Bill Text: NJ A1611 | 2010-2011 | Regular Session | Introduced
Bill Title: Allows pension calculation to be based on compensation increase in excess of actuarially assumed experience only if employer pays unfunded liability.
Spectrum: Partisan Bill (Republican 3-0)
Status: (Introduced - Dead) 2010-01-12 - Introduced, Referred to Assembly State Government Committee [A1611 Detail]
Download: New_Jersey-2010-A1611-Introduced.html
STATE OF NEW JERSEY
214th LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2010 SESSION
Sponsored by:
Assemblyman DECLAN J. O'SCANLON, JR.
District 12 (Mercer and Monmouth)
Assemblywoman CAROLINE CASAGRANDE
District 12 (Mercer and Monmouth)
Co-Sponsored by:
Assemblywoman N.Munoz
SYNOPSIS
Allows pension calculation to be based on compensation increase in excess of actuarially assumed experience only if employer pays unfunded liability.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel
An Act concerning the calculation of benefits of members of the State-administered retirement systems and supplementing Title 43 of the Revised Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. With respect to all claims for benefits, the Division of Pensions and Benefits shall investigate certain increases in compensation reported for credit which exceed the reasonably anticipated annual compensation increases for members of a retirement system or fund based upon the table of assumed salary increases recommended by the actuary and adopted by the board of trustees, or administering commission, of a system or fund for the time period of the increases as follows.
a. The division shall examine the member's compensation history for a minimum of the five years prior to the member filing for retirement benefits.
b. If in any one year, a member's compensation increased by more than the actuarially assumed average experience of the relevant retirement system, the division shall require that the member's employer at the time of receipt of the compensation under review provide documentation justifying the increase in compensation and verify whether such an increase was given to any other employees at the same time.
c. The division shall calculate the amount of unfunded liability that would result from crediting to the member the amount of compensation under examination in the calculation of retirement benefits.
d. The division shall permit the calculation of the member's retirement benefits to be based upon compensation in excess of the actuarially assumed amount only if the employer pays the amount of unfunded liability calculated under subsection c. of this section.
e. If the employer fails to pay the amount of unfunded liability as required by subsection d. of this section, the retirement benefit of the member shall be calculated using the amount of compensation appropriate to the actuarially assumed rate of increase under the retirement system for each year that the member's compensation increased in excess of that rate.
2. This act shall take effect immediately.
STATEMENT
This bill provides that the compensation of a public employee creditable for retirement benefits will be limited to compensation consistent with increases actuarially assumed by the pension systems.
The bill requires the Division of Pensions and Benefits to examine a member's compensation history for a minimum of the five years prior to the filing for retirement benefits. If in any one year, a member's compensation increased by more than the actuarially assumed average experience, the division will require the member's employer at the time of receipt of the compensation under review to provide documentation justifying the increase in compensation and verify whether such an increase was given to any other employees at the same time. The division will calculate the amount of unfunded liability that would result from crediting to the member the amount of compensation under examination and retirement benefits will be calculated using that amount only if the employer pays the unfunded liability. Otherwise, the retirement benefits will be calculated using compensation consistent with the actuarially assumed rate of increase for each year that the member's compensation increased in excess of that rate.
