Eligibility
Any permanent employee working as
a teacher or member of the professional staff, certificated by
the State Board of Examiners, serving in an eligible title and
earning at least $500 per year, is required to become a member
of the TPAF as a condition of employment.
As a general rule, if a job is a
permanent, regularly budgeted position requiring State certification, and the employee possesses
the required State certification, the person will be eligible for
enrollment in the TPAF. Temporary and substitute teachers are
not eligible for TPAF membership, nor are replacement teachers,
except for replacement teachers who are taking the place of someone on terminal
leave.
Chapter 24, PL 1986 eliminated the
full time requirement for participation in the TPAF. As of 1986,
part-time teachers are enrolled in the TPAF.
Employees of the NJ Department of
Education who have unclassified, professional titles, and are
certificated, are eligible for TPAF membership (Chapter 189, PL
1989).
Click here for a listing of some
of the more common eligible titles.
TPAF 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 TPAF Enrollment Application in order to enroll a newly hired employee in the Teachers' Pension and Annuity Fund, or TPAF.*
However, if the newly hired employee is transferring into the TPAF from another State-administered retirement system, such as the PERS or PFRS, the printed version of the PERS/TPAF
Enrollment Application, along with a fully completed Interfund Transfer Form, can be submitted (see below).
At the time of enrollment, the employee's estate will automatically be designated as beneficiary for any death benefits payable. Please see the "Beneficiary Designation" section below for more information, including how a member can change his or her beneficiary information once enrolled.
*To sign up for EPIC at this time, please view the EPIC Registration Information page. For help in completing the online TPAF Enrollment Application through EPIC, please refer to the EPIC User's Information Guide.
Required
Forms for Interfund Transfers
When a member accepts new employment requiring his or her transfer into the Teachers' Pension and Annuity Fund from another State-administered retirement system, like the Public Employees' Retirement System or Police and Firemen's Retirement System, the following two forms can be submitted to the Division of Pensions and Benefits:
A fill-in and print version of the PERS/TPAF Enrollment Application is also available: PERS/TPAF
Enrollment Application (Adobe Acrobat 4.0 and higher required).
However, if the fully completed Application for Interfund Transfer cannot be obtained from the member's former employer in a timely manner, the new employer is encouraged to complete the online TPAF Enrollment Application. The Application for Interfund Transfer can be submitted and processed at a later date.
Employers are reminded to enroll all newly hired employees into the Teachers' Pension and Annuity Fund 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.
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, they may either register with the Member Benefits Online System (MBOS), which will allow the member to designate beneficiaries, or subsequently update their beneficiary information online, using the "Designation of Beneficiary" application; or the member may submit a printed Designation
of Beneficiary form.
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.
Members wishing to sign up for MBOS at this time should be directed to the "MBOS Registration Information" page, at: http://www.state.nj.us/treasury/pensions/mbosregister.htm
If the member does not complete the Designation
of Beneficiary form or designate pension and group life insurance beneficiaries online through MBOS, the estate of the newly enrolled member will remain as both the group life insurance and pension beneficiary for any death benefit payable.
Members wishing to update their beneficiary
information at any time must either submit a new Designation
of Beneficiary form, or use the MBOS "Designation of Beneficiary" application to make the changes.
Non-eligible
Titles
Non-eligible
titles for the TPAF include replacement teachers (except those
replacing teachers on terminal leave), substitute teachers, and
long term permanent substitutes. However, these titles are eligible
for PERS membership.
Replacement teachers are eligible
for PERS enrollment after one year; however, replacement teachers taking the place of
teachers on terminal leave are eligible for TPAF membership if all other TPAF member eligibility requirements are met.
Long-term substitutes are eligible
for PERS enrollment on the date of hire.
Generally, non-certificated professional
personnel are not eligible for membership in the TPAF.
Employees whose job titles focus
on serving in supporting capacities to classroom teachers (e.g.,
teachers aides, classroom assistants), clerical and maintenance
staff, and most non-certificated administrative positions are
not eligible for membership in the TPAF, but may be eligible for
PERS membership if PERS eligibility requirements are met.
Seasonal employees are not eligible
for membership in any NJ State-administered retirement system.
Temporary teachers are also not eligible
for membership in the TPAF — but may be eligible for PERS membership
after one year.
Reenrollment Now
Required for Interim
Appointments of Retired TPAF Members —
Repeal of the "Six Month Rule"
Prior to November 3, 2003, local
school boards were permitted to appoint a retired Teachers' Pension
and Annuity Fund (TPAF) member to any TPAF-covered position on
an interim basis — for up to six months — without affecting
the individual's retirement allowance, under the rule N.J.A.C.
17:3-2.6.
On October 2, 2003, the Teachers'
Pension and Annuity Fund Board of Trustees repealed this rule.
Effective November 3, 2003, any retired member of the TPAF — except
for those who fall under the reenrollment exemption for certificated
administrators and superintendents — who is employed or accepts
employment in a TPAF-covered position, must reenroll in the TPAF.
If the reenrolling TPAF member is
over age 60, the member must prove insurability for active Noncontributory
and Contributory Group Life Insurance coverage. Upon reenrollment,
the member's retirement allowance and any benefits associated
with that retirement would be suspended until the member retires
again.
Certificated
administrators and superintendents are permitted to take TPAF-covered
positions on an interim basis without reenrolling in the TPAF
under statute N.J.S.A. 18:66-53.2, so they are not affected by
the rule repeal explained above.
For a fuller discussion of post-retirement
TPAF employment issues, see the TPAF Employment after Retirement section of this manual,
or see Fact Sheet
#28.
Contribution
Rate
The full or normal
PERS employee contribution rate is currently 5.5 percent of base salary,
The full or normal
employee contribution rate for the TPAF was 5 percent of base salary, through June 30, 2007; under Chapter 92, P.L. 2007 and Chapter 103, P.L. 2007, the TPAF employee contribution rate increased to 5.5 percent, according to the timetable provided below.
The
full rate of contribution is established by the legislature by
enacting or amending pension law.
Timetable for TPAF Employee Contribution Rate Change
The increase in the TPAF contribution rate was implemented in two phases: Phase One and Phase Two.
Those employee groups in Phase One include:
- State employees, except those working for the Judicial branch;
- Employees of an independent State authority, board, commission, corporation, agency, or organization;
- Employees of a board or commission under the authority of the Commissioner of Education or of the State Board of Education;
- Employees of a State public institution of higher education, except employees of the University of Medicine and Dentistry of New Jersey (UMDNJ);
- 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 employees included in the Phase One employee group, the increase in the member contribution rate from 5 percent to 5.5 percent was effective:
- Pay Period #15, beginning July 7, 2007 for the July 27, 2007 check date, for State employees paid through the State Centralized Payroll Unit who were already enrolled in the PERS or TPAF prior to July 1, 2007.
- July 1, 2007 for all new employees of the Phase One employee groups.
- July 1, 2007 for all other employees of the Phase One employee groups who were enrolled in the PERS or TPAF prior to July 1, 2007.
Those employee groups in Phase Two include:
- Employees of the Judicial Branch of State government,
- Employees of the University of Medicine and Dentistry of New Jersey (UMDNJ); and
- Employees of counties, municipalities, and other local employers not included in phase one.
For employees included in Phase Two employee group, the increase in the contribution rate from 5 percent to 5.5 percent was effective:
- Pay Period #15 beginning July 5, 2008 for the July 25, 2008 check date, for State Judicial Branch employees paid through the State Centralized Payroll Unit who are already enrolled in the PERS or TPAF prior to July 1, 2008.
- July 1, 2008 for all new employees of the Phase Two employee groups;
- July 1, 2008 for all other employees of the Phase Two employee groups who were already enrolled in the PERS or TPAF prior to July 1, 2008.
Temporary Reductions in TPAF Employee Contribution Rate
The State Treasurer has the right
under the current law to make temporary reductions in rate. Between
1998 and 2004, temporary reductions in the TPAF employee contribution
rate had been in effect. For specific
information about these temporary reductions, click here.
On January 1, 2004, the
Teachers' Pension and Annuity Fund member contribution rate returned
to the 5 percent full (normal) contribution rate* until Chapter 92, P.L. 2007, and Chapter 103, P.L. 2007 increased the full (normal) contribution rate to 5.5 percent.
*The Fiscal Year 2005 Budget Act
called for a temporary reduction in the pension contributions
of TPAF members at New Jersey State colleges and universities—from
5 percent to 3 percent—for the period of July 1, 2004 through
December 31, 2004, but effective January 1, 2005, this rate returned to the full 5 percent in effect until the increase to 5.5 percent called for by Chapter 92, P.L. 2007 and Chapter 103, P.L. 2007.
All voluntary pension deductions
(loan repayments, purchases) are based upon the full or normal pension rate. This will not change regardless of any temporary reductions
granted for normal pension and back deductions.
Reductions in the employee pension
contribution rate are considered temporary reductions. Therefore,
the regular pension deduction certifications for new employees
would continue to reflect the full or normal rate when such reductions
occur. Any changes in deduction rate must be certified by the
Division of Pensions and Benefits.
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.
The TPAF is a "Qualified"
Pension Plan
The TPAF 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 ($230,000 in 2008) applies to the base
salaries of TPAF 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.
History
of Pensionable Salary Limits
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 member's gross wages subject to federal income tax. Purchases
of service credit are voluntary pension contributions and
are not tax deferred.