A1990

ASSEMBLY, No. 1990

STATE OF NEW JERSEY

INTRODUCED MAY 13, 1996

By Assemblywoman BUONO, Assemblymen DORIA, Gusciora, Assemblywomen Turner, Friscia and Assemblyman Barnes

An Act concerning the selection of actuaries for certain State-administered retirement systems and amending and repealing 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:66-57 is amended to read as follows:

18A:66-57. The board shall elect annually from its membership a chairman and may also elect a vice chairman, who shall have all the power and authority of the chairman in the event of the death, absence or disability of the chairman. The actuary of the fund shall be selected by the [Retirement Systems Actuary Selection Committee established by P.L.1992, c.125]board in accordance with the provisions of P.L.1954, c.48 (C.52:34-6 et seq.). The actuary of the fund on the effective date of this act, P.L. , c. (C. ) (now pending before the Legislature as this bill), shall continue to serve in that capacity until the expiration of the actuary's contract.

The actuary shall be the technical adviser of the board on matters regarding the operation of the funds created by the provisions of this article and shall perform such other duties as are required in connection therewith.

The Attorney General shall be the legal adviser of the retirement system, except that if the Attorney General determines that a conflict of interest would affect the ability of the Attorney General to represent the board on a matter affecting the retirement system, the board may select and employ legal counsel to advise and represent the board on that matter.

The chief or assistant chief of the office of secretarial services of the Division of Pensions and Benefits of the State Department of the Treasury, shall be the secretary of the board. The chief and assistant chief of the office of secretarial services shall be in the competitive division of the State [classified] career service. The secretary presently in office shall hold the position as chief of the office of secretarial services subject to all of the provisions of Title [11] 11A of the [Revised] New Jersey Statutes and shall not be removed from said office except in the manner provided under the provisions of said title relating to permanent employees in the competitive division of the State [classified] career service. The board of trustees shall select its secretary from among the eligible candidates.

(cf: P.L.1992, c.125, s.3)

2. Section 29 of P.L.1973, c.140 (C.43:6A-29) is amended to read as follows:

29. a. Subject to the provisions of P.L.1955, c.70 (C.52:18A-95 to 52:18A-104), the general responsibility for the proper operation of the retirement system is hereby vested in the State House Commission. b. Except as otherwise herein provided, no member of the State House Commission shall have any direct interest in the gains or profits of any investments of the retirement system, nor shall any member of the State House Commission directly or indirectly, for himself or as an agent in any manner use the moneys of the retirement system, except to make such current and necessary payments as are authorized by the commission; nor shall any member of the State House Commission become an endorser or surety, or in any manner an obligor for moneys loaned to or borrowed from the retirement system.

c. For purposes of this act, each member of the State House Commission shall be entitled to one vote and a majority vote of all members shall be necessary for any decision by the commission at any meeting of said commission.

d. Subject to the limitations of this act, the State House Commission shall annually establish rules and regulations for the administration of the funds created by this act and for the transaction of its business. Such rules and regulations shall be consistent with those adopted by the other pension funds within the Division of Pensions and Benefits in order to permit the most economical and uniform administration of all such retirement systems.

e. The actuary of the system shall be selected by the [Retirement Systems Actuary Selection Committee established by P.L.1992, c.125] commission in accordance with the provisions of P.L.1954, c.48 (C.52:34-6 et seq.). The actuary of the system on the effective date of this act, P.L. , c. (C. ) (now pending before the Legislature as this bill), shall continue to serve in that capacity until the expiration of the actuary's contract. [He] The actuary shall be the technical adviser of the commission on matters regarding the operation of the funds created by the provisions of this act and shall perform such other duties as are required in connection herewith.

f. The Attorney General shall be the legal adviser of the retirement system, except that if the Attorney General determines that a conflict of interest would affect the ability of the Attorney General to represent the commission on a matter affecting the retirement system, the commission may select and employ legal counsel to advise and represent the commission on that matter.

g. The Director of the Division of Pensions and Benefits of the State Department of the Treasury shall be the secretary of the commission for purposes pertaining to the provisions of this act.

h. For purposes of this act, the State House Commission shall keep a record of all of its proceedings which shall be open to public inspection. The retirement system shall publish annually a report showing the fiscal transactions of the retirement system for the preceding year, the amount of the accumulated cash and securities of the system and the last balance sheet showing the financial condition of the system by means of any actuarial valuation of the assets and liabilities of the retirement system.

i. The State Treasurer shall designate a medical board after consultation with the Director of the Division of Pensions and Benefits. It shall be composed of three physicians. The medical board shall pass on all medical examinations required under the provisions of this act, and shall report in writing to the retirement system its conclusions and recommendations upon all matters referred to it.

(cf: P.L.1992, c.125, s.5)

3. Section 18 of P.L.1954, c.84 (C.43:15A-18) is amended to read as follows:

18. The board shall elect annually from its membership a chairman and may also elect a vice-chairman, who shall have all the power and authority of the chairman in the event of the death, absence or disability of the chairman.

The actuary of the fund shall be selected by the [Retirement Systems Actuary Selection Committee established by P.L.1992, c.125] board in accordance with the provisions of P.L.1954, c.48 (C.52:34-6 et seq.). The actuary of the fund on the effective date of this act, P.L. , c. (C. ) (now pending before the Legislature as this bill), shall continue to serve in that capacity until the expiration of the actuary's contract.

The actuary shall be the technical adviser of the board on matters regarding the operation of the funds created by the provisions of this act and shall perform such other duties as are required in connection therewith.

The chief or assistant chief of the office of secretarial services of the Division of Pensions and Benefits of the State Department of the Treasury shall be the secretary of the board. The chief and assistant chief of the office of secretarial services shall be in the competitive division of the State classified service. The secretary presently in office shall hold the position as assistant chief of the office of secretarial services subject to all of the provisions of Title [11] 11A of the [Revised] New Jersey Statutes and shall not be removed from said office except in the manner provided under the provisions of said Title relating to permanent employees in the competitive division of the State [classified] career service. The board of trustees shall select its secretary from among the eligible candidates.

(cf: P.L.1992, c.125, s.8)

4. Section 7 of P.L.1952, c.358 (C.43:16-6.2) is amended to read as follows:

7. On July 1, 1952, and in each succeeding year, or, when July 1 is a legal holiday, upon the first business day thereafter, the members of the commission shall meet in annual meeting at which a chairman shall be elected from the membership thereof. The commission shall keep, in convenient form, such data as may be necessary for the actuarial evaluation of the fund committed to its charge and to serve as a record of its experience in the administration of the pension system dependent upon such fund. A record shall be kept of all proceedings of the commission, which shall be open to public inspection. The Attorney General shall act as the legal adviser of the commission, except that if the Attorney General determines that a conflict of interest would affect the ability of the Attorney General to represent the commission on a matter affecting the retirement system, the commission may select and employ legal counsel to advise and represent the commission on that matter. The actuary of the fund shall be selected by the [Retirement Systems Actuary Selection Committee established by P.L.1992, c.125] commission in accordance with the provisions of P.L.1954, c.48 (C.52:34-6 et seq.). The actuary of the fund on the effective date of this act, P.L. , c. (C. ) (now pending before the Legislature as this bill), shall continue to serve in that capacity until the expiration of the actuary's contract. He shall be the technical adviser of the commission on all matters regarding the operation of the pension fund not otherwise prescribed by law.

(cf: P.L.1992, c.125, s.11)

5. Section 13 of P.L.1944, c.255 (C.43:16A-13) is amended to read as follows:

13. (1) Subject to the provisions of P.L.1955, c.70 (C.52:18A-95 et seq.), the general responsibility for the proper operation of the retirement system is hereby vested in a board of trustees.

(2) The board shall consist of 11 trustees as follows:

(a) Five members to be appointed by the Governor, with the advice and consent of the Senate, who shall serve for a term of office of four years and until their successors are appointed and who shall be private citizens of the State of New Jersey who are neither an officer thereof nor an active or retired member of any police or fire department thereof. Of the four members initially appointed by the Governor pursuant to P.L.1992, c.125 (C.43:4B-1 et al.), one shall be appointed for a term of one year, one for a term of two years, one for a term of three years, and one for a term of four years. The member appointed by the Governor pursuant to the provisions of this amendatory act, P.L.1995, c.238, shall serve for a term of four years and until a successor is appointed.

(b) The State Treasurer or the deputy State Treasurer, when designated for that purpose by the State Treasurer.

(c) Two policemen and two firemen who shall be active members of the system and who shall be elected by the active members of the system for a term of four years according to such rules and regulations as the board of trustees shall adopt to govern such election.

(d) One retiree from the system who shall be elected by retirees from the system for a term of four years according to such rules and regulations as the board of trustees shall adopt to govern the election.

(3) Each trustee shall, after his appointment or election, take an oath of office that, so far as it devolves upon him he will diligently and honestly fulfill his duties as a board member, and that he will not knowingly violate or willingly permit to be violated any of the provisions of the law applicable to the retirement system. Such oath shall be subscribed by the member making it, and certified by the officer before whom it is taken, and immediately filed in the office of the Secretary of State.

(4) If a vacancy occurs in the office of a trustee, the vacancy shall be filled in the same manner as the office was previously filled.

(5) The trustees shall serve without compensation, but they shall be reimbursed for all necessary expenses that they may incur through service on the board.

(6) Each trustee shall be entitled to one vote in the board. Six trustees must be present at any meeting of said board for the transaction of its business.

(7) Subject to the limitations of this act, the board of trustees shall annually establish rules and regulations for the administration of the funds created by this act and for the transaction of its business. Such rules and regulations shall be consistent with those adopted by the other pension funds within the Division of Pensions and Benefits in order to permit the most economical and uniform administration of all such retirement systems.

(8) The board of trustees shall elect from its membership a chairman. The Director of the Division of Pensions and Benefits shall appoint a qualified employee of the division to be secretary of the board. The administration of the program shall be performed by the personnel of the Division of Pensions and Benefits.

(9) The board of trustees shall keep a record of all of its proceedings which shall be open to public inspection. The retirement system shall publish annually a report showing the fiscal transactions of the retirement system for the preceding year, the amount of the accumulated cash and securities of the system, and the last balance sheet showing the financial condition of the system by means of an actuarial valuation of the assets and liabilities of the retirement system.

(10) The Attorney General of the State of New Jersey shall be the legal adviser of the retirement system, except that if the Attorney General determines that a conflict of interest would affect the ability of the Attorney General to represent the board on a matter affecting the retirement system, the board may select and employ legal counsel to advise and represent the board on that matter.

(11) The State Treasurer shall designate a medical board after consultation with the Director of the Division of Pensions and Benefits, subject to veto by the board of trustees for valid reason. It shall be composed of three physicians who are not eligible to participate in the retirement system. The medical board shall pass upon all medical examinations required under the provisions of this act, shall investigate all essential statements and certificates by or on behalf of a member in connection with an application for disability retirement, and shall report in writing to the retirement system its conclusions and recommendations upon all matters referred to it.

(12) The actuary of the system shall be selected by the [Retirement Systems Actuary Selection Committee established by P.L.1992, c.125] board in accordance with the provisions of P.L.1954, c.48 (C.52:34-6 et seq.). The actuary of the system on the effective date of this act, P.L. , c. (C. ) (now pending before the Legislature as this bill), shall continue to serve in that capacity until the expiration of the actuary's contract. [He] The actuary shall be the technical adviser of the board of trustees on matters regarding the operation of the funds created by the provisions of this act, and shall perform such other duties as are required in connection therewith.

(13) At least once in each three-year period the actuary shall make an actuarial investigation into the mortality, service and compensation experience of the members and beneficiaries of the retirement system and, with the advice of the actuary, the board of trustees shall adopt for the retirement system such mortality, service and other tables as shall be deemed necessary and shall certify the rates of contribution payable under the provisions of this act.

(14) (Deleted by amendment, P.L.1970, c.57.)

(15) On the basis of such tables recommended by the actuary as the board of trustees shall adopt and regular interest, the actuary shall make an annual valuation of the assets and liability of the funds of the system created by this act.

(16) (Deleted by amendment, P.L.1987, c.330.)

(17) Each policeman or fireman member of the board of trustees shall be entitled to time off from his duty, with pay, during the periods of his attendance upon regular or special meetings of the board of trustees, and such time off shall include reasonable travel time required in connection therewith.

(cf: P.L.1995, c.238, s.1)

6. Section 30 of P.L.1965, c.89 (C.53:5A-30) is amended to read as follows:

30. a. Subject to the provisions of P.L.1955, c.70 (C.52:18A-95 et seq.), the general responsibility for the proper operation of the retirement system is hereby vested in the board of trustees.

b. The board shall consist of five trustees as follows:

(1) Two active or retired members of the system who shall be appointed by the Superintendent of State Police, who shall serve at the pleasure of the superintendent and until their successors are appointed and one of whom shall be or shall have been a commissioned officer of the Division of State Police.

(2) Two members to be appointed by the Governor, with the advice and consent of the Senate, who shall serve for a term of office of three years and until their successors are appointed and who shall be private citizens of the State of New Jersey who are neither an officer thereof nor active or retired members of the system. Of the two members initially appointed by the Governor pursuant to P.L.1992, c.125 (C.43:4B-1 et al.), one shall be appointed for a term of two years and one for a term of three years.

(3) The State Treasurer ex officio. The Deputy State Treasurer, when designated for that purpose by the State Treasurer, may sit as a member of the board of trustees and when so sitting shall have all the powers and shall perform all the duties vested by this act in the State Treasurer.

c. Each trustee shall, after his appointment, take an oath of office that, so far as it devolves upon him, he will diligently and honestly fulfill his duties as a board member, that he will not knowingly violate or permit to be violated any of the provisions of the law applicable to the retirement system. Such oath shall be subscribed by the member taking it, and certified by the official before whom it is taken, and immediately filed in the office of the Secretary of State.

d. If a vacancy occurs in the office of a trustee, the vacancy shall be filled in the same manner as the office was previously filled.

e. The trustees shall serve without compensation, but they shall be reimbursed by the State for all necessary expenses that they may incur through service on the board. No employee member shall suffer loss of salary through the serving on the board.

f. Except as otherwise herein provided, no member of the board of trustees shall have any direct interest in the gains or profits of any investments of the retirement system; nor shall any member of the board of trustees directly or indirectly, for himself or as an agent in any manner use the moneys of the retirement system, except to make such current and necessary payments as are authorized by the board of trustees; nor shall any member of the board of trustees become an endorser or surety, or in any manner an obligor for moneys loaned to or borrowed from the retirement system.

g. Each trustee shall be entitled to one vote in the board. A majority vote of all trustees shall be necessary for any decision by the trustees at any meeting of said board.

h. Subject to the limitations of this act, the board of trustees shall annually establish rules and regulations for the administration of the funds created by this act and for the transactions of its business. Such rules and regulations shall be consistent with those adopted by the other pension funds within the Division of Pensions and Benefits in order to permit the most economical and uniform administration of all such retirement systems.

i. The actuary of the fund shall be selected by the [Retirement Systems Actuary Selection Committee established by P.L.1992, c.125] board in accordance with the provisions of P.L.1954, c.48 (C.52:34-6 et seq.). The actuary of the fund on the effective date of this act, P.L. , c. (C. ) (now pending before the Legislature as this bill), shall continue to serve in that capacity until the expiration of the actuary's contract. [He] The actuary shall be the technical adviser of the board on matters regarding the operation of the funds created by the provisions of this act and shall perform such other duties as are required in connection herewith.

j. The Attorney General shall be the legal adviser of the retirement system, except that if the Attorney General determines that a conflict of interest would affect the ability of the Attorney General to represent the board on a matter affecting the retirement system, the board may select and employ legal counsel to advise and represent the board on that matter.

k. The Chief of the Bureau of Police and Fire Funds of the Division of Pensions and Benefits of the State Department of the Treasury shall be the secretary of the board.

l. The board of trustees shall keep a record of all of its proceedings which shall be open to public inspection. The retirement system shall publish annually a report showing the fiscal transactions of the retirement system for the preceding year, the amount of the accumulated cash and securities of the system and the last balance sheet showing the financial condition of the system by means of an actuarial valuation of the assets and liabilities of the retirement system. m. The State Treasurer shall designate a medical board after consultation with the Director of the Division of Pensions and Benefits, subject to veto by the board of trustees for valid reason. It shall be composed of three physicians. The medical board shall pass on all medical examinations required under the provisions of this act, and shall report in writing to the retirement system its conclusions and recommendations upon all matters referred to it.

n. (Deleted by amendment, P.L.1987, c.330).

(cf: P.L.1992, c.125, s.17)

7. Section 19 of P.L.1992, c.125 (C.43:4B-1) is repealed.

8. This act shall take effect immediately .

STATEMENT

At present, the actuary for the Teachers' Pension and Annuity Fund, the Judicial Retirement System, the Public Employees' Retirement System, the Consolidated Police and Firemen's Pension Fund, the Police and Firemen's Retirement System, and the State Police Retirement System is selected by the Retirement Systems Actuary Selection Committee. This bill repeals the provision of the law which established that committee and provides instead that the board of trustees or commission governing the respective State-administered retirement systems shall select the system's actuary. An actuary serving on the effective date of this act shall continue to serve until the expiration of the actuary's contract.

Allows board of trustees of a State-administered retirement system to select the system's actuary.