Bill Text: NJ A4258 | 2024-2025 | Regular Session | Introduced
Bill Title: Requires eligibility checklist and audit for enrollment in PERS of certain public employees who provide professional services; imposes fine on certifying officer or supervisor for ineligible enrollments.
Spectrum: Partisan Bill (Republican 3-0)
Status: (Introduced) 2024-05-02 - Introduced, Referred to Assembly State and Local Government Committee [A4258 Detail]
Download: New_Jersey-2024-A4258-Introduced.html
Sponsored by:
Assemblyman MICHAEL INGANAMORT
District 24 (Morris, Sussex and Warren)
Co-Sponsored by:
Assemblyman Auth
SYNOPSIS
Requires eligibility checklist and audit for enrollment in PERS of certain public employees who provide professional services; imposes fine on certifying officer or supervisor for ineligible enrollments.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning the enrollment of certain public employees in the Public Employees' Retirement System and supplementing P.L.1954, c.84 (C.43:15A-1 et seq.) and Title 43 of the Revised Statues.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. Upon the enrollment in the Public Employees' Retirement System of a public officer or employee whose position requires that the officer or employee render professional services as an attorney, engineer, accountant, auditor, physician, or architect, the certifying officer shall complete, sign, and submit at the time of enrollment a certification that requires the certifying officer to answer a series of questions for the purpose of verifying that the status of the public officer or employee being enrolled is that of an employee and not an independent contractor. The questions shall be based, to the extent appropriate, on the employee test utilized by the federal Internal Revenue Service. The certifying officer shall submit with the certification a copy of the resolution or ordinance adopted by the employer to create the position, the resolution adopted by the employer to appoint the public officer or employee to that position, and a copy of the oath of office taken by the public officer or employee, if any.
This certification shall be in addition to any other certification required pursuant to section 1 of P.L.2011, c.52 (C.43:3C-15) or any other law or regulation. The form and content of the certification shall be developed by the Division of Pensions and Benefits in the Department of the Treasury and approved by the Board of Trustees of the retirement system. The board of trustees may require certifying officers to complete the certification for positions that require the rendering of professional services other than those specified above, as the board may determine to be appropriate and necessary.
b. A certifying officer shall not seek advice or rely upon representations from the public officer or employee who is being enrolled when completing the certification required under subsection a. of this section or when making any decision with regard to the eligibility for enrollment in the retirement system of that public officer or employee. The certifying officer shall seek advice and rely upon the representations only from an impartial individual or an employee of the Division of Pensions and Benefits. The certification required by this subsection shall require the signature of the certifying officer following a statement that the certifying officer acknowledges compliance with this subsection. The signature shall be in addition to the signature required under subsection a. of this section.
c. The board of trustees of the retirement system shall establish an audit program through which it shall conduct a continuous review of the various public employers participating in the system for the purpose of ensuring that only eligible public officers and employees whose position requires the officer or employee to render professional services are enrolled in the retirement system. The audit program may be conducted in cooperation with or, upon agreement, by another office or agency within the Executive Branch of State government.
Every public employer whose employees are enrolled in the retirement system, as well as enrolled officers and employees, and any other public entity having relevant information, shall cooperate fully with the board of trustees and the division and shall provide all information, records, and documents requested by the board or division in connection with an audit.
The audit program shall be initiated within 60 days following the effective date of P.L. , c. (C. )(pending before the Legislature as this bill) and the primary focus of the program for the first 12 months shall be to verify the eligibility of those public officers and employees who were enrolled prior to the effective date.
d. Within six months following the effective date of P.L. , c. (C. )(pending before the Legislature as this bill), the certifications required by subsections a. and b. of this section shall be completed by all certifying officers for all applicable public officers and employees who were enrolled prior to the effective date.
2. A certifying officer or the officer's immediate supervisor who knowingly and willfully violates a provision of law or regulation concerning the enrollment of a public officer or employee in a State-administered retirement system that results in the enrollment or continued enrollment of a public officer, employee, or other person who is ineligible for such enrollment shall be subject to a civil penalty of $1,000 for an initial violation, $2,500 for a second violation that occurs within 10 years of an initial violation, and $5,000 for a third violation or subsequent violation that occurs within 10 years of an initial violation. This penalty shall be collected and enforced in proceedings in accordance with the "Penalty Enforcement Law of 1999," P.L.1999, c.274 (C.2A:58-10 et seq.), and the rules of court governing actions for the collection of civil penalties. The Superior Court shall have jurisdiction of proceedings for the collection and enforcement of the penalty imposed by this section. This penalty shall be in addition to any other penalty that may be imposed by law.
Appropriate disciplinary proceedings may be initiated against the certifying officer or immediate supervisor against whom a penalty has been imposed.
3. This act shall take effect on the first day of the third month following enactment.
STATEMENT
This bill requires the completion of specific certifications by certifying officers of public employers who enroll certain public officers and employees in the Public Employee's Retirement System (PERS).
For each enrollment in the PERS of a public officer or employee whose position requires that the officer or employee render professional services as an attorney, engineer, accountant, auditor, physician, or architect, the certifying officer must complete, sign, and submit at the time of enrollment a certification that requires the certifying officer to answer a series of questions for the purpose of verifying that the status of the public officer or employee being enrolled is that of an employee and not an independent contractor. The questions will be based, to the extent appropriate, on the employee test utilized by the federal Internal Revenue Service. The certifying officer must also submit with the certification a copy of the resolution or ordinance adopted by the employer to create the position, the resolution adopted by the employer to appoint the individual to the position, and a copy of the oath of office taken by the individual. The bill also requires this certification to be completed by all certifying officers for all applicable public officers and employees who were enrolled prior to the bill's effective date.
The bill prohibits a certifying officer from seeking advice or relying upon representations of the individual who is the subject of the enrollment when completing the certification or when making any decision with regard to the eligibility for enrollment. The certifying officer must seek advice and rely upon representations only from an impartial individual or an employee of the Division of Pensions and Benefits.
The bill requires the board of trustees of the PERS to establish an audit program through which it will conduct a continuous review of the various public employers participating in the system for the purpose of ensuring that only eligible officers and employees who render professional services are enrolled in the retirement system. The audit program must be initiated within 60 days following the bill's effective date and the primary focus of the program for the first 12 months must be to verify the eligibility of public officers and employees enrolled prior to the effective date.
The provisions of this bill described above are based on the recommendations of the Office of the State Comptroller as set forth in its report of July 17, 2012 entitled "Improper Participation by Professional Service Providers in the State Pension System."
In addition, the bill provides for the imposition of civil penalties against a certifying officer or the officer's immediate supervisor who knowingly and willfully violate any provision of law or regulation concerning the enrollment of a public officer or employee in a State-administered retirement system that results in the enrollment or continued enrollment of a public officer, employee, or other person who is ineligible for such enrollment. The penalty will be a fine of $1,000 for an initial violation, $2,500 for a second violation that occurs within 10 years of an initial violation, and $5,000 for a third violation or subsequent violation that occurs within 10 years of an initial violation. The penalty will be collected and enforced in proceedings in accordance with the "Penalty Enforcement Law of 1999" and the rules of court governing actions for the collection of civil penalties.
