Rule Changes 2000

The Division of Pensions and Benefits posts proposed rules — new rules, amended rules and readoptions of existing rules — on this Web site to inform members, retirants, employers, and other interested parties.

Proposed rules are first published in the New Jersey Register, a biweekly publication prepared by the Office of Administrative Law. The Division then posts, on this site, summaries of the proposed rules. After adoption, a rule becomes part of the New Jersey Administrative Code.

If you would like to learn more regarding a proposed rule, the numbers in the parentheses before the proposed rule refer to the volume and page number in which the entire proposal is found in the Register. NJAC refers to the New Jersey Administrative Code, and the numbers identify the title and specific chapter citations.

Proposed changes are either in bold print or are underlined. Deletions are bracketed [so].

New Introductions

Proposed Amendment: N.J.A.C. 17:2-2.3 Ineligible Persons. Cite as 32 N.J.R. 4239. [PERS]

Proposed Amendment N.J.A.C. 17:9-3.1 and Proposed New Rule: N.J.A.C. 17:9-3.8 Dependents and Children Defined and Children with Disabilities Age 23 or Older; Determination of Eligibility for Continuation of Coverage. Cite as 32 N.J. Reg. 3383(a)

Proposed Amendment:: N.J.A.C. 17:2-3.14 Acceptable Designations of Beneficiaries. Cite as 32 N.J. Reg. 3213(a) [PERS]

Notice of Administrative Change

Notice of Administrative Change: N.J.A.C. 17:2-2.3 Public Employees' Retirement System - Ineligible Persons. Cite as 32 N.J.R. 2925(a)
[PERS]

Adoptions

Readoption with Amendments N.J.A.C 17:4 Cite as 32 N.J.R 4060(a). [PFRS]

Adopted Amendment N.J.A.C. 17:4-3.4 Survivor Benefits. Cite as 32 N.J.R. 3554(b). [PFRS]

Adopted Amendment: N.J.A.C. 17:9-6.9 Eligibility of State Payment of Retiree Coverage Under P.L. 1997, C.330 Cite as 32 N.J.R.. 4451(a) [SHBP]

Adopted Amendment N.J.A.C. 17:9-6.1 Retired Employee Defined. Cite as 32 N.J.R. 4450(b). [SHBP]

Adopted Repeal N.J.A.C. 17:9-5.6 Health Maintenance Organization Charges. Cite as 32 N.J.R. 4450(a) [SHBP]

Adopted New Rule: N.J.A.C 17:5-2.4 Acceptable Designation of Beneficiaries. Cite as 32 N.J.R. 3996(d) [SPRS]

Adopted Amendment: N.J.A.C. 17:3-3:13 Acceptable Designations of Beneficiaries. Cite as 32 N.J.R. 3996(c) [TPAF]

Adopted Amendment: N.J.A.C.17:3-1.2 Fiscal Year. Cite as 32 N.J.R. 3996(b) [TPAF]

Adopted New Rule: N.J.A.C. 17:2-1.2 Division of Pensions and Benefits Public Employees' Retirement System Fiscal Year. Cite as 32 N.J.R. 3966(a) [PERS]

Adopted New Rule: N.J.A.C. 17:6-1.4 Consolidated Police and Firemen's Pension Fund Election of Members--Commission. Cite as 32 N.J.R. 3863(a) [PFRS]

Adopted New Rule N.J.A.C. 17:4-3.6 Acceptable Designation of Beneficiaries. Cite as 32 N.J.R. 3581(a) [PFRS]

Adopted Amendment: N.J.A.C. 17:3-1.4 Election of Member-Trustee. Cite as 32 N.J.R. 2926(a). [TPAF]

Adopted Amendment: N.J.A.C. 17:4-1.4 Election of Active Member-Trustee. Cite as 32 N.J.R. 2598(a). [PFRS]

Adopted Amendment: N.J.A.C. 17:4-5.1 and Proposed Repeal and New Rule: N.J.A.C. 17:4-5.1 and 5.3 Eligibility for Purchase and Optional Purchases of Eligible Service. Cite as 32 N.J. Reg. 2600(a). [PFRS]

Adopted Amendment: N.J.A.C. 17:9-5.12 and 6.8 Premium Sharing for Active State health Benefit Coverage; Premium Sharing for Retired State Health Benefit coverage. Cite as 32 N.J.R. 2601(b). [SHBP]

Adopted New Rules: N.J.A.C. 17:1-4.10 and 5.12 Eligibility for a Loan; Outstanding Loans. Cite as 32 N.J.R. 2602(a) [JRS]

Adopted Amendment: N.J.A.C. 17:4-2.5 Age Requirements. Cite as 32 N.J.R. 2599(a). [PFRS]

Adopted Amendment N.J.A.C. 17:3-6.13 Disability Retirant; Annual Medical Examinations. Cite as 32 N.J.R. 2110(a) [TPAF], 32 N.J.R. 2257(a) [PERS]

Adopted New Rule: N.J.A.C. 17:2-2.8 Enrollment Eligibility Of Provisional, Temporary Employees Occupying Full Time Police And Fire Titles. Cite as 32 N.J.R. 1415(a). [PERS]

Amendment: N.J.A.C. 17:1-4.36 Peacetime Military Service. Cite as 32 N.J.Reg. 1045(a) [General]

New Rules, Amendments and Repeals: N.J.A.C. 17:2 Administration, enrollment, insurance and death benefits, membership, purchase, eligible service, retirement and transfer. Adopted December 15, 1999. Cite as 32 N.J. Reg. 304(a). [PERS]

Adopted New Rules: N.J.A.C. 17:2-3.9, 6.2 and 7.2
Adopted Recodification with Amendments: N.J.A.C. 17:2-5.9 as 4.15,5.10 as 4.16 and 6.2 as 6.3
Adopted Repeals: N.J.A.C. 17:2-1.10, 4.5, 5.7, 6.19 and 6.23

Repeal and New Rule: N.J.A.C. 17.2-1.4 Election of Member Trustee. Adopted March 6, 2000. Cite as 31 N.J.R. 3926(a)[PERS]

New Rule: N.J.A.C. 17:3-3.13 Acceptable Designations of Beneficiaries. Cite as 32 N.J. Reg. 1046(a) [TPAF]

Repeal: N.J.A.C. 17.3-6.19 Maximum Allowance Prescribed. Cite as 32 N.J. Reg. 1047(a) [TPAF]

Reproposed Repeal and New Rule: N.J.A.C. 17:4-4.1 Membership, Creditable Compensation. Adopted February 28, 2000. Cite as 32 N.J.R. 1246(a) [PFRS]

Amendments: N.J.A.C. 17:5-4.1 and 4.2 Eligibilty for Purchase and Optional Purchases of Eligible Service. Cite as 32 N.J. R. 1047(b) [SPRS]

Amendment: N.J.A.C. 17:5-5.5 Outstanding Loan. Cite as 32 N.J. Reg. 1047(c) [SPRS]

New Rule N.J.A.C. 17:9-6.10 Retiree Prescription Drug card Plan. Adopted February 23, 2000. Cite as 32 N.J. Reg. 1048(a) [SHBP]

1999 Adoptions
1998 Adoptions

The agency proposal follows:

Summary

The proposed amendment is necessary to clarify that those employed by the Federal Workforce Investment Act of 1998 are ineligible for enrollment in the Public Employees' Retirement System (PERS). The Federal Workforce Investment Act is the successor to the Job Training Partnership Act (JTPA).

N.J.S.A. 43:15A-7h specifically excludes employees of the JTPA from PERS enrollment. The Division of Pensions and Benefits recently requested advice from the Attorney General's Office asking whether Title I of P.L. 105-220 (112 Stat. 936 to 1059) effects any change on N.J.S.A. 43:15A-7h which provides that employees hired under the predecessor Federal law, the Job Training Partnership Act, are ineligible for membership in the PERS. The more recent federal law, approved August 7, 1998, repealed the JTPA as of July 1, 2000. The membership eligibility of local government employees hired pursuant to the Workforce Investment Act of 1998 has become an issue.

The Attorney General's Office response stated that section 199A(c) of the Workforce Investment Act of 1998 (112 Stat. 1059) provides that "all references in any other provision of law to a provision of the .JTPA.shall be deemed to refer to the corresponding provision of this title." Accordingly, employees hired under the Workforce Investment Act can be deemed to be JTPA employees and therefore ineligible for PERS membership pursuant to N.J.S.A. 43:15A-7h.

Full text of the proposal follows

N.J.A.C. 17:2-2.3 Ineligible persons

1. The following classes of persons are ineligible for membership in the system

1 through 8 (No change)

9. Any person hired under the Workforce Investment Act of 1998. Employees hired under the Workforce Investment Act shall be deemed to be Job Training Partnership Act (JTPA) employees and therefore ineligible for PERS membership pursuant to N.J.S.A. 43:15A-7h.

POLICE AND FIREMEN'S RETIREMENT SYSTEM

Proposed Readoption with Amendments: N.J.A.C. 17:4
Proposed Recodifications with Amendments: N.J.A.C. 17:4-1.9 as 1.12, 1.10 as 3.7, and 6.3 as 6.2
Proposed Repeals: N.J.A.C. 17:4-1.11, 3.3, 4.8 and 5.7
Proposed Repeal and New Rule: N.J.A.C. 17:4-6.13
Cite as 32 N.J. Reg. 4060(a)

The agency proposal follows:

Summary

The Board of Trustees of the Police and Firemen's Retirement System (Board) is responsible for reviewing the administrative rules within N.J.A.C. 17:4. When they become aware of a change in the laws or a court decision that possibly could affect the Police and Firemen's Retirement System (PFRS), the administrative rules are reviewed and, if changes therein are mandated, steps are taken to propose changes to those rules to conform to the new statute or court decision. Additionally, the rules are periodically reviewed by the Division of Pensions and Benefits, and the Board's staff to ascertain if the current rules are necessary and/or cost efficient. In 1999, the Public Employees' Retirement System (PERS) Board of Trustees completed an extensive review of their rules found at N.J.A.C. 17:2. Many of the proposed amendments which follow are being made to better correspond with the rules of the PERS.

Accordingly, the Board of Trustees of the Police and Firemen's Retirement System proposes to readopt the current rules within N.J.A.C. 17:4, which expire on April 1, 2001, with the following amendments, repeals and new rule, and to extend the expiration date for such rules under Executive Order No. 66(1978). The current rules deal with the administration, enrollment, insurance and death benefits, membership, purchases and eligible service, retirement and transfer aspects associated with the Police and Firemen's Retirement System. Members, participating employers, retirees and survivors of retirees rely on the efficient operation of the retirement system to administer retirement benefits and to provide the information they need regarding individual accounts. They rely upon the presence and predictability of the rules that guide the administration of benefits and the stability of the Retirement System. The protections and guarantees that these rules afford its members mandate their continued existence. The rules proposed for readoption and the proposed amendments, repeals and new rule reflect the requirements for eligibility and amounts of benefits available that are mandated within the statutes governing the Police and Firemen's Retirement System. The chapter originally became effective prior to September 1, 1969. Pursuant to Executive Order No. 66(1978), the chapter was readopted as new rules in 1990. Chapter 4 expired on June 8, 1995 pursuant to Executive Order No. 66(1978), and a new Chapter 4, Police and Firemen's Retirement System was adopted, effective April 1, 1996. Following is a discussion of the proposed amendments, repeals and new rule.

Subchapter 1. Administration

The Board proposes that N.J.A.C. 17:4-1.1(a) be amended to correspond to the language in the PERS rules found at N.J.A.C. 17:2-1.1. The amended rule provides that the Board shall meet on the third Monday of each month, adding "or at such other time as may be deemed necessary by the Board." Subsection (b) is added, providing that the chairperson may call for special meetings as necessary.

Proposed amendments at N.J.A.C. 17:4-1.3 would change "chairman" to "chairperson." This change is to be made throughout the chapter. "Each fiscal year" would be changed to "July" to better clarify when the election takes place.

N.J.S.A. 43:16A-13(6) requires six members in attendance and not five as previously stated because this statute also increased the size of the Board to 11 members instead of nine (N.J.S.A. 43:16A-13(2)). N.J.S.A. 43:16A- 13(8) requires that the Director of the Division of Pensions and Benefits appoint a Secretary to the Board. Therefore, N.J.A.C. 17:4-1.3(c) and (d) would be replaced with a new subsection (c) stating this requirement. N.J.A.C. 17:4-1.3(e) would become (d).

Proposed amendments to N.J.A.C. 17:4-1.5 would change certifying "agent" to certifying "officer" throughout this chapter because the participating employers are not agents of the Division. N.J.A.C. 17:4-1.5(d) would be added, stating upon the request of the Board, "the certifying officer shall be required to sign a statement, verifying that any information reported is accurate to the best of the officer's knowledge, and conforms with the statutes and rules governing the retirement system." This language will impress upon the certifying officers the importance of accuracy in the information they provide the Division.

Proposed amendments to N.J.A.C. 17:4-1.6 would add subsection (c) dealing with beneficiary information. The confidentiality of beneficiary information appears at N.J.A.C. 17:1-4.1 under General Administration, but the Board believes it also belongs in the PFRS rules. Advice from the Attorney General's Office has been interpreted to permit the Division to release beneficiary information once a member's death has been reported to the System; therefore, proposed new N.J.A.C. 17:4-1.6(c) provides as follows: "The designations of beneficiaries of all active and retired members are considered to be a part of the member's confidential files and shall only be released after the member's death." Existing subsection (c) would be recodified as (d). Proposed amendments at subsection (d) as recodified would establish the conditions under which the Division will release medical records.

Proposed amendments to N.J.A.C. 17:4-1.7 would change the words "his or her" to "claimant." The required notice is proposed to be expanded through the efforts of the Board Secretary and the Attorney General's Office to include more information regarding the appeals process. These new paragraphs are to replace the existing notice.

Proposed amendments to N.J.A.C. 17:4-1.8 would change the beginning of the first sentence from "[m]onthly retirement allowances will be suspended" to "[t]he disbursement of pension checks shall be suspended" to correspond with the language in the PERS rules. Paragraph (a)2 is amended to reflect certificates of eligibility being mailed periodically rather than annually. In paragraph (a)3, the word "event" would also be changed to "instance" for the above reason.

Proposed amendments at N.J.A.C. 17:4-1.9 would recodify it as N.J.A.C. 17:4-1.12 to correspond with the PERS rules. The proposed amendments would eliminate the word "State" from the section heading. In subsection (a), "State employees paid by centralized payroll" is replaced with "employees whose employers who report salary and contributions on a biweekly basis" because the computer reporting systems of employers are expected to be advanced enough at this time so as to permit the Division to request on-line reporting of information instead of paper-based reporting.

The Board proposes that N.J.A.C. 17:4-1.10 be recodified as N.J.A.C. 17:4-3.7 because it deals with survivor benefits. References to widowers would be eliminated and the last sentence of subsection (b) would be deleted because a widower no longer must prove dependency to receive a surviving spouse benefit.

The Board proposes to repeal N.J.A.C. 17:4-1.11 concerning travel as it is also found at N.J.A.C. 17:4-6.17(c)1. Proposed amendments to N.J.A.C. 17:4-1.12 would recodify it as N.J.A.C. 17:4-1.11 to correspond with the PERS rules. "May be required" would be replaced with "shall," because a member's age is required information. The next sentence would be deleted as the Division no longer requires birth date evidence within the first six years of membership. A new sentence detailing acceptable proofs of age would appear next to establish examples of acceptable proofs.

Subchapter 2. Enrollment

Proposed amendments at N.J.A.C. 17:4-2.1 would add provisions to clarify what information must be provided to the Division and the Board before a position may be classified as that of a firefighter. Employees from civil service locations must satisfy the requirements of the positions as set forth by the Department of Personnel, but non-civil service locations do not have any uniform requirements for these positions. A determination is made by the Board regarding eligibility for the PFRS on a case-by-case basis and the Board proposes to set forth the following information requirements in order to allow for employers and the Board to determine whether the position satisfies the definition of firefighter. The Board also proposes to change the words "policeman" and "fireman" to "police officer" and "firefighter" throughout this rule and to replace any gender specific pronouns. The "b" in Board and the "s" in "System" would also be capitalized throughout the proposed amendment. Finally, the proposed amendment at N.J.A.C. 17:4-2.1(b)9 would add quotation marks before and after "direct supervision" and would also add "as defined by (b)5 above" to clarify that specific usage of the term.

Proposed amendments at N.J.A.C. 17:4-2.2 would eliminate the references to N.J.S.A. 43:10 (county pension funds--closed for new enrollments), Chapter 92, P.L. 1973 and Chapter 156, P.L. 1973 because the positions covered by these laws have been enrolled in the PFRS for more than 25 years and no new enrollments are possible under these provisions. The proposed amendment would also change policeman and fireman to police officer and firefighter. Proposed amendment at N.J.A.C 17:4-2.3 would add the requirement that the examining physician's signature be less than a year old. The System requires proof of present physical condition, not the condition of an applicant more than a year ago. Proposed amendment would also delete the reference to the civil service commission, which no longer submits medical evidence to the Division.

Proposed amendments at N.J.A.C. 17:4-2.6, Enrollment date, would make this rule better correspond to the similar rule found in the PERS rules at N.J.A.C. 17:2-2.4. A new paragraph (a)1 would be established using the existing language regarding the enrollment date of monthly employees, while a new paragraph (a)2 would be added to define what the compulsory enrollment date will be for biweekly employees. A proposed amendment to subsection (b) would eliminate the gender specific pronouns. Existing subsection (c) would be deleted, and a new subsection (c) dealing with the same subject, enrollment dates for those not covered by Civil Service, would be added to better address monthly and biweekly enrollment dates for those not covered by Civil Service. Subsection (d) would be amended to include the requirement that temporary employees be enrolled in the PERS under the provisions of N.J.A.C. 17:2-2.8.

Subchapter 3. Insurance and Death Benefits

The Board proposes to amend N.J.A.C. 17:4-3.1(a) by changing "he" to "the member" and deleting the reference to contributions for insurance coverage. The life insurance coverage in the PFRS is noncontributory. If an employer reports pensionable income after a member's death, then the Board will bill the employer or the beneficiary. The deduction does not have to be made by the employer; therefore, the Board also proposes to delete "provided such deduction was made by the employer." The Board also proposes to amend N.J.A.C. 17:4- 3.1(b) by adding "and noncontributory insurance benefits" after "death benefits" to apply this subsection to both types of benefits as their base salary calculation is the same. The Board proposes to amend N.J.A.C. 17:4- 3.1(c) by changing the masculine pronouns to "the member." N.J.A.C. 17:4- 3.1(d) and (e) would be deleted because the members described therein are now paid in the same manner as outlined in N.J.A.C. 17:4-3.1(c). The proposed amendments to N.J.A.C. 17:4-3.1(f) would recodify it as subsection (d). The Board proposes to replace "indicate" with "indicates" to be grammatically correct and to delete the language regarding billing the employer for overpayment. This has not been the Division's practice for many years. The language regarding underpayment to the beneficiary would remain.

N.J.A.C. 17:4-3.1(g) would be recodified as subsection (e), and the Board proposes to add "If a deceased member does not have an eligible surviving spouse, child or parent" before current first word "refunds" to reflect that a deceased member's contributions will be used to fund an active death benefit under the provisions of P.L. 1999, c.428, and only if there is no eligible survivor will a refund be made. Refunds are only made to beneficiaries or a member's estate and are not refunded to the employer, therefore, the Board proposes to delete the last sentence of this section. The Board proposes to delete N.J.A.C. 17:4-3.1(h) because only members who are over 60 need to prove insurability now. The maximum enrollment age is 35 in PFRS; therefore, no members would have to prove insurability. The Board proposes to recodify N.J.A.C. 17:4-3.1(i) as (g). The Board proposes to delete N.J.A.C. 17:4-3.1(j) and (k) because there are no 10-month employees in the PFRS and these paragraphs only apply to the calculation of benefits for 10-month employees.

The Board proposes to repeal N.J.A.C. 17:4-3.3 because it deals with proof of insurability. At one time, member's had to prove insurability if they were late enrollees into the system. Now, the only time a member must prove insurability is when the member is age 60 at enrollment. Because the enrollment age is 35 in the PFRS, this situation cannot exist, and so the rule as written is no longer necessary.

The proposed amendment at N.J.A.C. 17:4-3.5 would change "his" to "the member's."

Subchapter 4. Membership

Proposed amendments at N.J.A.C. 17:4-4.3 would change "he" to "the member."

Proposed amendments at N.J.A.C. 17:4-4.5 would place a period after "full normal deduction" and add that if wages are sufficient, arrears and loan deductions should be taken. The Division will accept just pension contributions and will not reject the contribution if loan and arrears payments are not also made. The proposed amendment reflects this practice.

Proposed amendments at N.J.A.C. 17:4-4.6 would change the minimum adjustment amount to $2.00 per quarter to reflect the PERS rules at N.J.A.C. 17:2-4.6 and the general rules at N.J.A.C. 17:1-1.10.

Proposed amendments at N.J.A.C. 17:4-4.7(b) would delete "retirement" before "deductions" because no pension deductions of any type (loan, arrears, normal contributions) should be taken during a suspension without pay. The Division now refers to retirement credit as service credit, and so, the Board proposes this amendment as well. The Board also proposes, in subsection (c), to capitalize the "B" in Board and to move the word "entire" to modify suspension and not elimination.

The Board proposes to repeal N.J.A.C. 17:4-4.8, Military leave, because it has not been in effect since August 1, 1974, when the Vietnam War ended. The Board proposes to clarify N.J.A.C. 17:4-4.9 to match the language in the PERS rules at 17:2-4.9.

The Board proposes to amend N.J.A.C. 17:4-4.10 to match the language in the PERS rules at 17:2-4.11, replacing "he" with "the member."

The Board proposes to amend N.J.A.C. 17:4-4.11 by adding the words "the day" before "they return to service" to better clarify this section.

Subchapter 5. Purchases and Eligible Service

Proposed amendments at N.J.A.C. 17:4-5.5 would add the statutory cites for the referenced Chapter Laws. The Board proposes to delete paragraph (a)1 because there now exists a uniform contribution rate. Paragraph (a)2 would be recodified as (a)1, and would change the word "reinstate" to "purchase" to reflect current usage. The Board proposes to delete the references to rate of contribution and would add a cross-reference to the purchase rules to determine costs. The Board proposes to delete paragraphs (a)3 and 4 because delayed enrollees no longer need to prove insurability and the proration of purchases is covered in statute (N.J.S.A. 43:16A-11.4).

The Board proposes to amend N.J.A.C. 17:5-5.6 by deleting the gender specific pronouns. The Board also proposes to eliminate the reference to the current rate of contribution because the PFRS has had a uniform contribution rate since 1989.

The Board proposes to repeal N.J.A.C. 17:5-5.7 because it is no longer necessary. Purchases, whether in lump-sum or through payroll deduction, are credited at the time the purchase is agreed to.

Subchapter 6. Retirement

The Board proposes to amend N.J.A.C. 17:4-6.1 by changing the wording to match that in the PERS rules found at N.J.A.C. 17:2-6.1. Specifically, the Board proposes to change the word "prescribed" to "required" and capitalize the "s" in System. The Board also proposes to amend the rule by changing the requirement that the form be filed with the system, to the Division of Pensions and Benefits, to reflect actual practice. The Board proposes to add "on or" in front of "before" to clarify that the Division will accept a form received on the date of retirement. A sentence is added providing that the retirement application becomes effective on the first of the month following receipt of the application, unless a future date is requested. The Board proposes to remove all gender specific pronouns and change them to "the member." The Board also proposes to delete the words "acceptance for" in front of "processing." The Board proposes at paragraph (c) to add the requirements that a member submit proof of age before retirement. The Board does not want employers to make medical opinions; therefore, it proposes at subsection (d) to amend the requirement that the employer state that a member is incapable for further duty and replace it with a second source from either a doctor or hospital. Finally, the Board proposes to add subsection (e) which would deal with the situation when a member returns to employment, cancels the retirement allowance and then retires again. This amendment is necessary due to a recent Administrative Law Decision (Jan Astin for Harry Astin v. PERS, OAL Docket No. TYP 2603-99) which found that there was a lack of any specificity as to how a re-retiree was to go about reinstatement of the initial retirement allowance in the Administrative Code.

The Board proposes to recodify N.J.A.C. 17:4-6.2 as 6.3 to match the PERS rules, and also because it makes more sense to define the effective date and then changes to that date, instead of the reverse. The proposed amendment to existing N.J.A.C 17:4-6.2 would be to delete the gender specific pronouns and to change from 30 days from the effective date to "one month" from the effective date to make it clear that benefits start on the first of a month and not on the 30th or 31st. The Board proposes to delete subsection (c) because P.L. 1999, c.428 now provides for active survivor benefits and not just retired survivor benefits. The Board proposes at new subsection (c) to add that a member retire on the first of a month that the member turns 55 if the member's birthday is the first. The Board proposes to recodify N.J.A.C. 17:4-6.3 as 6.2 as stated above. The Board also proposes to amend the rule to state "one month" instead of "30 days." The Board proposes to delete subsection (b) because insurance coverage is covered in subchapter 3.

Proposed amendments at N.J.A.C. 17:4-6.6 would eliminate the gender specific pronouns.

Proposed amendments at N.J.A.C. 17:4-6.7 would eliminate the gender specific pronouns and delete paragraph (a)1 concerning "normal" retirement age because age restrictions for disability benefits were found to be discriminatory. The requirement that an applicant be considered a member at the time of filing would be added as new paragraph (a)1.

The Board proposes to amend N.J.A.C. 17:4-6.9 because P.L. 1999, c.428 eliminated the use of average final compensation in the calculation of PFRS benefits. Retirements are now all calculated on the last 12 months of service. Therefore, the Board proposes to add that final compensation includes pay in the 12 months before retirement and also proposes to delete references to 10 month employees because there are no 10 month employees in the PFRS.

Proposed amendments to N.J.A.C. 17:4-6.10 would amend the language to better match the PERS rules at N.J.A.C. 17:2-6.10. The proposed amendment includes adding the words "employer initiated" and deleting "employee notice" from the section heading to better reflect the subject matter of the rule. The proposed amendment would make this rule gender neutral and remove the requirement that the employer make a medical opinion as to the totality and permanency of an employee's disability. The proposed amendment would also remove the language at N.J.A.C. 17:4-6.10(a)6 regarding the selection of the type of allowance desired. Members of the PFRS do not select an option at retirement. This was changed in December, 1967 when the widows' pension was enacted (N.J.S.A. 43:16A-12.1).

Proposed amendments at N.J.A.C. 17:4-6.11 would delete the gender specific pronouns and add that a member may retire on the first of the month that the member turns 55 if the member's birthday is on the first, or when the member has a minimum of 20 years of service credit, if the member was enrolled in PFRS as of January 18, 2000.

Proposed amendments to N.J.A.C. 17:4-6.12 would delete any gender specific pronouns.

At N.J.A.C. 17:4-6.13, the Board proposes to repeal the existing rule and replace it with the rule language developed for the PERS at N.J.A.C. 17:2- 6.26. Changes include the deletion of references to specific membership directories from which physicians are to be designated by the Board to conduct medical examinations and would require those physicians to be independent except in the case of abbreviated life expectancies.

Proposed amendments to N.J.A.C. 17:4-6.14 would replace gender specific pronouns with "the member" and would replace "system" with "Division" to accurately reflect who will be sending notice. Proposed amendments at N.J.A.C. 17:4-6.14(b) would delete "if not voluntarily established before that date" because if a member has already retired, he or she would not be subject to mandatory retirement. N.J.A.C. 17:4-6.14(j) is proposed for deletion because P.L. 1999, c.428 eliminated the 30 day requirement for a member's survivor to receive a survivor's benefit.

Proposed amendments at N.J.A.C. 17:4-6.15 would change any gender specific pronouns, capitalize the "b" in Board and change "system" to "Division." The last sentence is proposed for deletion to conform to Division practice. The sentence provided that a copy of the notice of rejection of an application for accidental disability retirement, based on incapacity not the direct result of a traumatic event occurring during and as a result of performance of duties, would be returned and considered in future claims. Any medical information must be updated in order to file again.

Proposed amendments at N.J.A.C. 17:4-6.16 would eliminate "average" before "final compensation" because the provisions of P.L. 1999, c.428 eliminated the use of the average of the final three years of service and replaced it with the last 12 months or 26 pay periods of compensation. Proposed amendments would also delete references to "State" and "centralized payroll" and add "on a biweekly basis" because more employers are expected to report on a biweekly basis, and this would apply to them. The proposed deletions of N.J.A.C. 17:4-6.16(c) and (d) are necessary because there are no longer any 10-month employees in the PFRS.

Proposed amendments at N.J.A.C. 17:4-6.17 would change any gender specific pronouns and replace them with "the member."

Proposed new rule N.J.A.C. 17:4-6.18 would mimic that found at N.J.A.C. 17:2-6.22 and is necessary to address the situation where a member waived all or a portion of the member's retirement allowance.

Subchapter 7. Transfers

Proposed amendments at N.J.A.C. 17:4-7.1 would include a new subsection (a), stating that "[t]he receipt of a public pension or retirement benefit is expressly conditioned upon the rendering of honorable service by a public officer or employee. Therefore, the Board of Trustees shall disallow the transfer of all or a portion of prior service of any member of the System for misconduct occurring during the member's prior public service which renders that prior service, or part thereof, dishonorable." This is necessary to establish that only honorable service can be transferred. Paragraphs (b)1 and 2 (former (a)1 and 2) are amended to clarify that service credits and contributions transfer, and the form names have been changed. The Division now does wire transfers and not checks. Back deductions are scheduled in the new account. Paragraph (b)3 (former (a)3) allows the statement to be prepared and forwarded, but does not require it to accompany a check because we don't issue one. Paragraph (b)4 (former (a)4) would delete mention of the same rate of contribution because the Board now has standardized and not age based rates. Paragraph (b)5 (former (a)5) is amended to detail when a member is not eligible to transfer service credit. Paragraph (a)6 providing for transfer application copy forwarding would be deleted because it is no longer Division practice. A new paragraph (b)6 is proposed to reflect a change in Division practice, which is to use a data sheet indicating an interfund transfer. Subsection (c) (former (b)) is proposed to be amended to clarify the procedure for handling and valuation of accrued reserves. Subsection (c) would become subsection (d) and old subsection (d) would also be deleted because of the standardized rates now in effect. Proposed new subsection (e) would clarify that someone who transfers into the PFRS is subject to the age and physical requirements of enrollment.

Proposed new rule N.J.A.C. 17:4-7.2 would clarify when a member is eligible to do an intrafund transfer, and impose penalties on employers for late enrollment.

N.J.A.C. 17:4-7.3 is proposed for repeal as its substance is now addressed in N.J.A.C. 17:4-7.2.

Full text of the proposed amendments follows:

SUBCHAPTER 1. ADMINISTRATION

17:4-1.1 Board Meetings

(a) The Board of Trustees shall meet on the third Monday of each month [, unless a change is declared in order by the chairman at an appropriate time] or at such other time as may be deemed necessary by the Board.

(b) The chairperson may call for special meetings when necessary.

17:4-1.3 Officers and committees

(a) The [chairman] chairperson and vice [chairman] chairperson of the Board will be elected by a majority vote of the members in attendance at the first meeting of [each fiscal year] July, not less than [five] six members to be present at such meeting.

(b) The [chairman] chairperson of the Board shall preside at all of its meetings [that he or she attends and in his or her], or in the absence of the [vice chairman or, if] chairperson, the vice chairperson shall assume the chairperson's responsibilities if both are absent, another member selected by the majority of the members in attendance will preside for that single meeting.

[(c) The secretary of the Board will be the Chief of the Bureau of Police and Fire Funds, Division of Pensions.]

[(d) Upon recommendation of the Chief, the Board will also select from the staff of such Bureau, an assistant secretary who will serve in the absence of the secretary.]

(c) The Director of the Division of Pensions and Benefits shall appoint a qualified employee of the Division to be Secretary of the Board.

[(e) (d) The [chairman] chairperson will appoint such committees from the Board members as [he deems] deemed necessary to facilitate the Board's operations. Such committee appointments will be for a one year period, commencing each July 1.

17:4-1.5 Certifying [agent ] officer (employer)

(a) The chief fiscal officer or other officer duly designated by a resolution of each county, [or] municipality or public agency, and the personnel officer of the Division, Bureau or Institution of the State locations, shall serve as certifying [agent] officer for that unit.

(b) The certifying [agent] officer shall be responsible for the duties described by N.J.S.A. 43:16A-32.

(c) The certifying [agent] officer shall be responsible for all other duties relating to matters concerning the [system] System.

(d) Upon the request of the Board, the certifying officer shall be required to sign a statement, verifying that any information reported is accurate to the best of the officer's knowledge, and conforms with the statutes and rules governing the retirement system.

17:4-1.6 Records

(a)-(b) (No change.)

(c) The designations of beneficiaries of all active and retired members are considered to be a part of the member's confidential files and shall only be released after the member's death.

[(c)](d) All medical testimony obtained in connection with an application for disability retirement shall be restricted for the confidential use of the Board of Trustees. The Division shall release a copy of the examining physician's medical report to the member, the member's attorney or any person authorized by the member in writing to receive a copy of such report. In no event shall the report be released to any individual not authorized in writing to receive the report.

17:4-1.7 Appeal from Board decisions

The following statement shall be incorporated in every written notice setting forth the Boards determination in a matter where such determination is contrary to the claim made by the claimant or [his or her] the claimant's legal representative:

["If you disagree with the determination of the Board of Trustees in this matter, you may appeal by sending a written statement to the Board within 45 days from the date of this letter informing the Board of your disagreements and all of the reasons therefore. If no such written statement is received within the 45-day period, this determination shall be considered final."]

"(a) If you disagree with the determination of the Board, you may appeal by submitting a written statement to the Board within 45 days after the date of written notice of the determination. The statement shall set forth in detail the reasons for your disagreement with the Board's determination and shall include any relevant documentation supporting your claim. If no such written statement is received within the 45-day period, the determination by the Board shall be final.

(b) The Board shall determine whether to grant an administrative hearing based upon the standards for a contested case hearing set forth the Administrative Procedure Act, N.J.S.A. 52:14B-1 et seq., and the Uniform Administrative Procedure Rules, N.J.A.C. 1:1-1 et seq.

(c) Administrative hearings will be conducted by the Office of Administrative Law pursuant to the provisions of N.J.S.A. 52:14B-1 et seq. and N.J.A.C. 1:1-1.

(d) If the granted appeal involves a question of facts, the Board shall submit the matter to the Office of Administrative Law.

(e) If the granted appeal involves solely a question of law, the Board may retain the matter and issue a final administrative determination which shall include detailed findings of fact and conclusions of law based upon the documents, submissions and legal arguments of the parties. The Board's final determination may be appealed to the Superior Court, Appellate Division."

17:4-1.8 Suspension of pension checks

(a) [Monthly retirement allowances will] The disbursement of pension checks shall be suspended under the following circumstances and [the suspension will] such suspensions shall continue during the period [of] in default:

1. (No change.)

2. If a widow, widower, parent or guardian of a minor child(ren) fails to file a certificate of eligibility which is normally mailed to such beneficiaries on [an annual] a periodic basis;

3. If a retirant or beneficiary becomes mentally or physically incompetent. The disbursement of pension checks in this [event],instance shall be suspended until a proper legal representative has been appointed.

(Agency Note: N.J.A.C. 17:4-1.9 is proposed for recodification with amendments as N.J.A.C. 17:4-1.12.)

(Agency Note: N.J.A.C. 17:4-1.10 is proposed for recodification with amendment as N.J.A.C. 17:4-3.7)

[17:4-1.11 Travel]

[Travel to and from work when it is to and from the regular place of employment is not considered duty rendered in the course of employment for the purpose of determining eligibility for accidental disability or accidental death benefits.]

17:4[1.12]1.11 Proof of age

(a) All members [may be required to] shall establish proof of their age with the System. [A person enrolling in the System may be requested to submit proof of his or her age at the time of such enrollment and will be required to submit such proof of age before a period of six years has elapsed from the date of enrollment.] Acceptable proofs of age include birth or baptismal certificates, passports, naturalization papers, Biblical records, affidavits of older members of the immediate family or primary school records.

(b) In the event a member dies before satisfactory evidence of [his or her] the [member's] date of birth has been filed with the System, appropriate evidence may be required before any death claim is processed for settlement.

(c) (No change.)

17:4-[1.9]1.12 [State employees] Employees; biweekly salaries

(a) Retirement and death benefits as well as service credit will be determined on the basis of biweekly pay periods for [State employees paid by centralized payroll] employees whose employers report salary and contributions on a biweekly basis. This biweekly schedule should conform to the biweekly reporting schedule issued by the State's Centralized Payroll Office.

(b) In the event a member is reported on a combination of monthly and biweekly pay periods, [his] the member's last year's salary or final compensation as well as [his] the member's service credit will be computed on a proportional basis.

SUBCHAPTER 2. ENROLLMENT

17:4-2.1 Eligible positions

(a) All public employees actively employed in positions meeting the definition ["policeman"] "police officer" or ["fireman"]"firefighter" shall be members of the Police and Firemen's Retirement System of New Jersey.

(b) The following words and terms, as used in this section and in N.J.S.A. 43:16A-1 et seq., shall have the following meanings:

1.-2. (No change.)

3. "Board of Trustees" or ["board"]"Board" means the Board of Trustees of the Police and Firemen's Retirement System established pursuant to N.J.S.A. 43:16A-13.

4.-5. (No change.)

6. "Employer" means the State of New Jersey or the county, municipality or political subdivision thereof which pays the particular [policeman] police officer or [fireman] firefighter.

7. (No change.)

8. ["Fireman"]"Firefighter" shall have the meaning ascribed to that term by P.L. 1989, c.204 (N.J.S.A. 43:16A-1) as the same may be amended and supplemented from time to time.

9. "General supervision" means "direct supervision" of employees who perform "direct supervision" as defined by (b)5 above.

10. (No change.)

11. ["Policeman"]"Police officer" shall have the meaning ascribed to that term by P.L. 1989, c.204 (N.J.S.A. 43:16A-1) as the same may be amended and supplemented from time to time.

12.-13. (No change.)

14. "Retirement [system"] System" or ["system "] "System" means the Police and Firemen's Retirement System of New Jersey as defined in N.J.S.A. 43:16A-2.

(c) Determinations by the Director and the Board of whether an employee of a law enforcement unit or firefighting unit is an administrative employee with the meaning of the definitions of ["policeman"] "police officer" or ["fireman"]"firefighter" under the law and these rules shall be on a case-by-case basis. An employee may perform some administrative functions without being an administrative employee. In determining whether an employee is an administrative employee, the Board shall consider the following factors:

1.-2. (No change.)

3. Whether the career path to become an administrative employee begins with or includes positions as non-administrative [policemen or firemen] police officers or firefighters.

(d) Determinations by the Director and the Board of whether an employee of a law enforcement unit or firefighting unit is a supervisory employee within the meaning of the definitions of ["policeman"] "police officer" or ["fireman"] "firefighter" under the law and these rules shall be on a case-by-case basis. An employee may perform some supervisory functions without being a supervisor. In determining whether an employee is a supervisory employee, the Board shall consider the following factors:

1. Whether and to what extent the employee is responsible for conducting performance evaluations, disciplining, adjusting the grievances, rewarding, and assigning and directing the work of non-supervisory [policemen or firemen] police officers or firefighters or effectively recommending such actions;

2. Whether the individual [policemen or firemen] police officers or firefighters subject to some supervision by the employee have a primary supervisor other than the employee;

3. (No change.)

4. Whether the career path to become a supervisor begins with or includes positions as non-supervisory [policemen or firemen] police officers or firefighters.

(e) Employers shall not use the same job title for both individuals whose job functions meet the definition of ["policeman"] "police officer" or ["fireman"] "firefighter" and individuals whose job functions do not meet those definitions. In the event that the Board determines that an employee's primary duties qualify that employee as a ["policeman"] "police officer" or ["fireman,"] "firefighter," but that employee holds a position held by other individuals whose primary duties do not qualify those employees as a [ policeman] police officer or [fireman] firefighter, then the employer shall promptly take the necessary actions to create a new job title to ensure that the same job title is not used both for individuals whose job functions meet the definition of [ "policeman"] "police officer" or ["fireman"] "firefighter" and individuals whose job functions do not meet those definitions.

(f) In the event an employee, not currently included as a member of the system, believes that [he or she]the employee performs duties that meet the definition of ["policeman"]"police officer" or ["fireman,"] "firefighter," the employee may file an application for membership in the [system] System with the Director, stating in detail the basis for the employee's belief that the employee is a [policeman] police officer or [fireman] firefighter. A copy of the application shall be served on counsel for the employee's employer.

(g) The Director shall review the application and determine whether the employee meets the definition of ["policeman"]"police officer" or ["fireman."] firefighter." The Director shall then make a recommendation to the Board as to whether the employee should be included in the [system] System.

(h) If, after considering the recommendation of the Director, the Board determines that the employee meets the definition of ["policeman"] police officer" or ["fireman "] "firefighter" the Board shall, prior to making a final determination, publish in the New Jersey Register a notice that it proposes to include the employee's position in the System. Interested parties shall be given at least 30 days to comment on the proposal.

(i) If, after considering the recommendation of the Director, the Board determines that the employee does not meet the definition of [ "policeman"]"police officer" or ["fireman,"] "firefighter," the employee shall be offered an opportunity for a hearing in accordance with the Uniform Administrative Procedure Rules, N.J.A.C. 1:1.

(j) If the employee requests a hearing, the Board shall publish in the New Jersey Register a notice that a hearing will be conducted on the application of the employee that the employee's position be deemed to meet the definition of ["policeman"] "police officer" or ["fireman"]"firefighter" as the case may be, and that interested parties may seek to intervene in accordance with N.J.A.C. 1:1-16.

(k) Guidelines for fire districts that have not adopted the provisions of Title 11A of the New Jersey Statutes (non-civil service) are as follows:

1. A Board of Fire Commissioners created under the provisions of N.J.S.A. 40A:14-81 shall have the powers, duties and functions within said district to the same extent as in the case of municipalities, relating to the prevention and extinguishment of fires and the regulation of fire hazards.

2. When establishing an eligible position for the PFRS, the commissioners must comply with the employment guidelines stated in N.J.S.A. 40A:14-81.1, excerpted below:

i. The position must be established by resolution;

ii. The appointment of persons to the position, determination of the term and compensation and prescribed functions and duties of the position must also be established by resolution; and

iii. The resolution must be published at least once in a substantial newspaper in the district.

(l) To determine the eligibility of a non-civil service position for the PFRS, the Board requires the following items:

1. A description of the physical and mental requirements for the position including evidence of the completion of a test determined by the Board to be comparable to the Fire Fighters' Physical Performance Test required by civil service employers;

2. A description of the training requirements including but not limited to, the Fire Fighter's I certification issued by the Division of Fire Safety, Department of Community Affairs.

3. A table of organization for the employing entity;

4. A list of employees currently in the position, with present pension status and job title; and

5. Proof of compliance with the provisions of N.J.S.A. 40A:14- 81.1.

17:4-2.2 Compulsory enrollment

[(a)] Membership in the Police and Firemen's Retirement System of New Jersey is mandatory, a condition of employment for every [ "policeman"]"police officer" or ["fireman"] "firefighter" [appointed after July 1, 1944, in a county or municipality which had prior to July 1, 1944, adopted the provisions of N.J.S.A. 43:10, or in such county or municipality first providing coverage for such employees by referendum under N.J.S.A. 43:16A, or pursuant to the provisions of Chapter 92, P.L. 1973] under the provisions of N.J.S.A. 43:16A-1 et seq.

[(b) It shall also be mandatory for eligible employees of the State or counties as provided by Chapter 156, P.L. 1973.]

17:4-2.3 Medical requirements

(a) Applicants must furnish evidence of good health sufficient to satisfy the Board of Trustees:

1. In this connection, the Board may accept the medical determination [of the Civil Service Commission or] of the physician examining for the appointing [county or municipal] authority. If [either of these] this medical [sources] source indicates further examination is in order, the [ system] System will select and arrange an appointment with an independent physician.

2. Each question of [the] physical eligibility is decided individually and on the basis of recommendations and findings of the examiner.

3. The completed Report of Examining Physician shall be deemed unacceptable if there is more than one year's difference from the date of signature of the examining physician and the date of receipt time-stamped by the Division of Pensions and Benefits.

17:4-2.6 Enrollment date

(a) An employee who is appointed to a permanent position from a [Civil Service] civil service list shall be considered as having begun [his or her] eligibility for enrollment on the date of [his or her] regular appointment. [The compulsory enrollment date shall be fixed as the first of the month for an appointee whose regular appointment date falls between the first through the 16th of the month and the compulsory enrollment date shall be fixed as the first of the following month for an appointee whose regular appointment date falls between the 17th and the end of the month.]

1. For employers who report on a monthly basis, the compulsory enrollment date shall be fixed as the first of the month of regular appointment for an employee whose regular appointment date falls between the first through the 16th of the month and the compulsory enrollment date shall be fixed as the first of the following month for an employee whose regular appointment date falls between the 17th and the end of the month.

2. For employers who report on a biweekly basis, the compulsory enrollment date shall be fixed as the first day of the pay period of regular appointment for an employee whose appointment date falls on the first through seventh day of the biweekly pay period. The compulsory enrollment date shall be fixed as the first day of the following biweekly pay period for an employee whose appointment date falls on any subsequent date within that pay period.

(b) An employee in the unclassified service shall be considered as beginning service on the date [his or her] employment began. The compulsory enrollment date shall be fixed as the first of the month of hire for an appointee whose beginning employment date falls between the first through the 16th of the month and the compulsory enrollment date shall be fixed as the first of the following month for an appointee whose beginning employment date falls between the 17th and the end of the month.

[(c) The regular appointment of an employee appointed by a local employer not covered by Civil Service shall constitute the date the employee originally accepted employment in a regular budgeted position. The date of compulsory enrollment shall be fixed as the first of the month for an appointee whose beginning date of employment falls between the first through the 16th of the month and the compulsory enrollment date shall be fixed as the first of the following month for an appointee whose beginning employment date falls between the 17th and the end of the month.]

(c) For local employers not covered by civil service, a regular appointment shall constitute the date the employee originally accepted employment in a regular budgeted position.

1. For local employers not covered by civil service who report on a monthly basis, the compulsory enrollment date shall be fixed as the first of the month of hire for an employee whose beginning employment date falls between the first through 16th of the month and the compulsory enrollment date shall be fixed as the first of the following month for an employee whose beginning employment date falls between the 17th and the end of the month.

2. For local employers not covered by civil service who report on a biweekly basis, the compulsory enrollment date shall be fixed as the first day of the pay period of hire for an employee whose date of hire falls on the first through seventh day of the biweekly pay period. The compulsory enrollment date shall be fixed as the first day of the following biweekly pay period for an employee whose date of hire falls on any subsequent date within that pay period.

(d) An employee [who does not meet the requirements for enrollment cited in (a) (b) and (c) above] of a civil service employer who is not permanent in a classified position or an employee of a non-civil service employer who is not in a regular budgeted position may be considered a temporary employee by [his] the employer for [as long as a] the one-year period following the employee's date of hire, but if [his] the employment continues into [his] a second year, [he] the employee will be required to enroll immediately[; his compulsory enrollment date will be the first of the month following the end of the one year (12-month- period] in the Public Employees' Retirement System pursuant to the provisions of N.J.A.C. 17:2-2.8.

SUBCHAPTER 3. INSURANCE AND DEATH BENEFITS

17:4-3.1 Computation of insurance benefits

(a) Full salary credit will be given for the month or biweekly pay period in which a member dies, if [he] the member was paid salary to date of death and the salary paid was sufficient to permit a full normal month's or biweekly pension [and insurance contribution] deduction [, provided such deduction was made by the employer].

(b) Death benefits and noncontributory insurance benefits shall be based on the base salary upon which contributions to the Annuity Savings Fund were actually made during the 12 months or 26 biweekly pay periods immediately preceding the member's death. [The salary, in the month] Months or pay periods in which no salary was paid[,] shall ] be counted as zero] not be used in the calculation.

(c) If a member dies during the first year following [his] the date of enrollment , the insurance benefit shall be 3 1/2 times the member's base salary on which [he] the member contributed or would have contributed immediately prior to [his] death.

[(d) For a member dying after the first year following the date of his enrollment, the noncontributory insurance benefits shall be determined on the base salary on which contributions to the Annuity Savings Fund were made or would have been made during the 12 months or 26 biweekly pay periods preceding death.]

[(e) If a member has contributed pension contributions for less than a year but his enrollment has been in effect for more than a year, only those wages upon which pension contributions were based can be used as salary to determine the value of the noncontributory insurance benefit.]

[(f)](d) Where a post-audit of insurance claim payments indicates the pension contributions reported by an employer were incorrect and resulted in the [overpayment ]underpayment of an insurance claim to a member's designated beneficiary or estate, [the employer will be billed for the value of the overpayment of the insurance benefits. Where post-audits establish the insurance benefits were underpaid,] an additional check would be sent to the beneficiary for the value of the underpayment.

[(g)](e) [Refunds] If a deceased member does not have an eligible surviving spouse, child or parent, then refunds of a deceased member's pension contributions will be made to the member's designated beneficiary [or the employer after written confirmation is received from the employer setting forth the reason for the refund of pension contributions to either the beneficiary or to the employer].

[(h) Members who prove their insurability for the group life insurance benefits shall have their insurance benefit calculated on the basis of the salary they received or salary upon which pension contributions were based during their last year (12 months) of service prior to death, regardless of their effective date of insurance coverage.]

[(i)](f) (No change in text.)

[(j) In computing (i) above in the case of State employees reported on a 10-month basis, the total biweekly pays will include those pay periods in the third quarter of each year in which the member does not receive salary. The adjustment as specified in (i) above shall not be made.]

[(k) If a member was reported on a biweekly basis on any combination of 10 and 12-month contract years, the last year's salary prior to death or retirement shall be determined on a proportional basis. The biweekly pay periods for which no contributions were made shall be counted as zero.]

17:4-3.3 [Proof of insurability] (Reserved)

[When proof of insurability is required, the member's opportunity to prove such insurability shall expire one year (12 months) from the date the initial written notice is sent advising him that he must prove insurability by taking a medical examination.]

17:4-3.5 Beneficiary designation; pension contributions

Only a primary and a contingent designation of beneficiary may be made by the member for the payment of [his] the member's accumulated pension contributions.

17:4-[1.10]3.7 Survivor benefits; establishing dependency

(a) (No change.)

(b) A [widower or] parent will be deemed to be dependent on the member if they were accepted as dependents of the member for Federal income tax purposes. [If the member and spouse file separate or joint tax returns, the widower will be deemed dependent on the member, if the claimant's income was less than one-half of the total income of both spouses.]

SUBCHAPTER 4. MEMBERSHIP

17:4-4.3 Continuance of membership; transfer

Once an employee establishes membership in the retirement system, [he]the member is eligible to continue such membership should [he] the member be temporarily employed in a position covered by the system.

17:4-4.5 Deductions

(a) A full deduction shall be taken for the Police and Firemen's Retirement System in any payroll period in which the member is paid a sufficient amount to make a full normal deduction. [, plus any other] If wages are sufficient, deductions should also be made for any arrears or loan deductions then in effect.

(b) (No change.)

17:4-4.6 Minimum adjustment

In order to facilitate the reconciliation of a member's account, no rebates or additional contributions shall be made where an adjustment involves an amount of [$3.00] $2.00 or less during a calendar quarter.

17:4-4.7 Suspension

(a) (No change.)

(b) No [retirement] deductions will be made during such a break in service, nor will any [retirement] service credit accrue.

(c) If during the period of suspension or at the conclusion of the penalty period adjustment is made in favor of the member, the [board] Board may allow the payment of pension deductions to reflect the lesser penalty or the [entire] elimination of the entire suspension.

17:4-4.8 [Military leave](Reserved)

[(a) Military leave contributions remitted by an employer on behalf of an employee who does not return to the payroll for the minimum 90-day period required by N.J.S.A. 43:16A-11 shall be retained by the system. Such contributions shall be transferred from the Annuity Savings Fund to the Pension Accumulation Fund. Military leave contributions remitted by an employer shall be based on the employee's salary at the time he entered military service.]

[(b) Payroll as referred to in (a) above shall be interpreted to mean any public payroll in New Jersey, not necessarily the payroll of the employer where the member was employed when he entered military service.]

17:4-4.9 Eligibility for loan

Only [an] active contributing members of the System may exercise the privilege of obtaining a loan.[and the] The member's total outstanding loan balance [maximum loan] shall [be] not exceed 50 percent of the accumulated deductions posted to the member's account.

17:4-4.10 Termination; withdrawal

(a) Under the terms of the statutes, a member may withdraw from the System only if [he] the member terminates all employment.

(b) No application shall be approved if:

1. The member is on official leave of absence;

2. The member certifies that [his] employment has not ended or that [he] the member has taken another position subject to coverage;

3. The member has been dismissed or suspended from employment. In this event, such a member will be eligible to withdraw if [he] the member has formally resigned from [his] the position or there is no legal action contemplated or pending and the dismissal has been adjudged final; or

4. The member has a claim pending for Workers' Compensation benefits.

17:4-4.11 Active employment; membership requirement

All employees, otherwise eligible, who are not actively employed on the date of their enrollment, will not be covered by the group life insurance program until the day they return to service.

SUBCHAPTER 5. PURCHASES AND ELIGIBLE SERVICE

17:4-5.5 Reinstatement of membership credit

(a) A member, whose account has been terminated by the withdrawal of [his or her] contributions from the Annuity Savings Fund or whose account has been terminated because of a two-year lapse in contribution, may be reinstated to the [system] System under the provisions of Chapter 199, P.L. 1967 (N.J.S.A. 11A:4-9), Chapter 303, P.L. 1969 (N.J.S.A. 40:47-11.1 and 11.2), or Chapter 439, P.L. 1981 (N.J.S.A. 11A:4-9), provided that [he or she] the member meets the requirements of the System other than the age maximum:

[1. A member reinstated under Chapter 199, P.L. 1967, shall be enrolled at a rate appropriate to his or her age at original enrollment.]

[2.] 1. A member reinstated under Chapter 303, P.L. 1969 (N.J.S.A. 40:47-11.1 and 11.2), shall [reinstate] purchase the previous credit [he or she] the member had established in the Police and Firemen's Retirement System at enrollment. [The reinstatement will result in a rate assignment appropriate to his or her age at original enrollment.] The cost of [reinstating] purchasing the previous credit will be determined [by applying the factor certified by the actuary] using the formula for calculating shared-cost purchases found at N.J.A.C. 17:4-5.3(a).

[3. All members reinstated and reenrolled under these acts will be required to prove insurability to resume insurance coverages.]

[4. Should a member reinstating such credit retire or die before the completion of his or her payments, pension credits will be recognized in proportion to the amount paid to the total arrearage.]

17:4-5.6 Elected officials; continuation of membership

Any member accepting an elective position may continue [his or her] membership and contribute [at his or her current rate of contribution] on the salary being received as an elected official as long as [he or she] the member holds elective office and remains a member of the retirement system.

[17:4-5.7 Lump-sum purchases]

[If a purchase is paid in a lump-sum, the member shall receive full credit for the amount of service covered by the purchase upon receipt of the lump-sum payment. The service may be used for any purpose for which it is authorized under the law governing the Police and Firemen's Retirement System (N.J.S.A. 43:16A-1 et seq.) and the rules of the retirement system.]

SUBCHAPTER 6. RETIREMENT

17:4-6.1 Applications

(a) Applications for retirement must be made on forms [prescribed] required by the [system] System. Such forms must be completed in all respects and filed with the [system] Division of Pensions and Benefits (Division) on or before the requested date of retirement. A member's retirement application becomes effective on the first of the month following receipt of the application unless a future date is requested.

(b) In the event a member files an incomplete application, the [deficiency] deficiencies shall be brought to [his or her] the member's attention and [he or she] the member [will] shall be required to file a completed application with the [system] Division to enable [acceptance for] processing.

(c) Before an application for retirement may be [accepted for processing] processed, the Division must receive proof of the member's age, if none is already in the member's record, and[it must be supported by] a [certificate] completed Certification of Service and Final Salary form from the employer setting forth the employment termination date and the salaries reported for contributions in the member's final year[s] of employment.

(d) In addition to the [foregoing] requirements in (a) through (c) above, an application for disability retirement must be supported by at least two medical reports[a report of] one by the member's personal or attending physician and [a statement from the employer regarding the member's incapacity for further duty] the other in the form of either hospital records supporting the disability or a report from a second physician.

(e) If a member's previous retirement allowance has been cancelled due to the member's return to employment and reenrollment in the Retirement System pursuant to the provisions of N.J.S.A. 43:16A-15.3, a new retirement application must be filed with the Division in accordance with (a) through (d) above. The previous retirement allowance shall then be reinstated, and the new retirement allowance, based on the member's subsequent covered employment, shall commence. The previous and subsequent retirement allowances shall then be combined and paid in one monthly benefit check.

17:4[6.3]6.2+>> Effective date; death prior thereto

[(a)]A member's retirement allowance shall not become due and payable until 30 days after the date the [board] Board approved the application for retirement or [30 days] one month after the date of the retirement, whichever is later.

[(b) A member who files an application for retirement and whose insurance coverage has not lapsed prior to filing a retirement application is covered under the insurance program as an active member in the event of death prior to the date the retirement allowance becomes due and payable.]

17:4[6.2] 6.3 Effective dates; changes

(a) A member shall have the right to withdraw, cancel or change an application for retirement at any time before [his] the member's retirement allowance becomes due and payable by sending a written request signed by the member[; thereafter] Thereafter, the retirement shall stand as approved by the Board.

(b) Except in the event of deferred retirement, if a member requests a change in [his] the retirement application before [his] the retirement allowance becomes due and payable, said change will require approval of the Board and the revised retirement allowance shall not become due and payable until [30 days have] one month has elapsed following the effective date or 30 days after the date the Board met and approved the change in the member's retirement application, whichever is later.

[(c) If the applicant should die within 30 days following the date the board of trustees approved the revised application, the member shall be considered to be retired on the basis of the originally approved application for retirement, provided that the initial 30-day requirement was satisfied.]

[(d)](c) A deferred retirement shall become effective on the first of the month following the member's 55th birthday. If the member's 55th birthday falls on the first of a month, the retirement shall become effective on that date, provided the member files a timely retirement application pursuant to N.J.S.A. 43:16A-11.2 and requests that retirement date.

[(e)](d) In the case of deferred retirement, if an applicant desires to amend [his] the retirement application, the amended application must be filed with the [system] Division a minimum of one month prior to [his] the effective date of retirement.

[(f)](e) (No change in text.)

(Agency Note: N.J.A.C. 17:4-6.3 is proposed for readoption as N.J.A.C. 17:4-6.2.)

17:4-6.6 Retirement credit

(a) A member shall receive credit toward retirement for any month or biweekly pay period in which a full normal deduction is received by the [system] System.

(b) A member who appeals the suspension or termination of [his or her] the member's employment and is awarded back pay for all or a portion of [his or her] the member's employment for the period of such suspension or termination shall receive retirement credit for the period covered by the award, regardless of the amount of the back pay awarded, provided a full normal pension contribution is received from the member or deducted from the value of the award. The amount of the pension contribution will be determined by the provisions of the award. If the member receives full back pay, including normal salary increases, then the contribution will be computed on the base salaries that the employee would have earned for the reinstated, suspended or terminated period. When the settlement is less than the full back pay, the pension contribution will be based upon the salary that the member was receiving for pension purposes prior to the suspension or termination of employment. In the event that the amount of back payment is insufficient to deduct the value of the normal pension contributions due, such contribution shall be paid by the member.

(c) (No change.)

17:4-6.7 Disability determination

(a) A member for whom an application for accidental disability retirement allowance has been filed by the member, by [his] the member's employer or by one acting in behalf of the member, will be retired on an ordinary disability retirement allowance if the [board] Board finds that:

[1. The member was under the normal retirement age at the time of filing application for a disability retirement allowance; and]

1. The applicant was considered a member in service at the time of filing the application for a disability retirement allowance;

2. The member is physically or mentally incapacitated for the performance of duty; [and]

3. The member is not eligible for accidental disability since the incapacity is not a direct result of a traumatic event occurring during and as a result of the performance of [his] the member's regular or assigned duties; and

4. (No change.)

17:4-6.9 [Average final] Final compensation [; 10 and 12- month members]

(a) In order to determine the [average] final compensation [ (three-year average)] for benefits on a:

1. Member reported on a monthly basis, use the [creditable salaries]base salary upon which pension contributions were made to the [retirement system] Annuity Savings Fund for [his] the member's last [36] 12 months of service.

[2. If a member was reported on any combination of 10 and 12-month contract years in such three-year period, the final average compensation shall be determined on a proportional basis.]

2. Member reported on a biweekly basis, use the base salary upon which pension contributions were made to the Annuity Savings Fund for the member's last 26 pay periods of service multiplied by the factor supplied by the actuary to compensate for biweekly payroll schedules.

[3.] (b) The months or pay periods for which no contributions were made shall not be [counted as zero] used in the calculation.

17:4-6.10 Employer [disability application; employee notice] initiated disability retirement application

(a) If an application for an accidental disability retirement benefit or for an ordinary disability retirement benefit is filed by an employer for an [one of his or her] employee[s], the member will be promptly notified by letter that:

1. [His] The member's employer has properly initiated a disability application signed by the Certifying Officer or other designated officer of the employer, on the member's behalf; [and]

2. [His] The member's employer has [certified that the member is permanently and totally disabled for the continued performance of duty] submitted a written statement as to the grounds for the employer's request for the member's involuntary disability retirement and all available medical documentation; and, if appropriate;

3. [His]The member's employer has certified that the member should be retired as a direct result of a traumatic event occurring during and as a result of the performance of [his] the member's regular or assigned duties;

4. [He] The member has a period of 30 days to contest [his] the involuntary retirement before the [board] Board acts on [his] the employer's application;

5. [He] The member will be required to appear for an examination before a physician designated to conduct such an examination for the retirement system; and

6. In the event the [board] Board finds that [he] the member is totally and permanently incapacitated for the performance of duty, [he] the member shall be granted [the maximum] a retirement allowance [payable under the statute, if he does not file a completed "Application for Disability Retirement Allowance" setting forth the type of allowance he desires, before his retirement goes into effect]; and

7. In the event the [board] Board finds that [he] the member is not totally and permanently incapacitated for the performance of duty, the employer's application shall be disallowed and the employer shall be informed that the member should be returned to duty.

17:4-6.11 Service or special retirement; eligibility

(a) A member becomes eligible for "service" retirement [on]:

1. On the first of the month following [his] the member's 55th birthday. If the member's 55th birthday falls on the first of a month, the retirement shall become effective on that date, provided the member files a timely retirement application pursuant to N.J.S.A. 43:16A-5, and requests that date; or

2. When the member has a minimum of 20 years of service credit if the member was enrolled in the PFRS as of January 18, 2000.

(b) A member becomes eligible for "special" retirement on the first of the month following the establishment of 25 years of creditable service, regardless of [his] the member's age.

17:4-6.12 Disability retirant; annual medical examinations

(a) (No change.)

(b) Failure on the part of a retirant to submit to the required medical examination shall result in the automatic suspension of [his] the retirant's retirement allowance until [he] the retirant submits to a medical examination.

17:4-6.13 Medical examinations; physicians

[Where the statute prescribes that a physician be designated by the system to perform a medical examination, such physician shall be selected from the current membership directory of the Medical Society of New Jersey and the New Jersey Association of Osteopathic Physicians and Surgeons; however, in the cases of those members whose personal physician has identified them as having a probable abbreviated life expectancy, such "imminent death" cases may be processed without the necessity of an examination by a physician designated by the system if corroborating medical evidence of the diagnosis can be obtained.] N.J.S.A. 43:16A-13(11) requires the Retirement System or the Board to designate physicians to perform medical examinations. A designated physician shall not be a member's personal physician, except in the case of a member whose personal physician has identified the member as having a probable abbreviated life expectancy if sufficient corroborating medical evidence of the diagnosis can be obtained.

17:4-6.14 Compulsory retirement

(a) (No change.)

(b) The retirement will be effective on the first day of the month following the 65th birthdate [, if not voluntarily established before that date].

(c)-(d) (No change.)

(e) The [system] Division shall send written notice to the member and [his] the member's employer between 120 and 180 days in advance of the date on which the member shall be required to retire.

(f) A member shall be retired automatically by the Board as of [his] the member's compulsory retirement date following [his] the member's 65th birthday.

(g) Should a member fail to file an "Application for Retirement Allowance" before [his or her] the member's compulsory retirement date, no retirement checks will be disbursed until [he or she] the member files the required application.

(h) When such a member files [his] an application with the [system] Division [he] the member shall be eligible to receive retirement benefits for the months that have elapsed since [his] the compulsory retirement date, provided satisfactory evidence is received to show that [he] the member terminated employment as of [his] the compulsory retirement date.

(i) No retirement benefits shall be paid for any period the member continued in service beyond [his] the compulsory retirement date, nor shall [he] the member receive any credit for retirement purposes for salary received or for service rendered beyond [his] the compulsory retirement date.

[(j) If a member's death occurs after the 30-day waiting period has been satisfied, but before he has filed the required application for retirement, the member shall be considered to be retired for death benefit purposes. His estate shall be entitled to the retroactive retirement allowance due, in addition to any insurance and survivorship benefits payable.]{

17:4-6.15 Employer and employee notices

If an applicant for accidental disability retirement is found to be physically or mentally incapacitated for the performance of duty but is rejected for accidental disability retirement because the [board] Board finds that the disability was not a direct result of a traumatic event occurring during and as a result of the performance of [his] the applicant's regular or assigned duties, and if the applicant does not meet the minimum statutory requirements for any other type of retirement allowance, the [system] Division will notify both the member and [his] the member's employer that the member was found to be physically or mentally incapacitated for the continued performance of duty, as was previously certified to the [system] Division by both the employee and his employer. [Both the employer and the employee will also be advised that a copy of such notice will be placed in the member's file and will be given full consideration in any future claim for disability retirement benefits].

17:4-6.16 [Average final] Final compensation; [biweekly] salary computation for [State] employees reported by centralized payroll on a biweekly basis

(a) In computing [average] final compensation upon which pension contributions were based in the case of a 12-month [State] employee reported on a biweekly basis, a total of [78] 26 biweekly pays will be used, including any retroactive salary payments [made within the prescribed] attributable to the covered period.

(b) In computing (a) above, the total salary will be adjusted by the factors

supplied by the actuary to convert biweekly salaries to compensate for [State] biweekly payroll schedules. Application of the factors to the salaries reported for pension purposes will develop "final compensation."

[(c) In computing (a) above in the case of State employees reported on a 10-month basis, the total biweekly pays will include those pay periods in the third quarter of each year in which the member does not receive a salary. The adjustment as specified in (b) above shall not be made.]

[(d) If a member was reported on a biweekly basis on any combination of 10 and 12-month contract years, the final average compensation prior to retirement shall be determined on a proportional basis. The biweekly pay periods for which no contributions were made shall be counted as zero.]

17:4-6.17 Work-related travel; accidental disability retirement and accidental death benefit coverage

(a) A member whose duties include regular or occasional travel in the course of employment will be considered in the "performance of [his] regular or assigned duties" for the purposes of accidental disability retirement or "in the actual performance of