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Pensions and Benefits
PENSION AND HEALTH BENEFITS
REVIEW COMMISSION 2004

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Meeting Agendas

June September October December

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Voting Results

June September October December

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The Pension and Health Benefits Review Commission
Agenda for December 10, 2004 Meeting

The Pension and Health Benefits Review Commission will meet on Friday, December 10, 2004 at 10:00 AM in the first floor boardroom of the Division of Pensions and Benefits, 50 West State Street, Trenton.  No verbal comments are accepted during the meeting. The Commission should receive written comments at least ten business days in advance of the meeting. The agenda is as follows:

S-1866 (Inverso)
Requires SHBP to obtain two physician examinations of patient to uphold on appeal decision to discontinue patient's skilled nursing care.

S-246 (Coniglio)/(Sweeney)
Requires health benefits coverage for certain therapies and applied behavioral analysis for the treatment of certain autism disorders.

S-146 (Bryant)/(Ciesla)/ A-1785 (Roberts)/(Vandervalk)
Provides State-paid SHBP benefits in retirement to certain former State employees with 25 or more years State service.

S-107 (Inverso)/(Singer)
Requires coverage for certain nonprescription formulas under certain health benefits plans, including SHBP.

S-245 (Coniglio)/(Sweeney)
Requires health insurers, State Health Benefits Program and NJ FamilyCare to provide coverage for hearing aids for covered persons 18 years of age and younger.

A-3381 (Cohen)
Provides maximum retirement allowance for certain judges required to retire at age 70 with prior service as administrative law judge.

S-229 (Singer)
Authorizes counties, municipalities and school districts to grant cost-of-living increases to certain retired veterans.

S-216 (Singer)
Allows certain surviving spouses to receive a PERS retirement allowance.

S-145 (Bryant)
Grants post-retirement death benefit in alternate benefit program if retiree had 25 or more years of NJ service credit regardless of age.

S-135 (Connors)/A-2066 (Connors)
Increases SPRS "special" retirement benefit from 65% to 70% of final compensation.

A-3342 (Johnson)/(Manzo)/(Scalera)
Allows law enforcement officers in PERS to transfer to and enroll in PFRS; requires all law enforcement officers to be enrolled in PFRS.



The Pension and Health Benefits Review Commission
Agenda for October 29, 2004 Meeting

The Pension and Health Benefits Review Commission will meet on Friday, October 29, 2004 at 10:00 AM in the first floor boardroom of the Division of Pensions and Benefits, 50 West State Street, Trenton. No verbal comments are accepted during the meeting. The Commission should receive written comments at least ten business days in advance of the meeting. The agenda is as follows:

S-1477 (Bucco)
Provides for recalculation of PERS retirement allowance for subsequent public employment.

S-1184 (Turner)
Adds option of receipt of employee's contributions plus portion of employer contributions when vested PERS member leaves PERS-covered service.

S-1112 (Rice)/A-2374 (Van Drew)/(Chiappone)
Allows emergency medical technicians to transfer to and enroll in PFRS.

A-3025 (Wolfe)/(Holzapfel)
Eliminates remarriage prohibition for PFRS death benefits; provides retirement allowance to certain survivors of PFRS members.

S-971 (Connors)/A1389 (Conners)/(Van Drew)
Broadens eligibility for certain veterans' benefits by eliminating requirement of service during specified dates or in specified locations.

S-839 (Vitale)/(Asselta)/A-2357 (Conners)
Provides that TPAF and PERS veterans' retirement with 35 years of service shall be based on highest benefit year rather than last year of service.

S-746 (Turner)
Requires SHBP coverage for certain new employees.

S-678 (Connors)
Permits certain county and municipal employees to waive benefits coverage under the State Health Benefits Program when covered by a spouse's benefits plan.

S-556 (Vitale)/(Buono)
Requires insurers that provide prescription drug benefits and State Health Benefits Program to cover costs of prescription female contraceptives.

A-3234 (Johnson)/(Chivukula)
Permits public employers to pay health insurance premiums for survivors of PFRS members.



The Pension and Health Benefits Review Commission
Agenda for September 11, 2004 Meeting

The Pension and Health Benefits Review Commission will meet on Friday, September 17, 2004 at 10 AM in the first floor boardroom of the Division of Pensions and Benefits, 50 West State Street, Trenton. No verbal comments are accepted during the meeting. The Commission should receive written comments at least ten business days in advance of the meeting. The agenda is as follows:

S-1683 (Vitale)
Requires SHBP and health insurers providing dependent coverage to cover unmarried dependent children until their 26th birthday.

A-3044 (Blee)
Increases amount of State payment for post-retirement health care benefits for certain retired police officers and firefighters.

A-2853 (Chiappone)
Allows reenrollment in the SHBP by certain retirees.

S-1603 (Turner)/A451 (Impreveduto)
Allows school boards to offer incentive to waive SHBP coverage to employees eligible for spouse's health care coverage.

S-1575 (Singer)
Provides State-paid SHBP benefits to TPAF retirees who retired with at least 20 years of service prior to May 1, 1988.

A-2655 (Connors)
Provides certain veteran benefits to veterans of the global war on terror conflicts and those of certain military engagements served during certain periods.

S-1560 (Bark)
Extends certain benefits to veterans of the global war on terror.

S-1578 (Allen)/(Girgenti)
Provides that employees no longer must pay full cost of purchase of PERS, PFRS or TPAF credit for military service.

A-2874 (Van Drew)
Permits public employees to purchase PERS credit for three years of service with certain private employers.

A-2947 (Van Drew)
Changes salary base for PERS Prosecutors Part benefits from final compensation to highest compensation.

S-1604 (Sarlo)
Enhances benefits for active members when PFRS funded at 101%, and for retirees when PFRS funded at 104%.

A-2932 (Merkt)
Establishes Public Employees' Defined Contribution Plan Study Commission.



The Pension and Health Benefits Review Commission
Agenda for June 11, 2004 Meeting

The Pension and Health Benefits Review Commission will meet on Friday, June 11, 2004 at 10 AM in the first floor boardroom of the Division of Pensions and Benefits, 50 West State Street, Trenton. No verbal comments are accepted during the meeting. The Commission should receive written comments at least ten business days in advance of the meeting. The agenda is as follows:

S-1385 (Ciesla)/(Kyrillos) / A-989 (Chatzidakis)
Extends eligibility for certain veterans' benefits to members of reserve components of US Armed Forces and NJ organized militia who serve at least 180 continuous days

A-2498 (Baroni) / S-1527 (Inverso)
Requires legislators with simultaneous PERS-covered elected office or employment to choose one position for receipt of PERS credit

A-2560 (Scalera)/(Hackett)
Permits rehired public employees to purchase PERS credit for three years of layoff period

A-2597 (Gusciora)/(Coleman)
Provides additional PERS death benefit coverage

A-2548 (Barnes)/(Diegnan) / S-1472 (Ciesla)
Adds certain forensic scientists to Prosecutors Part in PERS

A-2536 (Steele)
Creates Weights and Measures Officers Part in PERS with certain enhanced benefits

A-2694 (Barnes)
Allows certain DOC administrators to become members of PERS Prosecutors Part

S-1237 (L. Connors) / A-936 (C. Connors)
Grants PFRS membership for certain Division of Parks and Forestry titles; allows current DEP employees in titles to transfer from PERS to PFRS

S-1315 (Girgenti)/(Bucco) / A-2263 (Wisniewski)
Makes volunteer firefighter appointed to paid position eligible for PFRS membership through age 40

A-1624 (Steele)/(Wisniewski) / S-1317 (Girgenti)
Requires laws for police service benefits and fire service benefits to be the same

A-2538 (Chiappone) / S-1570 (Bucco)
Eliminates maximum age requirement for appointment as police officer or paid firefighter

S-520 (Girgenti) /A193 (Previte/Scalera)
Concerns workers' compensation for firefighters with cancer.

S-1395 (Rice)
Provides paid post-retirement medical benefits to certain retired veteran State
Employees

S-1199 (Turner)
Provides retirement allowance option to surviving spouses of deceased vested PERS and TPAF members.



Pension and Health Benefits Review Commission
Vote Results
December 10, 2004

S-1866 (Inverso)
Requires SHBP to obtain two physician examinations of patient to uphold on appeal decision to discontinue patient's skilled nursing care.

Motion: To recommend against enactment because of the precedent setting nature of this bill.

Discussion:  This bill is special legislation.  Its enactment would have a broad impact since it would become part of the SHBP laws and apply to all similar situations on a prospective basis.  The SHBP pays for eligible services which are ordered by a doctor for the treatment of illness or injury.  This bill would mandate SHBP coverage of skilled nursing care in long term care situations.  It also mandates a second mutually agreed upon physician be retained to make a personal examination of the patient in the event the first physician concludes that there is no medical need for the skilled nursing care.  Problems can be anticipated with the "mutual agreement" requirement.  SHBP costs would increase as a result of enactment.

S-246 (Coniglio)/(Sweeney)
Requires health benefits coverage for certain therapies and applied behavioral analysis for the treatment of certain autism disorders.

Motion:  To recommend against enactment since few states offer these types of services in their health benefits coverage and increased State and local employer SHBP costs would result.

Discussion:  Federal legislation already exists that provides services through the public school system.  On the State level, the State of Developmental Disabilities coordinates and provides services for people with autism and other debilitating conditions.  If enacted this bill would increase annual State and participating local employer SHBP costs by an estimated $30 million.

S-146 (Bryant)/(Ciesla)/ A-1785 (Roberts)/(Vandervalk)
Provides State-paid SHBP benefits in retirement to certain former State employees with 25 or more years State service.

Motion:  To recommend against enactment since the bill is special legislation and increased State costs would result.

Discussion:  The enactment of this bill will provide the impetus for the introduction of future legislation further expanding the State's liability to provide post retirement medical benefits.  These benefits are expensive; the average State costs is approximately $11,900 per retiree.  For FY'2005 the State's projected cost for post retirement medical is anticipated to be $911.1 million.  The bill also has a provision for retroactivity to retirements occurring on or after December 31, 2000, which indicates it may be special legislation.

S-107 (Inverso)/(Singer)
Requires coverage for certain nonprescription formulas under certain health benefits plans, including SHBP.

Motion:  To recommend against enactment because it would significantly increase the SHBP costs.

Discussion:  If enacted this bill would increase prescription drug claims by an estimated 4%, which will  increase SHBP costs by an estimated $27 million.  The issue of mandating health benefit coverage continues to be a questionable practice and typically not applicable to private sector, self funded group benefit plans where many New Jersey residents obtain coverage.  Coverage mandates for particular conditions in insured plans has been a noted reason for health plan sponsors electing to move to self funded plans. 

S-245 (Coniglio)/(Sweeney)
Requires health insurers, State Health Benefits Program and NJ FamilyCare to provide coverage for hearing aids for covered persons 18 years of age and younger.

Motion:  To recommend against enactment since it may encourage expansion of coverage to individuals over the age of 18 with potentially significant costs.

Discussion:  The enactment of this bill may encourage the introduction of future legislation to expand coverage to the SHBP population over the age of 18, with potentially significant cost to the State and participating local employers. 

A-3381 (Cohen)
Provides maximum retirement allowance for certain judges required to retire at age 70 with prior service as administrative law judge.

Motion:  To recommend against enactment because of the additional State employer pension costs.

Discussion:  The narrowly drawn provision of this bill indicates it is special legislation, which will impact only one individual, providing the member with a significantly higher annual pension.  It will also encourage the introduction of future legislation providing similar exceptions to other judges who are required to retire at age 70 without the requisite 10 years of judicial service.

S-229 (Singer)
Authorizes counties, municipalities and school districts to grant cost-of-living increases to certain retired veterans.

Motion: To recommend enactment since it would provide COLA increases on the same basis as the State.

Discussion:  This bill would apply to relatively few individuals.  The additional costs will be borne by local employers electing to provide the cost-of-living adjustment.

S-216 (Singer)
Allows certain surviving spouses to receive a PERS retirement allowance.

Motion:To recommend against enactment since bill is special legislation.

Discussion:  The bill's narrowly drawn provisions to qualify for the survivor's pension indicates it was crafted to benefit one individual.  The Commission generally opposes such legislation because they tend to lay the foundation for future introduction of much broader, more costly pension liberalization bills.  This bill will provide a pension benefit to a member's beneficiary prior to the member becoming qualified for a pension.  It also indicates that only the non-contributory life insurance benefit along with accumulated deductions must be returned in order to get the benefit provided by this bill, ignoring the return of any contributory life insurance benefit paid. 

S-145 (Bryant)
Grants post-retirement death benefit in alternate benefit program if retiree had 25 or more years of NJ service credit regardless of age.

Motion:  To recommend enactment because bill would make the entitlement to the post retirement death benefit for ABP members more comparable to the other State retirement systems. 

Discussion:  The enactment of this bill would allow the payment of death benefits under the same service criteria currently required in the Public Employees' Retirement System (PERS) and the Teachers' Pension and Annuity Fund (TPAF).  Although, ABP is a defined contribution plan and is a fundamentally different type of retirement arrangement compared to the other State-administered defined benefit plans, the ABP laws are structured to make benefit entitlements under the program comparable to the other State plans.     

S-135 (Connors)/A-2066 (Connors)
Increases SPRS "special" retirement benefit from 65% to 70% of final compensation.

Motion: To recommend against enactment since a benefit increase cannot be justified.

Discussion:  Poor investment returns over the past several years has significantly eroded the market value of assets in the State pension system.Increasing pension liabilities, in the aggregate the State plans are no longer 100 percent funded.  The SPRS funding level has decreased from a high of 115.8% in 2000 to 102.7% for 2003.  Market value of assets in the SPRS during this period decreased from $2.0 billion to $1.5 billion.  The additional pension liabilities associated with this bill is estimated to be over $101.9 million.  Its enactment will further erode the plan's funded status and increase the required State pension contributions.  It may also encourage the enactment of similar legislation for the Police and Firemen's Retirement System.

A-3342 (Johnson)/(Manzo)/(Scalera)
Allows law enforcement officers in PERS to transfer to and enroll in PFRS; requires all law enforcement officers to be enrolled in PFRS.

Motion:  To recommend against enactment because of State mandate State pay issues.

Discussion:  This bill could be considered discriminatory since it would provide an exemption to the age thirty-five enrollment limit that currently exists in order to qualify for membership in the PFRS to a limited group of public employees classified as Law Enforcement Officers (LEO's).  LEO's are currently members of PERS that are eligible for a special tier of enhanced benefits which are greater than a normal PERS pension, but less than that available through the PFRS.  Legislation is constantly introduced to provide exceptions to the PFRS laws that require members to be age thirty-five or under in order to qualify for PFRS membership.  The enactment of this bill will encourage the introduction and enactment of more such legislation.  It will also increase both State and local employer pension contributions if enacted.



Pension and Health Benefits Review Commission
Vote Results
October 29, 2004

S-1477 (Bucco)
Provides for recalculation of PERS retirement allowance for subsequent public employment.

Motion:  To recommend against enactment because it would create inconsistency in the return to employment provisions in comparison to the other State retirement systems and would undermine the funding of the pension system.

Discussion:  Since PERS is the only pension system impacted by this bill, its enactment would create a disparity among the other State pension systems.  This bill would introduce adverse selection into the PERS and undermine the funding of the plan.  Current pension statutes contain a provision that places a cap on the total pension received after a return to employment.  This provision prevents a member from returning to employment at a significantly higher salary and receiving an inflated, under-funded pension upon subsequent retirement.  This bill would remove that provision.

S-1184 (Turner)
Adds option of receipt of employee's contributions plus portion of employer contributions when vested PERS member leaves PERS-covered service.

Motion: To recommend against enactment based on additional cost to the State and local employers, amends only PERS creating a disparity in benefits when compared to the TPAF and would provide a defined contribution feature to a defined benefit plan.

Discussion:  If enacted this bill would provide a significant benefit enhancement that would be available to only PERS members upon vesting, which would encourage future legislation to enhance the benefits of the other State retirement systems.  The bill also provides a retroactive application to the beneficiary or estate of a PERS member who died prior to the effective date of the bill, which indicates it may be special legislation.  There are "State mandate, State pay" issues which may need to be addressed.  Additional annual contributions would increase by $4.2 million to the State and an additional $9.9 million to local employers.  The unfunded liability for the State would increase to $30 million and $68.7 million to local employers.

S-1112 (Rice)/A-2374 (Van Drew)/(Chiappone)
Allows emergency medical technicians to transfer to and enroll in PFRS.

Motion:  To recommend against enactment because it sets a precedent for another category of public employees to obtain membership into the PFRS, which was established for"police" and "firemen."

Discussion:  This bill would expand the category of public employees who would be eligible for enrollment into the PFRS.  Current pension law limits membership in the PFRS to policemen and firemen.  The PFRS Board of Trustees through the recommendation by the Director of the Division of Pensions and Benefits approves membership positions that meet the PFRS eligibility criteria.  The enactment of this bill would encourage the

introduction of future legislation allowing further exceptions to the PFRS membership eligibility criteria.  This bill would create an unfunded pension liability for which the member would be responsible.  The member would be required to pay the difference between the assets transferred from the PERS to the PFRS.  The cost may be so significant that the transfer may be prohibitive.  There would also be increased costs to the State and local employers.

A-3025 (Wolfe)/(Holzapfel)
Eliminates remarriage prohibition for PFRS death benefits; provides retirement allowance to certain survivors of PFRS members.

Motion:  To recommend modification to change the funding approach similar to that of PERS and TPAF and permit employees to reduce their benefit to fund a benefit for the surviving spouse.

Discussion:  The bill changes the original fundamental purpose for providing a survivor's death benefit in that it is supposed to provide financial relief to a spouse who may be financially dependent upon the member.  This financial dependence principle justifies the termination of the benefit upon remarriage.  The enactment of this bill changes the nature of the surviving spouse benefit to more of an entitlement rather than a benefit related to the member's service.  Chapter 181, P.L. 2003 eliminated the remarriage prohibition for PFRS and SPRS accidental death benefits.  It was prospective in nature and did not restore the accidental death benefit to widows/widowers of PFRS and SPRS members who remarried prior to its enactment.  This bill would not only be prospective, but it would also restore the death benefits of all PFRS widows/widowers whose benefits were terminated because of remarriage prior to the bill's effective date.  The State and local PFRS pension liabilities are estimated to increase by $30 million if this bill is enacted.

S-971 (Connors)/A1389 (Conners)/(Van Drew)
Broadens eligibility for certain veterans' benefits by eliminating requirement of service during specified dates or in specified locations.

Motion:  To recommend against enactment because the bill is too broad and costly.

Discussion:  According to a Department of Personnel study, approximately 7.8% of New Jersey's population are classified as veterans in public employment, and consequently, members of a State-administered retirement system.  The Division of Taxation estimates that there are approximately 156,000 additional individuals that would be eligible to receive veterans' preference in New Jersey as a result of the enactment of this bill.  Expanding the eligibility of pension system members who would qualify for a special veteran retirement will increase pension costs for the State, and for local employers participating in the PERS.  The State would be required to pay the increased cost for both the State and local employers.  The additional annual pension costs are estimated to be $13.7 million.

S-839 (Vitale)/(Asselta)/A-2357 (Conners)
Provides that TPAF and PERS veterans' retirement with 35 years of service shall be based on highest benefit year rather than last year of service.

Motion:  To recommend enactment because it extends a concept already available to PERS and TPAF members.

Discussion:  Chapter 332, P.L. 1995 made this same change to the 54.5% of final compensation veterans benefit calculation when a PERS and TPAF member becomes eligible upon attaining 20 years of service and age 60, or upon attaining 25 years of service and age 55.  This bill provides consistency in veteran benefits.

S-746 (Turner)
Requires SHBP coverage for certain new employees.

Motion:  To recommend against enactment since the federal COBRA legislation addresses this issue.

Discussion:  This bill will would promote adverse selection against the SHBP by permitting new employees with pre-existing medical conditions the opportunity to enroll immediately.  New employees with high medical risk will accept employment for medical reasons only, which would adversely affect SHBP claims experience.  The SHBP costs to the State and State employees who premium share will increase.  The continuation of coverage is offered under the provisions of COBRA to individuals and their dependents that lose health care coverage.  

S-678 (Connors)
Permits certain county and municipal employees to waive benefits coverage under the State Health Benefits Program when covered by a spouse's benefits plan.

Motion:  To recommend against enactment since the waiver of coverage program does not provide any cost savings to the State.

Discussion:  The Commission opposed Chapter 259 P.L. 1995 since it was a piecemeal attempt to offer cash incentives to waive SHBP and non-SHBP coverage to its employees if the employee had coverage as a dependent of a spouse.  Similar legislation has since been passed to extend the waiver programs and the results have been inconsistently applied to employers, municipalities and county colleges.  Overall, health benefit waiver programs do little to generate savings to local employers in the SHBP and may create negative utilization with the effect of increasing SHBP premiums.

S-556 (Vitale)/(Buono)
Requires insurers that provide outpatient prescription drug benefits and State Health Benefits Program to cover costs of prescription female contraceptives.

Motion:  To recommend enactment since most of the SHBP already covers prescription female contraceptives. 

Discussion:  The bill will have minimal impact on the SHBP prescription drug plan since it is designed to cover the cost of oral contraceptives, contraceptive injections and emergency contraceptives.  The greater cost impact will be on the Traditional Plan, with an estimated increase in medical plan costs of $4 million per year.  Sub dermal implants, intrauterine systems, and injection must be administered by a physician. This will result in increased physician office visits.  The office visits and contraceptives are covered under the NJ PLUS in-network only and managed care plans.  These services are not covered under the Traditional plan or NJ PLUS out-of-network.  Most of the additional cost would be incurred by local employers participating in the SHBP since the large majority of State employees are enrolled in one of the managed care plans or NJ PLUS.

A-3234 (Johnson)/(Chivukula)
Permits public employers to pay health insurance premiums for survivors of PFRS members.

Motion: To recommend against enactment since it would create a disparity in benefits when compared to other State-administered retirement systems and would increase annual employer costs.

Discussion:  This bill impacts only the PFRS creating a disparity among the various retirement systems that would not have this benefit available to them.  The laws governing the SHBP allow participating employers to elect to provide the surviving spouse and dependents of a retiree with health benefit coverage, but only if the retiree qualified for such coverage by retiring with 25 or more years of service credit.  This bill would set a precedent by allowing employers other than the State to pay for survivor health care coverage when the member had terminated service with less than 25 years of pension service credit.  Local employer health benefit premiums would increase with the enactment of this bill.  There is a concern that this increase in costs would be passed to the State with future legislation mandating the State to bear these increased costs.



Pension and Health Benefits Review Commission
Vote Results
September 17, 2004

S-1683 (Vitale)
Requires SHBP and health insurers providing dependent coverage to cover unmarried dependent children until their 26th birthday.

Motion: To recommend against enactment as the SHBP benefits are already quite generous in comparison to other state health plans.

Discussion: The SHBP already provides coverage to unmarried dependents until the end of the calendar year in which the dependent attains age 23. Cobra coverage can be purchased for overage dependent children for an additional 3 years, or until the end of the calendar year in which the dependent attains the age of 26. The enactment of this bill will increase annual SHBP costs for the State and local public employers by over $23 million.

A-3044 (Blee)
Increases amount of State payment for post-retirement health care benefits for certain retired police officers and firefighters.

Motion: Recommend against enactment as it would add considerable cost to the State. This bill is not a solution to the much larger health care problem.

Discussion: This bill if enacted would increase the amount of State payment for post-retirement health care benefits for certain retired police officers and firefighters by $4 million annually. Currently, the State will pay 80% of the cost of the least expensive plan offered by the SHBP for the level of coverage selected established by P.L. 1997, c.330. The retiree pays the remaining cost of the plan. Under this bill, the State will pay 80% of the premium or periodic charges for the medical plan chosen by the qualified retiree, without regard to whether it is the least expensive in the SHBP program. Expanding the benefits established by Chapter 330 may serve as a disincentive to those local employers that do not pay for retiree health care coverage from ever paying for this benefit.

A-2853 (Chiappone)
Allows reenrollment in the SHBP by certain retirees.

Motion: To recommend against enactment because the reenrollment issue can be accomplished more
efficiently by the adoption of an administrative rule initiated by the Division of Pensions and Benefits,
rather than through legislation.

Discussion: The Division of Pensions and Benefits recently drafted a proposed rule for consideration that would allow a retiree to reenroll in the SHBP, as provided in this bill. Reenrollment, however, would be contingent upon proof of continuation of coverage. The drafted rule is predicated on the premise that as the cost of retired SHBP coverage continues to increase; the SHBP coverage to retired employees will have little value as long as they have alternative active coverage. The ability to reenroll may encourage
termination of SHBP coverage if private health insurance coverage can be obtained, generating savings to retirees who pay for SHBP coverage into retirement, and to the State and local participating employers who pay for post-retirement medical coverage through the SHBP.

S-1603 (Turner)/A451 (Impreveduto)
Allows school boards to offer incentive to waive SHBP coverage to employees eligible for spouse's health care coverage.

Motion: To recommend against enactment because the bill would not provide any savings to the State.

Discussion: The enactment of this bill would simply extend the local employee health care waiver program already allowed for certain other public entities to school boards. The current waiver of coverage laws are inconsistently applied to employers other than municipalities and county colleges. This bill will continue to apply the waiver inconsistently, since it only applies to school boards who participate in the SHBP and not to school boards who provide employee health benefit coverage outside the SHBP. Since it only impacts local school boards, there would be no direct savings to the State and aggregate savings to school boards is questionable.

S-1575 (Singer)
Provides State-paid SHBP benefits to TPAF retirees who retired with at least 20 years of service prior to May 1, 1988.

Motion: To recommend against enactment because the bill would increase cost to the State.

Discussion: The increase costs to the State if this bill were enacted are estimated to be almost $20 million. The State currently is obligated to provide post-retirement medical benefits to retired State employees, and to employees of school boards and county colleges, who retire with 25 or more years of pension service credit. The State also provides post-retirement medical benefit subsidies to local members of the PFRS under Chapter 330, P.L. 1997 who retire with 25 or more years of service credit. This bill only applies to TPAF retirees, if enacted it would pave the way for bills to be introduced that would provide other public retirees with less than 25 years of pension service credit, State paid post-retirement medical benefits.

A-2655 (Connors)
Provides certain veteran benefits to veterans of the global war on terror conflicts and those of certain military engagements served during certain periods.

Motion: To recommend against enactment because the bill is too broad. Service within the theatre of
operation would not be required for veteran preference status.

Discussion: In general, governmental and private sector retirement plans provide for military service credit but do not provide enhanced benefits for veterans. In New Jersey, veteran status provides civil service hiring preferences, the purchase of service credit in PERS, TPAF and PFRS, receipt of a property tax deduction or exemption and enhanced retirement benefits for TPAF and PERS. This bill if enacted will provide for a greater number of individuals to be classified as a veteran and receive the enhanced benefits, which will significantly increase State and local employer costs. It is estimated that approximately 156,000 additional individuals would receive veterans' preference in New Jersey. State and local pension costs will increase by $13.7 million annually.

S-1560 (Bark)
Extends certain benefits to veterans of the global war on terror.

Motion: To recommend against enactment because the bill is too broad. Minimal eligibility requirements specified in other veteran statutes are not met.

Discussion: The provisions of this bill are too broad and will likely result in confusion as to who would be eligible for veterans preference. There are no final dates identified to the specified conflict, therefore individuals may qualify indefinitely into the future. It does not require that the individual serve for any specified period of time to qualify, which under the existing veteran statues require that at least 14 days be served in the theatre of operation. Increased pension cost to State and local employers will result.

S-1578 (Allen)/(Girgenti) A-402 (Van Drew)/(Conners)
Provides that employees no longer must pay full cost of purchase of PERS, PFRS or TPAF credit for military service.

Motion: To recommend against enactment because of the additional cost to the State.

Discussion: It is unclear as to whether this bill would provide a retrospective application. Generally, bills are interpreted to be prospective and as such, this bill would impact a number of members who have contracted to purchase their military time over a series of scheduled payments. These members would have the ability to cancel their remaining arrears balance and receive pro rata credit for the service purchased to date. Should this legislation pass, many members would cancel the balance of their purchase payments and seek to re-contract for the remainder of the purchase under the amended statute. The purchase cost calculation does not include the costs associated with providing post-retirement health benefits to members, which significantly increases costs to employers. If enacted, State and local pension costs will increase to $3.5 million by FY 09.

A-2874 (Van Drew)
Permits public employees to purchase PERS credit for three years of service with certain private employers.

Motion: To recommend against enactment because of the cost involved to the State, the difficulty of administration and the disparity that would be created when compared to the other New Jersey State retirement systems.

Discussion: The types of service available for purchase have been consistent in all the major State-administered retirement systems. Chapter 338, P.L. 1999 and Chapter 228, P.L. 2001 were enacted allowing the purchase of credit for up to three years of layoff period, but these laws only apply to PFRS members. This bill only applies to PERS members and its enactment would create a disparity in the purchase provisions when compared to the other State-administered retirement systems. It would also encourage the introduction of future legislation expanding these types of purchase provisions. The bill specifies that the full cost of the purchase would be borne by the member but the additional years of service credited may make the member eligible for special benefits, i.e., free health benefits, which would be borne by the employer.

A-2947 (Van Drew)
Changes salary base for PERS Prosecutors Part benefits from final compensation to highest compensation.

Motion: To recommend against enactment because the Prosecutors Part benefits are already generous and would provide a greater benefit than those of the PFRS.

Discussion: The purpose of Chapter 366, P.L. 2001 was to provide prosecutors with PFRS-type pensions. This bill would provide additional enhancements to the Prosecutors Part pension, which is not warranted. The bill will create an unfunded pension liability, which would increase employer pension costs. The bill will allow a prosecutor to collect a Prosecutors Part pension based on salary earned in regular public employment without having contributed at the Prosecutors Part rate of 7.5 percent of salary and the regular PERS contribution rate is 5 percent. Since the State is liable for the employer contributions to fund the Prosecutors Part of PERS, this bill will increase State pensions costs. This bill will only continue to encourage future legislation to expand the benefits of the PERS Prosecutors Part.

S-1604 (Sarlo)
Enhances benefits for active members when PFRS is funded at 101 percent and for retirees when PFRS is funded at 104 percent.

Motion: To recommend against enactment because of the additional cost to the State and there already exist a provision that would increase the special retirement provision to the 70-75 percent level as proposed by P.L. 2003, c.108.

Discussion: The enactment of this bill would provide PFRS members with greater benefits than are currently available to SPRS members. The bill would serve to have legislation introduced to increase the benefits for the SPRS members. Chapter 108, P.L. 2003 contains a provision that would increase the special retirement provision to the 70 -75 percent level, as proposed by this bill, for active members only, but only after the PFRS funded level exceeds 104 percent. Poor investment returns, which plagued all institutional and personal investors in recent years, have significantly eroded the market value of assets in the PFRS. Compounded by increasing pension liabilities, the PFRS is no longer funded at 100 percent. The additional liabilities associated with this bill are estimated to be over $1.3 billion.

A-2932 (Merkt)
Establishes Public Employees' Defined Contribution Plan Study Commission.

Motion: To recommend support to establish a Defined Contribution Plan Study Commission and to broaden the composition of the Commission to include members who do not participate in any of the State's public retirement systems.

Discussion: The Pension Health Benefits Review Commission supports this bill because it establishes the means to study and evaluate more cost effective approaches to providing and funding pensions for public employees in the State. Other state pension funds have studied alternatives to a defined benefit plan when the stock market and other investments were doing well. A Public Employees' Defined Contribution Plan Study Commission should be empowered to review all alternatives to the current defined benefit plan. Bill should include funding for Commission. An executive order by the Governor could also establish such a Commission.



Pension and Health Benefits Review Commission
Vote Results
June 11, 2004

S-1385 (Ciesla)/(Kyrillos) / A-989 (Chatzidakis)
Extends eligibility for certain veterans' benefits to members of reserve components of US Armed Forces and NJ organized militia who serve at least 180 continuous days.

Discussion: This bill is slightly different than A2103, which was reviewed during the April 30th meeting. The differences are that a member of the reserves or militia would have been honorably discharged and to have been called to active duty because of an emergency to qualify as a Veteran. This bill does not require any exposure to risk or an honorable discharge.

Motion: To recommend against enactment since bill departs from the State's long-standing criteria to become eligible for veterans' preference by not requiring an honorable discharge and not requiring exposure to some actual military conflict.

A-2498 (Baroni) / S-1527 (Inverso)
Requires legislators with simultaneous PERS-covered elected office or employment to choose one position for receipt of PERS credit.

Discussion: This bill as drafted impacts only the legislature and it may not present the best solution to accomplish the bill sponsor's objectives. Alternative solutions should be explored. It would have no impact on members of the legislature with concurrent service in a State-administered retirement system other than PERS.

Motion: To recommend against enactment since this bill only addresses the legislators. A comprehensive study of all pension systems plan designs would be supported.

A-2560 (Scalera)/(Hackett)
Permits rehired public employees to purchase PERS credit for three years of layoff period.

Discussion: The discussion concerned the purchase of "airtime", which is service purchased in that plan that is not tied to service with an employer. Although the member would pay the full cost of the purchase, it does not include the retiree health benefit costs that the member may be entitled to as a result of the purchase. In addition, the cost of the purchase would be based on the member's salary for the last 12 months prior to separation, which is a concern since this salary may not be the member's highest salary. The cost quoted will not be sufficient to cover the full cost of the purchase.

Motion: To recommend against enactment based on the potential cost to the State and it would set a precedent by allowing the purchase of time unrelated to public service.

A-2597 (Gusciora)/(Watson Coleman)
Provides additional PERS death benefit coverage.

Discussion: There is a concern that the cost of the additional death benefits will increase the employee contribution rate. The bill does not provide for PERS and TPAF death benefit coverage parity. In one provision, it enhances the PERS benefit over what is available in the TPAF. Section 1 of the bill would increase the contributory PERS active death benefit payable to "two times the compensation received by the member in the last year of creditable service or the member's highest annual salary, whichever is greater." This would be a greater benefit than provided to TPAF members, which is limited to two times the compensation received in the last year of creditable salary.

Motion: To recommend against enactment because it does not adequately address the life insurance needs of the workforce.

A-2548 (Barnes)/(Diegnan) / S-1472 (Ciesla)
Adds certain forensic scientists to Prosecutors Part in PERS.

Discussion: This is another attempt to expand eligibility to another group who seek the enhanced benefits established by Chapter 366, P.L. 2001. Its enactment will only encourage more legislation to continue to expand eligibility. Additional State pension costs will result.

Motion: To recommend against enactment because the job position does not justify the enhanced benefits.

A-2536 (Steele)
Creates Weights and Measures Officers Part in PERS with certain enhanced benefits.

Discussion: This is another attempt to expand eligibility to another group who seek the enhanced benefits established by Chapter 366, P.L. 2001. Its enactment will only encourage more legislation to continue to expand eligibility. Additional State pension costs will result.

Motion: To recommend against enactment because the job position does not justify the enhanced benefits.

A-2694 ( Barnes)
Allows certain DOC administrators to become members of PERS Prosecutors Part.

Discussion: This is another attempt to expand eligibility to another group who seek the enhanced benefits established by Chapter 366, P.L. 2001. Its enactment will only encourage more legislation to continue to expand eligibility. Additional State pension costs will result.

Motion: To recommend against enactment because the job position does not justify the enhanced benefits.

S-1237 (L. Connors) / A-936 (C. Connors)
Grants PFRS membership for certain Division of Parks and Forestry titles; allows current DEP employees in titles to transfer from PERS to PFRS.

Discussion: The bill violates the intent of Chapter 204, P.L. 1989, which changed how positions are determined eligible for PFRS membership. It established duties and physical requirements for law enforcement officer or firemen positions to be covered by the system rather than mentioning position titles specifically. The PFRS Board of Trustees through the Director of the Division of Pensions and Benefits has determined that the Division of Parks and Forestry job duties do not meet the eligibility criteria established by Chapter 204.

Motion: To recommend against enactment since this would be in conflict with the administrative procedures established by Chapter 204, P.L. 1989, which determines the positions that are eligible for PFRS membership.

S-1315 (Girgenti)/(Bucco) / A-2263 (Wisniewski)
Makes volunteer firefighter appointed to paid position eligible for PFRS membership through age 40.

Discussion: Municipal laws restrict the appointment of personnel to a municipal police or fire department to individuals age 35 and under. No existing law provides similar age restrictions when police and fire personnel are appointed on a county or State level. Because of the PFRS age restriction, officers appointed on a county or State level are required to join the PERS. A PFRS enrollment disparity would be created if this bill were enacted since certain municipal firemen hired over the age of 35 would be allowed to enroll in the PFRS, however, their counterparts employed on a county or State level would not.

Motion: To recommend against enactment because it does not meet the intent of the PFRS.

A-1624 (Steele)/(Wisniewski) / S-1317 (Girgenti)
Requires laws for police service benefits and fire service benefits to be the same.

Discussion: Concerns as to the sponsor's objectives are unclear. The PFRS benefits are the same regardless whether the member is a police or fire personnel. Some areas of PFRS pension law are applied differently based on the member's occupation. There are differences in qualifying for accidental disabilities between police and fire duties. If enacted this bill may increase the number of disability claims. Further bill clarification is needed.

Motion: To recommend against enactment because the benefits of the PFRS are uniform for all its members.

A-2538 (Chiappone) / S-1570 (Bucco)
Eliminates maximum age requirement for appointment as police officer or paid firefighter.

Discussion: Assemblymen Chiappone stated that age should not be the determining factor in the hiring of police or fire personnel. As long as the individual can meet the physical and psychology requirements of the position, then age should not be the issue. The maximum age 35 requirement should be eliminated, as it is a form of age discrimination. The Commission did support further study of other states systems maximum age requirements. There is a concern that an aging public safety workforce may not be in the best interest of its citizens. The PFRS is a retirement system designed to encourage retirement at early ages and the elimination of age 35 memberships may encourage future legislation to enhance the PFRS benefits to accommodate an older workforce.

Motion: To recommend against enactment, as it would have a significant impact on the PFRS; especially the potential for increasing mandatory retirement age as a result of the change, further study is recommended.

S-520 (Girgenti) /A193 (Previte/Scalera)
Concerns workers' compensation for firefighters with cancer.

Discussion: Analysis indicates that local employer pension and health benefits costs would increase by approximately $2 million. Employers will be required to continue the pension and health benefits contributions up until the periodic benefits under workers' compensation award terminates or the member retires. There will be increases in the amount of accidental disability and accidental death claims, which will increase employer pension costs. The municipality will have the additional burden of trying to refute occupational hazard claims.

Motion: To recommend against enactment because the bill as currently crafted is 1) too vague, 2) would increase local employer pension and health benefits costs and 3) occupational exposure would be difficult to prove.

S-1395 (Rice)
Provides paid post-retirement medical benefits to certain retired veteran State Employees.

Discussion: There are significant costs associated with this bill. Costs to the State would increase by $17 million in year one and by year four the costs would increase to $23 million. The enactment of this bill would encourage other groups to introduce legislation to provide paid post-retirement medical at the cost to the State.

Motion: To recommend against enactment due to 1) the significant costs to the State, 2) it would create disparity in the veterans' benefit provided to State and local PERS employees, and 3) it would create disparity in the PERS and TPAF veteran benefits.

S-1199 (Turner)
Provides retirement allowance option to surviving spouses of deceased vested PERS and TPAF members.

Discussion: Concerns were raised that the bill will create disparity in benefits paid to active members dying with 10 or more years of service compared to terminated vested members. Benefits would be payable only to a surviving spouse, which along with the retroactive provision indicates that it is special legislation. It would also result in State and local employer pension costs. State-mandate, State-pay issues may need to be addressed.

Motion: To recommend against enactment since it is a piecemeal effort to redesign death benefit payments as it applies only to terminated vested members and not to active members dying with more than 10 years of service.

 
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