RULE CHANGES
1998

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 bi-weekly 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].

Public Notices

There are no Public Notices for 1998.

Proposed Rules

Proposed New Rule: N.J.A.C 17:3-3.13 Insurance and Death Benefits; Benefits payable under Chapter 96, Laws of 1984, as amended by Chapter 221, Laws of 1995.

Proposed Amendment: N.J.A.C. 17:1-4.13 Purchases; Cancellation, Interest on Outstanding Purchases or Cash Discount Requested (Cite as 30 NJR 4146(a))

Proposed New Rule; N.J.A.C. 17:2-2.6 Enrollment Eligibility of Professors and Instructors Employed on a Temporary, Provisional or Adjunct Basis by Public Institutions of Higher Education [PERS] (Cite as 30 NJR 4146(b))

Proposed New Rule: 17:2-6.15 Disability retirements; filing after discontinuance of service (cite as 30 NJR 3375 (b)) [PERS]

Proposed New Rule: 17:3-6.15 Disability retirements; filing after discontinuance of service (cite as 30 NJR 3377(a)) [TPAF]

Adoptions

N.J.A.C. 17:4-6.12 Disability retirant; annual medical examinations. Adopted 7/6/98 (cite as 30 NJR 2516(a)).

N.J.A.C. 17:2-6.13 Disability retirant; annual medical examinations. Adopted 7/6/98 (cite as 30 NJR 2514(a)).

N.J.A.C. 17:3-6.13 Disability retirant; annual medical examinations.Adopted 7/6/98 (cite as 30 NJR 2515(a)).

N.J.A.C. 17:2-6.14 Disability retirant; annual report (employment, earnings, test and adjustment). Adopted 7/6/98 (cite as 30 NJR 2514(b)).

N.J.A.C. 17:3-6.14 Disability retirant; annual report (employment, earnings, test and adjustment). Adopted 7/6/98.

N.J.A.C. 17:2-2.3 Ineligible persons. Adopted 7/6/98 (cite as 30 NJR 2513(c)).

Proposed Amendment: N.J.A.C. 17:1-4.13 Purchases; cancellation or cash discount requested. Adopted 9/8/98. (Cite as 30 NJR 3257 (b))

Proposed New Rule: N.J.A.C 17:2-3.13 Insurance and Death Benefits; Benefits payable under PL 1984, c.96 as amended by PL. 1995, c. 221, Adopted 11/2/98. (Cite as 30 NJR 3970(a)).

Readoption: N.J.A.C. 17:9 State Health Benefits Program Adopted (cite as 30 NJR 2953(c)).

Readoption: N.J.A.C. 17:3 Teachers' Pension and Annuity Fund. Full text of this readoption can be found at NJAC 17:3 Adopted (Cite as 30 NJR 4254 (a))

Proposed Readoption with Amendments: N.J.A.C. 17:6 Consolidated Police and Firemen's Pension Fund Adopted 11/23/98 (Cite as 30 NJR 4388(a)).

DISABILITY RETIRANT; ANNUAL MEDICAL EXAMINATIONS

N.J.A.C. 17:3-6.13

Summary

This amendment is necessary to clarify the Division of Pensions and Benefits ability to require a disability retirant to undergo a medical examination five or more years after his retirement in order to determine whether the disability that existed at retirement has vanished or has materially diminished.

N.J.A.C. 17:3-6.13 Disability retirant; annual medical examinations

(a) All disability retirants, [under the normal retirement age], may be required to undergo a medical examination each year for [a maximum period of] at least five years or for good cause thereafter by a physician designated by the Fund as of the anniversary date of their retirement, unless such examination requirement has been waived by the Board.

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

Comment period on the above changes ends April 15, 1998.

DISABILITY RETIRANT; ANNUAL MEDICAL EXAMINATIONS

N.J.A.C. 17:4-6.12

Summary

This amendment is necessary to clarify the Division of Pensions and Benefits ability to require a disability retirant to undergo a medical examination five or more years after his retirement in order to determine whether the disability that existed at retirement has vanished or has materially diminished.

N.J.A.C. 17:4-6.12 Disability retirant; annual medical examinations

(a) All disability retirants [shall be required], may be required to undergo a medical examination each year for [a maximum period of] at least five years or for good cause thereafter by a physician designated by the system as of the anniversary date of their retirement, unless such examination requirement has been waived by the board.

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

Comment period on the above changes ends April 15, 1998.

DISABILITY RETIRANT; ANNUAL MEDICAL EXAMINATIONS

N.J.A.C. 17:2-6.13

Summary

This amendment is necessary to clarify the Division of Pensions and Benefits ability to require a disability retirant to undergo a medical examination five or more years after his retirement in order to determine whether the disability that existed at retirement has vanished or has materially diminished.

N.J.A.C. 17:2-6.13 Disability retirant; annual medical examinations

(a) All disability retirants[, under age 60,] may be required to undergo a medical examination each year for [a maximum period of] at least five years or for good cause thereafter by a physician designated by the System as of the anniversary date of their retirement, unless such examination requirement has been waived by the Board.

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

Comment period on the above changes ends April 15, 1998.

DISABILITY RETIRANT; ANNUAL REPORT
Employment, Earnings Test, and Adjustment

N.J.A.C. 17:2-6.14

Summary

This proposed amendment is necessary to update the existing procedures used by the Division of Pensions and Benefits to apply the earnings test required under N.J.S.A. 43:15A-44 of all PERS disability retirants by making them more efficient and economical.

Previously, disability retirants were required to disclose earnings information to the Division when requested, but proof of these earnings was not part of this required disclosure. The Division would like to request proof of earnings in the form of copies of W-2's and IRS Form 1040, in order to make more accurate determinations of income.

This proposed amendment would also require disability retirants to report actual and not estimated earnings to the Division in order to eliminate the possibility of errors . This proposed amendment would change the reporting date from February 15, of each year, to April 30, to enable the Division to request current copies of filed tax forms.

Finally, the proposed amendment would delete the under age 60 requirement to reflect changes made by the Division to eliminate age discrimination.

N.J.A.C. 17:2-6.14 Disability retirant; annual report (employment, earnings, test and adjustment)

(a) All disability retirants [under age 60] shall be required to file a report with the System which shall include copies of the retirants' IRS 1040 forms and W-2 forms and any other proofs of employment requested indicating the type of employment they are engaged in, if any, and the gross earned income realized therefrom as of December 31 of each year.

1. Such report must be filed with the System before the following [February 15th] April 30th.

2. Failure on the part of the retirant to file a completed report with the System before [February 15] April 30th shall result in the [automatic] presentation of the retirant's case to the PERS Board of Trustees who may impose penalties or [suspension] suspend [of] the retirant's entire retirement allowance for the period the report is in default.

(b) If a retirant reports employment and earnings, then the following tests shall be made by the System to ascertain:

1. If the retirant is engaged in a position subject to coverage by the System, [his] the retirement allowance shall be canceled and [he] the retirant shall be reenrolled in the System pursuant to N.J.S.A. 43:15A-44, effective as of the date of [his] the retirant's appointment to such position. Any disability retirement benefits received after this date of appointment shall be refunded to the System.

2. If the retirant is engaged in employment and [he estimates that his] the gross earned income for the [present] preceding calendar year [will] exceeds the difference between [his] the pension and the salary [he] the retirant would have been receiving had [he] the retirant continued to work for [his] the former employer (normal increment steps and salary range revisions will be considered but no promotional assumptions will be made) [his] an appropriate adjustment to the pension for the period will be made by such difference. [If, at the close of the calendar year it is found that his earnings differ from his estimate, an appropriate adjustment will be made.]

3. If [such a retirant has not properly estimated his gross earned income for the calendar year and] it is found [at the close of the calendar year] on or after April 30, that gross earned income for the calendar year exceeded the difference between his pension and the salary of his former position and if he does not refund the excess pension to the System within 30 days[, effective April 1,] of notification of the difference, his pension for the succeeding 12-month period will be reduced by the excess pension he received in the preceding calendar year.

Comment period on the above changes ends April 15, 1998.

DISABILITY RETIRANT; ANNUAL REPORT
Employment, Earnings Test, and Adjustment

N.J.A.C. 17:3-6.14

Summary

This proposed amendment is necessary to update the existing procedures used by the Division of Pensions and Benefits to apply the earnings test required under N.J.S.A. 18A:66-40(a) of all TPAF disability retirants by making them more efficient and economical.

Previously, disability retirants were required to disclose earnings information to the Division when requested, but proof of these earnings was not part of this required disclosure. The Division would like to request proof of earnings in the form of copies of W-2's and IRS Form 1040, in order to make more accurate determinations of income.

This proposed amendment would also require disability retirants to report actual and not estimated earnings to the Division in order to eliminate the possibility of errors . This proposed amendment would change the reporting date from February 15, of each year, to April 30, to enable the Division to request current copies of filed tax forms.

The proposed amendment would also delete the under age 60 requirement to reflect changes made by the Division to eliminate age discrimination.

This amendment also provides that if a member is working in a position covered by the retirement system from which the member retired and the member is found eligible for reenrollment, than the member's retirement allowance will be canceled and the member will be reenrolled into the retirement system. Any retirement allowances paid after the time of eligibility for reenrollment will be refunded to the system.

Finally this amendment provides that if the earnings that a member is making in retirement, plus the member's retirement benefit, is greater than what the member would have been earning at the position from which the member retired, than the member's pension benefit may be reduced by the difference. This calculation will be performed as of April 30th instead of the end of the year.

N.J.A.C. 17:3-6.14 Disability retirant; annual report (employment, earnings, test and adjustment)

(a) All disability retirants [under the normal retirement age] shall be required to file a report with the Fund which shall include copies of the retirants' IRS 1040

forms and W-2 forms as well as any other proofs of employment requested of a specific retirant indicating the type of employment they are engaged in, if any, and the gross earned income realized therefrom as of December 31 of each year.

1. Such report must be filed with the Fund before the following [February 15th] April 30th.

2. Failure on the part of the retirant to file a completed report with the Fund before [February 15] April 30th shall result in the [automatic] presentation of the retirant's case to the TPAF Board of Trustees who may impose penalties or [suspension] suspend [of] the retirant's entire retirement allowance for the period the report is in default.

(b) If a retirant reports employment and earnings, then the following tests shall be made by the Fund to ascertain:

1. Eligibility for reenrollment: If the retirant is engaged in a position subject to coverage by the Fund, [his] the retirement allowance shall be canceled and [he] the retirant shall be reenrolled in the Fund pursuant to N.J.S.A. 18A:66-40c, effective as of the date of [his] the retirant's appointment to such contract. Any disability retirement benefits received after this date of appointment shall be refunded to the System.

2. Adjustment of allowance:

i. If the retirant is engaged in employment and [he estimates that his] the gross earned income for the [present] preceding calendar year [will] exceeds the

difference between [his] the pension and the salary [he] the retirant would have been receiving had [he] the retirant continued to work for [his] the former employer (normal

increment steps and salary guide revisions will be considered but no promotional assumptions will be made) [his] an appropriate adjustment to the pension for the period will be made by such difference. [If, at the close of the calendar year it is found that his earnings differ from his estimate, an appropriate adjustment will be made.]

ii. If [such a retirant has not properly estimated his gross earned income for the calendar year and] it is found [at the close of the calendar year] on or after April 30, that gross earned income for the calendar year exceeded the difference between [his] the pension and the salary of [his] the former position and if [he] the retirant does not refund the excess pension to the Fund within 30 days[, effective April 1,] of notification of the difference, [his] the pension for the succeeding 12-month period will be reduced by the excess pension [he] received in the preceding calendar year.

Comment period on the above changes ends April 15, 1998.

INELIGIBLE PERSONS

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

Summary

This proposed amendment is necessary due to the enactment of Chapter 23, P.L. 1997 which makes retirees from the Public Employees' Retirement System (PERS) who, after being granted a retirement allowance, return to public employment in a position which earns less than $10,000.00, ineligible for reenrollment into the Retirement System. This proposed amendment will attempt to clarify the period one must be retired to be covered by this rule. It will also attempt to clarify the position of the Division of Pensions and Benefits toward multiple employers of retired members earning less than $10,000 from each employer.

Chapter 23, P.L. 1997 also includes provisions for the Director the Division of Pensions and Benefits to periodically increase of this $10,000.00 earnings limit based on 3/5 of the percentage of change in the Consumer Price Index. This amendment will outline the method to be used to implement these proposed increases.

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

(a) The following classes of persons are ineligible for membership in the system:

1-6.(No change)

7. Any effectively retired PERS member who returns to a PERS eligible position after February 27, 1997 and whose annual salary does not exceed 10,000 from any single participating PERS employer is ineligible for membership in the PERS.

(a) An effectively retired PERS member is:

1. someone who has terminated all PERS covered employment and

2. who has been off payroll for at least 30 consecutive days and

3. whose retirement benefit has become "due and payable". A pension benefit is not due and payable until either 30 days after the date the board approved the application for retirement or 30 days after the date of the retirement, whichever is later.

(b) A retired PERS covered employee who returns to work in more than 1 PERS eligible positions with the same employer, must combine the salaries from all PERS eligible positions when considering the $10,000 limit. A retired PERS employee who returns to work in more than 1 PERS eligible positions with different employers will be able to consider the salaries earned at each employer separately when considering the $10,000 limit.

(c) The Director of the Division of Pensions and Benefits may adjust the $10,000 earnings limit at a rate equal to 3/5 of the percentage of change in the Consumer Price Index for Urban Wage Earners and Clerical Workers, All Items Series A from the time of the enactment of this legislation to the present, but such adjustments shall not be made until the percent increase has reached

Comment period on the above changes ends April 15, 1998.

TEACHERS' PENSION AND ANNUITY FUND
Insurance and Death Benefits; Benefits payable under
Chapter 96, Laws of 1984, as amended by Chapter 221, Laws of 1995

Proposed New Rule: N.J.A.C 17:3-3.13

Summary

The purpose of this proposed new rule is to clarify the death benefits payable under the Teachers' Pension and Annuity Fund (TPAF) when beneficiaries request that retirements become effective under Chapter 221, Laws of 1995. This law amended Chapter 96 of the Laws of 1984 which first authorized beneficiaries to request that retirements become effective under certain circumstances where members died before retirements became effective. Prior to Chapter 96, a retirement was not effective until 30 days after the date specified by the member or the date of Board action on the retirement, whichever was later. Chapter 221 eliminated all the requirements for beneficiaries to be eligible to make such requests other than the requirement that a member file a retirement application.

Chapter 96 was interpreted by the Division of Pensions and Benefits as giving the beneficiaries of members who met the requirements of the law the option of receiving the death benefits payable on behalf of a member who died in active service (1 1/2 or 3 1/2 times final year salary) and the return of the member's contributions plus accrued interest, or a retirement allowance under an optional retirement benefit selection and the death benefits payable on behalf of a retiree (3/16 or 7/16 times final year salary). If a member took the steps necessary to convert the difference between the amount of active and retired death benefits, the beneficiary would also receive the converted death benefit.

After the enactment of Chapter 221, questions arose concerning the appropriate interpretation of these laws and the benefits which should be paid under them. Clarifying advice was requested from the Attorney General. The advice confirmed that the interpretation and practice of the Division was the correct application of the law.

The proposed new rule provides that the beneficiary designated for an optional settlement on a retirement application may request that the retirement take effect and that the optional settlement be made under Chapter 221. If there is no such beneficiary, the beneficiary designated to receive the return of contributions or unpaid benefits at the date of death may make the request. If a beneficiary requests that a retirement become effective, the death benefits payable on behalf of the member shall be the benefits payable on behalf of a member who dies after retirement as provided under the laws governing the retirement system. If a member files the required application to convert some or all of the difference between the amount of active and retired death benefits and pays the initial premium, the amount of the converted death benefits shall be paid as claims under the group insurance policies for noncontributory and contributory death benefits. The premiums paid shall be retained by the carrier and shall be applied to the premiums payable by the State and the retirement system for the group policies.

Full text of the proposed new rules follows:

17:3-3.13 Benefits payable under Chapter 96, Laws of 1984, as amended by Chapter 221, Laws of 1995

a. For the purposes of section 1 Chapter 96, Laws of 1984, as amended by section 2 of Chapter 221, Laws of 1995 (N.J.S.A.18A:66-47), the person designated as the beneficiary for an optional settlement on the retirement application may request that a retirement become effective and that a selection of an optional settlement be made as authorized by the law. If there is no designated beneficiary for an optional settlement, the person designated as the beneficiary to receive the return of contributions or unpaid benefits due to a retiree at the date of death may make this request. If a beneficiary requests that an optional settlement be made, the death benefits payable on behalf of the member shall be the death benefits payable on behalf of a member who dies after retirement as otherwise provided in the Teachers' Pension and Annuity Fund Law, as amended and supplemented (N.J.S.A. 18A:66-1 through 93).

b. Where a beneficiary of a member requests that a retirement take effect and that a selection of an optional settlement be made as authorized under section 2 of Chapter 96 Laws of 1984, as amended by section 1 of Chapter 221, Laws of 1995, an additional amount of insurance, not to exceed the amount of insurance that could be converted under the group policies for noncontributory and contributory death benefits, shall be paid as claims under the group policies only if the member files an application for conversion of the insurance upon retirement as provided under N.J.S.A. 18A:66-79 and pays the initial premium for the converted insurance. The premiums paid for the converted insurance shall be retained by the carrier and be applied to the premiums payable by the State and the retirement system for benefits provided under the group policies.

STATE HEALTH BENEFITS PROGRAM

Proposed Readoption: N.J.A.C. 17:9

Summary

The New Jersey State Health Benefits Commission is constantly reviewing the administrative rules within N.J.A.C. 17:9 concerning the State Health Benefits Program. When the Commission becomes aware of a change in the laws or a court decision that possibly could affect the State Health Benefits Program, 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 Commission's staff to ascertain if the current rules are necessary and/or cost efficient. After careful scrutiny of the current rules in N.J.A.C. 17:9, the Division is satisfied that they are necessary and needed for the efficient operation of the Program. Accordingly, the New Jersey State Health Benefits Commission proposes to readopt the current rules within N.J.A.C 17:9, which expire on August 23, 1998, with the exception of minor amendments, and to extend the expiration date for such rules under Executive Order No. 66 (1978) to August 23, 2003. The Commission is in the process of doing a detailed review of this chapter which it will submit at a later date. The current rules deal with the administration, coverage, dependents, employees, charges, retirement, termination, prescription drug program and dental expense programs associated with the State Health Benefits Program.

Full text of the proposed readoption can be found in the New Jersey Administrative Code at N.J.A.C. 17:9.

PURCHASES; CANCELLATION OR CASH DISCOUNT REQUESTED

Proposed Amendment: N.J.A.C. 17:1-4.13

Summary

The Division of Pensions and Benefits proposes to amend the current rule found at N.J.A.C. 17:1-1.2, Purchases; cancellation or cash discount requested. Currently, once an agreement is made to purchase service credit, and installment payments begun, the member cannot stop the deductions regardless of the member's ability to afford them due to changing financial circumstances. This amendment will allow the cancellation of any additional installment payments and a pro-ration of credit to protect members from undue financial hardship.

At present, there are no interest charges made against outstanding arrears balances, regardless of the period of time that no payments have been made. This amendment will allow the Division to charge interest on purchases that have been inactive for more than two years due to a member's leave of absence.

This amendment would also give the Division the authority to cancel an outstanding arrearage for an incomplete purchase, should it remain inactive for more than two years, to better enable the Division to keep accurate records of service credit actually accrued in a member's account.

Full text of the proposed amendment follows:

17:1-4.13 Purchases; cancellation , interest on outstanding purchases or cash discount requested

(a) A member who authorizes [payroll deductions or makes a lump sum payment for the partial or complete] a purchase of service credit [and then requests cancellation of the purchase and/or the return of his payment, or who requests the cancellation of further payroll deductions as previously arranged, shall be informed that the purchase cannot be] may cancel [ed] that purchase at any time on a prospective basis only.

No refunds will be made of any lump sum payments, partial payments or installment payments. The member will receive a pro rata credit for the service purchased to the date installment payments cease. Any subsequent requests to purchase the remaining service credit shall be based on the laws and rules in effect on the date that the subsequent request is received.

(b) No more than one request received from a member for the cash discount value of an outstanding arrearage or a purchase quotation for previous service will be honored in a calendar year.

(c) A member who authorizes a purchase which requires installment payments, but who has not had installment payments made toward that purchase for two years due to inactivity in the account, shall be informed by the Division that the remainder of the purchase will be canceled. The member shall receive a pro rata credit for the service purchased to the date that the installment payments ceased. The member may request to pay the cash discount value of the outstanding arrearage for the purchase in full within 60 days of the Division notice. Any subsequent requests to purchase the remaining service credit shall be based on the laws and rules in effect on the date that the subsequent request is received.

(d) A member returning from an approved leave of absence after two years may request that the original purchase be resumed. Such purchase shall be recalculated to include additional regular interest accrued between two years after the date of the last installment payment and the date the purchase is resumed.

PUBLIC EMPLOYEES' RETIREMENT SYSTEM
Insurance and Death Benefits; Benefits payable under P.L. 1984, c.96
as amended by P.L. 1995, c. 221, Proposed New Rule: N.J.A.C 17:2-3.13

Summary

The purpose of this proposed new rule is to clarify the death benefits payable under the Public Employees' Retirement System (PES) when beneficiaries request that retirements become effective under Chapter 221, Laws of 1995. This law amended Chapter 96 of the Laws of 1984 which first authorized beneficiaries to request that retirements become effective under certain circumstances where members died before retirements became effective. Prior to Chapter 96, a retirement was not effective until 30 days after the date specified by the member or the date of Board action on the retirement, whichever was later. Chapter 221 eliminated all the requirements for beneficiaries to be eligible to make such requests other than the requirement that a member file a retirement application.

Chapter 96 was interpreted by the Division of Pensions and Benefits as giving the beneficiaries of members who met the requirements of the law the option of receiving the death benefits payable on behalf of a member who died in active service (1 1/2 or 3 times final year salary) and the return of the member's contributions plus accrued interest, or a retirement allowance under an optional retirement benefit selection and the death benefits payable on behalf of a retiree (3/16 times final year salary). If a member took the steps necessary to convert the difference between the amount of active and retired death benefits, the beneficiary would also receive the converted death benefit.

After the enactment of Chapter 221, questions arose concerning the appropriate interpretation of these laws and the benefits which should be paid under them. Clarifying advice was requested from the Attorney General. The advice confirmed that the interpretation and practice of the Division was the correct application of the law.

The proposed new rule provides that the beneficiary designated for an optional settlement on a retirement application may request that the retirement take effect and that the optional settlement be made under Chapter 221. If there is no such beneficiary, the beneficiary designated to receive the return of contributions or unpaid benefits at the date of death may make the request. If a beneficiary requests that a retirement become effective, the death benefits payable on behalf of the member shall be the benefits payable on behalf of a member who dies after retirement as provided under the laws governing the retirement system. If a member files the required application to convert some or all of the difference between the amount of active and retired death benefits and pays the initial premium, the amount of the converted death benefits shall be paid as claims under the group insurance policies for noncontributory and contributory death benefits. The premiums paid shall be retained by the carrier and shall be applied to the premiums payable by the State and the retirement system for the group policies.

Full text of the proposed new rules follows:

17:2-3.13 Benefits payable under Chapter 96, Laws of 1984, as amended by Chapter 221, Laws of 1995

a. For the purposes of section 1 Chapter 96, Laws of 1984, as amended by section 2 of Chapter 221, Laws of 1995 (N.J.S.A. 43:15A-50), the person designated as the beneficiary for an optional settlement on the retirement application may request that a retirement become effective and that a selection of an optional settlement be made as authorized by the law. If there is no designated beneficiary for an optional settlement, the person designated as the beneficiary to receive the return of contributions or unpaid benefits due to a retiree at the date of death may make this request. If a beneficiary requests that an optional settlement be made, the death benefits payable on behalf of the member shall be the death benefits payable on behalf of a member who dies after retirement as otherwise provided in the Public Employees' Retirement System Act, as amended and supplemented (N.J.S.A. 43:15A-1 through 141).

b. Where a beneficiary of a member requests that a retirement take effect and that a selection of an optional settlement be made as authorized under section 2 of Chapter 96 Laws of 1984, as amended by section 1 of Chapter 221, Laws of 1995, an additional amount of insurance, not to exceed the amount of insurance that could be converted under the group policies for noncontributory and contributory death benefits, shall be paid as claims under the group policies only if the member files an application for conversion of the insurance upon retirement as provided under N.J.S.A. 43:15A-93 and pays the initial premium for the converted insurance. The premiums paid for the converted insurance shall be retained by the carrier and be applied to the premiums payable by the State and the retirement system for benefits provided under the group policies.

PUBLIC EMPLOYEES' RETIREMENT SYSTEM
Disability retirements; filing after discontinuance of service

Proposed New Rule: 17:2-6.15

Cite as 30 NJR 3375 (b)

(a) A member who discontinued service for more than two consecutive years and was otherwise eligible for disability retirement at the time service was discontinued may file for disability retirement if:

1. the Medical Board certifies that the member was physically or mentally incapacitated for the performance of duty at the time service was discontinued and continues to be so incapacitated at the time of filing; and,

2. the member factually demonstrates to the satisfaction of the Board of Trustees that service was discontinued because of the disability.

(b) A disability retirement under this rule may take effect in accordance with the laws and rules applicable to effective dates for disability retirements after the date the application is filed.

(c) This rule shall be applicable to all current active and inactive members and retirees, but disability retirements under this rule shall not be effective prior to the effective date of the rule.

Summary

The rule will permit members to file for disability retirements after they have discontinued service for more than two consecutive years. Active membership in the retirement system ceases after discontinuance of service for two consecutive years. Under the current rules and operating procedures of the Division, members may not file for disability retirements if their active membership has ceased.

There have been several cases in recent years where members were clearly disabled and discontinued service because of their disabilities, but did not file for disability retirements within two years of the discontinuation of service.

This proposed rule would permit members to file for disability retirements after their active membership ceased if they were disabled at the time of discontinuance of service and their disability at that time and at the time of filing is certified by the Medical Board. In addition, the member would have to establish factually to the satisfaction of the Board of Trustees that service was discontinued because of the disability.

Disability retirements under this rule would not take effect until after this proposed rule is effective. Thereafter, they would be effective on or after the date of filing under this rule.

TEACHERS' PENSION AND ANNUITY FUND
Disability retirements; filing after discontinuance of service

Proposed New Rule: 17:3-6.15

Cite as 30 NJR 3377(a)

(a) A member who discontinued service for more than two consecutive years and was otherwise eligible for disability retirement at the time service was discontinued may file for disability retirement if:

1. the Medical Board certifies that the member was physically or mentally incapacitated for the performance of duty at the time service was discontinued and continues to be so incapacitated at the time of filing; and,

2. the member factually demonstrates to the satisfaction of the Board of Trustees that service was discontinued because of the disability.

(b) A disability retirement under this rule may take effect in accordance with the laws and rules applicable to effective dates for disability retirements after the date the application is filed.

(c) This rule shall be applicable to all current active and inactive members and retirees, but disability retirements under this rule shall not be effective prior to the effective date of the rule.

Summary

The rule will permit members to file for disability retirements after they have discontinued service for more than two consecutive years. Active membership in the retirement system ceases after discontinuance of service for two consecutive years. Under the current rules and operating procedures of the Division, members may not file for disability retirements if their active membership has ceased.

There have been several cases in recent years where members were clearly disabled and discontinued service because of their disabilities, but did not file for disability retirements within two years of the discontinuation of service.

This proposed rule would permit members to file for disability retirements after their active membership ceased if they were disabled at the time of discontinuance of service and their disability at that time and at the time of filing is certified by the Medical Board. In addition, the member would have to establish factually to the satisfaction of the Board of Trustees that service was discontinued because of the disability.

Disability retirements under this rule would not take effect until after this proposed rule is effective. Thereafter, they would be effective on or after the date of filing under this rule.

Proposed readoption of the subchapter Teachers' Pension and Annuity Fund. Full text may be found in the New Jersey Administrative Code at N.J.A.C. 17:3.

Cite as 30 NJR 3376 (a)

Summary

The Division of Pensions and Benefits is constantly reviewing the administrative rules within N.J.A.C. 17:3 concerning the Teachers' Pension and Annuity Fund. When the Division becomes aware of a change in the laws or a court decision that possibly could affect the Teachers' Pension and Annuity Fund, 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's staff to ascertain if the current rules are necessary and/or cost efficient. After careful scrutiny of the current rules in N.J.A.C. 17:3, the Division is satisfied that they are necessary and needed for the efficient operation of the Fund. Accordingly, the Division of Pensions and Benefits proposes to readopt the current rules within N.J.A.C 17:3, which expire on December 20, 1998. The current rules deal with the administration, enrollment, insurance and death benefits, membership, purchases and eligible service, retirement and transfer aspects associated with the Teachers' Pension and Annuity Fund.

CONSOLIDATED POLICE AND FIREMEN'S PENSION FUND

Proposed Readoption with Amendments: N.J.A.C. 17:6

Summary

The Division of Pensions and Benefits is constantly reviewing the administrative rules within N.J.A.C. 17:6 concerning the Consolidated Police and Firemen's Pension Fund. When the Division becomes aware of a change in the laws or a court decision that possibly could affect the Consolidated Police and Firemen's Pension Fund, 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's staff to ascertain if the current rules are necessary and/or cost efficient.

Accordingly, the Division of Pensions and Benefits proposes to readopt the current rules within N.J.A.C 17:6, which expire on December 20, 1998 with the following amendments and deletions, and to extend the expiration date for such rules under Executive Order No. 66 (1978) to December 20, 2003. The current rules deal with the administration, membership, retirement and transfer aspects associated with the Consolidated Police and Firemen's Pension Fund.

The Consolidated Police and Firemen's Pension Fund is a closed Fund which has not had any active contributing members since March 1, 1994. Because no new members may join this Fund, the Subchapters regarding membership and transfer are no longer necessary. Therefore, the Division is proposing to delete Subchapter 2, Membership and Subchapter 4, Transfers. The Division is proposing the following amendments and deletions to the remaining Subchapters:

N.J.A.C. 17:6-1.1 (b) would be amended to provide for three members to constitute a quorum instead of four. Many of the eligible retirees in this Fund are over age 80 and it is becoming increasingly difficult to constitute a four member quorum as previously required.

N.J.A.C. 17:6-1.2 would remain unchanged.

N.J.A.C. 17:6-1.3(a) would be amended to allow for the election of the chairman of the commission during the June meeting with three members present.

N.J.A.C. 17:6-1.4(a) and (b) would be amended to delete references to "each active" member, as there are no longer any active members.

N.J.A.C. 17:6-1.4(b)4 would be amended to change the requirement for a "register" number to a social security number. The reference to the employing municipality would also be deleted.

N.J.A.C. 17:6-1.4(d)1 would be amended to delete the reference to the election notice being distributed to active members.

N.J.A.C. 17:6-1.4(d)3 which also deals with active employees would also be deleted.

N.J.A.C. 17:6-1.4(e)1 which again deals with active employees regarding ballots, would be deleted and sections 2 and 3 would become sections 1 and 2.

N.J.A.C. 17:6-1.4(f) would be deleted regarding active members and the following paragraphs would be relettered to reflect this deletion. Section h would become section g and "three election judges" would be amended to the "secretary and one assistant" to reflect current practice. Section 1 and 2 of this rule would be amended to read "the Secretary" instead of "the judges".

N.J.A.C. 17:6-1.5 would be amended to change "agent" to "officer, again to reflect current usage. Section b would be deleted as it deals with active employees.

N.J.A.C. 17:6-1.6(b) would be amended to delete "active" members.

N.J.A.C. 17:6-1.7 would remain unchanged as would N.J.A.C. 17:6-1.8.

Subchapter 2, Membership, as previously stated, would be deleted as it deals entirely with active members.

Subchapter 3 would become Subchapter 2, retirement.

N.J.A.C. 17:6-3.1 would be deleted because it deals with the retirement process as would N.J.A.C. 17:6-3.2 as it is no longer applicable.

N.J.A.C. 17:6-3.3(b) will be deleted because there are no longer any members to die in service.

N.J.A.C. 17:6-3.3(c) will be amended to state that a "pension allowance shall be payable for the entire month in which the retirant or beneficiary dies" due to a statutory change.

N.J.A.C. 17:6-3.4 and N.J.A.C. 17:6-3.5 remain unchanged.

N.J.A.C. 17:6-3.6 will be deleted as it deals with active service credit.

N.J.A.C. 17:6-3.7, N.J.A.C. 17:6-3.8, N.J.A.C. 17:6-3.9 and N.J.A.C. 17:6-3.10 will remain unchanged although they are more for informational purposes at this time.

Subchapter 4, Transfers will be deleted as it deals with active employees only.

Purchases; Cancellation, Interest on Outstanding Purchases or Cash Discount Requested

Proposed Amendment: N.J.A.C. 17:1-4.13

Summary

The Division of Pensions and Benefits proposes to amend NJAC 17:1-4.13, Purchases; cancellation or cash discount requested so that the situations of members who are presently in covered service would not be negatively impacted by the implementation of a recent amendment to this rule. This amendment allows a purchase of service credit to remain in effect at the original purchase cost, if a member who authorized a purchase prior to the effective date of this proposed amendment, so chooses and exempts those members from the cancellation of the purchase as required in subsection c.

Currently, under section (e), only members who were not in covered service on the effective date of the rule were allowed to have their purchases remain outstanding after two years. Members who purchased their time under the old rules, but were active employees at the time of enactment, do not receive this benefit. This proposed amendment expands the number of participants eligible to have a purchase remain outstanding to those who made a purchase prior to the effective date of this amendment.

17:1-4.13 Purchases; cancellation, interest on outstanding purchases or cash discount requested

(a) through (d) (no change) (e) For a member who has authorized a purchase of service credit [with an outstanding purchase who is not in covered service on the] prior to the effective date of this rule and who is inactive, or becomes inactive, the purchase shall remain outstanding. The outstanding balance on the purchase shall include additional regular interest beginning two years after the effective date of this rule, or the date of inactivity, whichever is later.

Cite as 30 NJR 4146(b)

PUBLIC EMPLOYEES' RETIREMENT SYSTEM
Enrollment Eligibility of Professors and Instructors Employed on a Temporary,
Provisional or Adjunct Basis by Public Institutions of Higher Education

Proposed New Rule; N.J.A.C. 17:2-2.6

Summary

This proposed new rule clarifies the eligibility requirements for enrollment into the PERS of professors and instructors employed on a temporary, provisional or adjunct basis at institutions for higher education. Those not employed in regularly appointed teaching or administrative staff positions, or civil service or regularly budgeted positions who earn more than the minimum threshold salary, work for the normal school year and whose services are renewed for the succeeding school year will be eligible for enrollment. Those who teach courses which provide no academic credit and vary in length from the normal school year will not be eligible for enrollment, or service and salary credit on the basis of that course.

17:2-2.6 Enrollment Eligibility of Professors and Instructors Employed on a Temporary, Provisional or Adjunct Basis by Public Institutions of Higher Education

(a). Professors and instructors, employed on a temporary, provisional or adjunct basis by public institutions of higher education, who are not in regularly appointed teaching or administrative staff positions, in classified or unclassified positions with a Civil Service employer, or in regularly budgeted positions with a non-Civil Service employer, and who:

1. earn more than the minimum threshold salary required for enrollment and,

2. work for the entire normal school year, and

3. whose services are renewed for the succeeding school year, are eligible for enrollment.

(b). Professors and instructors employed on a temporary, provisional or adjunct basis by public institutions of higher education who are not in regularly appointed teaching or administrative staff positions, in classified or unclassified positions with a Civil Service employer, or in regularly budgeted positions with a non-Civil Service employer, and who:

1. teach a course that provides no academic credit and

2. the course's length varies from the normal academic semester are not eligible for enrollment or salary and service credit on the basis of that course.

Cite as 30 NJR 4254 (a)

TEACHERS' PENSION AND ANNUITY FUND

Readoption: N.J.A.C. 17:3

Federal Standards Statement

Full text of this readoption can be found at NJAC 17:3

Please send your comments to: Division of Pensions and Benefits.

Last update: June 24, 2010