A4433

An Act concerning the ability of certain employees in a State-administered pension fund or retirement system to continue to volunteer after retirement and supplementing P.L.1968, c.23 (C.43:3C-1 et seq.).

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

1. a. Except as otherwise provided for a volunteer firefighter or first aid worker, rescue squad worker, or emergency medical technician serving as a volunteer under sections 1 or 2 of P.L.2018, c.96 (C.43:15A-47.3 and C.43:16A-5.2, respectively), and notwithstanding any other law, rule, or regulation to the contrary, the retirement of a member of any pension fund or retirement system, contributory or noncontributory, established under any law of this State, who:

(1) on the date of retirement has attained the service retirement age applicable to that member and is serving in a volunteer capacity in an office or position not related to the paid job title with the same employer from whose employment the member retires;

(2) remains in that volunteer capacity after the date of retirement;

(3) received specialized training required to fulfil the volunteer role; and

(4) is involved in making decisions concerning activities or projects that unfold over a lengthy time period, shall constitute a bona fide severance from employment, notwithstanding that the retired employee maintains the volunteer relationship with the same employer from whose employment the member retired.

b. This act shall be effective if the qualified status of the retirement system under federal law can be maintained upon its application, and such modifications to the system as may be available shall be made to allow for its application.

2. This act shall take effect immediately.

STATEMENT

This bill provides that the retirement of a member of any pension fund or retirement system established under any law of this State who: (1) on the date of retirement has attained the service retirement age applicable to that member and is serving in a volunteer capacity in an office or position not related to the paid job title with the same employer from whose employment the member retires; (2) remains in that volunteer capacity after retirement, (3) received specialized training required to fulfil the volunteer role; and (4) is involved in making decisions concerning activities or projects that unfold over a lengthy time period, will be a bona fide severance from employment, notwithstanding that the retired employee maintains the volunteer relationship with the same employer from whom the member retired.

It is the sponsor’s intention to permit retirees who worked for public entities to continue serving their communities without interruption in volunteer positions, such as members of the planning board or recreation committee. A recently-enacted law, P.L.2018, c.96 (C.43:15A-47.3 and C.43:16A-5.2), already permits volunteer firefighters or first aid workers, rescue squad workers, or emergency medical technicians serving as volunteers to continue in their volunteer capacities after retirement; if their former employment was similar to their volunteer role, the employee must have a 30-day break in service from their former employer before resuming their volunteer role. The sponsor recognizes the value of volunteers for local governments and the difficulty of attracting and retaining volunteers on local-level boards, such as planning and zoning boards and recreation committees. This legislation provides the opportunity for volunteers to continue their service.

A regulation of the Division of Pensions and Benefits in the Department of the Treasury, in compliance with the federal Internal Revenue Code, provides: “ ‘Bona fide severance from employment’ means a complete termination of the employee’s employment relationship with the employer for a period of at least 180 days.” (N.J.A.C.17:1-17.14(a)2.) The division’s August 22, 2014 letter to local governments certifying officers of the defined benefit pension systems states: “If the employer and employee make an arrangement prior to the employee’s retirement to return to the same employer in any capacity, including as a volunteer – at any future time, regardless whether the position is covered by the former retirement system – the employer/employee relationship is not completely severed and the retirement will be invalid.” This bill will allow certain persons with a pre-existing volunteer relationship with their employer to retire from service as an employee covered by a State-administered pension fund or retirement system and continue to serve that employer as a volunteer.

The bill also provides that it will be effective if the qualified status of the State-administered pension funds or retirement systems under federal law can be maintained upon its application, and such modifications to the system as may be available will be made to allow for its application.