SENATE, No. 792

STATE OF NEW JERSEY

INTRODUCED FEBRUARY 15, 1996

By Senator BASSANO

An Act concerning membership in the Public Employees' Retirement System and amending and supplementing P.L.1954, c.84 and P.L.1972, c.167.

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

    1.    Section 25 of P.L.1954, c.84 (C.43:15A-25) is amended to read as follows:

    25. The annuity savings fund shall be the fund in which shall be credited accumulated deductions and contributions by members or on their behalf to provide for their allowances. A single account shall be established in this fund for each person who is or shall become a member and all contributions deducted from each such member's compensation shall be credited to his single account [regardless of the number of positions a member might hold or the number of employers as he might have] in accordance with the provisions of section 2 of P.L. , c. (C. ) (now pending before the Legislature as this bill).

    Members enrolled in the retirement system on or after July 1, 1994 shall contribute 5% of compensation to the system. Members enrolled in the system prior to July 1, 1994 shall contribute 5% of compensation to the system effective with the payroll period for which the beginning date is closest to July 1, 1995, provided, however, that any member enrolled before July 1, 1994, whose full contribution rate under the system prior to the revisions by this act was less than 6%, shall pay 4% of compensation to the system effective with the payroll period for which the beginning date is closest to July 1, 1995, and 5% of compensation to the system effective with the payroll period for which the beginning date is closest to July 1, 1996.

    The retirement system shall certify to each State department or subdivision thereof, and to each branch of the State service not included in a State department, and to every other employer, the proportion of each member's compensation to be deducted and to facilitate the making of deductions the retirement system may modify the deduction required by a member by such an amount as shall not exceed 1/10 of 1% of the compensation upon the basis of which the deduction is to be made.

    If payment in full, representing the monthly or biweekly transmittal and report of salary deductions, is not made within 15 days of the due date established by the retirement system, interest at the rate of 6% per annum shall commence to run against the total transmittal of salary deductions for the period on the first day after such fifteenth day.

    Every employee to whom this act applies shall be deemed to consent and agree to any deduction from his compensation required by this act and to all other provisions of this act. Notwithstanding any other law, rule or regulation affecting the salary, pay, compensation, other perquisites, or tenure of a person to whom this act applies, or shall apply, and notwithstanding that the minimum salary, pay, or compensation or other perquisites provided by law for him shall be reduced thereby, payment, less such deductions, shall be a full and complete discharge and acquittance of all claims and demands for service rendered by him during the period covered by such payment.

(cf: P.L.1994, c.62, s.9)

    2.    (New section) a. Any person who is or becomes a member of the retirement system and becomes employed in more than one position covered by the retirement system or commences covered employment with more than one employer shall be eligible for membership in the retirement system based upon only one position, which shall be designated by the person. Contributions shall be deducted only from the member's compensation for the position so designated and shall be credited to the member's single account established pursuant to section 25 of P.L.1954, c.84 (C.43:15A-25). The decision of a member to designate one of the member's positions as the basis of membership in the retirement system shall be irrevocable as between or among the positions held at the time the designation is made. However, a member who, after making a designation, acquires a different or additional position may make a new designation from among the positions then held. Service in a position other than the designated position shall not be deemed creditable service for the purposes of the retirement system.

    b.    The provisions of subsection a. of this section shall not apply to any member of the retirement system who, on the effective date of P.L. , c. (C. ) (now pending before the Legislature as this bill), holds more than one position covered by the retirement system or has covered employment with more than one employer while the member holds more than one of those positions.

    3.    Section 2 of P.L.1972, c.167 (C.43:15A-136) is amended to read as follows:

    2.    Notwithstanding the provisions of P.L.1954, c.84, s.25 (C.43:15A-25), (a) a separate account shall be established in the annuity savings fund for each person who served as a member of the Legislature on or before the effective date of P.L. , c. (C. ) (now pending before the Legislature as this bill) and all contributions based on legislative salaries shall be credited to this account as distinguished from any other account that the legislator may have as a result of other public service covered by the retirement system; [and] (b) a separate account shall be established in the annuity savings fund for each member of the Legislature who commences service in the Legislature for the first time after the effective date of P.L. , c. (C. ) (now pending before the Legislature as this bill) and who either: (1) does not hold another position or other employment covered by the retirement system, or (2) holds another position or employment covered by the retirement system but, pursuant to section 4 of P.L. , c. (C. ) (now pending before the Legislature as this bill), designates the legislative position as the basis for membership in the retirement system; and (c) the member of the Legislature shall contribute at a rate equal to 5% of his legislative salary, which contribution shall be deducted from his salary at the time or times it is paid, and which shall be exclusive of any other contribution required of the member for Social Security, contributory death benefits or deductions for any other purpose.

    A member of the Legislature who is enrolled on the basis of other public service before, during, or after his service as a member of the Legislature shall contribute for such other service at the rate of contribution required of other members as provided by section 25.

(cf: P.L.1972, c.167, s.2)

    4.    (New section) a. Any person who, after the effective date of P.L. , c. (C. ) (now pending before the Legislature as this bill), commences service for the first time as a member of the Legislature and who is, or becomes, employed in one or more other positions covered by the retirement system or who holds, or commences, covered employment with one or more other employers, shall be eligible for membership in the retirement system based upon only one position which shall be designated by the member. Contributions shall be deducted only from the member's compensation for the position so designated and shall be credited to the member's single account established pursuant to section 25 of P.L.1954, c.84 (C.43:15A-25) if the member chooses to contribute on the basis of his non-legislative position or to the member's legislative account established pursuant to section 2 of P.L.1972, c.167 (C.43:15A-136). Any benefit to which a member may be entitled based upon contributions to either account shall be determined separately. Notwithstanding the provisions of subsection a. of section 41 of P.L.1954, c.84 (C.43:15A-41), a person who, upon becoming a member of the Legislature, holds other covered employment but chooses to be enrolled in the retirement system by virtue of service in the Legislature, shall not be required to withdraw the member's contributions in the account established pursuant to section 25 of P.L.1954, c.84 (43:15A-25) until two years from the date the member discontinues service in the Legislature. If, prior to two years after discontinuing service in the Legislature, such a member is employed in the same or another position covered by the retirement system, the member shall be reenrolled in the system based on that position at the contribution rate which was previously applicable to the member.

    b.    The provisions of subsection a. of this section shall not apply to any person who served as a member of the Legislature on or before the effective date of P.L. , c. (C. ) (now pending before the Legislature as this bill).

    5.    Section 6 of P.L.1972, c.167 (C.43:15A-140) is amended to read as follows:

    6. a. A member making contributions pursuant to the provisions of this supplementary act and who is not eligible for any benefits hereunder, may, upon termination of such service as a member of the Legislature, elect to receive the return of his accumulated contributions in accordance with the provisions of P.L.1954, c. 84, s. 41a (C. 43:15A-41a); but if a member of the Legislature is a member of the retirement system on the basis of other public service, no application for a return of contributions may be approved until he has terminated all service covered by the system and makes application for a return of all contributions made to the retirement system. If all or any part of a member's legislative service is applied toward qualifying for benefits under any other provisions of the act to which this act is a supplement, no return of contributions made on the basis of legislative salaries shall be approved; in that event service established as a member of the Legislature and salaries pertaining thereto shall be credited in the same manner as all other service and salaries covered by the retirement system.

    b. At the time of retirement, a member who served in the Legislature on or before the effective date of this act, P.L. , c. (C. ) (now pending before the Legislature as this bill) and who is enrolled on the basis of legislative as well as other public service shall be permitted to elect the largest possible retirement allowance, if he qualifies for benefits under both the provisions of this supplementary act and the act to which this is a supplement. Upon the election of the legislative retirement benefits provided by this supplementary act, an application for a return of contributions made on the basis of such other public service may be approved.

    c. A member of the Legislature electing to receive a retirement allowance under this supplementary act or the act to which this is a supplement shall be ineligible to receive a retirement allowance or pension for the same service under any other law of the State.

(cf: P.L.1972, c.167, s.6)

    6.    This act shall take effect immediately.

STATEMENT

    This bill provides that any person who, after the bill's effective date, becomes employed in more than one position covered by the Public Employees' Retirement System (PERS) would be required to designate only one position as the basis of the member's enrollment in PERS. At present, a member holding multiple covered positions makes contributions to the retirement system for each position and the member's retirement benefit is calculated using the combined salaries of the positions. Under the bill, contributions would be deducted only from the member's compensation for the position designated and the member's retirement benefit would be calculated based solely on the compensation for the designated position. The bill's provisions would not apply to any person who, on the bill's effective date, already holds more than one covered position while the person continues to hold more than one of those positions.

    This bill also provides that a person commencing service after the bill's effective date as a member of the Legislature who holds one or more other positions covered by the retirement system would have to choose between enrollment in the system based on either service in the Legislature or one of the other positions. The pension status of members of the Legislature who served on or before the bill's effective date would not be affected.

Provides that PERS member holding more than one position covered by the retirement system would have to designate one position as the basis for enrollment.