Changes in the Administration
of the New Jersey State Employees Deferred Compensation Plan
On October 25, 2005, the State Treasury
and New Jersey State Employers Deferred Compensation Board announced
that Prudential Retirement, a business of New Jersey-based Prudential
Financial, has been selected as the third party administrator
for the New Jersey State Employees Deferred Compensation Plan
(NJSEDCP). Because of this change in the administration of the
NJSEDCP, effective January 1, 2006, some of the information provided
below may no longer be accurate; other information has been added
to incorporate the changes brought about by the plan administration
changes explained above. The Division of Pensions will provide
procedural updates regarding the NJSEDCP as soon as they become
The Catch-up provision allows participants
within three years of retirement from employment to make a catch-up
contribution in addition to their regular pre-tax contribution.
The allowable catch-up amount is one times the pre-tax contribution
amount the participant is making for the year, up to a maximum
additional annual deferral of $15,000.
"Catch up" is allowed if
the participant has underutilized deferrals from prior years of
participation under the Plan. Underutilized deferrals are defined
as the difference between the maximum allowable annual deferral
amount and the participant's actual annual deferral amount that
has accumulated in the participant's account. Total underutilized
deferrals are updated annually and shown on the participant's
quarterly statement of account as "Available Catch-up
A participant in the Plan may enter
the catch-up provision for any or all of the three years prior
to, but not including, the year retirement becomes effective.
The minimum age for entering catch-up is three years before the
year that the participant could retire and immediately receive
an unreduced retirement benefit.
For example, the earliest possible
retirement age for a PERS employee that would not lead to a reduced
pension is an "Early Retirement" at age 55. The first
eligible year for this employee to exercise the Catch-up provision
under Deferred Compensation is the year in which he or she reaches
The participant must also have accumulated
underutilized deferral amounts. Catch-up dollars accumulate only
if the participant has not deferred the maximum allowable during
the years of participation in the Deferred Compensation Plan.
During participation in Catch-up,
participants may defer up to a maximum amount of $15,000 per year
for any or all of the three years prior to retirement, providing
the participant has accumulated a sufficient catch-up dollar amount.
In order to enter into catch-up,
the participant must indicate on a Deferred
Compensation Catch-up Election form the elected retirement
date and the percentage of payroll deferral. Upon reaching
this projected retirement date the participant will no longer
be eligible to utilize any remaining catch-up amounts that may
The catch-up provision may only
be used once. A participant changing a declared retirement date
would not be eligible to elect the catch-up provision again.
Transfer forms must be processed through Pudential Financial. Contact Prudential
Financial, toll-free at 1-866-NJSEDCP (1-866-657-3327). Toll-free
TDD is available at 1-877-760-5166; or visit Prudential's
NJSEDCP Web site at: www.prudential.com/njsedcp.