Employers' Pensions and Benefits Administration Manual (EPBAM)
   

 

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Legislative Retirement System
Retirements


 

Introduction

  Deferred Compensation Retirement Program (DCRP)
 

Legislative "Special" Retirement

 

Deferred Retirement

 

PERS Service Retirement

 

Combined PERS and Legislative Retirement

  Important Information: Those with BOTH Legislative and Non-legislative Service
 

Waivers of Retirement Allowance

  Age Limits on Nonspouse Beneficiaries

Introduction

Technically, members of the Legislative Retirement System belong to a sub-category of the Public Employees' Retirement System (PERS). Because the conditions that affect employment — namely periodic elections, are unique to enrolled members of the State Legislature, there are special provisions for retirement that need to be outlined separately. 

What follows is a listing of the types of retirement available to members of the PERS Legislative Retirement System (LRS), as well as the eligibility requirements and benefit calculations. From among the following options, the member will receive the highest benefits for which he or she qualifies.* Employer and employee responsibilities are also outlined.

*Please note that under Chapter 92, P.L. 2007, effective July 1, 2007, newly elected legislators whose term begins on or after July 1, 2007 will be enrolled in the Deferred Compensation Retirement Program, or DCRP.

Legislators who are already enrolled in the LRS Part of the Public Employees' Retirement System, or PERS, prior to July 1, 2007 will remain PERS LRS members, and will continue to receive retirement benefits through their PERS LRS membership.

The Deferred Compensation Retirement Program

Under Chapter 92, P.L. 2007, the Defined Contribution Retirement Program, or DCRP, became operational on July 1, 2007.

DCRP membership is limited to:

  1. Newly elected and appointed officials, including legislators, whose elected term or appointment takes effect on or after July 1, 2007;
  2. New members of the PERS and TPAF who reach the annual maximum wage contribution base for Social Security, pursuant to the Federal Insurance Contributions Act ($106,800 in 2009), unless the member waives participation when first eligible.
  3. Retired elected officials who choose to participate in the program.

General DCRP Information

Under the DCRP, State and local government employers will contribute three percent of the employee’s base salary to the program. Group life insurance and the option for disability benefits coverage will be provided to participants. A Defined Contribution Retirement Program Board has been established to oversee the program.

Chapter 92, P.L. 2007 called for participants to contribute 5 percent of their salary to the DCRP, but a more recent law, Chapter 103, P.L. 2007, stipulates that participants contribute 5.5 percent.

Participants will be allowed to allocate their contributions and the contributions of their employer into investment alternatives as determined by the new program board. The DCRP will be administered for the Division of Pensions and
benefits by Prudential Financial.

More information about the Defined Contribution Retirement Program, or DCRP, will be provided as it becomes available.

Elected and Appointed Officials

Newly elected legislators whose term begins on or after July 1, 2007 (that is, the elected official assumes the duties of his/her elected office on or after July 1, 2007) must be enrolled in the DCRP — instead of the PERS LRS.

Legislators who are already enrolled in the PERS LRS prior to July 1, 2007, will remain PERS LRS members.

Minimum DCRP eligibility criteria for an elected or appointed official (including legislators) are the same as they would be for a similar PERS position (this includes a minimum base salary of $1,500.00 for PERS LRS positions).

Furthermore, if the elected or appointed official will earn less than $5,000.00 annually, the official may choose to waive participation in the DCRP. However, if the elected or appointed official waives participation, the waiver is irrevocable and the official cannot enroll at a later date.

Retired Elected Officials

Retired elected officials may choose to participate in the Defined Contribution Retirement Program.

New Members of the PERS and TPAF Reaching the Annual Maximum Wage Contribution Base for Social Security

New members of the PERS and TPAF who reach the annual maximum wage contribution base for Social Security, pursuant to the Federal Insurance Contributions Act ($106,800 in 2009), will become a member of the DCRP, unless the member waives participation when first eligible.

The member may elect to participate at a later time, with such election effective on the January 1 following a participation request.  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 TPAF or 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.

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PERS LRS Retirement Benefits

Special Legislative Retirement
Eligibility Age 60 or older, and
No other public service credit in PERS
Benefit Calculation 3% of Final Average Salary (FAS) per year in the legislature.

Maximum Benefit: 2/3 X FAS

Employee Responsibility Complete Application for Retirement Allowance
Provide proof of age for member
Provide proof of age for beneficiary *
Employer Responsibility Complete Certification of Service and Final Salary for member and submit to Division of Pensions and Benefits.
FAS = Final Average Salary.  FAS is the greater amount of the average of the last three years salary, or the average of the three highest fiscal years of earnings.

* Providing proof of age for a beneficiary is required if the member selects Option 2, 3, 4, A, B, C, or D. Since the Internal Revenue Service is a federal agency, a civil union partner or domestic partner as defined under New Jersey State law does not qualify as a spouse under these circumstances and would be subject to the age limitations described.


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Deferred Legislative Retirement

Eligibility Under age 60, and
Eight or more years of service as a legislator.
Benefit Calculation 3% of Final Average Salary (FAS) per year in legislature.

Maximum Benefit: 2/3 X FAS

Employee Responsibility Complete Application for Retirement Allowance
Provide proof of age for member
Provide proof of age for beneficiary *
Employer Responsibility Complete Certification of Service and Final Salary for member and submit to Division of Pensions and Benefits.
FAS = Final Average Salary.  FAS is the greater amount of the average of the last three years salary, or the average of the three highest fiscal years of earnings.

* Providing proof of age for a beneficiary is required if the member selects Option 2, 3, 4, A, B, C, or D. Since the Internal Revenue Service is a federal agency, a civil union partner or domestic partner as defined under New Jersey State law does not qualify as a spouse under these circumstances and would be subject to the age limitations described.

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PERS Service Retirement

Eligibility

PERS qualifications are used:

Age 60 or older, no minimum years of service credit.

Veteran status can be used to qualify for a PERS Veteran Retirement

Benefit Calculation

Combined years of Service (Legislative and PERS) 60 X FAS

Note: If there is concurrent service, only 12 months of service credit can be earned in any 12-month period.

Employee Responsibility Complete Application for Retirement Allowance. State clearly it is a PERS Service Retirement.
Provide proof of age for member
Provide proof of age for beneficiary *
Employer Responsibility Complete Certification of Service and Final Salary for member and submit to the Division of Pensions and Benefits.
FAS = Final Average Salary.  FAS is the greater amount of the average of the last three years salary, or the average of the three highest fiscal years of earnings.

* Providing proof of age for a beneficiary is required if the member selects Option 2, 3, 4, A, B, C, or D. Since the Internal Revenue Service is a federal agency, a civil union partner or domestic partner as defined under New Jersey State law does not qualify as a spouse under these circumstances and would be subject to the age limitations described.

 

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"Combined" Legislative and PERS Retirement

Eligibility

Age 60, and
member applies all public service (PERS and Legislative) credit.
Veteran status can be used to qualify for a PERS Veteran Retirement calculation.
This qualifies for a PERS Service Retirement.

Benefit Calculation Special (or Deferred) Legislative Retirement Allowance based on legislative service, plus
PERS retirement allowance based on non-legislative public service.
Employee Responsibility Complete Application for Retirement Allowance: State clearly is a "Combined Retirement."
Provide proof of age for member
Provide proof of age for beneficiary *
Employer Responsibility Complete Certification of Service and Final Salary for member and submit to Division of Pensions and Benefits.
FAS = Final Average Salary.  FAS is the greater amount of the average of the last three years salary, or the average of the three highest fiscal years of earnings.

* Providing proof of age for a beneficiary is required if the member selects Option 2, 3, 4, A, B, C, or D. Since the Internal Revenue Service is a federal agency, a civil union partner or domestic partner as defined under New Jersey State law does not qualify as a spouse under these circumstances and would be subject to the age limitations described.

 


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Important Additional Information for those with BOTH Legislative and Non-legislative Service

If the member has both non-legislative and legislative service and receives the Special Legislative Retirement or the Deferred Legislative Retirement, all contributions for non-legislative service will be refunded to the member.

If the member has both non-legislative and legislative service and is eligible to begin receiving retirement benefits, the member can retire from the non-legislative employment and begin collecting retirement benefits while completing the term in office. This only applies to members who qualify for both non-legislative PERS retirement and legislative retirement as of the effective retirement date.

Age Limits on Nonspouse Beneficiaries

For all options, you can name your spouse* as your beneficiary regardless of your spouse's age. For Options 1, 3, C, or D, you can name someone other than your spouse as beneficiary regardless of age.

For Options 2 and A (100% to beneficiary), if you are naming a beneficiary who is not your spouse, Internal Revenue Service regulations restrict the age of your beneficiary to no more than 10 years younger than you.

For Option B (75% to beneficiary) you can name a nonspouse who is no more than 19 years younger than you.

If you name a nonspouse beneficiary under Option 4, if the dollar amount of your beneficiary's pension is more than half of your allowance, restrictions on your beneficiary's age apply.

*Since the Internal Revenue Service is a federal agency, a civil union partner or domestic partner as defined under New Jersey State law does not qualify as a spouse under these circumstances and would be subject to the age limitations described.

 

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Last Updated: June 29, 2009