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Pensions and Benefits
RECENT LEGISLATION
2006
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Chapter 103, P.L. 2006 Revises the marriage laws; establishes civil unions; establishes the “New Jersey Civil Union Review Commission.
Chapter 381, P.L. 2005 Allows members of PFRS hired during certain periods to serve until attainment of age 68 or 25 years of creditable service, whichever comes first.
Chapter 375, P.L. 2005 Requires health insurers and SHBP providing dependent coverage to provide for election of coverage by certain dependents until their 30th birthday.
Chapter 368, P.L. 2005 Provides paid and unpaid leaves of absence for service with public employee unions and allows full cost purchase of PERS credit for period of leave.
Chapter 366, P.L. 2005 Requires permanent, full-time county fire marshals and assistant marshals authorized to coordinate, control or extinguish fires to be enrolled in PFRS.
Chapter 341, P.L. 2005 Limits coverage under SHBP traditional health indemnity plan for State law enforcement officers; limits SHBP coverage options for State law enforcement officer retirees and nonaligned Division of State Police retirees.
Chapter 334, P.L. 2005 Permits local public entities to provide health benefits to domestic partners of non-SHBP participating employees.
Chapter 326, P.L. 2005 Makes certain volunteer firefighters who were appointed to paid positions and currently in PERS eligible for transfer to PFRS.
Chapter 256, P.L. 2005 Amends the SACT law to allow participants in either SACT plan to contribute the maximum amount permitted under the Internal Revenue Code.
Chapter 251, P.L. 2005 Requires health insurers that provide benefits for expenses incurred in the purchase of outpatient prescription drugs, to cover the cost of prescription female contraceptives.

Links to the New Jersey Legislature and other legislature information.


Chapter 103, P.L. 2006

Date Enacted: December 21, 2006.

Effective Date: February 19, 2007.

Description:

This law establishes civil unions and establishes the “New Jersey Civil Union Review Commission. The impact of this law on pension and SHBP eligibility, and its inter-relationship with the current Domestic Partnership laws, will need to be determined prior to its February 19, 2007 effective date.

To view the new law, click here: Chapter 103, P.L. 2006 Adobe PDF (241K)

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Chapter 381, P.L. 2005

Date Enacted: January 12, 2006.

Effective Date: January 12, 2006.

Description:

This law concerns New Jersey police officers and firefighters subject to mandatory retirement at the age of 65 under the Police and Fireman's Retirement System (PFRS). For a brief period in the 1980's, federal law prohibited states from imposing a maximum age at time of appointment (age 35 years) or mandatory retirement requirements based on age. Once federal law was amended in 1986 to again permit such requirements, New Jersey's mandatory police officer and firefighter appointment and retirement ages were reinstated.

One consequence of the reinstatement of the mandatory retirement age is that police officers and firefighters hired when the maximum appointment age was suspended are today are being required to retire due to age without the ability to achieve certain retirement benefits. This law provides a limited window of opportunity to PFRS members to remain in employment for a reasonable period in order to gain certain benefits upon retirement by allowing a member hired prior to January 1, 1987 to remain a member of the system until the member attains age 68 years or 25 years of creditable service, whichever comes first.

To view the new law, click here: Chapter 381, P.L. 2005 Adobe PDF (12K)

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Chapter 375, P.L. 2005

Date Enacted: January 12, 2006.

Effective Date: This act shall take effect on the 120th day after enactment (May 12, 2006), and shall apply to all contracts, policies, or plans that are delivered, issued, executed or renewed, or approved for issuance or renewal in this State on or after the effective date.

Description:

This law requires health insurers to provide for an election of continued coverage by certain dependents, following the termination of dependent coverage at the time the dependents "age-out" of coverage, until their 30th birthday, under health benefits plans issued by health insurers, including hospital service corporations, medical service corporations, health service corporations, commercial insurers, health maintenance organizations and health benefits plans issued pursuant to the New Jersey Small Employer Health Benefits Program, and the New Jersey State Health Benefits Program. Nothing within the provisions of this law would require an employer to pay all or part of the cost of coverage for any election of this continued coverage.

In order to qualify as a "dependent" for purposes of electing coverage pursuant to this law, the individual must be: (1) less than 30 years of age; (2) unmarried; (3) without a dependent of his own; (4) a resident of this State or enrolled as a full-time student at an accredited institution of higher education; and (5) not actually provided coverage as a named subscriber, insured, enrollee, or covered person under any other group or individual health benefits plan, group health plan, church plan or health benefits plan, or entitled to benefits under Title XVIII of the Social Security Act, Pub.L.89-97 (42 U.S.C. s.1395 et seq.). The intent of the phrase "actually provided coverage" concerning a dependent's coverage under another plan as the named subscriber, insured, enrollee, or covered person, is to only remove a dependent from coverage as provided under the law once the individual can receive immediate services under another plan, and not when merely eligible to obtain coverage under another plan.

A dependent may elect coverage within 30 days prior to "aging- out" of plan coverage so that coverage immediately continues beyond the specific age set forth in the applicable plan. Alternatively, a dependent who previously "aged-out" of a plan and does not receive coverage may, so long as the dependent meets the law's requirements for dependent status, subsequently elect coverage under that plan, notwithstanding the gap in coverage, during specified time periods as provided in the law.

In addition, a dependent previously provided continuation coverage under a plan pursuant to the law, whose coverage subsequently terminates prior to the dependent's 30th birthday, may again elect coverage under that plan until the dependent's 30th birthday. As such, a health insurer is prohibited from refusing a written election for coverage based only upon the fact that the dependent previously elected and lost coverage under the applicable plan.

Any coverage provided to a dependent pursuant to an election of coverage under the law must consist of coverage which is identical to the coverage provided to that dependent prior to the dependent "aging- out" of the plan. This coverage cannot be conditioned upon, or discriminate on the basis of, lack of evidence of insurability.

The applicable plan covering the dependent may require payment of a premium by either the named insured or the dependent for any period of elected coverage. This premium cannot exceed 102% of "the applicable portion" of the premium previously paid for that dependent's coverage under the plan prior to the dependent aging out of the contract. The formula to determine this applicable portion will be established by regulation, and, similar to dependent continuation coverage premiums calculated pursuant to federal COBRA, based upon the difference between the plan's rating tiers for adult and dependent coverage or family coverage, as appropriate, and single coverage; or the formula may be based upon some other formulation or dependent rating tier which provides a substantially similar result.

Any period of elected coverage by a dependent will terminate upon: 1) the dependent no longer meeting the law's requirements for dependent status; 2) the failure to make a timely payment for any applicable premium; or 3) the plan's named insured losing coverage under the contract.

Finally, with respect to the State Health Benefits Program, the State Health Benefits Commission must ensure that, on or after the effective date of the law, every contract purchased by the commission that provides dependent coverage does not terminate such coverage by reason of age before the dependent's 23th birthday, and otherwise complies with the provisions of the law for elections of coverage until the dependent's 30th birthday. Public employees must reimburse the cost of the coverage provided pursuant to the law to the New Jersey State Health Benefits Program, in accordance with a rate to be determined by the commission.

To view the new law, click here: Chapter 375, P.L. 2005 Adobe PDF (114K)

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Chapter 368, P.L. 2005

Date Enacted: January 12, 2006.

Effective Date: January 12, 2006.

Description:

This law permits a State, county or municipal employer to grant a paid or unpaid leave of absence to public employees, excluding police officers and firefighters outside the civil service, who are elected or appointed as officers or representatives of a local, county or State labor organization. A paid leave may be granted provided the employer is reimbursed in advance for compensation and benefit costs including retirement system contributions and health benefit costs, or in accordance with the terms of a collective bargaining agreement. The length of a leave is subject to negotiation between the employer and the union.

It also provides a member of the Public Employees' Retirement System (PERS) with the option of receiving PERS service credit for the period of an approved leave of absence, if the member pays PERS the full cost, employer and employee contributions, for the credit.

In addition, this law permits a public employee who had been granted and had taken an approved unpaid leave of absence in the past and who has not received PERS credit for that service to purchase the credit within one year after its effective date.

To view the new law, click here: Chapter 368, P.L. 2005 Adobe PDF (16K)

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Chapter 366, P.L. 2005

Date Enacted: January 12, 2006.

Effective Date: January 12, 2006.

Description:

This law requires permanent, full-time county fire marshals and assistant county marshals authorized by their boards of chosen freeholders to provide municipal fire departments with assistance as necessary to coordinate, control, or extinguish any fire situation or other emergency situation, to be enrolled in the Police and Firemen's Retirement System (PFRS), as long as they meet all of the other eligibility requirements in applicable pension statutes to qualify for enrollment in PFRS. It also provides that any such permanent, full-time county fire marshal or assistant fire marshal who performs the duties in paragraph (8) of N.J.S.A. 40A:14-2, at the time this law takes effect, will be exempt from any age requirement for enrollment in the PFRS. Any permanent, full-time county fire marshal and assistant fire marshal given approval by the board of chosen freeholders on or after October 1, 2001 to engage in activities provided in N.J.S.A. 40A:14-2b.(8) shall be enrolled as a member in the Police and Firemen's Retirement System effective upon the date when such approval by the board of chosen freeholders was given. Currently, fire marshals and assistant fire marshals are enrolled in Public Employees' Retirement System (PERS). The law also clarifies that the cost of enrollment of a full time county fire marshal or assistant fire marshal in the PFRS of New Jersey shall not be the responsibility of the State.

To view the new law, click here: Chapter 366, P.L. 2005 Adobe PDF (17K)

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Chapter 341, P.L. 2005

Date Enacted: January 12, 2006.

Effective Date: January 12, 2006.

Description:

This law amends N.J.S.A. 52:14-17.28 to provide that all law enforcement officers employed by the State for whom there is a majority representative for collective negotiations purposes may not be eligible for coverage under the traditional plan within the State Health Benefits Program (SHBP). Coverage under the SHBP traditional indemnity health insurance plan may be limited or discontinued pursuant to a binding collective negotiations agreement or pursuant to the application by the State Health Benefits Commission, in its sole discretion, of the terms of any collective negotiations agreement binding on the State to non-aligned State employees.

In addition, it amends N.J.S.A. 52:14-17.32 to require that, for law enforcement officers employed by the State for whom there is a majority representative for collective negotiation purposes and for nonaligned sworn members of the Division of the State police who retire after July 1, 2005, the coverage options available to such employees in retirement will be limited to those options that were available to the employee on the employee's last day of employment.

To view the new law, click here: Chapter 341, P.L. 2005 Adobe PDF (25K)

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Chapter 334, P.L. 2005

Date Enacted: January 12, 2006.

Effective Date: March 13, 2006.

Description:

This law permits certain public entities that are not participating in the State Health Benefits Program (SHBP) to provide, at their option, dependent health benefits coverage to a person who is the domestic partner of an employee, pursuant to the "Domestic Partnership Act," N.J.S.A. 26:8A-1 et seq.

This law applies to entities such as municipalities, counties, local boards of education and county colleges whose employees are not enrolled in SHBP. Its provisions would allow these entities to voluntarily provide dependent health benefits coverage to an employee's domestic partner on the same basis as local public entities whose employees are enrolled in SHBP are already permitted to do under the "Domestic Partnership Act."

Under this law, when entities choose to provide health benefits to domestic partners of employees, the coverage will continue during the employees' retirement pursuant to certain provisions of current law. This law, however, also states this requirement will not be construed to limit an entity's right to extend benefits to, or withdraw benefits from, an employee or dependents of an employee.

This act takes effect on the 60th day after enactment.

To view the new law, click here: Chapter 334, P.L. 2005 Adobe PDF (15K)

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Chapter 326, P.L. 2005

Date Enacted: January 12, 2006.

Effective Date: January 12, 2006.

Description:

This law provides that only a currently employed firefighter who had been a volunteer appointed to a paid position by a municipality and who (1) was not eligible for Police and Firemen's Retirement System (PFRS) membership at the time of appointment to the paid position, (2) meets the PFRS definition of "fireman", and (3) is currently enrolled in Public Employees' Retirement System (PERS), may transfer, subject to the approval of the municipal governing body, from PERS to PFRS, regardless of age.

An eligible individual must waive their rights to their PERS benefits within 90 days of this law's effective date to qualify. Transfers under this law shall take effect on the first day of the first full calendar month following the effective date of this act by at least 180 days. PERS shall transmit to PFRS an amount equal to the present value of the benefit under PERS accrued to the date of transfer by each person transferring to PFRS. The service credit accrued in PERS to the date of transfer shall be transferred to PFRS and may be used to meet any service credit requirement for benefits under PFRS. Any benefit of a member who transfers membership from PERS to PFRS under this act based upon service credit shall be the amount of benefit determined as provided under PFRS based upon the total amount of service credit multiplied by the ratio of the service credit under PFRS from the date of transfer to the total amount of service credit, plus a benefit comparable to a PERS deferred, early or regular service retirement benefit, as appropriate, based upon the age of the member at the time of retirement and the amount of PERS service credit transferred to PFRS, determined as provided under the law and regulations governing PERS for the benefit. The total amount of service credit in PFRS, including the transferred PERS service credit, may be used to meet the service credit requirement for the benefit comparable to a PERS deferred or early retirement benefit, but the benefit shall be calculated only on the transferred PERS service credit.

Active and retired death benefits, accidental death benefits, and ordinary and accidental disability retirement benefits for members transferring to PFRS under this act shall be the benefits provided under PFRS.

For members transferring to PFRS under this act, the widows' or widowers' pensions provided under section 26 of Chapter 250, P.L. 1967 (C.43:16A 12.1) shall be the amount of the benefit determined as provided in section 26 multiplied by the ratio of the service credit under PFRS from the date of transfer to the total amount of service credit. Transferring members shall be entitled to elect optional retirement allowances for the portions of their retirement benefits based upon their PERS service credit as provided under the laws and regulations governing selection of optional retirement allowances under PERS.

A fireman who transfers membership from PERS to PFRS may receive full credit toward benefits under PFRS for the transferred PERS service credit if the member agrees to pay the full cost of the accrued liability for the transferred PERS service credit in the same manner and subject to the same terms and conditions provided for the purchase of credit for military service under section 3 of Chapter 153, P.L.1991 (C.43:16A-11.11).

The law provides that the State will not be liable for additional costs to a local employer associated with a firefighter transferring to PFRS under this law.

To view the new law, click here: Chapter 326, P.L. 2005 Adobe PDF (22K)

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Chapter 256, P.L. 2005

Date Enacted: January 4, 2006.

Effective Date: January 4, 2006.

Description:

Active members of the State-administered retirement systems are eligible to participate in the voluntary investment Supplemental Annuity Collective Trust (SACT) Regular Plan. Additionally, active members of the State-administered retirement systems who are employed by a public educational institution are eligible to participate in the SACT Tax-Sheltered Plan. Prior to the enactment of this law, participants in either plan were permitted to contribute only 10 percent of their annual salary into the SACT each year.

This law amends the SACT law to allow participants in either SACT plan to contribute the maximum amount permitted under the Internal Revenue Code. For the year 2006, an individual's maximum contribution to a 403(b) plan, such as the Tax-Sheltered SACT, is $15,000.

To view the new law, click here: Chapter 256, P.L. 2005 Adobe PDF (13K)

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Chapter 251, P.L. 2005

Date Enacted: January 4, 2006.

Effective Date: This law takes effect on the 180th day after enactment (July 3, 2006) and applies to policies and contracts issued or renewed on or after its effective date.

Description:

This law requires health insurers that provide benefits for expenses incurred in the purchase of outpatient prescription drugs, to cover the cost of prescription female contraceptives. The provisions apply to hospital, medical and health service corporations, commercial individual, small employer and group health insurers, health maintenance organizations and prepaid prescription service organizations and the State Health Benefits Program.

It defines "prescription female contraceptives" to mean any drug or device used for contraception by a female, which is approved by the federal Food and Drug Administration for that purpose, that can only be purchased in this State with a prescription written by a health care professional licensed or authorized to write prescriptions, and includes, but is not limited to, birth control pills and diaphragms.

This law takes effect on the 180th day after enactment and applies to policies and contracts issued or renewed on or after its effective date.

To view the new law, click here: Chapter 251, P.L. 2005 Adobe PDF (30K)

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