Employers' Pensions and Benefits Administration Manual (EPBAM)
   

 

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Enrolling in the State Police
Retirement System (SPRS)


 
  Required Employer Training, Enrollment ProceduresNEW!  
   
   
  Membership Tiers  
   
   
   
 
The SPRS is a "Qualified Pension Plan"  
 
SPRS Contributions are Tax Deferred  
  SPRS Maximum Salary Limits  
 

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.

Eligibility

All persons hired to the position of State Trooper must be enrolled in the State Police Retirement System as a condition of employment. (Any member who became a full-time State Trooper or commissioned or noncommissioned officer of the Division of State Police after July 1, 1965, became a member of the System, as did all members enrolled in the former fund.)

Eligible candidates are persons between the age of 18 and 55 who satisfy the standards of health and physical fitness established by the Superintendent of State Police for members of the State Police.

Enrollment Procedures

Upon appointment, new recruits who have completed New Jersey State Police Academy training are enrolled as a condition of employment. Both the member and the employer must complete the enrollment application, and the employer will send the completed application to the Division of Pensions and Benefits for processing.

SPRS Membership Tiers

Please note that effective May 21, 2010, SPRS members are now classified by enrollment date, as eligibility requirements for SPRS enrollment and retirement are now different for two distinct enrollment periods, according to the law. The “membership tiers” by enrollment date are:

  • Tier 1 membership, for members who were enrolled on or before May 21, 2010.
  • Tier 2 membership, for members who were eligible to enroll after May 21, 2010.

Several important differences for membership under each Tier exist, including:.

For Tier 1 Members, enrolled on or before May 21, 2010, a federal ceiling on pensionable salary applies.

Definition of Final Compensation, Tier 1 Members

For a SPRS Tier 1 member 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.

Definition of Final Compensation, Tier 2 Members

For a SPRS Tier 2 member 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 provide the largest possible benefit.

Retirement allowance formulas for SPRS Service, Special, and Deferred Retirements are the same for Tier 1 and Tier 2 members, but Final Compensation calculations are different, according to the above definitions.

For all SPRS members, Final Compensation includes the maintenance allowance value for the same period.

Service under Other Pension Systems

Only service as a member of the SPRS may be used to satisfy the minimum creditable service requirements for the available SPRS retirement types below.

Service from other New Jersey State-administered retirement systems cannot be used to satisfy the minimum creditable service requirements for the SPRS retirement types.

Such service may, however, be applied to a member's retirement allowance as an additional one percent of Final Compensation per year of service, up to the limits specified or to meet the 25-year requirement for State-paid health benefits coverage.

Enrollment Procedures for Recruits Already Members of a State Pension System

For new recruits who have not yet completed training at the NJ State Police Academy, and who are already members of NJ State-administered retirement systems:

  • If a new recruit is already a member of PERS and not paid by the State Centralized Payroll, an intrafund transfer (Report of Transfer) form must be filed in order for the recruit to continue to receive PERS service credit while at the State Police Academy.
  • If a new recruit is already a member of PERS and is paid by the State Centralized Payroll, no action is required since Centralized Payroll will continue taking deductions.
  • If a new recruit is a member of the PFRS, the TPAF, or the JRS, make sure that Centralized Payroll stops any future deductions as of the date of hire.
  • If a new recruit is a member of the PFRS or the TPAF and is not in a Centralized Payroll position, deductions must stop at the former employing location since the position is not covered under either the PFRS or the TPAF (As per NJAC 17:2-2.8).

Required Form

Th State Police Retirement System Enrollment Application or the EPIC online "SPRS Enrollment Application" must be submitted to the Division of Pensions and Benefits. On the application, the employer must also indicate the employee's enlistment date, date employee completed Academy training, and the date on which the medical requirement was approved by the examining physician.

The medical exam must occur within one year of the submission. It is no longer a requirement to attach the Report of Examining Physician to the enrollment application.

The enrollment application (online or printed version) must be submitted without delay, so that the enrollment can be processed in a timely manner, because delayed and forced enrollments can be costly to the employer.

Beneficiary Designation

At the time of enrollment, the employee's estate will automatically be designated as beneficiary for any death benefits payable.

If an employee wishes to change that designation, the member may either register with the Member Benefits Online System (MBOS), which will enable the member to designate or update their beneficiary information online by using the MBOS "Designation of Beneficiary" application; or, the member may complete and submit a printed Designation of Beneficiary form.

If the member does not make beneficiary designations by either completing the printed Designation of Beneficiary form or using MBOS to designate pension and group life insurance beneficiaries online, 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.

In order to change the beneficiary information in effect, the member must either submit a new Designation of Beneficiary form, or use the MBOS "Designation of Beneficiary" application to make changes.

Proof of Age

Proof of age must also be submitted to the Division of Pensions and Benefits. For examples of acceptable proof of age documents, click here.

Contribution Rate

The contribution rate for members of the State Police Retirement System is currently 9.0 percent of the base salary.

Base salary for contribution purposes does not include overtime, bonuses, maintenance, or money a member receives as an adjustment before retirement.

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

For Tier 2 members, the SPRS contribution rate 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 members who earn in excess of the annual compensation limit will be enrolled in the Defined Contribution Retirement Program (DCRP), in addition to the SPRS. 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 SPRS is a "Qualified Pension Plan" - Federal Pensionable Maximum

The SPRS 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 2012) applies to the base salaries of Tier 1 SPRS members.

Salary earned by a member in excess of this amount is not pensionable; that is, it may not be used in determining member contributions and benefits. Additional information about this topic is available at: History of Pensionable Salary Limits.

Maximum Compensation

Chapter 1, P.L. 2010, imposed a maximum compensation limit upon which pension contributions will be made for State Police officers who become members of the SPRS after May 21, 2010, under a Tier 2 membership.

The maximum amount will be the amount of base salary equivalent to the annual maximum wage contribution base for Social Security, pursuant to the federal Insurance Contributions Act. For 2012, that amount is $110,100.

Under this law, a new member who reaches this annual maximum compensation in any year will become a participant of the Defined Contribution Retirement Program (DCRP) with regard to the remaining compensation, unless the member irrevocably elects to waive participation in the DCRP.

For the amount of compensation in excess of the maximum compensation, 5.5 percent will be deducted as a contribution for the purposes of the DCRP. The employer will be responsible for the DCRP’s matching 3 percent contribution.

When a SPRS member also becomes a participant in the DCRP, the life insurance and disability benefit provisions of that program will be available for that participant.

Additional information about the DCRP is available in Fact Sheet 79, Defined Contribution Retirement Program.

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.

SPRS Contributions 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.

For a fuller discussion of purchasing Service Credit, click here.

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Last Updated: April 25, 2012