SENATE, No. 131

 

STATE OF NEW JERSEY

 

Introduced Pending Technical Review by Legislative Counsel

 

PRE-FILED FOR INTRODUCTION IN THE 1996 SESSION

 

 

By Senators KYRILLOS and PALAIA

 

 

An Act concerning retirement benefits for certain employees of certain public employers other than the State.

 

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

 

    1. An employee of a participating employer under the Public Employees' Retirement System (PERS), the Teachers' Pension and Annuity Fund (TPAF) or the Alternate Benefit Program (ABP) which elects to provide the benefits authorized under this act who:

    a. is 50 or more years of age and has 25 or more years of service credit under PERS or TPAF, or service with public employers in this State participating in ABP for which contributions were made by the employee under the program before the effective date of retirement;

    b. files an application to retire on or after November 1, 1995 and on or before March 1, 1996; and

    c. retires under the retirement system on or after December 1, 1995, but not later than April 1, 1996, other than a veteran who retires on a special veteran's retirement, shall receive an additional five years of service credit under PERS or TPAF, or an amount equal to 100% of the employee's base annual salary at the time of retirement from the employer for members of ABP. An employee who meets the age and service requirements under this act and retires on a special veteran's retirement shall receive an addtional pension under the retirement system in the amount of 5/60 of final year compensation. The additional retirement benefit under this section is applicable only to the full-time employment with the employer which elects to provide the benefits authorized under this act and from which the employee retires to receive the benefit and the compensation for that employment.

 

    2. For an employee of a participating employer under PERS, TPAF or ABP which provides paid health benefits to retirees pursuant to section 7 of P.L.1964, c.125 (C.52:14-17.38), N.J.S.40A:10-23, or N.J.S.18A:16-19 and which elects to provide the benefits authorized under this act who:

    a. is 60 or more years of age and has 20 or more years of service credit under PERS or TPAF, or service with public employers in this State participating in ABP for which contributions were made by the employee under the program before the effective date of retirement:

    b. files an application to retire on or after November 1, 1995 and on or before March 1, 1996; and

    c. retires under the retirement system on or after December 1, 1995, but not later than April 1, 1996, the employer shall pay the entire cost for coverage for the retired employee and the employee's dependents, but not including survivors, unless the employer is paying the entire cost for coverage for survivors on the effective date of this act. For employers participating in the New Jersey State Health Benefits Program (NJSHBP), the payment shall be made in the same manner provided for payment by an employer other than the State of premiums or periodic charges for retired employees under section 7 of P.L.1964, c.125 (C.52:14-17.38). For employers not participating in the NJSHBP, the payment shall be made in the same manner provided for payment of premiums after retirement under N.J.S.40A:10-23 or N.J.S.18A:16-19, or the employer's group health insurance contract or health benefits plan, and the level of benefits to retirees under this section shall be the same as the level of benefits provided to other retirees by that employer.

 

    3. An employer may elect to provide the benefits under this act by adoption of a resolution by its governing body and filing a certified copy of the resolution with the Director of the Division of Pensions and Benefits on or before September 1, 1995. With respect to county colleges, the governing body is the board of trustees. The employer shall submit to the director any information necessary to provide the benefits or to determine the liability for them.

 

    4. The actuaries for PERS and TPAF shall determine the liability of the retirement systems for the additional service credit or pensions provided under this act and for the early retirement of employees in accordance with the tables of actuarial assumptions adopted by the board of trustees of the retirement system. For PERS, this liability shall be added to the unfunded accrued liability of the employer under the retirement system and shall be paid in the same manner and over the remaining time period provided for the employer's unfunded accrued liability under sections 24, 68 and 81 of P.L.1954, c.84 (C.43:15A-24, 68 and 81).

    For TPAF, the liability and contribution requirements for each employer shall be determined by the actuary of the system in the same manner and over the remaining time period provided for the unfunded accrued liability of the system under N.J.S.18A:66-18. The retirement system shall annually certify to each employer the contributions due to the contingent reserve fund for the liability under this act. The contributions certified by the retirement system shall be paid by the employer to the retirement system on or before July 1 in each year commencing with July 1, 1997. If payment of the full amount of the contribution certified is not made within 30 days after July 1, interest at the rate of regular interest shall begin to run against the unpaid balance on the first day after the thirtieth day.

    The employer shall pay the cost of the actuarial work to determine the additional liability of the retirement system for the benefits under this act which shall be included in the initial contribution required from the employer.

 

    5. The cost of the cash payments for ABP members under this act shall be funded by the employer from appropriations to the employer for annual operating expenses or from funds otherwise available to the employer for operating expenses.

 

    6. An employee who receives a benefit under this act shall forfeit all tenure rights.

 

    7. Where the needs of the employer require the service of an employee who elects to retire and receive a benefit under this act, the employer, with the approval of the governing body of the employer and with the consent of the employee, may delay the effective retirement date of the employee until the first day of any calendar month after April 1, 1996, but not later than April 1, 1997. With respect to county colleges, the governing body is the board of trustees. A delay in the effective retirement date of an employee shall not extend the dates set forth in sections 1 and 2 to qualify for benefits under this act.

    For a member of PERS or TPAF whose effective retirement date is delayed under this section and who dies before the retirement becomes effective, the retirement shall be effective as of the first day of the month after the date of death of the member if the member's beneficiary requests in writing to the board of trustees of the retirement system that the retirement be effective under the Option settlement selected by the member, or under Option 3 if the member did not select an Option.

 

    8. An employee retiring with a benefit under this act who has not repaid the full amount of a loan from PERS or TPAF by the effective date of retirement may repay the loan through deductions from the member's retirement benefit payments in the same monthly amount which was deducted from the member's compensation immediately preceding retirement until the balance of the amount borrowed together with interest at the statutory rate is repaid. If the retiree dies before the outstanding balance of the loan and interest is repaid, the remaining amount shall be repaid as provided in section 2 of P.L.1981, c.55 (C.43:15A-34.1) or N.J.S.18A:66-35.

 

    9. For the purposes of this act:

    a. "Employee" means a full-time employee of a county, a county college, or a municipality who is eligible to participate in the employer's health benefits plan. It does not include an employee of a public agency or organization as defined in section 71 of P.L.1954, c.84 (C.43:15A-71).

    b. "Final year compensation" means the compensation received in the last 12 months immediately preceding retirement in which compensation is received and upon which contributions are made by the employee to the retirement system.

 

    10. The provisions of this act shall be applicable to employers and employees participating in a county pension fund created under Article 1 of Chapter 10 of Title 43 of the Revised Statutes, P.L.1943, c.160 (C.43:10-18.1 et seq.), P.L.1948, c.310 (C.43:10-18.50 et seq.), or Article 2 of Chapter 66 of Title 18A of the New Jersey Statutes, or in a municipal retirement system created under P.L.1954, c.218 (C.43:13-22.3 et seq.) or P.L.1964, c.275 (C.43:13-22.50), and shall become operative upon the adoption of the provisions of this act by the employer.

 

    11. Prior to September 1, 1995, each employer covered by the provisions of this act shall meet and consult with the representatives of the bargaining unit or units representing the employees who would be eligible for benefits under this act and the governing body of the employer shall formally consider and decide whether or not to adopt the provisions of this act.

 

    12. This act shall take effect immediately.

 

 

STATEMENT

 

    This bill establishes an early retirement incentive program for employees of counties and municipalities who retire under the Public Employees' Retirement System (PERS), the Teachers' Pension and Annuity Fund (TPAF), or the Alternate Benefit Program (ABP) between December 1, 1995 and April 1, 1996 if the employer elects to provide the benefits. Employees who are 50 or more years of age and have 25 years or more of service credit under PERS or TPAF as of the effective date of retirement will receive an additional five years of service credit. Employees who meet the age and service credit requirements and retire on special veteran's retirement under PERS and TPAF will receive an additional pension in the amount of 5/60 of their final-year compensation. Members of ABP who are 50 or more years of age and have 25 or more years of service will receive an amount equal to one year of salary based upon their base salary at the time of retirement. In the case of employers which offer paid health benefits coverage to retirees, employees who are 60 or more years of age and have 20 or more years, but fewer than 25 years of service as of the effective date of retirement will receive payment of premiums for health benefits coverage.

    The cost of the enhanced pension benefits for PERS and TPAF members will be funded through increased employer contributions which will be paid by the local employer to the retirement systems and which will be calculated separately for each employer. The cost for the cash payments for ABP members and for health benefits for all qualifying employees will be paid by their employers out of their operating budgets.

    In addition, retiring employees will forfeit their tenure rights.

    The bill permits a participating employer to delay, with the consent of the employee, for up to one year, the retirements of employees determined to be essential. This authorization for a delay in the retirement date does not extend the dates for qualification for benefits under this act.

 

 

 

Provides additional retirement benefits for certain county and municipal employees and county college employees who retire between December 1, 1995 and April 1, 1996.