SENATE, No. 1752

 

STATE OF NEW JERSEY

 

INTRODUCED DECEMBER 19, 1996

 

 

By Senator PALAIA

 

 

An Act concerning early retirement incentives for certain members of the Public Employees' Retirement System and the Teachers' Pension and Annuity Fund who are employed by school boards, educational services commissions and jointure commissions.

 

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

 

    1. Upon the adoption by resolution of the provisions of this act on or before December 31, 1997 by a school board, educational services commission or jointure commission, and written notification by the school board, educational services commission or jointure commission to the board of trustees of the Public Employees' Retirement System (PERS), the Teachers' Pension and Annuity Fund (TPAF), or both, as appropriate, and to the State Health Benefits Commission established by section 3 of P.L.1961, c.49 (C.52:14-17.27), on or before January 1, 1998, that the school board, educational services commission or jointure commission has so adopted those provisions, an employee of that school board, educational services commission or jointure commission who:

    a. is at least 50 years of age and has at least 25 years of service credit under the Public Employees' Retirement System (PERS) or the Teachers' Pension and Annuity Fund (TPAF);

    b. files an application to retire on or after January 1, 1998 and on or before June 1, 1998; and

    c. retires under the retirement system on or after February 1, 1998, but not later than July 1, 1998, other than a veteran who retires on a special veteran's retirement, shall receive an additional five years of service credit under PERS or TPAF.

    An employee who meets the age and service credit requirements and retires on a special veteran's retirement under PERS or TPAF shall receive an additional pension under the retirement system in the amount of 5/60 of final year compensation. The additional retirement benefit under this section is applicable only to the employment with the employer which elects to provide the benefits authorized under this section and from which the employee retires to receive the benefit and the compensation for that employment.

    A resolution adopting the provisions of this act shall provide for extension of the benefits coverage provided hereunder to all eligible employees of the school board, educational services commission or jointure commission, and any such resolution which would extend such coverage only to some of those employees or exclude some of those employees from such coverage shall be void.

    Any former employee on January 1, 1998 of a school board, educational services commission or jointure commission that has adopted the provisions of this act who retired under PERS or TPAF on or after July 1, 1997 and on or before January 1, 1998 and who, at the time of retirement, met the age and service requirements specified in subsection a. of this section shall receive, effective January 1, 1998, the appropriate additional retirement benefits provided under this section.

 

    2. For an employee of a school board, educational services commission or jointure commission which shall have adopted the provisions of this act and given notice thereof as provided in section 1 who:

    a. is at least 60 years of age and has at least 20, but less than 25, years of service credit under the Public Employees' Retirement System (PERS) or the Teachers' Pension and Annuity Fund (TPAF);

    b. files an application to retire on or after January 1, 1998 and on or before June 1, 1998; and

    c. retires under the retirement system on or after February 1, 1998, but not later than July 1, 1998, the retired employee and that employee's dependents, but not including survivors, shall be eligible for the benefits provided under the "New Jersey State Health Benefits Program Act," P.L.1961, c.49 (C.52:14-17.25 et seq.) in the same manner provided for retired State employees under subsection c. of section 8 of that act (C.52:14-17.32). Any former employee on January 1, 1998 of a school board, educational services commission or jointure commission that has adopted the provisions of this act who retired under PERS or TPAF on or after July 1, 1997 and on or before January 1, 1998 and who, at the time of retirement, met the age and service requirements specified in subsection a. of this section shall also be eligible, effective January 1, 1998, for the benefits provided under this section. For each retired employee and for that employee's eligible dependents, the school board, educational services commission or jointure commission, as the case may be, shall pay the premium or periodic charges for benefits provided under this section to that retired employee and the employee's dependents, but not including survivors, in the same manner as provided for payment by the State of the premium or charges with respect to active covered State employees and their dependents under section 6 of P.L.1961, c.49 (C.52:14-17.30).

 

    3. For an employee of a school board, educational services commission or jointure commission which shall have adopted the provisions of this act and given notice thereof as provided in section 1 who:

    a. is at least 60 years of age and has at least 10, but less than 20, years of service credit under the Public Employees' Retirement System (PERS) or the Teachers' Pension and Annunity Fund (TPAF);

    b. files an application to retire on or after January 1, 1998 and on or before June 1, 1998; and

    c. retires under the retirement system on or after February 1, 1998, but not later than July 1, 1998, the employer shall pay an additional pension of $500 per month in each of the 24 months following the date of retirement.

 

    4. The actuaries for PERS and TPAF shall determine the liability of the retirement systems for the additional service credit or pensions provided under this act and for the early retirement of employees in accordance with the tables of actuarial assumptions adopted by the board of trustees of the retirement system.

    For PERS, this liability shall be 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 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 thirtieth day.

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

 

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

 

    6. Where the needs of a school board, educational services commission or jointure commission require the services of an employee who elects to retire on July 1, 1998 and receive a benefit under this act, the school board, educational services commission or jointure commission may delay, with the consent of the employee, the effective retirement date of the employee until the first day of any calendar month after July 1, 1998, but not later than July 1, 1999. A delay in the effective retirement date of an employee shall not extend the dates set forth in sections 1 through 3 to qualify for benefits under this act.

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

 

    7. An employee retiring under PERS or TPAF with a benefit under this act on or after February 1, 1998, but not later than July 1, 1998, 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), as appropriate.

 

    8. For the purposes of this act:

    a. "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 vocational school.

    b. "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.

    c. "Jointure commission" means a commission set up by 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.

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

 

    9. The Director of the Division of Pensions and Benefits may promulgate rules and regulations which the director deems necessary for the effective implementation of this act.

 

    10. This act shall take effect immediately.

 

 

STATEMENT

 

    This bill provides for additional benefits for certain employees of a local school board, educational services commission or jointure commission who retire under the Public Employees' Retirement System (PERS) or the Teachers' Pension and Annuity Fund (TPAF) between February 1, 1998 and July 1, 1998 if the school board, educational services commission or jointure commission elects to provide the benefits. An employee of such an employer who retires under either of the two systems between July 1, 1997 and January 1, 1998 will be eligible for benefits on January 1, 1998 if that employee met the age and service requirements set forth in the bill upon the date of retirement.

    The additional benefits for which the bill provides are as follows:

    (1) An employee who is at least 50 years of age and has at least 25 years of service credit under PERS or TPAF as of the effective date of retirement will receive an additional five years of service credit under the respective retirement systems;

    (2) An employee veteran who meets the age and service credit requirements for and retires on special veteran's retirement under PERS and TPAF will receive an additional pension under the appropriate retirement system in the amount of 5/60 of final-year compensation;

    (3) An employee who is at least 60 years of age and has at least 20, but less than 25, years of service as of the effective date of retirement will receive payment of premiums for retired coverage under the State Health Benefits Program for self and dependents, but not including survivors, whether or not the employer participates in SHBP with respect to its active employees;

    (4) An employee who is at least 60 years of age with at least 10, but less than 20, years of service credit will receive an additional pension of $500 per month for the 24 months following retirement.

    An employee retiring under PERS or TPAF under the provisions of this legislation who has an outstanding loan balance upon retirement is to have the option of repaying the balance plus interest by deductions from retirement benefit payments in the same monthly amount that was deducted from the employee's compensation preceding retirement.

    Where the needs of an employer require the services of an employee who elects to receive a benefit under the act, the employer may delay, with the consent of the employee, the effective retirement date of the employee for up to one year, but not later than July 1, 1999. The authorization for delays in effective retirement dates does not extend the dates for qualification for benefits under the legislation.

    The cost of the enhanced pension benefits for PERS and TPAF members will be funded through employer contributions which will be paid by school boards, educational services commissions or jointure commissions, as the case may be, to the retirement systems and which will be calculated separately for each entity. The cost of the health benefits payments for eligible retirees will be paid by the employer on a current cost basis.

    The employees eligible for the benefits under this legislation are all eligible to retire under their respective retirement systems. It is hoped that these additional benefits will induce a large number of them to retire and thus assist in reducing the workforce in school districts and education commissions in this time of fiscal crisis.

 

 

                             

Provides additional retirement benefits for certain members of PERS and TPAF who are employed by school boards, educational services commissions and jointure commissions.