SENATE, No. 381

 

STATE OF NEW JERSEY

 

Introduced Pending Technical Review by Legislative Counsel

 

PRE-FILED FOR INTRODUCTION IN THE 1996 SESSION

 

 

By Senator McNAMARA

 

 

An Act concerning retirement allowances in certain State-administered retirement systems, amending various parts of the statutory law and supplementing Title 43 of the Revised Statutes.

 

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

 

    1. N.J.S.18A:66-2 is amended to read as follows:

    18A:66-2. As used in this article:

    a. "Accumulated deductions" means the sum of all the amounts, deducted from the compensation of a member or contributed by him or in his behalf, including interest credited to January 1, 1956, standing to the credit of his individual account in the annuity savings fund.

    b. "Annuity" means payments for life derived from the accumulated deductions of a member as provided in this article.

    c. "Beneficiary" means any person receiving a retirement allowance or other benefit as provided in this article.

    d. "Compensation" means the contractual salary, for services as a teacher as defined in this article, which is in accordance with established salary policies of the member's employer for all employees in the same position but shall not include individual salary adjustments which are granted primarily in anticipation of the member's retirement [or], additional remuneration for performing temporary or extracurricular duties beyond the regular school day or the regular school year, or salary paid on a per diem basis. It does not include that portion of salary in the last three years of creditable service which exceeds the salary in the immediately preceding year of creditable service by more than 10 per cent.

    e. "Employer" means the State, the board of education or any educational institution or agency of or within the State by which a teacher is paid.

    f. "Final compensation" means the average annual compensation for which contributions are made for the three years of creditable service in New Jersey immediately preceding his retirement or death, or it shall mean the average annual compensation for New Jersey service for which contributions are made during any three fiscal years of his or her membership providing the largest possible benefit to the member or his beneficiary.

    g. "Fiscal year" means any year commencing with July 1, and ending with June 30, next following.

    h. "Pension" means payments for life derived from appropriations made by the State or employers to the Teachers' Pension and Annuity Fund.

    i. "Annuity reserve" means the present value of all payments to be made on account of any annuity or benefit in lieu of an annuity, granted under the provisions of this article, computed on the basis of such mortality tables recommended by the actuary as the board of trustees adopts, with regular interest.

    j. "Pension reserve" means the present value of all payments to be made on account of any pension or benefit in lieu of a pension granted to a member from the Teachers' Pension and Annuity Fund, computed on the basis of such mortality tables recommended by the actuary as the board of trustees adopts, with regular interest.

    k. "Present-entrant" means any member of the Teachers' Pension and Annuity Fund who had established status as a "present-entrant member" of said fund prior to January 1, 1956.

    l. "Rate of contribution initially certified" means the rate of contribution certified by the retirement system in accordance with N.J.S.18A:66-29.

    m. "Regular interest" shall mean interest as determined annually by the State Treasurer after consultation with the directors of the Divisions of Investment and Pensions and the actuary of the fund. It shall bear a reasonable relationship to the percentage rate of earnings on investments but shall not exceed 105% of such percentage rate.

    n. "Retirement allowance" means the pension plus the annuity.

    o. "School service" means any service as a "teacher" as defined in this section.

    p. "Teacher" means any regular teacher, special teacher, helping teacher, teacher clerk, principal, vice-principal, supervisor, supervising principal, director, superintendent, city superintendent, assistant city superintendent, county superintendent, State Commissioner or Assistant Commissioner of Education, members of the State Department of Education who are certificated, unclassified professional staff and other members of the teaching or professional staff of any class, public school, high school, normal school, model school, training school, vocational school, truant reformatory school, or parental school, and of any and all classes or schools within the State conducted under the order and superintendence, and wholly or partly at the expense of the State Board of Education, of a duly elected or appointed board of education, board of school directors, or board of trustees of the State or of any school district or normal school district thereof, and any persons under contract or engagement to perform one or more of these functions. It shall also mean any person who serves, while on an approved leave of absence from regular duties as a teacher, as an officer of a local, county or State labor organization which represents, or is affiliated with an organization which represents, teachers as defined in this subsection. No person shall be deemed a teacher within the meaning of this article who is a substitute teacher. In all cases of doubt the board of trustees shall determine whether any person is a teacher as defined in this article.

    q. "Teachers' Pension and Annuity Fund," hereinafter referred to as the "retirement system," is the corporate name of the arrangement for the payment of retirement allowances and other benefits under the provisions of this article, including the several funds placed under said system. By that name all its business shall be transacted, its funds invested, warrants for money drawn, and payments made and all of its cash and securities and other property held.

    r. "Veteran" means any honorably discharged officer, soldier, sailor, airman, marine or nurse who served in any Army, Air Force or Navy of the Allies of the United States in World War I between July 14, 1914, and November 11, 1918, or who served in any Army, Air Force or Navy of the Allies of the United States in World War II, between September 1, 1939, and September 2, 1945, and who was inducted into such service through voluntary enlistment, and was a citizen of the United States at the time of such enlistment, and who did not, during or by reason of such service, renounce or lose his United States citizenship, and any officer, soldier, sailor, marine, airman, nurse or army field clerk who has served in the active military or naval service of the United States and has or shall be discharged or released therefrom under conditions other than dishonorable, in any of the following wars, uprisings, insurrections, expeditions or emergencies, and who has presented to the retirement system evidence of such record of service in form and content satisfactory to said retirement system:

    (1) The Indian wars and uprisings during any of the periods recognized by the War Department of the United States as periods of active hostility;

    (2) The Spanish-American War between April 20, 1898, and April 11, 1899;

    (3) The Philippine insurrections and expeditions during the periods recognized by the War Department of the United States as of active hostility from February 4, 1899, to the end of 1913;

    (4) The Peking relief expedition between June 20, 1900, and May 27, 1902;

    (5) The army of Cuban occupation between July 18, 1898, and May 20, 1902;

    (6) The army of Cuban pacification between October 6, 1906, and April 1, 1909;

    (7) The Mexican punitive expedition between March 14, 1916, and February 7, 1917;

    (8) The Mexican border patrol, having actually participated in engagements against Mexicans between April 12, 1911, and June 16, 1919;

    (9) World War I, between April 6, 1917, and November 11, 1918;

    (10) World War II, between September 16, 1940, and September 2, 1945, who shall have served at least 90 days in such active service, exclusive of any period he was assigned (1) for a course of education or training under the Army Specialized Training Program or the Navy College Training Program, which course was a continuation of his civilian course and was pursued to completion, or (2) as a cadet or midshipman at one of the service academies, any part of which 90 days was served between said dates; provided that any person receiving an actual service-incurred injury or disability shall be classed as a veteran, whether or not he has completed the 90-day service as herein provided;

    (11) Korean conflict after June 23, 1950, and prior to July 27, 1953, who shall have served at least 90 days in such active service, exclusive of any period he was assigned (1) for a course of education or training under the Army Specialized Training Program or the Navy College Training Program, which course was a continuation of his civilian course and was pursued to completion, or (2) as a cadet or midshipman at one of the service academies, any part of which 90 days was served between said dates; provided that any person receiving an actual service-incurred injury or disability shall be classed as a veteran, whether or not he has completed the 90-day service as herein provided; and provided further that any member classed as a veteran pursuant to this subsection prior to August 1, 1966, shall continue to be classed as a veteran, whether or not he completed the 90-day service between said dates as herein provided;

    (12) Vietnam conflict, after December 31, 1960, and prior to the date of termination as proclaimed by the Governor, who shall have served at least 90 days in such active service, exclusive of any period he was assigned (1) for a course of education or training under the Army Specialized Training Program or the Navy College Training Program, which course was a continuation of his civilian course and was pursued to completion, or (2) as a cadet or midshipman at one of the service academies, any part of which 90 days was served between said dates; and exclusive of any service performed pursuant to the provisions of section 511(d) of Title 10, United States Code, pursuant to an enlistment in the Army National Guard or as a reserve for service in the Army Reserve, Naval Reserve, Air Force Reserve, Marine Corps Reserve, or Coast Guard Reserve; provided that any person receiving an actual service-incurred injury or disability shall be classed as a veteran, whether or not he has completed the 90-day service as herein provided.

    s. "Child" means a deceased member's unmarried child either (a) under the age of 18 or (b) of any age who, at the time of the member's death, is disabled because of mental retardation or physical incapacity, is unable to do any substantial, gainful work because of the impairment and his impairment has lasted or can be expected to last for a continuous period of not less than 12 months, as affirmed by the medical board.

    t. "Widower" means the man to whom a member was married at least five years before the date of her death and to whom she continued to be married until the date of her death and who was receiving at least one-half of his support from the member in the 12-month period immediately preceding the member's death or the accident which was the direct cause of the member's death. The dependency of such a widower will be considered terminated by marriage of the widower subsequent to the death of the member. In the event of the payment of an accidental death benefit, the five-year qualification shall be waived.

     u. "Widow" means the woman to whom a member was married at least five years before the date of his death and to whom he continued to be married until the date of his death and who was receiving at least one-half of her support from the member in the 12-month period immediately preceding the member's death or the accident which was the direct cause of the member's death. The dependency of such a widow will be considered terminated by the marriage of the widow subsequent to the member's death. In the event of the payment of an accidental death benefit, the five-year qualification shall be waived.

    v. "Parent" means the parent of a member who was receiving at least one-half of his support from the member in the 12-month period immediately preceding the member's death or the accident which was the direct cause of the member's death. The dependency of such a parent will be considered terminated by marriage of the parent subsequent to the death of the member.

    w. "Medical board" means the board of physicians provided for in N.J.S.18A:66-56.

(cf: P.L.1989, c.198, s.1)

 

    2. N.J.S.18A:66-4 is amended to read as follows:

    18A:66-4. The membership of the retirement system shall consist of:

    (a) all members of the teachers' pension and annuity fund enrolled as such as of December 31, 1955;

    (b) any person becoming a teacher on or after January 1, 1956, except any person who has attained the age of 60 years prior to becoming a teacher after June 30, 1958 but before July 1, 1968;

    (c) every teacher veteran as of January 1, 1956, who is not a member of the "Teachers' Pension and Annuity Fund" as of such date and who shall not have notified the board of trustees within 30 days of such date that he does not desire to become a member;

    (d) any teacher employed on January 1, 1956, who is not a member of the Teachers' Pension and Annuity Fund and who elects to become a member under the provisions of section 18A:66-10.

    No person in employment, office or position, for which the annual salary or remuneration is fixed at less than[$500.00] $3,000 shall be eligible to become a member of the retirement system.

(cf: P.L.1968, c.229, s.1)

 

    3. N.J.S.18A:66-8 is amended to read as follows:

    18A:66-8. If a teacher is dismissed by his employer by reason of reduction in number of teachers employed in the school district, institution or department when in the judgment of the employer it is advisable to abolish any office, position or employment for reasons of a reduction in the number of pupils, economy, a change in the administrative or supervisory organization or other good cause; or if a teacher becomes unemployed by reason of the creation of a regional school district or a consolidated school district; or if a teacher has been discontinued for service through no fault of his own or through leave of absence granted by his employer or permitted by any law of this State; and if such teacher has not withdrawn his accumulated deductions, his membership may continue, notwithstanding any provisions of this article if such member returns to service within a period of 5 years from the date of his discontinuance from service; no credit for retirement purposes shall be allowed to such member, covering the period of his discontinuance except as provided in this section. In computing the service or in computing final compensation no time after September 1, 1919, during which a member was employed as a teacher at an annual salary or remuneration fixed at less than $500.00, or on or after the effective date of this amendatory and supplementary act, P.L. , c. , at an annual salary or remuneration fixed at less than $3,000, shall be credited, except that in the case of a veteran member credit shall be given for service rendered prior to January 1, 1955, in an employment, office or position if the annual salary or remuneration therefor was fixed at not less than $300.00 and such service consisted of the performance of the full duties of such employment, office or position. In computing service, time during which such teacher was absent on an official leave without pay shall be credited if such absence was for a period of (1) less than 3 months or (2) up to a maximum of 2 years if the leave was due to the member's personal illness or maternity and the period of leave is allowed for retirement purposes within 1 year following his return to service after the termination of such leave, or (3) the period of leave was specifically allowed for retirement purposes by the provisions of any law of this State. The method of computation, the terms of the purchase and credit granted shall be identical to those stipulated for the purchase of previous membership service by members of the fund as provided by section 18A:66-9.

(cf: P.L.1971, c.121, s.3)

 

    4. N.J.S.18A:66-15 is amended to read as follows:

    18A:66-15. In computing for retirement or for purposes of resignation or separation from service under sections 18A:66-36 and 18A:66-37 the total service of a member about to be retired, the retirement system shall credit him with all service rendered by him since he last became a member and in addition, with all the service to which he is entitled and with no other service. Except as otherwise provided in this article, such service credit shall be final and conclusive for retirement purposes, or for purposes of resignation under sections 18A:66-36 and 18A:66-37, unless the member shall discontinue his service for more than two consecutive years.

    For the purpose of computing service for retirement purposes, the board of trustees shall fix and determine by appropriate rules and regulations how much service in any year shall equal a year of service and part of a year of service. Not more than one year shall be credited for all service in a calendar year.

    A member may not receive credit for service during the year immediately preceding retirement, except for disability retirement, for any period of sick leave which did not accrue in that year unless the employer certifies to the board of trustees that the member is incapable of performing the duties of the member's position or any other work the employer is willing to give the member during the period of the leave because of physical or mental incapacity and provides information satisfactory to the board of the physical or mental incapacity. The board shall refer such a case to the medical board for its opinion on the physical or mental incapacity of the member and shall require the member to have an examination by a physician designated by the board before service credit for the sick leave is approved.

(cf: N.J.S.18A:66-15)

 

    5. Section 6 of P.L.1954, c.84 (C.43:15A-6) is amended to read as follows:

    6. As used in this act:

    a. "Accumulated deductions" means the sum of all the amounts, deducted from the compensation of a member or contributed by him or on his behalf, standing to the credit of his individual account in the annuity savings fund.

    b. "Annuity" means payments for life derived from the accumulated deductions of a member as provided in this act.

    c. "Annuity reserve" means the present value of all payments to be made on account of any annuity or benefit in lieu of an annuity, granted under the provisions of this act, computed on the basis of such mortality tables recommended by the actuary as the board of trustees adopts, with regular interest.

    d. "Beneficiary" means any person receiving a retirement allowance or other benefit as provided in this act.

    e. "Child" means a deceased member's unmarried child either (1) under the age of 18 or (2) of any age who, at the time of the member's death, is disabled because of mental retardation or physical incapacity, is unable to do any substantial, gainful work because of the impairment and his impairment has lasted or can be expected to last for a continuous period of not less than 12 months, as affirmed by the medical board.

    f. "Parent" shall mean the parent of a member who was receiving at least 1/2 of his support from the member in the 12-month period immediately preceding the member's death or the accident which was the direct cause of the member's death. The dependency of such a parent will be considered terminated by marriage of the parent subsequent to the death of the member.

    g. "Widower" means the man to whom a member was married at least 5 years before the date of her death and to whom she continued to be married until the date of her death and who was receiving at least 1/2 of his support from the member in the 12-month period immediately preceding the member's death or the accident which was the direct cause of the member's death. The dependency of such a widower will be considered terminated by marriage of the widower subsequent to the death of the member. In the event of the payment of an accidental death benefit, the 5-year qualification shall be waived.

    h. "Final compensation" means the average annual compensation for which contributions are made for the 3 years of creditable service in New Jersey immediately preceding his retirement or death, or it shall mean the average annual compensation for New Jersey service for which contributions are made during any 3 fiscal years of his or her membership providing the largest possible benefit to the member or his beneficiary.

    i. "Fiscal year" means any year commencing with July 1 and ending with June 30 next following.

    j. "Medical board" shall mean the board of physicians provided for in section 17 (C.43:15A-17).

    k. "Pension" means payments for life derived from appropriations made by the employer as provided in this act.

    l. "Pension reserve" means the present value of all payments to be made on account of any pension or benefit in lieu of a pension granted under the provisions of this act, computed on the basis of such mortality tables recommended by the actuary as the board of trustees adopts, with regular interest.

    m. "Public Employees' Retirement System of New Jersey," hereinafter referred to as the "retirement system," is the corporate name of the arrangement for the payment of retirement allowances and other benefits under the provisions of this act including the several funds placed under said system. By that name all of its business shall be transacted, its funds invested, warrants for money drawn, and payments made and all of its cash and securities and other property held.

    n. "Regular interest" shall mean interest as determined annually by the State Treasurer after consultation with the Directors of the Divisions of Investment and Pensions and the actuary of the system. It shall bear a reasonable relationship to the percentage rate of earnings on investments but shall not exceed 105% of such percentage rate.

    o. "Retirement allowance" means the pension plus the annuity.

    p. "Veteran" means any honorably discharged officer, soldier, sailor, airman, marine or nurse who served in any Army, Air Force or Navy of the Allies of the United States in World War I, between July 14, 1914, and November 11, 1918, or who served in any Army, Air Force or Navy of the Allies of the United States in World War II, between September 1, 1939, and September 2, 1945, and who was inducted into such service through voluntary enlistment, and was a citizen of the United States at the time of such enlistment, and who did not, during or by reason of such service, renounce or lose his United States citizenship, and any officer, soldier, sailor, marine, airman, nurse or army field clerk, who has served in the active military or naval service of the United States and has or shall be discharged or released therefrom under conditions other than dishonorable, in any of the following wars, uprisings, insurrections, expeditions, or emergencies, and who has presented to the retirement system evidence of such record of service in form and content satisfactory to said retirement system:

    (1) The Indian wars and uprisings during any of the periods recognized by the War Department of the United States as periods of active hostility;

    (2) The Spanish-American War between April 20, 1898, and April 11, 1899;

    (3) The Philippine insurrections and expeditions during the periods recognized by the War Department of the United States as of active hostility from February 4, 1899, to the end of 1913;

    (4) The Peking relief expedition between June 20, 1900, and May 27, 1902;

    (5) The army of Cuban occupation between July 18, 1898, and May 20, 1902;

    (6) The army of Cuban pacification between October 6, 1906, and April 1, 1909;

    (7) The Mexican punitive expedition between March 14, 1916, and February 7, 1917;

    (8) The Mexican border patrol, having actually participated in engagements against Mexicans between April 12, 1911, and June 16, 1919;

    (9) World War I, between April 6, 1917, and November 11, 1918;

    (10) World War II, between September 16, 1940, and September 2, 1945, who shall have served at least 90 days in such active service, exclusive of any period he was assigned (1) for a course of education or training under the Army Specialized Training Program or the Navy College Training Program which course was a continuation of his civilian course and was pursued to completion, or (2) as a cadet or midshipman at one of the service academies any part of which 90 days was served between said dates; provided, that any person receiving an actual service-incurred injury or disability shall be classed as a veteran whether or not he has completed the 90-day service as herein provided.

    (11) Korean conflict after June 23, 1950, and prior to July 27, 1953, who shall have served at least 90 days in such active service, exclusive of any period he was assigned (1) for a course of education or training under the Army Specialized Training Program or the Navy College Training Program which course was a continuation of his civilian course and was pursued to completion, or (2) as a cadet or midshipman at one of the service academies, any part of which 90 days was served between said dates; provided, that any person receiving an actual service-incurred injury or disability shall be classed as a veteran whether or not he has completed the 90-day service as herein provided; and provided further, that any member classed as a veteran pursuant to this subparagraph prior to August 1, 1966, shall continue to be classed as a veteran whether or not he completed the 90-day service between said dates as herein provided.

    (12) Vietnam conflict after December 31, 1960, and prior to the date of termination as proclaimed by the Governor, who shall have served at least 90 days in such active service, exclusive of any period he was assigned (1) for a course of education or training under the Army Specialized Training Program or the Navy College Training Program which course was a continuation of his civilian course and was pursued to completion, or (2) as a cadet or midshipman at one of the service academies, any part of which 90 days was served between said dates; and exclusive of any service performed pursuant to the provisions of section 511(d) of Title 10, United States Code, pursuant to an enlistment in the Army National Guard or as a reserve for service in the Army Reserve, Naval Reserve, Air Force Reserve, Marine Corps Reserve, or Coast Guard Reserve; provided, that any person receiving an actual service-incurred injury or disability shall be classed as a veteran whether or not he has completed the 90 days service as herein provided.

     q. "Widow" means the woman to whom a member was married at least 5 years before the date of his death and to whom he continued to be married until the date of his death and who was receiving at least 1/2 of her support from the member in the 12-month period immediately preceding the member's death or the accident which was the direct cause of the member's death. The dependency of such a widow will be considered terminated by the marriage of the widow subsequent to the member's death. In the event of the payment of an accidental death benefit, the 5-year qualification shall be waived.

    r. "Compensation" means the base or contractual salary, for services as an employee, which is in accordance with established salary policies of the member's employer for all employees in the same position but shall not include individual salary adjustments which are granted primarily in anticipation of the member's retirement [or], additional remuneration for performing temporary or extracurricular duties beyond the regular work day or the regular work year, or salary paid on a per diem basis. In cases where salary includes maintenance, the retirement system shall fix the value of that part of the salary not paid in money which shall be considered under this act. It does not include that portion of salary in the last three years of creditable service which exceeds the salary in the immediately preceding year of creditable service by more than 10 per cent. For an office, position or employment where salary is paid to the officer or employee in whole or in part on a voucher, fee schedule or basis other than regular salary payments but not on a per diem basis, it does include the total amount of the payments to the officer or employee for the services which constitute the regular duties of the office, position or employment during the normal work period regardless of the manner of payment.

(cf: P.L.1972, c.166, s.3)

 

    6. Section 7 of P.L.1954, c.84 (C.43:15A-7) is amended to read as follows:

    7. There is hereby established the Public Employees' Retirement System of New Jersey in the Division of Pensions of the Department of the Treasury. The membership of the retirement system shall include:

    a. The members of the former "State Employees' Retirement System of New Jersey" enrolled as such as of December 30, 1954, who shall not have claimed for refund their accumulated deductions in said system as provided in this section;

    b. Any person becoming an employee of the State or other employer after January 2, 1955 and every veteran, other than those whose appointments are seasonal, becoming an employee of the State or other employer after such date, including a temporary employee with at least one year's continuous service; and

    c. Every employee veteran in the employ of the State or other employer on January 2, 1955, who is not a member of any retirement system supported wholly or partly by the State.

    d. Membership in the retirement system shall be optional for elected officials other than veterans, and for school crossing guards, who having become eligible for benefits under other pension systems are so employed on a part-time basis. Any such part-time school crossing guard who is eligible for benefits under any other pension system and who was hired as a part-time school crossing guard prior to March 4, 1976, may at any time terminate his membership in the retirement system by making an application in writing to the board of trustees of the retirement system. Upon receiving such application, the board of trustees shall terminate his enrollment in the system and direct the employer to cease accepting contributions from the member or deducting from the compensation paid to the member. State employees who become members of any other retirement system supported wholly or partly by the State as a condition of employment shall not be eligible for membership in this retirement system. Notwithstanding any other law to the contrary, all other persons accepting employment in the service of the State shall be required to enroll in the retirement system as a condition of their employment, regardless of age. No person in employment, office or position, for which the annual salary or remuneration is fixed at less than[$1,500.00] $3,000, shall be eligible to become a member of the retirement system, except that a person in an elected municipal office for which the annual salary or remuneration is at least $1,500 shall be eligible for membership.

    e. Membership of any person in the retirement system shall cease if he shall discontinue his service for more than two consecutive years.

    f. The accumulated deductions of the members of the former "State Employees' Retirement System" which have been set aside in a trust fund designated as Fund A as provided in section 5 of this act and which have not been claimed for refund prior to February 1, 1955 shall be transferred from said Fund A to the Annuity Savings Fund of the Retirement System, provided for in section 25 of this act. Each member whose accumulated deductions are so transferred shall receive the same prior service credit, pension credit, and membership credit in the retirement system as he previously had in the former "State Employees' Retirement System" and shall have such accumulated deductions credited to his individual account in the Annuity Savings Fund. Any outstanding obligations of such member shall be continued.

    g. Any school crossing guard electing to terminate his membership in the retirement system pursuant to subsection d. of this section shall, upon his request, receive a refund of his accumulated deductions as of the date of his appointment to the position of school crossing guard. Such refund of contributions shall serve as a waiver of all benefits payable to the employee, to his dependent or dependents, or to any of his beneficiaries under the retirement system.

    h. A temporary employee who is employed under the federal Job Training Partnership Act, Pub.L. 97-300 (29 U.S.C. § 1501) shall not be eligible for membership in the system. Membership for temporary employees employed under the federal Job Training Partnership Act, Pub.L. 97-300 (29 U.S.C.§1501) who are in the system on the effective date of this 1986 amendatory act shall be terminated, and affected employees shall receive a refund of their accumulated deductions as of the date of commencement of employment in a federal Job Training Partnership Act program. Such refund of contributions shall serve as a waiver of all benefits payable to the employee, to his dependent or dependents, or to any of his beneficiaries under the retirement system.

(cf: P.L.1986, c.139, s.1)

 

    7. Section 39 of P.L.1954, c.84 (C.43:15A-39) is amended to read as follows:

    39. In computing for retirement purposes the total service as a member about to be retired, the retirement system shall credit him with the time of all service rendered by him since he last became a member, and in addition with all the service to which he is entitled and with no other service. Except as otherwise provided in this act, such service credit shall be final and conclusive for retirement purposes unless the member shall discontinue his service for more than two consecutive years.

    For the purpose of computing service for retirement purposes, the board shall fix and determine by appropriate rules and regulations how much service in any year shall equal a year of service and a part of a year of service. Not more than one year shall be credited for all service in a calendar year. In computing service, time during which a member was absent on an official leave without pay shall be credited, if such absence was for a period of (1) less than three months, or (2) up to a maximum of two years if the leave was due to the member's personal illness or maternity and the period of leave is allowed for retirement purposes within one year following his return to service after the termination of such leave, or (3) the period of leave was specifically allowed for retirement purposes by the provisions of any law of this State. The method of computation, the terms of the purchase and credit granted shall be identical to those stipulated for the purchase of previous membership service by members of the system as provided by section 8 (C.43:15A-8). In computing the service or in computing final compensation no time during which a member was in employment, office, or position, for which the annual salary or remuneration was fixed at less than[$1,500.00,] $3,000 shall be credited, except that in the case of a veteran member credit shall be given for service rendered prior to January 2, 1955, in an employment, office or position if the annual salary or remuneration therefor was fixed at not less than $300.00 and such service consisted of the performance of the full duties of such employment, office or position and in the case of a member who served in an elected municipal office credit shall be given if the annual salary or remuneration was at least $1,500.

    A member may not receive credit for service during the year immediately preceding retirement, except for disability retirement, for any period of sick leave which did not accrue in that year unless the employer certifies to the board of trustees that the member is incapable of performing the duties of the member's position or any other work the employer is willing to give the member during the period of the leave because of physical or mental incapacity and provides information satisfactory to the board of the physical or mental incapacity. The board shall refer such a case to the medical board for its opinion on the physical or mental incapacity of the member and shall require the member to have an examination by a physician designated by the board before service credit for the sick leave is approved.

(cf: P.L.1986, c.139, s.2)

 

    8. Section 65 of P.L.1954, c.84 (C.43:15A-65) is amended to read as follows:

    65. (a) All employees of any public agency or organization of this State, which employs persons engaged in service to the public, shall be eligible to participate in the Public Employees' Retirement System; provided the employer consents thereto by resolution and files a certified copy of such resolution with the board of trustees of the Public Employees' Retirement System and the board of trustees approves thereof by resolution. Such organization shall be referred to in this act as the employer. If the participation of such employees is so approved then the employer shall contribute to the contingent reserve fund on account of its members at the same rate per centum as would be paid by employers other than the State.

    (b) Notwithstanding the provisions of subsection (a) of this section, every person becoming an employee of a public agency or organization of this State, which employs persons engaged in service to the public, after June 30, 1966, who is not eligible to become a member of any other retirement system, shall be required to participate in the Public Employees' Retirement System. Notwithstanding the provisions of subsection (a) of this section, membership in the Public Employees' Retirement System shall be optional with any person in the employ of any such public agency or organization on June 30, 1966, provided such person is not required to be a member pursuant to another provision of this act, and provided further that such person is not eligible to be a member of any other retirement system. The provisions of this subsection shall not apply to any person whose position is temporary or seasonal, nor to any person in office, position or employment for which the annual salary or remuneration is fixed at less than[$1,500.00] $3,000, or less than $1,500 in the case of an elected municipal official, nor to any person whose position is not covered by the old-age and survivors' insurance provisions of the federal Social Security Act. The public agency or organization employing any such person who becomes a member of the retirement system pursuant to this subsection shall contribute to the contingent reserve fund on account of such employees at the same rate per centum as would be paid by employers other than the State.

(cf: P.L.1986, c.139, s.3)

 

    9. Section 75 of P.L.1954, c.84 (C.43:15A-75) is amended to read as follows:

    75. (a) If this act is so adopted it shall become effective in the county or municipality adopting it on June 30 of the following year. Membership in the Public Employees' Retirement System shall be optional with the employees of the county, board of education or municipality in the service on the day the act becomes effective or on June 30, 1966, whichever is earlier, in such county, board of education or municipality except in the case of public employee veterans who on such date are members. An employee who elects to become a member within one year after this act so takes effect shall be entitled to prior service covering service rendered to the county, board of education or municipality prior to July 1, 1966 or prior to the date this act so becomes effective, whichever is earlier. Membership shall be compulsory for all employees entering the service of the county, board of education or municipality on July 1, 1966 or after the date this act becomes effective, whichever is earlier. Where any such employee entering the service of the county, board of education of education or municipality after the date this act so becomes effective has had prior service for which evidence satisfactory to the retirement system is presented, as an employee in such county, board of education or municipality before the date upon which this act so becomes effective, or July 1, 1966, whichever is earlier, such employee shall be entitled to prior service covering service rendered to the county, board of education or municipality prior to the date this act so becomes effective, or July 1, 1966, whichever is earlier.

    (b) Notwithstanding the provisions of section 74 of this act and subsection (a) of this section, every person, other than a non-veteran elected official, becoming an employee of a county, board of education, municipality or school district after June 30, 1966, who is not eligible to become a member of another retirement system, shall be required to become a member of the Public Employees' Retirement System. Notwithstanding the provisions of section 74 of this act and subsection (a) of this section, membership in the retirement system shall be optional with any elected official who is not a veteran, regardless of the date he assumes office, and with any other person in the employ of any county, board of education, municipality or school district on June 30, 1966, provided such elected official or other person is not then a member and is not required to be a member of the retirement system pursuant to another provision of this act, and provided further that such person is not eligible to be a member of another retirement system. The provisions of this subsection shall not apply to any person whose position is temporary or seasonal, nor to any person in office, position or employment for which the annual salary or remuneration is fixed at less than[$1,500.00] $3,000, or less than $1,500 in the case of an elected municipal official, nor to any person whose position is not covered by the old age and survivors' insurance provisions of the federal Social Security Act. No credit shall be allowed to any person becoming a member of the retirement system pursuant to this subsection for service rendered to the employer prior to July 1, 1966, until the provisions of section 74 of this act have been complied with, in which event such credit shall be allowed in accordance with the provisions of subsection (a) of this section; except that the governing body of any county, board of education or municipality may, by resolution, consent to the allowance of such credit and file a certified copy of such resolution with the board of trustees of the Public Employees' Retirement System.

(cf: P.L.1986, c.139, s.4)

 

     10. Section 1 of P.L.1944, c.255 (C.43:16A-1) is amended to read as follows:

    1. As used in this act:

    (1) "Retirement system" shall mean the Police and Firemen's Retirement System of New Jersey as defined in section 2 of this act.

    (2) (a) "Policeman" shall mean a permanent, full-time employee of a law enforcement unit as defined in section 2 of P.L.1961, c.56 (C.52:17B-67) or the State, other than an officer or trooper of the Division of State Police whose position is covered by the State Police Retirement System, whose primary duties include the investigation, apprehension or detention of persons suspected or convicted of violating the criminal laws of the State and who:

    (i) is authorized to carry a firearm while engaged in the actual performance of his official duties;

    (ii) has police powers;

    (iii) is required to complete successfully the training requirements prescribed by P.L.1961, c.56 (C.52:17B-66 et seq.) or comparable training requirements as determined by the board of trustees; and

    (iv) is subject to the physical and mental fitness requirements applicable to the position of municipal police officer established by an agency authorized to establish these requirements on a Statewide basis, or comparable physical and mental fitness requirements as determined by the board of trustees.

    The term shall also include an administrative or supervisory employee of a law enforcement unit or the State whose duties include general or direct supervision of employees engaged in investigation, apprehension or detention activities or training responsibility for these employees and a requirement for engagement in investigation, apprehension or detention activities if necessary, and who is authorized to carry a firearm while in the actual performance of his official duties and has police powers.

    (b) "Fireman" shall mean a permanent, full-time employee of a firefighting unit whose primary duties include the control and extinguishment of fires and who is subject to the training and physical and mental fitness requirements applicable to the position of municipal firefighter established by an agency authorized to establish these requirements on a Statewide basis, or comparable training and physical and mental fitness requirements as determined by the board of trustees. The term shall also include an administrative or supervisory employee of a firefighting unit whose duties include general or direct supervision of employees engaged in fire control and extinguishment activities or training responsibility for these employees and a requirement for engagement in fire control and extinguishment activities if necessary. As used in this paragraph, "firefighting unit" shall mean a municipal fire department, a fire district, or an agency of a county or the State which is responsible for control and extinguishment of fires.

    (3) "Member" shall mean any policeman or fireman included in the membership of the retirement system pursuant to this amendatory and supplementary act, P.L.1989, c.204 (C.43:16A-15.6 et al.).

    (4) "Board of trustees" or "board" shall mean the board provided for in section 13 of this act.

    (5) "Medical board" shall mean the board of physicians provided for in section 13 of this act.

    (6) "Employer" shall mean the State of New Jersey, the county, municipality or political subdivision thereof which pays the particular policeman or fireman.

    (7) "Service" shall mean service as a policeman or fireman paid for by an employer.

    (8) "Creditable service" shall mean service rendered for which credit is allowed as provided under section 4 of this act.

    (9) "Regular interest" shall mean interest as determined annually by the State Treasurer after consultation with the Directors of the Divisions of Investment and Pensions and the actuary of the system. It shall bear a reasonable relationship to the percentage rate of earnings on investments but shall not exceed 105% of such percentage rate.

    (10) "Aggregate contributions" shall mean the sum of all the amounts, deducted from the compensation of a member or contributed by him or on his behalf, standing to the credit of his individual account in the annuity savings fund.

    (11) "Annuity" shall mean payments for life derived from the aggregate contributions of a member.

    (12) "Pension" shall mean payments for life derived from contributions by the employer.

    (13) "Retirement allowance" shall mean the pension plus the annuity.

    (14) "Earnable compensation" shall mean the full rate of the salary that would be payable to an employee if he worked the full normal working time for his position. In cases where salary includes maintenance, the retirement system shall fix the value of that part of the salary not paid in money which shall be considered under this act.

    (15) "Average final compensation" shall mean the average annual salary upon which contributions are made for the three years of creditable service immediately preceding his retirement or death, or it shall mean the average annual salary for which contributions are made during any three fiscal years of his or her membership providing the largest possible benefit to the member or his beneficiary.

    (16) "Retirement" shall mean the termination of the member's active service with a retirement allowance granted and paid under the provisions of this act.

    (17) "Annuity reserve" shall mean the present value of all payments to be made on account of any annuity or benefit in lieu of any annuity computed upon the basis of such mortality tables recommended by the actuary as shall be adopted by the board of trustees, and regular interest.

    (18) "Pension reserve" shall mean the present value of all payments to be made on account of any pension or benefit in lieu of any pension computed upon the basis of such mortality tables recommended by the actuary as shall be adopted by the board of trustees, and regular interest.

    (19) "Actuarial equivalent" shall mean a benefit of equal value when computed upon the basis of such mortality tables recommended by the actuary as shall be adopted by the board of trustees, and regular interest.

    (20) "Beneficiary" shall mean any person receiving a retirement allowance or other benefit as provided by this act.

    (21) "Child" shall mean a deceased member's or retirant's unmarried child (a) under the age of 18, or (b) 18 years of age or older and enrolled in a secondary school, or (c) under the age of 24 and enrolled in a degree program in an institution of higher education for at least 12 credit hours in each semester, provided that the member died in active service as a result of an accident met in the actual performance of duty at some definite time and place, and the death was not the result of the member's willful misconduct, or (d) of any age who, at the time of the member's or retirant's death, is disabled because of mental retardation or physical incapacity, is unable to do any substantial, gainful work because of the impairment and his impairment has lasted or can be expected to last for a continuous period of not less than 12 months, as affirmed by the medical board.

    (22) "Parent" shall mean the parent of a member who was receiving at least one-half of his support from the member in the 12-month period immediately preceding the member's death or the accident which was the direct cause of the member's death. The dependency of such a parent will be considered terminated by marriage of the parent subsequent to the death of the member.

    (23) "Widower" shall mean the man to whom a member or retirant was married at least two years before the date of her death and to whom she continued to be married until the date of her death and who was receiving at least one-half of his support from the member or retirant in the 12-month period immediately preceding the member's or retirant's death or the accident which was the direct cause of the member's death. The dependency of such a widower will be considered terminated by marriage of the widower subsequent to the death of the member or retirant. In the event of the payment of an accidental death benefit, the two-year qualification shall be waived.

    (24) "Widow" shall mean the woman to whom a member or retirant was married at least two years before the date of his death and to whom he continued to be married until the date of his death and who has not remarried. In the event of the payment of an accidental death benefit, the two-year qualification shall be waived.

    (25) "Fiscal year" shall mean any year commencing with July 1, and ending with June 30, next following.

    (26) "Compensation" shall mean the base salary, for services as a member as defined in this act, which is in accordance with established salary policies of the member's employer for all employees in the same position but shall not include individual salary adjustments which are granted primarily in anticipation of the member's retirement [or], additional remuneration for performing temporary duties beyond the regular workday, or salary paid on a per diem basis. It does not include that portion of salary in the last three years of creditable service which exceeds the salary in the immediately preceding year of creditable service by more than 10 per cent.

    (27) "Department" shall mean any police or fire department of a municipality or a fire department of a fire district located in a township or a county police or park police department or the appropriate department of the State or instrumentality thereof.

    (28) "Final compensation" means the compensation received by the member in the last 12 months of creditable service preceding his retirement.

(cf: P.L.1989, c.204, s.1)

 

    11. Section 4 of P.L.1944, c.255 (C.43:16A-4) is amended to read as follows:

    4. Only service as a policeman or fireman paid for by an employer, which was rendered by a member since he became a member, or, since he last became a member in case of a break in service, plus service, if any, covered by a prior service liability, shall be considered as creditable service for the purposes of this act, except that temporary service as a policeman or fireman may also be considered as creditable service if it results, without interruption, in a valid permanent or probational appointment as a policeman or fireman and the member agrees during his first year of membership in the retirement system, or within 1 year after the effective date of this 1975 amendatory act, to make contributions covering such temporary service on the basis of rates established by the actuary.

    A member may not receive credit for service during the year immediately preceding retirement, except for disability retirement, for any period of sick leave which did not accrue in that year unless the employer certifies to the board of trustees that the member is incapable of performing the duties of the member's position or any other work the employer is willing to give the member during the period of the leave because of physical or mental incapacity and provides information satisfactory to the board of the physical or mental incapacity. The board shall refer such a case to the medical board for its opinion on the physical or mental incapacity of the member and shall require the member to have an examination by a physician designated by the board before service credit for the sick leave is approved.

(cf: P.L.1975, c.388, s.1)

 

    12. Section 3 of P.L.1965, c.89 (C.53:5A-3) is amended to read as follows:

    3. As used in this act:

    a. "Aggregate contributions" means the sum of all the amounts, deducted from the salary of a member or contributed by him or on his behalf, standing to the credit of his individual account in the Annuity Savings Fund. Interest credited on contributions to the former "State Police Retirement and Benevolent Fund" shall be included in a member's aggregate contributions.

    b. "Annuity" means payments for life derived from the aggregate contributions of a member.

    c. "Annuity reserve" means the present value of all payments to be made on account of any annuity or benefit in lieu of an annuity, computed upon the basis of such mortality tables recommended by the actuary as the board of trustees adopts and regular interest.

    d. "Beneficiary" means any person entitled to receive any benefit pursuant to the provisions of this act by reason of the death of a member or retirant.

    e. "Board of trustees" or "board" means the board provided for in section 30 of this act.

    f. "Child" means a deceased member's or retirant's unmarried child either (a) under the age of 18 or (b) of any age who, at the time of the member's or retirant's death, is disabled because of mental retardation or physical incapacity, is unable to do any substantial, gainful work because of the impairment and his impairment has lasted or can be expected to last for a continuous period of not less than 12 months, as affirmed by the medical board.

    g. "Creditable service" means service rendered for which credit is allowed on the basis of contributions made by the member or the State.

    h. "Parent" means the parent of a member who was receiving at least one-half of his support from the member in the 12-month period immediately preceding the member's death or the accident which was the direct cause of the member's death. The dependency of such a parent will be considered terminated by marriage of the parent subsequent to the death of the member.

    i. "Final compensation" means the average compensation received by the member in the last 12 months of creditable service preceding his retirement or death. Such term includes the value of the member's maintenance allowance for this same period.

    j. "Final salary" means the average salary received by the member in the last 12 months of creditable service preceding his retirement or death. Such term shall not include the value of the member's maintenance allowance.

    k. "Fiscal year" means any year commencing with July 1 and ending with June 30 next following.

    l. "Medical board" means the board of physicians provided for in section 30 of this act.

    m. "Member" means any full-time, commissioned officer, non-commissioned officer or trooper of the Division of State Police of the Department of Law and Public Safety of the State of New Jersey enrolled in the retirement system established by this act.

    n. "Pension" means payment for life derived from contributions by the State.

    o. "Pension reserve" means the present value of all payments to be made on account of any pension or benefit in lieu of any pension computed on the basis of such mortality tables recommended by the actuary as shall be adopted by the board of trustees and regular interest. p. "Regular interest" means interest as determined annually by the State Treasurer after consultation with the Directors of the Divisions of Investment and Pensions and the actuary of the system. It shall bear a reasonable relationship to the percentage rate of earnings on investments but shall not exceed 105% of such percentage rate.

    q. "Retirant" means any former member receiving a retirement allowance as provided by this act.

    r. "Retirement allowance" means the pension plus the annuity.

    s. "State Police Retirement System of New Jersey," herein also referred to as the "retirement system," is the corporate name of the arrangement for the payment of retirement allowances and of the benefits under the provisions of this act including the several funds placed under said system. By that name, all of its business shall be transacted, its funds invested, warrants for moneys drawn, and payments made and all of its cash and securities and other property held. All assets held in the name of the former "State Police Retirement and Benevolent Fund" shall be transferred to the retirement system established by this act.

    t. "Surviving spouse" means the person to whom a member or a retirant was married on the date of the death of the member or retirant. The dependency of such a surviving spouse will be considered terminated by the marriage of the surviving spouse subsequent to the member's or the retirant's death.

    u. "Compensation" for purposes of computing pension contributions means the base salary, for services as a member as defined in this act, which is in accordance with established salary policies of the State for all employees in the same position but shall not include individual salary adjustments which are granted primarily in anticipation of the member's retirement [or], additional remuneration for performing temporary duties beyond the regular work day or shift, or salary paid on a per diem basis. It does not include that portion of salary in the last three years of creditable service which exceeds the salary in the immediately preceding year of creditable service by more than 10 per cent.

(cf: P.L.1985, c.355, s.1)

 

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

    6. a. Service as a full-time commissioned officer, noncommissioned officer or trooper rendered as a member, and service credit which was transferred from the former "State Police Retirement and Benevolent Fund," shall, if the required contributions are made by the State and the member, be considered as creditable service. In addition, service as a chief inspector, deputy chief inspector, inspector and special inspector in the Division of Motor Vehicles or equivalent Civil Service classifications, including Chief, Highway Patrol Bureau; Assistant Chief (Major), Highway Patrol Bureau; Captain, Highway Patrol Bureau; Lieutenant, Highway Patrol Bureau; Sergeant, Highway Patrol Bureau; and Officer, Highway Patrol Bureau, and service credit may be transferred from the Police and Firemen's Retirement System and the Public Employees' Retirement System and shall, if the required contributions are made by the State and the member, be considered as creditable service. A member on suspension shall be considered in service for the period of the suspension, but the period of suspension shall not be considered as creditable service unless the member receives salary therefor.

    If an employee's membership has been terminated and he is re-enrolled as a member of the retirement system, he may purchase credit for all of his previous membership service by paying into the annuity savings fund the amount required by applying the factor, supplied by the actuary, as being applicable to his age at the time of the purchase, to his salary at that time. Such purchase may be made in regular installments equal to at least 1/2 the normal contribution to the retirement system, over a maximum period of 10 years. In order to give to such person the same credit for such service as he had at the time of termination, his pension credit shall be restored as it was at the time of his termination, upon the completion of 1 year of membership after his election to make the purchase and the payment of at least 1/2 the total amount due, except that in the case of retirement pursuant to sections 8, 27 and 28 of chapter 89 of the laws of 1965, the credit granted for the service being purchased shall be in direct proportion as the amount paid bears to the total amount of the arrearage obligation.

    b. Any member of the retirement system, who, prior to becoming a member, had established service credits in another retirement system supported in whole or in part by the State, or who had rendered service to the State prior to becoming a member, or had purchased service credits while in the Police and Firemen's Retirement System or the Public Employees' Retirement System, while serving as chief inspector, deputy chief inspector, inspector or special inspector in the Enforcement Bureau, Division of Motor Vehicles, for which he desires to establish credit in this retirement system, shall be permitted to purchase such credit or to transfer such previously purchased credit. If such credit is established, it shall be included in the computation of a retirement allowance on the basis of 1% of final compensation for each year of such service credit.

    c. Not more than 1 year shall be credited for all service in a calendar year.

    d. In computing service, time during which a member was absent on an official leave without pay shall be credited if such leave was for a period of: (1) less than 3 months; or (2) up to a maximum of 2 years, if the leave was due to the member's personal illness and the period of leave is allowed for retirement purposes within 1 year following his return to service after the termination of such leave.

    e. The method of computation and the terms of the purchase of service permitted by subsections b. and d. of this section shall be identical to those stipulated for the purchase of previous membership service by members of the system, as provided by subsection a. of this section.

    f. A member may not receive credit for service during the year immediately preceding retirement, except for disability retirement, for any period of sick leave which did not accrue in that year unless the employer certifies to the board of trustees that the member is incapable of performing the duties of the member's position or any other work the employer is willing to give the member during the period of the leave because of physical or mental incapacity and provides information satisfactory to the board of the physical or mental incapacity. The board shall refer such a case to the medical board for its opinion on the physical or mental incapacity of the member and shall require the member to have an examination by a physician designated by the board before service credit for the sick leave is approved.

(cf: P.L.1983, c.403, s.38)

 

    14. (New section) A public authority, board, commission, agency or other instrumentality established under the law of this State which is authorized to participate in a retirement system established under the laws of this State may not provide additional or supplemental retirement benefits paid in whole or in part by the public body unless specifically authorized by law.

 

    15. This act shall take effect on the first day of the first full calendar month which is more than 90 days after the date of enactment.

 

 

STATEMENT

 

    This bill eliminates the potential for certain abuses in the calculation of retirement allowances in the major State-administered retirement systems. It amends the statutes governing the Teachers' Pension and Annuity Fund (TPAF), the Public Employees' Retirement System (PERS), the Police and Firemen's Retirement System (PFRS), and the State Police Retirement System (SPRS).

    One of the major problems faced by these systems is extraordinary salary increases received by members near the time of retirement which result in extraordinary increases in retirement allowances granted to the members. Actuarial tables assume that a member will receive salary increases of 5% to 5 1/2% over the span of a career. When a member receives a salary increase near retirement which is substantially greater than this assumption, the moneys contributed by the member and the employer of the member are not sufficient to fund the retirement allowance, and the cost of the shortfall must be paid by the participating employers. This bill addresses the problem by limiting salary increases which may be used in the calculation of retirement allowances to 10% a year for the three years immediately preceding retirement.

    Another problem, which exists primarily in PERS, is the ability to earn credit in the retirement system on the basis of a very low salary. Certain types of professional employees, such as attorneys or doctors, participate in the system on a low salary, but earn a substantial amount of additional compensation on a fee or voucher basis. This additional compensation is not creditable for pension purposes and is not subject to employee contributions. Near retirement, these employees often take full-time positions and obtain retirement allowances based upon the substantially higher salaries of those positions. This bill addresses the problem in two ways. First, the minimum salary for participation in PERS and TPAF is raised to $3,000. Second, if an employee is paid in whole or in part on a voucher, fee schedule, or basis other than regular salary payments, the total amount of the payments shall be included for pension purposes and shall be subject to pension contributions.

    The abuse of sick leave is another problem which needs to be addressed. Employees with a substantial amount of accrued sick leave can often take an extended sick leave on full salary near the time of retirement. As long as they remain on the payroll, they continue to receive pension credit for this time. Sick leave is not an unconditional grant of leave to public employees, however, but rather a benefit to be used in the actual event of illness. This bill provides that a member may not receive credit for sick leave in the year before retirement, except for disability retirement, which did not accrue in that year unless the employer certifies that the employee was actually physically or mentally incapable of performing the duties of the member's position. Provision is made to refer these cases to the medical board of a retirement system for its opinion.

    Another problem arises from participation in a retirement system, primarily PERS, by persons who receive per diem compensation. If this compensation is at least the minimum required for enrollment, these persons become members of the retirement system. This provides another opportunity, however, for persons to earn cheap service credit which is then used to gain a substantial retirement allowance based upon the salary of a full-time position obtained near the time of retirement. Under the provisions of this bill, per diem compensation is excluded from the compensation used in the calculation of a retirement allowance.

    Finally, some of the autonomous public authorities and commissions which participate in State-administered retirement systems also provide additional retirement benefits at the employer's expense. Employees of the State and local governments cannot receive similar benefits. This bill provides that any autonomous body which participates in a State-administered retirement system may not provide additional or supplemental benefits paid in whole or in part by the employer unless specifically authorized by law.

 

 

 

Eliminates potential for certain abuses in calculation of retirement allowance in TPAF, PERS, PFRS and SPRS.