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Links to the New Jersey Legislature and other legislature information. Chapter 137, P.L. 1997 Enacted in response to the recent re-implementation of the mandatory age 65 retirement provision for members of the PFRS, which becomes effective again on July 1, 1997. It would extend membership in the PFRS beyond the July 1st date for certain members, but in no case beyond January 1, 1998. It would allow any member of the PFRS who has not acquired 25 years of service as of the effective date of this bill (which is still pending) to continue as a member of the PFRS after attaining age 65 up until one of the following three events, whichever occurs the earliest:
The law also contains a special provision that applies only to members of the PFRS who are "policemen" employed by a unit other than the State. This provision enables a local employer to file a resolution with the PFRS Board of Trustees allowing them to extend PFRS membership to "policemen" who would have been forced to retire on July 1, 1997, to January 1, 1998. To qualify under this provision, the member must have been employed by the local unit as of July 1, 1997, have acquired 25 years of service credit as of the effective date of this bill, and have attained the age of 65 on or before December 31, 1997. The term "policemen" refers to any member of the PFRS defined as such in pension law. This extension is not available to firefighters or State employees. Finally, for any local employer who adopts a resolution to extend PFRS membership for "policemen" age 65 or over as described in the previous paragraph, any civil service employment list to fill vacant "policemen" positions that either exists on the effective date of this bill (pending), or becomes effective on or before December 31, 1997, will not expire or be canceled prior to February 1, 1998. Date Approved: June 27, 1997 Effective Date: This act shall take effect immediately and shall expire February 1, 1998. CHAPTER 116, P.L. 1997 Enacted to implement the provisions of the federal Small Business Job Protection Act, signed into law on August 20, 1996, pertaining to public employee deferred compensation plans (i.e., Section 457 plans). Under Chapter 116, the assets of the State administered deferred compensation plan shall be held in trust for the exclusive benefit of the participating State employees and their beneficiaries as of the effective date of this legislation. For deferred compensation plans administered by local governmental employers, for plans approved prior to August 20, 1996, moneys deferred shall be subject to the claims of the employer's general creditors until the plan document is amended to have all moneys deferred and any other assets or income of the plan held in trust or one or more annuity contracts or one or more custodial accounts for the exclusive benefit of the participating employees and their beneficiaries. Employers shall have until January 1, 1999 to implement this change. For all plans adopted on or after August 20, 1996, all moneys that are deferred and any other assets or income of the plan shall be held in trust or one or more annuity contracts or one or more custodial accounts for the exclusive benefit of the participating employees and their beneficiaries. Date Approved: June 6, 1997 Effective Date: This act shall take effect immediately. CHAPTER 115, P.L. 1997 Changes the value of the assets of the retirement systems to "full-market" value of assets, for the State and participating local governments, as of the valuation reports applicable to FY 1998. This one-time accounting change from the current "market-related" value of assets (20 percent of full-market) to "full-market" immediately recognizes recent capital gains instead of recognizing those gains over five years, resulting in an increased value of the accumulated assets. For valuation reports applicable to FY 1999 and thereafter, the actuarial value of assets will revert to "market-related" value of assets. This law provides for a reduction in the normal contributions of the State to the systems from excess assets for FYs 1997 and 1998, and local employers for FY 1998, and, thereafter, authorizes the State Treasurer to reduce the normal contributions of State and local employers to the systems, to the extent possible, from up to 100 percent of excess assets through FY 2002, and on a declining maximum percentage of excess thereafter. In addition, it permits the State to pay its unfunded accrued liabilities under the various pension systems from any source of funds, including the proceeds of pension obligation bonds (POBs) to be issued by the New Jersey Economic Development Authority (EDA). Any unfunded pension liabilities generated in future periods shall be amortized over a maximum period of 30 years. It provides that in the case of any General Fund savings resulting from any excess assets allocated to the State in the various retirement systems for the valuation period ending in March or June 1996 (or June 1995 with respect to the Police and Firemen's Retirement System), the General Fund balances that would have been paid to the retirement systems for normal contributions shall first be allocated as State aid to public schools to the extent that additional sums are required to comply with the May 14, 1997 decision of the New Jersey Supreme Court in Abbott v. Burke. It also provides for a reduction from excess assets, during calendar years 1998 and 1999, of the contributions by employees of the State and local employers representing 1/2 of 1% of the salaries of employees, and for a similar reduction in contributions thereafter under certain circumstances. [This provision applies to members of TPAF and PERS only.] Date Approved: June 5, 1997 Effective Date: This act shall take effect immediately. CHAPTER 114, P.L. 1997 Authorizes New Jersey Economic Development Authority to issue bonds to provide funds for paying the unfunded accrued pension liability of the State in each State pension fund. Date Approved: June 5, 1997 Effective Date: This act shall take effect immediately. CHAPTER 113, P.L. 1997 Codifies administrative procedures that conform the Teachers' Pension and Annuity Fund, the Alternate Benefit Program, the Judicial Retirement System, the Prison Officers' Pension Fund, the Public Employees' Retirement System, the Consolidated Police and Firemen's Pension Fund, the Police and Firemen's Retirement System, and the State Police Retirement System to federal Internal Revenue Code (IRC) requirements of federal tax "qualified" pension plans. This law provides, in accordance with IRC section 401(a)(2), that at no time prior to the satisfaction of all liabilities with respect to members and their beneficiaries shall any part of the corpus or income of the respective retirement systems be used for or diverted to purposes other than for the exclusive benefit of the members or their beneficiaries. The law provides that the contributions and benefits payable under the retirement systems will be subject to the benefits and contributions limits of IRC section 415. It provides that the annual compensation on which employer and employee contributions and benefits may be based under the State-administered retirement systems will not exceed the annual compensation limit set by IRC section 401(a)(17). The current federal limit is $160,000 annually. The limit will not apply to a member of the systems enrolled prior to July 1, 1996 if that employee's employer certifies to the Director of the Division of Pensions and Benefits prior to July 1, 1997, that the employer will pay the additional cost for not applying the limit to the member. The law also provides that a vested member of a retirement system or fund listed in the bill will have non-forfeitable right to receive benefits as provided under the laws governing the retirement system or fund upon the attainment of five years of service credit in the system or fund or on the date of the enactment of the bill, whichever is later. However, this provision of the legislation will not apply to post-retirement medical benefits which are provided pursuant to law. It also requires the State to make an annual normal contribution and an annual unfunded accrued liability contribution to each system and fund except under two circumstances set forth in the bill. This legislation will not preclude the forfeiture, suspension or reduction of benefits for dishonorable service. In addition, the right to receive benefits will not be deemed to: (1) limit the right of the State to alter, modify or amend the retirement systems, other than the above-mentioned benefits, for members who have attained 10 years of service, or (2) create in any member a right in the corpus or management of a retirement system. Date Approved: June 5, 1997 Effective Date: This act shall take effect immediately. CHAPTER 94, P.L. 1997 This law requires the State Health Benefits Program to provide coverage for a minimum of 72 hours of inpatient care following a modified radical mastectomy and a minimum of 48 hours of inpatient care following a simple mastectomy. The substitute also provides that a carrier under the program shall not require a health care provider to obtain authorization from the carrier for prescribing 72 or 48 hours, as appropriate, of inpatient care. It also provides that the provisions of the law shall not be construed to require a patient to receive inpatient care for 72 or 48 hours, as appropriate, if the patient in consultation with the patient's physician determines that a shorter length of stay is medically appropriate or relieve a patient or physician from any insurer notification requirements. Date Approved: May 8, 1997 Effective Date: This act shall take effect immediately. CHAPTER 89, P.L. 1997 This law allows an employee of the Division of Criminal Justice in the New Jersey Department of Law and Public Safety holding the title of criminal investigator who is enrolled in the Public Employees' Retirement System (PERS) to transfer from the PERS to the Police and Firemen's Retirement System (PFRS). The election must be made within 90 days of the effective date of this act. Any service credit which has been established in the PERS by the transferred employee shall be established in the PFRS. The transferring employee is to be responsible for payment of the amount by which the person's contributions as a member of the PERS are exceeded by the contributions for which the person would, if enrolled in the PFRS, have been liable during the period between the date on which the person's appointment as a criminal investigator became effective and the date on which the person is enrolled as a PFRS member under the legislation, plus regular interest. Accumulated employee deductions and a pro-rata share of the PERS reserve standing to the credit of each transferred employee shall be remitted to the PFRS within 120 and 180 days, respectively, of the effective date of this act. Date Approved: May 8, 1997 Effective Date: This act shall take effect immediately. CHAPTER 63, P.L. 1997 This bill restores the staggered terms for members of the board of trustees of the Teachers' Pension and Annuity Fund who are elected from among the active or retired members of the retirement system. The terms of those members were originally staggered and filled only for the unexpired term, but the provision for filling vacancies for the unexpired term was eliminated in 1971. Several years ago there was a mid-term vacancy which resulted in two elected members standing for election at the same time and serving concurrent terms. This creates the potential for instability and a lack of continuity among the elected members of the board. Under this bill, the requirement for filling vacancies for the unexpired term is restored, and specific terms for the next three holders of the elected positions are established. Thereafter, one member will be elected each year for a three-year term. Date Approved: April 7, 1997 Effective Date: This act shall take effect immediately. CHAPTER 43, P.L. 1997 This bill provides that a member of the Police and Firemen's Retirement System (PFRS) who had established service credit in a municipal or county retirement system or pension fund and who is ineligible to transfer the service credit to PFRS may purchase credit for all of the service with the municipality or county. In order to purchase the credit, a member shall not have a vested right to retirement benefits in the municipal or county retirement system or pension fund. In addition, a member shall pay the full cost attributable to the increased benefits to be derived from the purchased credit but shall not be liable for any costs associated with the financing of pension adjustment benefits and health care benefits for retirees. Date Approved: March 27, 1997 Effective Date: This act shall take effect immediately. CHAPTER 25, P.L. 1997 This bill permits members of the Judicial Retirement System to borrow against their accumulated deductions in the retirement system. Any member who has at least three years of service in the retirement system may borrow up to, but not more, than 50 percent of the amount of the accumulated deductions. The amount borrowed, together with an interest rate of 4 percent per year on the unpaid balance of the loan, will be paid back to the system in equal installments deducted from compensation. The bill provides for the repayment of the loan in the case of a member or pensioner who retires or dies before the outstanding balance of the loan and interest has been recovered. Date Approved: March 7, 1997 Effective Date: This act shall take effect immediately. CHAPTER 23, P.L. 1997. This bill would allow a retired member of the Public Employees' Retirement System (PERS) to accept employment in a position covered by the retirement system without being subject to cancellation of retirement benefits and re-enrollment in the system, provided the person's annual compensation from the position does not exceed $10,000. The Director of the Division of Pensions and Benefits may from time to time adjust this amount. This adjustment shall be 3/5 of the percentage of change in the Consumer Price Index over a period of time as determined by the Director. Neither the individual nor the employer would be required to contribute to the retirement system with respect to the new employment. Date Approved: February 27, 1997 Effective Date: This act shall take effect immediately. CHAPTER 19, P.L. 1997. This law provides that all persons employed on the date on which the bill takes effect as law as inspectors by the Alcoholic Beverage Control Enforcement Bureau, members of the State Capitol Police Force, and as marine law enforcement officers in the Bureau of Marine Law Enforcement may become members of the Division of State Police and the State Police Retirement System (SPRS), provided they meet certain requirements. The requirements are that the inspector, member, or officer must (1) be between 18 and 55 years of age, (2) satisfy the health and physical fitness standards applicable to members of the State Police, and (3) have rendered performance as an inspector, member, or officer that demonstrates to the satisfaction of the Superintendent of State Police the character and ability to perform the duties of a member of the State Police. These persons would become members of the State Police, with all the powers, rights, privileges and benefits of State Police officers. An alcoholic beverage control inspector, State Capitol Police Force member, or marine law enforcement officer who does not become a member of the Division of State Police and elects to continue employment with the Department of Law and Public Safety or with another principal department shall be transferred without loss of salary or pension to the position of investigator or any other position deemed appropriate and shall continue membership in the Police and Firemen's Retirement System (PFRS). In the Alcoholic Beverage Control Enforcement Bureau, the specific positions covered by this legislation are those of supervising inspector, principal inspector, senior inspector, and inspector recruit. In the Bureau of Marine Law Enforcement, the specific positions covered are those of principal marine law enforcement officer, senior marine law enforcement officer, and marine law enforcement officer. A person eligible under the bill to become a member of the State Police shall be appointed for a period of two years. Upon satisfactory completion of that two years' service, the person shall serve as a State Police member continuously thereafter during good behavior. For purposes of determining seniority of service, a person becoming a member of the State Police under the bill shall be deemed to have been hired on the date on which the bill takes effect as law. The person's salary shall be fixed by the State Police Superintendent at an amount approximately equivalent to the person's final salary in the prior position, less any "maintenance allowance" to be allowed the person as a member of the State Police. The person's rank shall also be assigned by the superintendent based on the individual's salary, qualifications and duties. For persons becoming members of the State Police under the bill, their service credit in the Public Employees' Retirement System (PERS) or the Police and Firemen's Retirement System (PFRS) as an alcoholic beverage control inspector, State Capitol Police Force member, or marine law enforcement officer shall be transferred to the SPRS within 120 days. PFRS and PERS shall remit to SPRS employee and employer contributions standing to the credit of a transferred inspector, member or officer within 180 days. If the transferred contributions are insufficient to fund the SPRS liability created by the transfer of service credit, the employer (i.e., the State) shall be liable for the amount of the deficiency. Note: It is the Division's opinion that anyone transferred into the SPRS under this bill who is required to retire upon attaining age 55 with less than 25 years of service will not be eligible for free health benefits. Date Approved: February 13, 1997 CHAPTER 139, P.L. 1996. This bill makes membership in the Public Employees' Retirement System (PERS) optional for a special service employee employed under the federal Older American Community Service Employment Act. Any such employee who is in the retirement system on the effective date of this act may terminate membership in the retirement system by making an application in writing to the board of trustees of the retirement system. Upon receiving the application, the board shall terminate enrollment in the system and the member shall receive a refund of accumulated deductions from the date of commencement of employment in a program under the Act. This refund shall serve as a waiver of all benefits payable under the retirement system. Date Approved: December 20, 1996 CHAPTER 101, P.L. 1996. This law revises the retirement and survivorship benefits payable to retirants and beneficiaries participating in the Employees Retirement System (ERS) of Jersey City. Its impact on the Division of Pensions and Benefits will be limited to the calculation and reporting of the change in the cost of living index pursuant to the Pension Adjustment Act, which the Division provides to the ERS annually. The full provisions of this new law are as follows: Increases from 50% to 55% of final salary the basic allowance payable to retirants with at least 20 years of service who have attained the age of 60. The allowance continues to be supplemented by an amount equal to 1% of such salary for each year of creditable service in excess of 20 years; Increases the retirement allowance for a retirant with 25 years of service before the age of 60, from 50% to 55% of final salary, plus the current 1% for each year of service in excess of 20 years. The pension, currently reduced by 5/12 of 1% for each month that the member is under age 60, would be reduced by only 2/12 of 1% per month under the bill. (If the member waits until age 60 to collect there is no reduction in benefits.) Provides for inclusion of the cost-of-living adjustments in determining the amount of pension provided to the survivor of the retirant. Current law excludes adjustments; Increases from 50% to 60% the proportion of the increase in the cost of living, as measured by the federal Department of Labor's Consumer Price Index. Date Approved: August 19, 1996 CHAPTER 89, P.L. 1996. This law shortens the length of time that the surviving spouse of a retirant from the Police and Firemen's Retirement System (PFRS) must have been married to the retirant in order for the spouse to qualify for a widow or widower's pension under the retirement system. Prior to this new law, "widow" and "widower" meant the woman or the man, respectively, to whom a PFRS member or retirant was married at least two years and to whom the member or retirant continued to be married until death and who has not remarried. This bill changes the two-year period to one year. Additionally, the bill eliminates a requirement, applicable to widowers but not to widows, that to be eligible for a pension, the survivor must have been receiving at least one-half of his support from the decedent in the year preceding her death. Date Approved: July 26, 1996 and is retroactive to January 1, 1995. CHAPTER 77, P.L. 1996. This bill allows participants in the section 403(b) plan under the Supplemental Annuity Collective Trust (SACT) and Additional Contributions Tax-Sheltered (ACTS) programs to transfer their accumulated deductions between the SACT fund and the alternate vendors participating in the ACTS program. P.L.1995, c.92 (established the ACTS program) allowed eligible employees of county colleges, state universities and colleges, the Department of Education, the Commission on Higher Education and the Office of Student Assistance to invest, pursuant to section 403(b) of the federal Internal Revenue Code of 1954, in a tax-deferred annuity with an insurer or mutual fund company authorized to provide investment contracts under the alternate benefit program and not solely with the State-administered SACT program. That law, however, did not allow these employees to transfer all or a portion of their funds from the SACT program to investments with an approved alternate vendor. This bill allows employees to make such a transfer as well as allowing employees to transfer all or a portion of the funds that they may have invested in a tax-deferred annuity with an approved alternate vendor to the SACT program. Date Approved: July 25, 1996. Links to the New Jersey Legislature and other legislature information.
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