SENATE, No. 150
STATE OF NEW JERSEY
Introduced Pending Technical Review by Legislative Counsel
PRE-FILED FOR INTRODUCTION IN THE 1996 SESSION
By Senators LaROSSA and INVERSO
An Act providing certain retirement benefits to certain public employees.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. For the purposes of this act:
a. "Public employee" means:
(1) a State employee;
(2) a full-time employee of a county, county college, or municipality the governing body of which elects to provide the benefits authorized by this act pursuant to section 4 thereof, who is eligible to participate in the employer's health benefits plan, but not including an employee of a public agency or organization as defined in section 71 of P.L.1954, c.84 (C.43:15A-71); and
(3) an employee of a school board, educational services commission, or jointure commission which elects to provide the benefits authorized by this act pursuant to section 4 thereof, who is eligible to participate in the employer's health benefits plan.
b. "State employee" means a full-time employee, eligible to participate in the New Jersey State Health Benefits Program, of the State of New Jersey, or Rutgers, The State University, the New Jersey Institute of Technology, the University of Medicine and Dentistry of New Jersey, or a State college, but does not include an employee of an authority, board, commission, corporation, or other agency or instrumentality, other than Rutgers, The State University, authorized to participate in the Public Employees' Retirement System under section 73 of P.L.1954, c.84 (C.43:15A-73) or P.L.1990, c.25 (C.43:15A-73.2 et seq.), or a public agency or organization as defined in section 71 of P.L.1954, c.84 (C.43:15A-71).
c. "School board" means the board of education of any local school district, consolidated school district, regional school district, county special services school district, or county vocatgional school.
d. "Educational services commission" means an agency established in one or more counties for the purpose of carrying on programs of educational research and development and providing to public school districts such educational and administrative services as may be authorized pursuant to rules of the State Board of Education.
e. "Jointure commission" means a commission set up be two or more boards of education to carry out jointly by agreement the duties imposed upon them in regard to the education and training of handicapped pupils.
2. Notwithstanding the provisions of subsection b. of section 41 of P.L.1954, c.84 (C.43:15A-41) or the provisions of N.J.S.18A:66-37 to the contrary:
a. a public employee who is a member of the Public Employees' Retirement System (PERS) or the Teachers' Pension and Annuity Fund (TPAF) may retire and receive the retirement allowance provided under that subsection or section, as the case may be, if the member's age and years of service credit total at least 75 at the time of retirement and the member retires on or before January 1, 1996; and
b. if the member is under age 55 at the time of retirement under subsection a. of this section, the member's retirement allowance shall not be reduced.
3. Notwithstanding the provisions of section 8 of P.L.1961, c.49 (C.52:14-17.32), section 7 of P.L.1964, c.125 (C.52:14-17.38), section 3 of P.L.1987, c.384 (C.52:14-17.32f), section 2 of P.L.1992, c.126 (C.52:14-17.32f1), N.J.S.18A:16-19, or N.J.S.40A:10-23 to the contrary:
a. (1) if a public employee who is a member of PERS or TPAF retires under the provisions of section 2 of this act; or
(2) if a public employee who is a member of PERS retires on or before January 1, 1996 under the provisions of section 47 or subsection b. of section 61 of P.L.1954, c.84 (C.43:15A-47 and 15A-61) or if a public employee who is a member of TPAF retires on or before January 1, 1996 under the provisions of N.J.S.18A:66-43 or N.J.S.18A:66-71, and the member's age and years of service credit total at least 75 at the time of retirement; or
(3) if a public employee who is a participant in the Alternate Benefit Program established pursuant to P.L.1969, c.242 (C.18A:66-167 et seq.) retires as provided in section 9 of that act (C.18A:66-175) on or before January 1, 1996 and the participant's age and years of service with public employers in this State participating in the Alternate Benefit Program total at least 75 at the time of retirement; and
b. if the member or participant, at the time of retirement, has fewer than 25 years of service and does not qualify for paid health benefits under section 8 of P.L.1961, c.49 (C.52:14-17.32), section 7 of P.L.1964, c.125 (C.52:14-17.38), section 3 of P.L.1987, c.384 (C.52:14-17.32f), section 2 of P.L.1992, c.126 (C.52:14-17.32f1), N.J.S.18A:16-19, or N.J.S.40A:10-23, as the case may be, the State, in the case of a State employee, and the employer, in the case of an employee of a county or municipality which provides paid health benefits to retirees or an employee of a county college, school board, educational services commission, or jointure commission, shall pay the premium or periodic charges for benefits provided to the retired public 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, in an amount equal to the proportion that the number of years of service bears to 25, and the employee shall pay the remaining amount of any such premium or charges.
A full-time employee of the Rutgers University Cooperative Extension Service who meets the requirements of this section based upon service credited in the federal Civil Service Retirement System or the Federal Employees Retirement System earned as a result of full-time employment at Rutgers University alone, or in combination with service credit under PERS or qualifying service under the Alternate Benefit Program, and is eligible to retire under the federal Civil Service Retirement System or the Federal Employees Retirement System within the time period set forth in this section, shall receive the benefits provided by this section. The State shall pay the the relevant portion of the premium or periodic charges for the benefits if the employee is a member of the federal Civil Service Retirement System or the Federal Employees Retirement System.
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.
4. a. The governing body of a county or a municipality, the board of trustees of a county college, a school board, an educational service commission, or a jointure commission may elect to provide the benefits under this act by adopting a resolution and filing a certified copy of the resolution with the Director of the Division of Pensions and Benefits on or before September 1, 1995.
b. Prior to September 1, 1995, each employer other than the State 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.
5. a. The actuaries for PERS and TPAF shall determine the liability of the retirement systems for the pension benefits to State employees provided under this act in accordance with the tables of actuarial assumptions adopted by the boards of trustees of the retirement systems. These liabilities shall be added to the unfunded accrued liabilities of the State under the retirement systems and shall be paid in the same manner and over the remaining time periods provided for the State's unfunded liability under section 24 of P.L.1954, c.84 (C.43:15A-23) and N.J.S.18A:66-18, respectively. The State shall pay the cost of the actuarial work to determine the additional liabilities of the retirement systems for the benefits under this act.
b. The actuaries for PERS and TPAF shall determine the liability of the retirement systems for the pension benefits for employees other than State employees provided under this act in accordance with the tables of actuarial assumptions adopted by the board of trustees of the retirement systems.
For PERS, this liability shall be paid by the employer in level annual payments over the remaining time period provided for payment of the unfunded accrued liability of the retirement system under section 24 of P.L.1954, c.84 (C.43:15A-24) or over lesser alternative time periods as determined by the Director of the Division of Pensions and Benefits.
For TPAF, this liability shall be paid by the employer in level annual payments over the remaining time period provided for payment of the unfunded accrued liability of the system under N.J.S.18A:66-18 or over lesser alternative time periods as determined by the Director of the Division of Pensions and Benefits. 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 the date prescribed by law for payment of employer contributions for basic retirement benefits. If payment of the full amount of the contribution certified is not made within 30 days after the last date for payment of employer contributions for basic retirement benefits, interest at the rate of 10% per year shall begin to run against the unpaid balance on the first day after the 30th 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.
6. A public employee retiring under PERS or TPAF with a benefit under this act who has not repaid the full amount of a loan from the retirement system 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 section 2 of P.L.1981, c.212 (C.18A:66-35.1).
7. This act shall take effect immediately.
STATEMENT
The purpose of this bill is to provide an opportunity for public employees to retire rather than face possible layoffs. The bill applies to State employees, employees of local governments which choose to offer the benefits specified in the bill, and teachers and other staff employed by school boards which choose to offer those benefits who are members of the Public Employees' Retirement System or the Teachers' Pension and Annuity Fund or are participants in the Alternate Benefit Program. The employees must retire on or before January 1, 1996.
The benefits provided are as follows:
(1) If the age and years of service of an employee under age 60 total 75 at the time of retirement, that employee may retire notwithstanding the fact that the employee does not have 25 years of service, the period of service presently required by law in order for members of PERS and TPAF to retire before age 60. Moreover, if the employee is under age 55, the present reduction in the employee's retirement allowance would not apply. The formula for calculating the employee's retirement allowance would be the one presently applicable under the law.
(2) If the age and years of service of any employee, whether under or over the age of 60, total 75 at the time of retirement, and if the employee's years of service are fewer than 25, thus presently disqualifying the employee from paid health benefits during retirement, the State, in the case of State employees, and the employer, in the case of other employees whose employer provides paid health benefits to retirees or employees of a county college, school board, educational services commission, or jointure commission, shall pay the premium or charges for health benefits in an amount equal to the proportion that the number of the employee's years of service bears to 25, and the employee shall pay the remaining amount.
Local government units and school boards have until September 1, 1995 to determine whether they wish to provide the benefits of this bill.
Provides certain retirement benefits to qualified public employees who retire on or before January 1, 1996.