ASSEMBLY BUDGET COMMITTEE
ASSEMBLY, No. 4536
STATE OF NEW JERSEY
DATED: DECEMBER 12, 2013
The Assembly Budget Committee reports favorably Assembly Bill No. 4536.
This bill makes various prospective changes to the qualifications and benefits associated with the Employees’ Retirement System of Jersey City (ERS). The purpose of this bill is to protect the provision of ERS benefits for current and future members while complying with the ERS’ legal and fiduciary duties.
For new members of ERS, the bill makes the following changes to ERS qualifications and benefits:
· Raises the minimum age of eligibility for ERS’ deferred, service, or early retirement benefit from the age of 60 to the age of 65;
· Increases the number of years of service necessary for service retirement from 20 years to 25 years;
· Raises the number of years of service necessary for early retirement from 25 years to 30 years;
· Reconfigures the retirement benefit penalty for insufficient service time from 1/12 of 1% for each month preceding age 60 to 3/12 of 1% for each month preceding age 65;
· Expands the averaging period in calculating a final salary for determining retirement benefits from three years to five years; and
· Maintains State-Administered Public Employees’ Retirement System (PERS) membership for new employees under the age of 40 who are members of PERS based on prior employment.
For current and new members of ERS, the bill makes the following changes to ERS benefits:
· Reduces the percentage of the Consumer Price Index used for the calculation of cost-of-living adjustments from 100% to 50%;
· Authorizes the purchase of up to three years of service credit, at full cost, for qualified employment rendered before becoming an ERS member, subject to restrictions. Qualified employment includes public in-State employment that was eligible for credit in a State-administered retirement system or military service in the United States Armed Forces.
· Changes conditions attached to member loans from ERS to comply with the federal Internal Revenue Code.
The Office of Legislative Services is without sufficient data at this point in time with which to provide a fiscal impact.