Bill Text: NJ A4188 | 2010-2011 | Regular Session | Introduced
Bill Title: Repeals law allowing PERS member to retire with PERS pension and continue to receive salary for current PERS-covered elective office; permits certain PERS and TPAF members to file for retirement without designating retirement date.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2011-08-19 - Reviewed by the Pension and Health Benefits Commission Recommend to not enact [A4188 Detail]
Download: New_Jersey-2010-A4188-Introduced.html
Sponsored by:
Assemblyman JAMES W. HOLZAPFEL
District 10 (Monmouth and Ocean)
SYNOPSIS
Repeals law allowing PERS member to retire with PERS pension and continue to receive salary for current PERS-covered elective office; permits certain PERS and TPAF members to file for retirement without designating retirement date.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning the retirement application of a member of the Teachers' Pension and Annuity Fund or Public Employees' Retirement System, and amending N.J.S.18A:66-47, P.L.1954, c.84, and P.L.1996, c.217, and repealing P.L.1985, c.414.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. N.J.S.18A:66-47 is amended to read as follows:
18A:66-47. At the time of retirement a member shall receive benefits in a retirement allowance payable throughout life, or the member may on retirement elect to receive the actuarial equivalent of the member's retirement allowance, in a lesser retirement allowance payable throughout life, with the provision that:
Option 1. If the member dies before the member has received in payments the present value of the retirement allowance as it was at the time of retirement, the balance shall be paid to a legal representative or to such person as the member shall nominate by written designation acknowledged and filed with the retirement system, either in lump sum or by equal payments over a period of years at the option of the payee. If the member shall have designated a natural person as a payee, said payee may elect to receive such payments in the form of a life annuity.
Option 2. Upon the member's death, the member's retirement allowance shall be continued throughout the life of and paid to such person as the member shall nominate by written designation duly acknowledged and filed with the retirement system at the time of retirement.
Option 3. Upon the member's death, one-half of the member's retirement allowance shall be continued throughout the life of and paid to such person as the member shall nominate by written designation duly acknowledged and filed with the retirement system at the time of retirement.
Option 4. Some other benefit or benefits shall be paid either to the member or to whomever the member nominates, if such other benefit or benefits, together with the lesser retirement allowance, shall be certified by the actuary to be of equivalent actuarial value. In no case, however, shall the lesser retirement allowance be smaller than that provided under Option 2.
Option 5. Some other benefit, which is equivalent to the full amount, three-quarters, one-half or one-quarter of the member's retirement allowance, shall be paid to whomever the member nominates and if that nominee dies before the member, the member's retirement allowance shall increase to the maximum retirement allowance for the member's lifetime, provided that such other benefit together with the member's lesser and maximum retirement allowances shall be certified by the actuary to be of equivalent actuarial value.
If the total amount of benefits paid to a retirant who does not elect to receive benefits in the form of an optional settlement, or to the retirant and the designated beneficiary in the case of a retirant who does so elect, before the death of the retirant or the retirant and the beneficiary is less than the deductions accumulated in the retirant's account at the time of retirement, including regular interest, the balance shall be paid in one lump sum to the retirant's designated beneficiary or estate in the manner provided in N.J.S.18A:66-48.
Except in the case of members who have elected to receive (1) a deferred retirement allowance pursuant to N.J.S.18A:66-36 or (2) early retirement allowances pursuant to N.J.S.18A:66-37 after separation from service pursuant to N.J.S.18A:66-36, if a member dies within 30 days after the date of retirement or the date of board approval, whichever is later, the member's retirement allowance shall not become effective and the member shall be considered an active member at the time of death. However, if the member dies after the date the application for retirement was filed with the system, the retirement will become effective if:
a. (Deleted by amendment, P.L.1995, c.221);
b. (Deleted by amendment, P.L.1995, c.221);
c. The deceased member had designated a beneficiary under an optional settlement provided by this section; and
d. The surviving beneficiary requests in writing that the board make such a selection. Upon formal action by the board approving that request, the request shall become irrevocable.
The board may select an Option 3 settlement, on behalf of the beneficiary of a member who applied for and was eligible for retirement but who died prior to the effective date of the retirement allowance, if all of the above conditions, with the exception of c., are met.
For the applicable purposes of this section, the board of trustees of the retirement system shall permit a member who is eligible to retire pursuant to N.J.S.18A:66-37, N.J.S.18A:66-43, or N.J.S.18A:66-71 to submit an application for retirement which does not specify an effective date of retirement but is complete in all other respects. If such an application is submitted and is determined to be complete by the board in all other respects, the application shall be valid until the applicant retires after notifying the board in writing of the applicant's requested effective date of retirement. If the applicant dies before designating an effective retirement date, the retirement shall be deemed effective on the first day of the month following the applicant's date of death.
(cf: P.L.2001, c.120, s.1)
2. Section 50 of P.L.1954, c.84 (C.43:15A-50) is amended to read as follows:
50. At the time of retirement, a member shall receive benefits in a retirement allowance payable throughout life, or the member may, on retirement, elect to receive the actuarial equivalent of the member's retirement allowance, in a lesser retirement allowance payable throughout life, with the provision that:
Option 1. If the member dies before the member has received in payments the present value of the retirement allowance as it was at the time of retirement, the balance shall be paid to a legal representative or to such person as the member shall nominate by written designation acknowledged and filed with the retirement system, either in a lump sum or by equal payments over a period of years at the option of the payee. If the member shall have designated a natural person as the payee, said payee may elect to receive such payments in the form of a life annuity.
Option 2. Upon the member's death, the member's retirement allowance shall be continued throughout the life of and paid to such person as the member shall nominate by written designation duly acknowledged and filed with the retirement system at the time of retirement.
Option 3. Upon the member's death, one-half of the member's retirement allowance shall be continued throughout the life of and paid to such person as the member shall nominate by written designation duly acknowledged and filed with the retirement system at the time of retirement.
Option 4. Some other benefit or benefits shall be paid either to the member or to whomever the member nominates, if such other benefit or benefits, together with the lesser retirement allowance, shall be certified by the actuary to be of equivalent actuarial value. In no case, however, shall the lesser retirement allowance be smaller than that provided under Option 2.
Option 5. Some other benefit, which is equivalent to the full amount, three-quarters, one-half or one-quarter of the member's retirement allowance, shall be paid to whomever the member nominates and if that nominee dies before the member, the member's retirement allowance shall increase to the maximum retirement allowance for the member's lifetime, provided that such other benefit together with the member's lesser and maximum retirement allowances shall be certified by the actuary to be of equivalent actuarial value.
If the total amount of benefits paid to a retirant who does not elect to receive benefits in the form of an optional settlement, or to the retirant and the designated beneficiary in the case of a retirant who does so elect, before the death of the retirant or the retirant and the beneficiary is less than the deductions accumulated in the retirant's account at the time of retirement, including regular interest, the balance shall be paid in one lump sum to the retirant's designated beneficiary or estate in the manner provided in section 51 of P.L.1954, c.84 (C.43:15A-51).
Except in the case of members who have elected to receive (1) a deferred retirement allowance pursuant to section 38 of P.L.1954, c.84 (C.43:15A-38) or (2) early retirement allowances pursuant to subsection b. of section 41 of P.L.1954, c.84 (C.43:15A-41) after separation from service pursuant to section 38, if a member dies within 30 days after the date of retirement or the date of board approval, whichever is later, the member's retirement allowance shall not become effective and the member shall be considered an active member at the time of death. However, if the member dies after the date the application for retirement was filed with the system, the retirement will become effective if:
a. (Deleted by amendment, P.L.1995, c.221);
b. (Deleted by amendment, P.L.1995, c.221);
c. The deceased member had designated a beneficiary under an optional settlement provided by this section; and
d. The surviving beneficiary requests in writing that the board make such a selection. Upon formal action by the board approving that request, the request shall be irrevocable.
The board may select an Option 3 settlement, on behalf of the beneficiary of a member who applied for and was eligible for retirement but who died prior to the effective date of the retirement allowance, if all of the above conditions, with the exception of c., are met.
For the applicable purposes of this section, the board of trustees of the retirement system shall permit a member who is eligible to retire pursuant to section 41 of P.L.1954, c.84 (C.43:15A-41), section 47 of P.L.1954, c.84 (C.43:15A-47), or section 61 of P.L.1954, c.84 (C.43:15A-61) to submit an application for retirement which does not specify an effective date of retirement but is complete in all other respects. If such an application is submitted and is determined to be complete by the board in all other respects, the application shall be valid until the applicant retires after notifying the board in writing of the applicant's requested effective date of retirement. If the applicant dies before designating an effective retirement date, the retirement shall be deemed effective on the first day of the month following the applicant's date of death.
(cf: P.L.2001, c.120, s.2)
3. Section 27 of P.L.1966, c.217 (C.43:15A-57.2) is amended to read as follows:
27. a. Except as provided in subsections b. [and] , c., and d. of this section, if a former member of the State Employees' Retirement System or the retirement system, who has been granted a retirement allowance for any cause other than disability, becomes employed again in a position which makes him eligible to be a member of the retirement system, his retirement allowance and the right to any death benefit as a result of his former membership, shall be canceled until he again retires.
Such person shall be re-enrolled in the retirement system and shall contribute thereto at a rate based on his age at the time of re-enrollment. Such person shall be treated as an active member for determining disability or death benefits while in service and no benefits pursuant to an optional selection with respect to his former membership shall be paid if his death shall occur during the period of such re-enrollment.
Upon subsequent retirement of such member, his former retirement allowance shall be reinstated together with any optional selection, based on his former membership. In addition, he shall receive an additional retirement allowance based on his subsequent service as a member computed in accordance with applicable provisions of chapter 84 of the laws of 1954; provided, however, that his total retirement allowance upon such subsequent retirement shall not be a greater proportion of his final compensation than the proportion to which he would have been entitled had he remained in service during the period of his prior retirement. Any death benefit to which such member shall be eligible shall be based on his latest retirement, but shall not be less than the death benefit that was applicable to his former retirement.
b. The cancellation, re-enrollment, and additional retirement allowance provisions of subsection a. of this section shall not apply to a former member of the retirement system who, after having been granted a retirement allowance, becomes employed again by: (1) an employer or employers in a position or positions for which the aggregate compensation does not exceed $15,000 per year; or (2) if the compensation exceeds $10,000 per year, by an employer that is a public institution of higher education as defined in N.J.S.18A:62-1 in a teaching staff position. The Director of the Division of Pensions and Benefits may from time to time adjust the amount in paragraph (1) of this subsection. This adjustment shall be 3/5 of the percentage of change in the index, as defined in section 1 of P.L.1958, c.143 (C.43:3B-1), over a period of time as determined by the director.
c. The cancellation, reenrollment, and additional retirement allowance provisions of subsection a. and the compensation limitations of subsection b. of this section shall not apply to a former member of the retirement system who, after having been granted a retirement allowance, becomes employed by the State Department of Education in a position of critical need as determined by the State Commissioner of Education, or becomes employed by a board of education in a position of critical need as determined by the superintendent of the district on a contractual basis for a term of not more than one year; except that the cancellation, reenrollment, and additional retirement allowance provisions and the compensation limitations shall apply if the former member becomes employed within 120 days of retirement in a position with the employer from which the member retired. Nothing herein shall preclude a former member so reemployed by a board of education from renewing a contract for one additional year, provided that the total period of employment with any individual board of education does not exceed a two-year period.
d. The cancellation, reenrollment, and additional retirement allowance provisions of subsections a., b., and c. of this section shall not apply to a former member of the retirement system who was granted a retirement allowance pursuant to section 1 of P.L.1985, c.414 (C.43:15A-47.2) prior to the effective date of P.L. , c. (pending before the Legislature as this bill).
(cf: P.L.2001, c.355, s.2)
4. Section 1 of P.L.1985, c.414 (C.43:15A-47.2) is repealed.
5. This act shall take effect immediately.
STATEMENT
This bill repeals N.J.S.A.43:15A-47.2, which provides that a member of the Public Employees' Retirement System (PERS) may retire while holding an elective public office covered by PERS and continue to receive the full salary for that office if the member's PERS retirement allowance is not based solely on his service in the elected public office. This section of current law exempts from the PERS enrollment requirement a member of PERS who continues to be covered by the retirement system while in elected office. The PERS member is allowed to retire based on other PERS-covered service as well as the accrued covered service in elected office. The person receives a PERS pension and the salary of the elected office, while no longer making any PERS contributions.
The bill provides that the PERS pension cancellation and reenrollment requirement would not apply to a PERS retiree who was granted a retirement allowance under the section repealed by the bill prior to its effective date.
In addition, this bill allows a member of the PERS or the Teachers' Pension and Annuity Fund (TPAF) who is eligible to retire under the early, service, or veterans' retirement provisions to submit to the board of trustees an application for retirement which does not specify an effective date of retirement but is complete in all other respects. If such an application is submitted and is determined to be complete by the board, the application will be valid until the applicant retires after notifying the board in writing of the applicant's requested effective date of retirement.
Currently, the retirement system requires an application for retirement to include an effective date of retirement and an application cannot be submitted more than one year in advance of the requested effective retirement date. Under current law, if the member dies after the date the application for retirement is filed with the system, the retirement will become effective if:
the deceased member had designated a beneficiary under an optional settlement permitted by law, which allows the member to elect a reduced pension so that a designated beneficiary will also receive a pension upon the death of the retiree; and
the surviving beneficiary requests in writing that the board make such a selection. Also under current law, the board may select an Option 3 settlement, as specified in law, on behalf of the beneficiary of a member who applied for and was eligible for retirement but who died prior to the effective date of the retirement allowance even if the deceased member had not designated a beneficiary.
This bill would allow a member of the PERS or TPAF to preserve these options by having a valid application on file for an indefinite period of time, without designating an effective date of retirement.
