SENATE, No. 7

STATE OF NEW JERSEY

213th LEGISLATURE

 

INTRODUCED DECEMBER 11, 2008

 


 

Sponsored by:

Senator RICHARD J. CODEY

District 27 (Essex)

 

 

 

 

SYNOPSIS

     Adjusts local employers’ contributions to PERS and PFRS for State fiscal years 2009 through 2011.

 

CURRENT VERSION OF TEXT

     As introduced.

  


An Act concerning the funding of the Public Employees' Retirement System of New Jersey and the Police and Firemen's Retirement System of New Jersey, amending various parts of the statutory law and supplementing P.L.1976, c.68 (C.40A:4-45.1 et seq.), P.L.1950, c.270 (C.52:18A-79 et seq.), and chapter 5 of Title 40A of the New Jersey Statutes.

 

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

 

     1.    Section 24 of P.L.1954, c.84 (C.43:15A-24) is amended to read as follows:

     24.  The contingent reserve fund shall be the fund in which shall be credited contributions made by the State and other employers.

     a.     Upon the basis of the tables recommended by the actuary which the board adopts and regular interest, the actuary shall compute annually, beginning as of March 31, 1992, the amount of contribution which shall be the normal cost as computed under the projected unit credit method attributable to service rendered under the retirement system for the year beginning on July 1 immediately succeeding the date of the computation.  This shall be known as the "normal contribution."

     b.    With respect to employers other than the State, upon the basis of the tables recommended by the actuary which the board adopts and regular interest, the actuary shall compute the amount of the accrued liability of the retirement system as of March 31, 1992 under the projected unit credit method, excluding the liability for pension adjustment benefits for active employees funded pursuant to section 2 of P.L.1990, c.6 (C.43:15A-24.1), which is not already covered by the assets of the retirement system, valued in accordance with the asset valuation method established in this section. Using the total amount of this unfunded accrued liability, the actuary shall compute the initial amount of contribution which, if the contribution is increased at a specific rate and paid annually for a specific period of time, will amortize this liability.  The State Treasurer shall determine, upon the advice of the Director of the Division of Pensions and Benefits, the board of trustees and the actuary, the rate of increase for the contribution and the time period for full funding of this liability, which shall not exceed 40 years on initial application of this section as amended by this act, P.L.1994, c.62.  This shall be known as the "accrued liability contribution." Any increase or decrease in the unfunded accrued liability as a result of actuarial losses or gains for the 10 valuation years following valuation year 1992 shall serve to increase or decrease, respectively, the unfunded accrued liability contribution. Thereafter, any increase or decrease in the unfunded accrued liability as a result of actuarial losses or gains for subsequent valuation years shall serve to increase or decrease, respectively, the amortization period for the unfunded accrued liability, unless an increase in the amortization period will cause it to exceed 30 years. If an increase in the amortization period as a result of actuarial losses for a valuation year would exceed 30 years, the accrued liability contribution shall be computed for the valuation year in the same manner provided for the computation of the initial accrued liability contribution under this section.

     With respect to the State, upon the basis of the tables recommended by the actuary which the commission adopts and regular interest, the actuary shall annually determine if there is an amount of the accrued liability of the retirement system, computed under the projected unit credit method, which is not already covered by the assets of the retirement system, valued in accordance with the asset valuation method established in this section.  This shall be known as the "unfunded accrued liability."  If there was no unfunded accrued liability for the valuation period immediately preceding the current valuation period, the actuary, using the total amount of this unfunded accrued liability, shall compute the initial amount of contribution which, if the contribution is increased at a specific rate and paid annually for a specific period of time, will amortize this liability.  The State Treasurer shall determine, upon the advice of the Director of the Division of Pensions and Benefits, the commission and the actuary, the rate of increase for the contribution and the time period for full funding of this liability, which shall not exceed 30 years.  This shall be known as the "accrued liability contribution."  Thereafter, any increase or decrease in the unfunded accrued liability as a result of actuarial losses or gains for subsequent valuation years shall serve to increase or decrease, respectively, the amortization period for the unfunded accrued liability, unless an increase in the amortization period will cause it to exceed 30 years.  If an increase in the amortization period as a result of actuarial losses for a valuation year would exceed 30 years, the accrued liability contribution shall be computed for the valuation year in the same manner provided for the computation of the initial accrued liability contribution under this section.  The State may pay all or any portion of its unfunded accrued liability under the retirement system from any source of funds legally available for the purpose, including, without limitation, the proceeds of bonds authorized by law for this purpose.

     The value of the assets to be used in the computation of the contributions provided for under this section for valuation periods shall be the value of the assets for the preceding valuation period increased by the regular interest rate, plus the net cash flow for the valuation period (the difference between the benefits and expenses paid by the system and the contributions to the system) increased by one half of the regular interest rate, plus 20% of the difference between this expected value and the full market value of the assets as of the end of the valuation period.  This shall be known as the "valuation assets."  Notwithstanding the first sentence of this paragraph, the valuation assets for the valuation period ending March 31, 1996 shall be the full market value of the assets as of that date and, with respect to the valuation assets allocated to the State, shall include the proceeds from the bonds issued pursuant to the "Pension Bond Financing Act of 1997," P.L.1997, c.114 (C.34:1B-7.45 et seq.), paid to the system by the New Jersey Economic Development Authority to fund the unfunded accrued liability of the system.  Notwithstanding the first sentence of this paragraph, the valuation assets for the valuation period ending June 30, 1999 shall be the full market value of the assets as of that date.

     "Excess valuation assets" for a valuation period means, with respect to the valuation assets allocated to the State:

     (1)   the valuation assets allocated to the State; less

     (2)   the actuarial accrued liability of the State for basic benefits and pension adjustment benefits under the retirement system; less

     (3)   the contributory group insurance premium fund, created by section 4 of P.L.1955, c.214 (C.43:15A-91), as amended by section 4 of P.L.1960, c.79; less

     (4)   the post retirement medical premium fund, created pursuant to section 2 of P.L.1990, c.6 (C.43:15A-24.1), as amended by section 8 of P.L.1994, c.62; less

     (5)   the present value of the projected total normal cost for pension adjustment benefits in excess of the projected total phased-in normal cost for pension adjustment benefits for the State authorized by section 2 of P.L.1990, c.6 (C.43:15A-24.1) over the full phase-in period, determined in the manner prescribed for the determination and amortization of the unfunded accrued liability of the system, if the sum of the foregoing items is greater than zero.

     "Excess valuation assets" for a valuation period means, with respect to the valuation assets allocated to other employers:

     (1)   the valuation assets allocated to the other employers; less

     (2)   the actuarial accrued liability of the other employers for basic benefits and pension adjustment benefits under the retirement system, excluding the unfunded accrued liability for early retirement incentive benefits pursuant to P.L.1991, c.229, P.L.1991, c.230, P.L.1993, c.138, and P.L.1993, c.181, for employers other than the State; less

     (3)   the contributory group insurance premium fund, created by section 4 of P.L.1955, c.214 (C.43:15A-91), as amended by section 4 of P.L.1960, c.79; less

     (4)   the present value of the projected total normal cost for pension adjustment benefits in excess of the projected total phased-in normal cost for pension adjustment benefits for the other employers authorized by section 2 of P.L.1990, c.6 (C.43:15A-24.1) over the full phase-in period, determined in the manner prescribed for the determination and amortization of the unfunded accrued liability of the system, if the sum of the foregoing items is greater than zero.

     If there are excess valuation assets allocated to the State or to the other employers for the valuation period ending March 31, 1996, the normal contributions payable by the State or by the other employers for the valuation periods ending March 31, 1996 and March 31, 1997 which have not yet been paid to the retirement system shall be reduced to the extent possible by the excess valuation assets allocated to the State or to the other employers, respectively, provided that with respect to the excess valuation assets allocated to the State, the General Fund balances that would have been paid to the retirement system except for this provision shall first be allocated as State aid to public schools to the extent that additional sums are required to comply with the May 14, 1997 decision of the New Jersey Supreme Court in Abbott v. Burke.  If there are excess valuation assets allocated to the State or to the other employers for a valuation period ending after March 31, 1996, the State Treasurer may reduce the normal contribution payable by the State or by the other employers for the next valuation period as follows:

     (1)   for valuation periods ending March 31, 1997 through March 31, 2001, to the extent possible by up to 100% of the excess valuation assets allocated to the State or to the other employers, respectively;

     (2)   for the valuation period ending March 31, 2002, to the extent possible by up to 84% of the excess valuation assets allocated to the State or to the other employers, respectively;

     (3)   for the valuation period ending March 31, 2003, to the extent possible by up to 68% of the excess valuation assets allocated to the State or to the other employers, respectively; and

     (4)   for valuation periods ending  March 31, 2004 through June 30, 2007, to the extent possible by up to 50% of the excess valuation assets allocated to the State or to the other employers, respectively.

     For calendar years 1998 and 1999, the rate of contribution of members of the retirement system under section 25 of P.L.1954, c.84 (C.43:15A-25) shall be reduced by 1/2 of 1% from excess valuation assets and for calendar years 2000 and 2001, the rate of contribution shall be reduced by 2% from excess valuation assets.  Thereafter, through calendar year 2007, the rate of contribution of members of the retirement system under that section for a calendar year shall be reduced equally with normal contributions to the extent possible, but not by more than 2%, from excess valuation assets if the State Treasurer determines that excess valuation assets shall be used to reduce normal contributions by the State and local employers for the fiscal year beginning immediately prior to the calendar year, or for the calendar year for local employers whose fiscal year is the calendar year, and excess valuation assets above the amount necessary to fund the reduction for that calendar year in the member contribution rate plus an equal reduction in the normal contribution shall be available for the further reduction of normal contributions, subject to the limitations prescribed by this subsection.

     If there are excess valuation assets after reductions in normal contributions and member contributions as authorized in the preceding paragraphs for a valuation period beginning with the valuation period ending June 30, 1999, an amount of excess valuation assets not to exceed the amount of the member contributions for the fiscal year in which the normal contributions are payable shall be credited to the benefit enhancement fund.  The amount of excess valuation assets credited to the benefit enhancement fund shall not exceed the present value of the expected additional normal contributions attributable to the provisions of P.L.2001, c.133 payable on behalf of the active members over the expected working lives of the active members in accordance with the tables of actuarial assumptions for the valuation period.  No additional excess valuation assets shall be credited to the benefit enhancement fund after the maximum amount is attained. Interest shall be credited to the benefit enhancement fund as provided under section 33 of P.L.1954, c.84 (C.43:15A-33).

     The normal contribution for the increased benefits for active employees under P.L.2001, c.133 shall be paid from the benefit enhancement fund.  If assets in the benefit enhancement fund are insufficient to pay the normal contribution for the increased benefits for a valuation period, the State shall pay the amount of normal contribution for the increased benefits not covered by assets from the benefit enhancement fund.

     c.     The retirement system shall certify annually the aggregate amount payable to the contingent reserve fund in the ensuing year, which amount shall be equal to the sum of the amounts described in this section.

   The State Treasurer shall reduce the normal and accrued liability contributions payable by employers other than the State, excluding the contribution payable from the benefit enhancement fund, to a percentage of the amount certified annually by the retirement system, which percentage shall be: for payments due in the State fiscal year ending June 30, 2005, 20%; for payments due in the State fiscal year ending June 30, 2006, not more than 40%; for payments due in the State fiscal year ending June 30, 2007, not more than 60%; [and] for payments due in the State fiscal year ending June 30, 2008, not more than 80%; for payments due in the State fiscal year ending June 30, 2009, not more than 50%; for payments due in the State fiscal year ending June 30, 2010, not more than 60%; and for payments due in the State fiscal year ending June 30, 2011, not more than 80%.

     The State shall pay into the contingent reserve fund during the ensuing year the amount so determined.  The death benefits, payable as a result of contribution by the State under the provisions of this chapter upon the death of an active or retired member, shall be paid from the contingent reserve fund.

     d.    The disbursements for benefits not covered by reserves in the system on account of veterans shall be met by direct contributions of the State and other employers.

(cf:  P.L.2007, c.92, s.26)

 

   2.      Section 15 of P.L.1944, c.255 (C.43:16A-15) is amended to read as follows:

     15.  (1) The contributions required for the support of the retirement system shall be made by members and their employers.

     (2)   The uniform percentage contribution rate for members shall be 8.5% of compensation.

     (3)   (Deleted by amendment, P.L.1989, c.204).

     (4)   Upon the basis of the tables recommended by the actuary which the board adopts and regular interest, the actuary shall compute annually, beginning as of June 30, 1991, the amount of contribution which shall be the normal cost as computed under the projected unit credit method attributable to service rendered under the retirement system for the year beginning on July 1 immediately succeeding the date of the computation.  This shall be known as the "normal contribution."

     (5)   (Deleted by amendment, P.L.1989, c.204).

     (6)   (Deleted by amendment, P.L.1994, c.62.)

     (7)   Each employer shall cause to be deducted from the salary of each member the percentage of earnable compensation prescribed in subsection (2) of this section.  To facilitate the making of deductions, the retirement system may modify the amount of deduction required of any member by an amount not to exceed 1/10 of 1% of the compensation upon which the deduction is based.

     (8)   The deductions provided for herein shall be made notwithstanding that the minimum salary provided for by law for any member shall be reduced thereby.  Every member shall be deemed to consent and agree to the deductions made and provided for herein, and payment of salary or compensation less said deduction shall be a full and complete discharge and acquittance of all claims and demands whatsoever for the service rendered by such person during the period covered by such payment, except as to the benefits provided under this act.  The chief fiscal officer of each employer shall certify to the retirement system in such manner as the retirement system may prescribe, the amounts deducted; and when deducted shall be paid into said annuity savings fund, and shall be credited to the individual account of the member from whose salary said deduction was made.

     (9)   With respect to employers other than the State, upon the basis of the tables recommended by the actuary which the board adopts and regular interest, the actuary shall compute the amount of the accrued liability as of June 30, 1991 under the projected unit credit method, which is not already covered by the assets of the retirement system, valued in accordance with the asset valuation method established in this section.  Using the total amount of this unfunded accrued liability, the actuary shall compute the initial amount of contribution which, if the contribution is increased at a specific rate and paid annually for a specific period of time, will amortize this liability.  The State Treasurer shall determine, upon the advice of the Director of the Division of Pensions and Benefits, the board of trustees and the actuary, the rate of increase for the contribution and the time period for full funding of this liability, which shall not exceed 40 years on initial application of this section as amended by this act, P.L.1994, c.62.  This shall be known as the "accrued liability contribution."  Any increase or decrease in the unfunded accrued liability as a result of actuarial losses or gains for the 10 valuation years following valuation year 1991 shall serve to increase or decrease, respectively, the unfunded accrued liability contribution.  Thereafter, any increase or decrease in the unfunded accrued liability as a result of actuarial losses or gains for subsequent valuation years shall serve to increase or decrease, respectively, the amortization period for the unfunded accrued liability, unless an increase in the amortization period will cause it to exceed 30 years.  If an increase in the amortization period as a result of actuarial losses for a valuation year would exceed 30 years, the accrued liability contribution shall be computed for the valuation year in the same manner provided for the computation of the initial accrued liability contribution under this section.

     With respect to the State, upon the basis of the tables recommended by the actuary which the board adopts and regular interest, the actuary shall annually determine if there is an amount of the accrued liability, computed under the projected unit credit method, which is not already covered by the assets of the retirement system, valued in accordance with the asset valuation method established in this section.  This shall be known as the "unfunded accrued liability."  If there was no unfunded accrued liability for the valuation period immediately preceding the current valuation period, the actuary, using the total amount of this unfunded accrued liability, shall compute the initial amount of contribution which, if the contribution is increased at a specific rate and paid annually for a specific period of time, will amortize this liability.  The State Treasurer shall determine, upon the advice of the Director of the Division of Pensions and Benefits, the board of trustees and the actuary, the rate of increase for the contribution and the time period for full funding of this liability, which shall not exceed 30 years. This shall be known as the "accrued liability contribution." Thereafter, any increase or decrease in the unfunded accrued liability as a result of actuarial losses or gains for subsequent valuation years shall serve to increase or decrease, respectively, the amortization period for the unfunded accrued liability, unless an increase in the amortization period will cause it to exceed 30 years. If an increase in the amortization period as a result of actuarial losses for a valuation year would exceed 30 years, the accrued liability contribution shall be computed for the valuation year in the same manner provided for the computation of the initial accrued liability contribution under this section.  The State may pay all or any portion of its unfunded accrued liability under the retirement system from any source of funds legally available for the purpose, including, without limitation, the proceeds of bonds authorized by law for this purpose.

     The value of the assets to be used in the computation of the contributions provided for under this section for valuation periods shall be the value of the assets for the preceding valuation period increased by the regular interest rate, plus the net cash flow for the valuation period (the difference between the benefits and expenses paid by the system and the contributions to the system) increased by one half of the regular interest rate, plus 20% of the difference between this expected value and the full market value of the assets as of the end of the valuation period.  This shall be known as the "valuation assets."  Notwithstanding the first sentence of this paragraph, the valuation assets for the valuation period ending June 30, 1995 shall be the full market value of the assets as of that date and, with respect to the valuation assets allocated to the State, shall include the proceeds from the bonds issued pursuant to the "Pension Bond Financing Act of 1997," P.L.1997, c.114 (C.34:1B-7.45 et seq.), paid to the system by the New Jersey Economic Development Authority to fund the unfunded accrued liability of the system. Notwithstanding the first sentence of this paragraph, the percentage of the difference between the expected value and the full market value of the assets to be added to the expected value of the assets for the valuation period ending June 30, 1998 for the State shall be 100% and for other employers shall be 57% plus such additional percentage as is equivalent to $150,000,000.  Notwithstanding the first sentence of this paragraph, the amount of the difference between the expected value and the full market value of the assets to be added to the expected value of the assets for the valuation period ending June 30, 1999 shall include an additional amount of the market value of the assets sufficient to fund (1) the unfunded accrued liability for the supplementary "special retirement" allowances provided under subsection b. of section 16 of P.L.1964, c.241 (C.43:16A-11.1) and (2) the unfunded accrued liability for the full credit toward benefits under the retirement system for service credited in the Public Employees' Retirement System and transferred pursuant to section 1 of P.L.1993, c.247 (C.43:16A-3.8) and the reimbursement of the cost of any credit purchase pursuant to section 3 of P.L.1993, c.247 (C.43:16A-3.10) provided under section 1 of P.L.2001, c.201 (C.43:16A-3.14).

     "Excess valuation assets" means, with respect to the valuation assets allocated to the State, the valuation assets allocated to the State for a valuation period less the actuarial accrued liability of the State for the valuation period, and beginning with the valuation period ending June 30, 1998, less the present value of the expected additional normal cost contributions attributable to the provisions of P.L.1999, c.428 (C.43:16A-15.8 et al.) payable on behalf of the active members employed by the State as of the valuation period over the expected working lives of the active members in accordance with the tables of actuarial assumptions applicable to the valuation period, and less the present value of the expected additional normal cost contributions attributable to the provisions of P.L.2003, c.108 as amending section 16 of P.L.1964, c.241 (C.43:16A-11.1) payable on behalf of the active members employed by the State as of the valuation period over the expected working lives of the active members in accordance with the tables of actuarial assumptions applicable to the valuation period, if the sum is greater than zero.  "Excess valuation assets" means, with respect to the valuation assets allocated to other employers, the valuation assets allocated to the other employers for a valuation period less the actuarial accrued liability of the other employers for the valuation period, excluding the unfunded accrued liability for early retirement incentive benefits pursuant to P.L.1993, c.99 for the other employers, and beginning with the valuation period ending June 30, 1998, less the present value of the expected additional normal cost contributions attributable to the provisions of P.L.1999, c.428 (C.43:16A-15.8 et al.) payable on behalf of the active members employed by other employers as of the valuation period over the expected working lives of the active members in accordance with the tables of actuarial assumptions applicable to the valuation period, and less the present value of the expected additional normal cost contributions attributable to the provisions of P.L.2003, c.108 as amending section 16 of P.L.1964, c.241 (C.43:16A-11.1) payable on behalf of the active members employed by other employers as of the valuation period over the expected working lives of the active members in accordance with the tables of actuarial assumptions applicable to the valuation period, if the sum is greater than zero.

     If there are excess valuation assets allocated to the State or to the other employers for the valuation period ending June 30, 1995, the normal contributions payable by the State or by the other employers for the valuation periods ending June 30, 1995, and June 30, 1996 which have not yet been paid to the retirement system shall be reduced to the extent possible by the excess valuation assets allocated to the State or to the other employers, respectively, provided that with respect to the excess valuation assets allocated to the State, the General Fund balances that would have been paid to the retirement system except for this provision shall first be allocated as State aid to public schools to the extent that additional sums are required to comply with the May 14, 1997 decision of the New Jersey Supreme Court in Abbott v. Burke.

     If there are excess valuation assets allocated to the other employers for the valuation period ending June 30, 1998, the accrued liability contributions payable by the other employers for the valuation period ending June 30, 1997 shall be reduced to the extent possible by the excess valuation assets allocated to the other employers.

     If there are excess valuation assets allocated to the State or to the other employers for a valuation period ending after June 30, 1998, the State Treasurer may reduce the normal contribution payable by the State or by other employers for the next valuation period as follows:

     (1)   for valuation periods ending June 30, 1996 through June 30, 2000, to the extent possible by up to 100% of the excess valuation assets allocated to the State or to the other employers, respectively;

     (2)   for the valuation period ending June 30, 2001, to the extent possible by up to 84% of the excess valuation assets allocated to the State or to the other employers, respectively;

     (3)   for the valuation period ending June 30, 2002, to the extent possible by up to 68% of the excess valuation assets allocated to the State or to the other employers, respectively; and

     (4)   for valuation periods ending June 30, 2003 through June 30, 2007, to the extent possible by up to 50% of the excess valuation assets allocated to the State or to the other employers, respectively.

     Notwithstanding the discretion provided to the State Treasurer in the previous paragraph to reduce the amount of the normal contribution payable by employers other than the State, the State Treasurer shall reduce the amount of the normal contribution payable by employers other than the State by $150,000,000 in the aggregate for the valuation period ending June 30, 1998, and then the State Treasurer may reduce further pursuant to the provisions of the previous paragraph the normal contribution payable by such employers for that valuation period.

     As of the valuation report in which the funded level is in excess of 104%, an amount equal to the present value of the future normal contributions for the benefits provided by P.L.2003, c.108 as amending section 16 of P.L.1964, c.241 (C.43:16A-11.1), shall be credited to the benefit enhancement fund.  If there are excess valuation assets after reductions in normal contributions as authorized in the preceding paragraphs, for a valuation period beginning with the valuation period in which the benefits provided by section 16 of P.L.1964, c.241 (C.43:16A-11.1), as amended by P.L.2003, c.108 apply, an amount of excess valuation assets not to exceed the amount of the member contributions for the fiscal year in which the normal contributions are payable shall be credited to the benefit enhancement fund.  The amount of excess valuation assets credited to the benefit enhancement fund shall not exceed the present value of the expected additional normal and accrued liability contributions attributable to the provisions of section 16 of P.L.1964, c.241 (C.43:16A-11.1), as amended by P.L.2003, c.108, payable on behalf of the active members over the expected working lives of the active members in accordance with the tables of actuarial assumptions for the valuation period.  No additional excess valuation assets shall be credited to the benefit enhancement fund after the maximum amount is attained.  Interest shall be credited to the benefit enhancement fund.

     The normal and accrued liability contributions for the increased benefits for active employees under section 16 of P.L.1964, c.241 (C.43:16A-11.1), as amended by P.L.2003, c.108, shall be paid from the benefit enhancement fund.  If assets in the benefit enhancement fund are insufficient to pay the normal and accrued liability contributions for the increased benefits for a valuation period, the retirement system shall pay the amount of normal and accrued liability contributions for the increased benefits not covered by assets from the benefit enhancement fund.

     The normal and accrued liability contributions shall be certified annually by the retirement system and shall be included in the budget of the employer and levied and collected in the same manner as any other taxes are levied and collected for the payment of the salaries of members.

   Notwithstanding the preceding sentence, the normal and accrued liability contributions to be included in the budget of and paid by the employer other than the State shall be as follows: for the payment due in the State fiscal year ending on June 30, 2004, 20% of the amount certified by the retirement system; for the payment due in the State fiscal year ending on June 30, 2005, a percentage of the amount certified by the retirement system as the State Treasurer shall determine but not more than 40%; for the payment due in the State fiscal year ending on June 30, 2006, a percentage of the amount certified by the retirement system as the State Treasurer shall determine but not more than 60%; [and] for the payment due in the State fiscal year ending on June 30, 2007, a percentage of the amount certified by the retirement system as the State Treasurer shall determine but not more than 80%; for the payment due in the State fiscal year ending on June 30, 2009, a percentage of the amount certified by the retirement system as the State Treasurer shall determine but not more than 50%; for the payment due in the State fiscal year ending on June 30, 2010, a percentage of the amount certified by the retirement system as the State Treasurer shall determine but not more than 60%; and for the payment due in the State fiscal year ending on June 30, 2011, a percentage of the amount certified by the retirement system as the State Treasurer shall determine but not more than 80%.

     (10) The treasurer or corresponding officer of the employer shall pay to the State Treasurer no later than April 1 of the State's fiscal year in which payment is due the amount so certified as payable by the employer, and shall pay monthly to the State Treasurer the amount of the deductions from the salary of the members in the employ of the employer, and the State Treasurer shall credit such amount to the appropriate fund or funds, of the retirement system.

     If payment of the full amount of the employer's obligation is not made within 30 days of the due date established by this act, interest at the rate of 10% per annum shall commence to run against the unpaid balance thereof on the first day after such 30th day.

     If payment in full, representing the monthly transmittal and report of salary deductions, is not made within 15 days of the due date established by the retirement system, interest at the rate of 10% per annum shall commence to run against the total transmittal of salary deductions for the period on the first day after such 15th day.

     (11) The expenses of administration of the retirement system shall be paid by the State of New Jersey.  Each employer shall reimburse the State for a proportionate share of the amount paid by the State for administrative expense.  This proportion shall be computed as the number of members under the jurisdiction of such employer bears to the total number of members in the system.  The pro rata share of the cost of administrative expense shall be included with the certification by the retirement system of the employer's contribution to the system.

     (12) Notwithstanding anything to the contrary, the retirement system shall not be liable for the payment of any pension or other benefits on account of the employees or beneficiaries of any employer participating in the retirement system, for which reserves have not been previously created from funds, contributed by such employer or its employees for such benefits.

     (13) (Deleted by amendment, P.L.1992, c.125.)

     (14) Commencing with valuation year 1991, with payment to be made in Fiscal Year 1994, the Legislature shall annually appropriate and the State Treasurer shall pay into the pension accumulation fund of the retirement system an amount equal to 1.1% of the compensation of the members of the system for the valuation year to fund the benefits provided by section 16 of P.L.1964, c.241 (C.43:16A-11.1), as amended by P.L.1979, c.109.

     (15) If the valuation assets are insufficient to fund the normal and accrued liability costs attributable to P.L.1999, c.428 (C.43:16A-15.8 et al.) as provided hereinabove, the normal and unfunded accrued liability contributions required to fund these costs for the State and other employers shall be paid by the State.

     (16) The savings realized as a result of the amendments to this section by P.L.2001, c.44 in the payment of normal contributions computed by the actuary for the valuation periods ending June 30, 1998 for employers other than the State shall be used solely and exclusively by a county or municipality for the purpose of reducing the amount that is required to be raised by the local property tax levy by the county for county purposes or by the municipality for municipal purposes, as appropriate.  The Director of the Division of Local Government Services in the Department of Community Affairs shall certify for each year that each county or municipality has complied with the requirements set forth herein.  If the director finds that a county or municipality has not used the savings solely and exclusively for the purpose of reducing the amount that is required to be raised by the local property tax levy by the county for county purposes or by the municipality for municipal purposes, as appropriate, the director shall direct the county or municipal governing body, as appropriate, to make corrections to its budget.

(cf: P.L. 2007, c.92, s.23)

 

     3.    Section 3 of P.L.2007, c.62 (C.18A:7F-38) is amended to read as follows:

     3.    a. (1) Notwithstanding the provisions of any other law to the contrary, a school district shall not adopt a budget pursuant to sections 5 and 6 of P.L.1996, c.138 (C.18A:7F-5 and 18A:7F-6) with an increase in its adjusted tax levy that exceeds the tax levy growth limitation calculated as follows: the sum of the prebudget year adjusted tax levy and the adjustment for increases in enrollment multiplied by four percent, and adjustments for a reduction in total unrestricted State aid from the prebudget year, an increase in health care costs, [and] beginning in the 2008-2009 school year, amounts approved by a waiver granted by the commissioner pursuant to section 4 of P.L.2007, c.62 (C.18A:7F-39), and, beginning in the 2010-2011 school year, increases in amounts for certain normal and accrued liability pension contributions set forth in sections 1 and 2 of P.L.  , c.      (pending before the Legislature as this bill) amending section 24 of P.L.1954, c.84 (C.43:15A-24) and section 15 of P.L.1944, c.255 (C.43:16A-15) for the years set forth in those sections.

     (2)   Notwithstanding any provision of paragraph (1) of this subsection to the contrary, beginning in the 2008-2009 school year the tax levy growth limitation for a district which is spending above adequacy as determined pursuant to subsection d. of section 5 of P.L.2007, c.260 (C.18A:7F-47) and has a prebudget year general fund tax levy greater than its local share as calculated pursuant to section 10 of that act and which receives an increase in State aid between the prebudget and budget years that is greater than 2% or the CPI, whichever is greater, shall be reduced by the amount of the State aid increase that exceeds 2% or the CPI, whichever is greater. For the purposes of this paragraph, the CPI shall not exceed 4%. The reduction shall be made following the calculation of any adjustments for increases in enrollment, a reduction in total unrestricted State aid, [and] an increase in health care costs, and an increase in the amount of the normal and accrued liability pension contributions calculated pursuant to subsections b., c., and d. of this section and prior to the request or approval of waivers pursuant to section 4 of P.L.2007, c.62 (C.18A:7F-39).  In the event that the reduction would bring the district's spending below adequacy, notwithstanding the requirements of this paragraph to the contrary the amount of the reduction made to the district's tax levy growth limitation shall not be greater than the amount that brings the district's spending to adequacy.

     b.    (1) The allowable adjustment for increases in enrollment authorized pursuant to subsection a. of this section shall equal the per pupil prebudget year adjusted tax levy multiplied by EP, where EP equals the sum of:

     (a)   0.50 for each unit of weighted resident enrollment that constitutes an increase from the prebudget year over 1%, but not more than 2.5%;

     (b)   0.75 for each unit of weighted resident enrollment that constitutes an increase from the prebudget year over 2.5%, but not more than 4%; and

     (c)   1.00 for each unit of weighted resident enrollment that constitutes an increase from the prebudget year over 4%.

     (2)   A school district may request approval from the commissioner to calculate EP equal to 1.00 for any increase in weighted resident enrollment if it can demonstrate that the calculation pursuant to paragraph (1) of this subsection would result in an average class size that exceeds 10% above the facilities efficiency standards established pursuant to P.L.2000, c.72 (C.18A:7G-1 et al.).

     c.     The allowable adjustment for a reduction in total unrestricted State aid authorized pursuant to subsection a. of this section shall equal any reduction in total unrestricted State aid from the prebudget to the budget year.

     d.    (1) The allowable adjustment for increases in health care costs authorized pursuant to subsection a. of this section shall equal that portion of the actual increase in total health care costs for the budget year, less any withdrawals from the current expense emergency reserve account for increases in total health care costs, that exceeds four percent of the total health care costs in the prebudget year, but that is not in excess of the product of the total health care costs in the prebudget year multiplied by the average percentage increase of the State Health Benefits Program, P.L.1961, c.49 (C.52:14-17.25 et seq.), as annually determined by the Division of Pensions and Benefits in the Department of the Treasury.

     (2)   The allowable adjustment for increases in the amount of normal and accrued liability pension contributions authorized pursuant to subsection a. of this section shall equal that portion of the actual increase in total normal and accrued liability pension contributions for the budget year that exceeds four percent of the total normal and accrued liability pension contributions in the prebudget year.

     e.     In addition to the adjustments authorized pursuant to subsection a. of this section, for the purpose of determining a school district's allowable tax levy growth limitation for the 2007-2008 school year, a school district may apply to the commissioner for an adjustment for increases in special education costs over $40,000 per pupil, increases in tuition, capital outlay increases, and incremental increases in costs for opening a new school facility in the budget year.

     (1)   The allowable adjustment for increases in special education costs over $40,000 per pupil shall equal any increase in the sum of per pupil amounts in excess of $40,000 for the budget year less the sum of per pupil amounts in excess of $40,000 for the prebudget year indexed by four percent.

     (2)   The allowable adjustment for increases in tuition shall equal any increase in the tuition for the budget year charged to a sending district by the receiving district pursuant to the provisions of N.J.S.18A:38-19 or charged by a county vocational school district pursuant to the provisions of section 71 of P.L.1990, c.52 (C.18A:54-20.1) less 104 percent of the tuition for the prebudget year charged to a sending district by the receiving district pursuant to the provisions of N.J.S.18A:38-19 or charged by a county vocational school district pursuant to the provisions of section 71 of P.L.1990, c.52 (C.18A:54-20.1).

     (3)   The allowable adjustment for increases in capital outlay shall equal any increase in capital outlay, less any withdrawals from the capital reserve account, over the prebudget year in excess of four percent.

     f.     The adjusted tax levy shall be increased or decreased accordingly whenever the responsibility and associated cost of a school district activity is transferred to another school district or governmental entity.

(cf: P.L.2007, c.260, s.37)

 

     4.    Section 10 of P.L.2007, c.62 (C.40A:4-45.45) is amended to read as follows:

     10.  a. In the preparation of its budget the amount to be raised by taxation by a local unit shall not exceed the sum of new ratables, the adjusted tax levy, and the total of waivers approved pursuant to section 11 of P.L.2007, c.62 (C.40A:4-45.46); provided, however, that in the case of a county, the amount to be raised by taxation shall not exceed the amount permitted by section 4 of P.L.1976, c. 68 (C.40A:4-45.4).

     b.    The following exclusions shall be added to the calculation of the adjusted tax levy:

     (1)   increases in amounts required to be raised for (a) all debt service and (b) lease payments with county improvement authorities pursuant to leases in effect on the effective date of P.L.2007, c.62 (C.18A:7F-37 et al.);

     (2)   increases in amounts required to be raised to replace State formula aid due to a reduction in State formula aid from the previous local budget year;

     (3)   increases in amounts for certain pension contributions set forth in section 5 of P.L.2003, c.108 (C.40A:4-45.43) for the years set forth in that section;

     (4)   with respect to municipalities, any increase, greater than four percent, in the reserve for uncollected taxes that is required by law;

     (5)   increases in health care costs equal to that portion of the actual increase in total health care costs for the budget year that is in excess of four percent of the total health care costs in the prior year, but is not in excess of the product of the total health care costs in the prior year and the average percentage increase of the State Health Benefits Program, P.L.1961, c.49 (C.52:14-17.25 et seq.), as annually determined by the Division of Pensions and Benefits in the Department of the Treasury;

     (6)  increases in amounts for certain normal and accrued liability pension contributions set forth in sections 1 and 2 of P.L.  , c.      (pending before the Legislature as this bill) amending section 24 of P.L.1954, c.84 (C.43:15A-24) and section 15 of P.L.1944, c.255 (C.43:16A-15) equal to that portion of the actual increase in normal and accrued liability pension contributions for the budget year that is in excess of four percent of the normal and accrued liability pension contributions in the prior year.

     [(6)]  Notwithstanding the other provisions of this subsection, when the appropriation for all debt service is less than the amount appropriated for all debt service in the prior fiscal year, the amount of the difference shall be deducted from the sum of the exclusions listed in paragraphs (1) through [(5)] (6) of this subsection.  If there are no exclusions, then the amount of the difference shall reduce the adjusted tax levy by that amount.  Any cancelled or unexpended appropriation for any exclusion pursuant to this subsection or waiver pursuant to section 11 of P.L.2007, c.62 (C.40A:4-45.46), also shall be deducted from the sum of the exclusions listed in paragraphs (1) through [(5)] (6) or directly reduce the adjusted tax levy if there are no exclusions.

(cf:  P.L.2007, c.62, s.10)

 

   5.      (New section)  In addition to the exceptions to the limits on increases to municipal appropriations set forth in section 3 of P.L.1976, c.68 (C.40A:4-45.3) and to the county tax levy set forth in section 4 of P.L.1976, c.68 (C.40A:4-45.4), appropriations that represent expenditures made by a municipality or county for the purpose of funding normal and accrued liability contributions to the Public Employees' Retirement System or to the Police and Firemen's Retirement System due in the State fiscal years 2008-09, 2009-10, 2010-11 and 2011-12 shall be exempt from the limits on increases to municipal appropriations and from the limits on increases to the county tax levy in county budgets, respectively, for the local budget year in which those contributions are due.

 

     6.    (New section)  a.  The Director of the Division of Investment in the Department of the Treasury is authorized to accept, for purposes of investment, moneys from any local employer.  For purposes of this section, “local employer” means any employer other than the State whose pension contribution requirements are adjusted by the provisions of sections 1 and 2 of P.L.   , c.  (pending before the Legislature as this bill) amending section 24 of P.L.1954, c.84 (C.43:15A-24) and section 15 of P.L.1944, c.255 (C.43:16A-15).

     The director shall create a special reserve fund, and all moneys accepted by the director pursuant to this section shall be deposited in the fund and invested on behalf of the local employers in accordance with the standards governing the investment of other funds managed under the rules and regulations of the State Investment Council.

     In addition, the director shall make every reasonable effort to invest the assets of the fund in a manner that reflects the composite allocation values of the common pension funds; provided, however, that the director shall not be required to invest assets in the fund in all of the types of permissible investments of the common pension funds and may, in the director’s discretion, invest the assets of the fund solely in fixed income securities, common and preferred stocks and issues convertible into common stock, the State of New Jersey Cash Management Fund or any combination thereof.  The director shall have the authority and discretion to make any and all decisions relating to the disposition of moneys deposited in the fund, including but not limited to investment of fund assets, fund monitoring, and discharge of fiduciary duties.

     b.    The fund shall be composed of units of participation of unlimited quantity.  Each unit shall represent an equal beneficial interest in the fund and no unit shall have priority or preference over any other.  Each unit of participation shall be valued at the net asset value as provided in regulations of the State Investment Council governing the New Jersey Better Educational Savings Trust Fund.  Eligible participants shall be local employers as defined in subsection a. of this section.

     c.  All units of participation in the fund, representing net capital contributions to the fund, together with any income earned thereon, shall be evidenced by proper entries setting forth ownership units in the records of the division or an agent of the division.

     d.  All units of participation shall be purchased by cash payments.  Such cash payments shall be made on an annual basis in accordance with a schedule to be established by the director in consultation with the Director of the Division of Local Government Services in the Department of Community Affairs and the Commissioner of the Department of Education.  No purchases shall be made after the date on which local employer pension contributions are required to be paid for the State fiscal year ending June 30, 2012.

     e.  Every reasonable effort shall be made by the director and any agents of the director to reduce expenses or costs related to the investment of fund assets.  In the event that costs or expenses are incurred, these encumbrances shall be charged against fund assets as equitably as practicable and in accordance with the regulations and policies that govern the charging of such encumbrances against the assets of the common pension funds.

     f.  The State Investment Council shall adopt a policy statement and investment plan related to the investment of fund assets. This policy statement and investment plan shall be made available to the public on the division’s website.

     g.  A local employer that wishes to withdraw any portion of its fund contribution shall notify the director in writing and provide three business days notice. Once contributions are withdrawn from the fund, the contributions cannot be reinvested in the fund.

     h.  A local employer that withdraws any portion of its fund contribution shall use the withdrawn moneys and any proceeds or gains realized during the duration of the investment in the fund only for the purpose of making a required pension contribution.

     i.  The director shall take such action as is necessary to ensure that any fund contributions and any proceeds or gains realized during the duration of the investment in the fund that have not been withdrawn by the date on which local employer pension contributions are required to be paid for the State fiscal year ending June 30, 2012 are returned to the local employer that made the fund contributions.

     j.  The director shall periodically provide to the Director of the Division of Local Government Services in the Department of Community Affairs and the Commissioner of the Department of Education information regarding purchases and withdrawals by local employers pursuant to this section.

 

     7.    (New section)  Until the date on which pension contributions by a municipality, county, or other local unit are required to be paid for the State fiscal year ending June 30, 2012, an amount appropriated for pension contributions by a municipality, county, or other local unit in excess of the amount due in any year as a pension contribution to the Public Employees’ Retirement System or the Police and Firemen’s Retirement System shall be deposited in a pension reserve account created by the municipality, county, or other local unit for such moneys and the moneys shall be invested in the special reserve fund created pursuant to section 6 of P.L.   , c.    (C.   )(pending before the legislature as this bill), in the State Cash Management Plan created pursuant to section 1 of P.L.1977, c. 281 (C.52:18A-90.4), or in such other interest bearing account as permitted pursuant to the cash management plan of the municipality, county, or other local unit.  The invested moneys shall remain in the fund, plan, or account until the municipality, county, or other local unit determines that the moneys are needed to make pension contribution payments or until the date on which pension contributions by the municipality, county, or other local unit are required to be paid for the State fiscal year ending June 30, 2012. All invested moneys with any earnings shall be withdrawn by that date.  No deposits or investments pursuant to this section shall be made after the date on which local employer pension contributions are required to be paid for the State fiscal year ending June 30, 2012.

     The Director of the Division of Local Government Services in the Department of Community Affairs shall take such action as is determined to be necessary to direct and account for transactions pursuant to this section.

 

     8.    Within 180 days after the effective date of P.L.  , c.   (pending before the Legislature as this bill), the Director of the Division of Pensions and Benefits in the Department of the Treasury shall report to the Governor and, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), to the Legislature on the feasibility and consequences of creating individual employer accounts within the State-administered retirement systems.

 

     9.    Section 6 of P.L.2007, c.62 (C.18A:7F-41) is amended to read as follows:

     6.    Notwithstanding the provisions of any law or regulation to the contrary:

     a.     A board of education or board of school estimate, as appropriate, may supplement a capital reserve account through a transfer by board resolution at year end of any unanticipated revenue or unexpended line-item appropriation amounts, or both, for withdrawal in subsequent school years.

     b.    A board of education or board of school estimate, as appropriate, may supplement a maintenance reserve account through a transfer by board resolution at year end of any unanticipated revenue or unexpended line-item appropriation amounts, or both, for withdrawal in subsequent school years.

     c.     A board of education or a board of school estimate, as appropriate, may through the adoption of a board resolution establish the following reserve accounts:

     (1)   Current expense emergency reserve account.  The funds in the reserve shall be used to finance unanticipated general fund current expense costs required for a thorough and efficient education.  The account shall not exceed $250,000 or one percent of the district's general fund budget up to a maximum of $1,000,000, whichever is greater.  A board of education may appropriate funds to establish or supplement the reserve in the district's annual budget or through a transfer by board resolution at year end of any unanticipated revenue and unexpended line-item appropriation amounts.  Withdrawals from the reserve shall require the approval of the commissioner unless the withdrawal is necessary to meet an increase in total health care costs in excess of four percent.

     (2)   Debt service reserve account in the debt service fund for proceeds from the sale of district property.  The funds in the reserve shall be used to retire outstanding debt service obligations of the district.  The reserve shall be liquidated within the lesser of five years from its inception or the remaining term on the obligations. Any remaining balance shall be used for tax relief.

     d.  A board of education or a board of school estimate, as appropriate, shall establish through the adoption of a board resolution a pension reserve account.  The funds in the reserve shall be used to fund future pension obligations in a given year for the Public Employees’ Retirement System and the funds shall be invested in the special reserve fund created pursuant to section 6 of P.L.      , c.     (C.       )(pending before the Legislature as this bill), the State Cash Management Plan created pursuant to section 1 of P.L.1977, c.281 (C.52:18A-90.4), or any interest bearing account as permitted pursuant to section 1 of P.L.1977, c.177 (C.18A:20-37). The funds in the reserve shall remain invested until the time the district determines that the funds are needed to pay such pension obligations or until the date on which pension contributions by the board are required to be paid for the State fiscal year ending June 30, 2012.

     The board shall deposit into the reserve by June 30, 2009 the amount of funds included in its original budget certified for taxes that exceeds the pension contribution to the Public Employees’ Retirement System required to be paid pursuant to section 1 of P.L.    , c.    (pending before the Legislature as this bill) amending section 24 of P.L.1954, c.84 (C.43:15A-24) for the State fiscal year ending June 30, 2009, up to the difference between the pension contribution that would have been required to be paid for the State fiscal year ending June 30, 2009 notwithstanding section 1 of P.L.    , c.    (pending before the Legislature as this bill) amending section 24 of P.L.1954, c.84 (C.43:15A-24) and the payment contribution required to be paid for the State fiscal year ending June 30, 2009 pursuant to section 1 of P.L.    , c.    (pending before the Legislature as this bill) amending section 24 of P.L.1954, c.84 (C.43:15A-24).

     A board may appropriate funds to supplement the reserve in the district’s annual budget or through a transfer by board resolution at the end of a year of any unanticipated revenue and unexpended line-item appropriation amounts.  The Commissioner of the Department of Education shall take such action as determined necessary to provide the procedures necessary to direct and account for such transactions.

     All invested funds with any earnings shall be withdrawn by the date on which pension contributions by the board are required to be paid for the State fiscal year ending June 30, 2012.  No deposits or investments pursuant to this subsection shall be made after the date on which board’s pension contributions are required to be paid for the State fiscal year ending June 30, 2012.

     [d] e.  All reserve accounts shall be established and held in accordance with GAAP and shall be subject to annual audit.  Any capital gains or interest earned shall become part of the reserve account.  A separate bank account is not required, however, a separate identity for each reserve account shall be maintained.

(cf:  P.L.2007, c.62, s.6)

 

     10.  This act shall take effect immediately.

 

 

STATEMENT

 

     This bill provides for reductions in the contributions that local employers must make to the Public Employees' Retirement System (PERS) and the Police and Firemen's Retirement System (PFRS) during State fiscal years 2009 through 2011.

     The PERS and PFRS, like the other State-administered retirement systems, are funded on an actuarial reserve basis.  An actuary for each system annually projects that system's overall liability for benefits to members, retirees and their beneficiaries. The actuary then sets off against this projected liability the system's assets on hand, and its anticipated income from such sources such as return on investments and member contributions.  The difference constitutes the system's liability, which must be met through employer contributions; these consist of a "normal contribution," covering the system's liability attributable to the service rendered by covered employees during the year for which the contribution is determined, and an "accrued liability contribution," covering the system's unfunded liability for previous service.  The two contribution requirements are computed and certified to employers as a percentage of total compensation.

     In recognition of the enormous financial burden that full payments of the PERS and PFRS contributions in State fiscal years 2009 through 2011 will place on local property taxpayers and local budgets during this historically difficult economic period for the State, this bill provides that the State Treasurer will reduce for local employers the normal and accrued liability contributions to a percentage of the amount certified annually by the PERS and PFRS, which percentage will be not more than 50% for payments due in State fiscal year 2009; not more than 60% for payments due in State fiscal year 2010; and not more than 80% for payments due in State fiscal year 2011.

   The bill provides that for the respective three fiscal years during which local public employers' pension contributions to the PERS and PFRS will be reduced, and for the year thereafter when the employers would again be subject to the full contribution requirement, the affected contribution payments will be exempt from the limits imposed on increases to municipal appropriations set forth in N.J.S.A.40A:4-45.3, the local budget "cap" law, and to the county tax levy set forth in N.J.S.A.40A:4-45.4.  The bill also amends current law concerning the calculation of the tax levy growth limitation for the purpose of an increase in the adjusted tax levy for a school district, and the exclusions added to the calculation for the adjusted tax levy for a local unit of government, to account for certain normal and accrued liability pension contribution increases.

     The bill authorizes the Director of the Division of Investment in the Department of the Treasury to create a special reserve fund to accept and invest moneys received from local employers for whom pension contribution requirements were adjusted as a result of this bill.  The moneys will be held in the fund and invested  in accordance with the standards governing the investment of other funds managed under the rules and regulations of the State Investment Council.  The State Investment Council is to adopt a policy statement and investment plan related to the investment of fund assets, which will be made available to the public on the division’s website.  A local employer that withdraws any portion of its fund contribution must use the withdrawn moneys and any earnings only for the purpose of making a required pension contribution.  Any fund contributions and earnings that have not been withdrawn by the date on which local employer pension contributions are required to be paid for the State fiscal year ending June 30, 2012 will be returned to the local employer that made the fund contributions.

     The bill requires a municipality, county, or other local unit that has appropriated an amount in excess of the amount due as an annual pension contribution to the PERS or the PFRS to deposit the excess in the special reserve fund described above, in the State Cash Management Plan, or in an interest bearing account as permitted pursuant to the cash management plan of the municipality, county, or other local unit.  The deposited amount must remain in the fund, plan, or account until the municipality, county, or other local unit determines that the moneys are needed to make pension contribution payments.  The provision described in this paragraph will be operative only until the date on which PERS and PFRS pension contributions by a municipality, county, or other local unit are required to be paid for the State fiscal year ending June 30, 2012.  Similar provisions are created by the bill for boards of education and boards of school estimate.

     Finally, the bill requires the Director of the Division of Pensions and Benefits in the Department of the Treasury to report to the Governor and Legislature, within 180 days after the effective date of this bill, on the feasibility and consequences of creating individual employer accounts within the State-administered retirement systems.