ASSEMBLY, No. 555
STATE OF NEW JERSEY
Introduced Pending Technical Review by Legislative Counsel
PRE-FILED FOR INTRODUCTION IN THE 1996 SESSION
By Assemblywoman TURNER
An Act concerning retirement benefits for certain State employees.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. A State employee who:
a. is at least 50 years of age and has at least 25 years of service credit under the Public Employees' Retirement System (PERS) or the Teachers' Pension and Annuity Fund (TPAF), or service with public employers in this State participating in the Alternate Benefit Program (ABP) for which contributions were made by the employee under the program before the effective date of retirement;
b. files an application to retire on or before June 1, 1995; and
c. retires under the retirement system on or after April 1, 1995, but not later than July 1, 1995, other than a veteran who retires on a special veteran's retirement, shall receive an additional five years of service credit under PERS or TPAF, or an amount equal to 100% of the employee's base annual salary at the time of retirement from the employer for members of ABP. An employee who meets the age and service credit requirements under this section and retires on a special veteran's retirement under PERS or TPAF shall receive an additional pension under the retirement system in the amount of 5/60 of the compensation upon which the special retirement allowance is based. A full-time employee of the Rutgers University Cooperative Extension Service who meets the age and service requirements based upon service credited in the federal Civil Service Retirement System or the Federal Employees Retirement System earned as a result of full-time employment at Rutgers University alone, or in combination with service credit under PERS or qualifying service under ABP, and is eligible to retire under the federal Civil Service Retirement System or the Federal Employees Retirement System within the time period set forth in subsection c., shall receive the benefits provided by this section. If the employee is a member of the federal Civil Service Retirement System or the Federal Employees Retirement System, the employee shall receive an amount equal to 100% of the employee's base annual salary at the time of retirement from the employer. The amount payable to retirees under ABP and the federal retirement systems shall be paid in two equal installments with the first installment due not later than the thirtieth day after the effective date of retirement, and the second due not later than the same calendar day in the following calendar year. The additional retirement benefit provided under this section is applicable only to the full-time State employment from which an eligible employee retires to receive the benefit and the compensation for that employment.
2. For a State employee who:
a. is at least 60 years of age and has at least 20, but less than 25, years of service credit under the Public Employees' Retirement System (PERS) or the Teachers' Pension and Annuity Fund (TPAF), or service with public employers in this State participating in the Alternate Benefit Program (ABP) for which contributions were made by the employee under the program before the effective date of retirement;
b. files an application to retire on or before June 1, 1995; and
c. retires under the retirement system on or after April 1, 1995, but not later than July 1, 1995, the retirement system for PERS or TPAF members, or the State for ABP members, shall pay the premium or periodic charges for benefits provided to the retired State employee and the employee's dependents, but not including survivors, under the "New Jersey State Health Benefits Program Act," P.L.1961, c.49 (C.52:14-17.25 et seq.), in the same manner provided for State payment of premiums or periodic charges for retired State employees under subsection c. of section 8 of that act (C.52:14-17.32). A full-time employee of the Rutgers University Cooperative Extension Service who meets the age and service requirements based upon service credited in the federal Civil Service Retirement System or the Federal Employees Retirement System earned as a result of full-time employment at Rutgers University alone, or in combination with service credit under PERS or qualifying service under ABP, and is eligible to retire under the federal Civil Service Retirement System or the Federal Employees Retirement System within the time period set forth in subsection c., shall receive the benefits provided by this section. The State shall pay the premium or periodic charges for the benefits if the employee is a member of the federal Civil Service Retirement System or the Federal Employees Retirement System.
3. A State employee who:
a. is at least 60 years of age and has at least 10, but less than 20, years of service credit under the Public Employees' Retirement System (PERS) or the Teachers' Pension and Annuity Fund (TPAF), or service with public employers in this State participating in the Alternate Benefit Program (ABP) for which contributions were made by the employee under the program before the effective date of retirement;
b. files an application to retire on or before June 1, 1995; and
c. retires under the retirement system on or after April 1, 1995, but not later than July 1, 1995, shall receive an additional pension under PERS or TPAF, or payment from the employer for members of ABP, of $500 month in each of the 24 months following the date of retirement. A full-time employee of the Rutgers University Cooperative Extension Service who meets the age and service requirements based upon service credited in the federal Civil Service Retirement System or the Federal Employees Retirement System earned as a result of full-time employment at Rutgers University alone, or in combination with service credit under PERS or qualifying service under ABP, and is eligible to retire under the federal Civil Service Retirement System or the Federal Employees Retirement System within the time period set forth in subsection c., shall receive the benefits provided by this section for members of ABP.
4. The actuaries for PERS and TPAF shall determine the liabilities of the retirement systems for the additional service credit or pensions and health benefits payments provided under this act and for the early retirement of employees in accordance with the tables of actuarial assumptions adopted by the boards of trustees of the retirement systems. These liabilities shall be added to the unfunded accrued liabilities of the State under the retirement systems and shall be paid in the same manner and over the remaining time periods provided for the State's unfunded accrued liability under section 24 of P.L.1954, c.84 (C.43:15A-24) and N.J.S.18A:66-18, respectively. The State shall pay the cost of the actuarial work to determine the additional liabilities of the retirement systems for the benefits under this act.
5. The cost of the cash payments to members of ABP, the federal Civil Service Retirement System and the Federal Employees Retirement System under this act shall be funded by the employer from annual appropriations to the employer in the State Budget or from funds otherwise available for payment of operating expenditures.
6. A State employee who receives a benefit under this act shall forfeit all tenure rights.
7. Where the needs of State government or a State college or university require the services of an employee who elects to retire and receive a benefit under this act, a State department, with the approval of the State Treasurer, or a State college or university, with the approval of the State Board of Higher Education, may delay, with the consent of the employee, the effective retirement date of the employee until the first day of any calendar month after July 1, 1995, but not later than July 1, 1996. The effective retirement date of an employee of the Legislative or Judicial Branch of State government who elects to retire and receive a benefit under this act may be similarly delayed with the consent of the employee and with the approval of the Senate President in the case of an employee of the Senate, the Speaker of the General Assembly in the case of an employee of the General Assembly, the Legislative Services Commission in the case of an employee of the Office of Legislative Services, and the Chief Justice of the Supreme Court in the case of an employee of the Judicial Branch. A delay in the effective retirement date of an employee shall not extend the dates set forth in sections 1 and 2 to qualify for benefits under this act.
For a member of PERS or TPAF whose effective retirement date is delayed under this section and who dies before the retirement becomes effective, the retirement shall be effective as of the first day of the month after the date of death of the member if the member's surviving beneficiary requests in writing to the board of trustees of the retirement system that the retirement be effective under the option settlement selected by the member, or under Option 3 if the member did not select an option.
8. A State employee retiring under PERS or TPAF with a benefit under this act who has not repaid the full amount of a loan from the retirement system by the effective date of retirement, may repay the loan through deductions from the member's retirement benefit payments in the same monthly amount which was deducted from the member's compensation immediately preceding retirement until the balance of the amount borrowed together with interest at the statutory rate is repaid. If the retiree dies before the outstanding balance of the loan and interest is repaid, the remaining amount shall be repaid as provided in section 2 of P.L.1981, c.55 (C.43:15A-34.1) or section 2 of P.L.1981, c.212 (C.18A:66-35.1), as appropriate.
9. The provisions of this act shall not apply to any State employee who would be required to retire on or before July 1, 1995 under any statute, under any rule or regulation adopted by an employer of State employees, or under the provisions of any applicable contract of employment.
10. For the purposes of this act:
a. "State employee" means a full-time employee, eligible to participate in the New Jersey State Health Benefits Program, of the State of New Jersey, or Rutgers, The State University, the New Jersey Institute of Technology, the University of Medicine and Dentistry of New Jersey, or a State college. It does not include an employee of an authority, board, commission, corporation, or other agency or instrumentality, other than Rutgers, The State University, authorized to participate in PERS under section 73 of P.L.1954, c.84 (C.43:15A-73) or P.L.1990, c.25 (C.43:15A-73.2 et seq.), or a public agency or organization as defined in section 71 of P.L.1954, c.84 (C.43:15A-71).
b. "Final year compensation" means the compensation received in the last 12 months immediately preceding retirement in which compensation is received and upon which contributions are made by the employee to the retirement system.
11. The Director of the Division of Pensions and Benefits may promulgate rules and regulations which the director deems necessary for the effective implementation of this act.
12. Notwithstanding the provisions of any law to the contrary, an amount not to exceed $2.24 million may be expended by the Division of Pensions and Benefits for administration of this act and shall be charged to the funds of the retirement systems affected by this act which are established by law to receive employer contributions or payments. Receipts from such charges, payable on a schedule to be determined by the Director of the Division of Budget and Accounting, shall be deposited in the General Fund and anticipated as revenue thereto. These expenses charged to each retirement system shall be included as a liability of the system for the purpose of determining future employer contributions or payments to the system.
13. a. The Director of the Division of Budget and Accounting shall eliminate the same number of positions authorized as the number of employees that elect to participate in the early retirement program pursuant to P.L.1995, c. (C. ) (now pending before the Legislature as this bill). Additionally, any new hiring undertaken to fill vacancies created under this program shall receive approval of the Vacancy Review Board created pursuant to Executive Order #10 of 1982 or any successor to that Board. The Director shall report to the Joint Budget Oversight Committee on or before December 1, 1995 on the total number of positions eliminated.
b. The Division of Pensions and Benefits shall report in writing to the Joint Budget Oversight Committee on (1) the number of applications to retire filed pursuant to P.L.1995, c. (C. ) (now pending before the Legislature as this bill), (2) the number of applications to retire which have been approved, (3) the number of cases in which the effective retirement date of an employee has been delayed pursuant to section 7 of P.L.1995, c. (C. ) (now pending before the Legislature as this bill), and (4) the number of positions held by employees whose applications to retire have been approved which positions are determined to be critical and essential to State services and need to be filled by a new or transferred employee. The division shall report the information required by this subsection to the Joint Budget Oversight Committee on April 30, May 31, June 15 and July 15, 1995.
14. A State employee purchasing service credit on or after the effective date of this act to qualify for a benefit under this act may purchase a portion of the credit which the employee is eligible to purchase.
15. For an employee who retires on a special veteran's retirement under PERS or TPAF and receives a benefit under this act, the retirement allowance shall be based on the compensation, upon which contributions are made to the annuity savings fund or the contingent reserve fund, received during the last year of employment or either of the two years of employment immediately preceding the last year, whichever provides the largest possible benefit to the member or member's beneficiary.
16. The Division of Pensions and Benefits shall report in writing to the Joint Budget Oversight Committee beginning on July 15, 1996, and annually thereafter on or before July 15, through 2006, on the results of the early retirement program provided by P.L.1995, c. (C. )(now pending before the Legislature as this bill). The report shall provide an analysis of the program in order to document the aggregate costs incurred and aggregate savings realized by the State as a result of this program.
17. This act shall take effect immediately.
STATEMENT
This bill provides additional retirement benefits for certain State employees who retire under the Public Employees' Retirement System (PERS), the Teachers' Pension and Annuity Fund (TPAF), or the Alternate Benefit Program (ABP) between April 1, 1995 and July 1, 1995.
The bill provides the following additional benefits:
(1) Employees who, as of the effective date of retirement, are at least 50 years old with at least 25 years of service credit in PERS or TPAF will receive an additional five years of service credit under those respective retirement systems;
(2) Employees who satisfy the age and service requirements noted in (1) and who are eligible to retire under a special veteran's retirement under PERS or TPAF will receive an additional pension amount of 5/60 of the compensation on which the special veteran's allowance is based;
(3) Members of ABP who are at least 50 years old with at least 25 years of service with public employers in this State participating in the program will receive an amount equal to one year of base annual salary at the time of retirement, one-half of which is to be payable upon retirement and the other half one year later;
(4) Employees who are at least 60 years old with at least 20, but less than 25, years of service in PERS, TPAF or ABP will receive payment of premiums for retired coverage under the State Health Benefits Program for themselves and their dependents, but not for survivors;
(5) Employees who are at least 60 years old with at least 10, but less than 20, years of service in PERS, TPAF or ABP will receive an additional benefit of $500 per month for two years following retirement.
The bill also provides that a full-time employee of the Rutgers University Cooperative Extension Service who meets the age and service requirements based upon service credited in the federal Civil Service Retirement System or the Federal Employees Retirement System earned as a result of full-time employment with Rutgers University alone, or in combination with service credit under PERS or qualifying service under ABP, and is eligible to retire under the federal retirement systems within the time period specified shall receive the benefits provided by this bill. In the case of an Extension Service employee in the 25 years of service category who is retiring from either of the federal systems, the benefit shall take the same form (cash payment of one year's base annual salary) as provided to 25-year employees under ABP.
Where the needs of State government or a State college or university require the services of an employee who elects to retire under the provisions of this bill, the department, college or university may delay the effective retirement date up to July 1, 1996, with the consent of the employee and the approval of the State Treasurer or State Board of Higher Education. The effective retirement dates for employees of the Legislative and Judicial Branches may be similarly delayed with the approval of the appropriate authorities.
The employees eligible for the benefits under this bill are all eligible to retire under their respective retirement systems. The purpose of these additional benefits is to induce a large number of the employees to retire and thus assist in reducing the workforce in State government.
Provides additional retirement benefits for certain State employees who retire between April 1, 1995 and July 1, 1995.