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Pensions and Benefits
PENSION AND HEALTH BENEFITS
REVIEW COMMISSION 2007

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PENSION AND HEALTH BENEFITS REVIEW COMMISSION
2007 CALENDAR

The following meeting dates have been scheduled at 10:00 AM in the first floor board room at the
Division of Pensions and Benefits, 50 West State Street, Trenton, NJ 08625:

  • January 19, 2007
  • March 2, 2007
  • April 27, 2007
  • June 8, 2007
  • October 12, 2007
  • December 7, 2007

Meeting Agendas for 2007

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Vote Results for 2007

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MEETING AGENDAS




Pension and Health Benefits Review Commission
Agenda for January 19, 2007

The Pension and Health Benefits Review Commission will meet on Friday, January 19, 2007 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-2362 (McNamara)/A-3641 (O’Toole)
Requires health insurers and SHBP to provide coverage for anorexia under same terms and conditions as for other diseases and illnesses.

S-2284 (Karcher/Weinberg)/A-3659 (Baroni)
Requires insurers and State health care coverage programs to cover cost of HPV vaccine.

A-3501 (Giblin/Diegnan)
Permits alternate benefit program retirees with 25 or more years of service to enroll in SHBP.

A-3722 (Van Drew)
Allows members of PERS Prosecutors Part to establish purchased PERS credit in the Part at additional cost.

A-3719 (Van Drew)
Permits PFRS retirees to borrow from State-provided death benefit funds equal to no more than 50% of benefit’s total value.

A-3678 (Merkt)
Limits retirement allowance of new enrollees in JRS to two-thirds of final salary.

A-3601 (Cohen)
Establishes Administrative Law Judges Part in PERS; funds payment of unfunded accrued liability thereof with certain new OAL filing fees.

A-3368 (Diegnan/Barnes)
Provides PFRS and PERS accidental disability retirement and death benefits for volunteer firefighter service-connected injury or death.


Pension and Health Benefits Review Commission
Agenda for March 2, 2007

The Pension and Health Benefits Review Commission will meet on Friday, March 2, 2007 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:

A-2163 (Payne)
Provides for enrollment in PERS of certain employees of the City of Newark.

S-2440 (Rice)
Provides certain benefits to New Jersey Transit police officers.

A-3831 (Wisniewski)
Creates PFRS non-accidental disability retirement option for disability incurred in performance of duty other than as result of traumatic event.

S-2397 (Vitale/Weinberg) /A-3781 (Gordon/Vainieri Huttle)
Creates presumption regarding disability pension and workers compensation eligibility for public employees and emergency personnel participating in World Trade Center operations; requires Commissioner of Health and Senior Services to develop health registry and screenings.

A-3732 (O’Toole )/S-2283 (Gormley)
Prohibits enrollment in PERS of public employee who is also public contractor; requires member to designate only one position as basis of enrollment.

A-3729 (O’Toole)
Allows pension calculation to be based on compensation increase in excess of actuarially assumed experience only if employer pays unfunded liability.

A-3736 (O’Toole)
Requires SHBP to provide disease and chronic care management plan for certain specified conditions.

A-3811 (Doherty)
Defines compensation for calculation of PERS contributions and benefits as amount taxed for Social Security purposes for new members.


Pension and Health Benefits Review Commission
Agenda for April 27, 2007

The Pension and Health Benefits Review Commission will meet on Friday, April 27, 2007 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-1599 (Asselta)/A-2562 (Van Drew)
Permits purchase of temporary service credit in TPAF and PERS even if the service did not result without interruption in permanent employment.

S-1201 (Allen)/A-970 (Stender/Cohen/Wisniewski)
Provides PFRS member in federal or State military service who is injured or killed with disability or death benefits.

A-160 (Vandervalk/Bateman/Steele)
Changes compensation trigger for reenrollment of PERS retiree from $15,000 in aggregate to $15,000 per public employer.

A-2629 (Van Drew/Albano)
Provides enhanced benefits to survivors of certain PFRS members.

A-2755 (Van Drew)
Extends mandatory retirement age for certain PFRS members.

S-177 (Doria)
Provides contributory SHBP benefits to certain PFRS, CPFPF and PERS retirees.

S-1081 (Singer)
Permits certain TPAF veteran retirees to receive paid health benefits under State Health Benefits Program.

S-1573 ( Rice)/A-2474 (Van Drew)
Provides paid post-retirement medical benefits to certain retired veteran State employees.


Pension and Health Benefits Review Commission
Agenda for June 8, 2007

The Pension and Health Benefits Review Commission will meet on Friday, June 8, 2007 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-2414 (Doria/Kavanaugh)/A-3805 (Steele)
Establishes the “Equal Benefits Act of 2007.”

S-2570 (Bark/Allen)
Makes membership in PERS optional for all elected officials and certain appointed officials.

S-2593 (Kyrillos)/A-4080 (Thompson)
Special legislation to permit appointment of John O'Connor to the Keansburg Police Department and enrollment in PFRS.

A-4079 (Thompson)
Special legislation to permit appointment of Guillermo Rivera, Jr. to the Keansburg Police Department and enrollment in PFRS.

S-2612 (Lance)/A-3811 (Doherty)
Defines compensation for calculation of PERS contributions and benefits as amount taxed for Social Security purposes for new members.

A-4050 (Conaway/Vainieri Huttle)
Requires insurers and State health care coverage programs to cover cost of HPV and establishes public awareness campaign about HPV.


Pension and Health Benefits Review Commission
Agenda for October 12, 2007

The Pension and Health Benefits Review Commission will meet on Friday, October 12, 2007 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-2658 (Karcher)/A4319 (Watson Coleman)
Requires insurance and SHBP coverage for magnetic resonance imaging for women at high risk for breast cancer.

A-4414 (Cohen)
Provides that the State pay health care coverage for certain survivors of members of PFRS and SPRS.

S-2238 (Scutari)
Terminates sick leave injury program for certain State employees injured after January 1, 2007 or expiration of current collective negotiation agreement.

S-2192 (Singer)/A-3706 (Dancer)
Allows application for PERS accidental disability benefit for injury sustained while employed at State psychiatric institution or correctional facility immediately prior to PERS membership.

S-2113 (Kyrillos)
Increases enrollment threshold in PERS and TPAF to $10,000.

A-4158 (Roberts)
Permits member of PFRS who is law enforcement or firefighting unit chief to serve until age 70 upon approval by municipal governing body or director of public safety.

A-3042 (Cohen)
Provides for certain ex-spouses to receive a widows' pension.

A-2630 (Van Drew/Albano)
Increases PFRS benefits for active members when PFRS funded at 101%, for retirees over three fiscal years thereafter.

A-4378 (Van Drew/Albano)
Returns pension loan interest rate in TPAF, PERS, JRS, PFRS and SPRS to fixed 4%.


Pension and Health Benefits Review Commission
Agenda for December 7, 2007

The Pension and Health Benefits Review Commission will meet on Friday, December 7, 2007 at 1:00 PM 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-1524 (Buono)/A-289 (Cohen/Roberts)
"Grace's Law;" requires health insurers, State Health Benefits Program and NJ FamilyCare to provide coverage for hearing aids for covered persons 15 and younger.

S-260 (Sarlo/Asselta)
Provides non-forfeitable right to post-retirement medical benefits provided by law to certain public employees with 25 years of service.

A-2636 (Connors/Rumpf)
Increases cost of living adjustment in pension allowances and survivor benefits payable to certain former public safety officers and their survivors.

S-602 (Ciesla/Connors)
Increases PFRS disability, accidental death and special retirement benefits.

S-1507 (Turner)/A-1196 (Diegnan/Conners/Prieto/Van Drew)
Increases from $15,000 to $25,000 annual compensation PERS retiree may earn in PERS-covered employment without reenrollment.

S-1552 (Inverso)
Requires SHBP to obtain two physician examinations of patient to uphold on appeal decision to discontinue patient's skilled nursing care.

SCR-109 (Lance)/ACR-271 (Wolfe/Bramnick)
Proposes constitutional amendment to increase mandatory retirement age for judges and justices from 70 to 75.


VOTE RESULTS


Pension and Health Benefits Review Commission
Vote Results
January 19, 2007

S-2362 (McNamara)/A-3641 (O’Toole)
Requires health insurers and SHBP to provide coverage for anorexia under same terms and conditions as for other diseases and illnesses.

Motion: Recommend not to enact since it would increase State and local employer SHBP costs and continues the questionable practice of mandating health benefit coverage.
 
Discussion: Treatment for anorexia is covered by the SHBP under the rules regarding coverage for non-biologically based mental illness.  Coverage is limited to maximums of $10,000 per calendar year and $20,000 for the entire period of the person’s coverage under the plan.  This bill would remove the non-biologically based mental illness limitation for anorexia which would increase the SHBP costs to over $15 million annually.

S-2284 (Karcher/Weinberg)/A-3659 (Baroni)
Requires insurers and State health care coverage programs to cover cost of HPV vaccine.

Motion: Recommend not to enact since it will increase SHBP costs to the State and participating employers and continues the questionable practice of mandating health benefit coverage.

Discussion:  The enactment of this bill would mandate coverage for the HPV vaccination in the Traditional Plan and NJ PLUS out-of-network, which currently does not provide coverage for preventative vaccinations.  This vaccination is covered under the NJ PLUS in-network plan and the participating HMO’s in the SHBP.  Annual State and local employer SHBP premiums are estimated to increase by $2.2 million.

A-3501 (Giblin/Diegnan)
Permits alternate benefit program retirees with 25 or more years of service to enroll in SHBP.

Motion: Recommend not to enact since it may burden the State with additional SHBP costs.

Discussion:  The bill is unclear as to who would pay for the post-retirement medical coverage: the retiree or the State.  Under the current law, the State is liable for the cost of the post-retirement medical coverage for any ABP member that retires with 25 or more years of pension service credit. Prior to the enactment of Chapter 209, P.L. 2001, a member was required to have 25 years of service credit in one specific retirement system to qualify for health benefits.  Chapter 209 allowed the accumulation of 25 years of pension service credit in more than one pension system to qualify for this State-paid benefit.  This bill would allow SHBP participation as long as the ABP retiree has 25 or more years of public employment for which pension service credit was once received but rescinded because of withdrawal of the plan.  Under current law, the lack of 25 years of pension service credit would preclude the ABP retiree from the State-paid post-retirement medical benefit.

A-3722 (Van Drew)
Allows members of PERS Prosecutors Part to establish purchased PERS credit in the Part at additional cost.

Motion:  Recommend not to enact since it will encourage the introduction of more legislation seeking to enhance Prosecutors Part benefits even further.

Discussion: The enactment of this legislation will allow Prosecutor Part members who can take advantage of this bill’s provisions to purchase additional PERS service credit to qualify for the enhanced benefits sooner than they would otherwise be able to, thereby accelerating the State’s pension costs required to fund the higher pension benefits associated with the Prosecutors Part.

A-3719 (Van Drew)
Permits PFRS retirees to borrow from State-provided death benefit funds equal to no more than 50% of benefit’s total value.

Motion: Recommend not to enact since there are no funds available to issue loans.

Discussion:  The State’s group life insurance death benefit is a self-funded program with no reserve monies maintained.  Employers contribute annually toward the non-contributory group life insurance (NCGLI) benefit only the amount needed to pay the death benefit claims due.  Although the NCGLI premium is paid annually by employers along with their pension contributions, pension and life insurance contributions are accounted for separately, as required to maintain the pension system’s tax qualified status under the Internal Revenue Code.  This self-funded arrangement is not conducive to a loan program as proposed by the bill.

A-3678 (Merkt)
Limits retirement allowance of new enrollees in JRS to two-thirds of final salary.

Motion:  Recommend not to enact since the savings associated with its enactment would be nominal.

Discussion: The Joint Legislative Committee on Benefits Reform report concluded that there are valid reasons not to make changes in the pension coverage provided to members of the JRS.  Their report stated, “Unlike the members of the other retirement systems, judges usually become members of the JRS later in life, often after a career as an attorney in private practice.  Their time in public service tends to be shorter than most public employees.  In private practice, their salaries tend to be higher than when they are judges.  As a judge, however, their salaries and pensions tend to be higher than the average public employee.  This differential is essential to enable the State to stay competitive with the private sector when recruiting.

A-3601 (Cohen)
Establishes Administrative Law Judges Part in PERS; funds payment of unfunded accrued liability thereof with certain new OAL filing fees.

Motion:  Recommend not to enact since additional State employer pension costs will result and the additional filing fees created amount to a hidden tax.

Discussion:  This bill would provide a significant pension benefit enhancement to 42 administrative law judges.  It would also generate filing fees to cover the additional unfunded accrued liability payments created by the bill.  If the filing fees are not adequate to cover the payment toward the unfunded accrued liability, the employee contribution rate can be increased from 5 percent to no more than 7 percent.  It can be assumed that the State would be liable for any excess pension amounts due and any increased normal cost generated by the bill.  Since this bill mirrors the Workers Compensation Judges Part of PERS, it should be noted that the Joint Committee on Public Employee Benefits Reform recommended closing participation in this pension system prospectively.

A-3368 (Diegnan/Barnes)
Provides PFRS and PERS accidental disability retirement and death benefits for volunteer firefighter service-connected injury or death.

Motion:  Recommend not to enact since the bill does not address the unfunded pension liabilities associated with it.

Discussion:  The enactment of this bill does not address the issue of the steady decline of volunteer firefighters.  The bill states that the major factors contributing to the decline include increased time demands, more rigorous training standards, and the proliferation of two-income families.  The bill as written does not remedy any of these issues.  Instead it would increase the rate of accidental disability pension and accidental death awards to levels not actuarially anticipated, which would increase State and local employer pension contributions. 


Pension and Health Benefits Review Commission
Vote Results
March 2, 2007

A-2163 (Payne)
Provides for enrollment in PERS of certain employees of the City of Newark.

Motion: Recommend against enactment because of the additional employer cost that could be transferred to the State.

Discussion:  Newark City employees had the option to participate in PERS in 1992 when the NERS system was closed to new members.  The employees that remained in NERS when it closed could receive a greater pension if they were now able to participate in PERS because the NERS pension is capped at $12,000 per year.  The total additional PERS pension liability is $2.3 million.

S-2440 (Rice)
Provides certain benefits to New Jersey Transit police officers.

Motion: Recommend against enactment since it would create disparity issues in the PFRS reenrollment provisions applicable to NJ Transit.

Discussion: The bill’s impact on the PFRS would predicate a former transit police officer’s reappointment to the New Jersey Transit Police Department on the mandatory purchase of all of the officer’s previous service credit in the PFRS.  The mandatory purchase requirement would be unique to NJ Transit when compared to other public entities that participate in the retirement system.  The PFRS laws do allow the purchase of prior PFRS service credit for a former member who has withdrawn, however there is no statutory provision that would mandate the member to purchase all former PFRS service credit upon reappointment.

A-3831 (Wisniewski)
Creates PFRS non-accidental disability retirement option for disability incurred in performance of duty other than as result of traumatic event.

Motion: Recommend against enactment since the bill liberalizes the eligibility criteria for which an ordinary disability type pension can be acquired only for the PFRS and will increase State and local employer pension costs.

Discussion:  Current PFRS law requires members to have at least four years service credit to qualify for an ordinary disability pension.  This bill does not have this stipulation.  If enacted, it would provide an ordinary disability pension under more liberal conditions than current law allows when the disability occurs on the job and results from a non-traumatic event.  Increased employer pension costs and annual employer health benefits costs will occur, since PFRS members qualifying for a disability retirement would also qualify for full or partly employer subsidized post-retirement medical coverage. The passage of this bill would also open the door for other State-administered retirement systems to create similar legislation.  

S-2397 (Vitale/Weinberg) /A-3781 (Gordon/Vainieri Huttle)
Creates presumption regarding disability pension and workers compensation eligibility for public employees and emergency personnel participating in World Trade Center operations; requires Commissioner of Health and Senior Services to develop health registry and screenings.

Motion: Recommend against enactment since relief/alternative programs should be subsidized at the Federal level and the fact that the bill does not address all the State-administered retirement systems.

Discussion: This bill would award accidental disability pensions under conditions that are inconsistent with the criteria currently used to determine eligibility.  Pension law regarding accidental disability pension eligibility is consistent for all the State-administered plans: i.e. eligibility is predicated upon an employee becoming permanently and totally disabled as a result of a traumatic event occurring during and as a result of the performance of his regular and assigned duties.  This has been interpreted by the courts to mean that the disability must be caused by a “great rush of force or uncontrollable power.”  Accidental disability pensions have been consistently denied to firemen who developed respiratory disease as a result of long-term, job-related exposure to irritants over the length of their careers. 

A-3732 (O’Toole )/S-2283 (Gormley)
Prohibits enrollment in PERS of public employee who is also public contractor; requires member to designate only one position as basis of enrollment.

Motion: Recommend against enactment since it may unintentionally create potential for pension abuse.  The Commission commends the bill sponsors in their support to end pension abuses.

Discussion:  This bill may create the potential for pension abuse.  Since members are to designate one position for enrollment, there is concern that they will select the lowest paying position.  This will enable them to contribute the lowest dollar amount to the pension system during their earlier pension years.  A member who gets closer to retirement can terminate from the lower paying position and designate the higher paying position as pensionable and collect a lifetime pension calculated on the higher salary.  The State and local employers participating in PERS would be responsible for the unfunded pension liability created.

A-3729 (O’Toole)
Allows pension calculation to be based on compensation increase in excess of actuarially assumed experience only if employer pays unfunded liability.

Motion: #1 – Failed to carry. Motion was to enact bill with modifications to review compensation increases on a case by case basis.

Motion: #2 – Failed to carry. Motion was to enact and support bill as written.

Discussion: The first motion presented by the Commission resulted in a tie vote. Some Commission members believed that the bill should include modifications that would not penalize employers for legitimate salary increases greater than the actuarial salary increase assumption, pending review by the Division of Pensions and Benefits.

The second motion also resulted in a split vote.  Some of the Commission members stated the bill as written is clear and the intent is not to legitimize end of career salary increases but to direct the cost to the employers that approve greater salary increases greater than the actuarial salary assumption.

A-3736 (O’Toole)
Requires SHBP to provide disease and chronic care management plan for certain specified conditions.

Motion:  Recommend against enactment since there is uncertainty in the future of the State’s Traditional plan.

Discussion:  The SHBP already utilizes disease and chronic care management in the managed care plans within the program.  The Traditional Plan currently does not provide for disease and chronic care management.  Health and wellness programs are unique to managed care plans.  The Traditional Plan and its continued existence are still in question at this time.

A-3811 (Doherty)
Defines compensation for calculation of PERS contributions and benefits as amount taxed for Social Security purposes for new members.

Motion: Bill is tabled awaiting the outcome of Senate Bill No. 17.


Pension and Health Benefits Review Commission
Vote Results
April 27, 2007

S-1599 (Asselta)/A-2562 (Van Drew)
Permits purchase of temporary service credit in TPAF and PERS even if the service did not result without interruption in permanent employment.

Motion: Recommend not to enact because of the administrative issues and costs associated with obtaining older employment records and the increase in State and local employer pension costs.

Discussion: The provisions of this bill stipulate that the purchase shall be made under the same terms and conditions as a purchase of previous membership, which means the employee and employer share the aggregate cost of the purchase. Consequently, for each incident of the purchase of temporary service by either a State employee or TPAF member, the State’s pension liabilities will increase and for each non-State PERS employee, local employer pension liabilities will increase. The ability to purchase temporary service as provided for in this bill may also accelerate the employer’s payment of post retirement medical benefits, which can be obtained after retirement with 25 years of pension service credit. State-mandate, State-pay issues need to be addressed. 

S-1201 (Allen)/A-970 (Stender/Cohen/Wisniewski)
Provides PFRS member in federal or State military service who is injured or killed with disability or death benefits.

Motion: Recommend not to enact since the provisions of the bill are limited only to members of the PFRS and the costs associated with the bill.

Discussion: This bill is limited to only the PFRS and does not apply to members of all the State administered retirement systems. Many of the bills provisions are already effective through Executive Orders signed by the Governor on the State level and at the option of the individual employers on the local level. The additional PFRS pension costs associated with this bill cannot be quantified without any assumption as to the number of deaths and disabilities that may occur. Since this bill mandates continued PFRS coverage for the active death benefit and disability pension for both the State and local employers in the PFRS, the bill will increase State and local employer pension costs. State-mandate, State-pay issues need to be addressed.

A-160 (Vandervalk/Bateman/Steele)
Changes compensation trigger for reenrollment of PERS retiree from $15,000 in aggregate to $15,000 per public employer.

Motion: Recommend not to enact since it would undermine the return to employment after retirement laws and would overturn a legislative decision considered under the enactment of Chapter 278, P.L. 2001.

Discussion: Prior to Chapter 278 a PERS retiree could work for many locations earning up to $10,000 annually at each location. The enactment of Chapter 278 increased the earnings threshold to $15,000 but also included a provision that made the $15,000 threshold apply to the total salary earned by the PERS retiree from all employers. The intent was to avoid the perception of “double-dipping” (receiving a public pension and a public salary simultaneously) which was historically precluded by original public pension laws.
 
A-2629 (Van Drew/Albano)
Provides enhanced benefits to survivors of certain PFRS members.

Motion: Recommend not to enact since the bill is considered special legislation and has the potential to increase State cost by $109.9 million.

Discussion: The enactment of this bill would set a potentially costly precedent by encouraging the introduction of future bills seeking retroactive application of the numerous other PFRS benefit enhancements established by P.L. 1999 c. 428.  In addition to establishing a 50 percent of final compensation survivors pension for non-job related active deaths for PFRS members, Chapter 428 also provided for a 20 years of service credit pension at 50 percent of final compensation, an enhanced ordinary disability pension, and changed the basis for calculating the retired survivors pension and deferred retirement pension from final average compensation to final compensation. If enacted this bill will increase State and local employer pension costs.

A-2755 (Van Drew)
Extends mandatory retirement age for certain PFRS members.

Motion: Recommend not to enact since it is special legislation and will increase local employer pension costs.

Discussion: Several special bills have been introduced in the past seeking exemptions from enrollment and retirement age limits in the PFRS. Enactment of this bill will encourage the introduction of future legislation seeking similar exemptions. Since this bill impacts local PFRS members, the pension enhancement provided will increase local employer pension costs. It is estimated that the additional present value cost per impacted member is $55,629. State-mandate, State-pay issues need to be addressed.

S-177 (Doria)
Provides contributory SHBP benefits to certain PFRS, CPFPF, and PERS retirees.

Motion: Recommend not to enact since it will increase annual State SHBP costs by $15.7 million.

Discussion: Currently, the State’s annual Chapter 330 costs are $19.5 million. The enactment of this bill would create an additional cost of $15.7 since it is expected to increase participation in the program to approximately 4,703 members.

S-1081 (Singer)
Permits certain TPAF veteran retirees to receive paid health benefits under State Health Benefits Program.

Motion: Recommend not to enact since it will significantly increase costs to the State.

Discussion: The bill only impacts veteran members of the TPAF. The enactment of this legislation would inspire future legislation which would provide all State employees who are veterans retiring with only 20 years of service credit with the same benefit. Veteran members of the TPAF and PERS who have 20 or more years of service and attain age 60 already retire with an enhanced pension as opposed to non-veteran members. The estimated State cost of providing five additional years of Post Retirement Medical Benefits to active TPAF veteran is $62.6 million.

S-1573 ( Rice)/A-2474 (Van Drew)
Provides paid post-retirement medical benefits to certain retired veteran State employees.

Motion: Recommend not to enact since it will significantly increase costs to the State.

Discussion: The bill only impacts veterans who are State employees and are members of the PERS. Its enactment would inspire future legislation which would provide veterans of all the State-administered pension plans retiring with only 20 years of service credit with the same benefit. Veteran members of the TPAF and PERS who have 20 or more years of service and attain age 60 already retire with an enhanced pension as opposed to non-veteran members. The estimated State cost of providing five additional years of Post Retirement Medical Benefits to active PERS-State veteran is $137.3 million.


Pension and Health Benefits Review Commission
Vote Results
June 8, 2007

S-2414 (Doria/Kavanaugh)/A-3805 (Steele)
Establishes the “Equal Benefits Act of 2007.”

Motion: Recommend not to enact since it will increase pension and health benefits costs and may create the potential for abuse.

Discussion: There are additional costs associated with the enactment of this bill. On the State side, the SHBP cost would increase an additional $10 million and on the local side an additional $16.2 million. Pension costs would also increase for both State and local government.

S-2570 (Bark/Allen)
Makes membership in PERS optional for all elected officials and certain appointed officials.

Motion: Recommend not to enact because of the recent legislation enacted P.L. 2007, c. 92.

Discussion: The provisions in Chapter 92 would place all future officials, elected and appointed on or after July 1, 2007, in a defined contribution plan (DC) as opposed to PERS. Additionally, it closes the Workers Compensation Judges Part of PERS to new members as of Chapter 92’s June 8, 2007 effective date. Chapter 92 mandates DC plan participation, but allows an irrevocable election to opt out only at the commencement of service and only if the person’s annual base salary is less than $5,000. Consequently, this bill’s provisions relating to future PERS members would not be applicable. However, S-2570 would allow elected and appointed officials and members of the Workers Compensation Part and the Prosecutors Part of PERS whose continued membership in PERS was grandfathered by Chapter 92 to opt out of PERS also. 

S-2593 (Kyrillos)/A-4080 (Thompson)
Special legislation to permit appointment of John O'Connor to the Keansburg Police Department and enrollment in PFRS.

Motion:  Recommend not to enact since the bill is special legislation.

Discussion: The Commission usually does not endorse special legislation. The enactment of this bill would promote future exceptions to the police and firemen hiring age restrictions.

A-4079 (Thompson)
Special legislation to permit appointment of Guillermo Rivera, Jr. to the Keansburg Police Department and enrollment in PFRS.

Motion: Recommend not to enact since the bill is special legislation.

Discussion: The Commission usually does not endorse special legislation. The enactment of this bill would promote future exceptions to the police and firemen hiring age restrictions.

S-2612 (Lance)/A-3811 (Doherty)
Defines compensation for calculation of PERS contributions and benefits as amount taxed for Social Security purposes for new members.

Motion: Recommend conditional support for enactment.

Discussion: The Commission supports the intent of this bill as a means to curtailing the abusive practice known as pension padding or boosting and is anticipating a much broader bill that will include the provisions of the State union contract. 

A-4050 (Conaway/Vainieri Huttle)
Requires insurers and State health care coverage programs to cover cost of HPV and establishes public awareness campaign about HPV.

Motion: Recommend not to enact since it continues the questionable practice of mandating health benefit coverage.

Discussion: The enactment of this bill would mandate coverage for the HPV vaccine in the Traditional Plan and NJ PLUS out-of-network, which currently does not provide this coverage. This vaccine is currently covered under the NJ PLUS in-network plan and the HMO’s participating in the SHBP. This bill continues the questionable practice of mandating health benefit coverage which generally tends to place the health insurance industry outside of the “free enterprise” system and drives up the cost of health insurance for both the employer provided coverage and individual policies. The annual State and local employer SHBP premiums are estimated to increase to an additional $2.2 million. 


Pension and Health Benefits Review Commission
Vote Results
October 12, 2007

S-2658 (Karcher)/A4319 (Watson Coleman)
Requires insurance and SHBP coverage for magnetic resonance imaging for women at high risk for breast cancer.

Motion: Recommend enactment.

Discussion: The enactment of this bill will not have any impact on the SHBP since the coverage is already provided under the terms and conditions specified in this bill. The bill should be directed to the Mandated Health Benefits Advisory Commission under the Department of Banking and Insurance for consideration of this bill’s impact on heath insurance plans other than the SHBP.

A-4414 (Cohen)
Provides that the State pay health care coverage for certain survivors of members of PFRS and SPRS.

Motion: Recommend not to enact.

Discussion: The enactment of this bill would create a disparity in benefits when compared to the other State-administered retirement systems. 

S-2238 (Scutari)
Terminates sick leave injury program for certain State employees injured after January 1, 2007 or expiration of current collective negotiation agreement.

Motion:  Recommend not to enact.

Discussion: The Sick Leave Injury Program is not administered by the Division of Pensions and Benefits, but by the Department of Personnel. The enactment of this bill would implement a recommendation proposed by the Joint Legislative Committee on Public Employee Benefits Reform. Their proposal regarding the Sick Leave Injury Program recommended eliminating the program and utilizing the Workers’ Compensation Program in its place. The Commission feels it should remain a part of the collective negotiation process. Also, the Commission took exception with the bill’s provision that would keep the program in effect but only for State Law enforcement officers, firefighters and correction officers.

S-2192 (Singer)/A-3706 (Dancer)
Allows application for PERS accidental disability benefit for injury sustained while employed at State psychiatric institution or correctional facility immediately prior to PERS membership.

Motion: Recommend not to enact.

Discussion: The Commission cannot support this bill since it appears to be special legislation designed to impact one or possibly a few individuals. Generally, the Commission opposes all forms of special legislation since it encourages the continued introduction of more special legislation.

S-2113 (Kyrillos)
Increases enrollment threshold in PERS and TPAF to $10,000.

Motion: Recommend to enact.

Discussion:  The Commission supports this bill based on the contingency that legislation is not enacted to limit PERS and TPAF participation to full-time employees only. This bill addresses an issue addressed by both the report of the Benefits Review Task Force to Governor Codey dated December, 2005 and the report of the Joint Legislative Committee on Public Employee Benefits Reform dated November, 2006. Jack Donnelly stated, “it would be beneficial to give time for the reforms enacted this year to effect change, specifically P.L. 2007, c. 92 as to not providing the Defined Benefit pensions to elected and appointed officials or professional services contractors, and P.L. 2007, c. 103 as to the higher age for service retirement and creation of a Defined Contribution pension for salary amounts above the Social Security threshold.”

A-4158 (Roberts)
Permits member of PFRS who is law enforcement or firefighting unit chief to serve until age 70 upon approval by municipal governing body or director of public safety.

Motion: Recommend not to enact.

Discussion: The enactment of the legislation will likely undermine the rationale of allowing age restrictions for public safety officers as again allowed under the Age Discrimination and Employment Act (ADEA).

A-3042 (Cohen)
Provides for certain ex-spouses to receive a widows' pension.

Motion:  Recommend not to enact.

Discussion:  This bill does not correct all perceived inequities with the PFRS widow’s pension. A recommended approach will be to pattern this benefit after federal rules governing private sector pension plans. Regulations regarding Qualified Domestic Relation Orders (QDRO’s) allow for a court ordered division of a member’s pension benefit between the retiree and an ex-spouse in case of divorce. The provision of the bill making it retroactive to October 1, 1993 indicates it is special legislation introduced to impact a certain individual.  

A-2630 (Van Drew/Albano)
Increases PFRS benefits for active members when PFRS funded at 101%, for retirees over three fiscal years thereafter.

Motion:  Recommend not to enact.

Discussion:  P.L. 2003 c.108 establishes in PFRS a benefit enhancement fund to which will be credited an amount of certain excess valuation assets for a valuation period beginning with the valuation report which indicates a funded level of 104%. This bill, instead, will credit the benefit enhancement fund with the appropriate amount of certain excess valuation assets for a valuation period beginning with the valuation report which indicates a funded level of 101%. The additional pension liabilities associated with this bill is estimated to be over $1.3 billion. Its enactment will serve to further erode the plan’s funded status and increase State pension contributions.

A-4378 (Van Drew/Albano)
Returns pension loan interest rate in TPAF, PERS, JRS, PFRS and SPRS to fixed 4%.

Motion:  Recommend not to enact.

Discussion:  The enactment of this bill will remove recently passed legislation which changed the rate of interest on loans from 4% per annum to a commercially reasonable rate as required by the Internal Revenue Code to be determined by the State Treasurer including an administration fee. As of June 30, 2006, there was in excess of $1.1 billion in pension loans outstanding. 


Pension and Health Benefits Review Commission
Vote Results
December 7, 2007

S-1524 (Buono)/A-289 (Cohen/Roberts)
"Grace's Law;" requires health insurers, State Health Benefits Program and NJ FamilyCare to provide coverage for hearing aids for covered persons 15 and younger.

Motion: Recommend not to enact since it continues the unfavorable practice of mandating health benefits coverage.

Discussion: There is a concern that the enactment of this bill will encourage the introduction of future legislation to expand this coverage to the SHBP population over the age of 15, with potentially significant cost and it continues the unfavorable practice of mandating health benefit coverage.

S-260 (Sarlo/Asselta)
Provides non-forfeitable right to post-retirement medical benefits provided by law to certain public employees with 25 years of service.

Motion: Recommend not to enact since it will preclude the State from fully initiating certain cost containment measures that may be required in the future to aid in controlling increasing State and local employer SHBP costs or other changes that may be considered.
 
Discussion: The enactment of this bill would effectively preclude the application of premium sharing, or any other SHBP cost containment measure, to any prospective school board or county college retiree who had five years of pension service credit at the time the cost containment measure is adopted, minimizing any cost reduction to the State.

A-2636 (Connors/Rumpf)
Increases cost of living adjustment in pension allowances and survivor benefits payable to certain former public safety officers and their survivors.

Motion: Recommend not to enact, substantial increases in employer pension contributions will result.

Discussion: The enactment of this bill would eliminate the current uniformity and provide higher COLA benefits to retired policemen and firemen and their beneficiaries.  It would further increase the disparity in benefits which currently exists between policemen and firemen and other public employees. Pension costs for local employers in the PFRS and CPFPF will increase.  State-mandate, State-pay issues need to be addressed.

S-602 (Ciesla/Connors)
Increases PFRS disability, accidental death and special retirement benefits.

Motion: Recommend not to enact since benefit increases at this time are not justifiable.

Discussion: 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 100% funded.  The additional pension liabilities associated with this bill is estimated to be over $618 million.  The bill’s enactment will serve to further erode the plan’s funded status and increase required employer pension contributions.

S-1507 (Turner)/A-1196 (Diegnan/Conners/Prieto/Van Drew)
Increases from $15,000 to $25,000 annual compensation PERS retiree may earn in PERS-covered employment without reenrollment.

Motion: Recommend not to enact since this is expected to encourage retirements at a time when a worker shortage due to aging baby boomers is expected, and this also is expected to increase costs to the pension fund.

Discussion: Chapter 23, P.L. 1997 was enacted to provide some relief to PERS members who were somewhat disadvantaged by the return to public employment.  This law originally allowed PERS retirees to earn up to $10,000 annually upon their return to employment in a PERS covered position.  It also contains a provision that permits the Director of the Division of Pensions and Benefits to adjust the threshold periodically for cost-of-living increases. Chapter 278, P.L. 2001 increased the threshold to $15,000. Since the threshold was recently increased from $10,000 to $15,000, further increases are not justifiable.

S-1552 (Inverso)
Requires SHBP to obtain two physician examinations of patient to uphold on appeal decision to discontinue patient's skilled nursing care.

Motion: Recommend not to enact since it is considered to be special legislation and would eliminate current care exclusions at an enormous cost.

Discussion: 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 where no change in the patient’s condition is anticipated.  The bill would virtually transform the SHBP into a long term care plan and increase plan costs significantly.  A long term care insurance coverage is currently offered to State employees under a separate supplementary plan.  This bill mandates that 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.  If there is a split of opinion between the two physicians, the bill mandates that the skilled nursing care be covered.  A split decision can be anticipated in almost every case, especially in light of the mutually agreed upon requirement.

SCR-109 (Lance)/ACR-271 (Wolfe/Bramnick)
Proposes constitutional amendment to increase mandatory retirement age for judges and justices from 70 to 75.

Motion:  Commission members were neutral on the enactment of this resolution.

Discussion:  The Judicial Retirement System statute requiring retirement at age 70 would require the current Chief Justice’s input if it is to be amended, and then any amendment might lead to increased pension costs.

 
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