A4039

An Act concerning retirement benefits for certain members of the Police and Firemen's Retirement System of New Jersey.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. An employee of the State, and an employee of a participating employer under the Police and Firemen's Retirement System (PFRS) which elects to provide the benefits authorized under this act, who:

a. has 20 or more years of service credit under PFRS;

b. files an application to retire on or after October 1, 2007 and on or before October 1, 2008; and

c. retires under the retirement system on or after November 1, 2007 but not later than November 8, 2008 shall receive an additional five years of service credit under PFRS or any lesser number of years of service credit under PFRS as will provide the member, as of the date of retirement, with a total of not more than 30 years of service credit under PFRS. The additional retirement benefit under this section is applicable only to the employee's full-time employment with the State, or with the employer which elects to provide the benefits authorized under this act, and from which employment the employee retires to receive the benefit and the compensation for that employment.

2. An employer other than the State may elect to provide the benefits under this act by adoption of a resolution by its governing body and filing a certified copy of the resolution with the Director of the Division of Pensions and Benefits on or before October 1, 2007. The employer shall submit to the director any information necessary to provide the benefits or to determine the liability for them. The division shall prepare and provide to employers other than the State information on the employees eligible for the benefits under this act, estimates of the full liability to the retirement system and the payments which the employer will have to make on account of the early retirement of employees under the act, and detailed charts, tables and other information necessary for employers to do a cost/savings analysis of the impact through Fiscal Year 2013.

3. The actuaries for PFRS shall determine the liability of the retirement system for the additional service credit or pensions provided under this act and for the early retirement of employees in accordance with the tables of actuarial assumptions adopted by the board of trustees of the retirement system. This liability shall be added to the unfunded accrued liability of the employer under the retirement system and shall be paid in the same manner and over the remaining time period provided for the employer's unfunded accrued liability under section 15 of P.L.1944, c.255 (C.43:16A-15), except that in the case of an employer adopting the retirement system after July 1, 1988, the time period for payment of such liability shall be in accordance with the provisions of section 21 of P.L.1971, c.175 (C.43:16A-15.4).

The employer shall pay the cost of the actuarial work to determine the additional liability of the retirement system for the benefits under this act which shall be included in the initial contribution required from the employer.

4. An employee who receives a benefit under this act shall forfeit all tenure rights.

5. Where the needs of the State or an employer other than the State require the services of an employee who elects to retire and receive a benefit under this act, the State department, or that employer other than the State with the approval of the governing body of such employer, as the case may be, and with the consent of the employee, may delay the effective retirement date of the employee until the first day of any calendar month after November 1, 2008, but not later than November 1, 2009. A delay in the effective retirement date of an employee shall not extend the dates set forth in section 1 of this act to apply and qualify for benefits under this act.

For a member of PFRS whose effective retirement date is delayed under this section and who dies before the retirement becomes effective, the retirement shall be effective as of the first day of the month after the date of death of the member if the member's beneficiary so requests in writing to the board of trustees of the retirement system.

6. For the purposes of this act, "employee" means a policeman employed by the State or by a law enforcement unit as defined in section 2 of P.L.1961, c.56 (C.52:17B-67), or a fireman employed by a firefighting unit as defined in paragraph (b) of subsection (2) of section 1 of P.L.1944, c.255 (C.43:16A-1).

7. Prior to the last day upon which an employer other than the State may, under section 2 of this act, elect to provide the benefits under this act, each such employer covered by the provisions of this act shall meet and consult with the representatives of the bargaining unit or units representing the employees who would be eligible for benefits under this act and the governing body of the employer shall formally consider and decide whether or not to adopt the provisions of this act.

8. An amount not to exceed $1,000,000 for the administrative expenses of the Division of Pensions and Benefits for implementation of this act shall be charged to the Police and Firemen's Retirement System Fund. Receipts from such charges, payable on a schedule to be determined by the Director of the Division of Budget and Accounting, shall be deposited in the General Fund and anticipated as revenue thereto in fiscal years 2008 and 2009. The expenses charged to the fund shall be included as a liability of the Police and Firemen's Retirement System for the purpose of determining future employer contributions or payments to the fund, or the amount of benefits to be paid under the program, as appropriate.

9. This act shall take effect immediately.

STATEMENT

This bill establishes a temporary early retirement incentive program for certain police officers and firefighters employed by the State or by counties and municipalities which elect to adopt the program.

Under the bill, the additional benefits would be available to members of the Police and Firemen's Retirement System (PFRS) who retire under that system on or after November 1, 2007 but on or before November 1, 2008. To be eligible for the incentive, employees must have 20 or more years of service credit under PFRS as of the effective date of retirement.

Employees meeting these qualifications will receive an additional five years of PFRS service credit or any lesser number of years of PFRS service credit under the retirement system as will provide the member, as of the date of retirement, with a total of not more than 30 years of PFRS service credit. Where the needs of the State or an employer other than the State require the services of an employee who elects to retire under this legislation, the employer may delay the effective date of the employee's retirement until November 1, 2009.

Police officers and firefighters employed by the State will automatically be eligible for the program. An employer other than the State may elect to provide the benefits by adopting a resolution and by filing a certified copy of the resolution with the Director of the Division of Pensions and Benefits on or before October 1, 2007. Before an employer other than the State adopts the early retirement program in this bill, the employer must meet and consult with the representatives of the bargaining unit of its employees.

The actuary for the retirement system will determine the liability for the additional service credit and pensions and for the early retirement of employees. This liability will be added to the employer's unfunded accrued liability and will be paid by the employer over the remaining time period for payment of its unfunded accrued liability. The bill permits the Division of Pensions and Benefits to charge up to $1,000,000 to the Police and Firemen's Retirement System Fund for the division's administrative expenses related to this early retirement incentive program.