Employers' Pensions and Benefits Administration Manual (EPBAM)



Information by Employer Task


Supplemental Annuity Collective Trust
of New Jersey (SACT) Tax-Sheltered
(Pretax) Plan — Eligibility

Supplemental Annuity Collective Trust (SACT) Member Handbook


Major Areas of Discussion About SACT Tax-Sheltered

Eligibility  (present page)


If you are an actively contributing member of one of the following state-administered retirement systems, and employed by a public educational institution, you are eligible to participate in SACT Tax-Sheltered Account (SACT-TSA). 

These systems will be referred to as the 'basic retirement systems' throughout this guide:

    •  Teachers' Pension and Annuity Fund (TPAF)

    •  Public Employees' Retirement System (PERS)

    •  Police and Firemen's Retirement System (PFRS)

Elected officials are ineligible.

Contributions Allowed

The SACT-Tax-Sheltered Plan allows contributions in whole percentages beginning at one percent of your compensation (base salary minus pension contribution). The maximum contribution allowable is the prevailing IRS maximum for all 403(b) plans ($16,500 in 2010). Your contributions are excluded from your income for federal income tax purposes.


If an employee wishes to participate in this plan, a Enrollment Request Form and Salary Reduction Agreement must be completed.  The employer certifies the application and sends it to the Division of Pensions and Benefits.  Enrollment applications are processed quarterly and must be received by the Division of Pensions and Benefits, SACT Section, no less than 30 days before the beginning of any calendar quarter.  

Once an enrollment has been processed, the employer will receive confirmation copies and certifications of payroll deductions. A member's enrollment will become effective at the start of the next calendar quarter.

Each enrolling participant is also asked to nominate primary and contingent beneficiaries.

Change or Suspension of Salary Reduction

A member may change or suspend the elected percentage rate of salary reduction before the beginning of any calendar quarter. 

All changes (increase or decrease) in percentage rate of salary reduction must be made on a "Change of Contribution Rate Request Form", accompanied by a new "Salary Reduction Agreement"

The maximum dollar amount that members are permitted to contribute annually in 2010 is $16,500. This is in accordance with federal Internal Revenue Code. Salary reductions are made through payroll deductions.

The member completes the forms and has them certified by the authorized personnel representative. The forms must be received by the Division of Pensions and Benefits, SACT Section, 30 days before the beginning of the calendar quarter. 

Once changes have been processed, the employer will receive confirmation copies of the updated certification of payroll deductions. 

All requests become effective at the start of the next calendar quarter.

Upon Termination of Employment

If a member terminates employment and withdraws all contributions from the basic retirement system, the member must also withdraw all monies in the SACT Trust account as a lump-sum settlement.  

If a member has a SACT-TSA account, it is eligible for tax-free rollover to an IRA.

The withdrawal value of the account is determined as of the close of the month in which the employee ceases to be a member of the basic retirement system.  That is, the month the member's withdrawal check from the basic system is dated.


To withdraw from the Trust, the member must file a "Application for Withdrawal" with the Division of Pensions and Benefits, SACT Section. 


Death Benefits           

The member should tell the designated beneficiary or family to notify the Division of Pensions and Benefits, SACT Section immediately upon their death.

Any time there is a change in family status (marriage, divorce, death, birth, etc.) a member should complete a new Designation of Beneficiary form to reflect those changes for any death benefits that may be payable.  Once received at the Division of Pensions and Benefits, properly completed beneficiary designations supersede all prior designations in the member's file.  

NOTE:  If a member has completed a Designation of Beneficiary form for the "basic retirement system " (PERS, TPAF, etc.), a form specific to SACT must also be completed.  If one is not completed for an existing SACT account, recent changes in family status will NOT be reflected in payment of SACT death benefits.

If a member dies before retirement, the named beneficiary(ies) will receive a lump-sum payment equal to the value of the account at the time of death or, if the beneficiary is a person (as opposed to an institution or charity), he or she may elect to receive a variable annuity under one of the distribution options of the plan.

If a member's named beneficiary does not apply for benefits within 90 days of notifying the Division of Pensions and Benefits of the member's death, the account is placed in suspense. For questions concerning an account in suspense, call the SACT office at (609) 633-2031.





























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Last Updated: March 31, 2010