Employers' Pensions and Benefits Administration Manual (EPBAM)
   

 

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Retirement from the
Public Employees' Retirement System (PERS)
and the Teachers' Pension and Annuity Fund (TPAF)



TABLE OF CONTENTS
 

Get a Retirement Estimate

  Membership Tiers
 

Service Retirement

    Tier 1
    Tier 2
    Tier 3
    Tier 4
    Tier 5
 

Early Retirement

    Tier 1
    Tier 2
    Tier 3
    Tier 4
    Tier 5
 

Deferred Retirement

    Tier 1
    Tier 2
    Tier 3
    Tier 4
    Tier 5
 

Veteran Retirements for the PERS and the TPAF

  Disability Retirements for Tiers 1, 2 and 3
      Ordinary Disability
      Accidental Disability    
  Disability Retirements for Tier 4 and Tier 5
      Ordinary Disability Ineligibility
      Accidental Disability Ineligibility     
  Pension Options
  Age Limits, Non-spouse Beneficiaries
  Making Changes to thr Retirement Application
 

Waivers of Retirement Allowance

 

Retirement from the PERS Special Groups
      Retirement from the LEO Group of the PERS
      Retirement from the LRS
      Retirement from the Prosecutors Part
      Retirement from the Workers' Comp Judges Part

  Returning to Work after Retirement
      Retired PERS Members
      Retired TPAF Members
      PERS Retired Elected Officials
   

Introduction

This section offers an overview of the retirement process for Public Employees' Retirement System (PERS) members and Teachers' Pension and Annuity Fund (TPAF) members, with special attention paid to the forms that are required to enable the Division to process a member's retirement benefit.

For the Application for Disability Retirement, there will be links to additional information concerning the Certification of Service and Final Salary.

Line-by-line instructions are included for each form. 

Please note: It is important that those who qualify for Veteran status for pension purposes establish Veteran status well in advance of retirement.

Click here to find out how to establish Veteran status (for pension) with the New Jersey Department of Military and Veteran's Affairs.

Membership Tiers

PERS and TPAF members are now classified by enrollment date, as several laws, including Chapter 92, P.L. 2007, Chapter 103, P.L. 2007, Chapter 89, P.L. 2008, and Chapter 78, P.L. 2011 make the eligibility requirements for PERS and TPAF 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.

Retirement eligibility requirements will be listed separately, by Tier, for each type of retirement, when differences exist.

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Get An Estimate of Retirement Benefits

Most retirement applications require three to four months processing time, from the date the application and retirement certification are received, for calculation, Board approval, preparing the retirement account and receiving the first check.  Changes to retirement selections can often cause delays in processing and can delay prompt payment of a member's first retirement check. Needless to say, the Division of Pensions and Benefits, the retiring member, and you, the employer, would like to avoid delays of this kind. 

The simplest way to avoid unnecessary delays in processing a retirement is to ensure the member has as much information as possible concerning the retirement process and what to expect in retirement. A retirement estimate is a valuable tool for retirement planning and can be obtained simply and easily. The member can choose to:

*Member must first register for MBOS. Click here to learn how.

The Division suggests that members request an estimate at least six months prior to an anticipated retirement date. There is no obligation to retire when a retirement estimate is requested since it is a planning tool, not an application for benefits.  Many members request multiple estimates based on different projected dates of retirement, retirement types and options.  

  • Retirement estimates may be obtained for any eligible date up to two years ahead.
  • All retirements begin on the first of a month.
  • The member must not be actively employed as of the day prior to retirement. Even though payroll checks may still be in process as of a member's retirement date, there can be no more service rendered nor salary earned by the member as of that date.
  • A retirement is "due and payable" — that is, eligible for the first retirement check, 30 days after the retirement date, or 30 days after the Board of Trustees approves the retirement, whichever is later.

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Retirement Eligibility, Calculations and Documents Required

SERVICE RETIREMENT

Tier 1 Eligibility:

Age 60 or older, any number years of service

Benefit Formula

Years and Months of Service ÷ 55 X Final Average Salary (FAS) = Annual Maximum

FAS - 3 YEARS (See below)

 

Tier 2 Eligibility:

Age 60 or older, any number years of service

Benefit Formula

Years and Months of Service ÷ 55 X Final Average Salary (FAS) = Annual Maximum

FAS - 3 YEARS (See below)

   

Tier 3 Eligibility :

Age 62 or older, any number years of service

Benefit Formula

Years and Months of Service ÷ 55 X Final Average Salary (FAS) = Annual Maximum

FAS - 3 YEARS (See below)

   

Tier 4 Eligibility:

Age 62 or older, any number years of service

Benefit Formula

Years and Months of Service 60 X Final Average Salary (FAS) = Annual Maximum

FAS - 5 YEARS (See FAS Tiers 4 and 5 below)

   

Tier 5 Eligibility:

Age 65 or older, any number years of service

Benefit Formula

Years and Months of Service ÷ 60 X Final Average Salary (FAS) = Annual Maximum

FAS - 5 YEARS (See FAS Tiers 4 and 5 below)

 

Member Responsibilities

  1. Complete Application for Retirement Allowance and submit to Pensions 3-4 months in advance.

    View instructions on completing the Application for Retirement Allowance
    .

  2. Submit proof of age for member.

  3. Submit proof of age for beneficiary if Option A, B, C, D, 2, 3, or 4 are selected.

Employer Responsibilities

Complete and submit Certification of Service and Final Salary as soon as possible once you are aware member intends to retire.

View Instructions on completing Certification of Service and Final Salary.

Notes

  • Maximum monthly benefit is Annual Maximum divided by 12.

FOR TIERS 1, 2, AND 3 MEMBERS:

  • FAS (Final Average Salary) is last 36 months of pensionable salary (30 months for 10 month members), or highest 3 Fiscal Years (July 1 - June 30), for Tier 1, 2, and 3 members. Fiscal Years do not have to be consecutive.

  • Member should note on the Application for Retirement Allowance if the last three years are not the highest years.

FOR TIERS 4 and 5 MEMBERS:

  • FAS (Final Average Salary) is last 60 months of pensionable salary (50 months for 10 month members), or highest 5 Fiscal Years (July 1 - June 30).
  • Member should note on the Application for Retirement Allowance if the last five years are not the highest years.

 

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EARLY RETIREMENT

Tier 1 Eligibility: 

Under age 60 with 25 or more years of service.

Benefit Formula:

Same calculation as a Service Retirement = Years & Months of Service 55 X Final Average Salary (FAS) = Annual Maximum;

FAS - 3 YEARS (See above)

Retirement allowance is permanently reduced if retirement occurs prior to member's attainment of age 55, according to membership tier.

For Tier 1 members who retire before age 55, allowance is reduced 1/4 of 1 percent (3 percent per year) for each month under age 55.

 

Tier 2 Eligibility: 

Under age 60 with 25 or more years of service.

Benefit Formula:

Same calculation as a Service Retirement = Years & Months of Service ÷ 55 X Final Average Salary (FAS) = Annual Maximum;

FAS - 3 YEARS (See above)

Retirement allowance is permanently reduced if retirement occurs prior to member's attainment of age 60, according to membership tier.

For Tier 2 members who retire before age 60, allowance is reduced 1/12 of 1 percent (1 percent per year) for each month under age 60 through age 55, and 1/4 of 1 percent (3 percent per year) for each month under age 55.

 

Tier 3 Eligibility

Under age 62 with 25 or more years of service.

Benefit Formula

Same calculation as a Service Retirement = Years & Months of Service ÷ 55 X Final Average Salary (FAS) = Annual Maximum;

FAS - 3 YEARS (See above)

Retirement allowance is permanently reduced if retirement occurs prior to member's attainment of age 62, according to membership tier.

For Tier 3 members who retire before age 62, allowance is reduced 1/12 of 1 percent (1 percent per year) for each month under age 62 through age 55, and 1/4 of 1 percent (3 percent per year) for each month under age 55.

 

Tier 4 Eligibility: 

Under age 62 with 25 or more years of service.

Benefit Formula:

Same calculation as a Service Retirement = Years & Months of Service ÷ 60 X Final Average Salary (FAS) = Annual Maximum;

FAS - 5 YEARS (See FAS Tiers 4 and 5 above)

Retirement allowance is permanently reduced if retirement occurs prior to member's attainment of age 62, according to membership tier.

For Tier 4 members who retire before age 62, allowance is reduced 1/12 of 1 percent (1 percent per year) for each month under age 60 through age 55, and 1/4 of 1 percent (3 percent per year) for each month under age 55.

   

Tier 5 Eligibility: 

Under age 65 with 30 or more years of service.

Benefit Formula:

Same calculation as a Service Retirement = Years & Months of Service ÷ 60 X Final Average Salary (FAS) = Annual Maximum;

FAS - 5 YEARS (See FAS Tiers 4 and 5 above)

Retirement allowance is permanently reduced if retirement occurs prior to member's attainment of age 65, according to membership tier.

For Tier 5 members who retire before age 65, allowance is reduced 3 percent per year for each year under age 65.

   

Member Responsibilities:

  1. Complete Application for Retirement Allowance and submit to Pensions 3-4 months in advance of attaining age required for retirement.

    Instructions on completing the Application for Retirement Allowance.

  2. Submit proof of age for member.

  3. Submit proof of age for beneficiary, if Options A, B, C, D, 2, 3, or 4 selected.

Employer Responsibilities:

Complete and submit Certification of Service and Final Salary as soon as possible once you are aware member intends to retire.

Instructions on completing the Certification of Service and Final Salary 

Notes:
  • Maximum monthly benefit is Annual Maximum divided by 12.

FOR TIER 1, 2, AND 3 MEMBERS:

  • FAS (Final Average Salary) is last 36 months of pensionable salary (30 months for 10 month members), or highest 3 Fiscal Years (July 1 - June 30), for Tier 1, 2, and 3 members. Fiscal Years do not have to be consecutive.
  • Member should note on the Application for Retirement Allowance if the last three years are not the highest years.

FOR TIERS 4 AND 5 MEMBERS:

  • FAS (Final Average Salary) is last 60 months of pensionable salary (50 months for 10 month members), or highest 5 Fiscal Years (July 1 - June 30).
  • Member should note on the Application for Retirement Allowance if the last five years are not the highest years.

 

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DEFERRED RETIREMENT

Tier 1 Eligibility:

Effective at age 60 with 10 or more years of service. Available to Tier 1 members who have at least 10 years of service credit and are not yet 60 years of age when they terminate employment.

The retirement would be effective on the first of the month after attaining the appropriate Tier 1 Deferred Retirement age of 60.

Benefit Formula:

Years & Months of Service 55 X Final Average Salary (FAS) = Annual Maximum

FAS - 3 YEARS (See above)

 

Tier 2 Eligibility:

Effective at age 60 with 10 or more years of service. Available to Tier 2 members who have at least 10 years of service credit and are not yet 60 years of age when they terminate employment.

The retirement would be effective on the first of the month after attaining the appropriate Tier 2 Deferred Retirement age of 60.

Benefit Formula:

Years & Months of Service ÷ 55 X Final Average Salary (FAS) = Annual Maximum

FAS - 3 YEARS (See above)

 

Tier 3 Eligibility:

Tier 3: Effective at age 62 with 10 or more years of service. Available to Tier 3 members who have at least 10 years of service credit and are not yet 62 years of age when they terminate employment.

The retirement would be effective on the first of the month after attaining the appropriate Tier 3 Deferred Retirement age of 62.

Benefit Formula:

Years & Months of Service ÷ 55 X Final Average Salary (FAS) = Annual Maximum

FAS - 3 YEARS (See above)

 

Tier 4 Eligibility:

Effective at age 62 with 10 or more years of service. Available to Tier 4 members who have at least 10 years of service credit and are not yet 62 years of age when they terminate employment.

The retirement would be effective on the first of the month after attaining the appropriate Tier 4 Deferred Retirement age of 62.

Benefit Formula:

Years & Months of Service ÷ 60 X Final Average Salary (FAS) = Annual Maximum

FAS - 5 YEARS (See FAS Tiers 4 and 5 above)

   

Tier 5 Eligibility:

Effective at age 65 with 10 or more years of service. Available to Tier 5 members who have at least 10 years of service credit and are not yet 65 years of age when they terminate employment.

The retirement would be effective on the first of the month after attaining the appropriate Tier 5 Deferred Retirement age of 65.

Benefit Formula:

Years & Months of Service ÷ 60 X Final Average Salary (FAS) = Annual Maximum

FAS - 5 YEARS (See FAS Tiers 4 and 5 above)

  

Member Responsibilities:

  1. Complete Application for Retirement Allowance and submit to Pensions as soon as possible after terminating employment or, at the latest, 3-4 months in advance of attaining age 60.

    Instructions on completing the Application for Retirement Allowance

  2. Submit proof of age for member.

  3. Submit proof of age for beneficiary, if Options A, B, C, D, 2, 3, or 4 selected.

Employer Responsibilities:

Complete and submit Certification of Service and Final Salary as soon as possible once you are aware member intends to retire.

Instructions on completing the Certification of Service and Final Salary

Notes:
  • Maximum monthly benefit is Annual Maximum divided by 12.

  • Deferred retirements can only change their options up to one month prior to their effective retirement date.

FOR TIER 1, 2, AND 3 MEMBERS:

  • FAS (Final Average Salary) is last 36 months of pensionable salary (30 months for 10 month members), or highest 3 Fiscal Years (July 1 - June 30), for Tier 1, 2, and 3 members. Fiscal Years do not have to be consecutive.
  • Member should note on the Application for Retirement Allowance if the last three years are not the highest years.

FOR TIER 4 and TIER 5 MEMBERS:

  • FAS (Final Average Salary) is last 60 months of pensionable salary (50 months for 10 month members), or highest 5 Fiscal Years (July 1 - June 30).
  • Member should note on the Application for Retirement Allowance if the last five years are not the highest years.

 

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VETERAN RETIREMENT: PERS and TPAF
Member must provide Form DD-214 to Department of Military and Veteran Affairs to prove Veteran's status, well in advance of retirement.
Click here to learn more about establishing Veteran status.

The age requirements and formulas for calculating a Veteran Retirement are the same for membership Tier 1, Tier 2, Tier 3, Tier 4, and Tier 5

Eligibility #1:

Age 55 or older with 25 years service or
Age 60 or older with 20 years service

Please note that PERS eligibility requirements were changed, effective October 1, 2001. PERS members are now eligible for this Veteran Retirement benefit in the two ways given above.

(Must meet eligibility requirements at termination of employment)

Benefit:

54.5 % X Final Salary* = Annual Maximum
OR
Highest 12 consecutive months (10 months if applicable)

Eligibility #2:

Attainment of 35 or more years of service

(Must meet eligibility requirements at termination of employment)

Benefit:
Years of Service 55
X
Highest Consecutive * 12 months of Salary (or 10 months if applicable)
=
Annual Maximum

Member Responsibilities:

  1. Member must provide Form DD-214 to Department of Military and Veteran Affairs to prove Veteran's status, well in advance of retirement.

    Click here to learn more about establishing Veteran status.

  2. Complete Application for Retirement Allowance and submit to Pensions 3-4 months in advance.

    Instructions on completing the Application for Retirement Allowance 

  3. Submit proof of age for member

  4. Submit proof of age for beneficiary, if Options A, B, C, D, 2, 3, or 4 selected

Employer Responsibilities:

Complete and submit Certification of Service and Final Salary as soon as possible once you are aware member intends to retire.

Instructions on completing the Certification of Service and Final Salary

Notes:
  • Maximum monthly benefit is Annual Maximum divided by 12.

* Final Salary = Last 12 months (10 months if applicable) base salary; Highest Salary = Highest consecutive 12 months (10 months if applicable) base salary;

 

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DISABILITY RETIREMENTS

IMPORTANT NOTE: ORDINARY DISABILITY RETIREMENTS AND ACCIDENTAL RETIREMENTS ARE NOT AVAILABLE TO TIER 4 PERS OR TPAF MEMBERS

No age requirement for Accidental or Ordinary Disability

Ordinary Disability
ORDINARY DISABILITY RETIREMENTS ARE NOT AVAILABLE TO TIER 4 OR TIER 5 PERS OR TPAF MEMBERS

Eligibility:

Member must be Totally and Permanently disabled from doing normal job duties.

Application must be made within 2 years of termination date.

Member must have a minimum of 10 years of New Jersey service credit (Out-of-state, Military, and Federal government purchases are not considered New Jersey service credit)

Process:

Must be processed through Disability Review procedure.

Benefit:

     Higher calculation of following formulas:

43.6% X Final Average Salary (FAS) = Annual  Maximum

OR

1.64% X Years of Service X FAS = Annual Maximum

FAS (Final Average Salary) is last 36 months of pensionable salary (30 months for 10 month members), or highest 3 Fiscal Years (July 1 - June 30), for Tier 1, 2, and 3 members. Fiscal Years do not have to be consecutive. Ordinary Disability retirements are not available to Tier 4 and Tier 5 PERS or TPAF members.

Member Responsibilities:

  1. Complete an Application for Disability Retirement Allowance 4-6 months in advance

    Instructions on completing the Application for Disability Retirement Allowance

  2. Supply proof of age document for member

  3. Submit proof of age for beneficiary, if Options A, B, C, D, 2, 3, or 4 selected

  4. Have medical providers complete Medical Examination by Personal or Treating Physician forms (as many as necessary, but 2 at least are recommended)

    Instructions on completing the "Medical Examination by Personal or Treating Physician"

  5. Secure medical records through Authorization for Release of Medical Records

    For instructions on completing the Authorization for Release of Medical Records

Please note: Once the PERS or TPAF Board of Trustees grants approval for a disability retirement, the member may only cancel the retirement by submitting a letter requesting to do so to the Board of Trustees, with a written statement from his/her physician expressing that the member can return to work. The Disability Review Section would then send the member for an IME, and all medical information would be again submitted to the Medical Review Board. Once all of the above information is received, the Board of Trustees would make a determination of whether member is able to return to work or not.

Employer Responsibilities:

  1. Complete Employer Certification for Disability Retirement as soon as possible upon learning of member's retirement.

    Instructions on completing the Employer Certification for Disability Retirement

  2. Include copy of Job Description - PERS only

  3. If you answered "Yes" to Question #6 on the Employer Certification for Disability Retirement, please include copies of indictments, convictions and/or preliminary and final notices of disciplinary action.

  4. If an Involuntary Disability Retirement: Enclose a letter addressed to the Division of Pensions and Benefits stating that, in the employing authority's opinion, the member is "totally and permanently disabled" from fulfilling his or her job duties. The employer must submit attendance records, along with any pertinent medical records.
    Sample Letter


    Local employers must submit a resolution, authorizing the employing location to process an Involuntary Disability Retirement Application.
    Sample Resolution

*When an employer submits a PERS/TPAF Application for Disability Retirement Allowance for a member's Involuntary Disability Retirement, the member may not change the date of retirement indicated by the employer.

Notes: Maximum monthly benefit = Annual Maximum divided by 12

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Accidental Disability
ACCIDENTAL RETIREMENTS ARE NOT AVAILABLE TO TIER 4 PERS OR TPAF MEMBERS

Eligibility:

Member must be determined to be Totally and Permanently (TP) disabled as a Direct Result (DR) of a Traumatic Event (TE) while doing the member's normal job duties.

Must be a member on or before accident date.

Process:

Must be processed through Disability Review procedure.

Application must normally be made within 5 years of accident date.

Benefit:

72.7 % X Salary at time of Accident = Annual Maximum.

Member Responsibilities:

  1. Complete an Application for Disability Retirement Allowance 4-6 months in advance.

    Instructions on completing the Application for Disability Retirement Allowance.

  2. Supply proof of age document for member.

  3. Submit proof of age for beneficiary, if Options A, B, C, D, 2, 3, or 4 selected

  4. Have medical providers complete Medical Examination by Personal or Treating Physician forms (as many as necessary, but 2 at least are recommended).

    Instructions on completing the Medical Examination by Personal or Treating Physician

  5. Secure medical records through Authorization for Release of Medical Records.

    Instructions on completing the Authorization for Release of Medical Records.

Please note: Once the PERS or TPAF Board of Trustees grants approval for a disability retirement, the member may only cancel the retirement by submitting a letter requesting to do so to the Board of Trustees, with a written statement from his/her physician expressing that the member can return to work. The Disability Review Section would then send the member for an IME, and all medical information would be again submitted to the Medical Review Board. Once all of the above information is received, the Board of Trustees would make a determination of whether member is able to return to work or not.

Employer Responsibilities:

  1. Complete Employer Certification for Disability Retirement as soon as possible upon learning of member's retirement.

    Instructions on completing the Employer Certification for Disability Retirement.

  2. Include copy of Job Description - PERS only.

  3. If you answered "Yes" to Question #6 on the Employer Certification for Disability Retirement, please include copies of indictments, convictions and/or preliminary and final notices of disciplinary action.

  4. Copies of accident reports, incident reports, witness statements, medical records relating to the incident, and other related documents.

  5. Copies of Workers' Compensation awards.

  6. If an Involuntary Disability Retirement: Enclose a letter addressed to the Division of Pensions and Benefits stating that, in the employing authority's opinion, the member is "totally and permanently disabled" from fulfilling his or her job duties. The employer must submit attendance records, along with any pertinent medical records.
    Sample Letter

  7. Local employers must submit a resolution, authorizing the employing location to process an Involuntary Disability Retirement Application.
    Sample Resolution
Notes Maximum monthly benefit is Annual Maximum divided by 12

 

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Last Updated: July 30, 2012