ASSEMBLY, No. 3796

STATE OF NEW JERSEY

214th LEGISLATURE

 

INTRODUCED FEBRUARY 10, 2011

 


 

Sponsored by:

Assemblyman  DECLAN J. O'SCANLON, JR.

District 12 (Mercer and Monmouth)

Assemblyman  GARY R. CHIUSANO

District 24 (Sussex, Hunterdon and Morris)

 

 

 

 

SYNOPSIS

     Makes changes to retirement benefits for members of the State-administered retirement systems and eliminates future COLAs.

 

CURRENT VERSION OF TEXT

     As introduced.

  


An Act concerning the retirement benefits of public employees and the State-administered retirement systems, and amending, supplementing and repealing various parts of the statutory law.

 

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

 

     1.    (New section)  The Legislature finds and declares:

     a.     The State’s pension plans have experienced increasing deterioration in their funded status which has been exacerbated by recent declines in the market value of the fund assets. The probability of investment returns making up for the shortfall is very low even if economic conditions improved.

     b.    In the past, the State has authorized expensive benefit enhancements, but the funding for these benefits has not followed, further impeding the sustainability of the pension systems at these current level of benefits.

     c.     As a consequence of such factors, including these poor investment returns and increased benefits, the funded status of the pension plans has drastically decreased over the past ten years.  Currently, the pension systems are estimated to be underfunded by $54 billion, and if current benefits continue, the underfunding could grow to $181 billion by 2041.

     d.    In order to maintain the long term fiscal integrity of the pension funds and their ability to pay required benefits to the members of the pension plans, it is necessary to enact reforms that will protect the pension systems.

     e.     Such reforms are intended to bring solvency and long-term stability to the pension systems and thereby protect the retirement benefits of all members participating in the systems.  These reforms are essential in order to contain the increasing costs of employee pension benefits and the burden placed on current and future generations of  taxpayers who must support these costs. 

     f.     These reforms are also intended to bring uniformity and consistency to the area of disability retirement by making benefits uniform among the several pension plans, eliminating the complicated and costly benefit formula under current law that has resulted in substantial litigation, and more closely aligning these benefits with our workers’ compensation laws.

     g.     The reforms contain technical changes that are required in order to ensure the pension plans operate as qualified plans under federal tax law.

 

     2.    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) In the case of a member with 25 or more years of creditable service or who has attained normal retirement age on the effective date of this section of P.L.    , c.   (pending before the Legislature as this bill), "[Final] 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 member with fewer than 25 years of creditable service and who has not attained normal retirement age on the effective date of this section of P.L.    , c.   (pending before the Legislature as this bill) and a person who becomes a member of the retirement system on or after the effective date of P.L.2010, c.1, "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] an intellectual disability 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.

     y.     “Normal retirement age” means the age at which the member is first eligible for a service retirement based on age under N.J.S.18A:66-43.

(cf:  P.L.2010, c.1, s.20)

 

     3.    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 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 November 1, 2008, a person who was a member of the retirement system on that 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 November 1, 2008 and before or on the effective date of P.L.2010, c.1, a person who was not a member of the retirement system on November 1, 2008, or who was a member of the retirement system on that 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.2010, c.1, 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.  This subsection shall not apply to prohibit the enrollment or reenrollment of a retiree whose retirement was not bona fide within the meaning of section 92 of P.L.    , c.   (C.     ) (pending before the Legislature as this bill).

(cf: P.L.2010, c.1, s.1)

 

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

     18A:66-18.  The contingent reserve fund shall be the fund in which shall be credited contributions made by the State and other employers.

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

     b.    Upon the basis of the tables recommended by the actuary which the board of trustees adopts and regular interest, the actuary of the board shall annually determine if there is an  amount of the accrued liability of the retirement system, computed under the projected unit credit method, including the liability for pension adjustment benefits for active employees funded pursuant to section 2 of P.L.1987, c.385 (C.18A:66-18.1), which is not already covered by the assets of the retirement system, valued in accordance with the asset valuation method established in this section. 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 in level dollars 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 March 31, 1996 shall be the full market value of the assets as of that date and shall include the proceeds from the bonds issued pursuant to the Pension Bond Financing Act of 1997, P.L.1997, c.114 (C.34:1B-7.45 et seq.), paid to the system by the New Jersey Economic Development Authority to fund the unfunded accrued liability of the system.  Notwithstanding the first sentence of this paragraph, the valuation assets for the valuation period ending June 30, 1999 shall be the full market value of the assets as of that date.

     "Excess valuation assets" for a valuation period means:

     (1)   the valuation assets; less

     (2)   the actuarial accrued liability for basic benefits and pension adjustment benefits, excluding the unfunded accrued liability for early retirement incentive benefits pursuant to P.L.1991, c.231 and P.L.1993, c.163 for employers other than the State; less

     (3)   the contributory group insurance premium fund created by N.J.S.18A:66-77; less

     (4)   the post-retirement medical premium fund created pursuant to section 2 of P.L.1987, c.385 (C.18A:66-18.1), as amended by section 3 of P.L.1994, c.62; less

     (5)   the present value of the projected total normal cost for pension adjustment benefits in excess of the projected total phased-in normal cost for pension adjustment benefits as originally authorized by section 2 of P.L.1987, c.385 (C.18A:66-18.1) over the full phase-in period, determined in the manner prescribed for the determination and amortization of the unfunded accrued liability of the system, if the sum of the foregoing items is greater than zero.

     If there are excess valuation assets for the valuation period ending March 31, 1996, the normal contributions for the valuation periods ending March 31, 1996 and March 31, 1997 which have not yet been paid to the retirement system shall be reduced to the extent possible by the excess valuation assets, provided that 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, and provided further that the normal contribution for the valuation period ending March 31, 1996 shall not be less than $54,000,000.  If there are excess valuation assets for a valuation period ending after March 31, 1996, the State Treasurer may reduce the normal contribution payable for the next valuation period as follows:

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

     (2)   for the valuation period ending March 31, 2002, to the extent  possible by up to 84% of the excess valuation assets;

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

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

     For calendar years 1998 and 1999, the rate of contribution of members of the retirement system under N.J.S.18A:66-29 shall be reduced by 1/2 of 1% from excess valuation assets.  For calendar years 2000 and 2001, the rate of contribution of members of the retirement system shall be reduced equally with normal contributions to the extent possible, but not more than 1/2 of 1%, from excess valuation assets.  Thereafter, through calendar year 2007, the rate of contribution of members of the retirement system under that section for a calendar year shall be reduced equally with normal contributions to the extent possible, but not by more than 2%, from excess valuation assets if the State Treasurer determines that excess valuation assets shall be used to reduce normal contributions by the State for the fiscal year beginning immediately prior to the calendar year, and excess valuation assets above the amount necessary to fund the reduction for that calendar year in the member contribution rate plus an equal reduction in the normal contribution shall be available for the further reduction of normal contributions, subject to the limitations prescribed by this subsection.

     If there are excess valuation assets after reductions in normal contributions and member contributions as authorized in the preceding paragraphs for a valuation period beginning with the valuation period ending June 30, 1999, an amount of excess valuation assets not to exceed the amount of the member contributions for the fiscal year in which the normal contributions are payable shall be credited to the benefit enhancement fund.  The amount of excess valuation assets credited to the benefit enhancement fund shall not exceed the present value of the expected additional normal contributions attributable to the provisions of P.L.2001, c.133 payable on behalf of the active members over the expected working lives of the active members in accordance with the tables of actuarial assumptions for the valuation period.  No additional excess valuation assets shall be credited to the benefit enhancement fund after the maximum amount is attained.  Interest shall be credited to the benefit enhancement fund as provided under N.J.S.18A:66-25.

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

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

     d.    The retirement system shall certify annually the aggregate amount payable to the contingent reserve fund in the ensuing year, which amount shall be equal to the sum of the amounts described in this section, and which shall be paid into the contingent reserve fund in the manner provided by section 18A:66-33.

     e.     Except as provided in sections 18A:66-26 and 18A:66-53, the death benefits payable under the provisions of this article upon the death of an active or retired member shall be paid from the contingent reserve fund.

     f.     The disbursements for benefits not covered by reserves in the system on account of veterans shall be met by direct contribution of the State.

(cf: P.L.2007, c.92, s.24)

 

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

     18A:66-20.  (a)  Any contributions made by a member in excess of those required shall be  refunded with regular interest to January 1, 1956, which rate of interest shall be 4 percent commencing with the effective date of this section of P.L.    , c.   (pending before the Legislature as this bill), to the member or his beneficiary or estate or shall, at his request, be used at retirement with regular interest to provide an annuity of equivalent actuarial value which shall be in addition to his retirement allowance as computed in accordance with  section 18A:66-44.

     (b) Upon the submission of such evidence as the retirement system may require, the system shall refund to any member, that part of his accumulated deductions paid into the retirement system as a result of deductions based on payments to him over and above compensation as defined in this article.

     (c) Until July 1, 1974 contributions, made by a member employed by an institution of higher education prior to July 1, 1969, on the basis of compensation earned during summer sessions may be refunded with regular interest to January 1, 1956 to the member at his request or shall be included in the computation of his retirement allowance.

(cf: P.L.1971, c.121, s.10)

 

     6.    N.J.S.18A:66-21 is amended to read as follows:

     18A:66-21.  The retirement reserve fund shall be the fund from which all retirement allowances shall be paid except those payable from the pension fund as provided  in section 18A:66-22.  Upon the retirement of a member other than a present-entrant, his accumulated deductions together with regular interest after January 1, 1956, shall be transferred to the retirement reserve fund from  the annuity savings fund.  The reserve needed to produce the balance of the  retirement allowance shall be transferred from the contingent reserve fund.  If  the retirement allowance of a member who has been retired is subsequently  canceled, the appropriate reserve shall be transferred to the annuity savings  fund and the contingent reserve fund.  Commencing with the effective date of this section of P.L.    , c.   (pending before the Legislature as this bill), the regular interest rate applicable to the annuity savings fund shall be 4 percent.

     Any surplus or deficit developing in the retirement reserve fund shall be adjusted from time to time by transfer to or from the contingent reserve fund by appropriate action of the retirement system upon the advice of the actuary.

(cf: P.L.1971, c.121, s.11)

 

     7.    N.J.S.18A:66-25 is amended to read as follows:

     18A:66-25.  The board of trustees at the end of each fiscal year shall allow interest on  the balance of the contingent reserve fund, the annuity savings fund, the retirement reserve fund, pension fund, benefit enhancement fund and the members' death benefit fund as of  the beginning of said fiscal year at the regular interest rate applicable thereto to cover the interest creditable to the respective funds for the year.  Commencing with the effective date of this section of P.L.    , c.   (pending before the Legislature as this bill), the regular interest rate applicable to the annuity savings fund shall be 4 percent. The amount so allowed shall be due and payable to said funds and shall be credited annually thereto by the board.

(cf: P.L.2001, c.133, s.3)

 

     8.    N.J.S.18A:66-29 is amended to read as follows:

     18A:66-29.  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.

     Members enrolled in the retirement system on or after July 1, 2007 shall contribute 5.5% of compensation to the system. Members 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.

     Commencing with the payroll period for which the payroll date occurs on or immediately following July 1, 2011, all members shall contribute an additional 3% of compensation to the system.  This additional contribution, however, shall not be used to reduce the employer normal contribution required pursuant to N.J.S.18A:66-18.

(cf:  P.L.2007, c.103, s.1)

 

     9.    N.J.S.18A:66-32.1 is amended to read as follows:

     18A:66-32.1.  a.  If any member of the retirement system receives periodic benefits payable under the workers' compensation law during the course of his active service, in lieu of his normal compensation, his regular salary deductions shall be paid to the retirement system by his employer.  Such payments shall be computed, in accordance with N.J.S.18A:66-29, at the rate of contribution on the base salary subject to the retirement system, just prior to the receipt of the workers' compensation benefits.  The moneys paid by the employer shall be credited to the member's account in the annuity savings fund and shall be treated as employee contributions for all purposes.  The employer will terminate the payment of these moneys when the periodic benefits payable under the workers' compensation law are terminated or when the member retires.

     The member for whom the employer is making such payments, will be considered as if he were in the active service.

     b.    An application for retirement benefits may be approved by the board of trustees while the member, applying for such benefits, is in receipt of periodic benefits under the workers' compensation law.  If a retirant receiving a work-related disability retirement or an accidental disability retirement allowance approved prior to the effective date of P.L.    , c.  (pending before the Legislature as this bill) becomes a recipient of periodic benefits under the workers' compensation law after the date of retirement, the pension portion of the retirement allowance payable to the retirant shall be reduced, during the period of the payment of the periodic benefits, dollar-for-dollar in the amount of the periodic benefits received after the date of retirement, subject to the provisions of N.J.S. 18A:66-69.  The reduction provided for herein shall not affect the retirant's pension adjustment benefits or survivor benefits that may be payable upon the death of the retirant.

     If a work-related disability retirant or an accidental disability retirant approved prior to the effective date of P.L.    , c.  (pending before the Legislature as this bill) receives a retirement allowance without reduction and periodic benefits under the workers' compensation law for any period of time after the date of retirement, the retirant shall repay to the retirement system the amount of the pension portion of the retirement allowance which should have been subject to reduction under this subsection.  The repayment may be in the form of a lump sum payment or scheduled as deductions from the retirant's retirement allowance and pension adjustment benefits.  If the retirant dies before full repayment of the amount required, the remaining balance shall be deducted from any death benefits payable on behalf of the retirant.  Notwithstanding the provisions of R.S.34:15-26 and R.S.34:15-40, the amount of the dollar-for-dollar reduction from the receipt of workers’ compensation periodic benefits shall not be reduced by a payment for legal services or by receipt of a third party recovery.

(cf: P.L.1995, c.369, s.1)

 

     10.  N.J.S.18A:66-34 is amended to read as follows:

     18A:66-34.  A member who withdraws from service or ceases to be a teacher 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 on contributions made after January 1, 1956, less any loan outstanding, and except  that for any period after June 30, 1944, the interest payable shall be such  proportion of the interest determined at the regular rate as 2% per annum bears  to the regular rate of interest which shall be 4 percent commencing with the effective date of this section of P.L.    , c.   (pending before the Legislature as this bill); provided, however, that no interest shall be  payable if such a member does not have 3 years of membership service at the  time of withdrawal from service or cessation of employment.

     He shall cease to be a member 2 years from the date he discontinued service  as a teacher, 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.

(cf: P.L.1971, c.121, s.17)

     11.  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 for a member who has established 25 or more years of creditable service on the effective date of this section of P.L.    , c.   (pending before the Legislature as this bill), or for a member who has established fewer than 25 years of creditable service on that effective date or a person who becomes a member of the retirement system on or after [the] that effective date [of P.L.2008, c.89] beginning at age [62] 65, 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) 1/64 of final compensation for each year of service credited as Class A service [and] , 1/55 of final compensation for each year of service credited as class B service, [or] and for a person who becomes a member of the retirement system on or after the effective date of P.L.2010, c.1, 1/60 of final compensation for each year of service credited as class B service, prior to the effective date of this section of P.L.   , c.     (pending before the Legislature as this bill), plus (2) 1/65 of final compensation for each year of service credited on or after the effective date if this section of P.L.   , c.     (pending before the Legislature as this bill), 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, which shall be 4 percent commencing with the effective date of this provision of this section of P.L.   , c.     (pending before the Legislature as this bill) and 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] 65, 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] he shall be enrolled in the retirement system under a new membership account and shall be subject to such benefits and requirements as shall apply to new members of the retirement system as of the date of such new enrollment.  The member may elect to transfer all service credit associated with the previously vested membership to the new membership account and such service credit will be subject to the benefit and requirements as shall apply to new members of the retirement system as of the date of such new enrollment.  Should the member elect not to transfer the service credit associated with the vested membership to the new membership account, no benefits shall be payable from the previous application for deferred retirement until such time as the member has terminated all Teachers’ Pension and Annuity Fund eligible employment.

(cf:  P.L.2010, c.1, s.8)

 

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

     18A:66-37.  Should a member with 25 or more years of creditable service credit on the effective date of this section of P.L.    , c.   (pending before the Legislature as this bill) 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] should a member with fewer than 25 years of creditable service on the effective date of this section of P.L.    , c.   (pending before the Legislature as this bill) or a person who becomes a member of the retirement system on or after that effective date, resign after having established 30 years of creditable service before reaching age 65, 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) 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] and for a person who becomes a member of the retirement system on or after the effective date of P.L.2010, c.1, 1/60 of final compensation for each year of service credited as class B service, prior to the effective date of this section of P.L.   , c.     (pending before the Legislature as this bill), plus (2)  1/65 of final compensation for each year of service credited on or after the effective date of this section of P.L.   , c.     (pending before the Legislature as this bill), 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, if the member has established 25 or more years of creditable service credit on the effective date of this section of P.L.    , c.   (pending before the Legislature as this bill); 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] 65 , if the member established fewer than 25 years of creditable service credit on the effective date of this section of P.L.    , c.   (pending before the Legislature as this bill) or the person becomes a member of the retirement system on or after that effective date; 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.2010, c.1, s.9)

 

     13.  N.J.S.18A:66-38 is amended to read as follows:

     18A:66-38.  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 18A:66-46, there shall be paid to such member's beneficiary:

     (a) The member's accumulated deductions at the time of death together with regular interest after January 1, 1956, which rate of interest shall be 4 percent commencing with the effective date of this section of P.L.    , c.   (pending before the Legislature as this bill);  and

     (b) An amount equal to 1  1/2   times the compensation upon which contributions by the member to the annuity savings fund were based in the last year of creditable service.

     For the purpose of this section, section 18A:66-46e and section 18A:66-53, a  member of the retirement system shall be deemed to be an active member (1) while he is disabled due to sickness or injury arising out of or in the course of his employment as a teacher to whom this article applies, is not engaged in any gainful occupation, and is receiving or entitled to receive periodic benefits (including any commutation of, or substitute for, such benefits) for loss of time on account of such disability under or by reason of workmen's compensation law, occupational disease law or similar legislation and has not retired or terminated his membership;  or (2) for a period of no more than two years while on official leave of absence without pay if satisfactory evidence is presented to the retirement system that such leave of absence without pay is  due to the member's personal illness other than an illness to which (1) above applies.  For the purpose of this section, section 18A:66-46e and section 18A:66-53, a member of the retirement system shall be deemed to be an active member for a period of not more than one year in the event of an official leave  (1) due to the member's maternity or (2) to fulfill a residency requirement for  an advanced degree or (3) as a full-time student at an institution of higher  education, and for a period of not more than 93 days while on official leave of  absence without pay when such leave of absence is due to any reason other than  illness.  In order for a member to be covered for the optional death benefits  provided by section 18A:66-53, he shall continue to make contributions for same  during the period such member is on official leave of absence without pay,  except that when such official leave of absence without pay is due to illness,  no contributions shall be required of the member during the period he is deemed  to be an active member while on such leave of absence.

     If a member dies within 30 days after the date of retirement or the date of  board approval, whichever is later, a death benefit shall be payable only if he  is deemed to be an active member in accordance with this section; provided,  however, a member applying for disability benefits shall be deemed an active  member if he was covered by the death benefit provisions of the act at the  termination of employment, filed the application for disability retirement with  the retirement system within 30 days following such termination of employment  and dies within 30 days after the date of retirement or the date of board  approval, whichever is later.

(cf: P.L.1984, c.132, s.1)

 

     14.  N.J.S.18A:66-39 is amended to read as follows:

     18A:66-39.  a.  [Before June 9, 1971, a member, who shall have been a teacher and a member of the retirement system for each of the 10 years next preceding his retirement, shall, upon the application of his employer or upon his own application or the application of one acting in his behalf, be retired for ordinary disability by the board of trustees, on a regular disability allowance if he is under 60 years of age and on a service allowance if he has reached or passed that age.  The physician or physicians designated by the board shall have first made a medical examination of him at his residence or at any other place mutually agreed upon and shall have certified to the board that the member is physically or mentally incapacitated for the performance of duty and should be retired] (Deleted by amendment, P.L.    , c.   (pending before the Legislature as this bill).

     b.    On and after June 9, 1971, a member, under [60 years of] normal retirement age, who has 10 or more years of credit for New Jersey service, shall, upon the application of his employer or upon his own application or the application of one acting in his behalf, be retired for ordinary disability by the board of trustees. The physician or physicians designated by the board shall have first made a medical examination of him [at his residence or at any other place mutually agreed upon] and shall have certified to the board that the member is physically or mentally incapacitated for the performance of his usual duty or of any other available duty that his employer is willing to assign to him and should be retired.  [No person who becomes a member of the retirement system on or after the effective date of P.L.2010, c.3 shall be eligible for retirement pursuant to this subsection.] 

     c.     A member, under [65 years of] normal retirement age, shall, upon the application of his employer or upon his own application or the application of one acting in his behalf, be retired by the board of trustees, [if said member is permanently and totally disabled as a direct result of a traumatic event occurring during and as a result of the performance of his regular or assigned duties,] on [an accidental] a work-related disability allowance, if he meets the requirements of the medical examination set forth in subsection b. of this section and the incapacity from the performance of duties is the direct result of a work-related accident or occupational exposure occurring during and as a result of his regular assigned duties and not the result of willful negligence[A traumatic event] An accident or occupational exposure occurring during voluntary performance of regular or assigned duties at a place of employment before or after required hours of employment which is not in violation of any valid work rule of the employer or otherwise prohibited by the employer shall be deemed as occurring during the performance of regular or assigned duties.  [No person who becomes a member of the retirement system on or after the effective date of P.L.2010, c.3 shall be eligible for retirement pursuant to this subsection.]  In order to qualify for a work-related disability benefit, the member shall have received a workers’ compensation  award of permanent disability under R.S.34:15-1 et seq.  The board may, in its discretion, waive the requirement for a medical examination under this subsection when the Division of Workers’ Compensation in the Department of Labor and Workforce Development has determined that the member is 100 percent totally and permanently disabled. 

     The application to accomplish [such] a work-related disability retirement must be filed within five years of the original [traumatic event] accident or occupational exposure, but the board of trustees may consider an application filed after the five-year period if it can be factually demonstrated to the satisfaction of the board of trustees that the disability is due to the accident or occupational exposure and the filing was not accomplished within the five-year period due to a delayed manifestation of the disability or to circumstances beyond the control of the member.

     [Permanent and total disability resulting from a cardiovascular, pulmonary or musculo-skeletal condition which was not a direct result of a traumatic event occurring in the performance of duty shall be deemed an ordinary disability.

     Before consideration of an application for accidental disability allowance by the board of trustees, the physician or physicians designated by the board shall have first made a medical examination of the member at his residence or at any other place mutually agreed upon and shall have certified to the board that he is physically or mentally incapacitated for the performance of duty, and should be retired, and the employer shall have certified to the board that the member is permanently and totally disabled as a direct result of a traumatic event occurring during and as a result of the performance of his regular and assigned duties, the time and place where the duty causing the disability was performed, that the disability was not the result of his willful negligence and that the member should be retired.]

(cf: P.L.2010, c.3, s.7)

 

     15.  N.J.S.18A:66-41 is amended to read as follows:

     18A:66-41.  A member upon retirement for ordinary disability or work-related disability shall receive a retirement allowance which shall consist of:

     (a)   an annuity which shall be the actuarial equivalent of his accumulated deductions at the time of his retirement together with regular interest after January 1, 1956 which rate of interest shall be 4 percent commencing with the effective date of this provision of this section of P.L.    , c.   (pending before the Legislature as this bill); 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 final compensation multiplied by his number of years of creditable service; and provided further, that in no event shall the allowance be less than [43.6%] 40% of final compensation.

     Upon the receipt of proper proofs of the death of a member who has retired on an ordinary or work-related disability retirement allowance, there shall be paid to such member's beneficiary, an amount equal to 1 1/2 times 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; provided, however, that if such death shall occur after the member shall have attained age 60, the amount payable shall equal 3/16 of such compensation.  The death benefits provided in this section shall apply to any member who has retired or shall retire on or after January 1, 1956.

(cf: P.L.2001, c.353, s.1)

 

     16.  N.J.S.18A:66-43 is amended to read as follows:

     18A:66-43.  Retirement for service shall be as follows:  (a) A person who was a member before the effective date of P.L.2008, c.89 [and has attained] who has attained age 60 on the effective date of this section of P.L.    , c.   (pending before the Legislature as this bill) or who has 25 or more years of creditable service on that effective date of this section upon attaining 60 years of age may retire on a service retirement allowance by filing with the retirement system a written application, duly attested, stating at which time subsequent to the execution and filing thereof he desires to be retired. The board of trustees shall retire him at the time specified or at such other time within 1 month after the date so specified as the board finds advisable.

     (b)   A person who becomes a member on or after the effective date of P.L.2008, c.89 [and has attained] who has attained age 62 on the effective date of this section of P.L.    , c.   (pending before the Legislature as this bill) or who has 25 or more years of creditable service on that effective date upon attaining 62 years of age may retire on a service retirement allowance by filing with the retirement system a written application, duly attested, stating at which time subsequent to the execution and filing thereof the member desires to be retired. The board of trustees shall retire the member at the time specified or at such other time within 1 month after the date so specified as the board finds advisable.

     (c)   A member who has established fewer than 25 years of creditable service and who is not eligible for retirement under subsection (a) or (b) of this section on the effective date of this section of P.L.    , c.   (pending before the Legislature as this bill) and a person who becomes a member on or after that effective date and who has attained 65 years of age may retire on a service retirement allowance by filing with the retirement system a written application, duly attested, stating at which time subsequent to the execution and filing thereof the member desires to be retired. The board of trustees shall retire the member at the time specified or at such other time within 1 month after the date so specified as the board finds advisable.

(cf: P.L.2008. c.89, s.21)

 

     17.  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 which rate of interest shall be 4 percent commencing with the effective date of this provision of this section of P.L.    , c.   (pending before the Legislature as this bill), 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)  1/64 of final compensation for each year of service credited as class A service [and] , 1/55 of final compensation for each year of service credited as class B service, [or] and for a person who becomes a member of the retirement system on or after the effective date of P.L.2010, c.1, 1/60 of final compensation for each year of service credited as class B service, prior to the effective date of this section of P.L.   , c.     (pending before the Legislature as this bill), plus (2) 1/65 of final compensation for each year of service credited on or after the effective date of this section of P.L.   , c.     (pending before the Legislature as this bill).

     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.2010, c.1, s.10)

 

     18.  N.J.S.18A:66-53.1 is amended to read as follows:

     18A:66-53.1.  The designation of beneficiary by a member or retirant shall be made in writing on a form satisfactory to the retirement system, and filed with the retirement system.  The member or retirant may, from time to time and without the consent of his death benefit designee, change the beneficiary by filing written notice of the change with the system on a form satisfactory to it. The  new nomination will be effective on the date the notice, in proper form, is  received by the system, and any prior nomination shall thereupon become void.

     If more than one beneficiary is nominated and in such nomination the member  or retirant has failed to specify their respective interests, the beneficiaries  shall share equally.  If any beneficiary predeceases the member or retirant,  the interest of such beneficiary shall terminate and shall be shared equally by  such of the beneficiaries as survive the member or retirant, unless the member  or retirant has made written request to the contrary in his beneficiary  nomination.

     Any amounts due for which there is no beneficiary at the death of a member, retirant or beneficiary shall be payable to the estate of such member, retirant  or beneficiary.

     Except with regard to the payment of the member's accumulated deductions with regular interest which rate of interest shall be 4 percent commencing with the effective date of this section of P.L.    , c.   (pending before the Legislature as this bill) and the payment, upon the death of (1) a retirant after attaining the age of 60 or receiving an allowance pursuant to section 18A:66-37, or (2) a member after attaining the age of 70 years, of the death benefits provided in sections 18A:66-36, 18A:66-37, 18A:66-41, 18A:66-42, and 18A:66-44, a member may elect, by making written request to the retirement system, that the whole or any part of his death benefits be made payable to his  beneficiary either as a life annuity or in equal installments over a period of  years specified in such election, and may alter such election from time to time  during his lifetime by again making such written request.  In the event of a  change of beneficiary, any previous arrangement by the member or retirant under this paragraph shall be void.  The election set forth in this paragraph shall not apply or be available when the beneficiary is an estate, or a corporation,  partnership, association, institution, trustee or any fiduciary.

     If, at the member's or retirant's death, an amount of death benefit would be  payable to the beneficiary in a single sum, any election with regard to such  amount which was available to the member or retirant immediately prior to his  death in accordance with the provisions of the immediately preceding paragraph  shall then be available to such beneficiary for the benefit of such beneficiary.

(cf: P.L.1984, c.132, s.4)

 

     19.  N.J.S.18A:66-71 is amended to read as follows:

     18A:66-71.  a.  (1) Any public employee veteran member in office, position or employment of this State or of a county, municipality, or school district, board of education or other employer who on or before the effective date of this section of P.L.    , c.  (pending before the Legislature as this bill) [(1)] (a) has or shall have attained the age of 60 years and has or shall have been for 20 years continuously or in the aggregate in office, position or employment of this State or of a county, municipality or school district, board of education or other employer, or [(2)] (b) has or shall have attained the age of 55 years and has or shall have been for 25 years continuously or in the aggregate in that office, position or employment, shall have the privilege of retiring for service and of receiving, instead of the retirement allowance provided under N.J.S.18A:66-44, a retirement allowance of 54.5% of the compensation for which contributions are made during the 12-month period of membership providing the largest possible benefit to the member or the member's beneficiary.

     (2) After the effective date of this section of P.L.    , c.   (pending before the Legislature as this bill) any public employee veteran member in office, position or employment of this State or of a county, municipality, public agency, school district or board of education and who (a) shall have attained 60 years of age and who has 20 years of aggregate service credit in such office, position or employment, or (b) shall have attained 55 years of age and who has 25 years of aggregate service credit in such office, position or employment, shall have the privilege of retiring for service and receiving, instead of the retirement allowance provided under section N.J.S.18A:66-44, a retirement allowance of 54.5% of the compensation for which contributions are made during the 12-month period of membership providing the largest possible benefit to the member or the member's beneficiary for service accrued prior to that effective date multiplied by the number of years of service accrued prior to that effective date divided by the total number of years of service accrued, plus 50% of the compensation for which contributions are made during the 36-month period of membership providing the largest possible benefit to the member or the member's beneficiary for service accrued after that effective date multiplied by the number of years of service accrued after that effective date divided by the total number of years of service accrued.

     b.    (Deleted by amendment, P.L.1984, c.69.)

     c.     Any public employee veteran member who has been for 20 years in the aggregate in office, position or employment of this State or of a county, municipality or school district, board of education or other employer as of January 1, 1955, shall have the privilege of retiring for ordinary disability and of receiving, instead of the retirement allowance provided under N.J.S.18A:66-41, a retirement allowance of one-half of the compensation received during the last year of employment upon which contributions to the annuity savings fund or contingent reserve fund are made.  Such retirement shall be subject to the provisions governing ordinary disability retirement in N.J.S.18A:66-39 and N.J.S.18A:66-40.

     d.    (1) Any public employee veteran member who shall be in office, position or employment of this State or of a county, municipality, school district, board of education or other employer and who on or before the effective date of this section of P.L.    , c.  (pending before the Legislature as this bill) shall have attained 55 years of age and who has at least 35 years of aggregate service credit in such office, position or employment, shall have the privilege of retiring for service and receiving a retirement allowance of 1/55 of the compensation the member received during the 12-month period of membership providing the largest possible benefit to the member or the member's beneficiary for each year of creditable service.

     (2) After the effective date of this section of P.L.    , c.   (pending before the Legislature as this bill), any public employee veteran member who shall be in office, position or employment of this State or of a county, municipality, public agency, school district or board of education and who shall have attained 55 years of age and who has 35 years of aggregate service credit in such office, position or employment, shall have the privilege of retiring for service and receiving a retirement allowance equal to 1/55 of the compensation the member received during the 12-month period of membership providing the largest possible benefit to the member or the member's beneficiary for each year of creditable service for service accrued prior to that effective date multiplied by the number of years of service accrued prior to that effective date divided by the total number of years of service accrued, plus 1/60 of the compensation the member received during the 36-month period of membership providing the largest possible benefit to the member or the member's beneficiary for each year of creditable service for service accrued after that effective date multiplied by the number of years of service accrued after that effective date divided by the total number of years of service accrued.

     e.     The death benefit provided in N.J.S.18A:66-44 shall apply in the case of any member retiring under the provisions of subsections a. and d. of this section and in the case of any member who has previously retired under the provisions of subsection b. of this section before said subsection was amended by P.L.1984, c.69.  The death benefit provided in N.J.S.18A:66-41 shall apply in the case of any member retired under the provisions of subsection c. of this section.

     f.     A member who purchases service credit pursuant to any provision of the "Teachers' Pension and Annuity Fund Law" (N.J.S.18A:66-1 et seq.) is entitled to apply the credit for the purpose of satisfying any of the service requirements of that act.

(cf: P.L.2004, c.177, s.1)

 

     20.  Section 3 of P.L.1969, c.242 (C.18A:66-169) is amended to read as follows:

     3.    As used in this act:

     a.     "Accumulated deductions" means those contributions as defined in N.J.S.18A:66-2 or in section 6 of P.L.1954, c.84 (C.43:15A-6).

     b.    "Base salary" means a participant's regular base or contractual salary.  It shall exclude bonus, overtime or other forms of extra compensation such as (1) longevity lump sum payments, (2) lump sum terminal sick leave or vacation pay, (3) the value of maintenance, (4) individual pay adjustments made within or at the conclusion of the participant's final year of service, (5) retroactive salary adjustments or other pay adjustments made in the participant's final year of service unless such adjustment was made as a result of a general pay adjustment for all personnel of the department or institution, (6) any unscheduled individual adjustment made in the final year to place the member at the maximum salary level within his salary range and (7) any pay for services rendered during the summer vacation period by a participant who is required to work only 10 months of the year. 

     c.     "Base annual salary" means the base salary upon which contributions by the member and his employer to the alternate benefit program were based during the last year of creditable service. 

     d.    (Deleted by amendment, P.L.1994, c.48).

     e.     "University of Medicine and Dentistry" means the University of Medicine and Dentistry of New Jersey established pursuant to the terms of section 3 of P.L.1970, c.102 (C.18A:64G-3). 

     f.     "County colleges" means the colleges so defined in N.J.S.18A:64A-1. 

     g.     "Division of Pensions" means the division established in the Department of the Treasury pursuant to section 1 of P.L.1955, c.70 (C.52:18A-95) and is the agency responsible for the administration of the alternate benefit program of the State and county colleges and for the administration of the group life and disability insurances of all alternate benefit programs established in the State for public employees. 

     h.     "Full-time officers" and "full-time members of the faculty" shall include the president, vice president, secretary and treasurer of the respective school.  "Full-time" shall also include eligible full-time officers and full-time members of the faculty who are granted sabbaticals or leaves of absence with pay where the compensation paid is 50% or more of the base salary at the time the leave commences and the period of eligibility terminates with the end of the school year following the year in which the sabbatical began. "Part-time" shall be defined as an appointment where the employee receives a salary or wages for a period of less than 50% of the normal work week.  These definitions shall apply to teaching or administrative staff members or to employees serving in a dual capacity where the appointment includes teaching as well as administrative duties. 

     i.      "Group Annuity Plan" refers to the Group Annuity Contract R-134 between the Board of Trustees of the New Jersey Institute of Technology and the Prudential Insurance Company of America. 

     j.     "Member" or "participant" means a full-time officer or a full-time member of the faculty participating in the alternate benefit program, and after the effective date of P.L.2008, c.89, means an adjunct faculty member or a part-time instructor whose employment agreement begins after that effective date. 

     k.    "New Jersey Institute of Technology" means the Newark College of Engineering. 

     l.      "Pension reserve" means those moneys as defined in N.J.S.18A:66-2 or in section 6 of P.L.1954, c.84 (C.43:15A-6). 

     m.    "Rutgers, The State University" means the institution of higher education described in chapter 65 of Title 18A of the New Jersey Statutes. 

     n.     "State Colleges" means the colleges so described in chapter 64 of Title 18A of the New Jersey Statutes. 

     o.    "Mutual fund company" means an investment company or trust regulated by the federal "Investment Company Act of 1940," 15 U.S.C.s. 80a-1 et seq. 

     p.    “Normal retirement age” means age 65.

(cf: P.L.2008, c.89, s.12)

 

     21.  (New section)  Notwithstanding any law, rule or regulation to the contrary, the Director of the Division of Pensions and Benefits in the Department of the Treasury has the authority to adopt an Alternate Benefits Program plan document by rule or regulation and to adopt such other rules and regulations as necessary to implement the provisions of P.L.1969, c.242 (C.18A:66-167 et seq.).

     22.  Section 3 of P.L.1993, c.385 (C.18A:66-172.1) is amended to read as follows:

     3.    There is established in but not of the Division of Pensions in the Department of the Treasury the Pension Provider Selection Board, which shall consist of the Director of the Division of Pensions or a representative of that director; the Director of the Division of Investment or a representative of that director; the Commissioner of the Department of Insurance or a representative of that commissioner; the Director of the Division of Purchase and Property or a representative of that director; and a person appointed by the Director of the Division of Pensions who is an active participant or receiving a benefit from the alternate benefit program. 

     The Pension Provider Selection Board shall select through a competitive bidding process [at least three] one or more unrelated insurance or mutual fund companies licensed or otherwise authorized to transact business in New Jersey from which alternate benefit contracts will be purchased.  [These new insurers or mutual fund companies shall be selected by competitive bidding in accordance with all applicable State laws and regulations not later than the 270th day following the effective date of P.L.1993, c.385 (C.18A:66-172.1 et al.).]  The selected carriers shall be authorized to receive contributions within 60 days of their selection.  Each contract shall be awarded for a period not to exceed six years with a renewal option for a period not to exceed three years.  All carriers shall be subject to a performance review by the Pension Provider Selection Board every [seven] three years and must meet such standards as the Pension Provider Selection Board shall establish by regulation in order to be renewed for another term [of seven years] not to exceed six years with a renewal option for a period not to exceed three years as carriers.  Removal of a carrier for cause [during a seven-year term] is not waived.  In establishing by regulation the criteria for the initial selection and any performance review of a carrier, the Pension Provider Selection Board shall consider, among other things, the following: 

     a.     the portability of the contracts offered or to be offered by the company, based on the number of states in which the company provides contracts under similar plans; 

     b.    the efficacy of the contracts in the recruitment and retention of employees for the various State public institutions of higher education; 

     c.     the nature and extent of the rights and benefits to be provided by the contracts for participating employees and their beneficiaries; 

     d.    the relation of the rights and benefits to the amount of contributions to be made pursuant to the provisions of this article; 

     e.     the suitability of the rights and benefits to the needs and interests of participating employees and the various State public institutions of higher education; 

     f.     the ability of the company to provide the rights and benefits under such contracts; 

     g.     the financial soundness of the company, the extent of the company's financial commitment to the contracts, and whether the company meets the minimum financial criteria established by the Division of Pensions; 

     h.     the company's overall quality of service, its investment performance considering return on investments and risk, the administrative fee to be charged to participating employees, and the offering of a balanced array of investment opportunities; and 

     i.      the nature of the informational or promotional materials to be provided to prospective participants. 

     The Pension Provider Selection Board may not designate a company which serves as a disbursement system for other providers or which charges third party administrative fees. 

     [A company that has been designated as of January 1, 1993 by the Division of Pensions as a designated provider shall continue to be so designated until its status as a designated provider is terminated for cause by the division or by the Pension Provider Selection Board.]

     All designated providers shall be selected by a competitive bidding process. 

(cf: P.L.1994, c.48, s.193)

 

     23.  Section 9 of P.L.1969, c.242 (C.18A:66-175) is amended to read as follows:

     9.    Membership or participation in the alternate benefit program shall terminate and the individual shall be considered retired once he or she has (a) attained normal retirement age as defined under  section 3 of P.L.1969, c.242 (C.18A:66-169) or accrued sufficient service credit to qualify for and elect to receive benefits under subsection c. of section 8 of P.L.1961, c.49 (C.52:14-17.32) and (b)  elected to receive a cash distribution upon separation from service or an annuity option from the designated insurer or insurers or a designated mutual fund company or companies, as appropriate. 

     Notwithstanding the foregoing provision, a member receiving a cash distribution or an annuity option upon separation from service from the designated insurer or insurers or a designated mutual fund company or companies, as appropriate, the amount of such computed by using only those funds provided through employee contributions, as provided under section 8 of P.L.1969, c.242 (C.18A:66-174), plus or minus any investment gains or losses, shall not be considered retired from the alternate benefit program.

(cf: P.L.1993, c.385, s.7)


     24.  Section 22 of P.L.1969, c.242 (C.18A:66-188) is amended to read as follows:

     22.  The alternate benefit programs shall provide an option for cash surrender upon separation from service.  The cash surrender shall be applicable only to employee contributions and accumulations prior to the participant's [55th] 65th birthday, and thereafter to the full amount of all employee and employer contributions and accumulations.  Additionally, a participant may borrow from his employee account accumulations up to the amounts allowed under federal law while still employed.  Employee and employer account accumulations shall be used to qualify for the amount of a policy loan.  In the event a participant in the alternate benefit program terminates his employment for reasons other than retirement or disability and requests repurchase of his annuity or annuities, such repurchase shall be allowed provided it meets the conditions under which the insurer or mutual fund company will repurchase annuities automatically, and provided that the portion of the repurchase value attributable to employer contributions made pursuant to this act shall be refunded to the employer. 

     The amendments to this section made by P.L.1993, c.385 (C.18A:66-172.1 et al.) shall apply to all contributions made to a plan under the alternate benefit program on or after the 90th day following the effective date of that P.L.1993, c.385.  Any plan contributions invested in the College Retirement Equities Fund prior to that date shall be fully subject to distribution as cash if those contributions shall not have been annuitized prior to that 90th day.  Any plan contributions invested in the Teachers Insurance and Annuity Association prior to that 90th day shall become subject to distribution as cash to the maximum extent permitted by the contract if those contributions shall not have been annuitized prior to that 90th day. 

(cf: P.L.1993, c.385, s.9)

 

     25.  Section 8 of P.L.1973, c.140 (C.43:6A-8) is amended to read as follows:

     8.    a.  Any member who shall have served at least 10 years as a judge of the several courts and having attained the age of 70 years, shall be retired.

     b.    Any member who shall have served at least 15 years as a judge of the several courts and having attained the age of 65 years but not the age of 70 years, may retire.

     c.     Any member who shall have served at least 20 years as a judge of the several courts and having attained the age of 60 years but not the age of 65 years, may retire.

     d.    Service in the several courts as given in subsections a., b. and c. of this section shall include service in the office of the Chancellor, Chief Justice of the old Supreme Court, associate justice of the old supreme court, judge of the circuit court, Vice-Chancellor, judge of the court of errors and appeals, judge of the court of common pleas, and advisory master to the superior court.

     e.     Any member of the retirement system eligible to retire under the provisions of this section, shall receive a retirement allowance consisting of an annuity which shall be the actuarial equivalent of his accumulated deductions together with regular interest, which rate of interest shall be 4 percent commencing with the effective date of this section of P.L.    , c.  (pending before the Legislature as this bill), and a pension which, when added to the member's annuity, will provide a retirement allowance during the remainder of his life in the amount equal to three-quarters of his final salary.

(cf: P.L.1981, c.470, s.2)

 

     26.  Section 9 of P.L.1973, c.140 (C.43:6A-9) is amended to read as follows:

     9.    a.  Any judge of the several courts, who shall have served at least 5 years  successively as such judge and shall have attained the age of 65 years or more  while serving in such office and shall have served at least 15 years in the  aggregate, including such service as a judge, or in office, position, or  employment of this State or of a county, municipality, board of education or  public agency of this State, may retire.

     b.    Any judge of the several courts, who shall have served at least 5 years  successively as such judge and shall have attained the age of 60 years or more  while serving in such office and shall have served at least 20 years in the  aggregate, including such service as a judge, or in office, position, or  employment of this State or of a county, municipality, board of education or  public agency of this State, may retire.

     c.     Any member of the retirement system, eligible to retire under the provisions of this section, shall receive a retirement allowance consisting of an annuity which shall be the actuarial equivalent of his accumulated deductions together with regular interest, which rate of interest shall be 4 percent commencing with the effective date of this section of P.L.    , c.  (pending before the Legislature as this bill), and a pension which, when added to the member's annuity, will provide a retirement allowance during the remainder of his life in an amount equal to one-half of his final salary.

(cf: P.L.1981, c.470, s.3)

 

     27.  Section 5 of P.L.1973, c.304 (C.43:6A-9.1) is amended to read as follows:

     5.    Any judge of the several courts who shall have attained the age of 60 years or more and who shall have served at least 5 years successively as a judge of the several courts and at least 15 years in the aggregate including such service as a judge or in office, position or employment of this State or a county, municipality, board of education, or public agency of this State may  retire;  provided that election is communicated by such judge 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 an annuity which is the actuarial equivalent of his accumulated deductions together with regular interest, which rate of interest shall be 4 percent commencing with the effective date of this section of P.L.    , c.  (pending before the Legislature as this bill), and a pension which, when added to  the member's annuity, will provide a retirement allowance in the amount of 2%  of his final salary multiplied by his number of years of service up to 25 plus  1% of his final salary multiplied by his number of years of service over 25.

     The State House Commission shall retire him at the time specified or at such  other time within 1 month after the date so specified as the commission finds  advisable.

(cf: P.L.1981, c.470, s.23)

 

     28.  Section 6 of P.L.1973, c.304 (C.43:6A-9.2) is amended to read as follows:

     6.    Any judge of the several courts who shall have attained the age of 60 years or more while serving as such judge may retire;  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 an annuity which is  the actuarial equivalent of his accumulated deductions together with regular interest, which rate of interest shall be 4 percent commencing with the effective date of this section of P.L.    , c.  (pending before the Legislature as this bill), and a pension which, when added to the member's annuity, will provide  a retirement allowance in the amount of 2% of his final salary multiplied by  his number of years of judicial service up to 25 plus 1% of his final salary  multiplied by his number of years of service over 25.

     The State House Commission shall retire him at the time specified or at such other time within 1 month after the date so specified as the commission finds  advisable.

(cf: P.L.1981, c.470, s.24)

 

     29.  Section 10 of P.L.1973, c.140 (C.43:6A-10) is amended to read as follows:

     10.  Should any member resign, or fail of reappointment who shall have served at  least 5 years successively as a judge of the several courts and at least 25  years in the aggregate, including such service as a judge or in office, position, or employment of this State or a county, municipality, board of education, or public agency of this State, before reaching age 60, 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 an annuity which is the actuarial equivalent of his accumulated deductions together with regular interest, which rate of interest shall be 4 percent commencing with the effective date of this section of P.L.    , c.  (pending before the Legislature as this bill), and a pension  which, when added to the member's annuity, will provide a retirement allowance  in the amount of 2% of his final salary multiplied by his number of years of  service up to 25 plus 1% of his final salary multiplied by his number of years  of service over 25;  provided, however, that such retirement allowance shall be  reduced in accordance with a table of actuarial equivalents recommended by the  actuary and adopted by the retirement system reflecting all months that the  member lacks of being age 60.

     The State House Commission shall retire him at the time specified or at such other time within 1 month after the date so specified as the commission finds  advisable.

(cf: P.L.1981, c.470, s.4)

 

     30.  Section 11 of P.L.1973, c.140 (C.43:6A-11) is amended to read as follows:

     11.  Should any member resign, or fail of reappointment who shall have served at  least 5 years successively as a judge of the several courts and at least 10 years in the aggregate, including such service as a judge or in office, position, or employment of this State or a county, municipality, board of education, or public agency of this State, before reaching age 60, and not by removal for cause on charges of misconduct or delinquency, he may elect to receive:

     a.     All of his accumulated deductions standing to the credit of his individual account in the annuity savings fund, or

     b.    A deferred retirement allowance, beginning on the first day of the month following his attainment of age 60 and the filing of an application therefor, which shall consist of an annuity derived from the accumulated deductions  standing to the credit of the member's account in the annuity savings fund at  the time of his severance from service together with regular interest which shall be 4 percent commencing with the effective date of this section of P.L.  , c.   (pending before the Legislature as this bill), and a pension which, when added to the annuity, will produce a retirement allowance  in the amount of 2% of his final salary multiplied by his number of years of service up to 25 plus 1% of his final salary multiplied by his number of years  of service over 25, provided that such inactive member may elect to receive  payments provided under section 10 if he had qualified under that section at  the time of leaving service, except that in order to avail himself of the  option, he must exercise such option at least 1 month before the effective date  of his retirement.  If such inactive member shall die after attaining age 60  but before filing an application for retirement benefits pursuant to this  section or section 10 and for which benefits he would have qualified, or in the  event of death after retirement, there shall be paid to such member's  beneficiary the death benefits prescribed by section 19.

     No beneficiary shall be eligible for a pension or survivor's benefit if the  member who elected to receive a deferred pension prior to the effective date of  this amendatory and supplementary act or who elects to receive a deferred  retirement allowance following the effective date of this amendatory and  supplementary act shall die before attaining age 60.  Upon receipt of the proper proofs of death, the beneficiary of a member who elects to receive a deferred retirement allowance shall be paid the member's accumulated deductions  at the time of death together with regular interest.

     Any member who, having elected to receive a deferred pension or deferred retirement allowance, again becomes a member while under the age of 60, shall thereupon be reenrolled.  He shall be credited with all service as a member standing to his credit at the time of his election to receive a deferred pension or deferred retirement allowance.

(cf: P.L.1981, c.470, s.5)

 

     31.  Section 12 of P.L.1973, c.140 (C.43:6A-12) is amended to read as follows:

     12.  Whenever the Supreme Court shall certify to the Governor, any member who shall have served as a judge of the several courts, may be retired for disability if the member has become physically or otherwise incapacitated for full and efficient service to the State in his judicial capacity.  The Governor shall thereupon refer the disability claim to three physicians of skill and  repute in their profession and residents of this State who shall examine the member and report to the Governor as to his physical or other disability and  whether in all reasonable probability, if they find the disability existent, it  will continue permanently and does and will continue to prevent the member from  giving full and efficient service in the performance of his judicial duties.   If the report confirms the existence of the disability, and if the Governor  approves the report, the member shall be retired not less than 1 month next following the date of filing of an application with the retirement system, and he shall receive a retirement allowance which shall consist of an annuity which is the actuarial equivalent of his accumulated deductions together with regular interest which shall be 4 percent commencing with the effective date of this section of P.L.  , c.   (pending before the Legislature as this bill), and a pension which, when added to the member's annuity, will provide a retirement allowance during the remainder of his life in
an amount equal to three-fourths of his final salary.

(cf: P.L.1981, c.470, s.6)

 

     32.  Section 33 of P.L.1973, c.140 (C.43:6A-33) is amended to read as follows:

     33.  a.  Upon the basis of the tables recommended by the actuary which the commission adopts and regular interest, the actuary shall compute annually, beginning as of June 30, 1992, the amount of the contribution which shall be the normal cost as computed under the projected unit credit method attributable to service rendered under the retirement system for the year beginning on July 1 immediately succeeding the date of the computation.  This shall be known as the "normal contribution."

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

     The value of the assets to be used in the computation of the contributions provided for under this section for valuation periods shall be the value of the assets for the preceding valuation period increased by the regular interest rate, plus the net cash flow for the valuation period (the difference between the benefits and expenses paid by the system and the contributions to the system) increased by one half of the regular interest rate, plus 20% of the difference between this expected value and the full market value of the assets as of the end of the valuation period.  This shall be known as the "valuation assets."  Notwithstanding the first sentence of this paragraph, the valuation assets for the valuation period ending June 30, 1996 shall be the full market value of the assets as of that date and 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.

     "Excess valuation assets" means the valuation assets for a valuation period less the actuarial accrued liability for the valuation period, if the sum is greater than zero.  If there are excess valuation assets for the valuation period ending June 30, 1996, the normal contributions for the valuation periods ending June 30, 1996 and June 30, 1997 which have not yet been paid to the retirement system shall be reduced to the extent possible by the excess valuation assets, provided that 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 for a valuation period ending after June 30, 1996, the State Treasurer may reduce the normal contribution payable for the next valuation period as follows:

     (1)   for valuation periods ending June 30, 1997 through June 30, 2001, to the extent possible by up to 100% of the excess valuation assets;

     (2)   for the valuation period ending June 30, 2002, to the extent possible by up to 84% of the excess valuation assets;

     (3)   for the valuation period ending June 30, 2003, to the extent possible by up to 68% of the excess valuation assets; and

     (4)   for valuation periods ending  June 30, 2004 through June 30, 2007, to the extent possible by up to 50% of the excess valuation assets.

     c.     The actuary shall certify annually the aggregate amount payable to the contingent reserve fund in the ensuing year, which amount shall be equal to the sum of the amounts described in this section.  The State shall pay into the contingent reserve fund during the ensuing year the amount so determined.

     The cash death benefits, payable as the result of contribution by the State under the provisions of this act upon the death of a member in active service and after retirement, shall be paid from the contingent reserve fund.

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

(cf: P.L.2007, c.92, s.25)

 

     33.  Section 34 of P.L.1973, c.140 (C.43:6A-34) is amended to read as follows:

     34.  The retirement reserve fund shall be the fund from which all pensions and retirement allowances shall be paid.

     Upon the retirement of the member his accumulated deductions together with regular interest, which shall be 4 percent commencing with the effective date of this section of P.L.  , c.   (pending before the Legislature as this bill), shall be transferred to the retirement reserve fund from the annuity savings fund.  The reserve needed to produce the pension shall be transferred from the contingent reserve fund.  If the pension of a member who has been retired is subsequently canceled, the appropriate reserve shall be transferred to the contingent reserve fund.  If the retirement allowance of a member who has been retired is subsequently cancelled, the appropriate reserve shall be transferred to the annuity savings fund and the contingent reserve fund.

     Any surplus or deficit developing in the retirement reserve fund shall be adjusted from time to time by transfer to or from the contingent reserve fund by appropriate action of the retirement system upon the advice of the actuary.

(cf: P.L.1981, c.470, s.15)

 

     34.  Section 26 of P.L.1981, c.470 (C.43:6A-34.1) is amended to read as follows:

     26.  a.  The annuity savings fund shall be the fund to which shall be credited aggregate contributions made 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 the event of death as provided by this amendatory and supplementary 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.

     b.    (1) There shall be deducted from the payroll of each member of the system 3% of the amount of any difference between the salary on or after January 19, 1982 for any judicial position held by the member and the salary for that position on January 18, 1982, except that there shall be deducted from the payroll of each new member initially enrolled on or after January 1, 1996, in the retirement system, 3% of the salary for the judicial position held by the member.

     (2) Commencing with the payroll period for which the payroll date occurs on or immediately following July 1, 2011, there shall be deducted from the payroll of each member of the system an additional 5.5% of the amount of any difference between the salary after that effective date for any judicial position held by the member and the salary for that position on that effective date, except that there shall be deducted from the payroll of each new member initially enrolled on or after that effective date in the retirement system, an additional 5.5% of the salary for the judicial position held by the member.  The additional deduction, however, shall not be used to reduce the employer normal contribution required pursuant to section 33 of P.L.1973, c.140 (C.43:6A-33).

     Every judge of the several courts to whom this amendatory and supplementary 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 person to whom this amendatory and supplementary 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.1995, c.424, s.4)

 

     35.  Section 27 of P.L.1981, c.470 (C.43:6A-34.2) is amended to read as follows:

     27.  The State House Commission at the end of each fiscal year shall allow interest on the balance of the annuity savings fund, contingent reserve fund and the retirement reserve fund as of the beginning of said fiscal year at the regular interest rate applicable thereto to cover the interest creditable to the respective funds for the year.  The amount so allowed shall be due and payable to the funds and shall be credited annually thereto by the commission.  Commencing with the effective date of this section of P.L.    , c.  (pending before the Legislature as this bill), the regular interest rate applicable to the annuity savings fund shall be 4 percent.

(cf: P.L.1981, c.470, s.27)

 

     36.  Section 35 of P.L.1973, c.140 (C.43:6A-35) is amended to read as follows:

     35.  The retirement system at the end of each fiscal year shall allow interest on  the balance of the contingent reserve fund, the annuity savings fund, and the retirement reserve fund as of the beginning of said fiscal year at the regular interest rate applicable thereto to cover the interest creditable to the respective funds for the year.  Commencing with the effective date of this section of P.L.  , c.   (pending before the Legislature as this bill), the regular interest rate applicable to the annuity savings fund shall be 4 percent.  The amount so allowed shall be due and payable to said funds and shall be credited annually.

(cf: P.L.1981, c. 470, s. 16)

 

     37.  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 an intellectual disability 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) In the case of a member with 25 or more years of creditable service or who has attained normal retirement age on the effective date of this section of P.L.    , c.   (pending before the Legislature as this bill), "[Final] 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 member with fewer than 25 years of creditable service and who has not attained normal retirement age on the effective date of this section of P.L.    , c.   (pending before the Legislature as this bill) and a person who becomes a member of the retirement system on or after the effective date of P.L.2010, c.1, "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 across the board negotiated wage increases under a collective negotiations agreement that were payable to all State employees covered by that 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 or the Judicial Branch of State government of New Jersey or an employee of the State University authorized to participate in the system under subsection b. of section 73 of P.L.1954, c.84 (C.43:15A-73), but shall not include employees of agencies authorized to participate in the system under subsections a., c., d., e., f., and g. of section 73 of P.L.1954, c.84 (C.43:15A-73) or under P.L.1990, c.25 (C.43:15A-73.2 et al.).

     For the period of July 1, 2009 through June 30, 2011, "contractual salary" for county and municipal employees shall include across the board negotiated wage increases under a collective negotiations agreement that were payable to all county or all municipal employees covered by that agreement notwithstanding that, by amendment to that collective negotiations agreement which has been filed with the Division of Pensions and Benefits, the effective date of the contractual increase has been deferred.  For the purpose of this paragraph, "county and municipal employees" means all persons employed by a county or municipality in this State.

     s.     “Normal retirement age” means the age at which the member is first eligible for a service retirement based on age under section 47 of P.L.1954, c.84 (C.43:15A-47), section 4 of P.L.1955, c.257 (C.43:15A-100), or section 4 of P.L.2001, c.366 (C.43:15A-158) as shall apply to the member.

(cf:  P.L.2010, c.50, s.71)

 

     38.  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  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 November 1, 2008, a person who was a member of the retirement system on that 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 November 1, 2008 and before or on the effective date of P.L.2010, c.1, a person who was not a member of the retirement system on November 1, 2008, or who was a member of the retirement system on that 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.2010, c.1, 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.  This subsection shall not apply to prohibit the enrollment or reenrollment of a retiree whose retirement was not bona fide within the meaning of section 92 of P.L.    , c.  (C.     ) (pending before the Legislature as this bill).

     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.2010, c.1, s.3)

 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

     The State Treasurer shall reduce the normal and accrued liability contributions payable by employers other than the State, excluding the contribution payable from the benefit enhancement fund, to 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.

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

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

(cf: P.L.2009, c.19, s.1)

 

     40.  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 this single account.

     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.

     (3) Commencing with the payroll period for which the payroll date occurs on or immediately following July 1, 2011, all members shall contribute an additional 3% of compensation to the system.  This additional contribution, however, shall not be used to reduce the employer normal contribution required pursuant to section 24 of P.L.1954, c.84 (C.43:15A-24). 

     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.2010, c.1, s.26)

 

     41.  Section 28 of P.L.1966, c.217 (C.43:15A-25.1) is amended to read as follows:

     28.  a.  If any member of the retirement system receives periodic benefits payable under the Workers' Compensation Law during the course of his active service, in lieu of his normal compensation, his regular salary deductions shall be paid to the retirement system by his employer.  Such payments shall be computed, in accordance with section 25 of P.L.1954, c.84 (C.43:15A-25), at the rate of contribution on the base salary subject to the retirement system, just prior to the receipt of the workers' compensation benefits.  The moneys paid by the employer shall be credited to the member's account in the annuity savings fund and shall be treated as employee contributions for all purposes.  The employer will terminate the payment of these moneys when the periodic benefits payable under the Workers' Compensation Law are terminated or when the member retires.

     The member for whom the employer is making such payments, will be considered as if he were in the active service and shall be permitted to continue to make contributions to purchase the additional death benefit coverage provided by section 57 of P.L.1954, c.84 (C.43:15A-57).

     b.    An application for retirement benefits may be approved by the board of trustees while the member, applying for such benefits, is in receipt of periodic benefits under the Workers' Compensation Law.  If a retirant receiving a work-related disability retirement or an accidental disability retirement allowance approved prior to the effective date of P.L.    , c.  (pending before the Legislature as this bill) becomes a recipient of periodic benefits under the workers' compensation law after the date of retirement, the pension portion of the retirement allowance payable to the retirant shall be reduced, during the period of the payment of the periodic benefits, dollar-for-dollar in the amount of the periodic benefits received after the date of retirement, subject to the provisions of section 64 of P.L.1954, c.84 (C.43:15A-64).  The reduction provided for herein shall not affect the retirant's pension adjustment benefits or survivor benefits that may be payable upon the death of the retirant.  Notwithstanding the provisions of R.S.34:15-26 and R.S.34:15-40, the amount of the dollar-for-dollar reduction from the receipt of workers’ compensation periodic benefits shall not be reduced by a payment for legal services nor by receipt of a third party recovery.

     If a work-related disability retirant or an accidental disability retirant approved prior to that effective date receives a retirement allowance without reduction and periodic benefits under the workers' compensation law for any period of time after the date of retirement, the retirant shall repay to the retirement system the amount of the pension portion of the retirement allowance which should have been subject to reduction under this subsection.  The repayment may be in the form of a lump sum payment or scheduled as deductions from the retirant's retirement allowance and pension adjustment benefits.  If the retirant dies before full repayment of the amount required, the remaining balance shall be deducted from any death benefits payable on behalf of the retirant.

(cf: P.L.1995, c.369, s.2)

 

     42.  Section 33 of P.L.1954, c.84 (C.43:15A-33) is amended to read as follows:

     33.  The board of trustees at the end of each fiscal year shall allow interest on the balance of the annuity savings fund, contingent reserve fund, the retirement reserve fund, benefit enhancement fund and the members' death benefit fund as of the beginning of said fiscal year at the regular interest rate applicable thereto to cover  the interest creditable to the respective funds for the year.  Commencing with the effective date of this section of P.L.    , c.   (pending before the Legislature as this bill), the regular interest rate applicable to the annuity savings fund shall be 4 percent.  The amount so  allowed shall be due and payable to said funds and shall be credited annually  thereto by the board.

(cf: P.L.2001, c.133, s.10)

 

     43.  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 60 for a member who has 25 or more years of creditable service on the effective date of this section of P.L.    , c.   (pending before the Legislature as this bill) or at age 65 for a member who has fewer than 25 years of creditable service on that effective date and a person who becomes a member of the retirement system on or after that effective date, 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, which rate of interest shall be 4 percent commencing with the effective date of this provision of this section of P.L.    , c.  (pending before the Legislature as this bill), and a pension which when added to the annuity will produce a total retirement allowance of (1) 1/64 of final compensation for each year of service credited as Class A service [and] , 1/55 of final compensation for each year of service credited as Class B service, [or] and for a person who becomes a member of the retirement system on or after the effective date of P.L.2010, c.1, 1/60 of final compensation for each year of service credited as Class B service, prior to the effective date of this section of P.L.   , c.     (pending before the Legislature as this bill), plus (2) 1/65 of final compensation for each year of service credited on or after the effective date of this section of P.L.   , c.     (pending before the Legislature as this bill), 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.

     A member who, having elected to receive a deferred retirement allowance, again becomes an employee covered by the retirement system while under the age of 65, shall thereupon be reenrolled.  If he had discontinued service for more than two consecutive years, he shall be enrolled in the retirement system under a new membership account and shall be subject to such benefits and requirements as shall apply to new members of the retirement system as of the date of such new enrollment.  The member may elect to transfer all service credit associated with the previously vested membership to the new membership account and such service credit will be subject to the benefit and requirements as shall apply to new members of the retirement system as of the date of such new enrollment.  Should the member elect not to transfer the service credit associated with the vested membership to the new membership account, no benefits shall be payable from the previous application for deferred retirement until such time as the member has terminated all Public Employees’ Retirement System eligible employment.

(cf:  P.L.2010, c.1, s.11)

 

     44.  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, which rate of interest shall be 4 percent commencing with the effective date of this provision of this section of P.L.    , c.   (pending before the Legislature as this bill), 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 with 25 or more years of creditable service  on the effective date of this section of P.L.    , c.   (pending before the Legislature as this bill), 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] should a member with fewer than 25 years of creditable service on the effective date of this section of P.L.    , c.   (pending before the Legislature as this bill) or a person who becomes a member of the retirement system on or after that effective date, resign after having established 30 years of creditable service before reaching age 65, 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, which rate of interest shall be 4 percent commencing with the effective date of this provision of this section of P.L.    , c.   (pending before the Legislature as this bill), and a pension in the amount which, when added to the member's annuity, will provide a total retirement allowance of (1) 1/64 of final compensation for each year of service credited as Class A service [and] , 1/55 of final compensation for each year of service credited as Class B service, [or] and for a person who becomes a member of the retirement system on or after the effective date of P.L.2010, c.1, 1/60 of final compensation for each year of service credited as Class B service, prior to the effective date of this section of P.L.   , c.     (pending before the Legislature as this bill), plus (2) 1/65 of final compensation for each year of service credited on or after the effective date of this section of P.L.   , c.     (pending before the Legislature as this bill), 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, if the member has established 25 or more years of creditable service on the effective date of this section of P.L.    , c.   (pending before the Legislature as this bill); 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] 65 , if the member has established fewer than 25 years of creditable service on the effective date of this section of P.L.    , c.   (pending before the Legislature as this bill) or the person becomes a member of the retirement system on or after that effective date; 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 which shall be 4 percent commencing with the effective date of this provision of this section of P.L.    , c.   (pending before the Legislature as this bill); 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.2010, c.1, s.12)

 

     45.  Section 42 of P.L.1954, c.84 (C.43:15A-42) is amended to read as follows:

     42.  a.  A member, under [60 years of] normal retirement age, who has 10 or more years of credit for New Jersey service, shall, upon the application of the head of the department in which he shall have been employed or upon his own application or the application of one acting in his behalf, be retired for ordinary disability by the board of trustees.  The physician or physicians designated by the board shall have first made a medical examination of him [at his residence or at any other place mutually agreed upon] and shall have certified to the board that the member is physically or mentally incapacitated for the performance of his usual duty or of any other available duty that his employer is willing to assign to him and should be retired.

     [The service requirement provisions of this amendatory and supplementary act shall not become effective for 5 years following the effective date of the act.

     No person who becomes a member of the retirement system on or after the effective date of P.L.2010, c.3 shall be eligible for retirement pursuant to this section.]

     b.    Upon the written application by a member in service, by one acting in his behalf or by his employer, any member under normal retirement age who has less than 10 years of creditable service may be retired on a work-related disability retirement allowance, if he meets the requirements of the medical examination under subsection a. of this section and the incapacity from the performance of duties is the direct result of a work-related accident or occupational exposure occurring during and as a result of his regular and assigned duties and not the result of willful negligence.  In order to qualify for a work-related disability benefit, the member shall have received a workers’ compensation award of permanent disability under R.S.34:15-1 et seq.  The board may, in its discretion, waive the requirement for a medical examination under this subsection when the Division of Workers’ Compensation in the Department of Labor and Workforce Development has determined that the member is 100 percent totally and permanently disabled.

     c.     Upon approval for ordinary or work-related disability, a member shall receive a disability retirement allowance as set forth in section 45 of P.L.1954, c.84 (C.43:15A-45).

(cf: P.L.2010, c.3, s.8)

 

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

     43.  [A member who has not attained age 65 shall, upon the application of the head of the department in which he is employed or upon his own application or the application of one acting in his behalf, be retired by the board of trustees, if said employee is permanently and totally disabled as a direct result of a traumatic event occurring during and as a result of the performance of his regular or assigned duties, on an accidental disability allowance.  A traumatic event occurring during voluntary performance of regular or assigned duties at a place of employment before or after required hours of employment which is not in violation of any valid work rule of the employer or otherwise prohibited by the employer shall be deemed as occurring during the performance of regular or assigned duties.]

     The application [to accomplish such retirement] for a work-related disability retirement under section 42 of P.L.1954, c.84 (C.43:15A-42) must be filed within five years of the original [traumatic event] accident or occupational exposure, but the board of trustees may consider an application filed after the five-year period if it can be factually demonstrated to the satisfaction of the board of trustees that the disability is due to the accident or occupational exposure and the filing was not accomplished within the five-year period due to a delayed manifestation of the disability or to circumstances beyond the control of the member.

     [Permanent and total disability resulting from a cardiovascular, pulmonary or musculo-skeletal condition which was not a direct result of a traumatic event occurring in the performance of duty shall be deemed an ordinary disability.

     Before consideration of the application by the board of trustees, the physician or physicians designated by the board shall have first made a medical examination of the member at his residence or at any other place mutually agreed upon and shall have certified to the board that he is physically or mentally incapacitated for the performance of duty, and should be retired, and the appointing authority shall have certified to the board that the member is permanently and totally disabled as a direct result of a traumatic event occurring during and as a result of the performance of his regular or assigned duties, the time and place where the duty causing the disability was performed, that the disability was not the result of his willful negligence and that the member should be retired. 

     No person who becomes a member of the retirement system on or after the effective date of P.L.2010, c.3 shall be eligible for retirement pursuant to this section.] 

(cf: P.L.2010, c.3, s.9)

 

     47.  Section 45 of P.L.1954, c.84 (C.43:15A-45) is amended to read as follows:

     45.  A member upon retirement for ordinary or work-related disability shall receive a retirement allowance, which shall consist of:

     a.     An annuity which shall be the actuarial equivalent of his accumulated deductions together with regular interest ,which rate of interest shall be 4 percent commencing with the effective date of this provision of this section of P.L.    , c.   (pending before the Legislature as this bill), 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 final compensation multiplied by his number of years of creditable service; provided further, that in no event shall the allowance be less than [43.6%] 40% of final compensation.

     c.     Upon the receipt of proper proofs of the death of a member who has retired on an ordinary or work-related disability retirement allowance, there shall be paid to such member's beneficiary, an amount equal to 1 1/2 times the compensation upon which contributions by the member to the annuity savings fund were based in the last year of creditable service; provided, however, that if such death shall occur after the member shall have attained age 60, the amount payable shall equal 3/16 of such compensation.

(cf: P.L.2001, c.353, s.9)

 

     48.  Section 47 of P.L.1954, c.84 (C.43:15A-47) is amended to read as follows:

     47.  a.  A person who was a member before the effective date of P.L.2008, c.89 who has attained age 60 on the effective date of this section of P.L.    , c.   (pending before the Legislature as this bill) or who has 25 or more years of creditable service on that effective date and has attained 60 years of age may retire on a service retirement allowance by filing with the retirement system a written application, duly attested, stating at which time subsequent to the execution and filing thereof the member desires to be retired.  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.

     b.    A person who becomes a member on or after the effective date of P.L.2008, c.89 [and has attained] who has attained age 62 on the effective date of this section of P.L.    , c.   (pending before the Legislature as this bill) or who has 25 or more years of creditable service on that effective date upon attaining 62 years of age may retire on a service retirement allowance by filing with the retirement system a written application, duly attested, stating at which time subsequent to the execution and filing thereof the member desires to be retired.  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.

     c.     A member who has established fewer than 25 years of creditable service on the effective date of this section of P.L.    , c.   (pending before the Legislature as this bill) and who is not eligible for retirement under subsection a. or b. of this section and a person who becomes a member on or after that effective date and who has attained 65 years of age may retire on a service retirement allowance by filing with the retirement system a written application, duly attested, stating at which time subsequent to the execution and filing thereof the member desires to be retired. The board of trustees shall retire the member at the time specified or at such other time within 1 month after the date so specified as the board finds advisable.

(cf: P.L.2008, c.89, s.24)

 

     49.  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, which rate of interest shall be 4 percent commencing with the effective date of this provision of this section of P.L.    , c.   (pending before the Legislature as this bill); and

     b.    A pension in the amount which, when added to the member's annuity, will provide a total retirement allowance of (1) 1/64 of final compensation for each year of service credited as Class A service [and] , 1/55 of final compensation for each year of service credited as Class B service, [or] and for a person who becomes a member of the retirement system on or after the effective date of P.L.2010, c.1, 1/60 of final compensation for each year of service credited as Class B service, prior to the effective date of this section of P.L.   , c.     (pending before the Legislature as this bill), plus (2) 1/65 of final compensation for each year of service credited on or after the effective date of P.L.   , c.     (pending before the Legislature as this bill).

     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.2010, c.1, s.13)

 

     50.  Section 25 of P.L.1966, c.217 (C.43:15A-57.1) is amended to read as follows:

     25.  The designation of beneficiary by a member or retirant shall be made in writing on a form satisfactory to the retirement system, and filed with the retirement system.  The member or retirant may, from time to time and without the consent of his death benefit designee, change the beneficiary by filing written notice of the change with the system on a form satisfactory to it. The  new nomination will be effective on the date the notice, in proper form, is  received by the system, and any prior nomination shall thereupon become void.

     If more than one beneficiary is nominated and in such nomination the member or retirant has failed to specify their respective interests, the beneficiaries  shall share equally.  If any beneficiary predeceases the member or retirant, the interest of such beneficiary shall terminate and shall be shared equally by  such of the beneficiaries as survive the member or retirant, unless the member  or retirant has made written request to the contrary in his beneficiary  nomination.

     Any amounts due for which there is no beneficiary at the death of a member,  retirant or beneficiary shall be payable to the estate of such member, retirant  or beneficiary.

     Except with regard to the payment of the member's accumulated deductions with regular interest, which rate of interest shall be 4 percent commencing with the effective date of this section of P.L.    , c.   (pending before the Legislature as this bill), and the payment, upon the death of (1) a retirant after attaining the age of 60 or receiving an allowance pursuant to section 41(b) of chapter 84 of the laws of 1954, or (2) a member after attaining the age of 70 years, of the death benefits provided in sections 38, 41, 45, 46, 48, 49(e) and  57 of chapter 84 of the laws of 1954, a member may elect, by making written  request to the retirement system, that the whole or any part of his death  benefits be made payable to his beneficiary either as a life annuity or in  equal installments over a period of years specified in such election, and may  alter such election from time to time during his lifetime by again making such  written request.  In the event of a change of beneficiary, any previous arrangement by the member or retirant under this paragraph shall be void.  The election set forth in this paragraph shall not apply or be available when the beneficiary is an estate, or a corporation, partnership, association, institution, trustee, or any fiduciary.

     If, at the member's or retirant's death, an amount of death benefit would be  payable to the beneficiary in a single sum, any election with regard to such  amount which was available to the member or retirant immediately prior to his  death in accordance with the provisions of the immediately preceding paragraph  shall then be available to such beneficiary for the benefit of such beneficiary.

(cf: P.L.1971, c.213, s.44)

 

     51.  Section 61 of P.L.1954, c.84 (C.43:15A-61) is amended to read as follows:

     61.  a.  (Deleted by amendment, P.L.1995, c.332.)

     b.    (1) Any public employee veteran member in office, position or employment of this State or of a county, municipality, public agency, school district or board of education and who on or before the effective date of this section of P.L.    , c.   (pending before the Legislature as this bill) [(1)] (a) shall have attained 60 years of age and who has 20 years of aggregate service credit in such office, position or employment, or [(2)] (b) shall have attained 55 years of age and who has 25 years of aggregate service credit in such office, position or employment, shall have the privilege of retiring for service and receiving, instead of the retirement allowance provided under section 48 of this act, a retirement allowance of 54.5% of the compensation for which contributions are made during the 12-month period of membership providing the largest possible benefit to the member or the member's beneficiary.

     (2) After the effective date of this section of P.L.    , c.   (pending before the Legislature as this bill) any public employee veteran member in office, position or employment of this State or of a county, municipality, public agency, school district or board of education and who (a) shall have attained 60 years of age and who has 20 years of aggregate service credit in such office, position or employment, or (b) shall have attained 55 years of age and who has 25 years of aggregate service credit in such office, position or employment, shall have the privilege of retiring for service and receiving, instead of the retirement allowance provided under section 48 of P.L.1954, c.84 (C.43:15A-48), a retirement allowance of 54.5% of the compensation for which contributions are made during the 12-month period of membership providing the largest possible benefit to the member or the member's beneficiary for service accrued prior to that effective date multiplied by the number of years of service accrued prior to the effective date divided by the total number of years of service accrued, plus 50% of the compensation for which contributions are made during the 36-month period of membership providing the largest possible benefit to the member or the member's beneficiary for service accrued after that effective date multiplied by the number of years of service accrued after that effective date divided by the total number of years of service accrued.

     c.     Any public employee veteran member who has been for 20 years in the aggregate in office, position or employment of this State or of a county, municipality, public agency, school district or board of education as of January 2, 1955, shall have the privilege of retiring for ordinary disability and of receiving, instead of the retirement allowance provided under section 45 of this act, a retirement allowance of one-half of the compensation received during the last year of employment upon which contributions to the annuity savings fund or contingent reserve fund are made.  Such retirement shall be subject to the provisions governing ordinary disability retirement in sections 42 and 44 of this act.

     d.    (1) Any public employee veteran member who shall be in office, position or employment of this State or of a county, municipality, public agency, school district or board of education and who on or before the effective date of this section of P.L.    , c.   (pending before the Legislature as this bill) shall have attained 55 years of age and who has at least 35 years of aggregate service credit in such office, position or employment, shall have the privilege of retiring for service and receiving a retirement allowance of 1/55 of the compensation the member received during the 12-month period of membership providing the largest possible benefit to the member or the member's beneficiary for each year of creditable service.

     (2) After the effective date of this section of P.L.    , c.   (pending before the Legislature as this bill) any public employee veteran member who shall be in office, position or employment of this State or of a county, municipality, public agency, school district or board of education and who shall have attained 55 years of age and who has 35 years of aggregate service credit in such office, position or employment, shall have the privilege of retiring for service and receiving a retirement allowance equal to 1/55 of the compensation the member received during the 12-month period of membership providing the largest possible benefit to the member or the member's beneficiary for each year of creditable service for service accrued prior to that effective date multiplied by the number of years of service accrued prior to that effective date divided by the total number of years of service accrued, plus 1/60 of the compensation the member received during the 36-month period of membership providing the largest possible benefit to the member or the member's beneficiary for each year of creditable service for service accrued after that effective date multiplied by the number of years of service accrued after that effective date divided by the total number of years of service accrued.

     e.     The death benefit provided in section 48 shall apply in the case of any member retiring under the provisions of subsections a., b. and d. of this section.  The death benefit provided in section 45 shall apply in the case of any member retired under the provisions of subsection c. of this section.

     f.     The State shall be liable for any increased cost to local government employers participating in the retirement system as a result of the amendment of this section by P.L.2001, c.353, except as provided in section 16 of P.L.2001, c.353.

(cf: P.L.2004, c.177, s.2)

 

     52.  Section 4 of P.L.1955, c.257 (C.43:15A-100) is amended to read as follows:

     4.    Upon service retirement as a law enforcement officer a member shall receive a service retirement allowance consisting of:

     a.     An annuity which shall be the actuarial equivalent of his accumulated deductions together with regular interest, which rate of interest shall be 4 percent commencing with the effective date of this section of P.L.    , c.   (pending before the Legislature as this bill); and

     b.    A pension in the amount which, when added to the member's annuity, will provide a total retirement allowance equal to 2% of his final compensation multiplied by his number of years of service credit as a law enforcement officer for which he has made contributions up to 25, plus the amount determined as provided in section 48 of P.L.1954, c.84 (C.43:15A-48) for years of service credit other than service as a law enforcement officer, for which he has made contributions, plus 1% of his final compensation multiplied by his number of years of service  credit as a law enforcement officer for which he has made contributions over 25 or for which he has made no contributions to the retirement system for the period while he was a law enforcement officer or, in the case of a veteran, while he was in office, position or employment of this State, or of any county, municipality, public agency or school district; provided, however, that in the case of any member electing to receive benefits under section 38(b) of chapter 84 of the laws of 1954, such benefits shall be payable at age 60.

     The death benefit provided in section 48(c) of chapter 84 of the laws of 1954 shall apply in the case of any member retiring under the provisions of this section.

(cf: P.L.2001, c.353, s.17)

 

     53.  Section 4 of P.L.2001, c.4 (C.43:15A-100.1) is amended to read as follows:

     4.    a.  Should a law enforcement officer member retire after having established 25 years of creditable service, the member shall receive, in addition to the service retirement allowance provided in section 4 of P.L.1955, c.257 (C.43:15A-100), a supplementary "special" retirement allowance equal to 5% of the member's final compensation or such lesser amount as will, if added to the member's service retirement allowance, provide (1) for a member with 25 or more years of creditable service on the effective date of this section of P.L.    , c.   (pending before the Legislature as this bill), a total retirement allowance of 70% of the member's final compensation or (2) for a member with fewer than 25 years of creditable service on the effective date of this section of P.L.    , c.   (pending before the Legislature as this bill) and a person who becomes a member of the retirement system on or after that effective date, a total retirement allowance of 60% of the member’s final compensation, plus 1% of final compensation multiplied by the number of years of creditable service over 25 but not over 30.

     b.    The supplementary "special" retirement allowance provided under subsection a. of this section shall be payable to any former member of the retirement system who, prior to the  effective date of this act, P.L.2001, c.4, retired as a law enforcement officer member of the retirement system after having established 25 years of creditable service.  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.2001, c.4, s.4)

 

     54.  Section 7 of P.L.1955, c.257 (C.43:15A-103) is amended to read as follows:

     7.    Upon the receipt of proper proofs of the death of a member who at the time of retirement was a law enforcement officer and who has retired on an accidental disability retirement allowance or after the effective date of P.L.    , c.   (pending before the Legislature as this bill) on a work-related disability retirement allowance, there shall be paid to such person, if living, as he shall have nominated by written designation duly executed and  filed with the board of trustees, otherwise to the executor or administrator of  the member's estate, the sum of $5,000.00 or the amount payable pursuant to  section 46c of the act to which this act is a supplement, whichever is  greater.

(cf: P.L.1955, c.257, s.7)

 

     55.  Section 8 of P.L.1955, c.257 (C.43:15A-104) is amended to read as follows:

     8.    The percentage contribution rate of each member who is a law enforcement officer shall be fixed according to his age at the time of becoming a permanent  and full-time employee of the State and shall be 1/2 of the total  percentage contribution rate calculated for such age by the actuary of the  board of trustees to be required to provide all benefits of service retirement, ordinary disability retirement, and termination of service benefits provided by  this act and the act to which this act is a supplement. In the event that a member ceases to hold a position as a law enforcement officer although continuing his employment in a position covered by the Public Employees' Retirement System, his rate of contribution shall be fixed in accordance with the rates applicable at that time to persons becoming members who are not law enforcement officers, except that his age at the time of becoming a permanent full-time employee of the State shall be used in determining his rate of  contribution.

     Commencing with the payroll period for which the payroll date occurs on or immediately following July 1, 2011, all members shall contribute an additional 3% of compensation to the system.  This additional contribution, however, shall not be used to reduce the employer normal contribution required pursuant to section 24 of P.L.1954, c.84 (C.43:15A-24).

(cf: P.L.1956, c.55, s.4)

 

     56.  Section 2 of P.L.1972, c.167 (C.43:15A-136) is amended to read as follows:

     2.    Notwithstanding the provisions of section 25 of P.L.1954, c.84 (C.43:15A-25), (a) a separate account shall be established in the annuity savings fund for each member of the Legislature and all contributions based on legislative salaries shall be credited to this account as distinguished from any other account that the legislator may have as a result of other public service covered by the retirement system; and (b) the member of the Legislature shall contribute at a rate equal to 5% of his legislative salary, which contribution shall be deducted from his salary at the time or times it is paid, and which shall be exclusive of any other contribution required of the member for Social Security, contributory death benefits or deductions for any other purpose. The contribution rate shall be 5.5% of the member's legislative salary beginning July 1, 2007.

     Commencing with the payroll period for which the payroll date occurs on or immediately following July 1, 2011, all members shall contribute an additional 3% of compensation to the system.  This additional contribution, however, shall not be used to reduce the employer normal contribution required pursuant to section 24 of P.L.1954, c.84 (C.43:15A-24).

     A member of the Legislature who is enrolled on the basis of other public service before, during, or after his service as a member of the Legislature shall contribute for such other service at the rate of contribution required of other members as provided by section 25.

(cf:  P.L.2007, c.103, s.3)

 

     57.  Section 3 of P.L.1972, c.167 (C.43:15A-137) is amended to read as follows:

     3.    Notwithstanding any other law regarding the purchase of service credit in the retirement system, a member of the Legislature may purchase credit for all previous legislative service by paying into the annuity savings fund 5%, and 5.5% after July 1, 2007, of the salaries he received in such prior periods, in which event he shall agree to make such purchase within 1 year after the effective date of this supplementary act or during the first year of membership as a member of the Legislature; if the request for the purchase is received beyond the 1-year period, interest shall be added to the amount of the arrearage obligation at the regular interest rate.  Commencing with the effective date of this section of P.L.    , c.   (pending before the Legislature as this bill), the regular interest rate applicable to the annuity savings fund shall be 4 percent. The purchase of such credit may be by lump sum or in regular installments over a maximum period of 10 years.

     In the case of any member of the Legislature coming under the provisions of this section, full pension credit for the period of service for which arrears are being paid by the member shall be given upon the payment of at least 1/2 of the total arrearage obligation and the completion of 1 year of membership and the making of such arrears payments, except that in the case of retirement pursuant to P.L.1954, c.84, sections 38, 41(b), 48 and 61 and to the provisions of this supplementary act, the total membership credit for such service shall be in direct proportion as the amount paid bears to the total amount of the arrearage obligation of the member.

     The contributions of all members of the Legislature related to their legislative service shall be adjusted for all years prior to the effective date of this supplementary act to determine either an overpayment or shortage in the separate account, requiring the payment of contributions at the percentage of salary provided for in this section. Overpayments shall be refunded and shortages shall be established as arrearage obligations to be satisfied in the same manner as any other arrearage obligation established pursuant to this section.

     No member shall receive credit for any legislative service for which he has not contributed as required by this section.

(cf: P.L.2007, c.103, s.4)

 

     58.  Section 4 of P.L.1972, c.167 (C.43:15A-138) is amended to read as follows:

     4.    A member, who has attained age 60 on the effective date of this section of P.L.    , c.  (pending before the Legislature as this bill) or who has 25 or more years of creditable service on that effective date and shall have attained the age of 60 years, and a member who has attained fewer than 25 years of creditable service and has not attained age 60 on that effective date and who has attained 65 years of age, upon retirement on the basis of legislative 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, which rate of interest shall be 4 percent commencing with the effective date of this provision of this section of P.L.    , c.   (pending before the Legislature as this bill);  and

     b.    a pension in the amount which, when added to the member's annuity, will  provide a total retirement allowance of 3% of final compensation as a legislator, for each year of creditable service as a member of the Legislature.   In no event shall the allowance payable under this section exceed two-thirds  of final compensation.

     c.     The death benefit provided in P.L.1954, c. 84, s. 48(c) (C. 43:15A-48c) shall apply in the case of any member retiring under the provisions of this section.

     d.  No member shall be eligible to retire pursuant to this section until he  has terminated all public service covered by the retirement system.

(cf: P.L.1972, c.167, s.4)

 

     59.  Section 3 of P.L.2001, c.259 (C.43:15A-144) is amended to read as follows:

     3.    a.  Notwithstanding the provisions of section 25 of P.L.1954, c.84 (C.43:15A-25) to the contrary, a separate account shall be established in the annuity savings fund for each workers compensation judge and all contributions based on the judge's salary shall be credited to this account. This account shall be separate from any other account that the member may have as a result of other public service covered by the retirement system.

     b.    (1) A workers compensation judge shall contribute at a rate equal to 5% of the judge's salary, which contribution shall be deducted from the salary at the time or times it is paid, and which shall be exclusive of any other contribution required of the member for Social Security, contributory death benefits or deductions for any other purpose.  The contribution rate shall be 5.5% of the judge's salary effective with the payroll period for which the beginning date is closest to July 1, 2007.

     (2) Commencing with the payroll period for which the payroll date occurs on or immediately following July 1, 2011, all members shall contribute an additional 3% of compensation to the system.  This additional contribution, however, shall not be used to reduce the employer normal contribution required pursuant to section 24 of P.L.1954, c.84 (C.43:15A-24).

     c.     A workers compensation judge who is enrolled on the basis of other public service before, during, or after service as a judge of compensation shall contribute for such other service at the rate of contribution required of other members as provided by section 25.

(cf:  P.L.2007, c.103, s.5)

 

     60.  Section 5 of P.L.2001, c.259 (C.43:15A-146) is amended to read as follows:

     5.    Any workers compensation judge who has served at least 10 years as a judge of compensation and attained the age of 70 years shall be retired and shall receive the retirement allowance prescribed by this section.

     Any workers compensation judge who has served at least 15 years as a judge of compensation and attained the age of 65 years, or served at least 20 years as a judge of compensation and attained the age of 60 years, may retire and receive the retirement allowance prescribed by this section.  The retirement allowance shall consist of an annuity that shall be the actuarial equivalent of the member's accumulated deductions together with regular interest, which rate of interest shall be 4 percent commencing with the effective date of this section of P.L.    , c.   (pending before the Legislature as this bill), and a pension that, when added to the member's annuity, shall provide a retirement allowance during the remainder of the member's life in the amount equal to three-quarters of the member's final salary.

(cf: P.L.2001, c.259, s.5)

 

     61.  Section 6 of P.L.2001, c.259 (C.43:15A-147) is amended to read as follows:

     6.    Any workers compensation judge who has:

     a.     served at least five years successively as a judge of compensation and attained the age of 65 years or more while serving in such office and has served at least 15 years of aggregate public service, or

     b.    served at least five years successively as a judge of compensation and attained the age of 60 years or more while serving in such office and has served at least 20 years of aggregate public service, may retire and receive the retirement allowance prescribed by this section.  The retirement allowance shall consist of an annuity that shall be the actuarial equivalent of the member's accumulated deductions together with regular interest, which rate of interest shall be 4 percent commencing with the effective date of this section of P.L.    , c.   (pending before the Legislature as this bill), and a pension that, when added to the member's annuity, shall provide a retirement allowance during the remainder of the member's life in an amount equal to one-half of the member's final salary.

(cf: P.L.2001, c.259, s.6)

 

     62.  Section 7 of P.L.2001, c.259 (C.43:15A-148) is amended to read as follows:

     7.    Any workers compensation judge who has served at least five years successively as a judge of compensation and at least 25 years of aggregate public service, and who resigns or is not reappointed before reaching age 60, may elect "early" retirement, provided, that such election is communicated by the 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.  Any member of the retirement system, eligible to retire under the provisions of this section, shall receive a retirement allowance consisting of an annuity which shall be the actuarial equivalent of the member's accumulated deductions together with regular interest, which rate of interest shall be 4 percent commencing with the effective date of this section of P.L.    , c.   (pending before the Legislature as this bill), and a pension which, when added to the member's annuity, shall provide a retirement allowance during the remainder of the member's life in the amount of 2% of the member's final salary multiplied by the number of years of service up to 25 plus 1% of the member's final salary multiplied by the number of years of service over 25.  Such retirement allowance shall be reduced in accordance with a table of actuarial equivalents recommended by the actuary and adopted by the retirement system reflecting all months that the member lacks of being age 60. 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.2001, c.259, s.7)

 

     63.  Section 8 of P.L.2001, c.259 (C.43:15A-149) is amended to read as follows:

     8.    Any workers compensation judge who has served at least five years successively as a judge of compensation and at least 10 years of aggregate public service, and who resigns or is not reappointed before reaching age 60, and not by removal for cause on charges of misconduct or delinquency, may elect to receive:

     a.     all of the member's accumulated deductions standing to the credit of the member's individual account in the annuity savings fund as provided under subsection a. of section 41 of P.L.1954, c.84 (C.43:15A-41), or

     b.    a deferred retirement allowance, beginning on the first day of the month following the member's attainment of age 60 and the filing of an application therefor, which shall consist of an annuity derived from the accumulated deductions standing to the credit of the member's account in the annuity savings fund at the time of severance from service together with regular interest which shall be 4 percent commencing with the effective date of this section of P.L.    , c.   (pending before the Legislature as this bill), and a pension which, when added to the annuity, shall produce a retirement allowance in the amount of 2% of the member's final salary multiplied by the number of years of service up to 25 plus 1% of the member's final salary multiplied by the number of years of service over 25, provided that such inactive member may elect to receive payments provided under  section 7 of this act, P.L.2001, c.259 (C.43:15A-148), if the member had qualified under that section at the time of leaving service, except that in order to avail the member of the option, the member shall exercise such option at least one month before the effective date of retirement.

     If such inactive member shall die after attaining age 60 but before filing an application for retirement benefits pursuant to this section or section 7 of this act and for which benefits the member would have qualified, or in the event of death after retirement, there shall be paid to such member's beneficiary the death benefits prescribed by section 10 of this act.

     No beneficiary shall be eligible for a pension or survivor's benefit if the member who elected to receive a deferred pension shall die before attaining age 60.  Upon receipt of the proper proofs of death, the beneficiary of a member who elects to receive a deferred retirement allowance shall be paid the member's accumulated deductions at the time of death together with regular interest.

     Any member who, having elected to receive a deferred pension or deferred retirement allowance, again becomes a member while under the age of 60, shall thereupon be reenrolled.  The member shall be credited with all service as a member standing to the member's credit at the time of the member's election to receive a deferred pension or deferred retirement allowance.

(cf: P.L.2001, c.259, s.8)

 

     64.  Section 3 of P.L.2001, c.366 (C.43:15A-157) is amended to read as follows:

     3.    a.  Notwithstanding the provisions of section 25 of P.L.1954, c.84 (C.43:15A-25) to the contrary, a separate account shall be established in the annuity savings fund for each prosecutor and all contributions based on the prosecutor's salary shall be credited to this account.

     b.    A prosecutor shall contribute at a rate [established by the board] of 8.5% of salary, which contribution shall be deducted from the salary at the time or times it is paid, and which shall be exclusive of any other contribution required of the prosecutor for Social Security, contributory death benefits or deductions for any other purpose.

     c.     A prosecutor who is enrolled on the basis of other public service before, during, or after service as a prosecutor shall contribute for such other service at the rate of contribution required of other members as provided by section 25.

(cf:  P.L.2001, c.366, s.3)

 

     65.  Section 4 of P.L.2001, c.366 (C.43:15A-158) is amended to read as follows:

     4.    a.  Any member of the Prosecutors Part who has attained age 55 years may retire on a service retirement allowance by filing with the retirement system a written application, duly attested, stating at what time subsequent to the execution and filing thereof the member desires to be retired. 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.  Any prosecutor in service who attains age 70 years shall be retired by the board of trustees on a service retirement allowance forthwith on the first day of the next calendar month or at such time within one month thereafter as it finds advisable, except that a prosecutor attaining age 70 years may be continued in service on an annual basis upon written notice to the retirement system by the Attorney General or the Board of Chosen Freeholders of the county employing the prosecutor.

     b.    Upon retirement for service a prosecutor shall receive a service retirement allowance which shall consist of:

     (1)   An annuity which shall be the actuarial equivalent of the prosecutor's aggregate contributions and

     (2)   A pension in the amount which, when added to the prosecutor's annuity, will provide a total retirement allowance of one-sixtieth of average final compensation multiplied by the number of years of creditable service, or 2% of average final compensation multiplied by the number of years of creditable service up to 30 plus 1% of average final compensation multiplied by the number of years of creditable service over 30, or 50% of final compensation if the prosecutor has established 20 or more years of creditable service, whichever is greater.

     c.     Any prosecutor as of the effective date of P.L.2001, c.366 (C.43:15A-155 et seq.) who has 20 or more years of creditable service at the time of retirement shall be entitled to receive a retirement allowance equal to 50% of final compensation plus, in the case of a prosecutor required to retire pursuant to the provisions of subsection a. of this section, [3%] 2% of final compensation multiplied by the number of years of creditable service over 20 but not over 25.

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

(cf: P.L.2001, c.366, s.4)

 

     66.  Section 5 of P.L.2001, c.366 (C.43:15A-159) is amended to read as follows:

     5.    Should a member of the Prosecutors Part resign after having established 25 years of creditable service, the prosecutor may elect "special retirement," provided, that such election is communicated by the prosecutor to the retirement system by filing a written application, duly attested, stating at what time subsequent to the execution and filing thereof the prosecutor desires to be retired.  The prosecutor shall receive, in lieu of the payment provided in section 4 of P.L.2001, c.366 (C.43:15A-158), a retirement allowance which shall consist of:

     (1)   An annuity which shall be the actuarial equivalent of the prosecutor's aggregate contributions and

     (2)   A pension in the amount which, when added to the prosecutor's annuity, will provide (a) for a member with 25 or more years of creditable service on the effective date of this section of P.L.    , c.   (pending before the Legislature as this bill), a total retirement allowance of 65% of final compensation, plus 1% of final compensation multiplied by the number of years of creditable service over 25 but not over 30 or (b) for a member with fewer than 25 years of creditable service on the effective date of this section of P.L.    , c.   (pending before the Legislature as this bill) and a person who becomes a member of the retirement system on or after that effective date, a total retirement allowance of 60% of final compensation, plus 1% of final compensation multiplied by the number of years of creditable service over 25 but not over 30.

     The board of trustees shall retire the prosecutor 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 retirant, there shall be paid to the retirant's beneficiary an amount equal to one-half of the final compensation received by the prosecutor.

(cf:  P.L.2001, c.366, s.5)

 

     67.  Section 1 of P.L.2007, c.92 (C.43:15C-1) is amended to read as follows:

     1.    There is hereby established in the Department of the Treasury a Defined Contribution Retirement Program. The program design shall be one that is permitted for governmental plans under the federal Internal Revenue Code as determined by the State Treasurer. The retirement program is deemed to be a pension fund or retirement system for purposes of P.L.1968, c.23 (C.43:3C-1 et seq.).

     The State Treasurer may adopt, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), a plan document by regulation which incorporates the plan document by reference and may adopt other rules and regulations as necessary to implement the provisions of sections 1 through 15 of P.L.2007, c.92 (C.43:15C-1 et seq.), except that notwithstanding the provisions of P.L.1968, c.410 to the contrary, the State Treasurer may adopt, immediately upon filing with the Office of Administrative Law, such plan document and rules and regulations as the State Treasurer deems necessary to implement the provisions of sections 1 through 15 of P.L.2007, c.92 (C.43:15C-1 et seq.), which shall be effective for a period not to exceed 12 months and shall thereafter be adopted or re-adopted by the State Treasurer in accordance with the provisions of P.L.1968, c.410.

     For the purposes of the Defined Contribution Retirement Program:

     "Base salary" means a participant's regular base salary; except that for 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, it shall mean the excess over the maximum compensation as specified in that paragraph. It shall exclude overtime or other forms of extra compensation, including but not limited to, longevity lump sum payments, lump sum terminal sick leave or vacation pay, the value of maintenance, individual pay adjustments made within or at the conclusion of the participant's final year of service, retroactive salary adjustments or other pay adjustments made in the participant's final year of service unless the adjustment was made as a result of a general pay adjustment for all personnel of the public office or agency in which the participant is employed, or any unscheduled individual adjustment made in the final year to place the participant at the maximum salary level within salary range.

     "Employer" means the State or a political subdivision thereof, or an agency, board, commission, authority or instrumentality of the State or a subdivision, that pays the base salary of a participant for services rendered by the participant.

     “Normal retirement age” means age 65.

     "Retirement program" means the Defined Contribution Retirement Program established by this section.

(cf: P.L.2007, c.103, s.11)


     68.  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 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 November 1, 2008.

     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 $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 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] To the extent permitted by the federal Internal Revenue Code, 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.

     e.     Membership or participation in the Defined Contribution Retirement Program shall terminate and the individual shall be considered retired once he or she has (1) attained normal retirement age as defined under section 1 of P.L.2007, c.92 (C.43:15C-1) and (2) elected to receive a cash distribution upon separation from service or an annuity option from the individual’s retirement account.  Notwithstanding the foregoing provision, a member receiving a cash distribution or an annuity option upon separation from service from the individual’s retirement account, the amount of such computed by using only those funds provided through employee contributions, as provided under subsection a. of section 3 of P.L.2007, c.92 (C.43:15C-3), plus or minus any investment gains or losses, shall not be considered retired from the Defined Contribution Retirement Program.

(cf: P.L.2010, c.1, s.7)

 

     69.  Section 3 of P.L.2007, c.92 (C.43:15C-3) is amended to read as follows:

     3.    a.  The employer shall reduce the compensation of each participant in the Defined Contribution Retirement Program and pay over to the plan provider for the benefit of the participant an employee contribution for the retirement benefit contract or contracts equal to 5.5% of the participant's base salary. At the option and request of a participant, the employer shall reduce the compensation of the participant for additional contributions as permitted by the federal Internal Revenue Code. The intervals for reductions and payments shall be determined by the Division of Pensions and Benefits.

     All required participant contributions shall be made in accordance with section 414(h) of the federal Internal Revenue Code (26 U.S.C. s.414(h)).  All optional contributions made by a participant shall be made to the State Employees Deferred Compensation Plan, established pursuant to P.L.1978, c.39 (C.52:18A-163 et seq.), or to a deferred compensation plan established pursuant to P.L.1977, c.381 (C.43:15B-1 et seq.), whichever the participant is eligible to participate in pursuant to the action of the employer of the participant, in accordance with section 457(b) of the federal Internal Revenue Code (26 U.S.C. s.457(b)).

     b.    The employer shall make payment of the employer contributions to the program at a rate equal to 3% of the employee's base salary, which moneys shall be paid to the designated provider for the benefit of each participant. Additionally, employers shall 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.

     c.     No employer contributions shall be vested in a participant until after the participant commences the second year of employment unless the participant, at the time of initial employment, either (1) participates in a program substantially similar to the retirement program, or (2) is a member of another State-administered pension fund or retirement system.

(cf: P.L.2007, c.103, s.6)

 

     70.  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 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 an intellectual disability 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.2010, c.1, "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) In the case of a member with 25 or more years of creditable service or who has attained normal retirement age on the effective date of this section of P.L.    , c.   (pending before the Legislature as this bill), "[Final] 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 member with fewer than 25 years of creditable service and who has not attained normal retirement age on the effective date of this section of P.L.    , c.   (pending before the Legislature as this bill) and a person who becomes a member of the retirement system on or after the effective date of P.L.2010, c.1, "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.

     (32) “Normal retirement age” means the age at which the member is first eligible for a service retirement based on age under section 5 of P.L.1944, c.255 (C.43:16A-5).

(cf:  P.L.2010, c.50, s.74)

     71.  Section 1 of P.L.1968, c.325 (C.43:16A-3.4) is amended to read as follows:

     1.    a.  [Any] (1) Prior to the effective date of this section of P.L.    , c.   (pending before the Legislature as this bill), any member elected to public office may continue to be a member during the time he remains in such public office.  The member's rate of contribution to the retirement system as applied to his salary as an elected official shall be the same rate, established pursuant to section 15 of P.L.1944, c. 255 (C. 43:16A-15), he paid prior to assuming elective office.  The employer of the elected official shall make the employer's normal contribution and any accrued liability contribution to the retirement system on the basis of the member's salary as an elected official as provided in section 15 of P.L.1944, c. 255 (C.43:16A-15) for so long as such member holds elective office and remains a member of the retirement system.

     (2) Except as provided by section 1 of P.L.1976, c.134 (C.43:16A-3.5), elected officials commencing service on or after the effective date of this section of P.L.    , c.   (pending before the Legislature as this bill) 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.

     b.    Any member of the retirement system who on the effective date of [this amendatory act] P.L.1981, c. 30 (C.43:16A-3.4) is an elected official and whose membership in the retirement system has been continued pursuant to the provisions of the act of which this act is amendatory shall have his rate of contribution thereto adjusted in accordance with the provisions of subsection a. of this section.  The employer of the elected official shall make contributions to the retirement system on behalf of the member as provided in subsection a. of this section.  No member who realizes a reduction in his rate of contribution as a result of subsection a. of this section shall be entitled to a refund of any contributions made to the retirement system prior to the effective date of [this amendatory act] P.L.1981, c. 30 (C.43:16A-3.4) which exceed the amount he would have contributed had his rate of contribution as an elected official enrolled in the retirement system been the same as provided by [this amendatory act] P.L.1981, c. 30 (C.43:16A-3.4).

(cf: P.L.1981, c. 30, s. 1)

 

     72.  Section 1 of P.L.1976, c.134 (C.43:16A-3.5) is amended to read as follows:

     1.    Any member of the Police and Firemen's Retirement System of New Jersey who has been or shall be elected to the position of sheriff or who has accepted or shall accept appointment to the office or position of undersheriff may, by irrevocable written notification to the Director of the Division of Pensions and the county  treasurer, elect to continue to be a member of the retirement system while  serving as sheriff or undersheriff and shall be deemed to have waived any and all benefits to which he would otherwise be entitled by eligibility for membership in the Public Employees' Retirement System.  The county treasurer shall make deductions from the salary of the sheriff or undersheriff and  contributions on his behalf to the Police and Firemen's Retirement System as is  required by law for members of that system.

(cf: P.L.1976, c. 134, s. 1)

 

     73.  Section 1 of P.L.1993, c.247 (C.43:16A-3.8) is amended to read as follows:

     1.    a.  The following are eligible, regardless of age, to become members of the Police and Firemen's Retirement System of New Jersey (PFRS) as provided in this supplementary act: 

     (1)   any policeman or fireman employed on the effective date of this supplementary act by a municipality, which was not required to participate in PFRS under section 3 of P.L.1944, c.255 (C.43:16A-3) and has not adopted that act, who meets the requirements for membership in PFRS as set forth in the definitions of "Policeman" and "Fireman" in section 1 of that act, as amended and supplemented, and who is enrolled in the Public Employees' Retirement System of New Jersey (PERS) on that date; 

     (2)   any policeman employed on the effective date of this supplementary act by a county who is enrolled in PERS on that date; 

     (3)   any sheriff's officer, sergeant sheriff's officer, lieutenant sheriff's officer, captain sheriff's officer, chief sheriff's officer, or sheriff's investigator employed on the effective date of this supplementary act in the offices of the county sheriffs who is enrolled in PERS on that date; 

     (4)   any correction officer, senior correction officer, correction officer sergeant, correction officer lieutenant, correction officer captain, investigator, senior investigator, principal investigator, assistant chief investigator, chief investigator, or director of custody operations I, II, III employed on the effective date of this supplementary act in the Department of Corrections who is enrolled in PERS on that date; 

     (5)   any county correction officer, county correction sergeant, county correction lieutenant, county correction captain, or county deputy warden employed on the effective date of this supplementary act in the several county jails who is enrolled in PERS on that date; 

     (6)   any principal inspector employed on the effective date of this supplementary act in the Alcoholic Beverage Control Enforcement Bureau, Department of Law and Public Safety who is enrolled in PERS on that date; 

     (7)   any police officer, police sergeant, or police lieutenant employed on the effective date of this supplementary act in the Department of Human Services who is enrolled in PERS on that date; and 

     (8)   any fireman employed on the effective date of this supplementary act by a fire district in which the provisions of P.L.1944, c.255 (C.43:16A-1 et seq.) are not operative who meets the requirements for membership in PFRS as set forth in the definition of "Fireman" in section 1 of that act, as amended and supplemented, and who is enrolled in PERS on that date. 

     b.    Any person eligible pursuant to subsection a. of this section to become a member of PFRS may, regardless of age, transfer membership from PERS to PFRS in accordance with the provisions of the law and regulations governing the retirement system relative to interfund transfers by waiving, within 90 days of the effective date of this supplementary act, all rights and benefits which would otherwise be provided by PERS.  If an eligible person does not file a timely waiver of PERS benefits, the person's pension status shall remain unchanged and the person's membership shall not be transferred to PFRS. Transfers under this section shall take effect on the first day of the first full calendar month following the effective date of this supplementary act by at least 180 days.  PERS shall transmit to PFRS an amount equal to the present value of the benefit under PERS accrued to the date of transfer by each person transferring to PFRS.  The service credit accrued in PERS to the date of transfer shall be transferred to PFRS and may be used to meet any service credit requirement for benefits under PFRS.  Any benefit of a member who transfers membership from PERS to PFRS under this supplementary act based upon service credit shall be the amount of benefit determined as provided under PFRS based upon the total amount of service credit multiplied by the ratio of the service credit under PFRS from the date of transfer to the total amount of service credit, plus a benefit comparable to a PERS deferred, early or regular service retirement benefit, as appropriate, based upon the age of the member at the time of retirement and the amount of PERS service credit transferred to PFRS, determined as provided under the law and regulations governing PERS for the benefit.  The total amount of service credit in PFRS, including the transferred PERS service credit, may be used to meet the service credit requirement for the benefit comparable to a PERS deferred or early retirement benefit, but the benefit shall be calculated only on the transferred PERS service credit. 

     Active and retired death benefits, accidental death benefits, and ordinary and [accidental] work-related disability retirement benefits for members transferring to PFRS under this supplementary act shall be the benefits provided under PFRS. 

     For members transferring to PFRS under this supplementary act, the widows' or widowers' pensions provided under section 26 of P.L.1967, c.250 (C.43:16A-12.1) shall be the amount of the benefit determined as provided in section 26 multiplied by the ratio of the service credit under PFRS from the date of transfer to the total amount of service credit.  Transferring members shall be entitled to elect optional retirement allowances for the portions of their retirement benefits based upon their PERS service credit as provided under the laws and regulations governing selection of optional retirement allowances under PERS. 

(cf: P.L.1993, c.247, s.1)

 

     74.  Section 1 of P.L.2005, c.326 (C.43:16A-3.15) is amended to read as follows:

     1.    a.  Upon the approval by the municipal governing body, any fireman employed by a municipality on the effective date of this act who (1) was not eligible for membership in the Police and Firemen's Retirement System (PFRS), established pursuant to P.L.1944, c.255 (C.43:16A-1 et seq.), at the time of appointment to a paid position pursuant to N.J.S.40A:14-42 through 40A:14-44, (2) meets the requirements for membership in the retirement system as set forth in the definition of "fireman" in section 1 of P.L.1944, c.255 (C.43:16A-1) and (3) is enrolled in the Public Employees' Retirement System of New Jersey (PERS), established pursuant to P.L.1954, c.84 (C.43:15A-1 et seq.), on the effective date of this act, is eligible to become a member of PFRS, regardless of age, and may transfer membership from PERS to PFRS in accordance with the provisions of the law and regulations governing the retirement system relative to interfund transfers by waiving, within 90 days of the effective date of this act, all rights and benefits which would otherwise be provided by PERS.  If an eligible person does not file a timely waiver of PERS benefits, the person's pension status shall remain unchanged and the person's membership shall not be transferred to PFRS.  Transfers under this section shall take effect on the first day of the first full calendar month following the effective date of this act by at least 180 days.  PERS shall transmit to PFRS an amount equal to the present value of the benefit under PERS accrued to the date of transfer by each person transferring to PFRS.  The service credit accrued in PERS to the date of transfer shall be transferred to PFRS and may be used to meet any service credit requirement for benefits under PFRS.  Any benefit of a member who transfers membership from PERS to PFRS under this act based upon service credit shall be the amount of benefit determined as provided under PFRS based upon the total amount of service credit multiplied by the ratio of the service credit under PFRS from the date of transfer to the total amount of service credit, plus a benefit comparable to a PERS deferred, early or regular service retirement benefit, as appropriate, based upon the age of the member at the time of retirement and the amount of PERS service credit transferred to PFRS, determined as provided under the law and regulations governing PERS for the benefit.  The total amount of service credit in PFRS, including the transferred PERS service credit, may be used to meet the service credit requirement for the benefit comparable to a PERS deferred or early retirement benefit, but the benefit shall be calculated only on the transferred PERS service credit.

     Active and retired death benefits, accidental death benefits, and ordinary and [accidental] work-related disability retirement benefits for members transferring to PFRS under this act shall be the benefits provided under PFRS.

     For members transferring to PFRS under this act, the widows' or widowers' pensions provided under section 26 of P.L.1967, c.250 (C.43:16A-12.1) shall be the amount of the benefit determined as provided in section 26 multiplied by the ratio of the service credit under PFRS from the date of transfer to the total amount of service credit.  Transferring members shall be entitled to elect optional retirement allowances for the portions of their retirement benefits based upon their PERS service credit as provided under the laws and regulations governing selection of optional retirement allowances under PERS.

     b.    Notwithstanding the provisions of subsection a. of this section, a fireman who transfers membership from PERS to PFRS may receive full credit toward benefits under PFRS for the transferred PERS service credit if the member agrees to pay the full cost of the accrued liability for the transferred PERS service credit in the same manner and subject to the same terms and conditions provided for the purchase of credit for military service under section 3 of P.L.1991, c.153 (C.43:16A-11.11).

     c.     The State shall not be liable for additional costs incurred by a local employer as a result of the transfers permitted by this section.

(cf: P.L.2005, c.326, s.1)

 

     75.  Section 5 of P.L.1944, c.255 (C.43:16A-5) is amended to read as follows:

     5.    (1)  Any member in service who has attained age 55 years may retire on a service retirement allowance upon filing a written and duly executed application to the retirement system, setting forth at what time, not less than one month subsequent to the filing thereof, he desires to be retired. Any member in service who attains age 65 years shall be retired on a service retirement allowance forthwith on the first day of the next calendar month, except that a member hired prior to January 1, 1987 may remain a member of the system until the member attains age 68 years or 25 years of creditable service, whichever comes first.

     (2)   Upon retirement for service a member shall receive a service retirement allowance which shall consist of:

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

     (b)   A pension in the amount which, when added to the member's annuity, will provide a total retirement allowance of one-sixtieth of his average final compensation multiplied by the number of years of his creditable service, or 2% of his average final compensation multiplied by the number of years of his creditable service up to 30 plus 1% of his average final compensation multiplied by the number of years of creditable service over 30, or 50% of his final compensation if the member has established 20 or more years of creditable service, whichever is greater.

     (3)   Any member of the retirement system as of the effective date of P.L.1999, c.428 who has 20 or more years of creditable service at the time of retirement shall be entitled to receive a retirement allowance equal to 50% of the member's final compensation plus, in the case of a member required to retire pursuant to the provisions of subsection (1) of this section, [3%] 2% of final compensation multiplied by the number of years of creditable service over 20 but not over 25.

     (4)   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 his beneficiary an amount equal to one-half 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.2005, c.381, s.1)

 

     76.  Section 6 of P.L.1944, c.255 (C.43:16A-6) is amended to read as follows:

     6.    (1) (a) Upon the written application by a member in service, by one acting in his behalf or by his employer, any member, under [55 years of age] normal retirement age, who has had [four] ten or more years of creditable service may be retired on an ordinary disability retirement allowance; provided, that the medical board, after a medical examination of such member, shall certify that such member is mentally or physically incapacitated for the performance of his usual duty and of any other available duty in the department which his employer is willing to assign to him and that such incapacity is likely to be permanent and to such an extent that he should be retired.

     (b)   Upon the written application by a member in service, by one acting in his behalf or by his employer, any member under normal retirement age who has less than 10 years of creditable service may be retired on a work-related disability retirement allowance, if he meets the requirements of the medical examination under paragraph (a) of this subsection and the incapacity from the performance of duties is the direct result of an accident or occupational exposure occurring during and as a result of his regular and assigned duties and not the result of willful negligence.  In order to qualify for a work-related disability benefit, the member shall have received a workers’ compensation award of permanent disability under R.S.34:15-1 et seq.  The board may, in its discretion, waive the requirement for a medical examination under this subsection when the Division of Workers’ Compensation in the Department of Labor and Workforce Development has determined that the member is 100 percent totally and permanently disabled.

     (2)   Upon retirement for ordinary or work-related disability, a member shall receive [an ordinary] a disability retirement allowance which shall consist of:

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

     (b)   A pension in the amount which, when added to the member's annuity, will provide a total retirement allowance of 1 1/2 % of final compensation multiplied by his number of years of creditable service but in no event shall the total allowance be less than 40% of the member's final compensation.

     (3)   [Notwithstanding the provisions of subsection (2) of this section, a member who has more than 20 but less than 25 years of creditable service and who is required to retire upon application by the employer on or after the effective date of P.L.1999, c.428, shall receive an ordinary disability retirement allowance which shall consist of:

     (a)   An annuity which shall be the actuarial equivalent of the member's aggregate contributions; and

     (b)   A pension in the amount which, when added to the member's annuity, will provide a total retirement allowance of 50% of final compensation plus 3% of final compensation multiplied by the number of years of creditable service over 20 but not over 25] (Deleted by amendment,  P.L.    , c.   (pending before the Legislature as this bill)).

     (4)   Upon the receipt of proper proofs of the death of a member who has retired on [an ordinary] a disability retirement allowance, there shall be paid to such member's beneficiary, an amount equal to 3 1/2 times the compensation upon which contributions by the member to the annuity savings fund were based in the last year of creditable service; provided, however, that if such death shall occur after the member shall have attained 55 years of age the amount payable shall equal 1/2 of such compensation instead of 3 1/2 times such compensation.

(cf: P.L.1999, c.428, s.3)

 

     77.  (New section)  a.  Once each year the retirement system may, and upon his application shall, require any disability beneficiary who is under normal retirement age to undergo a medical examination by a physician or physicians designated by the system for a period of five years following his retirement in order to determine whether or not the disability which existed at the time he was retired has vanished or has materially diminished.  If the disability beneficiary is under normal retirement age and engaged in an occupation, then the amount of his pension shall be reduced to an amount which when added to the amount then earned by him, shall not exceed the amount of the salary now attributable to his former position.  If his earnings have changed since the date of his last adjustment, then the amount of his pension may be further altered, but the new pension shall not exceed the amount of pension originally granted.

     If a disability beneficiary, while under normal retirement age, refuses to submit to at least one medical examination in any year by a physician or physicians designated by the system, his pension shall be discontinued until withdrawal of his refusal.  If the report of the medical board shall show that such beneficiary is able to perform either his former duty or other comparable duty which his former employer is willing to assign to him, the beneficiary shall report for duty.  Such a beneficiary shall not suffer any loss of benefits while he awaits his restoration to active service.  If the beneficiary fails to return to duty within 10 days after being ordered so to do, or within such further time as may be allowed by the board of trustees for valid reason as the case may be, the pension shall be discontinued during such default.  For the purposes of this section, normal retirement age means the age at which a member is eligible to receive a service retirement from the retirement system based on eligibility by age.  

     b. If a disability beneficiary becomes employed again in a position which makes him eligible to be a member of the retirement system, his allowance and the right to any death benefit as a result of his former membership, shall be canceled until he retires.

     Such person shall be reenrolled in the retirement system and shall be treated as an active member based upon his prior enrollment.

     Upon subsequent retirement of such member, he shall receive a retirement allowance based on all his service as a member computed in accordance with applicable provisions of P.L.1944, c.255 (C.43:16A-1 et seq.), but the total retirement allowance upon subsequent retirement shall not be a greater proportion of his final compensation than the proportion to which he would have been entitled had he remained in service during the period of his prior retirement.  Any death benefit to which such member shall be eligible shall be based on his latest retirement.

 

     78.  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) for a member with 25 or more years of creditable service credit on the effective date of this section of P.L.    , c.   (pending before the Legislature as this bill), 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 (b) for a member with fewer than 25 years of creditable service on the effective date of this section of P.L.    , c.   (pending before the Legislature as this bill) and a person who becomes a member of the retirement system on or after that effective date, a total retirement allowance of 60% 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.2010, c.1, s.31)

 

     79.  Section 17 of P.L.1964, c.241 (C.43:16A-11.2) is amended to read as follows:

     17.  Should a member, after having established 10 years of creditable service, be separated voluntarily or involuntarily from the service, before reaching age 55, and not by removal for cause on charges of misconduct or delinquency, such person may elect to receive the payments provided for in section 11 of P.L.1944, c. 255 or section 16 of P.L.1964, c. 241, or a deferred retirement allowance, beginning on the first day of the month following his attainment of age 55 and the filing of an application therefor, which shall consist of:

     (1)   An annuity which shall be the actuarial equivalent of his aggregate contributions at the time of his severance from the service and

     (2)   A pension in the amount which, when added to the member's annuity, will provide a total retirement allowance of 2% of the member's final compensation multiplied by the number of years of creditable service up to 30 plus 1% of final compensation multiplied by the number of years of creditable service over 30, provided that such inactive member may elect to receive  payments provided under section 11 of P.L.1944, c.255 or section 16 of P.L.1964, c. 241 if the member had qualified under that section at the time of leaving service[, except that in order to avail himself or herself of the option, the member must exercise such option at least 30 days before the effective date of retirement].  If such inactive member shall die before attaining age 55, the member's aggregate contributions shall be paid in accordance with section 11 of P.L.1944, c.255 and, in addition if such inactive member shall die after attaining age 55 but before filing an application for retirement benefits pursuant to this section or section 16 of P.L.1964, c.241 and has not withdrawn his or her aggregate contributions, or in the event of death after retirement, an amount equal to one-half 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 55, shall thereupon be reenrolled.  If he had discontinued his service for more than two consecutive years, [subsequent contributions shall be at his former rate increased for the years of his inactive membership.  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] he shall be enrolled in the retirement system under a new membership account and shall be subject to such benefits and requirements as shall apply to new members of the retirement system as of the date of such new enrollment.  The member may elect to transfer all service credit associated with the previously vested membership to the new membership account and such service credit will be subject to the benefit and requirements as shall apply to new members of the retirement system as of the date of such new enrollment.  Should the member elect not to transfer the service credit associated with the vested membership to the new membership account, no benefits shall be payable from the previous application for deferred retirement until such time as the member has terminated all Police and Firemen’s Retirement System eligible employment.

(cf: P.L.1999, c.428, s.6)

 

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

(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 in level dollars 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 in level dollars 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.

     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.2010, c.1, s.32)

 

     81.  Section 30 of P.L.1967, c.250 (C.43:16A-15.2) is amended to read as follows:

     30.  a.  If any member of the retirement system receives periodic benefits payable under the Workers' Compensation Law during the course of his active service, in lieu of his normal compensation, his regular salary deductions shall be paid to the retirement system by his employer.  Such payments shall be computed, in accordance with section 15 of P.L.1944, c.255 (C.43:16A-15), at the rate of contribution on the base salary subject to the retirement system, just prior to the receipt of the workers' compensation benefits.  The moneys paid by the employer shall be credited to the member's account in the annuity savings fund and shall be treated as employee contributions for all purposes.  The employer will terminate the payment of these moneys when the periodic benefits payable under the Workers' Compensation Law are terminated or when the member retires.

     The member for whom the employer is making such payments, will be considered as if he were in the active service.

     b.    An application for retirement benefits may be approved by the board of trustees while the member, applying for such benefits, is in receipt of periodic benefits under the Workers' Compensation Law.  If a retirant receiving an accidental disability retirement allowance becomes a recipient of periodic benefits under the workers' compensation law after the date of retirement, the pension portion of the retirement allowance payable to the retirant shall be reduced, during the period of the payment of the periodic benefits, dollar-for-dollar in the amount of the periodic benefits received after the date of retirement, subject to the provisions of section 19 of P.L.1971, c.175 (C.43:16A-12.4).  Notwithstanding the provisions of R.S.34:15-26 and R.S.34:15-40, the amount of the dollar-for-dollar reduction from the receipt of workers’ compensation periodic benefits shall not be reduced by a payment for legal services nor by receipt of a third party recovery.  The reduction provided for herein shall not affect the retirant's pension adjustment benefits or survivor benefits that may be payable upon the death of the retirant.

     If a work-related disability retirant or an accidental disability retirant approved prior to the effective date of P.L.    , c.   (pending before the Legislature as this bill) receives a retirement allowance without reduction and periodic benefits under the workers' compensation law for any period of time after the date of retirement, the retirant shall repay to the retirement system the amount of the pension portion of the retirement allowance which should have been subject to reduction under this subsection.  The repayment may be in the form of a lump sum payment or scheduled as deductions from the retirant's retirement allowance and pension adjustment benefits.  If the retirant dies before full repayment of the amount required, the remaining balance shall be deducted from any death benefits payable on behalf of the retirant.

(cf: P.L.1995, c.369, s.3)

 

     82.  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 an intellectual disability 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) In the case of a member with 25 or more years of creditable service or who has attained normal retirement age on the effective date of this section of P.L.    , c.   (pending before the Legislature as this bill), "[Final] 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 member with fewer than 25 years of creditable service and who has not attained normal retirement age on the effective date of this section of P.L.    , c.   (pending before the Legislature as this bill) and a person who becomes a member of the retirement system on or after the effective date of P.L.2010, c.1, "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) In the case of a member with 25 or more years of creditable service or who has attained normal retirement age on the effective date of this section of P.L.    , c.   (pending before the Legislature as this bill), "[Final] 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 member with fewer than 25 years of creditable service and who has not attained normal retirement age on the effective date of this section of P.L.    , c.   (pending before the Legislature as this bill) and a person who becomes a member of the retirement system on or after the effective date of P.L.2010, c.1, "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.2010, c.1, "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.

     v.     “Normal retirement age” means the age at which the member is first eligible for a service retirement based on age under section 8 of P.L.1965, c.89 (C.53:5A-8).

(cf:  P.L.2010, c.50, s.80)

 

     83.  Section 8 of P.L.1965, c.89 (C.53:5A-8) is amended to read as follows:

     8.    a.  The Legislature finds and declares that the public health, safety and welfare require the ongoing health and fitness of all members of the New Jersey State Police so that they may safely and efficiently protect the public.  The Legislature further finds and declares that such continued health and fitness cannot be determined except with reference to age, and therefore finds and concludes that retirement of all members of the State Police at age 55, except as provided for in subsection c. of this section, shall constitute a bona fide occupational qualification which is reasonably necessary to the normal operation of the State Police, which qualification the Legislature hereby promulgates and establishes.

     b.    Any member of the retirement system may retire on a service retirement allowance upon the completion of at least 20 years of creditable service as a State policeman, which includes the creditable service of those members appointed to the Division of State Police under section 3 of P.L.1983, c.403 (C.39:2-9.3) and the creditable service of those members appointed to the Division of State Police under section 1 of P.L.1997, c.19 (C.53:1-8.2).  Upon the filing of a written and duly executed application with the retirement system, setting forth at what time, not less than one month subsequent to the filing thereof, he desires to be retired, any such member retiring for service shall receive a service 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 50% of his final compensation.

     c.     Except for the Superintendent of State Police, any member of the retirement system, including a member appointed to the  State Police under section 3 of P.L.1983, c.403 (C.39:2-9.3) and a member appointed to the State Police under section 1 of P.L.1997, c.19 (C.53:1-8.2), who has attained the age of 55 years, shall be retired forthwith on the first day of the next calendar month following the effective date of this 1985 amendatory act.  Any member of the retirement system so retired shall receive a service retirement allowance pursuant to this section or section 27 of P.L.1965, c.89 (C.53:5A-27), as appropriate.

     d.    Any member of the retirement system who is required to retire pursuant to subsection c. of this section and who has more than 20 but fewer than 25 years of creditable service at the time of retirement shall be entitled to continued health benefits coverage during retirement as provided in the "New Jersey State Health Benefits Program Act," P.L.1961, c.49 (C.52:14-17.25 et seq.).  Notwithstanding the provisions of section 8 of P.L.1961, c.49 (C.52:14-17.32), the State shall pay the premium or periodic charge for the benefits provided under this subsection to a member retiring under subsection c. of this section with fewer than 25 years of service credited in the retirement system, and the member's dependents covered under the program, but not including survivors.

     e.     Any member of the retirement system as of the effective date of P.L.1985, c.175 who is required to retire pursuant to subsection c. of this section shall be entitled to the retirement allowance provided for by subsection b. of this section, notwithstanding that the member shall have fewer than 20 years' creditable service.

     f.     Any member of the retirement system as of the effective date of P.L.1985, c.175 who is required to retire pursuant to subsection c. of this section and who has more than 20 but less than 25 years of creditable service at the time of retirement shall be entitled to the retirement allowance provided for by subsection b. of this section plus [3%] 2% of his final compensation multiplied by the number of years of creditable service over 20 but not over 25.

     g.     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 one-half of the final compensation received by the member.

(cf: P.L.2001, c.316, s.1)

 

     84.  Section 9 of P.L.1965, c.89 (C.53:5A-9) is amended to read as follows:

     9.    a.  (1) Upon the written application by a member in service, by one acting in his behalf or by the State, any member, under [55 years of] normal retirement age, who has had [four] 10 or more years of creditable service as a State policeman, or [four] 10 or more years of creditable service as a person formerly employed by the Division of Motor Vehicles or the Division of State Police prior to appointment as provided in section 3 of P.L.1983, c.403 (C.39:2-9.3), or [four] 10 or more years of creditable service as a person formerly employed by the Alcoholic Beverage Control Enforcement Bureau, the State Capitol Police Force, or the Bureau of Marine Law Enforcement prior to appointment as provided in section 1 of P.L.1997, c.19 (C.53:1-8.2), may be retired, not less than one month next following the date of filing such application with the retirement system, on an  ordinary disability retirement allowance; provided, that the medical board, after a medical examination of such member, shall certify that such member is mentally or physically incapacitated for the performance of his usual duty and of any other available duty in the Division of State Police which the Superintendent of State Police is willing to assign to him and that such incapacity is likely to be permanent and of such an extent that he should be retired.

     (2) Upon the written application by a member in service under normal retirement age, by one acting in his behalf or by his employer, who has less than 10 years of creditable service may be retired on a work-related disability retirement allowance, if he meets the requirements of the medical examination under paragraph (1) of this subsection and the incapacity from the performance of duties is the direct result of an accident or occupational exposure occurring during and as a result of his regular and assigned duties and not the result of willful negligence.  In order to qualify for a work-related disability benefit, the member must have received a workers’ compensation award of permanent disability under R.S.34:15-1 et seq.  The board may, in its discretion, waive the requirement for a medical examination under this subsection where the Division of Workers’ Compensation in the Department of Labor and Workforce Development has determined that the member is 100 percent totally and permanently disabled.

     b.    Upon retirement for ordinary or work-related disability, a member shall receive [an ordinary] a disability 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 1 1/2% of final compensation multiplied by his number of years of creditable service, but in no event shall the total allowance be less than 40% of final compensation.

     c.     [Notwithstanding the provisions of subsection b. of this section, a member of the retirement system who has more than 20 but less than 25 years of creditable service and who is required to retire pursuant to subsection a. of this section upon application by the State made on or after October 1, 1988, shall receive an ordinary disability retirement allowance which shall consist of:

     (1)  An annuity which shall be the actuarial equivalent of the member's aggregate contributions; and

     (2)  A pension in the amount which, when added to the member's annuity, will provide a total retirement allowance of 50% of final compensation plus 3% of final compensation multiplied by the number of years of creditable service over 20 but not over 25.

     Any increase in the disability retirement allowance of a member who was required to retire on or after October 1, 1988 and prior to the effective date of this amendatory and supplementary act, P.L.1989, c.308, shall be retroactive to the date of retirement]  (Deleted by amendment,  P.L.    , c.   (pending before the Legislature as this bill)).

     d.    Upon the receipt of proper proofs of the death of a member who has retired on an ordinary or work-related disability retirement allowance, there shall be paid to the member's beneficiary an amount equal to three and one-half times the final compensation received by the member in the last year of creditable service; provided, however, that if such death shall occur after the member shall have attained 55 years of age, the amount payable shall equal one-half of such compensation instead of three and one-half times such compensation.

(cf: P.L.1997, c.19, s.10)

 

     85.  (New section)  a.  Once each year the retirement system may, and upon his application shall, require any disability beneficiary who is under normal retirement age to undergo a medical examination by a physician or physicians designated by the system for a period of five years following his retirement in order to determine whether or not the disability which existed at the time he was retired has vanished or has materially diminished.  If the disability beneficiary is under normal retirement age and engaged in an occupation, then the amount of his pension shall be reduced to an amount which when added to the amount then earned by him, shall not exceed the amount of the salary now attributable to his former position.  If his earnings have changed since the date of his last adjustment, then the amount of his pension may be further altered; but the new pension shall not exceed the amount of pension originally granted.

     If a disability beneficiary, while under normal retirement age, refuses to submit to at least one medical examination in any year by a physician or physicians designated by the system, his pension shall be discontinued until withdrawal of his refusal.  If the report of the medical board shall show that such beneficiary is able to perform either his former duty or other comparable duty which his former employer is willing to assign to him, the beneficiary shall report for duty; such a beneficiary shall not suffer any loss of benefits while he awaits his restoration to active service.  If the beneficiary fails to return to duty within 10 days after being ordered so to do, or within such further time as may be allowed by the board of trustees for valid reason as the case may be, the pension shall be discontinued during such default.  For the purposes of this section normal retirement age means the age at which a member is eligible to receive a service retirement from the retirement system based on eligibility by age.  

     b.    If a disability beneficiary becomes employed again in a position which makes him eligible to be a member of the retirement system, his allowance and the right to any death benefit as a result of his former membership, shall be canceled until he retires.

     Such person shall be reenrolled in the retirement system and shall be treated as an active member based upon his prior enrollment.

     Upon subsequent retirement of such member, he shall receive a retirement allowance based on all his service as a member computed in accordance with applicable provisions of P.L.1944, c.255 (C.43:16A-1 et seq.), but the total retirement allowance upon subsequent retirement shall not be a greater proportion of his final compensation than the proportion to which he would have been entitled had he remained in service during the period of his prior retirement.  Any death benefit to which such member shall be eligible shall be based on his latest retirement.

 

     86.  Section 27 of P.L.1965, c.89 (C.53:5A-27) is amended to read as follows:

     27.  a.  Should a member resign after having established 25 years of creditable service as a full-time commissioned officer, noncommissioned officer or trooper of the Division of State Police or a member appointed to the State Police under section 3 of P.L.1983, c.403 (C.39:2-9.3) or a member appointed to the State Police under section 1 of P.L.1997, c.19 (C.53:1-8.2), 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 26, 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) for a member with 25 or more years of creditable service credit on the effective date of this section of P.L.    , c.   (pending before the Legislature as this bill), 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 (b) for a member with fewer than 25 years of creditable service on the effective date of this section of P.L.    , c.   (pending before the Legislature as this bill) and a person who becomes a member of the retirement system on or after that effective date, a total retirement allowance of 60% of final compensation, plus 1% of final compensation multiplied by the number of years of creditable service over 25 but not 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.

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

(cf:  P.L.1997, c.19, s.11)

 

     87.  Section 34 of P.L.1965, c.89 (C.53:5A-34) is amended to read as follows:

     34.  The Contingent Reserve Fund shall be the fund in which shall be credited contributions made by the State. 

     a.     Upon the basis of the tables recommended by the actuary which the board adopts and regular interest, the actuary shall compute annually, beginning as of June 30, 1992, the amount of the contribution which shall be the normal cost as computed under the projected unit credit method attributable to service rendered under the retirement system for the year beginning on July 1 immediately succeeding the date of the computation.  This shall be known as the "normal contribution." 

     b.    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 of the retirement system, computed under the projected unit credit method, which is not already covered by the assets of the retirement system, valued in accordance with the asset valuation method established in this section.  This shall be known as the "unfunded accrued liability."  If there was no unfunded accrued liability for the valuation period immediately preceding the current valuation period, the actuary, using the total amount of this unfunded accrued liability, shall compute the initial amount of contribution which, if [the contribution is increased at a specific rate and] paid annually in level dollars 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, 1996 shall be the full market value of the assets as of that date and 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.

     "Excess valuation assets" means the valuation assets for a valuation period less the actuarial accrued liability for the valuation period, if the sum is greater than zero.  If there are excess valuation assets for the valuation period ending June 30, 1996, the normal contributions for the valuation periods ending June 30, 1996 and June 30, 1997 which have not yet been paid to the retirement system shall be reduced to the extent possible by the excess valuation assets, provided that 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 for a valuation period ending after June 30, 1996, the State Treasurer may reduce the normal contribution payable for the next valuation period as follows:

     (1)   for valuation periods ending June 30, 1997 through June 30, 2001, to the extent possible by up to 100% of the excess valuation assets;

     (2)   for the valuation period ending June 30, 2002, to the extent possible by up to 84% of the excess valuation assets;

     (3)   for the valuation period ending June 30, 2003, to the extent possible by up to 68% of the excess valuation assets;  and

     (4)   for valuation periods ending June 30, 2004 through June 30, 2007, to the extent possible by up to 50% of the excess valuation assets.

     c.     The actuary shall certify annually the aggregate amount payable to the Contingent Reserve Fund in the ensuing year, which amount shall be equal to the sum of the amounts described in this section.  The State shall pay into the Contingent Reserve Fund during the ensuing year the amount so certified. In the event the amount certified to be paid by the State includes amounts due for services rendered by members to specific instrumentalities or authorities the total amounts so certified shall be paid to the retirement system by the State; provided, however, the full cost attributable to such services rendered to such instrumentalities and authorities shall be computed separately by the actuary and the State shall be reimbursed for such amounts by such instrumentalities or authorities. 

     The cash death benefits, payable as the result of contribution by the State under the provisions of this act upon the death of a member in active service and after retirement shall be paid from the Contingent Reserve Fund. 

(cf: P.L.2007, c.92, s.27)

 

     88.  Section 38 of P.L.1965, c.89 (C.53:5A-38) is amended to read as follows:

     38.  There shall be deducted from the payroll of each active member of the system 7 1/2  % of the amount of his salary, which shall be turned over to the State Treasurer and be credited by him to the account of the State Police Retirement  System.  Commencing with the payroll period for which the payroll date occurs on or immediately following July 1, 2011, all members shall contribute an additional 1% of salary to the system.  This additional contribution, however, shall not be used to reduce the employer normal contribution required pursuant to section 34 of P.L.1965, c.89 (C.53:5A-34).  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 deductions 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.

(cf:  P.L.1980, c.55, s.6)

 

     89.  Section 30 of 1971, c.181 (C.53:5A-38.1) is amended to read as follows:

     30.  a.  If any member of the retirement system receives periodic benefits payable under the Workers' Compensation Law during the course of his active service, in lieu of his normal compensation, his regular salary deductions shall be paid to the retirement system by his employer.  Such payments shall be computed, in accordance with section 38 of P.L.1965, c.89 (C.53:5A-38), at the rate of contribution on the base salary subject to the retirement system, just prior to the receipt of the workers' compensation benefits.   The moneys paid by the employer shall be credited to the member's account in the annuity savings fund and shall be treated as employee contributions for all purposes.  The employer will terminate the payment of these moneys when the periodic benefits payable under the Workers' Compensation Law are terminated or when the member retires.

     The member for whom the employer is making such payments, will be considered as if he were in the active service.

     b.    An application for retirement benefits may be approved by the board of trustees while the member, applying for such benefits, is in receipt of periodic benefits under the Workers' Compensation Law.  If a retirant receiving [an accidental] a work-related disability retirement allowance becomes a recipient of periodic benefits under the workers' compensation law after the date of retirement, the pension portion of the retirement allowance payable to the retirant shall be reduced, during the period of the payment of the periodic benefits, dollar-for-dollar in the amount of the periodic benefits received after the date of retirement, subject to the provisions of section 31 of P.L.1971, c.181 (C.53:5A-15.3).  The reduction provided for herein shall not affect the retirant's pension adjustment benefits or survivor benefits that may be payable upon the death of the retirant.

     If a work-related disability retirant or an accidental disability retirant approved prior to the effective date of P.L.    , c.   (pending before the Legislature as this bill) receives a retirement allowance without reduction and periodic benefits under the workers' compensation law for any period of time after the date of retirement, the retirant shall repay to the retirement system the amount of the pension portion of the retirement allowance which should have been subject to reduction under this subsection.  The repayment may be in the form of a lump sum payment or scheduled as deductions from the retirant's retirement allowance and pension adjustment benefits.  If the retirant dies before full repayment of the amount required, the remaining balance shall be deducted from any death benefits payable on behalf of the retirant.

(cf: P.L.1995, c.369, s.4)

 

     90.  Section 2 of P.L.1958, c.143 (C.43:3B-2) is amended to read as follows:

     2.    The monthly retirement allowance or pension originally granted to any retirant and the pension or survivorship benefit originally granted to any beneficiary shall be adjusted in accordance with the provisions of this act provided, however, that: 

     a.     the maximum retirement allowance, without option, shall be considered the retirement allowance originally granted to any retirant who, at retirement, elected an Option I allowance pursuant to the provisions of the statutes stipulated in subsection b. of section 1 of this act (C.43:3B-1); and b. the minimum pension granted to any beneficiary stipulated in subsection d. (4) of section 1 of this act (C.43:3B-1), shall be considered the pension originally granted to such beneficiary. 

     Pension adjustments shall not be paid to retirants or beneficiaries who are not receiving their regular, full, monthly retirement allowances, pensions or survivorship benefits.  The adjustment granted under the provisions of this act shall be effective only on the first day of a month, shall be paid in monthly installments, and shall not be decreased, increased, revoked or repealed except as otherwise provided in this act.  No adjustment shall be due to a retirant or a beneficiary unless it constitutes a payment for an entire month; provided, however, that an adjustment shall be payable for the entire month in which the retirant or beneficiary dies. 

     Commencing with the effective date of P.L.   , c.    (pending before the Legislature as this bill) and thereafter, no further adjustments to the monthly retirement allowance or pension originally granted to any retirant and the pension or survivorship benefit originally granted to any beneficiary shall be made in accordance with the provisions of P.L.1958, c.143 (C.43:3B-1 et seq.).  This provision shall not reduce the monthly retirement benefit that a retirant or a beneficiary is receiving on the effective date of P.L.    , c.   (pending before the Legislature as this bill) when the benefit includes an adjustment granted prior to that effective date.

(cf: P.L.1993, c.335, s.2)

 

     91.  Section 1 of P.L.1968, c.23 (C.43:3C-1) is amended to read as follows:

     1.    Notwithstanding any other law to the contrary, if a former member of any pension fund or retirement system, contributory or noncontributory, established under any law of this State, who [has been granted] is in receipt of a pension or retirement allowance [for any cause other than vesting or deferred retirement] other than a disability retirement, becomes employed again in a position which makes him eligible to be a member of [another] any pension fund or retirement system established under any law of this State, such person shall not be enrolled in such [other] pension fund or retirement system [if he is eligible to receive such pension or retirement allowance].

(cf: P.L.1991, c.276, s.1)

 

     92.  (New section)  No person shall be eligible for a retirement allowance unless his retirement is bona fide. A retirement is bona fide if a retiree terminates his public office, position or employment for a period of not less than six months during which time he is in receipt of a retirement allowance and is not reemployed in an office or position that is covered by the retirement system from which he retired, or any other pension fund or retirement system, contributory or noncontributory, established under any law of this State.  

     If a retirement is not bona fide, in the event the member is employed in a position that qualified for continued participation in the same retirement system, the retirement shall be cancelled and the member shall be reenrolled in the retirement system and shall repay any retirement benefits received to which he was not entitled.  In the event the former member has become employed within the six month period in an office or position covered by another retirement system established under any law of this State, the retirement allowance shall be suspended until such time as the person has ceased all public employment in this State for a period of six months. The Director of the Division of Pensions and Benefits shall promulgate regulations implementing this section.

 

     93.  (New section)  An employer of a retiree who becomes reemployed in an office or position that is covered by the retirement system from which he retired, or any other pension fund or retirement system, contributory or noncontributory, established under any law of this State, shall notify the Division of Pensions and Benefits upon commencement of the retiree’s employment and shall report the amount of annual earnings to the Division of Pensions and Benefits, as prescribed by the director.

 

     94.  Section 1 of P.L.1997, c.113 (C.43:3C-9.1) is amended to read as follows:

     1.    In accordance with the provisions of section 401 (a) (2) of the federal Internal Revenue Code, and subject to such exceptions as may be permitted for governmental plans under section 401 (a) (2) of the federal Internal Revenue Code, at no time prior to the satisfaction of all liabilities with respect to members and their beneficiaries under 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.), the State Police Retirement System, established pursuant to P.L.1965, c.89 (C.53:5A-1 et seq.), [and] the Alternate Benefit Program, established pursuant to P.L.1969, c.242 (C.18A:66-167 et seq.), and the Defined Contribution Retirement Program, established pursuant to P.L.2007, c.92 (C.43:15C-1 et seq.), shall any part of the corpus or income of the respective retirement systems, within the taxable year or thereafter,  be used for or diverted to purposes other than for the exclusive benefit of the members or their beneficiaries.

(cf: P.L.1997, c.113, s.1)

 

     95.  Section 2 of P.L.1997, c.113 (C.43:3C-9.2) is amended to read as follows:

     2.    Notwithstanding any law, rule or regulation to the contrary, the contributions to and benefits payable under 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, the State Police Retirement System [and] , the Alternate Benefit Program , and the Defined Contribution Retirement Program shall not exceed the limitations provided under section 415 of the federal Internal Revenue Code.  The Division of Pensions and Benefits in the Department of the Treasury shall be responsible for implementation and enforcement of these limitations.

(cf: P.L.1997, c.113, s.2)

 

     96.  Section 4 of P.L.1997, c.113 (C.43:3C-9.4) is amended to read as follows:

     4.    a.  Notwithstanding any law, rule or regulation to the contrary, for members of the Alternate Benefit Program, the amount of compensation which may be used for employer and member contributions and benefits under the program after June 30, 1996 shall not exceed the compensation limitation of section 401 (a) (17) of the federal Internal Revenue Code of 1986, (26 U.S.C. s.401 (a) (17)), as amended pursuant to section 13212 of the Omnibus Budget Reconciliation Act of 1993, Pub. L.103-66, 107 Stat. 312, or as hereafter amended or supplemented, to the extent applicable to governmental plans.  The provisions of this section shall not be applicable to members enrolled prior to July 1, 1996 if the employer of the members certifies to the Director of the Division of Pensions and Benefits, in the form and manner prescribed by the director, prior to July 1, 1997, that the employer will pay the additional cost for not applying the limit to the members.

     b.    Notwithstanding any law, rule or regulation to the contrary, for members of the Defined Contribution Retirement Program, the amount of compensation which may be used for employer and member contributions shall not exceed the compensation limitation of section 401(a)(17) of the federal Internal Revenue Code of 1986 (26 U.S.C. s. 401(a)(17)), as amended from time to time.

(cf: P.L.1997, c.113, s.4)

 

     97.  Section 41 of P.L.2007, c.92 (C.43:3C-9.6) is amended to read as follows:

     41.  a.  Upon the termination of the Teachers' Pension and Annuity Fund, the Public Employees' Retirement System, the Judicial Retirement System, the Police and Firemen's Retirement System, the State Police Retirement System, the Prison Officers' Pension Fund, [or] the Consolidated Police and Firemen's Fund, the Alternate Benefit Program, or the Defined Contribution Retirement Program, or upon complete discontinuance of contributions to any of the retirement systems, the rights of all members of such retirement system to benefits accrued to the date of such termination or discontinuance, to the extent then funded, are non-forfeitable.

     b.    Notwithstanding any law, rule or regulation to the contrary, the form and timing of all distributions from the Teachers' Pension and Annuity Fund, the Public Employees' Retirement System, the Judicial Retirement System, the Police and Firemen's Retirement System, the State Police Retirement System, the Prison Officers' Pension Fund, [or] the Consolidated Police and Firemen's Fund, the Alternate Benefit Program, or the Defined Contribution Retirement Program, to a member, or to the beneficiary of a member if the member dies before the member's entire interest has been distributed, shall conform to the required distribution provisions of section 401(a)(9) of the federal Internal Revenue Code and the regulations issued by the United States Department of the Treasury under that Code section, including the incidental death benefit requirements of section 401(a)(9)(G) of the federal Internal Revenue Code.  In addition, in no event shall payments under any of the retirement systems commence to be paid to a member later than the member's required beginning date, without regard to whether the member has filed application therefor.  For this purpose, a member's required beginning date is the April 1 of the calendar year following the later of (1) the calendar year in which the member attains age 70 1/2 or (2) the calendar year in which the member retires.  The actuarial adjustment described in section 401(a)(9)(C)(iii) of the federal Internal Revenue Code shall not apply.

(cf: P.L.2007, c.92, s.41)

 

     98.     (New section)  a.  Notwithstanding any law, rule or regulation to the contrary, 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.), are established as qualified governmental defined benefit plans pursuant to sections 401(a) and 414(d) of the federal Internal Revenue Code of 1986 (26 U.S.C. ss. 401(a) and 414(d)), as amended, or such other provision of the federal Internal Revenue Code, as applicable, regulations of the U.S. Treasury Department, and other guidance of the federal Internal Revenue Service.

     b.  Notwithstanding any law, rule or regulation to the contrary, the Alternate Benefit Program, established pursuant to P.L.1969, c.242 (C.18A:66-167 et seq.), and the Defined Contribution Retirement Program, established pursuant to P.L.2007, c.92 (C.43:15C-1 et seq.) are established as qualified governmental defined contribution plans pursuant to sections 401(a) and 414(d) of the federal Internal Revenue Code of 1986 (26 U.S.C. ss. 401(a) and 414(d)), as amended, or such other provision of the federal Internal Revenue Code, as applicable, regulations of the U.S. Treasury Department, and other guidance of the federal Internal Revenue Service.  

     c.     Notwithstanding the provisions of any law, rule or regulation to the contrary, the Director of the Division of Pensions and Benefits in the Department of the Treasury shall be authorized to modify the provisions of the foregoing retirement plans, when a modification is required to maintain the qualified status of the retirement plans under the Internal Revenue Code of 1986, applicable regulations of the U.S. Treasury Department or other guidance of the federal Internal Revenue Service.  Notwithstanding the provisions of the Administrative Procedure Act, P.L.1968, c.410 (C.52:14B-1 et seq.), the director may modify the provisions of the foregoing retirement  plans, when a modification is required to maintain the qualified status of the retirement plans by promulgating a rule or regulation which shall be effective upon filing with the Office of Administrative Law.

     99.     (New section)  a. A member shall be fully vested in his or her accumulated contributions at all times.

     b.    A member shall be fully vested in his or her service retirement benefit upon the attainment of normal retirement age under the retirement system and the completion of any required years of service.  Normal retirement age means the age established by regulation consistent with statute.

     c.     In conformity with section 401(a)(8) of the federal Internal Revenue Code (26 U.S.C. s. 401(c)(8)), any forfeitures of benefits by members or former members of the plan shall not be applied to increase the benefits any member would otherwise receive under the plan.

 

     100.  (New section)  Notwithstanding any law, rule or regulation to the contrary, 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, the State Police Retirement System, the Alternate Benefit Program, and the Defined Contribution Retirement Program shall be administered in accordance with the rollover requirements of section 401(a)(31) of the federal Internal Revenue Code (26 U.S.C. s. 401(a)(31)).

 

     101. (New section)  Effective December 12, 1994, notwithstanding any other provision of the retirement system law, contributions, benefits and service credit with respect to qualified military service are governed by section 414(u) of the federal Internal Revenue Code (26 U.S.C. s. 414(u)) and the Uniformed Services Employment and Reemployment Rights Act of 1994 (38 U.S.C. s. 4301 et seq.).

 

     102.  (New section)  Effective as of July 1, 1989, a retirement board, or a member of such board, shall not engage in a transaction prohibited by section 503(b) of the federal Internal Revenue Code (26 U.S.C. s. 503(b)).

 

     103.  (New section)  Each retirement system may participate under Section 401(a)(24) of the federal Internal Revenue Code in a qualified group trust that meets the requirements of Section 401(a) of the federal Internal Revenue Code (26 U.S.C. s. 401(a)(24)) in accordance with Revenue Ruling 81-100, as amended by Revenue Ruling 2004-67 and Revenue Ruling 2011-1.

 

     104.  (New section)  a. Post-employment benefits other than pensions under the State Health Benefits Program, P.L.1961, c.49 (C.52:14-17.25 et seq.), for retired employees, and their dependents, of employers other than the State that are participating in the State Health Benefits Program pursuant to section 3 of P.L.1964, c.125 (C.52:14-17.34), as non-State participating employers, shall be funded and paid by means of contributions to a separate trust fund.  For the purposes of this section, the term “post-employment benefits other than pensions” means post-employment benefits including, but not limited to, health, dental and vision care, which give rise to a liability under Statement No. 43 of the Governmental Accounting Standards Board, Reporting for Postemployment Benefit Plans Other Than Pension Plans, and Statement No. 45 of the Governmental Accounting Standards Board, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions, together, GASB 43/45, as amended from time to time, or any successor publication.  For purposes of this section, and notwithstanding anything to the contrary, the term "non-State participating employers" is limited only to entities that are a political subdivision of the State, as defined in federal Treas. Reg. s. 1.103-1(b), or entities the income of which is excluded from gross income under section 115 of the Internal Revenue Code of 1986 (26 U.S.C. s.115), as amended.  For purposes of this section, the term "dependent" or "dependents" means a dependent as defined under section 152 of the Internal Revenue Code of 1986 (26 U.S.C. s.152), as amended, without regard to subsections (b)(1), (b)(2), or (d)(1)(B) thereof, of a retired employee.

     b.    There is hereby established the State of New Jersey Other Post-Employment Benefits (OPEB) Fund, which is intended to qualify as an instrumentality of the State or a political subdivision of the State under section 115 of the Internal Revenue Code of 1986 (26 U.S.C. s. 115), as amended.  The assets of the OPEB Fund shall be used only to fund and pay post-employment benefits other than pensions, and the reasonable cost of administering such benefits, with respect to eligible retired employees, and their dependents, of non-State participating employers, and deposits and contributions to the OPEB Fund shall be irrevocable except as specifically provided in subsection i. of this section.  The OPEB Fund shall be a trust, trust account or custodial account, the assets of which shall be deemed an arrangement equivalent to a trust for all legal purposes, and shall be established by means of appropriate documentation so as to be exempt from taxation under the provisions of applicable federal and State tax law, which shall contain such terms and conditions as are required to comply with all State and federal law including but not limited to the following:

     (1) The OPEB Fund shall provide no guaranty that payments or reimbursements to employees, former employees, retirees, spouses or beneficiaries will be tax-free.

     (2) In the event that the OPEB Fund has obtained a ruling from the Internal Revenue Service concerning only the federal tax treatment of the OPEB Fund's income, that ruling may not be cited or relied upon by any non-State participating employer as precedent concerning any matter relating to the non-State participating employer's health plans, including post-retirement health plans.  In particular, that ruling shall have no effect on whether contributions to the non-State participating employer's health plans or payments from the non-State participating employer's health plans, including reimbursements of medical expenses, are excludable from the gross income of employees, former employees or retirees, under the Internal Revenue Code of 1986, as amended.

     (3) The federal income tax consequences to employees, former employees and retirees shall depend on the terms and operation of the non-State participating employer's health plans

     c.  The assets of the OPEB Fund shall be segregated from all other funds of the State and the non-State participating employers,  including without limitation the fund described in section 48 of P.L.2007, c.103 (C.52:14-17.32a1), and shall be invested and administered solely in the interest of retired employees, and their dependents, of non-State participating employers entitled to post-employment benefits other than pensions provided by the State Health Benefits Program.  However, the OPEB Fund may be invested in a group trust established pursuant to section 401(a)(24) of the Internal Revenue Code of 1986 (26 U.S.C. s. 401(a)(24)), as amended.  Neither the State, the State Legislature, the State Health Benefits Commission, the Treasurer of the State of New Jersey, the Division of Pensions and Benefits in the Department of the Treasury, nor any public officer, employee or agency, nor service provider to the OPEB Fund, shall use or authorize the use of assets contributed to the OPEB Fund, or the investment earnings thereon, for any purpose other than the provision of post-employment benefits other than pensions in accordance with the terms of the State Health Benefits Program applicable to retired employees, and their dependents, of non-State participating employers, and the defraying of the reasonable costs of administering the OPEB Fund and the benefits provided by means of the OPEB Fund.  The assets constituting the OPEB Fund shall under no circumstances be subject to assignment or alienation in favor of the creditors of the State or any non-State participating employer, or of the individuals or entities that administer the State Health Benefits Program or the OPEB Fund.  Private parties' interests shall neither materially participate in the OPEB Fund nor benefit more than incidentally from the operation or earnings of the OPEB Fund.

     d.  The Director of the Division of Pensions and Benefits shall serve as the administrator of the OPEB Fund.  The Director of the Division of Investment as trustee shall have the authority to adopt a trust agreement, to receive and hold all moneys in the OPEB Fund, and to disburse the same in accordance with instructions from the fund administrator.  The Director of the Division of Investment shall have the authority to invest and reinvest the moneys in the OPEB Fund and to acquire for or on behalf of the OPEB Fund such investments in accordance with the standards governing the investment of other funds managed by the Director of the Division of Investment under the rules and regulations of the State Investment Council.  The State, the Division of Pensions and Benefits, the State Treasurer, the Division of Investment, and the State Investment Council, and their respective officers and employees, shall not be liable for any loss incurred by the OPEB Fund. 

     e.  The fund administrator or the trustee may select and contract with custodians, record keepers, actuaries and other consultants, and other service providers with respect to the administration of the OPEB Fund, and may delegate to such persons or entities, or to any person within the Department of the Treasury, any of their duties and responsibilities.  The Director of the Division of Investment may select and contract with investment managers, investment advisors and other service providers with respect to the investment of the OPEB Fund, and may delegate to such persons or entities, or to any person within the Division of Investment, any of its duties and responsibilities.

     f.   The fund administrator shall, with the assistance of a qualified actuary, determine a funding policy for the OPEB Fund and may promulgate rules and procedures with respect to the administration and funding of the OPEB Fund.  The fund administrator, with the assistance of a qualified actuary, shall annually measure and determine an amount for the annual “other post-employment benefits” cost of providing benefits for the retirees and their dependents of each  non-State participating employer in the State Health Benefits Program based on the “annual required cost” (ARC) for providing such benefits determined in accordance with applicable standards under GASB 43/45.  The fund administrator shall report the OPEB cost for each non-State participating employer to such employer on an annual basis.

     g.  The fund administrator, with the assistance of a qualified actuary, shall annually determine, and the fund administrator shall approve, the aggregate contribution to the OPEB Fund to fund post-employment benefits other than pensions under the terms of the State Health Benefit Program, which shall be the amount necessary to pay the anticipated premiums or periodic charges for the benefits for the following annual valuation period, with respect to all non-State employers participating in the OPEB Fund.  The fund administrator shall determine and approve the rate or rates to be charged to non-State participating employers as contributions by such employers to the OPEB Fund, based on such allocable amounts of the above-described aggregate contribution and such other factors as the fund administrator shall determine with respect to the setting of such rates. 

     h.     Deposits to the OPEB Fund shall be made by each non-State participating employer in the amounts specified by the fund administrator.  Deposits to the OPEB Fund by each non-State participating employer shall be segregated in a separate account for recordkeeping purposes from the deposits from all other non-State participating employers in the OPEB Fund.  Such deposits may be commingled for purposes of investment, but the fund administrator shall provide record keeping to establish the deposits allocable to each non-State participating employer and shall periodically report the value of the separate accounts to the applicable non-State participating employers.  Investment earnings attributable to the OPEB Fund shall be determined on an aggregate basis for all non-State participating employers.  A non-State participating employer shall not make a deposit to the OPEB Fund if the total amount invested with respect to that employer would exceed such employer’s actuarially determined liability for post-employment benefits other than pensions due to its employees, as determined under the applicable standards of GASB 43/45.

     i.      In the event that, following the satisfaction in full of all liabilities for post-employment benefits other than pensions to retired employees, and their dependents, of non-State participating employers, there remain undistributed assets of the OPEB Fund, such assets shall be distributed in the manner determined by the fund administrator, provided that in no event shall such assets be distributed to, or used for the purpose of paying benefits for, the active or retired employees of an entity that is not a State, a political subdivision of the State or an entity the income of which is excluded from gross income under section 115 of the Internal Revenue Code of 1986 (26 U.S.C. s. 115), as amended.

 

     105.  (New section)  With respect to the portion of the alternate benefit program, P.L.1969, c.242 (C.18A:66-167 et seq.), that is subject to section 403(b) of the federal Internal Revenue Code (26 U.S.C. s. 403(b)), the State may terminate the alternate benefit program as provided in this section.

     a.  The State adopted the alternate benefit program with the intention and expectation that contributions would be continued to the program indefinitely.  The State, however, has no obligation or liability whatsoever to maintain the alternate benefit program for any length of time and may discontinue contributions under the alternate benefit program at any time without any liability hereunder for any discontinuance.

     b.  The State reserves the authority to amend or terminate the alternate benefit program at any time and for any reason.

     c.  The State may provide that, in connection with a termination of the alternate benefit program and subject to any restrictions contained in the investment options offered under the alternate benefit program, all accounts will be distributed, provided that the State and any related employer on the date of termination do not make contributions to an alternative plan or program subject to the rules under section 403(b) of the federal Internal Revenue Code (26 U.S.C. s. 403(b)), that is not part of the alternate benefit program during the period beginning on the date of termination and ending 12 months after the distribution of all assets from the alternate benefit program, except as permitted by the applicable regulations of the United States Department of the Treasury.


     106.  Section 2 of P.L.1963, c.123 (C.52:18A-108) is amended to read as follows:

     2.    As used in this act:

     a.     "Fiscal year"  means any year commencing on July 1 and ending on June 30 next following.

     b.    "Participant"  means (1) for the purposes of the Supplemental Annuity Collective Trust under section 4 of P.L.1965, c.90 (C.52:18A-113.1), any member of a State administered retirement system, who has elected to make voluntary additional contributions to the Supplemental Annuity Collective Trust, or for whom an employer has agreed to purchase an annuity from the Supplemental Annuity Collective Trust as hereinafter provided; or (2) for the purposes of the Additional Contributions Tax-Sheltered Program under section 1 of P.L.1995, c.92 (C.52:18A-113.2), means any employee of the Department of Education, the Commission on Higher Education, the governing body of any public institution of education, or any public school, as defined in N.J.S.18A:1-1, regularly scheduled to work 20 or more hours per week who has elected to make voluntary additional contributions to the Supplemental Annuity Collective Trust, or for whom an employer has agreed to purchase an annuity from the Supplemental Annuity Collective Trust as hereinafter provided.  An employee regularly works less than 20 hours per week if, for the 12-month  period beginning on the date the employee’s employment commenced, the employee’s  employer reasonably expects the employee to work fewer than 1,000 hours of service, as defined under section 410(a)(3)(C) of the Internal Revenue Code of 1986 (26 U.S.C. s. 410(a)(3)(C)), as amended, and, for each  plan year ending after the close of that 12-month period, the employee has worked fewer than 1,000 hours of service.

     c.     "State administered retirement system"  means any of the following retirement plans:  Public Employees' Retirement System of New Jersey established pursuant to chapter 84, P.L.1954;  Teachers' Pension and Annuity Fund established pursuant to chapter 37, P.L.1955;  Police and Firemen's Retirement System of New Jersey established pursuant to chapter 255, P.L.1944; Consolidated Police and Firemen's Pension Fund established pursuant to chapter 358, P.L.1952;  Prison Officers' Pension Fund established pursuant to chapter 220, P.L.1941;  and State Police Retirement and Benevolent Fund established pursuant to chapter 188, P.L.1925.

(cf: P.L.1965, c.90, s.1)

 

     107.  Section 6 of P.L.1963, c.123 (C.52:18A-112) is amended to read as follows:

     6.    A member of a State administered retirement system or an employee of a board of education, as defined in N.J.S.18A:1-1, regularly scheduled to work 20 or more hours per week may become a participant  by filing an application for enrollment in either the Variable Division or the  Fixed Division, or both, in accordance with rules and regulations established  by the council.  An employee regularly works less than 20 hours per week if, for the 12-month period beginning on the date the employee’s employment commenced, the employee’s employer reasonably expects the employee to work fewer than 1,000 hours of service, as defined under section 410(a)(3)(C) of the Internal Revenue Code of 1986 (26 U.S.C. s. 410(a)(3)(C)), and, for each plan year ending after the close of that 12-month period, the employee has worked fewer than 1,000 hours of service.

(cf: P.L.1963, c.123, s.6)

 

     108.  Section 1 of P.L.1995, c.92 (C.52:18A-113.2) is amended to read as follows:

     1.  a. The Department of Education, the Commission on Higher Education, and the governing body of any public institution of [higher] education may enter into a written agreement with any of its employees to reduce the employee's annual salary for the purpose of investing in a tax-deferred annuity for the employee pursuant to section 403(b) of the federal Internal Revenue Code of [1954] 1986 (26 U.S.C. s. 403(b)), as amended.  Investments shall be (1) with an insurer or mutual fund company authorized to provide investment contracts under the alternate benefit program; (2) in investment contracts authorized under the program for supplemental retirement benefits which meet the requirements of section 403(b) of the federal Internal Revenue Code (26 U.S.C. s.  403(b)), as amended; and (3) on the same terms and conditions provided for participants in the alternate benefit program. 

     b.    An agreement (1) shall specify the amount and the effective date of the reduction; (2) shall be subject to filing with and approval by the State Treasurer or filing with and approval by the governing body of the institution of public higher education, as appropriate; and (3) shall be legally binding and irrevocable with respect to the amounts earned while the agreement is in effect.  The total amount of the reduction in an employee's salary pursuant hereto, for any calendar year, shall not exceed the lesser of (a) the applicable dollar amount or (b) the participant's Includible Compensation for the calendar year.  Includible Compensation is an employee's actual wages in box 1 of Form W-2 for a year for services to the employer, but subject to a maximum of $200,000, or such higher maximum as may apply under section 401(a)(17) of the federal Internal Revenue Code (26 U.S.C. s. 401(a)(17), and increased up to the dollar maximum by any compensation reduction election under section 125, 132(f), 401(k), 403(b), or 457(b) of the federal Internal Revenue Code (26 U.S.C. s.  125, 132(f), 401(k), 403(b), or 457(b)).  The amount of Includible Compensation is determined without regard to any community property laws.  The applicable dollar amount is the amount established under section 402(g)(1)(B) of the federal Internal Revenue Code (26 U.S.C. s. 402(g)(1)(B)), which is $16,500 for 2011, and is adjusted for cost-of-living after 2011 to the extent provided under section 415(d) of the federal Internal Revenue Code (26 U.S.C. s. 415(d)).  The total amount of the reduction in an employee's salary pursuant hereto, for any calendar year, when added to the contributions made in the year on behalf of the employee in accordance with section 7 of P.L.1963, c.123 (C.52:18A-113), exceed the limitations set forth in [Pub.L.93-406 (Employment Retirement Income Security Act of 1974) and] section 415 (c) of the federal Internal Revenue Code (26 U.S.C.s.415 (c)).  For the purposes of this section, if the participant is or has been a participant in one or more other plans under section 403(b) of the federal Internal Revenue Code (26 U.S.C.  s. 403(b)), and any other plan that permits elective deferrals under section 402(g) of the federal Internal Revenue Code (26 U.S.C.  s. 402(g)), then this plan and all such other plans shall be considered as one plan for purposes of applying the foregoing limitations.

     c.     An agreement may be terminated at any time upon written notice by either the employee or the employer.  Termination shall take effect at the beginning of the payroll period whose first day is nearest to the 30th day following the day on which notification of termination was (1) received by the employer, in the event termination is initiated by the employee, or (2) sent to the employee, in the event termination is initiated by the employer.

     d.    Amounts payable pursuant to this section by an employer on behalf of an employee for a payroll period shall be transmitted and credited not later than the fifth business day after the date on which the employee is paid for that pay period.

     e.     The plan described in subsection a. of this section shall be known as the New Jersey Additional Contributions Tax-Sheltered Program.

(cf: P.L.1999, c.247, s.4)

 

     109.  Section 2 of P.L.1995, c.92 (C.52:18A-113.3) is amended to read as follows:

     2.  Upon approval and filing, the State Treasurer or the applicable governing body of a public institution of [higher] education shall reduce an employee's salary pursuant to the agreement and shall pay an amount equal to the amount agreed upon for the salary reduction as an employer contribution to the issuer of the employee's annuity.  Participation in a reduction of salary pursuant to this act shall not cause the employee to lose any benefits under a State-administered retirement system to which the employee would otherwise be entitled had the employee not agreed to a reduction in salary for the purpose of purchasing a tax-deferred annuity.  Employee contributions and any survivor's benefit shall be paid on the basis of the employee's salary without regard to the reduction authorized by this act. 

(cf: P.L.1995, c.92, s.2)


     110.  Section 3 of P.L.1995, c.92 (C.52:18A-113.4) is amended to read as follows:

     3.  Payments for tax-deferred annuities shall be made by the State Treasurer or the applicable governing body of a public institution of [higher] education to the issuers of the annuities out of moneys available for the salaries of employees who have entered into agreements pursuant to this act. 

(cf: P.L.1995, c.92, s.3)

 

     111.  Section 1 of P.L.1996, c.77 (C.52:18A-113.6) is amended to read as follows:

     1.  Employees of the Department of Education, the Commission on Higher Education, or the governing body of any public institution of [higher] education who are participants in the Supplemental Annuity Collective Trust pursuant to section 403(b) of the federal Internal Revenue Code of [1954] 1986 (26 U.S.C. s. 403(b)), as amended, [may :

     a.] shall transfer all [or a portion of any] funds that they may have invested as participants in the Supplemental Annuity Collective Trust to a tax-deferred annuity with an insurer or mutual fund company authorized to provide investment contracts under the alternate benefit program pursuant to the provisions of P.L.1995, c.92 (C.52:18A-113.2 et seq.) [; or

     b.  transfer all or a portion of any funds that they may have invested in a tax-deferred annuity with any authorized provider to the Supplemental Annuity Collective Trust].

(cf: P.L.1996, c.77, s.1)

 

     112.  Section 9 of P.L.1963, c.123 (C.52:18A-115) is amended to read as follows:

     9.  The assets of the Variable Division shall be invested and reinvested principally in common stocks and securities which are convertible into common stocks.  Such common stocks and securities shall be [restricted to those listed] traded on a securities exchange in the United States or over-the-counter market.

(cf: P.L.1963, c.123, s.9)

 

     113.  (New section)  With respect to the portion of the Supplemental Annuity Collective Trust that is subject to section 403(b) of the federal Internal Revenue Code (26 U.S.C. s. 403(b)), the State may terminate the Supplemental Annuity Collective Trust as provided in this section.

     a.  The State enacted P.L.1963, c.123 (C.52:18A-107 et seq.) with the intention and expectation that contributions would be continued to the Supplemental Annuity Collective Trust program indefinitely. The State, however, has no obligation or liability whatsoever to maintain the program for any length of time and may discontinue contributions under the program at any time without any liability hereunder for any discontinuance.

     b.  The State reserves the authority to amend or terminate the Supplemental Annuity Collective Trust program at any time and for any reason.

     c.     The State may provide that, in connection with a termination of the program, all accounts will be distributed, provided that the State and any related employer on the date of termination do not make contributions to an alternative plan or program subject to the rules under section 403(b) of the Internal Revenue Code of 1986 (26 U.S.C. s. 403(b)), as amended, that is not part of the program during the period beginning on the date of termination and ending 12 months after the distribution of all assets from the Supplemental Annuity Collective Trust program, except as permitted by the applicable regulations of the United States Department of the Treasury.

 

     114.  The following sections are repealed:

     Section 10 of P.L.2010, c.3 (C.18A:66-39.1);

     N.J.S.18A:66-42;

     N.J.S.18A:66-53.2;

     Section 11 of P.L.2010, c.3 (C.43:15A-42.1);

     Section 12 of P.L.2010, c.3 (C.43:15A-42.2);

     Section 46 of P.L.1954, c.84 (C.43:15A-46);

     Section 1 of P.L.1985, c.414 (C.43:15A-47.2);

     Section 27 of P.L.1966, c.217 (C.43:15A-57.2);

     Section 1 of P.L.1985, c.283 (C.43:15A-57.3);

     Section 1 of P.L.1999, c.96 (C.43:16A-5.1);

     Section 1 of P.L.1989, c.103 (C.43:16A-6.1);

     Section 7 of P.L.1944, c.255 (C.43:16A-7); and

     Section 10 of P.L.1965, c.89 (C.53:5A-10).

 

     115.  The following section is repealed:

     Section 4 of P.L.1965, c.90 (C.52:18A-113.1).

 

     116.  This act shall take effect immediately, except that sections 2, 11, 12, 14-17 inclusive, 19, 20, 23, 24, 37, 43-49 inclusive, 51, 53, 58, 65, 66, 70-72 inclusive, 75, 76, 78, 79, 82-84 inclusive, 86, 106, 107 and 111 shall take effect on the 120th day after the date of enactment except that the provisions establishing the rate of regular interest in sections 11, 15, 17, 43, 44, 47, 49 and 58 shall take effect July 1, 2011, and sections 5, 6, 7, 8, 10, 13, 18, 25-31 inclusive, 33-36 inclusive, 40, 42, 50, 52, 55-57 inclusive, 59-63 inclusive, 88, 104 and 115 shall take effect on July 1, 2011.


STATEMENT

 

     This bill amends the various statutes governing the Teachers’ Pension and Annuity Fund (TPAF), the Public Employees’ Retirement System (PERS), the Judicial Retirement System (JRS), the Police and Firemen’s Retirement System (PFRS), the State Police Retirement System (SPRS), the Alternate Benefits Program (ABP), and the Defined Contribution Retirement Program (DCRP).  The bill makes a series of reforms to the State’s retirement systems to provide for the future stability of those systems by adjusting pension benefits to a more sustainable level.  For example, to strengthen the financial stability of the retirement systems, the bill increases employee contribution rates in TPAF, PERS, JRS and SPRS to a uniform 8.5% of salary, which matches the PFRS employee contribution rate, and provides that the additional employee contributions are not be used to offset employer contributions.  The bill also makes changes to the retirement systems to address the abuse and so-called gaming of a system whereby an individual is able to accrue a pension benefit substantially greater than the standard pension benefit. 

     Current law provides that members of TPAF and PERS contribute 5.5% of salary toward pension benefits and are eligible for a deferred, early or service retirement benefit calculated using 1/55 multiplied by years of service, then multiplied by average compensation.  The bill increases the TPAF and PERS employee contribution rate, including for members in the legislative part, the workers compensation judges part and the prosecutors part of the PERS, to 8.5% of compensation and specifies that the additional 3% for TPAF members and regular PERS members, as well as the increases of the special parts of PERS, will not be used to reduce the statutorily required employer normal contribution.  P.L.2001, c.133 provided a 9% increase in TPAF and PERS benefits by substituting 1/55 for 1/60 in the benefit calculation.  This bill rolls back that increase and further provides that for service credit accrued after the 120th day after its effective date, 1/65 will be used in benefit calculations for early, deferred and service retirements,  It provides for a proportional reduction in the calculation of future service for veteran benefits using 1/60 instead of 1/55.  The bill changes average compensation to the average of five years instead of three years, except that members with more than 25 years of service or who have attained age 60 on the 120th day after its effective date retain the 3-year average.

     A TPAF or PERS member with 25 or more years of service now may retire with an early retirement benefit at age 55 or older with no reduction in benefit, or if a person become a member after November 1, 2008 there is a reduction in benefit if the person is not yet age 62.  The bill  provides that for members with fewer than 25 years of creditable service, on or after the 120th day after the effective date of the bill, the number of years of service credit required for early retirement changes to 30 from 25 with a reduction of ¼% for each month the member lacks of being age 65.  Members with 25 or more years of creditable service on the 120th day after the effective date of the bill continue to be eligible for early retirement at age 55 with no reduction.  Service retirement is currently available to TPAF and PERS members with fewer than 25 years of service at age 60, or age 62 if a member since November 1, 2008.  Under the bill, service retirement will be available (1) at age 60 to members with 25 or more years of service or age 60 on the 120th day after the bill’s effective date, (2) at age 62 to members enrolled since November 1, 2008 with 25 or more years of service or age 62 on that day, or (3) at age 65 to members with fewer than 25 years and under age 65 on that day.  Age 65 becomes the new normal retirement age to reflect increased life expectancy and an individual’s longer productive work life.

     The bill makes some similar changes to the JRS.  The employee contribution rate is currently 3% of compensation.  The bill increases that rate to 8.5% for the total salary of new JRS members and for any future increases in salary for current members, with the additional 5.5% not being used to reduce the statutorily required employer normal contribution.  The increase in the contribution rate for members of the JRS is implemented in a manner to conform to a prohibition in the State Constitution against the reduction in the compensation of a judge during the judge’s term of appointment.

     With regard to the two State-administered defined contribution systems, ABP and DCRP, the bill provides that normal retirement age is 65, that cash surrender upon separation from service will be applicable prior to age 65, and that an ABP or DCRP member receiving a cash distribution or annuity option using employee contribution funds upon separation from service will not be considered retired from those defined contribution systems.  The bill also modifies provisions related to the selection of ABP providers.

     Members of PFRS and SPRS with 25 years of service credit currently may retire on a benefit of 65% of highest year salary with an additional 1% for each year beyond 25 but not more than 30 for a maximum benefit of 70%.  For PFRS and SPRS members with fewer than 25 years of creditable service on the 120th day after its effective date, the bill redefines final compensation as the average compensation received for three highest years and decreases the special retirement allowance from 65% to 60% of salary with the additional 1% for each year of service credit over 25 up to 30 years, for a maximum benefit of 65%.  Under current law, the three year average is applicable only to those employees who became members after May 21, 2010.

     Applications for accidental disability pensions have been growing at a pace that suggests an attempt to abuse these benefits.  The bill standardizes disability retirement benefits among all of the defined benefit retirement systems, TPAF, PERS, PFRS and SPRS, and provides the same level of disability benefit for those with 10 or more years in a retirement system, including an earnings test.  The bill establishes a work-related disability benefit for a member regardless of years of service if the member is totally and permanently disabled as a direct result of an accident or occupational exposure and receives an award of permanent disability under the worker’s compensation laws. 

     The bill also clarifies the law with respect to retirees returning to public employment.  It strengthens criteria for determining a bona fide retirement and provides that a retirement is bona fide if the retiree terminates all public employment for a period of not less than six months while receiving a retirement allowance.  If a retirement is not bona fide, the retirement will be cancelled or suspended and the retiree will be reenrolled or enrolled in the retirement system which covers the position in which the retiree is employed.  If a retirement is bona fide, a pubic employer may hire a retiree without a reenrollment requirement. The bill requires public employers to notify the Division of Pensions and Benefits when they hire a retiree. 

     With regard to the benefits of all retirees, current and future, and their beneficiaries, the bill provides that there will be no future cost-of-living adjustment (COLA) to pension benefits.  Eliminating the annual COLA will help ensure the sustainability of the retirement systems. While automatic future increases are eliminated, current monthly benefits are not reduced by this change.

     For TPAF, JRS, PERS, PFRS and SPRS, the bill changes the amortization methodology from a percentage of pay schedules to a level dollar amount each year and will result in the earlier retirement of the unfunded liability of the pension systems.  Currently, member contributions to those retirement system are credited and annuitized at an interest rate that exceeds current market rates.  The bill also provides that member contributions to these systems will be credited with 4% interest.

     Sections 94 through 103 of the bill contain a number of changes to the law that are necessary to maintain the qualified plan status of the retirements systems under the federal Internal Revenue Code.  Sections 104 and 105 contain provisions for compliance with Statements Nos. 43 and 45 of the Governmental Accounting Standards Board, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions (GASB 43/45) and to bring the defined contribution plans into compliance with U.S. Department of Treasury regulations affecting administration of plans administered under section 403(b) of the Internal Revenue Code.  Modifications pertaining to the Supplemental Annuity Collective Trust are found in sections 106 through 113.