LEGISLATIVE FISCAL ESTIMATE TO

[First Reprint]

ASSEMBLY, No. 1240

STATE OF NEW JERSEY

DATED: NOVEMBER 14, 1996

      Assembly Bill No. 1240 (1R) of 1996 lowers the age at which veteran members of the Public Employees' Retirement System (PERS) can retire on the veterans' retirement allowance from age 62 to age 60. The bill provides that the veterans' retirement allowance shall be either one-half (50 percent) of the compensation during the member's last year of employment, as provided under current law, or one-half of the highest compensation received during any other year of employment, whichever provides the highest retirement allowance.

      The Office of Legislative Services (OLS) notes that special veterans retirement in the PERS is 50 percent of final compensation for veterans age 62 with 20 or more years of service. Lowering the veterans retirement age from 62 to age 60 will result in veterans retiring two years earlier than they otherwise would. According to the most recent valuation of the retirement system, there are 18,841 active members with veterans status who potentially will retire under the provisions of veterans benefits. The OLS estimates the present value cost of permitting veterans to retire two years earlier than they otherwise could to be $8,755 per qualified retiree. This estimate was calculated using the average salary ($39,564) for State employees as published in the Department of Personnel's Workforce Profile report.

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.