ASSEMBLY, No. 1060

STATE OF NEW JERSEY

PRE-FILED FOR INTRODUCTION IN THE 1996 SESSION

By Assemblyman DORIA

An Act concerning retirement benefits for certain employees of certain public agencies or instrumentalities participating in the Public Employees' Retirement System.

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

    1. An employee of a public agency or instrumentality which elects to provide the benefits authorized under this act 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) before the effective date of retirement;

    b. files an application to retire on or after June 1, 1998 and on or before June 1, 1999; and

    c. retires under the retirement system on or after July 1, 1998 but not later than July 1, 1999, other than a veteran who retires on a special veteran's retirement, shall receive an additional five years of service credit under PERS. If the member is under age 55 at the time of retirement, the member’s retirement allowance shall not be reduced. An employee who meets the age and service credit requirements under this section and retires on a special veteran's retirement under PERS shall receive an additional pension under the retirement system in the amount of 5/60 of final year compensation. The additional retirement benefit under this section is applicable only to the full-time employment with the employer which elects to provide the benefits authorized under this act and from which the employee retires to receive the benefit and the compensation for that employment.

    2. For an employee of a public agency or instrumentality which provides paid health benefits to retirees pursuant to section 7 of P.L.1964, c.125 (C.52:14-17.38), N.J.S.40A:10-23, or another group health insurance contract or health benefits plan and which elects to provide the benefits authorized under this section 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) before the effective date of retirement;

    b. files an application to retire on or after June 1, 1998 and on or before June 1, 1999; and

    c. retires under the retirement system on or after July 1, 1998 but not later than July 1, 1999, the employer shall pay the entire cost for coverage for the retired employee and the employee's dependents, but not including survivors, unless the employer is paying the entire cost for coverage for survivors on the effective date of this act. For employers participating in the New Jersey State Health Benefits Program (NJSHBP), the payment shall be made in the same manner provided for payment by an employer other than the State of premiums or periodic charges for retired employees under section 7 of P.L.1964, c.125 (C.52:14-17.38). For employers not participating in the NJSHBP, the payment shall be made in the same manner provided for payment of premiums after retirement under N.J.S.40A:10-23 or N.J.S.18A:16-19, or the employer's group health insurance contract or health benefits plan, and the level of benefits to retirees under this section shall be the same as the level of benefits provided to other retirees by that employer.

    3. A public agency or instrumentality which does not provide paid health benefits to retirees and which elects to provide the benefits authorized under this act shall pay to an employee who meets the qualifications of subsections a. and b. of section 2 of this act an additional pension of $500 per month in each of the 24 months following the date of retirement.

    4. An employee of a public agency or instrumentality which elects to provide the benefits authorized under this act who:

    a. is at least 60 years of age and has at least 10, but less than 20, years of service credit under PERS before the effective date of retirement;

    b. files an application to retire on or after June 1, 1998 and on or before June 1, 1999; and

    c. retires under the retirement system on or after July 1, 1998 but not later than July 1, 1999, the employer shall pay an additional pension of $500 per month in each of the 24 months following the date of retirement.

    5. An employer may elect to provide the benefits under this act by adoption of a resolution by its governing body and filing a certified copy of the resolution with the Director of the Division of Pensions and Benefits on or before May 1,1998. The employer shall submit to the director any information necessary to provide the benefits or to determine the liability for them.

    6. The actuary for PERS shall determine the liability of the retirement system for the additional service credit or pensions provided under this act and for the early retirement of employees in accordance with the tables of actuarial assumptions adopted by the board of trustees of the retirement system. This liability shall be added to the unfunded accrued liability of the employer under the retirement system and shall be paid in the same manner and over the remaining time period provided for the unfunded accrued liability under section 24 of P.L.1954, c.84 (C.43:15A-24). The employer shall pay the cost of the actuarial work to determine the additional liability of the retirement system for the benefits under this act which shall be included in the initial contribution required from the employer.

    7. An employee who receives a benefit under this act shall forfeit all tenure rights.

    8. Where the needs of a public agency or instrumentality require the services of an employee who elects to retire and receive a benefit under this act, the employer, with the approval of the governing body of that agency or instrumentality and with the consent of the employee, may delay the effective retirement date of the employee until the first day of any calendar month after July 1, 1999 but not later than July 1, 2000. A delay in the effective retirement date of an employee shall not extend the dates set forth in sections 1 through 4 to qualify for benefits under this act.

    For a member of PERS 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 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.

    9. An employee of a public agency or instrumentality retiring 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).

    10. An employee of a public agency or instrumentality 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.

    11. For the purposes of this act:

    a. "Employee of a public agency or instrumentality" means a full-time employee of an authority, board, commission, corporation, or other agency or instrumentality which is a participating employer in PERS, including an agency or instrumentality authorized to participate in PERS under section 73 of P.L.1954, c.84 (C.43:15A-73) and P.L.1990, c.25 (C.43:15A-73.2 et seq.) and a public agency or organization as defined in section 71 of P.L.1954, c.84 (C.43:15A-71) but excluding Rutgers, The State University, the New Jersey Institute of Technology, the University of Medicine and Dentistry of New Jersey, a State or a county college, a board of education, a county and a municipality, who is eligible to participate in the employer's health benefits plan.

    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.

    12. Prior to April 1, 1998, each public agency or instrumentality covered by the provisions of this act shall meet and consult with the representatives of the bargaining unit or units representing the employees who would be eligible for benefits under this act.

    13. 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.

    14. This act shall take effect immediately.

STATEMENT

    This bill provides for additional retirement benefits for certain employees of a public agency or instrumentality, other than the State, who retire under the Public Employees' Retirement System (PERS) between July 1, 1998 and July 1, 1999 if the employer elects to provide the benefits. These employers are authorities, boards, commissions and other agencies and instrumentalities participating in PERS. Employees who are at least 50 years of age and have at least 25 years of service credit as of the effective date of retirement will receive an additional five years of service credit. If the member is under age 55 at the time of retirement, the member’s retirement allowance shall not be reduced. Employees who satisfy age and service requirements and who retire on special veteran's retirement will receive an additional pension amount of 5/60 of their final year compensation.

    Employees of employers which offer retirees paid health benefits coverage who are at least 60 years of age and have at least 20 years of service as of the effective date of retirement will receive payment of the cost for health benefits coverage. Employees of employers which do not offer retirees paid health benefits coverage who are at least 60 years of age and have at least 20 years of service as of the effective date of retirement will not be eligible for the paid health benefits coverage but will receive an additional pension payment of $500 per month for the first 24 months after retirement.

    Employees who are at least 60 years of age with at least 10 but not more than 20 years of service credit will receive an additional pension of $500 per month for the first 24 months after retirement.

    The employer may elect to provide benefits by adoption of a resolution of its governing body and by filing a certified copy with the Director of the Division of Pensions and Benefits.

    Where the needs of an employer require the services of an employee who elects to retire and receive a benefit under this act, the employer, with the approval of the governing body and the consent of the employee, may delay the effective retirement date of the employee for up to one year. The delay authorized under the act does not extend the dates for qualification for benefits under the act.

    The employees eligible for the benefits under this bill are all eligible to retire under the retirement system. 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 the various agencies covered by the bill.