SENATE, No. 2

STATE OF NEW JERSEY

214th LEGISLATURE

 

INTRODUCED FEBRUARY 8, 2010

 


 

Sponsored by:

Senator  NICHOLAS P. SCUTARI

District 22 (Middlesex, Somerset and Union)

Senator  KEVIN J. O'TOOLE

District 40 (Bergen, Essex and Passaic)

Senator  CHRISTOPHER "KIP" BATEMAN

District 16 (Morris and Somerset)

Assemblywoman  SHEILA Y. OLIVER

District 34 (Essex and Passaic)

Assemblyman  ALEX DECROCE

District 26 (Morris and Passaic)

 

Co-Sponsored by:

Senators Vitale, Lesniak, Oroho, Kyrillos, Codey, Beach, Gordon, T.Kean, A.R.Bucco, Cardinale, Beck, B.Smith, Stack, Doherty, Madden, Sweeney, Buono, Ruiz, Gill, Pennacchio, Ciesla and Haines

 

 

 

 

SYNOPSIS

     Makes various pension system changes concerning eligibility, retirement allowance formula, compensation definition, position eligible for service credit, non-forfeitable rights, enrollment waiver, prosecutors part, PFRS special retirement, employer contributions.

 

CURRENT VERSION OF TEXT

     As introduced.

  


An Act concerning various changes to the State-administered retirement systems and amending and supplementing various parts of the statutory law.

 

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

 

     1.    N.J.S.18A:66-4 is amended to read as follows:

     18A:66-4. a. The membership of the retirement system shall consist of:

     (a)   all members of the teachers' pension and annuity fund enrolled as such as of December 31, 1955;

     (b)   any person becoming a teacher on or after January 1, 1956, except any person who has attained the age of 60 years prior to becoming a teacher after June 30, 1958 but before July 1, 1968;

     (c)   every teacher veteran as of January 1, 1956, who is not a member of the "Teachers' Pension and Annuity Fund" as of such date and who shall not have notified the board of trustees within 30 days of such date that he does not desire to become a member;

     (d)   any teacher employed on January 1, 1956, who is not a member of the Teachers' Pension and Annuity Fund and who elects to become a member under the provisions of N.J.S.18A:66-10.

     b.    (1) Before or on [the effective date of P.L.2008, c.89] November 1, 2008, no person in employment, office or position, for which the annual salary or remuneration is fixed at less than $500.00 shall be eligible to become a member of the retirement system.

     (2)   After [the effective date of P.L.2008, c.89] November 1, 2008, a person who was a member of the retirement system on that [effective] date and continuously thereafter shall be eligible to be a member of the retirement system in employment, office or position, for which the annual salary or remuneration is fixed at $500 or more.

     (3)   After the [effective date of P.L.2008, c.89] November 1, 2008 and before or on the effective date of P.L.    , c.   (pending before the Legislature as this bill), a person who was not a member of the retirement system on [that effective date] November 1, 2008, or who was a member of the retirement system on that [effective] date but not continuously thereafter, and who is in employment, office or position, for which the annual salary or remuneration is certified by the applicable public entity at $7,500 or more, shall be eligible to become a member of the retirement system. The $7,500 minimum annual salary or remuneration amount shall be adjusted annually by the Director of the Division of Pensions and Benefits, by regulation, in accordance with changes in the Consumer Price Index but by no more than 4 percent.  "Consumer Price Index" means the average of the annual increase, expressed as a percentage, in the consumer price index for all urban consumers in the New York City and Philadelphia metropolitan statistical areas during the preceding calendar year as reported by the United States Department of Labor.

     (4)   After the effective date of P.L.    , c.   (pending before the Legislature as this bill), no person in an employment, office or position of the State, or an agency, board, commission, authority or instrumentality of the State, for which the hours of work are fixed at fewer than 35 per week shall be eligible to become a member of the retirement system; and no person in employment, office or position with a board of education or other education employer for which the hours of work are fixed by a resolution of the board of education or other education employer at fewer than 32 per week shall be eligible to become a member of the retirement system.  Any hour or part thereof, during which the person does not work due to the person’s participation in a voluntary or mandatory furlough program shall not be deducted in determining if a person’s hours of work are fixed at fewer than 35 or 32 per week, as appropriate, for the purpose of eligibility.

(cf: P.L.2008, c.89, s.5)

 

     2.    N.J.S.18A:66-8 is amended to read as follows:

     18A:66-8.  a. If a teacher:

     (1)   is dismissed by an employer by reason of reduction in number of teachers employed in the school district, institution or department when in the judgment of the employer it is advisable to abolish any office, position or employment for reasons of a reduction in the number of pupils, economy, a change in the administrative or supervisory organization or other good cause; or becomes unemployed by reason of the creation of a regional school district or a consolidated school district; or has been discontinued from service without personal fault or through leave of absence granted by an employer or permitted by any law of this State; and

     (2)   has not withdrawn the accumulated member's contributions from the retirement system, the teacher's membership may continue, notwithstanding any provisions of this article, if the member returns to service within a period of 10 years from the date of discontinuance from service.  No credit for retirement purposes shall be allowed to the member covering the period of discontinuance, except as provided in this section.  In computing the service or in computing final compensation, no time after September 1, 1919, during which a member shall have been employed as a teacher at an annual salary or remuneration, or a number of hours of work, fixed at less than that which is required for membership pursuant to N.J.S.18A:66-4 as applicable to the member shall be credited [, except that in] .  In computing the service or in computing final compensation, no time after the effective date of P.L.    , c.   (pending before the Legislature as this bill), during which a member shall have been employed as a teacher for fewer than 32 hours per week shall be credited, unless the member shall have been a member since that effective date continuously.  In the case of a veteran member credit shall be given for service rendered prior to January 1, 1955, in an employment, office or position if the annual salary or remuneration therefor was fixed at not less than $300.00 and the service consisted of the performance of the full duties of the employment, office or position.

     b.    A teacher may purchase credit for time during which the teacher shall have been absent on an official leave without pay. The credit shall be purchased for a period of time equal to:

     (1)   three months or the duration of the leave, whichever is less; or

     (2)   if the leave was due to the member's personal illness, two years or the duration of the leave, whichever is less; or

     (3)   the period of leave that is specifically allowed for retirement purposes by the provisions of any law of this State.

     The purchase shall be made in the same manner and be subject to the same terms and conditions provided for the purchase of previous membership service by N.J.S.18A:66-9.

(cf: P.L.2008. c.89, s.6)

 

     3.    Section 7 of P.L.1954, c.84 (C.43:15A-7) is amended to read as follows:

     7.    There is hereby established the Public Employees' Retirement System of New Jersey in the Division of Pensions and Benefits of the Department of the Treasury. The membership of the retirement system shall include:

     a.     The members of the former "State Employees' Retirement System of New Jersey" enrolled as such as of December 30, 1954, who shall not have claimed for refund their accumulated deductions in said system as provided in this section;

     b.    Any person becoming an employee of the State or other employer after January 2, 1955 and every veteran, other than a retired member who returns to service pursuant to subsection b. of section 27 of P.L.1966, c.217 (C.43:15A-57.2) and other than those whose appointments are seasonal, becoming an employee of the State or other employer after such date, including a temporary employee with at least one year's continuous service.  The membership of the retirement system shall not include those persons appointed to serve as described in paragraphs (2) and (3) of subsection a. of section 2 of P.L.2007, c.92 (C.43:15C-2), except a person who was a member of the retirement system prior to the effective date of sections 1 through 19 of P.L.2007, c.92 (C.43:15C-1 through C.43:15C-15, C.43:3C-9, C.43:15A-7, C.43:15A-75 and C.43:15A-135) and continuously thereafter; and

     c.     Every employee veteran in the employ of the State or other employer on January 2, 1955, who is not a member of any retirement system supported wholly or partly by the State.

     d.    Membership in the retirement system shall be optional for elected officials other than veterans, and for school crossing guards, who having become eligible for benefits under other pension systems are so employed on a part-time basis.  Elected officials commencing service on or after the effective date of sections 1 through 19 of P.L.2007, c.92 (C.43:15C-1 through C.43:15C-15, C.43:3C-9, C.43:15A-7, C.43:15A-75 and C.43:15A-135) shall not be eligible for membership in the retirement system based on service in the elective public office, except that an elected official enrolled in the retirement system as of that effective date who continues to hold that elective public office without a break in service shall be eligible to continue membership in the retirement system under the terms and conditions of enrollment.  Service in the Legislature shall be considered a single elective public office.  Any part-time school crossing guard who is eligible for benefits under any other pension system and who was hired as a part-time school crossing guard prior to March 4, 1976, may at any time terminate his membership in the retirement system by making an application in writing to the board of trustees of the retirement system.  Upon receiving such application, the board of trustees shall terminate his enrollment in the system and direct the employer to cease accepting contributions from the member or deducting from the compensation paid to the member. State employees who become members of any other retirement system supported wholly or partly by the State as a condition of employment shall not be eligible for membership in this retirement system.  Notwithstanding any other law to the contrary, all other persons accepting employment in the service of the State shall be required to enroll in the retirement system as a condition of their employment, regardless of age.

     (1)   Before or on [the effective date of P.L.2008, c.89] November 1, 2008, no person in employment, office or position, for which the annual salary or remuneration is fixed at less than $1,500.00, shall be eligible to become a member of the retirement system.

     (2)   After [the effective date of P.L.2008, c.89] November 1, 2008, a person who was a member of the retirement system on that [effective] date and continuously thereafter shall be eligible to be a member of the retirement system in employment, office or position, for which the annual salary or remuneration is fixed at $1,500 or more.

     (3)   After [the effective date of P.L.2008, c.89] November 1, 2008 and before or on the effective date of P.L.    , c.   (pending before the Legislature as this bill), a person who was not a member of the retirement system on [that effective date] November 1, 2008, or who was a member of the retirement system on that [effective] date but not continuously thereafter, and who is in employment, office or position, for which the annual salary or remuneration is certified by the applicable public entity at $7,500 or more, shall be eligible to become a member of the retirement system.  The $7,500 minimum annual salary or remuneration amount shall be adjusted annually by the Director of the Division of Pensions and Benefits, by regulation, in accordance with changes in the Consumer Price Index but by no more than 4 percent.  "Consumer Price Index" means the average of the annual increase, expressed as a percentage, in the consumer price index for all urban consumers in the New York City and Philadelphia metropolitan statistical areas during the preceding calendar year as reported by the United States Department of Labor.

     (4)   After the effective date of P.L.    , c.   (pending before the Legislature as this bill), no person in an employment, office or position of the State, or an agency, board, commission, authority or instrumentality of the State, for which the hours of work are fixed at fewer than 35 per week shall be eligible to become a member of the retirement system; and no person in employment, office or position with a political subdivision of the State, or an agency, board, commission, authority or instrumentality of a political subdivision of the State, for which the hours of work are fixed by an ordinance or resolution of the political subdivision, or agency, board, commission, authority or instrumentality thereof, at fewer than 32 per week shall be eligible to become a member of the retirement system.  Any hour or part thereof, during which the person does not work due to the person’s participation in a voluntary or mandatory furlough program shall not be deducted in determining if a person’s hours of work are fixed at fewer than 35 or 32 per week, as appropriate, for the purpose of eligibility.

     e.     Membership of any person in the retirement system shall cease if he shall discontinue his service for more than two consecutive years.

     f.     The accumulated deductions of the members of the former "State Employees' Retirement System" which have been set aside in a trust fund designated as Fund A as provided in section 5 of this act and which have not been claimed for refund prior to February 1, 1955 shall be transferred from said Fund A to the Annuity Savings Fund of the Retirement System, provided for in section 25 of this act.  Each member whose accumulated deductions are so transferred shall receive the same prior service credit, pension credit, and membership credit in the retirement system as he previously had in the former "State Employees' Retirement System" and shall have such accumulated deductions credited to his individual account in the Annuity Savings Fund.  Any outstanding obligations of such member shall be continued.

     g.     Any school crossing guard electing to terminate his membership in the retirement system pursuant to subsection d. of this section shall, upon his request, receive a refund of his accumulated deductions as of the date of his appointment to the position of school crossing guard.  Such refund of contributions shall serve as a waiver of all benefits payable to the employee, to his dependent or dependents, or to any of his beneficiaries under the retirement system.

     h.     A temporary employee who is employed under the federal Workforce Investment Act shall not be eligible for membership in the system.  Membership for temporary employees employed under the federal Job Training Partnership Act, Pub.L.97-300 (29 U.S.C.s.1501) who are in the system on September 19, 1986 shall be terminated, and affected employees shall receive a refund of their accumulated deductions as of the date of commencement of employment in a federal Job Training Partnership Act program. Such refund of contributions shall serve as a waiver of all benefits payable to the employee, to his dependent or dependents, or to any of his beneficiaries under the retirement system.

     i.      Membership in the retirement system shall be optional for a special service employee who is employed under the federal Older American Community Service Employment Act, Pub.L.94-135 (42 U.S.C.s.3056).  Any special service employee employed under the federal Older American Community Service Employment Act, Pub.L.94-135 (42 U.S.C.s.3056), who is in the retirement system on the effective date of P.L.1996, c.139 may terminate membership in the retirement system by making an application in writing to the board of trustees of the retirement system.  Upon receiving the application, the board shall terminate enrollment in the system and the member shall receive a refund of accumulated deductions as of the date of commencement of employment in a federal Older American Community Service Employment Act program.  This refund of contributions shall serve as a waiver of all benefits payable to the employee, to any dependent or dependents, or to any beneficiary under the retirement system.

     j.     An employee of the South Jersey Port Corporation who was employed by the South Jersey Port Corporation as of the effective date of P.L.1997, c.150 (C.34:1B-144 et al.) and who shall be re-employed within 365 days of such effective date by a subsidiary corporation or other corporation, which has been established by the Delaware River Port Authority pursuant to subdivision (m) of Article I of the compact creating the Delaware River Port Authority (R.S.32:3-2), as defined in section 3 of P.L.1997, c.150 (C.34:1B-146), shall be eligible to continue membership while an employee of such subsidiary or other corporation.

(cf: P.L.2008, c.89, s.7)


     4.    Section 39 of P.L.1954, c.84 (C.43:15A-39) is amended to read as follows:

     39.  In computing for retirement purposes the total service of a member about to be retired, the retirement system shall credit the member with the time of all service rendered by the member since that member's last enrollment, and in addition with all the service to which the member is entitled and with no other service. Except as otherwise provided in this act, this service credit shall be final and conclusive for retirement purposes unless the member shall discontinue service for more than two consecutive years. In the case of a member for whom compensation is defined in paragraph (2) of subsection r. of section 6 of P.L.1954, c.84 (C.43:15A-6), the retirement system shall credit the member with the time of all service rendered by the member during the part of any year that the member was a participant of the Defined Contribution Retirement Program, pursuant to paragraph (5) of subsection a. of section 2 of P.L.2007, c.92 (C.43:15C-2) as amended by section 12 of P.L.2007, c.103, and making contributions to that program.

     For the purpose of computing service for retirement purposes, the board shall fix and determine by appropriate rules and regulations how much service in any year shall equal a year of service and a part of a year of service. Not more than one year shall be credited for all service in a calendar year. A member may purchase credit for time during which the member shall have been absent on an official leave without pay. The credit shall be purchased for a period of time equal to:

     (1)   three months or the duration of the leave, whichever is less; or

     (2)   if the leave was due to the member's personal illness, two years or the duration of the leave, whichever is less; or

     (3)   the period of leave that is specifically allowed for retirement purposes by the provisions of any law of this State.

     The purchase shall be made in the same manner and be subject to the same terms and conditions provided for the purchase of previous membership service credit by section 8 of P.L.1954, c.84 (C.43:15A-8). In computing the service or in computing final compensation, no time during which a member was in employment, office, or position for which the annual salary or remuneration was fixed at less than $500.00 in the case of service rendered prior to November 6, 1986, or for which the annual salary or remuneration, or the number of hours of work, is fixed at less than that which was required for membership pursuant to section 7 of P.L.1954, c.84 (C.43:15A-7) as applicable to the member in the case of service rendered on or after that date, shall be credited[, except that in] .  In computing the service or in computing final compensation, no time during which a member was in employment, office, or position for which the hours of work were fewer per week than those required for membership pursuant to subsection d. of section 7 of P.L.1954, c.84 (C.43:15A-7) after the effective date of P.L.    , c.   (pending before the Legislature as this bill) shall be credited, unless the member shall have been a member since that effective date continuously.  In the case of a veteran member credit shall be given for service rendered prior to January 2, 1955, in an employment, office or position if the annual salary or remuneration therefor was fixed at not less than $300.00 and such service consisted of the performance of the full duties of the employment, office or position.

(cf: P.L.2008, c.89, s.8)

 

     5.    Section 65 of P.L.1954, c.84 (C.43:15A-65) is amended to read as follows:

     65.  (a) All employees of any public agency or organization of this State, which employs persons engaged in service to the public, shall be eligible to participate in the Public Employees' Retirement System; provided the employer consents thereto by resolution and files a certified copy of such resolution with the board of trustees of the Public Employees' Retirement System and the board of trustees approves thereof by resolution.  Such organization shall be referred to in this act as the employer.  If the participation of such employees is so approved then the employer shall contribute to the contingent reserve fund on account of its members at the same rate per centum as would be paid by employers other than the State.

     (b)   Notwithstanding the provisions of subsection (a) of this section, every person becoming an employee of a public agency or organization of this State, which employs persons engaged in service to the public, after June 30, 1966, who is not eligible to become a member of any other retirement system, shall be required to participate in the Public Employees' Retirement System. Notwithstanding the provisions of subsection (a) of this section, membership in the Public Employees' Retirement System shall be optional with any person in the employ of any such public agency or organization on June 30, 1966, provided such person is not required to be a member pursuant to another provision of this act, and provided further that such person is not eligible to be a member of any other retirement system.  The provisions of this subsection shall not apply to any person whose position is temporary or seasonal, nor to any person in office, position or employment for which the annual salary or remuneration, or the number of hours or work, is fixed at less than that which is required for membership pursuant to section 7 of P.L.1954, c.84 (C.43:15A-7) as applicable to the member, nor to any person whose position is not covered by the old-age and survivors' insurance provisions of the federal Social Security Act.  After the effective date of P.L.    , c.   (pending before the Legislature as this bill), the provisions of this subsection shall not apply to any person in office, position or employment for which the hours of work are fewer per week than those required for membership pursuant to subsection d. of section 7 of P.L.1954, c.84 (C.43:15A-7), unless the person shall have been a member since that effective date continuously.  The public agency or organization employing any such person who becomes a member of the retirement system pursuant to this subsection shall contribute to the contingent reserve fund on account of such employees at the same rate per centum as would be paid by employers other than the State.

(cf: P.L.2008, c.89, s.9)

 

     6.    Section 75 of P.L.1954, c.84 (C.43:15A-75) is amended to read as follows:

     75.  (a) If this act is so adopted it shall become effective in the county or municipality adopting it on June 30 of the following year. Membership in the Public Employees' Retirement System shall be optional with the employees of the county, board of education or municipality in the service on the day the act becomes effective or on June 30, 1966, whichever is earlier, in such county, board of education or municipality except in the case of public employee veterans who on such date are members.  An employee who elects to become a member within one year after this act so takes effect shall be entitled to prior service covering service rendered to the county, board of education or municipality prior to July 1, 1966 or prior to the date this act so becomes effective, whichever is earlier. Membership shall be compulsory for all employees entering the service of the county, board of education or municipality on July 1, 1966 or after the date this act becomes effective, whichever is earlier.  Where any such employee entering the service of the county, board of education or municipality after the date this act so becomes effective has had prior service for which evidence satisfactory to the retirement system is presented, as an employee in such county, board of education or municipality before the date upon which this act so becomes effective, or July 1, 1966, whichever is earlier, such employee shall be entitled to prior service covering service rendered to the county, board of education or municipality prior to the date this act so becomes effective, or July 1, 1966, whichever is earlier.

     (b)   Notwithstanding the provisions of section 74 of this act and subsection (a) of this section, every person, other than a non-veteran elected official, becoming an employee of a county, board of education, municipality or school district after June 30, 1966, who is not eligible to become a member of another retirement system, shall be required to become a member of the Public Employees' Retirement System.  Notwithstanding the provisions of section 74 of this act and subsection (a) of this section, membership in the retirement system shall be optional with any elected official who is not a veteran, regardless of the date he assumes office, and with any other person in the employ of any county, board of education, municipality or school district on June 30, 1966, provided such elected official or other person is not then a member and is not required to be a member of the retirement system pursuant to another provision of this act, and provided further that such person is not eligible to be a member of another retirement system.  Elected officials commencing service on or after the effective date of sections 1 through 19 of P.L.2007, c.92 (C.43:15C-1 through C.43:15C-15, C.43:3C-9, C.43:15A-7, C.43:15A-75 and C.43:15A-135) shall not be eligible for membership in the retirement system based on service in the elective public office, except that an elected official enrolled in the retirement system as of that effective date who continues to hold that elective public office without a break in service shall be eligible to continue membership in the retirement system under the terms and conditions of enrollment.

     The provisions of this subsection shall not apply to any person whose position is temporary or seasonal, nor to any person in office, position or employment for which the annual salary or remuneration, or the number of hours of work, is fixed at less than that which is required for membership pursuant to section 7 of P.L.1954, c.84 (C.43:15A-7) as applicable to the member, nor to any person whose position is not covered by the old age and survivors' insurance provisions of the federal Social Security Act.  After the effective date of P.L.    , c.   (pending before the Legislature as this bill), the provisions of this subsection shall not apply to any person in office, position or employment for which the hours of work are fewer per week than those required for membership pursuant to subsection d. of section 7 of P.L.1954, c.84 (C.43:15A-7), unless the person shall have been a member since that effective date continuously.  No credit shall be allowed to any person becoming a member of the retirement system pursuant to this subsection for service rendered to the employer prior to July 1, 1966, until the provisions of section 74 of this act have been complied with, in which event such credit shall be allowed in accordance with the provisions of subsection (a) of this section; except that the governing body of any county, board of education or municipality may, by resolution, consent to the allowance of such credit and file a certified copy of such resolution with the board of trustees of the Public Employees' Retirement System.

(cf: P.L.2008, c.89, s.10)

 

     7.    Section 2 of P.L.2007, c.92 (C.43:15C-2) is amended to read as follows:

     2.    a. The following persons shall be eligible and shall participate in the Defined Contribution Retirement Program:

     (1)   A person who commences service on or after the effective date of this section of P.L.2007, c.92 (C.43:15C-1 et al.) in an elective public office of this State or of a political subdivision thereof, except that it shall not include a person who holds elective public office on the effective date of this section and is enrolled in the Public Employees' Retirement System while that person continues to hold that elective public office without a break in service. Service in the Legislature shall be considered a single elective public office.

     (2)   A person who commences service on or after the effective date of this section in an employment, office or position of the State or of a political subdivision thereof, or an agency, board, commission, authority or instrumentality of the State or of a subdivision, pursuant to an appointment by the Governor that requires the advice and consent of the Senate, or pursuant to an appointment by the Governor to serve at the pleasure of the Governor only during his or her term of office. This paragraph shall not be deemed to include a person otherwise eligible for membership in the State Police Retirement System or the Judicial Retirement System.

     (3)   A person who commences service on or after the effective date of this section in an employment, office or position in a political subdivision of the State, or an agency, board, commission, authority or instrumentality of a subdivision, pursuant to an appointment by an elected public official or elected governing body, that requires the specific consent or approval of the elected governing body of the political subdivision that is substantially similar in nature to the advice and consent of the Senate for appointments by the Governor of the State as that similarity is determined by the elected governing body and set forth in an adopted ordinance or resolution, pursuant to guidelines or policy that shall be established by the Local Finance Board in the Department of Community Affairs or the Department of Education, as appropriate to the elected governing body. This paragraph shall not be deemed to include a person otherwise eligible for membership in the Teachers' Pension and Annuity Fund or the Police and Firemen's Retirement System, or a person who is employed or appointed in the regular or normal course of employment or appointment procedures and consented to or approved in a general or routine manner appropriate for and followed by the political subdivision, or the agency, board, commission, authority or instrumentality of a subdivision, or a person who holds a professional license or certificate to perform and is performing as a certified health officer, tax assessor, tax collector, municipal planner, chief financial officer, registered municipal clerk, construction code official, licensed uniform subcode inspector, qualified purchasing agent, or certified public works manager.

     (4)   A person who is granted a pension or retirement allowance under any pension fund or retirement system established under the laws of this State and elects to participate pursuant to section 1 of P.L.1977, c.171 (C.43:3C-3) upon being elected to public office.

     (5)   A member of the Teachers' Pension and Annuity Fund, Police and Firemen’s Retirement System, State Police Retirement System, or the Public Employees' Retirement System for whom compensation is defined as the amount of base or contractual salary equivalent to the annual maximum wage contribution base for Social Security, pursuant to the Federal Insurance Contributions Act, for contribution and benefit purposes [in either] of those retirement systems, for whom participation in this retirement program shall be with regard to any excess over the maximum compensation only.

     (6)   A person in employment, office or position for which the annual salary or remuneration is less, or the hours of work per week are fewer, than that which is required to become a member of the Teachers' Pension and Annuity Fund or the Public Employees' Retirement System, or to make contributions to those systems as a member on the basis of any such employment, office or position, after [the effective date of P.L.2008, c.89] November 1, 2008.

     (7) A person electing to participate pursuant to section 30 of P.L.  , c.   (C.    )(pending before the Legislature as this bill).

     b.    No person shall be eligible to participate in the retirement program with respect to any public employment, office, or position if:

     (1)   the base salary for that employment, office, or position is less than [$1,500] $5,000 per year;

     (2)   the person is, on the basis of service in that employment, office, or position, eligible for membership or enrolled as a member of another State or locally-administered pension fund or retirement system established under the laws of this State including the Alternate Benefit Program, except as otherwise specifically provided in subsection a. of this section;

     (3)   the person is receiving a benefit as a retiree from any other State or locally-administered pension fund or retirement system established under the laws of this State, except as provided in section 1 of P.L.1977, c.171 (C.43:3C-3); or

     (4)   the person is an officer or employee of a political subdivision of this State or of a board of education, or of any agency, authority or instrumentality thereof, who is ineligible for membership in the Public Employees' Retirement System pursuant to section 20 of P.L.2007, c.92 (C.43:15A-7.2).

     c.     [A person eligible and required to participate in the retirement program whose base salary is less than $5,000 may at the commencement of service in an employment, office or position irrevocably elect to waive participation with regard to that employment, office, or position by filing, at the time and on a form required by the division, a written waiver with the Division of Pensions and Benefits that waives all rights and benefits that would otherwise be provided by the retirement program.]

     A person eligible and required to participate in the retirement program pursuant to paragraph (5) of subsection a. of this section may elect to waive participation with regard to that employment, office, or position by filing, when first eligible, on a form required by the division, a written waiver with the Division of Pensions and Benefits that waives all rights and benefits that would otherwise be provided by the retirement program. Such a person may thereafter elect to participate in the retirement program by filing, on a form required by the division, a written election to participate in the retirement program and participation in the retirement program pursuant to such election shall commence on the January 1 next following the filing of the election to participate.

     d.    Service credited to a participant in the Defined Contribution Retirement Program shall not be recognized as service credit to determine eligibility for employer-paid health care benefits in retirement pursuant to P.L.1961, c.49 (C.52:14-17.25 et seq.), N.J.S.40A:10-16 et seq., P.L.1979, c.391 (C.18A:16-12 et al.) or any other law, rule or regulation.

(cf: P.L.2008, c.89, s.11)

 

     8.    N.J.S.18A:66-36 is amended to read as follows:

     18A:66-36.  Should a member of the Teachers' Pension and Annuity Fund, after having completed 10 years of service, be separated voluntarily or involuntarily from the service, before reaching service retirement age, and not by removal for conduct unbecoming a teacher or other just cause under the provisions of N.J.S.18A:28-4 to 18A:28-5 and 18A:28-9 to 18A:28-13 inclusive, such person may elect to receive, in lieu of the payment provided in N.J.S.18A:66-34:

     a.     The payments provided for in N.J.S.18A:66-37, if he so qualified under said section; or

     b.    A deferred retirement allowance beginning at age 60, or for a person who becomes a member of the retirement system on or after the effective date of P.L.2008, c.89 beginning at age 62, which shall be made up of an annuity derived from the member's accumulated deductions at the time of his severance from the service, and a pension in the amount which, when added to the member's annuity, will provide a total retirement allowance of 1/64 of [his] final compensation for each year of service credited as Class A service and 1/55 of [his] final compensation for each year of service credited as class B service, or for a person who becomes a member of the retirement system on or after the effective date of P.L.   , c.    (pending before the Legislature as this bill) 1/60 of final compensation for each year of service credited as class B service, calculated in accordance with N.J.S.18A:66-44, with optional privileges provided for in N.J.S.18A:66-47 if he exercises such optional privilege at least 30 days before his attainment of the normal retirement age; provided, that such election is communicated by such member to the retirement system in writing stating at what time subsequent to the execution and filing thereof he desires to be retired; and provided, further, that such member may later elect: (1) to receive the payments provided for in N.J.S.18A:66-37, if he had qualified under that section at the time of leaving service, except that in order to avail himself of the optional privileges pursuant to N.J.S.18A:66-47, he must exercise such optional privilege at least 30 days before the effective date of his retirement; or (2) to withdraw his accumulated deductions with interest as provided in N.J.S.18A:66-34.  If such member shall die before attaining service retirement age, then his accumulated deductions, plus regular interest after January 1, 1956, shall be paid in accordance with N.J.S.18A:66-38, and, in addition if such member shall die after attaining service retirement age and has not withdrawn his accumulated deductions, an amount equal to 3/16 of the compensation upon which contributions by the member to the annuity savings fund were based in the last year of creditable service shall be paid to such member's beneficiary.

     Any member who, having elected to receive a deferred retirement allowance, again becomes an employee covered by the retirement system while under the age of 60 or, if that person became a member of the retirement system on or after the effective date of P.L.2008, c.89, while under the age of 62, shall thereupon be reenrolled.  If he had discontinued his service for more than two consecutive years, subsequent contributions shall be at a rate applicable to the age resulting from the subtraction of his years of creditable service at the time of his last discontinuance of contributing membership from his age at the time of his return to service. He shall be credited with all service as a member standing to his credit at the time of his election to receive a deferred retirement allowance.

(cf: P.L.2008, c.89, s.19)

 

     9.    N.J.S.18A:66-37 is amended to read as follows:

     18A:66-37.  Should a member resign after having established 25 years of creditable service before reaching age 60, or before reaching the age of 62 if the person became a member of the retirement system on or after the effective date of P.L.2008, c.89, the member may elect "early retirement," provided, that such election is communicated by such member to the retirement system by filing a written application, duly attested, stating at what time subsequent to the execution and filing thereof the member desires to be retired. The member shall receive, in lieu of the payment provided in N.J.S.18A:66-34, an annuity which is the actuarial equivalent of the member's accumulated deductions and a pension in the amount which, when added to the member's annuity, will provide a total retirement allowance of 1/64 of the member's final compensation for each year of service credited as class A service and 1/55 of the member's final compensation for each year of service credited as class B service, or for a person who becomes a member of the retirement system on or after the effective date of P.L.  , c.   (pending before the Legislature as this bill) 1/60 of final compensation for each year of service credited as class B service, calculated in accordance with N.J.S.18A:66-44, reduced:

     (a)   by 1/4 of 1% for each month that the member lacks of being age 55; or

     (b)   for a person who becomes a member of the retirement system on or after July 1, 2007, by 1/4 of 1% for each month that the member lacks of being age 55 and by 1/12 of 1% for each month that the member lacks of being age 60 but over age 55; or

     (c)   for a person who becomes a member of the retirement system on or after the effective date of P.L.2008, c.89, by 1/4 of 1% for each month that the member lacks of being age 55 and by 1/12 of 1% for each month that the member lacks of being age 62 but over age 55; provided, however, that upon the receipt of proper proofs of the death of such a member there shall be paid to the member's beneficiary an amount equal to 3/16 of the compensation upon which contributions by the member to the annuity savings fund were based in the last year of creditable service or in the year of the member's highest contractual salary, whichever is higher.

     Subparagraph (b) or (c) of this section shall not apply to a person who at the time of enrollment in the retirement system on or after July 1, 2007 transfers service credit from another State-administered retirement system pursuant to N.J.S.18A:66-15.1, but shall apply to a former member of the retirement system who has been granted a retirement allowance and is reenrolled in the retirement system on or after July 1, 2007 pursuant to N.J.S.18A:66-53.2 after becoming employed again in a position that makes the person eligible to be a member of the retirement system.

     The board of trustees shall retire the member at the time specified or at such other time within one month after the date so specified as the board finds advisable.

(cf: P.L.2008, c.89, s.20)

 

     10.  N.J.S.18A:66-44 is amended to read as follows:

     18A:66-44.  A member, upon retirement for service, shall receive a retirement allowance consisting of:

     (a)   an annuity which shall be the actuarial equivalent of his accumulated deductions, together with interest after January 1, 1956, less any excess contributions as provided in N.J.S.18A:66-20; and

     (b)   a pension in the amount which, when added to the member's annuity, will provide a total retirement allowance of 1/64 of [his] final compensation for each year of service credited as class A service and 1/55 of [his] final compensation for each year of service credited as class B service, or for a person who becomes a member of the retirement system on or after the effective date of P.L.  , c.   (pending before the Legislature as this bill) 1/60 of final compensation for each year of service credited as class B service.

     Upon the receipt of proper proofs of the death of a member who has retired on a service retirement allowance, there shall be paid to the member's beneficiary, an amount equal to 3/16 of the compensation upon which contributions by the member to the annuity savings fund were based in the last year of creditable service or in the year of the member's highest contractual salary, whichever is higher.

(cf: P.L.2001, c.133, s.6)

 

     11.  Section 38 of P.L.1954, c.84 (C.43:15A-38) is amended to read as follows:

     38.  Should a member of the Public Employees' Retirement System, after having completed 10 years of service, be separated voluntarily or involuntarily from the service, before reaching service retirement age, and not by removal for cause on charges of misconduct or delinquency, such person may elect to receive:

     (a)   The payments provided for in section 41b. of this act, if he so qualifies under said section, or;

     (b)   A deferred retirement allowance, beginning at the retirement age, which  shall be made up of an annuity derived from the accumulated deductions standing  to the credit of the individual member's account in the annuity savings fund at  the time of his severance from the service together with regular interest, and  a pension which when added to the annuity will produce a total retirement  allowance of 1/64 of [his] final compensation for each year of service  credited as Class A service and 1/55 of [his] final compensation for each  year of service credited as Class B service, or for a person who becomes a member of the retirement system on or after the effective date of P.L.  , c.   (pending before the Legislature as this bill) 1/60 of final compensation for each year of service credited as Class B service, calculated in accordance with  section 48 of this act, with optional privileges provided for in section 50 of  this act if he exercises such optional privilege at least 30 days before his  attainment of the normal retirement age;  provided, that such election is  communicated by such member to the retirement system in writing stating at what time subsequent to the execution and filing thereof he desires to be retired; and provided further, that such member, as referred to in this subsection may  later elect:  (1) to receive the payments provided for in section 41b. of this act, if he had qualified under that section at the time of leaving service, except that in order to avail himself of the optional privileges pursuant to section 50, he must exercise such optional privilege at least 30 days before the effective date of his retirement; or (2) to withdraw his accumulated deductions with interest as provided in section 41a.  If such member shall die before attaining service retirement age then his accumulated deductions, plus regular interest, shall be paid in accordance with section 41c.; or if such member shall die after attaining service retirement age and has not withdrawn  his accumulated deductions, an amount equal to 3/16 of the compensation received by the member in the last year of creditable service shall be paid to such person, if living, as he shall have nominated by written designation duly executed and filed with the retirement system; otherwise to the executor or administrator of the member's estate.

(cf: P.L.2001, c.133, s.11)

 

     12.  Section 41 of P.L.1954, c.84 (C.43:15A-41) is amended to read as follows:

     41.  a. A member who withdraws from service or ceases to be an employee for any cause other than death or retirement shall, upon the filing of an application therefor, receive all of his accumulated deductions standing to the credit of his individual account in the annuity savings fund, plus regular interest, less any outstanding loan, except that for any period after June 30, 1944, the interest payable shall be such proportion of the interest determined at the regular rate of 2% per annum bears to the regular rate of interest, and except that no interest shall be payable in the case of a member who has less than three years of membership credit for which he has made contributions. He shall cease to be a member two years from the date he discontinued service as an eligible employee, or, if prior thereto, upon payment to him of his accumulated deductions. If any such person or member shall die before withdrawing or before endorsing the check constituting the return of his accumulated deductions, such deductions shall be paid to the member's beneficiary. No member shall be entitled to withdraw the amounts contributed by his employer covering his military leave unless he shall have returned to the payroll and contributed to the retirement system for a period of 90 days.

     b.    Should a member resign after having established 25 years of creditable service before reaching age 60, or before reaching age 62 if the person became a member of the retirement system on or after the effective date of P.L.2008, c.89, he may elect "early retirement," provided, that such election is communicated by such member to the retirement system by filing a written application, duly attested, stating at what time subsequent to the execution and filing thereof he desires to be retired. He shall receive, in lieu of the payment provided in subsection a. of this section, an annuity which is the actuarial equivalent of his accumulated deductions together with regular interest, and a pension in the amount which, when added to the member's annuity, will provide a total retirement allowance of 1/64 of [his] final compensation for each year of service credited as Class A service and 1/55 of [his] final compensation for each year of service credited as Class B service, or for a person who becomes a member of the retirement system on or after the effective date of P.L.  , c.   (pending before the Legislature as this bill) 1/60 of final compensation for each year of service credited as Class B service, calculated in accordance with section 48 (C.43:15A-48) of this act, reduced:

     (a)   by 1/4 of 1% for each month that the member lacks of being age 55; or

     (b)   for a person who becomes a member of the retirement system on or after July 1, 2007, by 1/4 of 1% for each month that the member lacks of being age 55 and by 1/12 of 1% for each month that the member lacks of being age 60 but over age 55; or

     (c)   for a person who becomes a member of the retirement system on or after the effective date of P.L.2008, c.89, by 1/4 of 1% for each month that the member lacks of being age 55 and by 1/12 of 1% for each month that the member lacks of being age 62 but over age 55; provided, however, that upon the receipt of proper proofs of the death of such a member there shall be paid to his beneficiary an amount equal to three-sixteenths of the compensation upon which contributions by the member to the annuity savings fund were based in the last year of creditable service.

     Paragraph (b) or (c) of this subsection shall not apply to a person who at the time of enrollment in the retirement system on or after July 1, 2007 transfers service credit from another State-administered retirement system pursuant to section 14 of P.L.1954, c.84 (C.43:15A-14), but shall apply to a former member of the retirement system who has been granted a retirement allowance and is reenrolled in the retirement system on or after July 1, 2007 pursuant to section 27 of P.L.1966, c.217 (C.43:15A-57.2) after becoming employed again in a position that makes the person eligible to be a member of the retirement system.

     The board of trustees shall retire him at the time specified or at such other time within one month after the date so specified as the board finds advisable.

     c.     Upon the receipt of proper proofs of the death of a member in service on account of which no accidental death benefit is payable under section 49 there shall be paid to such member's beneficiary:

     (1)   The member's accumulated deductions at the time of death together with regular interest; and

     (2)   An amount equal to one and one-half times the compensation upon which contributions by the member to the annuity savings fund were based in the last year of creditable service.

(cf: P.L.2008, c.89, s.23)

 

     13.  Section 48 of P.L.1954, c.84 (C.43:15A-48) is amended to read as follows:

     48.  A member, upon retirement for service, shall receive a retirement allowance consisting of:

     a.     An annuity which shall be the actuarial equivalent of his accumulated deductions together with regular interest;  and

     b.    A pension in the amount which, when added to the member's annuity, will provide a total retirement allowance of 1/64 of [his] final compensation for each year of service credited as Class A service and 1/55 of [his] final compensation for each year of service credited as Class B service, or for a person who becomes a member of the retirement system on or after the effective date of P.L.  , c.   (pending before the Legislature as this bill) 1/60 of final compensation for each year of service credited as Class B service.

     c.     Upon the receipt of proper proofs of the death of a member who has retired on a service retirement allowance, there shall be paid to the member's beneficiary, an amount equal to 3/16 of the compensation upon which contributions by the member to the annuity savings fund were based in the last year of creditable service.

(cf: P.L.2001, c.133, s.13)

 

     14.  Section 7 of P.L.2007, c.92 (C.43:15C-7) is amended to read as follows:

     7.    The benefit under a group contract or contracts providing life insurance shall be in an amount equal to one and one-half the base annual salary of the participant in the retirement program, except that in the event of death after retirement, the amount payable shall equal 3/16 of the participant's base annual salary. "Base annual salary" means the base salary upon which contributions by the participant and the participant's employer to the retirement program were based during the last year of creditable service.

     For purposes of this section, a participant shall be deemed to be in service and covered by the group life insurance for a period of official leave of absence without pay when such leave is due to illness or any reason other than illness, with such period to be determined by the Division of Pensions and Benefits, if satisfactory evidence is presented to the division of such official leave of absence. A participant shall be deemed to be on an official leave of absence only if the leave is formally approved by the employer prior to the time the leave commenced and timely notice is filed by the employer with the division. If timely notice is not filed, the employer shall be responsible for the payment of any benefits pursuant to this section if the participant was otherwise eligible for such benefits.

     In the event of the death of a participant in active service in the first year of participation as a result of an accident met in the actual performance of duty at some definite time and place, the death benefit payable pursuant to this section shall be computed at the annual rate of base salary.

     No beneficiary of a retired participant shall be entitled to receive the death benefits payable in the event of death after retirement pursuant to this section unless the participant either: had at least 25 years of credited participation in the retirement program established pursuant to this act; or had at least 10 years of such credited participation and had attained 60 years of age and was an actively employed participant in the program in the year immediately preceding initial receipt of a retirement annuity. For a member who is a participant pursuant to paragraph (5) of subsection a. of section 2 of P.L.2007, c.92 (C.43:15C-2) as amended by section 12 of P.L.2007, c.103 and section 7 of P.L.     , c.     (pending before the Legislature as this bill), service credit in the Teachers' Pension and Annuity Fund, Police and Firemen’s Retirement System, State Police Retirement System, or the Public Employees' Retirement System shall also be considered in determining if the participant met the requirements of this paragraph.

(cf: P.L.2007, c.103, s.13)

 

     15.  Section 11 of P.L.2007, c.92 (C.43:15C-11) is amended to read as follows:

     11.  Any person entitled to become a participant in the retirement program shall not be allowed any of the group life insurance and disability benefits if on the date of filing an application for participation the person is 60 or more years of age, or if the person makes application for participation in the retirement program beyond the year after first becoming eligible for participation, regardless of age, unless the participant furnishes satisfactory evidence of insurability and on the effective date of participation is actively at work and performing all regular duties at the customary place of employment.

     The effective date of coverage for such benefits shall be the first day of the month which immediately follows the date when such evidence is determined to be satisfactory.

     Such evidence of insurability shall not be required of any person enrolling in the retirement program upon transfer from another State-administered retirement system, if such retirement system provided a benefit of a similar nature and the transferring person was covered by such a benefit at the time of the transfer. If such transferring person was not covered by such a benefit at the time of the transfer, the person may be allowed the benefit under the group policy or policies; however, any such person shall furnish satisfactory evidence of insurability if he had been unable or failed to give such evidence as a member of the retirement system from which the person transferred. Such evidence of insurability shall not be required of any member of the Teachers' Pension and Annuity Fund, Police and Firemen’s Retirement System, State Police Retirement System, or the Public Employees' Retirement System who is enrolling in the retirement program pursuant to paragraph (5) of subsection a. of section 2 of P.L.2007, c.92 (C.43:15C-2) as amended by section 12 of P.L.2007, c.103 and section 7 of P.L.   , c.     (pending before the Legislature as this bill), if such retirement system provides a benefit of a similar nature and the participant is covered by such a benefit at the time of enrollment in the program.

     Any person who must furnish satisfactory evidence of insurability under the provisions of this section and who ceases to be a participant in the retirement program without such evidence having been given shall continue to be subject to the same requirement if the person subsequently becomes a participant.

(cf:  P.L.2007, c.103, s.14)

 

     16.  Section 13 of P.L.2007, c.92 (C.43:15C-13) is amended to read as follows:

     13.  The disability benefit coverage provided under a group policy or policies shall provide a monthly income if the participant becomes totally disabled from occupational or nonoccupational causes for a period of at least six consecutive months following the effective date of the coverage. The monthly disability benefit may be paid by the insurance company so long as the participant remains disabled up to the seventieth birthday, provided the disability commenced prior to the sixtieth birthday. The benefit shall terminate when the participant is no longer considered totally disabled or begins to receive retirement benefits.

     The participant shall be considered totally disabled if the participant is unable to perform each duty of the participant's occupation and is under the regular care of a physician. After the 24 months following the commencement of such disability benefit payments, the participant shall be unable to engage in any gainful occupation for which the participant is reasonably fitted by education, training or experience. Total disability shall not be considered to exist if the participant is gainfully employed. Following an agreement with the insurance company and the policyholder, the participant may continue to receive disability benefits for a limited time while performing some type of work. During the period of rehabilitation, the monthly benefit shall be the regular payment less 80% of the participant's earnings from such rehabilitative position.

     A participant shall be deemed to be in service and covered by the disability benefit insurance provisions for a period of no more than six months while on official leave of absence without pay if satisfactory evidence is presented to the Division of Pensions and Benefits that such leave of absence without pay is due to illness and that the participant was not actively engaged in any gainful occupation during such period of leave of absence without pay.

     Disability benefit insurance provisions of the group policy or policies shall not cover disability resulting from or contributed to by pregnancy, act of war, intentionally self-inflicted injury, or attempted suicide whether or not sane. For purposes of such disability benefit coverage, the participant shall not be considered to be disabled while the participant is imprisoned or while outside the United States, its territories or possessions, or Canada.

     If the participant has recovered from the disability for which the member had received benefits and again becomes totally disabled while insured, the later disability shall be regarded as a continuation of the prior one unless the participant has returned to full-time covered employment for at least six months. If the later absence is due to an unrelated cause and the participant had returned to full-time work, it shall be considered a new disability. The disability benefit insurance cannot be converted to an individual policy.

     No participant shall be covered by the disability benefit provision of the group policy or policies except upon the completion of one year of full-time continuous employment in a position eligible for participation in the Defined Contribution Retirement Program. For a member who is a participant pursuant to paragraph (5) of subsection a. of section 2 of P.L.2007, c.92 (C.43:15C-2) as amended by section 12 of P.L.2007, c.103 and section 7 of P.L.    , c.     (pending before the Legislature as this bill), completion of one year of full-time continuous employment in a position eligible for membership in the Teachers' Pension and Annuity Fund, Police and Firemen’s Retirement System, State Police Retirement System, or the Public Employees' Retirement System shall also be considered in determining if the participant met the requirements of this paragraph.

(cf: P.L.2007, c.103, s.15)

 

     17.  Section 14 of P.L.2007, c.92 (C.43:15C-14) is amended to read as follows:

     14.  The disability benefit provided under a group policy or policies shall be in an amount equal to 60% of the participant's base monthly salary, reduced by periodic benefits to which the participant may be entitled during the period of total disability. For a member who is a participant pursuant to paragraph (5) of subsection a. of section 2 of P.L.2007, c.92 (C.43:15C-2) as amended by section 12 of P.L.2007, c.103 and section 7 of P.L.   , c.     (pending before the Legislature as this bill), base monthly salary for this disability benefit shall mean the base or contractual salary upon which contributions were made to the Teachers' Pension and Annuity Fund, Police and Firemen’s Retirement System, State Police Retirement System, or the Public Employees' Retirement System and to this program.

     The periodic benefit by which the monthly disability benefit may be reduced shall include salary or wages, retirement benefits or benefits from any source for which the State or other public employer has paid any part of the cost or made payroll deductions, Social Security disability or other benefits, including dependents' benefits, and benefits paid by Social Security at the option of the participant before the age of 65, but not including any increase in Social Security benefits enacted after the disability benefit under such group policy or policies has commenced, and any other periodic benefits provided by law except on account of military service.

     When a participant begins to receive a disability benefit under such group policy or policies, the insurance company shall pay an amount equal to the employee contribution which would have been required of the participant and deducted from the participant's base salary in order to meet the participant's obligation for the program. Such amount shall be paid by the insurance company without reduction by any other periodic benefit which the participant is eligible to receive. Such amount shall be paid by the insurance company to the insurer or insurers for the participant's retirement annuity.

     Premiums for such disability coverage shall be paid from a special fund, hereby created, called the "Defined Contribution Retirement Program Disability Premium Fund." The State Treasurer shall estimate annually the amount that will be required for premiums for such benefits for the ensuing fiscal year and shall certify such amounts that shall be applied to the total State and other employer contributions due on behalf of the participants in the retirement program from the State and other employers, depositing such amounts in the premium fund. Additionally, employers will pay their share of the administrative costs of the program. The intervals for all payments and the allocation of administrative costs shall be determined by the Division of Pensions and Benefits including due dates and penalties for noncompliance.

(cf:  P.L.2007, c.103, s.16)

 

     18.  Section 4 of P.L.1944, c.255 (C.43:16A-4) is amended to read as follows:

     4.    a.  Only service as a policeman or fireman paid for by an employer, which was rendered by a member since that member's enrollment, or since that member's last enrollment in case of a break in service, plus service, if any, covered by a prior service liability, shall be considered as creditable service for the purposes of this act.  A member may purchase credit for temporary service as a policeman or fireman, or as the holder of a title which, following the termination of that temporary service, became covered by the provisions of P.L.1944, c.255 (C.43:16A-1 et seq.), if that temporary service shall have resulted, without interruption, in a valid permanent or probational appointment as a policeman or fireman or to a position, the title of which became covered by the retirement system following the member's appointment thereto.  The purchase shall be made in the same manner and be subject to the same terms and conditions provided for the purchase of previous membership service by section 1 of P.L.1973, c.63 (C.43:16A-11.4).

     b.    In the case of a member for whom compensation is defined in paragraph (b) of subsection (26) of section 1 of P.L.1944, c.255 (C.43:16A-1), the retirement system shall credit the member with the time of all service rendered by the member during the part of any year that the member was a participant of the Defined Contribution Retirement Program, pursuant to paragraph (5) of subsection a. of section 2 of P.L.2007, c.92 (C.43:15C-2) as amended by section 7 of P.L.   , c.    (pending before the Legislature as this bill), and making contributions to that program.

(cf: P.L.1991, c.138, s.11)

 

     19.  Section 6 of P.L.1965, c.89 (C.53:5A-6) is amended to read as follows;

     6.    a. Service as a full-time commissioned officer, noncommissioned officer or trooper rendered as a member, and service credit which was transferred from the former "State Police Retirement and Benevolent Fund," shall, if the required contributions are made by the State and the member, be considered as creditable service.  In addition, service as a chief inspector, deputy chief inspector, inspector and special inspector in the Division of Motor Vehicles or equivalent Civil Service classifications, including Chief, Highway Patrol Bureau; Assistant  Chief (Major), Highway Patrol Bureau; Captain, Highway Patrol Bureau; Lieutenant, Highway Patrol Bureau; Sergeant, Highway Patrol Bureau; and Officer, Highway Patrol Bureau, and service credit may be transferred from the Police and Firemen's Retirement System and the Public Employees' Retirement System and shall, if the required contributions are made by the State and the member, be considered as creditable service.  In addition, service as a member of the State Capitol Police Force, or as a Supervising Inspector, Principal Inspector, Senior Inspector, or Inspector Recruit in the Alcoholic Beverage Control Enforcement Bureau or as a Principal Marine Law Enforcement Officer, Senior Marine Law Enforcement Officer, or Marine Law Enforcement Officer in the Bureau of Marine Law Enforcement and service credit transferred from the Police and Firemen's Retirement System or the Public Employees' Retirement System shall, if the required contributions are made by the State and the member, be considered as creditable service.

     A member on suspension shall be considered in service for the period of the suspension, but the period of suspension shall not be considered as creditable service unless the member receives salary therefor.

     If an employee's membership has been terminated and he is re-enrolled as a member of the retirement system, he may purchase credit for all of his previous membership service by paying into the annuity savings fund the amount required by applying the factor, supplied by the actuary, as being applicable to his age at the time of the purchase, to his salary at that time.  Such purchase may be made in regular installments equal to at least 1/2 the normal contribution to the retirement system, over a maximum period of 10 years.  In order to give to such person the same credit for such service as he had at the time of termination, his pension credit shall be restored as it was at the time of his termination, upon the completion of one year of membership after his election to make the purchase and the payment of at least 1/2 the total amount due, except that in the case of retirement pursuant to sections 8, 27 and 28 of chapter 89 of the laws of 1965, the credit granted for the service being purchased shall be in direct proportion as the amount paid bears to the total amount of the arrearage obligation.

     b.    Any member of the retirement system, who, prior to becoming a member, had established service credits in another retirement system supported in whole or in part by the State, or who had rendered service to the State prior to becoming a member, or had purchased service credits while in the Police and Firemen's Retirement System or the Public Employees' Retirement System, while serving as chief inspector, deputy chief inspector, inspector or special inspector in the Enforcement Bureau, Division of Motor Vehicles, or as a member of the State Capitol Police Force,  or as a Supervising Inspector, Principal Inspector, Senior Inspector, Inspector, or Inspector Recruit in the Alcoholic Beverage Control Enforcement Bureau, or as a Principal Marine Law Enforcement Officer, Senior Marine Law Enforcement Officer, or Marine Law Enforcement Officer in the Bureau of Marine Law Enforcement, for which he desires to  establish credit in this retirement system, shall be permitted to purchase such credit or to transfer such previously purchased credit.  If such credit is established and except as provided in subsection f., it shall be included in the computation of a retirement allowance on the basis of 1% of final compensation for each year of such service credit.

     c.     Not more than one year shall be credited for all service in a calendar year.

     d.    In computing service, time during which a member was absent on an official leave without pay shall be credited if such leave was for a period of:  (1) less than three months; or (2) up to a maximum of two years, if the leave was due to the member's personal illness and the period of leave is allowed for retirement purposes within one year following his return to service after the termination of such leave.

     e.     The method of computation and the terms of the purchase of service permitted by subsections b. and d. of this section shall be identical to those stipulated for the purchase of previous membership service by members of the system, as provided by subsection a. of this section.

     f.     For any person who becomes a member of the retirement system pursuant to P.L.1997, c.19 (C.53:1-8.2 et al.) and is required to retire pursuant to section 8 of P.L.1965, c.89 (C.53:5A-8) with less than 20 years of creditable service in the retirement system, an amount of service credit transferred or purchased pursuant to subsection b. which when added to the amount of creditable service in the retirement system equals 20 years shall be considered creditable service in the retirement system.  Transferred or purchased service credit in excess of the amount necessary to provide 20 years of creditable service in the retirement system shall be included in the computation of a retirement allowance on the basis provided in subsection b.

     g.     In the case of a member for whom compensation is defined in paragraph (2) of subsection u. of section 3 of P.L.1965, c.89 (C.53:5A-3), the retirement system shall credit the member with the time of all service rendered by the member during the part of any year that the member was a participant of the Defined Contribution Retirement Program, pursuant to paragraph (5) of subsection a. of section 2 of P.L.2007, c.92 (C.43:15C-2) as amended by section 7 of P.L.   , c.    (pending before the Legislature as this bill), and making contributions to that program.

(cf:  P.L.1997, c.19, s.8)

 

     20.  N.J.S.18A:66-2 is amended to read as follows:

     18A:66-2.  As used in this article:

     a.     "Accumulated deductions" means the sum of all the amounts, deducted from the compensation of a member or contributed by or in behalf of the member, including interest credited to January 1, 1956, standing to the credit of the member's individual account in the annuity savings fund.

     b.    "Annuity" means payments for life derived from the accumulated deductions of a member as provided in this article.

     c.     "Beneficiary" means any person receiving a retirement allowance or other benefit as provided in this article.

     d. (1) "Compensation" means the contractual salary, for services as a teacher as defined in this article, which is in accordance with established salary policies of the member's employer for all employees in the same position but shall not include individual salary adjustments which are granted primarily in anticipation of the member's retirement or additional remuneration for performing temporary or extracurricular duties beyond the regular school day or the regular school year.

     (2)   In the case of a person who becomes a member of the retirement system on or after July 1, 2007, "compensation" means the amount of the contractual salary equivalent to the annual maximum wage contribution base for Social Security, pursuant to the Federal Insurance Contributions Act, for services as a teacher as defined in this article, which is in accordance with established salary policies of the member's employer for all employees in the same position but shall not include individual salary adjustments which are granted primarily in anticipation of the member's retirement or additional remuneration for performing temporary or extracurricular duties beyond the regular school day or the regular school year. This paragraph shall not apply to a person who at the time of enrollment in the retirement system on or after July 1, 2007 transfers service credit from another State-administered retirement system pursuant to N.J.S.18A:66-15.1, but shall apply to a former member of the retirement system who has been granted a retirement allowance and is reenrolled in the retirement system on or after July 1, 2007 pursuant to N.J.S.18A:66-53.2 after becoming employed again in a position that makes the person eligible to be a member of the retirement system.

     For the period of July 1, 2009 through June 30, 2011, "contractual salary" for State employees shall include wage increases under a collective negotiations agreement notwithstanding that, by amendment to that collective negotiations agreement, the effective date of the contractual increase has been deferred.  For the purpose of this paragraph, "State employee" means an employee in the Executive Branch of State government of New Jersey.

     e.     "Employer" means the State, the board of education or any educational institution or agency of or within the State by which a teacher is paid.

     f.     (1)  "Final compensation" means the average annual compensation for which contributions are made for the three years of creditable service in New Jersey immediately preceding the member's retirement or death, or it shall mean the average annual compensation for New Jersey service for which contributions are made during any three fiscal years of his or her membership providing the largest possible benefit to the member or the member's beneficiary.

     (2)   In the case of a person who becomes a member of the retirement system on or after the effective date of P.L.   , c.    (pending before the Legislature as this bill), “final compensation” means the average annual compensation for which contributions are made for the five years of creditable service in New Jersey immediately preceding the member's retirement or death, or it shall mean the average annual compensation for New Jersey service for which contributions are made during any five fiscal years of his or her membership providing the largest possible benefit to the member or the member's beneficiary.

     g.     "Fiscal year" means any year commencing with July 1, and ending with June 30, next following.

     h.     "Pension" means payments for life derived from appropriations made by the State or employers to the Teachers' Pension and Annuity Fund.

     i.      "Annuity reserve" means the present value of all payments to be made on account of any annuity or benefit in lieu of an annuity, granted under the provisions of this article, computed on the basis of such mortality tables recommended by the actuary as the board of trustees adopts, with regular interest.

     j.     "Pension reserve" means the present value of all payments to be made on account of any pension or benefit in lieu of a pension granted to a member from the Teachers' Pension and Annuity Fund, computed on the basis of such mortality tables recommended by the actuary as the board of trustees adopts, with regular interest.

     k.    "Present-entrant" means any member of the Teachers' Pension and Annuity Fund who had established status as a "present-entrant member" of said fund prior to January 1, 1956.

     l.      "Rate of contribution initially certified" means the rate of contribution certified by the retirement system in accordance with N.J.S.18A:66-29.

     m.    "Regular interest" shall mean interest as determined by the State Treasurer, after consultation with the Directors of the Divisions of Investment and Pensions, the board of trustees and the actuary. It shall bear a reasonable relationship to the percentage rate of earnings on investments based on the market value of assets but shall not exceed the assumed percentage rate of increase applied to salaries plus 3%, provided however that the board of trustees shall not set the average percentage rate of increase applied to salaries below 6%.

     n.     "Retirement allowance" means the pension plus the annuity.

     o.    "School service" means any service as a "teacher" as defined in this section.

     p.    "Teacher" means any regular teacher, special teacher, helping teacher, teacher clerk, principal, vice-principal, supervisor, supervising principal, director, superintendent, city superintendent, assistant city superintendent, county superintendent, State Commissioner or Assistant Commissioner of Education, members of the State Department of Education who are certificated, unclassified professional staff and other members of the teaching or professional staff of any class, public school, high school, normal school, model school, training school, vocational school, truant reformatory school, or parental school, and of any and all classes or schools within the State conducted under the order and superintendence, and wholly or partly at the expense of the State Board of Education, of a duly elected or appointed board of education, board of school directors, or board of trustees of the State or of any school district or normal school district thereof, and any persons under contract or engagement to perform one or more of these functions. It shall also mean any person who serves, while on an approved leave of absence from regular duties as a teacher, as an officer of a local, county or State labor organization which represents, or is affiliated with an organization which represents, teachers as defined in this subsection. No person shall be deemed a teacher within the meaning of this article who is a substitute teacher. In all cases of doubt the board of trustees shall determine whether any person is a teacher as defined in this article.

     q.    "Teachers' Pension and Annuity Fund," hereinafter referred to as the "retirement system" or "system," is the corporate name of the arrangement for the payment of retirement allowances and other benefits under the provisions of this article, including the several funds placed under said system. By that name all its business shall be transacted, its funds invested, warrants for money drawn, and payments made and all of its cash and securities and other property held.

     r.     "Veteran" means any honorably discharged officer, soldier, sailor, airman, marine or nurse who served in any Army, Air Force or Navy of the Allies of the United States in World War I between July 14, 1914, and November 11, 1918, or who served in any Army, Air Force or Navy of the Allies of the United States in World War II, between September 1, 1939, and September 2, 1945, and who was inducted into such service through voluntary enlistment, and was a citizen of the United States at the time of such enlistment, and who did not, during or by reason of such service, renounce or lose United States citizenship, and any officer, soldier, sailor, marine, airman, nurse or army field clerk who has served in the active military or naval service of the United States and has or shall be discharged or released therefrom under conditions other than dishonorable, in any of the following wars, uprisings, insurrections, expeditions or emergencies, and who has presented to the retirement system evidence of such record of service in form and content satisfactory to said retirement system:

     (1)   The Indian wars and uprisings during any of the periods recognized by the War Department of the United States as periods of active hostility;

     (2)   The Spanish-American War between April 20, 1898, and April 11, 1899;

     (3)   The Philippine insurrections and expeditions during the periods recognized by the War Department of the United States as of active hostility from February 4, 1899, to the end of 1913;

     (4)   The Peking relief expedition between June 20, 1900, and May 27, 1902;

     (5)   The army of Cuban occupation between July 18, 1898, and May 20, 1902;

     (6)   The army of Cuban pacification between October 6, 1906, and April 1, 1909;

     (7)   The Mexican punitive expedition between March 14, 1916, and February 7, 1917;

     (8)   The Mexican border patrol, having actually participated in engagements against Mexicans between April 12, 1911, and June 16, 1919;

     (9)   World War I, between April 6, 1917, and November 11, 1918;

     (10) World War II, between September 16, 1940, and December 31, 1946, who shall have served at least 90 days in such active service, exclusive of any period of assignment (1) for a course of education or training under the Army Specialized Training Program or the Navy College Training Program, which course was a continuation of a civilian course and was pursued to completion, or (2) as a cadet or midshipman at one of the service academies, any part of which 90 days was served between said dates; provided that any person receiving an actual service-incurred injury or disability shall be classed as a veteran, whether or not that person has completed the 90-day service as herein provided;

     (11) Korean conflict on or after June 23, 1950, and on or prior to January 31, 1955, who shall have served at least 90 days in such active service, exclusive of any period of assignment (1) for a course of education or training under the Army Specialized Training Program or the Navy College Training Program, which course was a continuation of a civilian course and was pursued to completion, or (2) as a cadet or midshipman at one of the service academies, any part of which 90 days was served between said dates; provided that any person receiving an actual service-incurred injury or disability shall be classed as a veteran, whether or not that person has completed the 90-day service as herein provided; and provided further that any member classed as a veteran pursuant to this subsection prior to August 1, 1966, shall continue to be classed as a veteran, whether or not that person completed the 90-day service between said dates as herein provided;

     (12) Lebanon crisis, on or after July 1, 1958, who has served in Lebanon or on board any ship actively engaged in patrolling the territorial waters of that nation for a period, continuous or in the aggregate, of at least 14 days commencing on or before November 1, 1958 or the date of termination of that conflict, as proclaimed by the President of the United States or Congress, whichever date of termination is the latest, in such active service; provided, that any person receiving an actual service-incurred injury or disability shall be classed as a veteran whether or not that person has completed the 14 days' service as herein provided;

     (13) Vietnam conflict, on or after December 31, 1960, and on or prior to May 7, 1975, who shall have served at least 90 days in such active service, exclusive of any period of assignment (1) for a course of education or training under the Army Specialized Training Program or the Navy College Training Program, which course was a continuation of a civilian course and was pursued to completion, or (2) as a cadet or midshipman at one of the service academies, any part of which 90 days was served between said dates; and exclusive of any service performed pursuant to the provisions of section 511(d) of Title 10, United States Code, pursuant to an enlistment in the Army National Guard or as a reserve for service in the Army Reserve, Naval Reserve, Air Force Reserve, Marine Corps Reserve, or Coast Guard Reserve; provided that any person receiving an actual service-incurred injury or disability shall be classed as a veteran, whether or not that person has completed the 90-day service as herein provided;

     (14) Lebanon peacekeeping mission, on or after September 26, 1982, who has served in Lebanon or on board any ship actively engaged in patrolling the territorial waters of that nation for a period, continuous or in the aggregate, of at least 14 days commencing on or before December 1, 1987 or the date of termination of that mission, as proclaimed by the President of the United States or Congress, whichever date of termination is the latest, in such active service; provided, that any person receiving an actual service-incurred injury or disability shall be classed as a veteran whether or not that person has completed the 14 days' service as herein provided;

     (15) Grenada peacekeeping mission, on or after October 23, 1983, who has served in Grenada or on board any ship actively engaged in patrolling the territorial waters of that nation for a period, continuous or in the aggregate, of at least 14 days commencing on or before November 21, 1983 or the date of termination of that mission, as proclaimed by the President of the United States or Congress, whichever date of termination is the latest, in such active service; provided, that any person receiving an actual service-incurred injury or disability shall be classed as a veteran whether or not that person has completed the 14 days' service as herein provided;

     (16) Panama peacekeeping mission, on or after December 20, 1989 or the date of inception of that mission, as proclaimed by the President of the United States or Congress, whichever date of inception is earliest, who has served in Panama or on board any ship actively engaged in patrolling the territorial waters of that nation for a period, continuous or in the aggregate, of at least 14 days commencing on or before January 31, 1990 or the date of termination of that mission, as proclaimed by the President of the United States or Congress, whichever date of termination is the latest, in such active service; provided, that any person receiving an actual service-incurred injury or disability shall be classed as a veteran whether or not that person has completed the 14 days' service as herein provided;

     (17) Operation "Desert Shield/Desert Storm" mission in the Arabian peninsula and the Persian Gulf, on or after August 2, 1990 or the date of inception of that operation, as proclaimed by the President of the United States or Congress, whichever date of inception is earliest, who has served in the Arabian peninsula or on board any ship actively engaged in patrolling the Persian Gulf for a period, continuous or in the aggregate, of at least 14 days commencing on or before the date of termination of that mission, as proclaimed by the President of the United States or Congress, whichever date of termination is the latest, in such active service; provided, that any person receiving an actual service-incurred injury or disability shall be classed as a veteran whether or not that person has completed the 14 days' service as herein provided;

     (18) Operation Northern Watch and Operation Southern Watch, on or after August 27, 1992, or the date of inception of that operation, as proclaimed by the President of the United States, Congress or United States Secretary of Defense, whichever date of inception is earliest, who served in the theater of operation, including in the Arabian peninsula and the Persian Gulf, and in direct support of that operation for a period, continuously or in the aggregate, of at least 14 days in such active service, commencing on or before the date of termination of the operation, as proclaimed by the President of the United States, Congress or United States Secretary of Defense, whichever date of termination is latest; provided, that any person receiving an actual service-incurred injury or disability while engaged in such service shall be classed as a veteran whether or not that person has completed the 14 days' service as herein provided;

     (19) Operation "Restore Hope" in Somalia, on or after December 5, 1992, or the date of inception of that operation as proclaimed by the President of the United States or Congress, whichever date is earliest, who has served in Somalia or on board any ship actively engaged in patrolling the territorial waters of that nation for a period, continuously or in the aggregate, of at least 14 days in such active service commencing on or before March 31, 1994; provided that any person receiving an actual service-incurred injury or disability shall be classed as a veteran whether or not that person has completed the 14-day service as herein provided;

     (20) Operations "Joint Endeavor" and "Joint Guard" in the Republic of Bosnia and Herzegovina, on or after November 20, 1995, who served in such active service in direct support of one or both of the operations for at least 14 days, continuously or in the aggregate, commencing on or before June 20, 1998, and (1) was deployed in that nation or in another area in the region, or (2) was on board a United States naval vessel operating in the Adriatic Sea, or (3) operated in airspace above the Republic of Bosnia and Herzegovina; provided that any person receiving an actual service-incurred injury or disability shall be classed as a veteran whether or not that person completed the 14-day service requirement;

     (21) Operation "Enduring Freedom", on or after September 11, 2001, who served in a theater of operation and in direct support of that operation for a period, continuously or in the aggregate, of at least 14 days in such active service commencing on or before the date the President of the United States or the United States Secretary of Defense designates as the termination date of that operation; provided, that any person receiving an actual service-incurred injury or disability while engaged in such service shall be classed as a veteran whether or not that person has completed the 14 days' service as herein provided; and

     (22) Operation "Iraqi Freedom", on or after the date the President of the United States or the United States Secretary of Defense designates as the inception date of that operation, who served in Iraq or in another area in the region in direct support of that operation for a period, continuously or in the aggregate, of at least 14 days in such active service commencing on or before the date the President of the United States or the United States Secretary of Defense designates as the termination date of that operation; provided, that any person receiving an actual service-incurred injury or disability while engaged in such service shall be classed as a veteran whether or not that person has completed the 14 days' service as herein provided.

     "Veteran" also means any honorably discharged member of the American Merchant Marine who served during World War II and is declared by the United States Department of Defense to be eligible for federal veterans' benefits.

     s.     "Child" means a deceased member's unmarried child either (a) under the age of 18 or (b) of any age who, at the time of the member's death, is disabled because of mental retardation or physical incapacity, is unable to do any substantial, gainful work because of the impairment and the impairment has lasted or can be expected to last for a continuous period of not less than 12 months, as affirmed by the medical board.

     t.     (1) "Widower," for employees of the State, means the man to whom a member was married, or a domestic partner as defined in section 3 of P.L.2003, c.246 (C.26:8A-3), at least five years before the date of her death and to whom she continued to be married or a domestic partner until the date of her death and who was receiving at least one-half of his support from the member in the 12-month period immediately preceding the member's death or the accident which was the direct cause of the member's death. The dependency of such a widower will be considered terminated by marriage of, or establishment of a domestic partnership by, the widower subsequent to the death of the member. In the event of the payment of an accidental death benefit, the five-year qualification shall be waived.

     (2)   Subject to the provisions of paragraph (3) of this subsection, "widower," for employees of public employers other than the State, means the man to whom a member was married at least five years before the date of her death and to whom she continued to be married until the date of her death and who was receiving at least one-half of his support from the member in the 12-month period immediately preceding the member's death or the accident which was the direct cause of the member's death. The dependency of such a widower shall be considered terminated by marriage of the widower subsequent to the death of the member. In the event of the payment of an accidental death benefit, the five-year qualification shall be waived.

     (3)   A public employer other than the State may adopt a resolution providing that the term "widower" as defined in paragraph (2) of this subsection shall include domestic partners as provided in paragraph (1) of this subsection.

     u.     (1) "Widow," for employees of the State, means the woman to whom a member was married, or a domestic partner as defined in section 3 of P.L.2003, c.246 (C.26:8A-3), at least five years before the date of his death and to whom he continued to be married or a domestic partner until the date of his death and who was receiving at least one-half of her support from the member in the 12-month period immediately preceding the member's death or the accident which was the direct cause of the member's death. The dependency of such a widow will be considered terminated by the marriage of, or establishment of a domestic partnership by, the widow subsequent to the member's death. In the event of the payment of an accidental death benefit, the five-year qualification shall be waived.

     (2)   Subject to the provisions of paragraph (3) of this subsection, "widow," for employees of public employers other than the State, means the woman to whom a member was married at least five years before the date of his death and to whom he continued to be married until the date of his death and who was receiving at least one-half of her support from the member in the 12-month period immediately preceding the member's death or the accident which was the direct cause of the member's death. The dependency of such a widow shall be considered terminated by the marriage of the widow subsequent to the member's death. In the event of the payment of an accidental death benefit, the five-year qualification shall be waived.

     (3)   A public employer other than the State may adopt a resolution providing that the term "widower" as defined in paragraph (2) of this subsection shall include domestic partners as provided in paragraph (1) of this subsection.

     v.     "Parent" means the parent of a member who was receiving at least one-half of the parent's support from the member in the 12-month period immediately preceding the member's death or the accident which was the direct cause of the member's death. The dependency of such a parent will be considered terminated by marriage of the parent subsequent to the death of the member.

     w.    "Medical board" means the board of physicians provided for in N.J.S.18A:66-56.

     x.     (1) "Spouse," for employees of the State, means the husband or wife, or domestic partner as defined in section 3 of P.L.2003, c.246 (C.26:8A-3), of a member.

     (2)   Subject to the provisions of paragraph (1) of this subsection, "spouse," for employees of public employers other than the State, means the husband or wife of a member.

     (3)   A public employer other than the State may adopt a resolution providing that the term "spouse" as defined in paragraph (2) of this subsection shall include domestic partners as provided in paragraph (1) of this subsection.

(cf:  P.L.2009, c.85, s.2)

 

     21.  Section 6 of P.L.1954, c.84 (C.43:15A-6) is amended to read as follows:

     6.    As used in this act:

     a.     "Accumulated deductions" means the sum of all the amounts, deducted from the compensation of a member or contributed by or on behalf of the member, standing to the credit of the member's individual account in the annuity savings fund.

     b.    "Annuity" means payments for life derived from the accumulated deductions of a member as provided in this act.

     c.     "Annuity reserve" means the present value of all payments to be made on account of any annuity or benefit in lieu of an annuity, granted under the provisions of this act, computed on the basis of such mortality tables recommended by the actuary as the board of trustees adopts, with regular interest.

     d.    "Beneficiary" means any person receiving a retirement allowance or other benefit as provided in this act.

     e.     "Child" means a deceased member's unmarried child either (1) under the age of 18 or (2) of any age who, at the time of the member's death, is disabled because of mental retardation or physical incapacity, is unable to do any substantial, gainful work because of the impairment and the impairment has lasted or can be expected to last for a continuous period of not less than 12 months, as affirmed by the medical board.

     f.     "Parent" shall mean the parent of a member who was receiving at least 1/2 of the parent's support from the member in the 12-month period immediately preceding the member's death or the accident which was the direct cause of the member's death. The dependency of such a parent will be considered terminated by marriage of the parent subsequent to the death of the member.

     g. (1) "Widower," for employees of the State, means the man to whom a member was married, or a domestic partner as defined in section 3 of P.L.2003, c.246 (C.26:8A-3), at least five years before the date of her death and to whom she continued to be married or a domestic partner until the date of her death and who was receiving at least 1/2 of his support from the member in the 12-month period immediately preceding the member's death or the accident which was the direct cause of the member's death. The dependency of such a widower will be considered terminated by marriage of, or establishment of a domestic partnership by, the widower subsequent to the death of the member. In the event of the payment of an accidental death benefit, the five-year qualification shall be waived.

     (2)   Subject to the provisions of paragraph (3) of this subsection, "widower," for employees of public employers other than the State, means the man to whom a member was married at least five years before the date of her death and to whom she continued to be married until the date of her death and who was receiving at least 1/2 of his support from the member in the 12-month period immediately preceding the member's death or the accident which was the direct cause of the member's death. The dependency of such a widower shall be considered terminated by marriage of the widower subsequent to the death of the member. In the event of the payment of an accidental death benefit, the five-year qualification shall be waived.

     (3)   A public employer other than the State may adopt a resolution providing that the term "widower" as defined in paragraph (2) of this subsection shall include domestic partners as provided in paragraph (1) of this subsection.

     h.     (1)  "Final compensation" means the average annual compensation for which contributions are made for the three years of creditable service in New Jersey immediately preceding the member's retirement or death, or it shall mean the average annual compensation for New Jersey service for which contributions are made during any three fiscal years of his or her membership providing the largest possible benefit to the member or the member's beneficiary.

     (2)   In the case of a person who becomes a member of the retirement system on or after the effective date of P.L.    , c.    (pending before the Legislature as this bill), “final compensation” means the average annual compensation for which contributions are made for the five years of creditable service in New Jersey immediately preceding the member's retirement or death, or it shall mean the average annual compensation for New Jersey service for which contributions are made during any five fiscal years of his or her membership providing the largest possible benefit to the member or the member's beneficiary.

     i.      "Fiscal year" means any year commencing with July 1 and ending with June 30 next following.

     j.     "Medical board" shall mean the board of physicians provided for in section 17 of P.L.1954, c.84 (C.43:15A-17).

     k.    "Pension" means payments for life derived from appropriations made by the employer as provided in this act.

     l.      "Pension reserve" means the present value of all payments to be made on account of any pension or benefit in lieu of a pension granted under the provisions of this act, computed on the basis of such mortality tables recommended by the actuary as the board of trustees adopts, with regular interest.

     m.    "Public Employees' Retirement System of New Jersey," hereinafter referred to as the "retirement system" or "system," is the corporate name of the arrangement for the payment of retirement allowances and other benefits under the provisions of this act including the several funds placed under said system. By that name all of its business shall be transacted, its funds invested, warrants for money drawn, and payments made and all of its cash and securities and other property held.

     n.     "Regular interest" shall mean interest as determined by the State Treasurer, after consultation with the Directors of the Divisions of Investment and Pensions, the board of trustees and the actuary. It shall bear a reasonable relationship to the percentage rate of earnings on investments based on the market value of the assets but shall not exceed the assumed percentage rate of increase applied to salaries plus 3%, provided however that the board of trustees shall not set the average percentage rate of increase applied to salaries below 6%.

     o.    "Retirement allowance" means the pension plus the annuity.

     p.    "Veteran" means any honorably discharged officer, soldier, sailor, airman, marine or nurse who served in any Army, Air Force or Navy of the Allies of the United States in World War I, between July 14, 1914, and November 11, 1918, or who served in any Army, Air Force or Navy of the Allies of the United States in World War II, between September 1, 1939, and September 2, 1945, and who was inducted into such service through voluntary enlistment, and was a citizen of the United States at the time of such enlistment, and who did not, during or by reason of such service, renounce or lose United States citizenship, and any officer, soldier, sailor, marine, airman, nurse or army field clerk, who has served in the active military or naval service of the United States and has or shall be discharged or released therefrom under conditions other than dishonorable, in any of the following wars, uprisings, insurrections, expeditions, or emergencies, and who has presented to the retirement system evidence of such record of service in form and content satisfactory to said retirement system:

     (1)   The Indian wars and uprisings during any of the periods recognized by the War Department of the United States as periods of active hostility;

     (2)   The Spanish-American War between April 20, 1898, and April 11, 1899;

     (3)   The Philippine insurrections and expeditions during the periods recognized by the War Department of the United States as of active hostility from February 4, 1899, to the end of 1913;

     (4)   The Peking relief expedition between June 20, 1900, and May 27, 1902;

     (5)   The army of Cuban occupation between July 18, 1898, and May 20, 1902;

     (6)   The army of Cuban pacification between October 6, 1906, and April 1, 1909;

     (7)   The Mexican punitive expedition between March 14, 1916, and February 7, 1917;

     (8)   The Mexican border patrol, having actually participated in engagements against Mexicans between April 12, 1911, and June 16, 1919;

     (9)   World War I, between April 6, 1917, and November 11, 1918;

     (10)  World War II, between September 16, 1940, and December 31, 1946, who shall have served at least 90 days in such active service, exclusive of any period of assignment (1) for a course of education or training under the Army Specialized Training Program or the Navy College Training Program which course was a continuation of a civilian course and was pursued to completion, or (2) as a cadet or midshipman at one of the service academies any part of which 90 days was served between said dates; provided, that any person receiving an actual service-incurred injury or disability shall be classed as a veteran whether or not that person has completed the 90-day service as herein provided;

     (11)  Korean conflict on or after June 23, 1950, and on or prior to January 31, 1955, who shall have served at least 90 days in such active service, exclusive of any period of assignment (1) for a course of education or training under the Army Specialized Training Program or the Navy College Training Program which course was a continuation of a civilian course and was pursued to completion, or (2) as a cadet or midshipman at one of the service academies, any part of which 90 days was served between said dates; provided, that any person receiving an actual service-incurred injury or disability shall be classed as a veteran whether or not that person has completed the 90-day service as herein provided; and provided further, that any member classed as a veteran pursuant to this paragraph prior to August 1, 1966, shall continue to be classed as a veteran whether or not that person completed the 90-day service between said dates as herein provided;

     (12)  Lebanon crisis, on or after July 1, 1958, who has served in Lebanon or on board any ship actively engaged in patrolling the territorial waters of that nation for a period, continuous or in the aggregate, of at least 14 days commencing on or before November 1, 1958 or the date of termination of that conflict, as proclaimed by the President of the United States or Congress, whichever date of termination is the latest, in such active service; provided, that any person receiving an actual service-incurred injury or disability shall be classed as a veteran whether or not that person has completed the 14 days' service as herein provided;

     (13)  Vietnam conflict on or after December 31, 1960, and on or prior to May 7, 1975, who shall have served at least 90 days in such active service, exclusive of any period of assignment (1) for a course of education or training under the Army Specialized Training Program or the Navy College Training Program which course was a continuation of a civilian course and was pursued to completion, or (2) as a cadet or midshipman at one of the service academies, any part of which 90 days was served between said dates; and exclusive of any service performed pursuant to the provisions of section 511(d) of Title 10, United States Code, pursuant to an enlistment in the Army National Guard or as a reserve for service in the Army Reserve, Naval Reserve, Air Force Reserve, Marine Corps Reserve, or Coast Guard Reserve; provided, that any person receiving an actual service-incurred injury or disability shall be classed as a veteran whether or not that person has completed the 90 days' service as herein provided;

     (14)  Lebanon peacekeeping mission, on or after September 26, 1982, who has served in Lebanon or on board any ship actively engaged in patrolling the territorial waters of that nation for a period, continuous or in the aggregate, of at least 14 days commencing on or before December 1, 1987 or the date of termination of that mission, as proclaimed by the President of the United States or Congress, whichever date of termination is the latest, in such active service; provided, that any person receiving an actual service-incurred injury or disability shall be classed as a veteran whether or not that person has completed the 14 days' service as herein provided;

     (15)  Grenada peacekeeping mission, on or after October 23, 1983, who has served in Grenada or on board any ship actively engaged in patrolling the territorial waters of that nation for a period, continuous or in the aggregate, of at least 14 days commencing on or before November 21, 1983 or the date of termination of that mission, as proclaimed by the President of the United States or Congress, whichever date of termination is the latest, in such active service; provided, that any person receiving an actual service-incurred injury or disability shall be classed as a veteran whether or not that person has completed the 14 days' service as herein provided;

     (16) Panama peacekeeping mission, on or after December 20, 1989 or the date of inception of that mission, as proclaimed by the President of the United States or Congress, whichever date of inception is earliest, who has served in Panama or on board any ship actively engaged in patrolling the territorial waters of that nation for a period, continuous or in the aggregate, of at least 14 days commencing on or before January 31, 1990 or the date of termination of that mission, as proclaimed by the President of the United States or Congress, whichever date of termination is the latest, in such active service; provided, that any person receiving an actual service-incurred injury or disability shall be classed as a veteran whether or not that person has completed the 14 days' service as herein provided;

     (17) Operation "Desert Shield/Desert Storm" mission in the Arabian peninsula and the Persian Gulf, on or after August 2, 1990 or the date of inception of that operation, as proclaimed by the President of the United States or Congress, whichever date of inception is earliest, who has served in the Arabian peninsula or on board any ship actively engaged in patrolling the Persian Gulf for a period, continuous or in the aggregate, of at least 14 days commencing on or before the date of termination of that mission, as proclaimed by the President of the United States or Congress, whichever date of termination is the latest, in such active service; provided, that any person receiving an actual service-incurred injury or disability shall be classed as a veteran whether or not that person has completed the 14 days' service as herein provided;

     (18)  Operation Northern Watch and Operation Southern Watch, on or after August 27, 1992, or the date of inception of that operation, as proclaimed by the President of the United States, Congress or United States Secretary of Defense, whichever date of inception is earliest, who served in the theater of operation, including in the Arabian peninsula and the Persian Gulf, and in direct support of that operation for a period, continuously or in the aggregate, of at least 14 days in such active service, commencing on or before the date of termination of that operation, as proclaimed by the President of the United States, Congress or United States Secretary of Defense, whichever date of termination is the latest; provided, that any person receiving an actual service-incurred injury or disability while engaged in such service shall be classed as a veteran whether or not that person has completed the 14 days' service as herein provided;

     (19) Operation "Restore Hope" in Somalia, on or after December 5, 1992, or the date of inception of that operation as proclaimed by the President of the United States or Congress, whichever date is earliest, who has served in Somalia or on board any ship actively engaged in patrolling the territorial waters of that nation for a period, continuously or in the aggregate, of at least 14 days in such active service commencing on or before March 31, 1994; provided that any person receiving an actual service-incurred injury or disability shall be classed as a veteran whether or not that person has completed the 14-day service as herein provided;

     (20) Operations "Joint Endeavor" and "Joint Guard" in the Republic of Bosnia and Herzegovina, on or after November 20, 1995, who served in such active service in direct support of one or both of the operations for at least 14 days, continuously or in the aggregate, commencing on or before June 20, 1998 and (1) was deployed in that nation or in another area in the region, or (2) was on board a United States naval vessel operating in the Adriatic Sea, or (3) operated in airspace above the Republic of Bosnia and Herzegovina; provided that any person receiving an actual service-incurred injury or disability shall be classed as a veteran whether or not that person completed the 14-day service requirement;

     (21) Operation "Enduring Freedom", on or after September 11, 2001, who served in a theater of operation and in direct support of that operation for a period, continuously or in the aggregate, of at least 14 days in such active service commencing on or before the date the President of the United States or the United States Secretary of Defense designates as the termination date of that operation; provided, that any person receiving an actual service-incurred injury or disability while engaged in such service shall be classed as a veteran whether or not that person has completed the 14 days' service as herein provided; and

     (22) Operation "Iraqi Freedom", on or after the date the President of the United States or the United States Secretary of Defense designates as the inception date of that operation, who served in Iraq or in another area in the region in direct support of that operation for a period, continuously or in the aggregate, of at least 14 days in such active service commencing on or before the date the President of the United States or the United States Secretary of Defense designates as the termination date of that operation; provided, that any person receiving an actual service-incurred injury or disability while engaged in such service shall be classed as a veteran whether or not that person has completed the 14 days' service as herein provided.

     "Veteran" also means any honorably discharged member of the American Merchant Marine who served during World War II and is declared by the United States Department of Defense to be eligible for federal veterans' benefits.

     q. (1) "Widow," for employees of the State, means the woman to whom a member was married, or a domestic partner as defined in section 3 of P.L.2003, c.246 (C.26:8A-3), at least five years before the date of his death and to whom he continued to be married or a domestic partner until the date of his death and who was receiving at least 1/2 of her support from the member in the 12-month period immediately preceding the member's death or the accident which was the direct cause of the member's death. The dependency of such a widow will be considered terminated by the marriage of, or establishment of a domestic partnership by, the widow subsequent to the member's death. In the event of the payment of an accidental death benefit, the five-year qualification shall be waived.

     (2)   Subject to the provisions of paragraph (3) of this subsection, "widow," for employees of public employers other than the State, means the woman to whom a member was married at least five years before the date of his death and to whom he continued to be married until the date of his death and who was receiving at least 1/2 of her support from the member in the 12-month period immediately preceding the member's death or the accident which was the direct cause of the member's death. The dependency of such a widow shall be considered terminated by the marriage of the widow subsequent to the member's death. In the event of the payment of an accidental death benefit, the five-year qualification shall be waived.

     (3)   A public employer other than the State may adopt a resolution providing that the term "widow" as defined in paragraph (2) of this subsection shall include domestic partners as provided in paragraph (1) of this subsection.

     r.     (1) "Compensation" means the base or contractual salary, for services as an employee, which is in accordance with established salary policies of the member's employer for all employees in the same position but shall not include individual salary adjustments which are granted primarily in anticipation of the member's retirement or additional remuneration for performing temporary or extracurricular duties beyond the regular workday or the regular work year.

     (2)   In the case of a person who becomes a member of the retirement system on or after July 1, 2007, "compensation" means the amount of base or contractual salary equivalent to the annual maximum wage contribution base for Social Security, pursuant to the Federal Insurance Contributions Act, for services as an employee, which is in accordance with established salary policies of the member's employer for all employees in the same position but shall not include individual salary adjustments which are granted primarily in anticipation of the member's retirement or additional remuneration for performing temporary or extracurricular duties beyond the regular workday or the regular work year. This paragraph shall not apply to a person who at the time of enrollment in the retirement system on or after July 1, 2007 transfers service credit from another State-administered retirement system pursuant to section 14 of P.L.1954, c.84 (C.43:15A-14), but shall apply to a former member of the retirement system who has been granted a retirement allowance and is reenrolled in the retirement system on or after July 1, 2007 pursuant to section 27 of P.L.1966, c.217 (C.43:15A-57.2) after becoming employed again in a position that makes the person eligible to be a member of the retirement system.

     In cases where salary includes maintenance, the retirement system shall fix the value of that part of the salary not paid in money which shall be considered under this act.

     For the period of July 1, 2009 through June 30, 2011, "contractual salary" for State employees shall include wage increases under a collective negotiations agreement notwithstanding that, by amendment to that collective negotiations agreement, the effective date of the contractual increase has been deferred.  For the purpose of this paragraph, "State employee" means an employee in the Executive Branch of State government of New Jersey but shall not include employees of agencies authorized to participate in the 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 al.).

(cf:  P.L.2009, c.85, s.1)

 

     22.  Section 1 of P.L.1944, c.255 (C.43:16A-1) is amended to read as follows:

     1.    As used in this act:

     (1)   "Retirement system" or "system" shall mean the Police and Firemen's Retirement System of New Jersey as defined in section 2 of this act.

     (2)   (a) "Policeman" shall mean a permanent, full-time employee of a law enforcement unit as defined in section 2 of P.L.1961, c.56 (C.52:17B-67) or the State, other than an officer or trooper of the Division of State Police whose position is covered by the State Police Retirement System, whose primary duties include the investigation, apprehension or detention of persons suspected or convicted of violating the criminal laws of the State and who:

     (i)    is authorized to carry a firearm while engaged in the actual performance of his official duties;

     (ii)   has police powers;

     (iii)   is required to complete successfully the training requirements prescribed by P.L.1961, c.56 (C.52:17B-66 et seq.) or comparable training requirements as determined by the board of trustees; and

     (iv)  is subject to the physical and mental fitness requirements applicable to the position of municipal police officer established by an agency authorized to establish these requirements on a Statewide basis, or comparable physical and mental fitness requirements as determined by the board of trustees.

     The term shall also include an administrative or supervisory employee of a law enforcement unit or the State whose duties include general or direct supervision of employees engaged in investigation, apprehension or detention activities or training responsibility for these employees and a requirement for engagement in investigation, apprehension or detention activities if necessary, and who is authorized to carry a firearm while in the actual performance of his official duties and has police powers.

     (b)   "Fireman" shall mean a permanent, full-time employee of a firefighting unit whose primary duties include the control and extinguishment of fires and who is subject to the training and physical and mental fitness requirements applicable to the position of municipal firefighter established by an agency authorized to establish these requirements on a Statewide basis, or comparable training and physical and mental fitness requirements as determined by the board of trustees.  The term shall also include an administrative or supervisory employee of a firefighting unit whose duties include general or direct supervision of employees engaged in fire control and extinguishment activities or training responsibility for these employees and a requirement for engagement in fire control and extinguishment activities if necessary.  As used in this paragraph, "firefighting unit" shall mean a municipal fire department, a fire district, or an agency of a county or the State which is responsible for control and extinguishment of fires.

     (3)   "Member" shall mean any policeman or fireman included in the membership of the retirement system pursuant to this amendatory and supplementary act, P.L.1989, c.204 (C.43:16A-15.6 et al.).

     (4)   "Board of trustees" or "board" shall mean the board provided for in section 13 of this act.

     (5)   "Medical board" shall mean the board of physicians provided for in section 13 of this act.

     (6)   "Employer" shall mean the State of New Jersey, the county, municipality or political subdivision thereof which pays the particular policeman or fireman.

     (7)   "Service" shall mean service as a policeman or fireman paid for by an employer.

     (8)   "Creditable service" shall mean service rendered for which credit is allowed as provided under section 4 of this act.

     (9)   "Regular interest" shall mean interest as determined by the State Treasurer, after consultation with the Directors of the Divisions of Investment and Pensions, the board of trustees and the actuary.  It shall bear a reasonable relationship to the percentage rate of earnings on investments based on the market value of assets but shall not exceed the assumed percentage rate of increase applied to salaries plus 3%, provided however that the board of trustees shall not set the average percentage rate of increase applied to salaries below 6%.

     (10) "Aggregate contributions" shall mean the sum of all the amounts, deducted from the compensation of a member or contributed by him or on his behalf, standing to the credit of his individual account in the annuity savings fund.

     (11) "Annuity" shall mean payments for life derived from the aggregate contributions of a member.

     (12) "Pension" shall mean payments for life derived from contributions by the employer.

     (13) "Retirement allowance" shall mean the pension plus the annuity.

     (14) "Earnable compensation" shall mean the full rate of the salary that would be payable to an employee if he worked the full normal working time for his position.  In cases where salary includes maintenance, the retirement system shall fix the value of that part of the salary not paid in money which shall be considered under this act.

     (15) "Average final compensation" shall mean [the average annual salary upon which contributions are made for the three years of creditable service immediately preceding his retirement or death, or it shall mean the average annual salary for which contributions are made during any three fiscal years of his or her membership providing the largest possible benefit to the member or his beneficiary] final compensation.

     (16) "Retirement" shall mean the termination of the member's active service with a retirement allowance granted and paid under the provisions of this act.

     (17) "Annuity reserve" shall mean the present value of all payments to be made on account of any annuity or benefit in lieu of any annuity computed upon the basis of such mortality tables recommended by the actuary as shall be adopted by the board of trustees, and regular interest.

     (18) "Pension reserve" shall mean the present value of all payments to be made on account of any pension or benefit in lieu of any pension computed upon the basis of such mortality tables recommended by the actuary as shall be adopted by the board of trustees, and regular interest.

     (19) "Actuarial equivalent" shall mean a benefit of equal value when computed upon the basis of such mortality tables recommended by the actuary as shall be adopted by the board of trustees, and regular interest.

     (20) "Beneficiary" shall mean any person receiving a retirement allowance or other benefit as provided by this act.

     (21) "Child" shall mean a deceased member's or retirant's unmarried child (a) under the age of 18, or (b) 18 years of age or older and enrolled in a secondary school, or (c) under the age of 24 and enrolled in a degree program in an institution of higher education for at least 12 credit hours in each semester, provided that the member died in active service as a result of an accident met in the actual performance of duty at some definite time and place, and the death was not the result of the member's willful misconduct, or (d) of any age who, at the time of the member's or retirant's death, is disabled because of mental retardation or physical incapacity, is unable to do any substantial, gainful work because of the impairment and his impairment has lasted or can be expected to last for a continuous period of not less than 12 months, as affirmed by the medical board.

     (22) "Parent" shall mean the parent of a member who was receiving at least one-half of his support from the member in the 12-month period immediately preceding the member's death or the accident which was the direct cause of the member's death.  The dependency of such a parent will be considered terminated by marriage of the parent subsequent to the death of the member.

     (23) (a) "Widower," for employees of the State, means the man to whom a member or retirant was married, or a domestic partner as defined in section 3 of P.L.2003, c.246 (C.26:8A-3), on the date of her death and who has not since remarried or established a domestic partnership. In the event of the payment of accidental death benefits, pursuant to section 10 of P.L.1944, c.255 (C.43:16A-10), the restriction concerning remarriage or establishment of a domestic partnership shall be waived.

     (b)   Subject to the provisions of paragraph (c) of this subsection, "widower," for employees of public employers other than the State, means the man to whom a member or retirant was married on the date of her death and who has not remarried.

     (c)   A public employer other than the State may adopt a resolution providing that the term "widower" as defined in paragraph (b) of this subsection shall include domestic partners as provided in paragraph (a) of this subsection.

     (24) (a) "Widow," for employees of the State, means the woman to whom a member or retirant was married, or a domestic partner as defined in section 3 of P.L.2003, c.246 (C.26:8A-3), on the date of his death and who has not since remarried or established a domestic partnership.  In the event of the payment of accidental death benefits, pursuant to section 10 of P.L.1944, c.255 (C.43:16A-10), the restriction concerning remarriage or establishment of a domestic partnership shall be waived.

     (b)   Subject to the provisions of paragraph (c) of this subsection, "widow," for employees of public employers other than the State, means the woman to whom a member or retirant was married on the date of his death and who has not remarried.

     (c)   A public employer other than the State may adopt a resolution providing that the term "widow" as defined in paragraph (b) of this subsection shall include domestic partners as provided in paragraph (a) of this subsection.

     (25) "Fiscal year" shall mean any year commencing with July 1, and ending with June 30, next following.

     (26)  (a)  "Compensation" shall mean the base salary, for services as a member as defined in this act, which is in accordance with established salary policies of the member's employer for all employees in the same position but shall not include individual salary adjustments which are granted primarily in anticipation of the member's retirement or additional remuneration for performing temporary duties beyond the regular workday.

     (b)   In the case of a person who becomes a member of the retirement system on or after the effective date of P.L.  , c.   (pending before the Legislature as this bill), "compensation" means the amount of base salary equivalent to the annual maximum wage contribution base for Social Security, pursuant to the Federal Insurance Contributions Act, for services as a member as defined in this act, which is in accordance with established salary policies of the member's employer for all employees in the same position but shall not include individual salary adjustments which are granted primarily in anticipation of the member's retirement or additional remuneration for performing temporary duties beyond the regular workday.

     (27) "Department" shall mean any police or fire department of a municipality or a fire department of a fire district located in a township or a county police or park police department or the appropriate department of the State or instrumentality thereof.

     (28) (a) "Final compensation" means the compensation received by the member in the last 12 months of creditable service preceding his retirement or death.

     (b)   In the case of a person who becomes a member of the retirement system on or after the effective date of P.L.    , c.    (pending before the Legislature as this bill), “final compensation” means the average annual compensation for service for which contributions are made during any three fiscal years of membership providing the largest possible benefit to the member or the member's beneficiary.

     (29) (Deleted by amendment, P.L.1992, c.78).

     (30) (Deleted by amendment, P.L.1992, c.78).

     (31) (a) "Spouse," for employees of the State, means the husband or wife, or domestic partner as defined in section 3 of P.L.2003, c.246 (C.26:8A-3), of a member.

     (b)   Subject to the provisions of paragraph (c) of this subsection, "spouse," for employees of public employers other than the State, means the husband or wife of a member.

     (c)   A public employer other than the State may adopt a resolution providing that the term "spouse" as defined in paragraph (b) of this subsection shall include domestic partners as provided in paragraph (a) of this subsection.

(cf:  P.L.2003, c.246, s.43)

 

     23.  Section 3 of P.L.1965, c.89 (C.53:5A-3) is amended to read as follows:

     3.    As used in this act:

     a.     "Aggregate contributions" means the sum of all the amounts, deducted from the salary of a member or contributed by him or on his behalf, standing to the credit of his individual account in the Annuity Savings Fund.  Interest credited on contributions to the former "State Police Retirement and Benevolent Fund" shall be included in a member's aggregate contributions.

     b.    "Annuity" means payments for life derived from the aggregate contributions of a member.

     c.     "Annuity reserve" means the present value of all payments to be made on account of any annuity or benefit in lieu of an annuity, computed upon the basis of such mortality tables recommended by the actuary as the board of trustees adopts and regular interest.

     d.    "Beneficiary" means any person entitled to receive any benefit pursuant to the provisions of this act by reason of the death of a member or retirant.

     e.     "Board of trustees" or "board" means the board provided for in section 30 of this act.

     f.     "Child" means a deceased member's or retirant's unmarried child either (a) under the age of 18 or (b) of any age who, at the time of the member's or retirant's death, is disabled because of mental retardation or physical incapacity, is unable to do any substantial, gainful work because of the impairment and his impairment has lasted or can be expected to last for a continuous period of not less than 12 months, as affirmed by the medical board.

     g.     "Creditable service" means service rendered for which credit is allowed on the basis of contributions made by the member or the State.

     h.     "Parent" means the parent of a member who was receiving at least one-half of his support from the member in the 12-month period immediately preceding the member's death or the accident which was the direct cause of the member's death.  The dependency of such a parent will be considered terminated by marriage of the parent subsequent to the death of the member.

     i.      (1)  "Final compensation" means the average compensation received by the member in the last 12 months of creditable service preceding his retirement or death.  Such term includes the value of the member's maintenance allowance for this same period.

     (2)   In the case of a person who becomes a member of the retirement system on or after the effective date of P.L.    , c.    (pending before the Legislature as this bill), “final compensation” means the average annual compensation for service for which contributions are made during any three fiscal years of membership providing the largest possible benefit to the member or the member's beneficiary.  Such term includes the value of the member's maintenance allowance for this same period.

     j.     (1)  "Final salary" means the average salary received by the member in the last 12 months of creditable service preceding his retirement or death.  Such term shall not include the value of the member's maintenance allowance.

     (2) In the case of a person who becomes a member of the retirement system on or after the effective date of P.L.    , c.    (pending before the Legislature as this bill), “final salary” means the average annual salary for service for which contributions are made during any three fiscal years of membership providing the largest possible benefit to the member or the member's beneficiary.  Such term shall not include the value of the member's maintenance allowance.

     k.    "Fiscal year" means any year commencing with July 1 and ending with June 30 next following.

     l.      "Medical board" means the board of physicians provided for in section 30 of this act.

     m.    "Member" means any full-time, commissioned officer, non-commissioned officer or trooper of the Division of State Police of the Department of Law and Public Safety of the State of New Jersey enrolled in the retirement system established by this act.

     n.     "Pension" means payment for life derived from contributions by the State.

     o.    "Pension reserve" means the present value of all payments to be made on account of any pension or benefit in lieu of any pension computed on the basis of such mortality tables recommended by the actuary as shall be adopted by the board of trustees and regular interest.

     p.    "Regular interest" means interest as determined by the State Treasurer, after consultation with the Directors of the Divisions of Investment and Pensions, the board of trustees and the actuary.  It shall bear a reasonable relationship to the percentage rate of earnings on investments based on the market value of the assets but shall not exceed the assumed percentage rate of increase applied to salaries plus 3%, provided however that the board of trustees shall not set the average percentage rate of increase applied to salaries below 6%.

     q.    "Retirant" means any former member receiving a retirement allowance as provided by this act.

     r.     "Retirement allowance" means the pension plus the annuity.

     s.     "State Police Retirement System of New Jersey," herein also referred to as the "retirement system" or "system," is the corporate name of the arrangement for the payment of retirement allowances and of the benefits under the provisions of this act including the several funds placed under said system.  By that name, all of its business shall be transacted, its funds invested, warrants for moneys drawn, and payments made and all of its cash and securities and other property held.  All assets held in the name of the former "State Police Retirement and Benevolent Fund" shall be transferred to the retirement system established by this act.

     t.     "Surviving spouse" means the person to whom a member or a retirant was married, or a domestic partner as defined in section 3 of P.L.2003, c.246 (C.26:8A-3), on the date of the death of the member or retirant. The dependency of such a surviving spouse will be considered terminated by the marriage of, or establishment of a domestic partnership by, the surviving spouse subsequent to the member's or the retirant's death, except that in the event of the payment of accidental death benefits, pursuant to section 14 of P.L.1965, c.89 (C.53:5A-14), the dependency of such a surviving spouse or domestic partner will not be considered terminated by the marriage of, or establishment of a domestic partnership by, the surviving spouse subsequent to the member's death.

     u.     (1)  "Compensation" for purposes of computing pension contributions means the base salary, for services as a member as defined in this act, which is in accordance with established salary policies of the State for all employees in the same position but shall not include individual salary adjustments which are granted primarily in anticipation of the member's retirement or additional remuneration for performing temporary duties beyond the regular workday or shift.

     (2)   In the case of a person who becomes a member of the retirement system on or after the effective date of P.L.   , c.   (pending before the legislature as this bill), "compensation" means the amount of base salary equivalent to the annual maximum wage contribution base for Social Security, pursuant to the Federal Insurance Contributions Act, for services as a member as defined in this act, which is in accordance with established salary policies of the State for all employees in the same position but shall not include individual salary adjustments which are granted primarily in anticipation of the member's retirement or additional remuneration for performing temporary duties beyond the regular workday or shift.

(cf:  P.L.2003, c.246, s.46)

 

     24.  N.J.S.18A:66-19 is amended to read as follows:

     18A:66-19.  The annuity savings fund shall be the fund in which shall be credited accumulated deductions and contributions by members or on their behalf to provide for their allowances.

     A single account shall be established in this fund for each person who is or shall become a member and all contributions deducted from each such member's compensation shall be credited to [his] this single account [regardless of the number of positions a member might hold or the number of employers he might have].

(cf:  P.L.1971, c. 121, s. 9)

 

     25.  (New section) a.  Notwithstanding the provisions of any law to the contrary, after the effective date of P.L.     , c.    (pending before the Legislature as this bill), a person who is or becomes a member of the Teachers’ Pension and Annuity Fund and becomes employed in more than one office, position, or employment covered by the retirement system or commences service in a covered office, position, or employment with more than one employer shall be eligible for membership in the retirement system based upon only one of the offices, positions, or employments held concurrently.  In the case of a person who holds more than one office, position, or employment covered by the retirement system, the retirement system shall designate the position providing the higher or highest compensation for the person with such concurrent positions as the basis for eligibility for membership and the compensation base for contributions and pension calculations.

     b.    Contributions shall be deducted only from the member’s compensation for the office, position, or employment designated pursuant to subsection a. of this section and shall be credited to the member’s single account established pursuant to N.J.S.18A:66-19.  The designation by the retirement system of one office, position, or employment upon which membership in the retirement system shall be based shall be irrevocable as between or among the offices, positions, or employments held at the time the designation is made as long as the designated position is the one with the higher or highest compensation.  A member who leaves a designated office, position, or employment, or acquires a different or additional office, position, or employment, may receive a new designation by the retirement system from among the offices, positions, or employments then held.  Service in an office, position, or employment other than the one designated shall not be deemed creditable service for the purposes of the retirement system.

     c.  The provisions of subsections a. and b. of this section shall not apply to a person who, on the effective date of P.L.     , c.    (pending before the Legislature as this bill), is a member of the retirement system and holds more than one office, position, or employment covered by the retirement system with one or more employers, while the member continues to hold without a break in service more than one of those offices, positions, or employments.  Any additional office, position, or employment acquired by the member shall not be deemed creditable service for the purposes of the retirement system and no designation for that member shall be made until only one of the offices, positions, or employments held on the effective date remains.

 

     26.  Section 25 of P.L.1954, c.84 (C.43:15A-25) is amended to read as follows:

     25.  a. The annuity savings fund shall be the fund in which shall be credited accumulated deductions and contributions by members or on their behalf to provide for their allowances. A single account shall be established in this fund for each person who is or shall become a member and all contributions deducted from each such member's compensation shall be credited to [his] this single account [regardless of the number of positions a member might hold or the number of employers as he might have].

     b.    (1) Members enrolled in the retirement system on or after July 1, 1994 shall contribute 5% of compensation to the system. Members enrolled in the system prior to July 1, 1994 shall contribute 5% of compensation to the system effective with the payroll period for which the beginning date is closest to July 1, 1995, provided, however, that any member enrolled before July 1, 1994, whose full contribution rate under the system prior to the revisions by this act was less than 6%, shall pay 4% of compensation to the system effective with the payroll period for which the beginning date is closest to July 1, 1995, and 5% of compensation to the system effective with the payroll period for which the beginning date is closest to July 1, 1996.

     (2)   Members enrolled in the retirement system on or after July 1, 2007 who are:

     employees of the State, other than employees of the Judicial Branch;

     employees of an independent State authority, board, commission, corporation, agency or organization;

     employees of a local school district, regional school district, county vocational school district, county special services school district, jointure commission, educational services commission, State-operated school district, charter school, county college, any officer, board, or commission under the authority of the Commissioner of Education or of the State Board of Education, and any other public entity which is established pursuant to authority provided by Title 18A of the New Jersey Statutes; or

     employees of a State public institution of higher education, other than employees of the University of Medicine and Dentistry of New Jersey shall contribute 5.5% of compensation to the system, and all such members described above enrolled in the system prior to July 1, 2007 shall contribute 5.5% of compensation to the system effective with the payroll period for which the beginning date is closest to July 1, 2007.

     Members enrolled in the retirement system on or after July 1, 2008, other than those described in the paragraph above, shall contribute 5.5% of compensation to the system. Members enrolled in the system prior to July 1, 2008, other than those described in the paragraph above, shall contribute 5.5% of compensation to the system effective with the payroll period that begins immediately after July 1, 2008.

     c.     The retirement system shall certify to each State department or subdivision thereof, and to each branch of the State service not included in a State department, and to every other employer, the proportion of each member's compensation to be deducted and to facilitate the making of deductions the retirement system may modify the deduction required by a member by such an amount as shall not exceed 1/10 of 1% of the compensation upon the basis of which the deduction is to be made.

     If payment in full, representing the monthly or biweekly 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 6% per annum shall commence to run against the total transmittal of salary deductions for the period on the first day after such fifteenth day.

     d.    Every employee to whom this act applies shall be deemed to consent and agree to any deduction from his compensation required by this act and to all other provisions of this act. Notwithstanding any other law, rule or regulation affecting the salary, pay, compensation, other perquisites, or tenure of a person to whom this act applies, or shall apply, and notwithstanding that the minimum salary, pay, or compensation or other perquisites provided by law for him shall be reduced thereby, payment, less such deductions, shall be a full and complete discharge and acquittance of all claims and demands for service rendered by him during the period covered by such payment.

(cf:  P.L.2007, c.103, s.2)

 

     27.  Section 1 of P.L.1972, c.167 (C.43:15A-135) is amended to read as follows:

     1.    Members of the Legislature commencing service on or after the effective date of sections 1 through 19 of P.L.2007, c.92 (C.43:15C-1 through C.43:15C-15, C.43:3C-9, C.43:15A-7, C.43:15A-75 and C.43:15A-135) shall not be eligible for membership in the retirement system based on service in that elective office.  A member of the Legislature enrolled in the retirement system as of that effective date who continues to hold office as a member of the Legislature without a break in service shall be eligible to continue membership in the retirement system under the terms and conditions of the member's enrollment, except that during service in the Legislature, a legislator shall be a member of the retirement system on the basis of only one position of service in an elected office or of employment with a participating employer, as designated by the retirement system pursuant to section 28 of P.L.     , c.     (C.    )(pending before the Legislature as this bill).

(cf:  P.L.2007, c.92, s.19)

 

     28.  (New section) a.  Notwithstanding the provisions of any law to the contrary, after the effective date of P.L.     , c.    (pending before the Legislature as this bill), a person who is or becomes a member of the Public Employees’ Retirement System and becomes employed in more than one office, position, or employment covered by the retirement system or commences service in a covered office, position, or employment with more than one employer shall be eligible for membership in the retirement system based upon only one of the offices, positions, or employments held concurrently.  In the case of a person who holds more than one office, position, or employment covered by the retirement system, the retirement system shall designate the position providing the higher or highest compensation for the person with such concurrent positions as the basis for eligibility for membership and the compensation base for contributions and pension calculations.

     b.    Contributions shall be deducted only from the member’s compensation for the office, position, or employment designated pursuant to subsection a. of this section and shall be credited to the member’s single account established pursuant to section 25 of P.L.1954, c.84 (C.43:15A-25), or in the case of an eligible member of the Legislature, the legislative account established pursuant to section 2 of P.L.1972, c.167 (C.43:15A-136).  The designation by the retirement system of one office, position or employment upon which membership in the retirement system shall be based shall be irrevocable as between or among the offices, positions, or employments held at the time the designation is made as long as the designated position is the one with the higher or highest compensation.  A member who leaves a designated office, position, or employment or acquires a different or additional office, position, or employment, may receive a new designation by the retirement system from among the offices, positions, or employments then held.  Service in an office, position, or employment other than the one designated shall not be deemed creditable service for the purposes of the retirement system.

     c.  The provisions of subsections a. and b. of this section shall not apply to a person who, on the effective date of P.L.     , c.    (pending before the Legislature as this bill), is a member of the retirement system and holds more than one office, position, or employment covered by the retirement system with one or more employers, while the member continues to hold without a break in service more than one of those offices, positions, or employments.  Any additional office, position, or employment acquired by the member shall not be deemed creditable service for the purposes of the retirement system and no designation for that member shall be made until only one of the offices, positions, or employments held on the effective date remains.

 

     29.  Section 5 of P.L.1997, c.113 (C.43:3C-9.5) is amended to read as follows:

     5.    a. For purposes of this section, a "non-forfeitable right to receive benefits" means that the benefits program, for any employee for whom the right has attached, cannot be reduced.  The provisions of this section shall not apply to post-retirement medical benefits which are provided pursuant to law.

     b.    Vested members of the Teachers' Pension and Annuity Fund, the Judicial Retirement System, the Prison Officers' Pension Fund, the Public Employees' Retirement System, the Consolidated Police and Firemen's Pension Fund, the Police and Firemen's Retirement System, and the State Police Retirement System, upon the attainment of five years of service credit in the retirement system or fund or on the date of enactment of this bill, whichever is later, shall have a non-forfeitable right to receive benefits as provided under the laws governing the retirement system or fund upon the attainment of five years of service credit in the retirement system or fund or on the effective date of this act, whichever is later.  This subsection shall not be applicable to a person who becomes a member of these systems or funds on or after the effective date of P.L.  , c.   (pending before the Legislature as this bill), except that such person shall not include a person who at the time of enrollment in the retirement system or fund on or after that effective date transfers service credit, as permitted, from another State-administered retirement system or fund of which the person was a member immediately prior to the effective date and continuously thereafter, but shall include a former member of the retirement system or fund who has been granted a retirement allowance and is reenrolled in the retirement system or fund on or after that effective date after becoming employed again in a position that makes the person eligible to be a member of the retirement system.

     c.     The State shall make an annual normal contribution and an annual unfunded accrued liability contribution to each system or fund pursuant to standard actuarial practices authorized by law, unless both of the following conditions are met:  (1) there is no existing unfunded accrued liability contribution due to the system or fund at the close of the valuation period applicable to the upcoming fiscal year; and (2) there are excess valuation assets in excess of the actuarial accrued liability of the system or fund at the close of the valuation period applicable to the upcoming fiscal year.

     d.    This act shall not be construed to preclude forfeiture, suspension or reduction in benefits for dishonorable service.

     e.     Except as expressly provided herein and only to the extent so expressly provided, nothing in this act shall be deemed to (1) limit the right of the State to alter, modify or amend such retirement systems and funds, or (2) create in any member a right in the corpus or management of a retirement system or pension fund.

(cf:  P.L.1997, c.113, s.5)

 

     30.  (New section)  a.  Notwithstanding any other provision of law to the contrary, a person who commences service in an employment, office or position that makes the person eligible to be a member of the Teachers’ Pension and Annuity Fund, the Judicial Retirement System, the Public Employees’ Retirement System, the Police and Firemen’s Retirement System, or the State Police Retirement System, or a member of the retirement system with less than 10 years of service credit, shall have the option to choose either to be enrolled in the relevant retirement system or enrolled in the Defined Contribution Retirement Program established pursuant to P.L.2007, c.92 (C.43:15C-1 et al.) with regard to that particular employment, office, or position by irrevocably waiving all rights and benefits which would otherwise be provided by the relevant retirement system.

     b.    When a member of the Teachers’ Pension and Annuity Fund, the Judicial Retirement System, the Public Employees’ Retirement System, the Police and Firemen’s Retirement System, or the State Police Retirement System elects to transfer to the Defined Contribution Retirement Program by filing the proper application form declaring the election to participate in the program, the respective retirement system shall transfer the amount of all of the member’s accumulated deductions standing to the credit of the member in the annuity savings fund, plus regular interest, less any outstanding loan, except that no interest shall be payable in the case of a member who has less than three years of membership credit for which the member has made contributions.  The interest payable shall be such proportion of the interest determined at the regular rate of 2% per annum bears to the regular rate of interest.

     c.     Notwithstanding any other provision of law to the contrary, a person who commences service in an employment, office, or position that makes the person eligible to be a member or participant of the Teachers’ Pension and Annuity Fund, the Judicial Retirement System, the Public Employees’ Retirement System, the Police and Firemen’s Retirement System, the State Police Retirement System, the Alternate Benefit Program, or the Defined Contribution Program, or a member or participant of the retirement system or program with less than 10 years of service credit, shall have the option to choose to not enroll or to withdraw from enrollment in the relevant retirement system or program with regard to that particular employment, office, or position by irrevocably waiving all rights and benefits which would otherwise be provided by the relevant retirement system or program.  All relevant provisions of law with regard to withdrawals from a retirement system or program shall be applicable to such a withdrawal.

 

     31.  Section 2 of P.L.2001, c.366 (C.43:15A-156) is amended to read as follows:

     2.    a.  Notwithstanding the provisions of any other law, prosecutors shall be members of the Prosecutors Part, established pursuant to P.L.2001, c.366 (C.43:15A-155 et seq.), of the Public Employees' Retirement System, established pursuant to P.L.1954, c.84 (C.43:15A-1 et seq.), if enrolled in the part prior to the effective date of P.L.   , c.     (pending before the Legislature as this bill), and shall be subject to the same membership and benefit provisions as State employees, except as provided by P.L.2001, c.366.  Membership in the retirement system shall be a condition of employment for service as a prosecutor for a prosecutor enrolled in the part prior to the effective date of P.L.   , c.      (pending before the Legislature as this bill).  Any service credit which has been established in the Public Employees' Retirement System by a prosecutor prior to the effective date of this act shall be established in the Prosecutors Part without further assessment of cost to the prosecutor; provided, however, any service credit which has been established in the Public Employees' Retirement System by a member of the retirement system in any position prior to service as a county prosecutor, nominated and appointed pursuant to Article VII, Section II, paragraph 1 of the New Jersey Constitution, shall be established in the Prosecutors Part without further assessment of cost to the prosecutor.

     A prosecutor who becomes a member of the retirement system on or after the effective date of P.L.    , c.    (pending before the Legislature as this bill) shall not be a member of the Prosecutors Part and the provisions of P.L.2001, c.366 (C.43:15A-155 et seq.) shall not apply to such prosecutor or the prosecutor’s beneficiary.

     b.    All outstanding obligations, such as loans, purchases and other arrearage, shall be satisfied by a prosecutor as previously scheduled for payment to the Public Employees' Retirement System.

(cf:  P.L.2003, c.140, s.1)

 

     32.  Section 16 of P.L.1964, c.241 (C.43:16A-11.1) is amended to read as follows:

     16.  a. Should a member resign after having established 25 years of creditable service, he may elect “special retirement,” provided, that such election is communicated by such member to the retirement system by filing a written application, duly attested, stating at what time subsequent to the execution and filing thereof he desires to be retired.  He shall receive, in lieu of the payment provided in section 11, a retirement allowance which shall consist of:

     (1)   An annuity which shall be the actuarial equivalent of his aggregate contributions, and

     (2)   A pension in the amount which, when added to the member’s annuity, will provide a total retirement allowance of 65% of his final compensation, plus 1% of his final compensation multiplied by the number of years of creditable service over 25 but not over 30[; or, beginning in the fiscal year immediately following the adoption of the valuation report by the retirement system board of trustees in which the funded level is in excess of 104%, a pension in the amount which, when added to the member’s annuity, will provide a total retirement allowance of 70% of final compensation, plus 1% of final compensation multiplied by the number of years of creditable service over 25 but not over 30]; provided, however, that any member who has earned, prior to July 1, 1979, more than 30 years of creditable service, shall receive an additional 1% of his final compensation for each year of his creditable service over 30.

     The board of trustees shall retire him at the time specified or at such other time within one month after the date so specified as the board finds advisable.

     Upon the receipt of proper proofs of the death of such a retired member, there shall be paid to his beneficiary an amount equal to one-half of the final compensation received by the member.

     b.    The “special retirement” allowance payable under subsection a. of this section to any person who retired under the retirement system prior to December 20, 1989 shall be increased by an amount equal to 5% of the person’s final compensation or by such lesser amount as would, if added to the allowance payable at the time of retirement, provide a total retirement allowance of 70% of final compensation, except that in the case of such a retirant who retired on or after July 1, 1979 and had earned prior to that date more than 30 years of creditable service, the amount of the increase shall be equal to 5% of the person’s final compensation irrespective of the total retirement allowance which such an increase would provide.  The provisions of this subsection shall not be construed either to require a reduction in the retirement allowance payable to any retirant or to provide for the payment of any adjustment in such an allowance with respect to any period of time prior to the first day of the month following that effective date.

(cf:  P.L.2003, c.108, s.2)

 

     33.  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%.

     The State Treasurer shall reduce the normal and accrued liability contributions payable by employers other than the State to 50 percent of the amount certified annually by the retirement system for payments due in the State fiscal year ending June 30, 2009.  An employer that elects to pay the reduced normal and accrued liability contribution shall adopt a resolution, separate and apart from other budget resolutions, stating that the employer needs to pay the reduced contribution and providing an explanation of that need which shall include (1) a description of its inability to meet the levy cap without jeopardizing public safety, health, and welfare or without jeopardizing the fiscal stability of the employer, or (2) a description of another condition that offsets the long term fiscal impact of the payment of the reduced contribution.  An employer also shall document those actions it has taken to reduce its operating costs, or provide a description of relevant anticipated circumstances that could have an impact on revenues or expenditures.  This resolution shall be submitted to and approved by the Local Finance Board after making a finding that these fiscal conditions are valid and affirming the findings contained in the employer resolution.

     An employer that elects to pay 100 percent of the amount certified by the retirement system for the State fiscal year ending June 30, 2009 shall be credited with such payment and any such amounts shall not be included in the employer's unfunded liability.

     The actuaries for the retirement system shall determine the unfunded liability of the retirement system, by employer, for the reduced normal and accrued liability contributions provided under P.L.2009, c.19.  This unfunded liability shall be paid by the employer in level annual payments over a period of 15 years beginning with the payments due in the State fiscal year ending June 30, 2012 and shall be adjusted by the rate of return on the actuarial value of assets.

     The retirement system shall annually certify to each employer the contributions due to the contingent reserve fund for the liability under P.L.2009, c.19.  The contributions certified by the retirement system shall be paid by the employer to the retirement system on or before the date prescribed by law for payment of employer contributions for basic retirement benefits.  If payment of the full amount of the contribution certified is not made within 30 days after the last date for payment of employer contributions for basic retirement benefits, interest at the rate of 10% per year shall be assessed against the unpaid balance on the first day after the thirtieth day.

     (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.2009, c.19, s.2)

 

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

     16.  (1) All the assets of the retirement system shall be credited according to the purpose for which they are held to one of five funds, namely, the annuity savings fund, the pension accumulation fund, the retirement reserve fund, and the special reserve fund[, and the benefit enhancement fund].

     (2)   The annuity savings fund shall be a fund in which shall be credited accumulated contributions by members or on their behalf to provide for their allowances.  The aggregate contributions of a member withdrawn by him or paid to his estate or his designated beneficiary in event of his death as provided in this act shall be paid from the annuity savings fund.  Upon the retirement of a member where the aggregate contributions of the member are to be provided in the form of an annuity, the aggregate contributions of the member shall be transferred from the annuity savings fund to the retirement reserve fund.

     (3)   The pension accumulation fund shall be the fund in which shall be credited contributions made by employers.  Upon the death of a member either before or after retirement any lump sum benefit payable shall be charged to the pension accumulation fund.  Upon the retirement or death of a member the reserve of any pension payable to or on his account shall be transferred to the retirement reserve fund.  The retirement system at the end of each fiscal year shall allow interest on the balance of the retirement reserve fund as of the beginning of said fiscal year at the regular interest rate applicable thereto to cover the interest creditable for the year.  The amount so allowed shall be due and payable and shall be credited annually.  All other income received on the securities, funds and investments of the retirement system shall be credited to the pension accumulation fund, except as provided by subsection (5) of this section. The retirement system, upon the advice of the actuary, shall transfer to and from the pension accumulation fund any surplus or deficit in the retirement reserve fund.

     (4)   The retirement reserve fund shall be the fund from which all retirement allowances and benefits in lieu thereof shall be paid.  If the retirement allowance of a member who has been retired is subsequently canceled, the appropriate reserve shall be transferred to the pension accumulation fund and the annuity savings fund.

     (5)   The special reserve fund shall be the fund to which any earnings in excess of the amounts annually allowed under the provisions of subsection (3) of this section shall be transferred.  No additional amounts shall be credited to the special reserve fund at any time when the total accumulations in such fund equal 1% of the book value of the investments of the retirement system. In this event, any such excess shall be credited to the pension accumulation fund.  All losses from the sale of securities shall be charged against the special reserve fund.  The special reserve fund shall be considered for valuation purposes by the actuary as an asset of the retirement system.

(cf:  P.L.2003, c.108, s.4)

 

     35.  (New section)  The provision of N.J.S.18A:66-2, N.J.S.18A:66-36, N.J.S.18A:66-37, N.J.S.18A:66-44, N.J.S.18A:66-71 as amended by P.L.  , c.   (pending before the Legislature as this bill) concerning persons who become members of the retirement system on or after the effective date of P.L.  , c.    (pending before the Legislature as this bill) shall not apply to a person who at the time of enrollment in the retirement system on or after that effective date transfers service credit, as permitted, from another State-administered retirement system of which the person was a member immediately prior to the effective date and continuously thereafter, but shall apply to a former member of the retirement system who has been granted a retirement allowance and is reenrolled in the retirement system on or after that effective date after becoming employed again in a position that makes the person eligible to be a member of the retirement system.

 

     36.  (New section)  The provision of section 6 of P.L.1954, c.84 (C.43:15A-6), section 38 of P.L.1954, c.84 (C.43:15A-38), section 41 of P.L.1954, c.84 (C.43:15A-41), section 48 of P.L.1954, c.84 (C.43:15A-48), section 61 of P.L.1954, c.84 (C.43:15A-61) as amended by P.L.  , c.   (pending before the Legislature as this bill) concerning persons who become members of the retirement system on or after the effective date of P.L.  , c.    (pending before the Legislature as this bill) shall not apply to a person who at the time of enrollment in the retirement system on or after that effective date transfers service credit, as permitted, from another State-administered retirement system of which the person was a member immediately prior to the effective date and continuously thereafter, but shall apply to a former member of the retirement system who has been granted a retirement allowance and is reenrolled in the retirement system on or after that effective date after becoming employed again in a position that makes the person eligible to be a member of the retirement system.


     37.  (New section)  The provision of section 1 of P.L.1944, c.255 (C.43:16A-1) as amended by P.L.  , c.   (pending before the Legislature as this bill) concerning persons who become members of the retirement system on or after the effective date of P.L.  , c.    (pending before the Legislature as this bill) shall not apply to a person who at the time of enrollment in the retirement system on or after that effective date transfers service credit , as permitted, from another State-administered retirement system of which the person was a member immediately prior to the effective date and continuously thereafter, but shall apply to a former member of the retirement system who has been granted a retirement allowance and is reenrolled in the retirement system on or after that effective date after becoming employed again in a position that makes the person eligible to be a member of the retirement system.

 

     38.  (New section)  The provision of section 3 of P.L.1965, c.89 (C.53:5A-3) as amended by P.L.  , c.   (pending before the Legislature as this bill) concerning persons who become members of the retirement system on or after the effective date of P.L.  , c.    (pending before the Legislature as this bill) shall not apply to a person who at the time of enrollment in the retirement system on or after that effective date transfers service credit, as permitted, from another State-administered retirement system of which the person was a member immediately prior to the effective date and continuously thereafter, but shall apply to a former member of the retirement system who has been granted a retirement allowance and is reenrolled in the retirement system on or after that effective date after becoming employed again in a position that makes the person eligible to be a member of the retirement system.

 

     39.  (New section)  Commencing July 1, 2011 and thereafter, the contribution required, by law, to be made by the State to the Teachers' Pension and Annuity Fund, established pursuant to N.J.S.18A:66-1 et seq., the Judicial Retirement System, established pursuant to P.L.1973, c.140 (C.43:6A-1 et seq.), the Prison Officers' Pension Fund, established pursuant to P.L.1941, c.220 (C.43:7-7 et seq.), the Public Employees' Retirement System, established pursuant to P.L.1954, c.84 (C.43:15A-1 et seq.), the Consolidated Police and Firemen's Pension Fund, established pursuant to R.S.43:16-1 et seq., the Police and Firemen's Retirement System, established pursuant to P.L.1944, c.255 (C.43:16A-1 et seq.), and the State Police Retirement System, established pursuant to P.L.1965, c.89 (C.53:5A-1 et seq.), shall be made in full each year to each system or fund in the manner and at the time provided by law.  The contribution shall be computed by actuaries for each system or fund based on an annual valuation of the assets and liabilities of the system or fund pursuant to consistent and generally accepted actuarial standards and shall include the normal contribution and the unfunded accrued liability contribution.  The State with regard to its obligations funded through the annual appropriations act shall be in compliance with this requirement provided the State makes a payment, to each State-administered retirement system or fund, of at least 1/7th of the full contribution, as computed by the actuaries, in the State fiscal year commencing July 1, 2011 and a payment in each subsequent fiscal year that increases by at least an additional 1/7th until payment of the full contribution is made in the seventh fiscal year and thereafter.

 

     40.  This act shall take effect on the 60th day following enactment.

 

 

STATEMENT

 

     Sections 1-7:

     These sections implement Recommendation 1 of the Joint Legislative Committee on Public Employee Benefits Reform set forth in the final report dated December 1, 2006.  The committee recommended “the enactment of legislation to limit eligibility for defined benefit plans to full-time employees”, with all new part-time employees, new elected officials and new full-time appointed officials having membership in a defined contribution pension plan.

     The bill shifts the basis for membership in the Teachers’ Pension and Annuity Fund (TPAF) and the Public Employees’ Retirement System (PERS) from the amount of compensation to the number of hours worked weekly.  After its effective date, any person in public employment for which the hours of work are fixed at fewer than 35 per week for State employees or 32 for political subdivision employees is ineligible to become a new member of PERS and at fewer than 32 hours per week is ineligible to become a new member of TPAF.  When determining eligibility, hours during which a person does not work due to the person’s participation in a voluntary or mandatory furlough program will not be deducted in determining if a person’s hours of work are fixed at fewer than 35 or 32 per week, as appropriate, for the purpose of eligibility.

     Persons ineligible for TPAF or PERS because the hours of work are fewer than required for PERS or TPAF membership may be eligible for enrollment in the Defined Contribution Retirement Program, whose membership compensation threshold the bill increases to $5,000 from $1,500.

 

     Sections 8-13:

     These sections implement Recommendation 3 of the Joint Legislative Committee on Public Employee Benefits Reform set forth in the final report dated December 1, 2006 to reduce the benefits formula for new members of the Public Employees’ Retirement System (PERS) and the Teachers’ Annuity and Pension Fund (TPAF) by changing from 1/55 to 1/60 the multiplier of the number of years of service in the calculation of a member’s retirement allowance.  The committee noted that this recommendation is consistent with other recommendations aimed at reducing the long-term costs of the defined benefit retirement systems to ensure their fiscal stability and the fiscal stability of the State and local public employers funding those costs.

     In 2001, legislation enhanced the PERS and TPAF benefits for members and retirees by 9% with a change of the multiplier from 1/60 to 1/55.  Veterans and disability benefits were similarly enhanced.  These sections return the multiplier for PERS and TPAF to 1/60 and the other benefits to their pre-2001 level, except for veterans and disability benefits, for persons who become members of PERS or TPAF after the bill is enacted.

 

     Sections 7, 14-19, and 22-23:

     These sections implement Recommendation 4 of the Joint Legislative Committee on Public Employee Benefits Reform set forth in the final report dated December 1, 2006.  The committee recommended “a cap on pensionable salary at the Social Security maximum wage contribution limit under the Federal Insurance Contributions Act (FICA).  ... Employees with annual compensation in excess of the Social Security maximum would be eligible for membership in the defined contribution program .. with regard to only that excess compensation.  The legislation should apply prospectively to all new employees who become members of the State-administered retirement system, except the Judicial Retirement System (JRS), after the enactment of legislation.”  The committee stated that it “believes that this proposal should help control escalating retirement system costs.”  P.L.2007, c.103 implemented this recommendation for the Public Employees’ Retirement System (PERS) and the Teachers’ Pension and Annuity Fund (TPAF).

     This bill imposes a maximum compensation upon which contributions will be made for Police and Firemen’s Retirement System (PFRS) and State Police Retirement System (SPRS) purposes for police officers, firefighters, and State Police officers who become members of those systems on or after the bill’s effective date.  The maximum amount will be the amount of base salary equivalent to the annual maximum wage contribution base for Social Security, pursuant to the federal Insurance Contributions Act.  For 2010, that amount is $106,800.  A new member for whom this annual maximum will be reached in any year will become a participant of the Defined Contribution Retirement Program (DCRP) with regard to the remaining compensation, unless the member irrevocably elects to waive the participation.  For the amount of compensation over the maximum compensation, 5.5% will be deducted as a contribution for the purposes of the DCRP.  When a PFRS or SPRS member also becomes a participant in the DCRP, the life insurance and disability benefit provisions of that program will be available for that participant.

 

     Sections 20-23:

     These sections implement Recommendation 5 of the Joint Legislative Committee on Public Employee Benefits Reform set forth in the final report dated December 1, 2006.  The committee recommended “the enactment of legislation to change the pension benefits calculation from the three highest paid years to the five highest paid years or from the single highest paid year to the three highest paid years, as appropriate.”  The committee recommended that the legislation apply to new employees who become members of the State-administered retirement systems, except the Judicial Retirement System, after the enactment of the legislation.  The committee stated that “its recommendation is consistent with other recommendations aimed at reducing the long-term costs of the defined benefit retirement systems to ensure their fiscal stability and the fiscal stability of the State and local public employers funding those costs.”

     This bill changes the definition of compensation to be used to calculate retirement benefits for members of the Public Employees’ Retirement System (PERS), Teachers’ Pension and Annuity Fund (TPAF), Police and Firemen’s Retirement System (PFRS), and State Police Retirement System (SPRS), who become members after the bill’s effective date, as well as to calculate, in certain cases, pension benefits for surviving family members, when available, and death benefit payments to beneficiaries.

     The bill provides that a member of the TPAF or PERS who is enrolled in the retirement system after the enactment date, would have the member’s retirement allowance calculated using the average annual compensation for the last five years of service or for any five fiscal years of membership providing the largest possible benefit to the member or the member’s beneficiary.  A member enrolled in the systems before the effective date would continue to have the member’s allowance calculated in the manner provided by existing law using the average annual compensation for the last three years of service or for any three fiscal years of membership providing the largest possible benefit to the member or the member's beneficiary.

     The bill also changes the provisions of the PFRS and  SPRS to provide that a member who is enrolled in one of these retirement systems after the effective date would have the member’s retirement allowance calculated using the average annual compensation received by the member during any three fiscal years of membership providing the largest possible benefit.  A member of the system before the effective date would continue to have the member’s allowance calculated in the manner provided by existing law using the compensation in the final year of service.

     The bill would affect the calculation of a family member’s pension benefit, when such a benefit is available, and the amount of a death benefit to a beneficiary whenever current law provides for the use of final compensation or final salary, as those terms are redefined by the bill, for the purpose of that calculation.  In some instances, the current law provides that the calculations for benefits be based on the compensation or salary received in the last year of service or at the time of death; in these instances, there would be no change as a result of this bill.

 

     Sections 24-28:

     These sections implement Recommendation 6 of the Joint Legislative Committee on Public Employee Benefits Reform set forth in the final report dated December 1, 2006.  The committee recommended “the enactment of legislation to require the designation of one position per employee for both the PERS or TPAF” and that the “legislation should apply to new full-time employees who become members of PERS or TPAF after the bill’s enactment and who must select one job for defined benefit credit.”  The committee noted that “although a person holding multiple positions does contribute to the retirement system for each position, the potential for abuse and the difficulty in preventing it make the one-position requirement a necessary reform.”

     For the purposes of the Public Employees’ Retirement System and the Teachers’ Pension and Annuity Fund, this bill provides that a person shall be eligible for membership in the retirement system based upon only one position and requires the retirement system to designate the position providing the higher or highest compensation for the person with such concurrent positions as the basis for eligibility for membership and the compensation base for contributions and pensions calculations.  A member who leaves a designated position or acquires a different or additional position will receive a new designation by the retirement system, if appropriate.  These provisions will not apply to a person who on the effective date of the bill is a member of the retirement system and holds more than one office, position, or employment covered by the retirement system with one or more employers, while the member continues to hold without a break in service more than one of those offices, positions, or employment.         Under the bill, contributions would be deducted only from the member's compensation for the position designated, and for the purpose of calculating the member's retirement benefit, only that compensation would be considered. Service in a position other than the one designated will not be deemed creditable service for the purposes of the retirement system.


     Section 29:

     This section implements Recommendation 7 of the Joint Legislative Committee on Public Employee Benefits Reform set forth in the final report dated December 1, 2006.  The committee recommended “the repeal on a prospective basis for new employees of N.J.S.A.43:3C-9.5 ...  because the Legislature should not be permanently and inextricably bound by an action of a prior session of the Legislature.”

     The bill would remove public employees who become members after the bill’s effective date of the Teachers' Pension and Annuity Fund, the Judicial Retirement System, the Prison Officers' Pension Fund, the Public Employees' Retirement System, the Consolidated Police and Firemen's Pension Fund, the Police and Firemen's Retirement System, and the State Police Retirement System from the law that provides vested members with a non-forfeitable right to receive benefits, as provided under the laws governing the retirement system or fund, upon the attainment of five years of service credit in the retirement system or fund.

 

     Section 30:

     This section implements Recommendation 9 of the Joint Legislative Committee on Public Employee Benefits Reform set forth in the final report dated December 1, 2006.  The committee recommended that legislation be enacted “to give all non-vested employees the option of entering into a defined contribution program ... and should apply to all current and future public employees.”

     This bill permits a person who commences service in a position that makes the person eligible to be a member of the Teachers’ Pension and Annuity Fund, the Judicial Retirement System, the Public Employees’ Retirement System, the Police and Firemen’s Retirement System, or the State Police Retirement System, or a person already enrolled but with less than 10 years of service credit, to choose either to be enrolled in the relevant retirement system or enrolled in the Defined Contribution Retirement Program established pursuant to N.J.S.A.43:15C-1 et al. with regard to that particular position by irrevocably waiving all rights and benefits which would otherwise be provided by the relevant retirement system.

     In addition, this bill would permit a person commencing service, or with less than 10 years of service credit, to choose to withdraw entirely from enrollment in any State-administered retirement system.  In this regard, the bill exceeds the recommendation, but serves the recommendation’s goal by providing a person with the flexibility to choose a course most consistent with his or her personal situation and financial goals while also reducing the costs to public employers.


     Section 31:

     This bill implements Recommendation 12 of the Joint Legislative Committee on Public Employee Benefits Reform set forth in the final report dated December 1, 2006.  The committee recommended “the enactment of legislation to close the PERS Prosecutors Part ... prospectively to new members.”  The committee recommended “an end to special benefits within the Public Employees’ Retirement System for selected groups of public employees and officials. ... This recommendation would standardize pension benefits for public employees with similar job functions.”

     This bill closes the Prosecutors Part of the Public Employees’ Retirement System (PERS) to new members.  The Prosecutors Part was added to PERS in 2001.  With the enactment of this bill, all prosecutors taking office after the bill’s effective date will be enrolled in the “regular” PERS system, except that a county prosecutor who is appointed by the Governor with the advice and consent of the Senate will be enrolled in the Defined Contribution Retirement System.  “Prosecutor” is defined in the law as a county prosecutor, first assistant prosecutor or assistant  prosecutor; the Director of the Division of Criminal Justice in the Department of Law and Public Safety; an assistant director, deputy director, assistant attorney general or deputy attorney general in that department and assigned to that division; or a criminal investigator in the Division of Criminal Justice in the Department of Law and Public Safety who is not eligible for enrollment in the Police and Firemen's Retirement System.

 

     Section 32-34:

     These section implement Recommendation 14 of the Joint Legislative Committee on Public Employee Benefits Reform set forth in the final report dated December 1, 2006.  The committee recommended “the enactment of legislation to repeal this prospective benefit enhancement, and the corresponding benefit enhancement fund, effective immediately.  This recommendation would result in significant cost savings for the State and local public employers.”

     The bill eliminates the provision in the PFRS that would permit a member of the Police and Firemen’s Retirement System to retire, at any age after 25 years of service credit, on a special retirement allowance of 70% of final compensation after the retirement system reaches a funded level of 104%.

 

     Sections 35-38:

     These sections provide that, with regard to any provision of this bill made applicable to a person who becomes a member of a State-administered retirement system on or after the bill’s effective date, that provision would not apply to a person who at the time of enrollment in the retirement system on or after that effective date transfers service credit, as permitted, from another State-administered retirement system or fund of which the person was a member immediately prior to the effective and continuously thereafter, but would apply to a former member of the retirement system who has been granted a retirement allowance and is reenrolled in the retirement system on or after that effective date after becoming employed again in a position that makes the person eligible to be a member of the retirement system.  These sections are in line with recent prior enactments in this regard.

 

     Section 39:

     This section of the bill requires the State, beginning July 1, 2011, to make in full the annual employer’s contribution, as computed by the actuaries, to the Teachers' Pension and Annuity Fund, the Judicial Retirement System, the Prison Officers' Pension Fund, the Public Employees' Retirement System, the Consolidated Police and Firemen's Pension Fund, the Police and Firemen's Retirement System, and the State Police Retirement System.  The State would be in compliance with this requirement provided the State makes a payment, to each State-administered retirement system or fund, of at least 1/7th of the full contribution, as computed by the actuaries, in the State fiscal year commencing July 1, 2011 and makes a payment in each subsequent fiscal year that increases by at least an additional 1/7th until payment of the full contribution is made in the eighth fiscal year and thereafter.  This phase-in is for the purpose of allowing the State to make gradual adjustments to the annual appropriations act.