SENATE, No. 2085

STATE OF NEW JERSEY

INTRODUCED MAY 15, 1997

By Senator KENNY

An Act concerning the assets in the Public Employees' Retirement System allocated to employers other than the State and supplementing P.L.1954, c.84 (C.43:15A-1 et seq.).

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

    1. a. Notwithstanding the provisions of section 24 of P.L.1954, c.84 (C.43:15A-24) to the contrary:

    (1) if, pursuant to subsection b. of section 24, the computation for the valuation period ending March 31, 1996 of the value of the assets allocated to employers other than the State results in excess valuation assets, as defined in subsection b. of this section, the normal contributions payable by the other employers for the valuation periods ending March 31, 1996 and March 31, 1997 which have not yet been paid to the retirement system shall be reduced to the extent possible by the excess valuation assets; and

    (2) if, pursuant to subsection b. of section 24, the computation for a valuation period ending after March 31, 1996 of the value of the assets allocated to employers other than the State results in excess valuation assets, as defined in subsection b. of this section, the normal contributions payable by the other employers for the next valuation period shall be reduced to the extent possible by up to 50% of the excess valuation assets.

    b. "Excess valuation assets" for a valuation period means:

    (1) the value of assets allocated to employers other than the State; less

    (2) the actuarial accrued liability of the other employers for basic benefits and pension adjustment benefits under the retirement system, excluding the unfunded accrued liability for early retirement incentive benefits pursuant to P.L.1991, c.229, P.L.1991, c.230, P.L.1993, c.138, and P.L.1993, c.181, for employers other than the State; less    (3) the contributory group insurance premium fund, created by section 4 of P.L.1954, c.214 (C.43:15A-91), as amended by section 4 of P.L.1960, c.79; less

    (4) the present value of the projected total normal cost for pension adjustment benefits in excess of the projected total phased-in normal cost for pension adjustment benefits for the other employers originally authorized by section 2 of P.L.1990, c. 6 (C.43:15A-24.1) over the full phase-in period, determined in the manner prescribed for the determination and amortization of the unfunded accrued liability of the system, if the sum of the foregoing items is greater than zero.

    2. This act shall take effect immediately.

STATEMENT

    This bill provides for the reduction of the normal contributions to the Public Employees' Retirement System by employers other than the State, including counties and municipalities, if there are "excess valuation assets" after the computation each year of the value of assets in the retirement system that are allocated to employers other than the State. The application of such assets would occur only after any unfunded accrued liability has been paid from those excess assets.

    The bill provides that:

    (1) if the computation for the valuation period ending March 31, 1996 of the value of the assets allocated to employers other than the State results in excess valuation assets, the normal contributions payable by the other employers for the valuation periods ending March 31, 1996 and March 31, 1997 which have not yet been paid to the retirement system shall be reduced to the extent possible by the excess valuation assets; and

    (2) if the computation for a valuation period ending after March 31, 1996 of the value of the assets allocated to employers other than the State results in excess valuation assets, the normal contributions payable by the other employers for the next valuation period shall be reduced to the extent possible by up to 50% of the excess valuation assets.

    "Excess valuation assets" is defined as:

    (1) the value of assets allocated to employers other than the State; less

    (2) the actuarial accrued liability of the other employers for basic benefits and pension adjustment benefits under the retirement system, excluding the unfunded accrued liability for early retirement incentive benefits pursuant to P.L.1991, c.229, P.L.1991, c.230, P.L.1993, c.138, and P.L.1993, c.181, for employers other than the State; less    (3) the contributory group insurance premium fund, created by section 4 of P.L.1954, c.214 (C.43:15A-91), as amended by section 4 of P.L.1960, c.79; less

    (4) the present value of the projected total normal cost for pension adjustment benefits in excess of the projected total phased-in normal cost for pension adjustment benefits for the other employers originally authorized by section 2 of P.L.1990, c. 6 (C.43:15A-24.1) over the full phase-in period, determined in the manner prescribed for the determination and amortization of the unfunded accrued liability of the system, if the sum of the foregoing items is greater than zero.

Provides for reduction of normal contributions to PERS by employers other than the State if there are "excess valuation assets."