LEGISLATIVE FISCAL ESTIMATE
[Fifth Reprint]
SENATE, No. 1403
STATE OF NEW JERSEY
218th LEGISLATURE
DATED: JUNE 11, 2019
SUMMARY
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Synopsis: |
Permits service credit transferred from another State-administered retirement system to apply toward creditable service requirement for retirement in SPRS.
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Type of Impact: |
Potentially No Expenditure Increase - State General Fund |
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Agencies Affected: |
Department of Treasury, Division of Pensions and Benefits |
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Office of Legislative Services Estimate |
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Fiscal Impact |
Year 1 |
Year 2 |
Year 3 |
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State Cost Increase |
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Indeterminate |
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· The bill provides that members of the State Police Retirement System (SPRS) who purchase service credit earned in another retirement system, or transfer previously purchased credit, will have that credit recognized as creditable service for the purposes of retirement and benefits.
· The bill requires a member to purchase prior service credit to have it recognized as creditable service in the SPRS. If such purchases cover the full cost of the credit established, there is potentially no additional cost to the State.
BILL DESCRIPTION
This bill provides that service credit transferred from another State-administered retirement system into the SPRS will be considered the same for retirement and benefit purposes as creditable service rendered as a full-time commissioned officer, noncommissioned officer, or trooper.
Under current law, a member of SPRS who established service credit in another State-administered retirement system prior to becoming a member is permitted to purchase credit or transfer credit previously purchased while in that system. The credit is included in the computation of a retirement allowance on the basis of one percent of final compensation for each year of that service credit. However, only service rendered as a member of the State Police may be used to satisfy the minimum creditable service requirement for retirement on a service or special service retirement, which requires a certain number of years of creditable service to qualify for those retirement benefits.
FISCAL ANALYSIS
EXECUTIVE BRANCH
None
OFFICE OF LEGISLATIVE SERVICES
The bill requires a member to purchase prior service credit to have it recognized as creditable service in the SPRS. If such purchases cover the full cost of the credit established, there is potentially no additional cost to the State. The bill may result in an indeterminate increase in State contributions to the SPRS for the additional benefits available to members as a result of the recognition of prior service credit as creditable service in the SPRS if the purchase and transfer does not cover the full cost of the credit. The OLS does not have information on the number of SPRS members with service accumulated in other retirement systems or the total years of that service, nor does it have a basis for projecting the future accumulation of transferrable service.
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Section: |
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Analyst: |
Section Chief |
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Approved: |
Frank W. Haines III Legislative Budget and Finance Officer |
This legislative fiscal estimate has been produced by the Office of Legislative Services due to the failure of the Executive Branch to respond to our request for a fiscal note.
This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).