now requires that an employee enrolled after May 21, 2010, be eligible for PERS or TPAF membership based upon only one position. It also 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.

Under the provisions of Chapter 1, P.L. 2010, multiple membership is only available to Tier 1, Tier 2, and Tier 3 members; only for PERS eligible positions when enrolled on or before May 21, 2010; and provided that there has not been a “break in service” in any concurrently held PERS eligible position.

Thus, for all tiers, any new, concurrently held PERS eligible position begun after May 21, 2010, will not qualify for service credit or the compensation base for pension contributions and calculation of retirement for any PERS member.

A break in service is any pension reporting period without pay — a month or a biweekly pay period as appropriate to the employer’s reporting method — with the exception of approved leaves of absence, lay-off, abolishment of position, military leave, Workers’ Compensation, litigation, or suspension.

If there is a break in service with any concurrently held PERS eligible position after May 21, 2010, that employer will no longer be permitted to submit pension contributions for a multiple member. Furthermore, service credit or salary from any future employment with that employer will not qualify for the compensation base for pension contributions and calculation of retirement for the PERS multiple member.

Once a member has established multiple membership, he or she cannot withdraw or begin to collect retirement benefits until retirement or termination occurs, from all positions covered by the PERS.

A Tier 1, Tier 2, or Tier 3 employee who established "multiple" status prior to May 21, 2010 will always be considered a multiple member for the duration of their membership, even if at a later date the member works for only one employer.

An employee who terminates PERS employment for one PERS employer to to accept employment at a new PERS employer is transferring membership, see "Transfers" below.

Please note: An employee hired for intermittent employment cannot be enrolled in the PERS, and salary earned by an intermittent employee would not be reported for pension credit.

Since multiple membership is no longer permitted for positions taken after May 21, 2010, the Report of Transfer/Multiple Enrollment form can no longer be used for this purpose.

Contribution Rate

The PERS full rate of contribution is established by the legislature by enacting or amending pension law.

The PERS employee pension contribution rate is currently at 6.5 percent, but under Chapter 78, P.L. 2011, which took effect on June 28, 2011, the PERS contribution rate will be increased to 7.5 percent in phases according to the timetable outlined below.

Beginning in July 2012, an additional increase will be phased in over the next seven years, bringing the total pension contribution rate to 7.5 percent of salary.

With the exception of the PERS Prosecutors Part, the rate increases apply to all PERS groups, including PERS LEOs, PERS Workers' Compensation Judges Part, and PERS legislators (LRS).

Information about employee contribution rate increases applicable to the Prosecutors Part group of the PERS is also available.

Contribution Rate Increase to 7.5 Percent

Beginning in July of 2012, an additional employee contribution rate increase will be phased in over a 7-year period, bringing the total pension contribution rate to 7.5 percent of salary.

The contribution rate will increase by 0.14 percent each year, with the first payroll of July 2012 until the 7.5 percent contribution rate is reached in July of 2018, according to the chart below, except that a final increase of 0.16 percent will occur in July of 2018:

Month-Year

Contribution Rate

July 2011

6.50 percent

July 2012

6.64 percent

July 2013

6.78 percent

July 2014

6.92 percent

July 2015

7.06 percent

July 2016

7.20 percent

July 2017

7.34 percent

July 2018

7.50 percent (a 0.16 percent increase)

The PERS contribution rate for Tier 1 members is applied to the full pensionable salary, up to the “federal pensionable maximum” explained below.

The PERS contribution rate for Tier 2, Tier 3, Tier 4, and Tier 5 members is applied to the pensionable salary up to a compensation limit based on the annual maximum wage for Social Security deductions (see below). Tier 2, Tier 3, Tier 4, and Tier 5 members who earn in excess of the annual compensation limit will be enrolled in the Defined Contribution Retirement Program (DCRP) in addition to the PERS. A contribution of 5.5 percent of the salary in excess of the limit (plus three percent from the employer) will be forwarded to a DCRP account.

The PERS is a Qualified Plan - Federal Pensionable Maximum Salary

PERS is a "qualified" pension plan under the provisions of the Internal Revenue Code, Section 401(a)(17); therefore, the current federal ceiling on pensionable salary ($250,000 in 2011) applies to the base salaries of PERS Tier 1 members. Salary earned by a PERS Tier 1 member in excess of this amount is not pensionable; that is, it may not be used in determining member contributions and benefits. For more information about this topic, please see the History of Pensionable Salary Limits section of this manual.

Maximum Compensation

Chapter 103, P.L. 2007 imposes a maximum compensation upon which contributions will be made for Tier 2, Tier 3, Tier 4, and Tier 5 PERS members — those who are enrolled in the PERS on or after July 1, 2007. The maximum amount will be the amount of base or the contractual salary equivalent to the annual maximum wage contribution base for Social Security, based on the Federal Insurance Contributions Act.  For 2012, that amount is $110,100.

  A member whose salary reaches or exceeds this annual maximum in any year will become a participant of the Defined Contribution Retirement Program, unless the member waives participation when first eligible; the PERS member may elect to participate in the DCRP at a later time; that election will take effect on January 1 following the member's request to participate.  For the amount of compensation over the maximum compensation, 5.5% will be deducted as a contribution for the purposes of the program.

When a PERS member also becomes a participant in the Defined Contribution Program, the life insurance and disability benefit provisions of that program will be available for that participant.

PERS Prosecutors Part Employee Pension Contribution Rate Increase

Chapter 78, P.L. 2011, increased the employee contribution rate for PERS Prosecutors Part members to 10 percent of base salary. The increase was effective with the first payroll on or after October 1, 2011.

The increase in the contribution rate also increases the minimum repayment amount for pension loans or for the cost of a purchase of service credit if the repayment is certified after the date of the rate change.

Prior to the enactment of Chapter 78, P.L. 2011, the contribution rate for PERS Prosecutors Part members was 8.5 percent of salary. This rate was effective July 1, 2008. The contribution rate from January 7, 2002, until June 30, 2008 was 7.5 percent of salary.

PERS Groups Closed to New Membership

Workers' Compensation Judges Group

Effective June 8, 2007, in accordance with Chapter 92, P.L. 2007, the Workers' Compensation Judges (WCJ) Part of the PERS was closed to new membership.

Members who were enrolled in the WCJ Part of the PERS (those employed by the Division of Workers' Compensation of the Department of Labor as Workers' Compensation Judges, see titles listed ) prior to June 8, 2007 will continue to be offered special retirement benefits through their membership in the WCJ Part of the PERS; they will see an increase in their member contribution rate as outlined below.

Chapter 78, P.L. 2011, increased the member contribution rate for the WCJ Part of the PERS to 6.5 percent of base salary, effective with the first payroll on or after October 1, 2011. Subsequent increases will be phased in over 7 years (each July 1st) to bring the total pension contribution rate to 7.5 percent of base salary as of July 1, 2018.

The increase in the contribution rate also increases the minimum repayment amount for pension loans or for the cost of a purchase of service credit if the repayment is certified after the date of the rate change.

Prior to the enactment of Chapter 78, P.L. 2011, the contribution rate for the WCJ Part of the PERS was 5.5 percent of base salary. This rate was effective July 1, 2007. The rate prior to July 1, 2007 was 5 percent of base salary.

Those who are appointed to a Workers' Compensation Judge title at Division of Workers' Compensation of the Department of Labor on or after July 1, 2007, including Chief Judge, Administrative Supervisory Judge, Supervisory Judge, Judge of Compensation may be eligible for enrollment in the Defined Contribution Retirement Program (DCRP), a plan established for "elected and appointed officials" under the provisions of Chapter 92, P.L. 2007.

Legislative Retirement System (LRS)

Chapter 92, P.L. 2007, closed the Legislative Retirement System group of the PERS to new enrollees as of July 1, 2007.

A State Legislator who is newly elected to office on or after July 1, 2007, is ineligible for enrollment in the PERS. Elected officials may be eligible
for enrollment in the Defined Contribution Retirement Program (DCRP).

A State Legislator who was enrolled in the LRS group of the PERS prior to July 1, 2007, may continue to receive LRS-PERS service credit while serving in the same elected office — service in either House of the State Legislature is considered a single elected public office.

If the individual is elected to a different elected office, PERS membership will end and the newly elected official may only be eligible for membership in the DCRP. Fact Sheet #80, DCRP for Elected and Appointed Officials, provides additional information.

Prosecutors Part of the PERS

Chapter 1, P.L. 2010, closed the Prosecutors Part of the PERS to new enrollees as of May 21, 2010.

Prosecutors who were enrolled on or before May 21, 2010 may remain members of the Prosecutors Part of the PERS provided that they continue in eligible prosecutor service.

Back Deductions

Back deductions are mandatory pension contributions subject to IRC Section 414(h). They are the pension obligations owed from the date of enrollment or transfer to the date deductions are certified to begin.

Back deductions are calculated on the member's current annual salary, regardless of when the member is enrolled. If back deductions are owed for a time period exceeding 12 months, 8.25% interest is added.

PERS Deductions Are Tax Deferred

Since January 1, 1987, mandatory pension contributions have been federally tax deferred. Under the 414(h) provisions of the Internal Revenue Code, this reduces a members' gross wages subject to federal income tax. Purchases of service credit are voluntary pension contributions and are not tax deferred.

PERS Enrollment Online through EPIC — New Employees

An employer must log on to the Employer Pensions and Benefits Information Connection, or EPIC, and complete the online PERS Enrollment Application in order to enroll a newly hired employee in the Public Employees' Retirement System, or PERS. However, there are exceptions:

  • If the newly hired employee is to be enrolled in the PERS Law Enforcement Officers (LEOs) group, the printed version of the PERS/TPAF Enrollment Application must be used.

Employers are reminded to submit the online EPIC PERS/TPAF Enrollment Application for each newly hired employee promptly, so that the Division of Pensions and Benefits can process the enrollment in a timely manner. Delayed and forced enrollments can be costly to the employer.

*To sign up for EPIC at this time, please view the EPIC Registration Information page. For help in completing the online PERS Enrollment Application through EPIC, please refer to the EPIC User's Information Guide.

At the time of enrollment, the employee's estate will automatically be designated as beneficiary for any death benefits payable. Employers should strongly encourage new employees to register to use MBOS in order to update their beneficiary information after enrollment. Please see the "Beneficiary Designation" section below for more information, including how a member can change his or her beneficiary information once enrolled.

Beneficiary Designation

Employees wishing to change the beneficiary designation of "estate" which automatically took effect at enrollment can update their beneficiary information in one of two ways:

  1. They may either register with the Member Benefits Online System (MBOS) to use MBOS Beneficiary Designation application to designate beneficiaries, or;

  2. They may complete and submit a printed Designation of Beneficiary form.

Either method may also be employed for subsequent updates of beneficiary information prior to retirement.

Fact Sheet #68, Designating a Beneficiary, is available to provide information to members requiring help in making their beneficiary selections for pension and/or group life insurance.

If a member does not complete the printed Designation of Beneficiary form or designate pension and group life insurance beneficiaries online through MBOS, the estate of the newly enrolled member will continue be listed as both the group life insurance and pension beneficiary for any death benefit payable.

In such cases, an insurance packet and policy rider confirming the estate as beneficiary will be mailed to the member.

Common Employer Tasks at the Time of Enrollment

For instructions on completing the online EPIC PERS Enrollment Application, click here: Instructions

If the member is over age 60, or returning to work from a disability retirement, and wishes to be covered under group life insurance, the member must provide proof of insurability. For more information, see "Proof of Insurability"

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Last Updated: August 8, 2012