ASSEMBLY STATE GOVERNMENT COMMITTEE

STATEMENT TO

[First Reprint]

SENATE, No. 84

STATE OF NEW JERSEY

DATED: JUNE 10, 1996

      The Assembly State Government Committee reports favorably Senate, No. 84(1R).

      This bill makes membership in the Public Employees' Retirement System (PERS) optional for a special service employee employed under the federal Older American Community Service Employment Act. Any such employee who is in the retirement system on the effective date of this act may terminate membership in the retirement system by making an application in writing to the board of trustees of the retirement system. Upon receiving the application, the board shall terminate enrollment in the system and the member shall receive a refund of accumulated deductions from the date of commencement of employment in a program under the Act. This refund shall serve as a waiver of all benefits payable under the retirement system.

      The employees to whom this bill applies are at least 55 years of age and receive minimum wages for part-time employment under the Senior Community Service Employment Program which is administered by the Division on Aging in the Department of Community Affairs. According to the sponsor's statement to the bill, the program employs approximately 580 persons who are at or near the poverty level. The program's budget is comprised of 90% federal funds and 10% State matching funds. Program participants receive the minimum wage for an average of 20 hours work per week. According to the Division on Aging, enrollment of these persons in PERS imposes an economic hardship due to the age of the employees and the limited income they derive from this employment.