ASSEMBLY, No. 2726

STATE OF NEW JERSEY

INTRODUCED FEBRUARY 10, 1997

By Assemblywoman TURNER and Assemblyman GUSCIORA

An Act concerning contributions to State-administered retirement systems and supplementing Title 43 of the Revised Statutes.

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

    1. If any action affecting the funding of a State-administered retirement system, other than the payment of regular employer and employee contributions, (1) changes the relationship between assets and liabilities, (2) results in a greater value of assets in relation to liabilities, and (3) allows the employer, or in the case of the Teachers' Pension and Annuity Fund the State, to use the increased value to reduce employer contributions, or in the case of the Teachers' Pension and Annuity Fund State contributions, then 25% of the amount of the increase in value shall be used by the employer, or in the case of the Teachers' Pension and Annuity Fund the State, to reduce, by up to 2% of compensation, the employee contribution rate in the fiscal year in which the action occurs. If the amount of the increase in value would allow a greater reduction in the employee contribution rate, such increase shall be applied to the reduction of the employee contribution rate in the next fiscal year.

    2. This act shall take effect immediately.

STATEMENT

    The purpose of this bill is to ensure that public employees benefit from any refinancing or alteration in the funding of State-administered retirement systems. It provides that if any action affecting the funding of a State-administered retirement system, other than the payment of regular employer and employee contributions, (1) changes the relationship between assets and liabilities, (2) results in a greater value of assets in relation to liabilities, and (3) allows the employer, or in the case of the Teachers' Pension and Annuity Fund the State, to use the increased value to reduce employer contributions, or in the case of the Teachers' Pension and Annuity Fund State contributions, then 25% of the amount of the increase in value shall be used by the employer, or in the case of the Teachers' Pension and Annuity Fund the State, to reduce, by up to 2% of compensation, the employee contribution rate in the fiscal year in which the action occurs. If the amount of the increase in value would allow a greater reduction in the employee contribution rate, such increase shall be applied to the reduction of the employee contribution rate in the next fiscal year.

Provides for the reduction of employee contribution rates when employer contribution rates are reduced in State-administered retirement systems.