SENATE STATE MANAGEMENT, INVESTMENT AND FINANCIAL INSTITUTIONS COMMITTEE

 

STATEMENT TO

 

SENATE, No. 129

 

with committee amendments

 

STATE OF NEW JERSEY

 

DATED: MARCH 14, 1996

 

      The Senate State Management, Investment and Financial Institutions Committee reports favorably and with committee amendments Senate Bill No. 129.

      This bill amends the definition of "widow" and "widower" in the Police and Firemen's Retirement System (PFRS) to reduce the marriage duration requirement from two years to 18 months prior to the retiree's date of death in order for a widow or widower to qualify for a pension benefit. Upon the death of a PFRS retiree, there is paid to the retiree's widow or widower a pension of 50% of average final compensation (the three years of creditable service preceding retirement or any three fiscal years providing the largest possible benefit). A member does not have to choose a reduced pension for a spouse to receive this benefit.

      It should also be noted that under current law the marriage duration requirement is waived for the widow or widower of a member who dies in the actual performance of duty. The surviving spouse is entitled to a pension benefit of 70% of the member's compensation during the last year of service.

      This act shall take effect immediately and shall be retroactive to January 1, 1995.

      This bill was prefiled for introduction in the 1996 session pending technical review. As reported, the bill includes the changes required by technical review which has been performed.

      Last session, an identical bill (S2028) was approved by the Pension and Health Benefits Review Commission. The commission, however, also recommended shortening the marriage duration requirement to one year rather than 18-months, eliminating different treatment of widows and widowers, and providing for uniform marriage duration requirements among all the retirement systems.

      (The following should be noted with regards to the commission's recommendations:

      (1) The spouse of a Public Employees' Retirement System (PERS) or Teachers' Pension and Annuity Fund (TPAF) retiree, unlike the spouse of a PFRS retiree, does not automatically receive a pension benefit upon the retiree's death after retirement. The retiree must have chosen a reduced retirement allowance option in order to provide that the spouse will receive a pension benefit upon the retiree's death. Thus, a marriage duration requirement is not applicable in this context in these retirement systems.

      (2) There is no marriage duration requirement in the State Police Retirement System (SPRS). A member does not have to choose a reduced retirement allowance option in order to provide that the spouse will receive a pension benefit of 50% of final compensation upon the retiree's death.

      (3) There is a four year marriage duration requirement in the Judicial Retirement System (JRS) for the spouse to qualify for a pension benefit upon the retiree's death. A member does not have to choose a reduced retirement allowance option in order to provide that the spouse will receive a pension benefit of 25% of final salary upon the retiree's death.)

 

COMMITTEE AMENDMENT

 

      The committee amended the bill to clarify that in the event of the payment of an accidental death benefit, the 18-month requirement, not the prior two-year requirement, shall be waived.