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Pensions and Benefits
PENSION AND HEALTH BENEFITS
REVIEW COMMISSION 2013

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PENSION AND HEALTH BENEFITS REVIEW COMMISSION
2013 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:

  • February 15, 2013
  • April 19, 2013 - CANCELLED
  • May 17, 2013
  • June 21, 2013 - CANCELLED AND RESCHEDULED FOR JULY 19, 2013
  • July 19, 2013
  • August 16, 2013 - CANCELLED
  • September 20, 2013
  • November 15, 2013 - CANCELLED

Meeting Agendas for 2013

Pension and Health Benefits Review Commission Meeting Agendas from

2013 | 2012 | 2011 | 2010 | 2009 | 2008 | 2007 | 2006 | 2005 | 2004


Vote Results for 2013

Pension and Health Benefits Review Commission Vote Results from

2013 | 2012 | 2011 | 2010 | 2009 | 2008 | 2007 | 2006 | 2005 | 2004


MEETING AGENDAS

Pension and Health Benefits Review Commission
Agenda for February 15, 2013

The Pension and Health Benefits Review Commission will meet on Friday, February 15, 2013 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-1970 (Greenstein)/A-2185 (Conaway/Benson/Gusciora)
Requires insurers and State health care coverage programs to cover cost of HPV vaccine.

S-2205 (Norcross)/A-3302 (Singleton/Conaway/Burzichelli)
Provides municipalities and fire districts with option to hire firefighters up to age 40 with eligibility for PFRS membership; allows firefighters legally hired after age 35 currently in PERS to transfer to PFRS.

A-3526 (Dancer)
Prohibits multiple coverage for public employer health care benefits as employee, dependent, or retiree.

A-3538 (Mainor/Albano/Johnson)
Provides for sick leave injury program of 30 days for State employees who are members of PFRS or SPRS.

 


Pension and Health Benefits Review Commission
Revised Agenda for May 17, 2013

The Pension and Health Benefits Review Commission will meet on Friday, May 17, 2013 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-1469 (O’Scanlon/Casagrande)
Allows pension calculation to be based on compensation increase in excess of actuarially assumed experience only if employer pays unfunded liability.

A-2404 (Stender)/S-1292 (Allen)
Provides PFRS member in federal or State military service who is injured or killed with disability or death benefits.

A-3763 (Dancer)
Provides that healthcare benefits plan, fully or partly paid by public employer, cannot cover public employee's spouse who is subject of divorce from bed and board.

A-3981 (Simon)
Requires certain health benefits coverage for diagnosing and treating autism and other developmental disabilities.


Pension and Health Benefits Review Commission
Agenda for July 19, 2013

The Pension and Health Benefits Review Commission will meet on Friday, July 19, 2013 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-1166 (Weinberg)
Requires health insurers SHBP, SEHBP, Medicaid, and NJ FamilyCare to provide coverage for ancillary medical services in connection with outpatient diagnostic screening and surgical intervention services.

A-779 (Munoz)
Provides that public employee pension benefits are calculated on base salary exclusive of various forms of extra compensation.

A-1235 (Moriarty)
Requires that public employees who are married, partners in civil union couples, or with domestic partners receive health care benefits from only one public employer.

A-1840 (Diegnan/Prieto/Caputo)
Increases from $15,000 to $25,000 annual compensation PERS retiree may earn in PERS-covered employment without reenrollment.

A-4161 (Rible/Mosquera)
Requires health insurers, SHBP and SEHBP to provide coverage for diagnosis, evaluation and treatment of lymphedema.


Pension and Health Benefits Review Commission
Agenda for September 20, 2013

The Pension and Health Benefits Review Commission will meet on Friday, September 20, 2013 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-2943 (Rice)
Increases pension benefits for certain retirees in certain municipal retirement systems.

A-272 (Amodeo/Brown)
Makes certain State and local appointed public officials ineligible, retroactive to July 1, 2007, for PERS membership regardless of prior PERS membership.

A-274 (Amodeo)
Eliminates PERS credit and health care benefits for appointees to State or local agency, board, commission, authority or instrumentality with annual compensation less than $20,000 and weekly hours fewer than 35.

A-1927 (Casagrande)
Imposes new criteria of $18,000 compensation and 30 hours weekly for TPAF and PERS membership as well as for TPAF and PERS credit.

A-2214 (Gusciora)
Requires dental benefits coverage for dental composite restorations.

 


VOTE RESULTS

Pension and Health Benefits Review Commission Vote Results
February 15, 2013

S-1970 (Greenstein)/A-2185 (Conaway/Benson/Gusciora)
Requires insurers and State health care coverage programs to cover cost of HPV vaccine.

Motion:  Recommend not to enact.

Discussion:  The procedure mandated by this bill is already covered under the SHBP/SEHBP by each of the plans offered within the program through both Horizon and Aetna.  Network providers in each of these plans offer a full range of services that include well-care and preventive services such as annual physicals, well-baby/well-child care, immunizations, mammograms, annual gynecological examinations, and prostate examinations.

Health benefit mandate bills impacting the SHBP/SEHBP usurp the authority of the SHBP and the SEHBP Plan Design Committees.  These committees were created with the enactment of P.L. 2011, c.78 (Pension and Health Benefit Reform) and were provided with the responsibility for plan design.

This bill continues the questionable practice of mandating health benefit coverage.  Such mandates generally tend to continue to place the health insurance industry outside of the "free enterprise" system and drive up the cost of health insurance for both employer provided coverage and individual policies.  The continued enactment of health benefit mandate legislation could soon make coverage unaffordable for both.  In addition, the new federal Affordable Care Act deems state mandates as a state responsibility that are not eligible for federal funds participation.

S-2205 (Norcross)/A-3302 (Singleton/Conaway/Burzichelli)
Provides municipalities and fire districts with option to hire firefighters up to age 40 with eligibility for PFRS membership; allows firefighters legally hired after age 35 currently in PERS to transfer to PFRS.

Motion:  Recommend not to enact.

Discussion:  State pension law regarding membership in the PFRS restricts enrollment to police and firemen age 35 and under.  The law does provide for the following exceptions:

  • Eligible periods of military service during periods of conflict may be used to reduce enrollment age and
  • Any former State trooper, sheriff's officer, deputy sheriff's officer or county or municipal policeman is permitted to use previous service as a police officer to reduce actual age in order to meet maximum age requirement of 35 years for the position of a municipal police officer.

Municipal laws restrict the appointment of personnel to a municipal police or fire department to individuals age 35 and under.  However, there are no similar age restrictions applicable to appointments made by a fire district or on a county or State level.  Because of the PFRS pension law age restriction, police and firemen appointed by a fire district or on a county and State level are required to join the PERS.   If this bill is enacted, a disparity in the laws regarding eligibility to participate in the PFRS would be created because;

  • Policemen appointed over the age of 35 would still be generally precluded from PFRS membership, since this bill only applies to firemen, and
  • Firemen over the age of 35 hired by a municipality or fire district electing the provisions of this bill would be allowed enrollment in the PFRS, however, their counterparts employed on a county or State level would not.

Additional considerations include: the possibility of an increased number of workers compensation and disability claims by older-than-expected workers; higher cost Tier 1 or 2 coverage permitted by this legislation’s conversion of an employee to another pension system; conversions to PFRS will result in much higher cost than PERS; this bill appears to be special legislation; there is a sufficient workforce under the age of 35 years that is eligible for firefighter positions, and; this bill encourages people to work past the age generally thought to be safe for public safety workers, in order to achieve the required years of service to receive a pension.

A-3526 (Dancer)
Prohibits multiple coverage for public employer health care benefits as employee, dependent, or retiree.

Motion: Recommend to enact.

Discussion: As a result of the enactment of P.L. 2010, c.2, participants in the SHBP/SEHBP are already precluded from multiple health benefit coverage (see Section 12).  This prohibition, however, is limited to multiple SHBP/SEHBP coverage.  Chapter 2’s multiple coverage prohibition did not extend to coverage outside of the SHBP/SEHBP.  The enactment of this bill would extend equitably the multiple health benefit coverage prohibition to public employee coverage in and out of the SHBP/SEHBP.
 
The provisions of this bill would not preclude multiple coverage if the other coverage is through the private sector.

A-3538 (Mainor/Albano/Johnson)
Provides for sick leave injury program of 30 days for State employees who are members of PFRS or SPRS. – Withdrawn from the files at the sponsors’ request.


Pension and Health Benefits Review Commission Vote Results
May 17, 2013

A-1469 (O’Scanlon/Casagrande)
Allows pension calculation to be based on compensation increase in excess of actuarially assumed experience only if employer pays unfunded liability.

Motion: Recommend not to enact. 

Discussion:The Commission recommended not to enact this bill because:

  • The marginal employer pension savings that would be derived from its enactment may not outweigh the additional administrative costs associated with the bill, and
  • There are indications that other pension reforms already enacted to curtail the abusive practice of pension boosting are meeting their objectives.

The enactment of this bill would create significant additional administrative and accounting responsibilities for the Division of Pensions and Benefits since unfunded liabilities would have to be tracked separately for each local employer that participates in the plans.  The PERS and PFRS are multi-employer plans.  In addition to the State, 1,704 local employers participate in the PERS and 581 local employers participate in the PFRS.  Although State and local pension plan assets and liabilities are segregated, for participating local employers, the assets and liabilities are aggregated.  For basic benefits, there is no separate accounting of pension plan assets and liabilities for each individual local employer.  The actuarially required local employer pension contribution is developed in the aggregate and apportioned to each location by applying the required local employer contribution rate to the total payroll of each location.  Additionally, the salary increase assumptions used by the plan actuaries are not static.  They change periodically to reflect actual historical trends.  These assumptions changed with the actuarial valuation reports dated July 1, 2011, and again with actuarial reports dated July 1, 2012.  The enactment of this bill would require the Division to communicate any prospective new salary increase assumptions to all employers in order for them to avoid the assessment of any additional pension costs pursuant to this bill.

Other pension reforms aimed at curtailing salary increases in anticipation of retirement have already been enacted, minimizing the need for the enactment of this bill.  These reforms include:

  • Section 21 of P.L. 2007, c.92 requires the Division to investigate unreasonable increases in compensation reported for credit in the various State-administered retirement systems based upon consideration of the Consumer Price Index for the time period of the increases, the table of assumed salary increases recommended by the system’s actuary and adopted by the board of trustees of the retirement system, and the annual percentage increases of salaries as indicated in data from the Public Employment Relations Commission;
  • Sections 8 through 18 of P.L. 2007, c.103 and Sections 7 through 23 of P.L. 2010, c.1 caps the salary that can be used to calculate pension benefits for new members of PERS, TPAF, PFRS and SPRS at the Social Security wage base, and
  • Sections 20 through 23 of P.L. 2010, c.1 increased the number of years included in final average salary used to calculate pension benefits from 3 to 5 years for new PERS and TPAF members, and from 1 to 3 years for new PFRS and SPRS members.

A-2404 (Stender)/S-1292 (Allen)
Provides PFRS member in federal or State military service who is injured or killed with disability or death benefits.

Motion: Recommend not to enact. 

Discussion: The Commission recommended not to enact this bill because:

  • It does not coordinate the benefits it would provide with VA benefits that may be available on the federal level, and
  • It discriminates against public employees who are members of the other State-administered pension plans (i.e. it’s PFRS specific).

The enactment of this bill would provide for continued eligibility for the active PFRS death benefit and an ordinary disability pension whenever a member is called to active military service and no longer is an active contributing member of the PFRS.  In the past, eligibility for these benefits has been extended on a temporary basis for all State employees regardless of their pension system membership on a conflict-by-conflict basis through Executive Orders signed by the Governor.  Extension of these benefits on a local level has been at the option of the local employers.  If local employers agreed to grant employees paid leaves of absence when called into active military duty, their employees would continue to be considered active members of the pension system and would be eligible for the benefits addressed by this bill.  

The provisions of this bill are limited only to members of the PFRS.  The other State plans (PERS, TPAF, SPRS, ABP) are not affected. 

A-3763 (Dancer)
Provides that healthcare benefits plan, fully or partly paid by public employer, cannot cover public employee's spouse who is subject of divorce from bed and board.

Motion:  Recommend to enact with amendment.        

Discussion:  The Commission recommended to enact this bill from the perspective that it would provide financial relief for public employers by eliminating the continued obligation to provide health benefit coverage to the spouse of an employee who was granted a divorce from bed and board.

The bill is unclear whether its impact is retroactive or prospective.  The Commission suggested the bill be amended to provide for retroactive application of its provisions.

A-3981 (Simon)
Requires certain health benefits coverage for diagnosing and treating autism and other developmental disabilities.

Motion:  Recommend not to enact.

Discussion: Coverage under the SHBP/SEHBP for autism and other developmental disabilities was mandated with the enactment L. 2009, c. 115.  Consequently, the mandated coverage for the development disabilities added by this bill is already provided under the SHBP/SEHBP by each of the plans offered within the program through both Horizon and Aetna. 

Although coverage for autism and other developmental disabilities is already provided under the SHBP/SEHBP, there is concern that this bill would mandate coverage for unconventional therapies that would be denied under the current plan design.  Additionally, pursuant to the Affordable Care Act, if the State requires benefits that exceed those included in the essential health benefits package, then the state has to directly pay the cost of these additional mandates.  Consequently, there are unknown future costs associated with this bill.

Health benefit mandate bills impacting the SHBP/SEHBP usurp the authority of the SHBP and the SEHBP Plan Design Committees.  These committees were created with the enactment of P.L. 2011, c.78 (Pension and Health Benefit Reform) and were provided with the responsibility for plan design.


Pension and Health Benefits Review Commission Vote Results
July 19, 2013

S-1166 (Weinberg)
Requires health insurers SHBP, SEHBP, Medicaid, and NJ FamilyCare to provide coverage for ancillary medical services in connection with outpatient diagnostic screening and surgical intervention services.

Motion: Recommend not to enact.      

Discussion: The Commission recommended not to enact this bill because:

  • The procedures mandated by this bill are already covered under the SHBP/SEHBP, and
  • It continues the questionable practice of mandating health benefit coverage.

The procedures mandated by this bill are already covered under the SHBP/SEHBP by each of the plans offered within the program through both Horizon and Aetna.
 
Health benefit mandate bills impacting the SHBP/SEHBP usurp the authority of the SHBP and the SEHBP Plan Design Committees.  These committees were created with the enactment of P.L. 2011, c.78 (Pension and Health Benefit Reform) and were provided with the responsibility for plan design.

A-779 (Munoz)
Provides that public employee pension benefits are calculated on base salary exclusive of various forms of extra compensation.

Motion: Recommend not to enact.
           
Discussion:  The recommendation not to enact was rendered in order to allow for consideration of Commission and perhaps Treasury comments to address the following issues related to this bill: 1) the proposed legislation serves to emphasize the existing statutory and regulatory prohibitions of lump sum longevity payments and other forms of extra compensation; 2) the proposed legislation serves to emphasize the existing statutory and regulatory authorities of the Division of Pensions and Benefits to investigate extraordinary compensation increases; 3) adding to the proposed legislation the authority of the Division of Pensions and Benefits additionally to investigate annual longevity payments particularly for unusual compensation increases; 4) adding to the proposed legislation the authority of the Division of Pensions and Benefits to investigate unusual compensation increases for those not covered by collective bargaining; 5) adding to the proposed legislation that, if enacted, the law would apply to future collective bargaining agreements; and 6) deleting from the proposed legislation the Consumer Price Index as a basis for an investigation by the Division of Pensions and Benefits.
 
A-1235 (Moriarty)
Requires that public employees who are married, partners in civil union couples, or with domestic partners receive health care benefits from only one public employer.

Motion:  Recommend to enact.

Discussion:  The Commission supports this bill because it would expand the prohibition of dual health care coverage currently imposed on SHBP/SEHBP participants to public employees covered outside of the State plan.

As a result of the enactment of P.L. 2010, c.2, participants in the SHBP/SEHBP are already precluded from multiple health benefit coverage.  This prohibition, however, is limited to multiple SHBP/SEHBP coverage.  Chapter 2’s multiple coverage prohibition did not extend to coverage outside of the SHBP/SEHBP i.e. public employees that may also be covered under a plan administered by a municipal or county or a school district. The enactment of this bill would extend the multiple health benefit coverage prohibition to public employee coverage in and out of the SHBP/SEHBP.

The bill applies only to active employee coverage.  Chapter 2’s prohibition of dual SHBP/SEHBP coverage extended to both active and employer paid post retirement medical coverage also.  The Commission recommends an amendment to this bill extending the dual coverage prohibition to retirees as well.

A-1840 (Diegnan/Prieto/Caputo)
Increases from $15,000 to $25,000 annual compensation PERS retiree may earn in PERS-covered employment without reenrollment.

Motion:  Recommend not to enact.      

Discussion:  The Commission opposes this bill because, in light of L. 2010, c.1’s provision requiring full time status for PERS membership eligibility, this bill, without further amendments, would accomplish little.

With the enactment of the pension reforms included in P.L. 2010, c.1, public employees employed after May 21, 2010 must be full-time to qualify for PERS membership, i.e. a 35 hour work week for State employees, 32 hours per week for local employees.  If a PERS member retires under a “bona fide” retirement, upon return to PERS-covered public employment, the public employee will now be subject to the full time rule regarding PERS membership.  Consequently, retired PERS members returning to public employment in a less than full-time capacity may now surpass the $15,000 salary exemption provided for in PERS law without suspending their pension and re-enrolling in PERS.  Unless the bill was amended to state that re-enrollment in the PERS is required if the annual salary exceeds $25,000 regardless of full-time or part-time status of the position, the enactment of this bill, as written, would have no impact.

A-4161 (Rible/Mosquera)
Requires health insurers, SHBP and SEHBP to provide coverage for diagnosis, evaluation and treatment of lymphedema.

Motion:  Recommend not to enact.

Discussion:  The Commission opposes this bill because:

  • The coverage mandated by this bill is already provided under the SHBP/SEHBP, and
  • It continues the questionable practice of mandating health benefit coverage.

The coverage mandated by this bill is already provided under the SHBP/SEHBP by each of the plans offered within the program through both Horizon and Aetna.

Health benefit mandate bills impacting the SHBP/SEHBP usurp the authority of the SHBP and the SEHBP Plan Design Committees.  These committees were created with the enactment of P.L. 2011, c.78 (Pension and Health Benefit Reform) and were provided with the responsibility for plan design.


Pension and Health Benefits Review Commission Vote Results
September 20, 2013

S-2943 (Rice)
Increases pension benefits for certain retirees in certain municipal retirement systems.

Motion: Recommend not to enact.

Discussion: This bill is intended to impact the Employees Retirement System of the City of Newark (NERS).  The Commission recommended not to enact this bill because: 1) As drafted, it applies to a city with a population greater than 400,000, and Newark’s population is currently less than 400,000; 2) It does not identify the number of employees who are members of the now-closed NERS and who are eligible for the legislation’s benefit enhancement; 3) It does not identify the financial impact on the NERS funding, including unfunded liabilities; 4) It does not identify the total cost of the legislation’s benefit enhancement, including costs incurred by future disability retirements and other employee actions; 5) It does not provide the need for the State Division of Local Government Services to approve of the Newark expenditure to pay for the unfunded liability created by the legislation’s benefit enhancement, and; 6) It does not address the cost to enhance PERS when PERS members seek to match the NERS enhancement that will result in higher benefits than PERS.

A-272 (Amodeo/Brown)
Makes certain State and local appointed public officials ineligible, retroactive to July 1, 2007, for PERS membership regardless of prior PERS membership.

Motion: Recommend not to enact.
                       
Discussion: The recommendation not to enact this bill was rendered because: 1) It affects PERS members who were already in PERS prior to any reforms that started in 2007, and would retroactively eliminate a benefit for those relying on it; 2) It seeks to expand upon P.L.2010 c.1 that restricts such members from getting a pension “boost” through an appointed position after that bill’s enactment, so this potential for boosting will eventually be eliminated for PERS members, and; 3) It does not identify DCRP compensation adequate to match the benefit being eliminated in PERS.

A-274 (Amodeo)
Eliminates PERS credit and health care benefits for appointees to State or local agency, board, commission, authority or instrumentality with annual compensation less than $20,000 and weekly hours fewer than 35.

Motion: Recommend not to enact.                              

Discussion: The Commission recommended not to enact this bill because it would be unconstitutional as to the impairment of contractual obligations pursuant to the 2006 Attorney General and Office of Legislative Services legal opinions.
 
A-1927 (Casagrande)
Imposes new criteria of $18,000 compensation and 30 hours weekly for TPAF and PERS membership as well as for TPAF and PERS credit.

Motion:  Recommend not to enact.                  

Discussion: The Commission recommended not to enact this bill because P.L.2010, c.1 has already established a full time requirement for PERS and TPAF pension eligibility.

A-2214 (Gusciora)
Requires dental benefits coverage for dental composite restorations.

Motion: Recommend not to enact.
    
Discussion: The Commission recommended not to enact this bill because: 1) It will result in increased employer costs without any ascertainable increased benefit; 2) It usurps the authority of the health benefit plan design committees, and; 3) It continues the questionable practice of mandating health benefit coverage.

 
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