SENATE, No. 2044

STATE OF NEW JERSEY

213th LEGISLATURE

 

INTRODUCED JUNE 12, 2008

 


 

Sponsored by:

Senator SHIRLEY K. TURNER

District 15 (Mercer)

 

 

 

 

SYNOPSIS

     Provides additional retirement benefits to certain employees of State government; creates Workforce Reduction Planning Board to oversee workforce reduction requirements in Executive Branch; imposes limit on number of employees in Executive and Judicial Branch.

 

CURRENT VERSION OF TEXT

     As introduced.

   


An Act providing additional retirement benefits to certain employees of State government and creating a Workforce Reduction Planning Board and supplementing Title 52 of the Revised Statutes.

 

Whereas, The public interest requires the control of long term costs and pension liabilities associated with the retirement of employees of State government pursuant to an early retirement program; and

Whereas, The public interest requires the maximization of short and long term budget savings associated with the reduction in the overall workforce for the State that will occur as a result of an offer of an early retirement incentive program; and

Whereas, The public interest requires assurance that a workforce reduction obtained as a result of an early retirement incentive program is maintained by a cap on the total number of employees to be administered through workforce reduction planning; and

Whereas, To maximize savings and limit pension liabilities resulting from an early retirement incentive program, it is essential to limit the retirement systems through which an early retirement incentive program will be offered to the Public Employees’ Retirement System and the Teachers’ Pension and Annuity Fund, to require that any employee who participates in such a program be already eligible to retire from State service and to further limit participation in the program to only a designated subset of employees who already are eligible to retire from State service; and

Whereas, Because the public interest requires that savings associated with vacancies achieved through an early retirement program not be lost by rehiring retired former employees, directly or indirectly, it is appropriate to establish restrictions prohibiting eligible employees who retire and receive a benefit pursuant to this act from eligibility for employment in, or from being awarded a contract to perform, or from performing professional services for the State as part of a contract awarded to a third party, by the branch of State government from which they retired, for a period of three years following the effective date of retirement; and

Whereas, To further ensure budget savings and limit liabilities, an early retirement incentive program must not be made available to employees of independent State authorities, or to employees enrolled in certain special sections of the Public Employees’ Retirement System, or to certain employees in State departments or agencies when there is a determination that the mission of those departments or agencies are principally related to the provision of direct care or when the nature of their operations otherwise does not permit the imposition of a strict limit on the filling of vacancies; now, therefore,

 

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

     1.  a.  An eligible State employee or an eligible Judiciary employee who is at least 58 years of age and has at least 25 years of service credit under the Public Employees’ Retirement System, established pursuant to P.L.1954, c.84 (C.43:15A-1 et seq.), or the Teachers' Pension and Annuity Fund, established pursuant N.J.S.18A:66-1 et seq., other than a veteran who retires on a veteran's retirement, shall receive an additional three years of service credit under the Public Employees’ Retirement System or the Teachers' Pension and Annuity Fund.

     An employee who is at least 58 years of age and has at least 25 years of service credit and retires on a veteran's retirement under the Public Employees’ Retirement System or the Teachers' Pension and Annuity Fund shall receive an additional pension under the retirement system in the amount of 3/55 of the compensation upon which the retirement allowance is based.

     The additional retirement benefit provided pursuant to this subsection shall be applicable only to the full-time State employment from which an eligible employee retires to receive the benefit and the compensation for that employment.

     b.  For an eligible State employee who is at least 60 years of age and has at least 20, but less than 25, years of service credit under the Public Employees’ Retirement System or the Teachers' Pension and Annuity Fund, the retirement system shall pay the premium or periodic charges for benefits provided to the retired State employee and the employee's dependents, but not including survivors, under the "New Jersey State Health Benefits Program Act," P.L.1961, c.49 (C.52:14-17.25 et seq.), in the same manner provided for State payment of premiums or periodic charges for a retired State employee with 25 or more years of service credit under section 6 of P.L.1996, c.8 (C.52:14-17.28b) for Public Employees’ Retirement System members, and in the same manner provided for State payment of premiums or periodic charges for a qualified retiree from the Teachers' Pension and Annuity Fund under section 3 of P.L.1987, c.384 (C.52:14-17.32f) for Teachers' Pension and Annuity Fund members.

     c.  An eligible State employee who is at least 60 years of age and has at least 10, but less than 20, years of service credit under the Public Employees’ Retirement System or the Teachers' Pension and Annuity Fund shall receive an additional pension under the Public Employees’ Retirement System or the Teachers' Pension and Annuity Fund of $500 a month in each of the 24 months following the effective date of retirement.

     d.  To receive the benefits provided by this section, an eligible State employee or an eligible Judiciary employee shall submit an application for retirement on or after March 1, 2008 but not later than July 15, 2008 and retire not later than August 1, 2008.

     Service credit in the Public Employees’ Retirement System or the Teachers' Pension and Annuity Fund established through a purchase completed after the effective date of this act, P.L.  , c.   (pending before the legislature as this bill), shall not be considered in determining an employee’s eligibility for the benefit provided pursuant to subsections a., b., and c. of this section.

     An application submitted by an eligible State employee or an eligible Judiciary employee for retirement within the time period set forth herein to receive the benefits provided shall be irrevocable seven days after submission.

     e.  For the purpose of this section:

     "Eligible State employee" means a full-time employee of the Executive Branch of State government eligible to participate in the New Jersey State Health Benefits Program of the State of New Jersey, but not including an employee of the Department of Human Services, Department of Military and Veterans’ Affairs, Department of Corrections, Juvenile Justice Commission in but not of the Department of Law and Public Safety, Office of the Public Defender in but not of the Department of the Treasury, and Department of Children and Families.

     The term shall not include an employee of Rutgers, The State University; the New Jersey Institute of Technology; the University of Medicine and Dentistry of New Jersey; or a State college or university.

     The term shall not include an employee of a public authority, board, commission, corporation, or other agency or instrumentality of the State allocated in, but not of, a principal department of State government pursuant to Article V, Section IV, paragraph 1 of the New Jersey Constitution authorized to participate in the Public Employees' Retirement System under section 73 of P.L.1954, c.84 (C.43:15A-73) or P.L.1990, c.25 (C.43:15A-73.2 et seq.), which entity was authorized under P.L.2002, c.23 to provide additional retirement benefits to certain employees, as such entities are identified by the Division of Pensions and Benefits in consideration that the division submits a separate request for payment and receives a separate payment for benefits purposes from the entity.  This paragraph shall not be deemed to exclude the New Jersey Commerce and Economic Growth Commission or its successor.

     The term shall not include an employee of a public agency or organization as defined in section 71 of P.L.1954, c.84 (C.43:15A-71), or a person participating in the Public Employees' Retirement System under the provisions of P.L.1972, c.167 (C.43:15A-135 et seq.),  P.L.2001, c. 259 (C.43:15A-142 et seq.), P.L.2001, c.366 (C.43:15A-155 et seq.) or P.L.1953, c.202 (C.32:23-1 et seq.).

     “Eligible Judiciary employee” means a full-time employee of the Judicial Branch of State Government eligible to participate in the New Jersey State Health Benefits Program of the State of New Jersey.  The term shall not include a Justice of the Supreme Court, or a Judge of the Superior Court, or a Judge of a Municipal Court, or an employee of a Municipal Court.

     f.  When the needs of the Executive Branch of State government require the services of an employee who elects to retire and receive a benefit pursuant to this section, a State department may delay the effective date of retirement of the employee until the first day of any calendar month after August 1, 2008, but not later than July 1, 2009.  For each such delayed retirement, the State department shall request the approval of the State Treasurer by submitting in writing an explanation of the needs of the department, the services required of the employee, and the reasons why that particular employee’s services are so essential as to necessitate a delay.  The delay shall be effective only upon approval of the request by the State Treasurer.  A request by an eligible State employee for a delay in the effective date of retirement, whether the employee provides reasons for the delay or not, shall not be considered by the State Treasurer unless the State department submits a request for a delay to the State Treasurer with the explanation described above.

     When the needs of the Judicial Branch of State government require the services of an employee who elects to retire and receive a benefit pursuant to this section, the Judiciary may delay the effective date of retirement of the employee until the first day of any calendar month after August 1, 2008, but not later than July 1, 2009, pursuant to protocols to be issued by the Chief Justice of the Supreme Court.

     An eligible State employee who applies to retire and receive the benefits provided by this section shall be deemed to consent, by that application, to a delay in the employee’s effective date of retirement if the State department requests and receives approval for such a delay.  An eligible Judiciary Employee who applies to retire and receive the benefits provided by this section shall be deemed to consent, by that application, to a delay in the employee’s effective date of retirement if the Chief Justice determines that such a delay is appropriate.  Such an employee’s receipt of the benefits provided by this section shall be conditioned upon faithful performance of services by the employee during the period of delay.

     A delay in the effective date of retirement of an eligible State employee or an eligible Judiciary employee shall not extend the time period set forth in this section within which an employee shall qualify for a benefit pursuant to this section.  The retirement of an employee for whom the effective date of retirement has been delayed shall be irrevocable.

     For an eligible State employee or an eligible Judiciary employee who is a member of the Public Employees’ Retirement System or the Teachers’ Pension and Annuity Fund whose effective date of retirement is delayed 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.

     g.  The actuaries for the Public Employees’ Retirement System and the Teachers' Pension and Annuity Fund shall determine the liabilities of the retirement systems for the additional service credit or pension provided pursuant to this section and for the early retirement of employees in accordance with the tables of actuarial assumptions adopted by the boards of trustees of the retirement systems.  These liabilities shall be added to the accrued liabilities of the State under the retirement systems and shall be funded as provided under section 24 of P.L.1954, c.84 (C.43:15A-24), section 2 of P.L.1990, c.6 (C.43:15A-24.1), N.J.S.18A:66-18, and section 2 of P.L.1987, c.385 (C.18A:66-18.1), respectively.

     h.  An eligible State employee or an eligible Judiciary employee who retires and receives a benefit pursuant to this section shall forfeit all tenure rights.

     i.  An eligible State employee who retires and receives a benefit pursuant to this section shall not be eligible for appointment to, or employment in, any position or capacity in the Executive Branch of State government for a period of three years following the effective date of retirement.  An eligible State employee who retires and receives a benefit pursuant to this section shall be barred from being awarded any contract for professional services by the Executive Branch of State Government, or from performing professional services for the State as part of a contract awarded to a third party by the Executive Branch of State government, for a period of three years following the effective date of retirement.

     An eligible Judiciary employee who retires and receives a benefit pursuant to this section shall not be eligible for appointment to, or employment in, any position or capacity in the Judicial Branch of State Government for a period of three years following the effective date of retirement.  An eligible Judiciary employee who retires and receives a benefit pursuant to this section shall be barred from being awarded any contract for professional services by the Judicial Branch of State Government, or from performing professional services for the State as part of a contract awarded to a third party by the Judicial Branch of State Government, for a period of three years following the effective date of retirement.

     j.  The Director of the Division of Pensions and Benefits in the Department of the Treasury may promulgate rules and regulations that the director deems necessary for the effective implementation of this section. Notwithstanding any provision of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) to the contrary, the division may adopt immediately upon filing with the Office of Administrative Law such regulations as the division deems necessary to implement the provisions of this act, which shall be effective for a period not to exceed 270 days following enactment of P.L.   ,    c.   (pending before the Legislature as this bill), and may thereafter be amended, adopted, or readopted by the division in accordance with the requirements of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.).

     k.  The Division of Pensions and Benefits in the Department of the Treasury shall report in writing to the Joint Budget Oversight Committee beginning on August 15, 2008, and annually thereafter on or before August 15, through 2014, on the results of the additional retirement benefits provided pursuant to this section.  In cooperation with the Workforce Reduction Planning Board established pursuant to section 2 of P.L.   , c.     (C.   )(pending before the Legislature as this bill) and based on information provided by the board, the report shall provide an analysis of the impact of this section in order to document the aggregate costs incurred and aggregate savings realized by the State as a result of this section.  The report shall include, but need not be limited to, the number of applications to retire filed pursuant to this section; the number of applications to retire approved; the number of delayed retirements; total annual savings; total additional one-time costs; and the corresponding retirement systems unfunded liability.

 

2.  (New section) a.  There is established in the Department of the Treasury a Workforce Reduction Planning Board composed of five members.  The board shall be composed of the State Treasurer; the Director of the Division of Budget and Accounting in the Department of the Treasury; either the chair of the Merit System Board or its successor overseeing civil service matters for the State, or a person designated by the Governor; and two persons designated by the Governor.  Not later than July 30, 2008, the State Treasurer shall certify to the board the number of full-time employees, excluding seasonal employees and employees of independent authorities, employed by each department of the Executive Branch of State government as of the final pay period in Fiscal Year 2008.  Within 60 days of that certification by the State Treasurer, the board shall establish for each department the maximum number of employees that will be permitted to be on each department’s payroll as of the final pay period of Fiscal Year 2009.  The aggregate number of employees that will be permitted to be on the payroll for all departments as of the final pay period of Fiscal Year 2009 shall not exceed the number of employees certified by the State Treasurer to be on the payroll as of the final pay period of Fiscal Year 2008, less 90 percent of the number of employees who elect to retire and receive a benefit pursuant to section 1 of P.L.  , c.    (pending before the Legislature as this bill).  For Fiscal Year 2010 and every year thereafter, the number of employees in total for all departments in the Executive Branch of State government shall not exceed the number of employees certified by the State Treasurer to be on the payroll as of the final pay period of Fiscal Year 2008, less 90 percent of the number of employees who elect to retire and receive a benefit pursuant to section 1 of P.L.  , c.    (pending before the Legislature as this bill).  The cap established pursuant to this section shall not be exceeded unless specifically authorized by law.  

     b.  Within 60 days of the receipt of its maximum employee count from the board, each department shall prepare and submit to the board a plan demonstrating how the department intends to achieve its maximum employee count.  The board shall review and approve, or modify and approve, each departmental workforce reduction plan within 30 days of its submittal.

     c.  The board shall submit detailed quarterly reports of its activities to the Joint Budget Oversight Committee and the Governor.  The board shall cooperate with the Division of Pensions and Benefits in the Department of the Treasury by providing such information as may be needed for the division to submit the annual reports required by subsection k. of section 1 of P.L.     , c.      (pending before the Legislature as this bill).

     d.  The board shall monitor implementation of each departmental workforce reduction plan and departmental compliance with the cap established pursuant to this section.  Each department shall fully cooperate with the board in monitoring implementation of the plan, and shall provide the board with such information as may be requested by the board.

 

     3.  (New section) The Chief Justice of the Supreme Court shall establish policies and procedures to ensure that the aggregate number of full-time employees of the Judicial Branch of State government  eligible to participate in the New Jersey State Health Benefits Program of the State of New Jersey, other than Justices of the Supreme Court, Judges of the Superior Court, Judges of a Municipal Court, and employees of a Municipal court, who are on the payroll as of the final pay period of Fiscal Year 2009 shall not exceed the number of such employees on the payroll as of April 1, 2008, less 90 percent of the number of employees who elect to retire and receive a benefit pursuant to section 1 of P.L.  , c.    (pending before the Legislature as this bill).  For Fiscal Year 2010 and every year thereafter, the number of such employees shall not exceed the number of such employees on the payroll as of the final pay period of April 1, 2008, less 90 percent of the number of employees who elect to retire and receive a benefit pursuant to section 1 of P.L.  , c.    (pending before the Legislature as this bill).  The cap established pursuant to this section shall not be exceeded unless specifically authorized by law.

 

     4.  This act shall take effect immediately.

 

 

STATEMENT

 

     This bill provides additional retirement benefits to eligible State employees in the Executive Branch of State government and eligible Judiciary employees in the Judicial Branch of State government who apply to retire on or after March 1, 2008 but by July 15, 2008 and retire by August 1, 2008. 

     An eligible State employee or an eligible Judiciary employee who is at least 58 years of age and has at least 25 years of service credit under the Public Employees’ Retirement System (PERS) or the Teachers' Pension and Annuity Fund (TPAF) will receive an additional three years of service credit.  An employee who is at least 58 years of age and has at least 25 years of service credit and retires on a veteran's retirement under the PERS or the TPAF will receive an additional pension in the amount of 3/55 of the compensation upon which the retirement allowance is based.

     For an eligible State employee, but not an eligible Judiciary employee, who is at least 60 years of age and has at least 20, but less than 25, years of service credit under the PERS or the TPAF, the retirement system will pay the premium or periodic charges for health care benefits provided to the retired State employee and the employee's dependents, but not including survivors, under the State Health Benefits Program, in the same manner provided for State payment of premiums or periodic charges for a retired State employee with 25 or more years of service credit under current law and in the same manner provided for State payment of premiums or periodic charges for a qualified retiree from the TPAF under current law.

     An eligible State employee, but not an eligible Judiciary employee, who is at least 60 years of age and has at least 10, but less than 20, years of service credit under the PERS or the TPAF will receive an additional pension of $500 a month for 24 months following the date of retirement.

     To receive these benefits, an eligible State employee or an eligible Judiciary employee must submit an application for retirement on or after March 1, 2008 but by July 15, 2008 and retire no later than August 1, 2008.  An application submitted by an eligible State employee or an eligible Judiciary employee for retirement within the time period set to receive the benefits provided will be irrevocable seven days after submission.

     An "eligible State employee" means a full-time employee of the Executive Branch of State government eligible to participate in the New Jersey State Health Benefits Program of the State of New Jersey, but not including an employee of the Department of Human Services, Department of Military and Veterans’ Affairs, Department of Corrections, Juvenile Justice Commission in but not of the Department of Law and Public Safety, Office of the Public Defender in but not of the Department of the Treasury, and Department of Children and Families.

     The term does not include an employee of Rutgers, The State University; the New Jersey Institute of Technology; the University of Medicine and Dentistry of New Jersey; or a State college or university.

     The term does not include an employee of a public authority, board, commission, corporation, or other agency or instrumentality of the State allocated in, but not of, a principal department of State government pursuant to Article V, Section IV, paragraph 1 of the New Jersey Constitution, authorized to participate in the Public Employees' Retirement System under section 73 of P.L.1954, c.84 (C.43:15A-73) or P.L.1990, c.25 (C.43:15A-73.2 et seq.), or an employee of a public agency or organization as defined in section 71 of P.L.1954, c.84 (C.43:15A-71), or a person participating in the Public Employees' Retirement System under the provisions of P.L.1972, c.167 (C.43:15A-135 et seq.),  P.L.2001, c. 259 (C.43:15A-142 et seq.), P.L.2001, c.366 ( C.43:15A-155 et seq.) or P.L.1953, c.202 (C.32:23-1 et seq.).

     “Eligible Judiciary employee” means a full-time employee of the Judicial branch of State Government eligible to participate in the New Jersey State Health Benefits Program of the State of New Jersey.  The term does not include a Justice of the Supreme Court, or a Judge of the Superior Court, or a Judge of a Municipal Court or an employee of a Municipal Court.

     An eligible State employee who retires and receives a benefit will not be eligible for appointment to, or employment in, any position or capacity in the Executive Branch of State government for a period of three years following the effective date of retirement.  An eligible State employee who retires and receives a benefit will be barred from being awarded any contract for professional services by the Executive Branch of State government, or from performing professional services for the State as part of a contract awarded to a third party by the Executive Branch of State government, for a period of three years following the effective date of retirement. 

     An eligible Judiciary employee who retires and receives a benefit pursuant to this section will not be eligible for appointment to, or employment in, any position or capacity in the Judicial Branch of State Government for a period of three years following the effective date of retirement.  An eligible Judiciary employee who retires and receives a benefit will be barred from being awarded any contract for professional services by the Judicial Branch of State Government, or from performing professional services for the State as part of a contract awarded to a third party by the Judicial Branch of State Government, for a period of three years following the effective date of retirement.

     When the needs of the Executive Branch of State government require the services of an employee who elects to retire and receive a benefit, a State department may delay the effective date of retirement of the employee until the first day of any calendar month after August 1, 2008, but not later than July 1, 2009.  For each such delayed retirement, the State department must request the approval of the State Treasurer by submitting in writing an explanation of the needs of the department, the services required of the employee, and the reasons why that particular employee’s services are so essential as to necessitate a delay.  The delay will be effective only upon approval of the request by the State Treasurer.  A request by an eligible State employee for a delay in the effective date of retirement, whether the employee provides reasons for the delay or not, will not be considered by the State Treasurer unless the State department submits a request for a delay to the State Treasurer with the explanation described above.

     When the needs of the Judicial Branch of State Government require the services of an employee who elects to retire and receive a benefit, the Judiciary may delay the effective date of retirement of the employee until the first day of any calendar month after August 1, 2008, but not later than July 1, 2009, pursuant to protocols to be issued by the Chief Justice of the Supreme Court.

     An eligible State employee or an eligible Judiciary employee who applies to retire and receive the benefits will be deemed to consent, by that application, to a delay in the employee’s effective date of retirement with regard to an eligible state employee, if the State department requests and receives approval for such a delay or, with regard to an eligible Judiciary employee, if the Chief Justice determines that such a delay is appropriate.  Such an employee’s receipt of the benefits provided by this bill will be conditioned upon faithful performance of service by the employee during the period of delay.

     A request by an eligible State employee or an eligible Judiciary employee for a delay in the effective date of retirement, whether the employee provides reasons for the delay or not, will not be sufficient reason to approve a delay.

     The Division of Pensions and Benefits in the Department of Treasury will report in writing to the Joint Budget Oversight Committee beginning on August 15, 2008, and annually thereafter on or before August 15, through 2014, on the results of the additional retirement benefits provided.

In addition, this bill establishes a Workforce Reduction Planning Board composed of five members: the State Treasurer; the Director of the Division of Budget and Accounting in the Department of the Treasury; either the chair of the Merit System Board or its successor overseeing civil service matters for the State, or a person designated by the Governor; and two persons designated by the Governor.  Not later than July 30, 2008, the State Treasurer will certify to the board the number of full-time employees, excluding seasonal employees and employees of independent authorities, employed by each department of the Executive Branch of State government as of the final pay period in Fiscal Year 2008.  Within 60 days of that certification by the State Treasurer, the board will establish for each department the maximum number of employees that will be permitted to be on each department’s payroll as of the final pay period of Fiscal Year 2009.  The aggregate number of employees that will be permitted to be on the payroll for all departments as of the final pay period of Fiscal Year 2009 will not exceed the number of employees certified by the State Treasurer to be on the payroll as of the final pay period of Fiscal Year 2008, less 90 percent of the number of employees who elect to retire and receive a benefit under the bill.  For Fiscal Year 2010 and every year thereafter, the number of employees, in total for all departments in the Executive Branch of State government, will not exceed the number of employees certified by the State Treasurer to be on the payroll as of the final pay period of Fiscal Year 2008, less 90 percent of the number of employees who elect to retire and receive a benefit under the bill.  The cap established pursuant to this section cannot be exceeded unless specifically authorized by law. 

     Within 60 days of the receipt of its maximum employee count from the board, each department will prepare and submit to the board a plan demonstrating how the department intends to achieve its maximum employee count.  The board will review and approve, or modify and approve, each departmental workforce reduction plan within 30 days of its submittal.

     The board will submit detailed quarterly reports of its activities to the Joint Budget Oversight Committee and the Governor.

     The board will monitor implementation of each departmental workforce reduction plan and departmental compliance with the cap established.  Each department will fully cooperate with the board in monitoring implementation of the plan, and will provide the board with such information as may be requested by the board.

     The Chief Justice of the Supreme Court will establish policies and procedures to ensure that the aggregate number of full-time employees of the Judicial Branch of State government  eligible to participate in the New Jersey State Health Benefits Program of the State of New Jersey, other than Justices of the Supreme Court, Judges of the Superior Court, Judges of a Municipal Court, and employees of a Municipal Court, who are on the payroll as of the final pay period of Fiscal Year 2009 will not exceed the number of such employees on the payroll as of April 1, 2008, less 90 percent of the number of employees who elect to retire and receive a benefit under the bill.  For Fiscal Year 2010 and every year thereafter, the number of such employees will not exceed the number of such employees on the payroll as of the final pay period of April 1, 2008, less 90 percent of the number of employees who elect to retire and receive a benefit under the bill.  The cap established will not be exceeded unless specifically authorized by law.