ASSEMBLY, No. 1593
STATE OF NEW JERSEY
INTRODUCED FEBRUARY 29, 1996
By Assemblyman DORIA
An Act concerning the computation of retirement allowances for certain members of the Teachers' Pension and Annuity Fund and the Public Employees' Retirement System and amending various parts of the statutory law.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. N.J.S.18A:66-36 is amended to read as follows:
18A:66-36. Should a member of the Teachers' Pension and Annuity Fund, after having completed 10 years of service, be separated voluntarily or involuntarily from the service, before reaching service retirement age, and not by removal for conduct unbecoming a teacher or other just cause under the provisions of sections 18A:28-4 to 18A:28-5 and 18A:28-9 to 18A:28-13 inclusive, such person may elect to receive, in lieu of the payment provided in section 18A:66-34:
a. The payments provided for in section 18A:66-37, if he so qualified under said section; or
b. A deferred retirement allowance beginning at age 60, which shall be made up of an annuity derived from the member's accumulated deductions at the time of his severance from the service, and a pension in the amount which, when added to the member's annuity, will provide a total retirement allowance of 1/70 of his final compensation for each year of service credited as Class A service and [1/60] 1/50 of his final compensation for each year of service credited as Class B service, calculated in accordance with section 18A:66-44, with optional privileges provided for in section 18A:66-47 if he excercises such optional privilege at least 30 days before his attainment of the normal retirement age provided, that such election is communicated by such member to the retirement system in writing stating at what time subsequent to the execution and filing thereof he desires to be, retired; and provided, further, that such member may later elect: (1) to receive the payments provided for in section 18A:66-37, if he had qualified under that section at the time of leaving service, except that in order to avail himself of the optional privileges pursuant to section 18A:66-47, he must exercise such optional privilege at least 30 days before the effective date of his retirement; or (2) to withdraw his accumulated deductions with interest as provided in section 18A:66-34. If such member shall die before attaining service retirement age, then his accumulated deductions, plus regular interest after January 1, 1956, shall be paid in accordance with section 18A:66-38, and, in addition if such member shall die after attaining service retirement age and has not withdrawn his accumulated deductions, an amount equal to 3/16% of the compensation upon which contributions by the member to the annuity savings fund were based in the last year of creditable service shall be paid to such member's beneficiary.
Any member who, having elected to receive a deferred retirement allowance, again becomes an employee covered by the retirement system while under the age of 60, shall thereupon be reenrolled. If he had discontinued his service for more than two consecutive years, subsequent contributions shall be at a rate applicable to the age resulting from the subtraction of his years of creditable service at the time of his last discontinuance of contributing membership from his age at the time of his return to service. He shall be credited with all service as a member standing to his credit at the time of his election to receive a deferred retirement allowance.
(cf: P.L.1981, c.177, s.1)
2. N.J.S.18A:66-37 is amended to read as follows:
18A:66-37. Should a member resign after having established 25 years of creditable service before reaching age 60, he may elect "early retirement," provided, that such election is communicated by such member to the retirement system by filing a written application, duly attested, stating at what time subsequent to the execution and filing thereof he desires to be retired. He shall receive, in lieu of the payment provided in N.J.S.18A:66-34, an annuity which is the actuarial equivalent of his accumulated deductions and a pension in the amount which, when added to the member's annuity, will provide a total retirement allowance of 1/70 of his final compensation for each year of service credited as class A service and [1/60] 1/50 of his final compensation for each year of service credited as class B service, calculated in accordance with N.J.S.18A:66-44, reduced by 1/4 of 1% for each month that the member lacks of being age 55; provided, however, that upon the receipt of proper proofs of the death of such a member there shall be paid to his beneficiary an amount equal to 3/16 of the compensation upon which contributions by the member to the annuity savings fund were based in the last year of creditable service or in the year of the member's highest contractual salary, whichever is higher.
The board of trustees shall retire him at the time specified or at such other time within one month after the date so specified as the board finds advisable.
(cf: P.L.1995, c.410, s.1)
3. N.J.S.18A:66-41 is amended to read as follows:
18A:66-41. A member upon retirement for ordinary disability shall receive a retirement allowance which shall consist of:
(a) an annuity which shall be the actuarial equivalent of his accumulated deductions at the time of his retirement together with regular interest after January 1, 1956; and
(b) a pension in the amount which, when added to the member's annuity, will provide a total retirement allowance of [1½%]1 4/5% of final compensation multiplied by his number of years of creditable service; and provided further, that in no event shall the allowance be less than 40% of final compensation, except that in no case shall the rate of allowance exceed 9/10 of the rate of the regular service retirement allowance which the member would have received had he remained in service from the date of retirement to age 60.
Upon the receipt of proper proofs of the death of a member who has retired on an ordinary disability retirement allowance, there shall be paid to such member's beneficiary, an amount equal to 1½ times the compensation upon which contributions by the member to the annuity savings fund were based in the last year of creditable service or in the year of the member's highest contractual salary, whichever is higher; provided, however, that if such death shall occur after the member shall gave have attained age 60, the amount payable shall equal 3/16 of such compensation. The death benefits provided in this section shall apply to any member who has retired or shall retire on or after January 1, 1956.
(cf: P.L.1995, c.410, s.2)
4. N.J.S.18A:66-44 is amended to read as follows:
18A:66-44. A member, upon retirement for service, shall receive a retirement allowance consisting of:
(a) an annuity which shall be the actuarial equivalent of his accumulated deductions, together with interest after January 1, 1956, less any excess contributions as provided in N.J.S.18A:66-20; and
(b) a pension in the amount which, when added to the member's annuity, will provide a total retirement allowance of 1/70 of his final compensation for each year of service credited as class A service and [1/60] 1/50 of his final compensation for each year of service credited as class B service.
Upon the receipt of proper proofs of the death of a member who has retired on a service retirement allowance, there shall be paid to the member's beneficiary, an amount equal to 3/16 of the compensation upon which contributions by the member to the annuity savings fund were based in the last year of creditable service or in the year of the member's highest contractual salary, whichever is higher.
(cf: P.L.1995, c.410, s.4)
5. Section 38 of P.L.1954, c.84 (C.43:15A-38) is amended to read as follows:
38. Should a member of the Public Employees' Retirement System, after having completed 10 years of service, be separated voluntarily or involuntarily from the service, before reaching service retirement age, and not by removal for cause on changes of misconduct or delinquency, such person may elect to receive:
(a) The payments provided for in section 41. b. of this act, if he so qualifies under said section, or;
(b) A deferred retirement allowance, beginning at the retirement age, which shall be made up of an annuity derived from the accumulated deductions standing to the credit of the individual member's account in the annuity savings fund at the time of his severance from the service together with regular interest, and a pension which when added to the annuity will produce a total retirement allowance of 1/70 of his final compensation for each year of service credited as Class A service and [1/60] 1/50 of his final compensation for each year of service credited as Class B service, calculated in accordance with section 48 of this act, with optional privileges provided for in section 50 of this act if he exercises such optional privilege at least 30 days before his attainment of the normal retirement age; provided, that such election is communicated by such member to the retirement system in writing stating at what time subsequent to the execution and filing thereof he desires to be retired; and provided further, that such member, as referred to in this subsection may later elect: (1) to receive the payments provided for in section 41 b. of this act, if he had qualified under that section at the time of leaving service, except that in order to avail himself of the optional privileges pursuant to section 50, he must exercise such optional privilege at least 30 days before the effective date of his retirement or; (2) to withdraw his accumulated deductions with interest as provided in section 41 a. If such member shall die before attaining service retirement age then his accumulated deductions, plus regular interest, shall be paid in accordance with section 41 c.; or if such member shall die after attaining service retirement age and has not withdrawn his accumulated deductions, an amount equal to 3/16 of the compensation received by the member in the last year of creditable service shall be paid to such person, if living, as he shall have nominated by written designation duly executed and filed with the
retirement system otherwise to the executor or administrator of the member's estate.
(cf: P.L.1981, c.177, s.4)
6. Section 41 of P.L.1954, c.84 (C.43:15A-41) is amended to read as follows:
41. a. A member who withdraws from service or ceases to be an employee for any cause other than death or retirement shall, upon the filing of an application therefor, receive all of his accumulated deductions standing to the credit of his individual account in the annuity savings fund, plus regular interest, less any outstanding loan, except that for any period after June 30, 1944, the interest payable shall be such proportion of the interest determined at the regular rate of 2% per annum bears to the regular rate of interest, and except that no interest shall be payable in the case of a member who has less than three years of membership credit for which he has made contributions. He shall cease to be a member two years from the date he discontinued service as an eligible employee, or, if prior thereto, upon payment to him of his accumulated deductions. If any such person or member shall die before withdrawing or before endorsing the check constituting the return of his accumulated deductions, such deductions shall be paid to the member's beneficiary. No member shall be entitled to withdraw the amounts contributed by his employer covering his military leave unless he shall have returned to the payroll and contributed to the retirement system for a period of 90 days.
b. Should a member resign after having established 25 years of creditable service before reaching age 60, he may elect "early retirement," provided, that such election is communicated by such member to the retirement system by filing a written application, duly attested, stating at what time subsequent to the execution and filing thereof he desires to be retired. He shall receive, in lieu of the payment provided in subsection a. of this section, an annuity which is the actuarial equivalent of his accumulated deductions together with regular interest, and a pension in the amount which, when added to the member's annuity, will provide a total retirement allowance of one-seventieth of his final compensation for each year of service credited as Class A service and [one-sixtieth] one-fiftieth of his final compensation for each year of service credited as Class B service, calculated in accordance with section 48 (C.43:15A-48) of this act, reduced by 1/4 of 1% for each month that the member lacks of being age 55; provided, however, that upon the receipt of proper proofs of the death of such a member there shall be paid to his beneficiary an amount equal to three-sixteenths of the compensation upon which contributions by the member to the annuity savings fund were based in the last year of creditable service.
The board of trustees shall retire him at the time specified or at such other time within one month after the date so specified as the board finds advisable.
c. Upon the receipt of proper proofs of the death of a member in service on account of which no accidental death benefit is payable under section 49 there shall be paid to such member's beneficiary:
(1) The member's accumulated deductions at the time of death together with regular interest; and
(2) An amount equal to one and one-half times the compensation upon which contributions by the member to the annuity savings fund were based in the last year of creditable service.
(cf: P.L.1987, c.1, s.1)
7. Section 45 of P.L.1954, c.84 (C.43:15A-45) is amended to read as follows:
45. A member upon retirement for ordinary disability shall receive a retirement allowance, which shall consist of:
a. An annuity which shall be the actuarial equivalent of his accumulated deductions together with regular interest and
b. A pension in the amount which, when added to the member's annuity, will provide a total retirement allowance of [1 1/2%]1 4/5% of final compensation multiplied by his number of years of creditable service; provided further, that in no event shall the allowance be less than 40% of final compensation, except that in no case shall the rate of allowance exceed 9/10 of the rate of the regular service retirement allowance which the member would have received had he remained in service from the date of retirement to age 60.
c. Upon the receipt of proper proofs of the death of a member who has retired on an ordinary disability retirement allowance there shall be paid to such member's beneficiary, an amount equal to 1 1/2 times the compensation upon which contributions by the member to the annuity savings fund were based in the last year of creditable service; provided, however, that if such death shall occur after the member shall have attained age 60, the amount payable shall equal 3/16 of such compensation.
(cf: P.L.1971, c.213, s.19)
8. Section 48 of P.L.1954, c.84 (C.43:15A-48) is amended to read as follows:
48. A member, upon retirement for service, shall receive a retirement allowance consisting of:
a. An annuity which shall be the actuarial equivalent of his accumulated deductions together with regular interest; and
b. A pension in the amount which, when added to the member's annuity, will provide a total retirement allowance of 1/70 of his final compensation for each year of service credited as Class A service and [1/60] 1/50 of his final compensation for each year of service credited as Class B service.
c. Upon the receipt of proper proofs of the death of a member who has retired on a service retirement allowance, there shall be paid to the member's beneficiary, an amount equal to 3/16 of the compensation upon which contributions by the member to the annuity savings fund were based in the last year of creditable service.
(cf: P.L.1971, c.213, s.22)
9. This act shall take effect immediately.
STATEMENT
The purpose of this bill is to improve the formula for computing retirement allowances for members with Class B service in both the Teachers' Pension and Annuity Fund and the Public Employees' Retirement System who retire on deferred, early, service or ordinary disability retirement allowances. The bill would change the formula to be used in computing the retirement allowance due members of each system under each of the above types of retirement allowances, other than ordinary disability, from 1/60th of a member's final compensation for each year of creditable service to 1/50th of final compensation for each year of creditable service; in the case of ordinary disability retirement allowances, the formula is changed from 1 1/2% of final compensation for each year of creditable service to 1 4/5% of final compensation for each year of creditable service.
Improves the formula for computing retirement allowances for certain PERS and TPAF members retiring on deferred, early, service or ordinary disability retirement allowances.