New Jersey-2024-A4590-Introduced

An Act concerning the purchase of credit in a State-administered retirement system for certain military service and amending various parts of the statutory law.

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

1. N.J.S.18A:66-13 is amended to read as follows:

18A:66-13. Prior service credit. A member may file a detailed statement of: a. school service and service in a similar capacity in other states and in schools within and outside the United States operated by a department of the United States Government for the instruction of the children of United States Government officers and employees, or b. other public employment in other states or with the United States Government which would be eligible for credit in a State-administered retirement system if the employment was with a public employer in this State, or c. military service in the Armed Forces of the United States, including any period of enrollment in a military service academy, rendered prior to becoming a member, for which the member desires credit, and of such other facts as the retirement system may require. The member may purchase credit for all or a portion of the service evidenced in the statement up to the nearest number of years and months, but not exceeding 10 years, provided however, that a member purchasing that maximum credit may purchase up to five additional years for additional military service qualifying the member as a veteran as defined in N.J.S.18A:66-2. No application shall be accepted for the purchase of credit for such service if, at the time of application, the member has a vested right to retirement benefits in another retirement system based in whole or in part upon that service.

The member may purchase credit for the service by paying into the annuity savings fund the amount required by applying the factor, supplied by the actuary as being applicable to the member's age at the time of the purchase, to the member's salary at that time, or to the highest annual compensation for service in this State for which contributions were made during any prior fiscal year of membership, whichever is greater. The purchase may be made in regular installments, equal to at least one-half the full normal contribution to the retirement system, over a maximum period of 10 years. Neither the State nor the employer of a member who applies to purchase credit for public employment with the United States Government pursuant to subsection b. of this section or for military service pursuant to subsection c. of this section shall be liable for any payment to the retirement system on behalf of the member for the purchase of this credit.

Notwithstanding any provision of this act to the contrary, a member shall not be liable for any costs associated with the financing of pension adjustment benefits and health care benefits for retirees when purchasing credit for school service, public employment in other states or with the United States Government, or military service in the Armed Forces of the United States, including any period of enrollment in a military service academy.

Any member electing to purchase the service who retires prior to completing payments as agreed with the retirement system will receive pro rata credit for service purchased prior to the date of retirement, but if the member so elects at the time of retirement, the member may make the additional lump sum payment required at that time to provide full credit.

Notwithstanding any other provision of law to the contrary, service credit established in the retirement system by a member through purchase in accordance with this section, which purchase was made by an application submitted on or after the effective date of P.L.2008, c.89, except a purchase for military service in the Armed Forces of the United States, including any period of enrollment in a military service academy, shall not be eligible for consideration when service is used to determine the qualification of the member for any health care benefits coverage paid, in whole or in part, by a public employer after the member's retirement.

As used in this section, "military service academy" means the United States Military Academy, the United State Naval Academy, the United States Air Force Academy, and the United States Coast Guard Academy.

(cf: P.L.2008, c.89, s.3)

2. Section 2 of P.L.1963, c.19 (C.43:15A-73.1) is amended to read as follows:

2. A member may file a detailed statement of public employment in other states or with the United States Government which would be eligible for credit in a State-administered retirement system if the employment was with a public employer in this State, or of military service in the Armed Forces of the United States, including any period of enrollment in a military service academy, or of service resulting from initial appointment or employment on or after January 1, 2002 with a bi-state or multi-state agency established pursuant to an interstate compact to which the State is a party which would be eligible for credit in a State-administered retirement system if the employment was with a public employer in this State, rendered prior to becoming a member, for which the member desires credit, and of such other facts as the retirement system may require. The member may purchase credit for all or a portion of the service evidenced in the statement up to the nearest number of years and months, but not exceeding 10 years, provided however, that a member purchasing that maximum credit may purchase up to five additional years for additional military service qualifying the member as a veteran as defined in section 6 of P.L.1954, c.84 (C.43:15A-6). No application shall be accepted for the purchase of credit for the service if, at the time of application, the member has a vested right to retirement benefits in another retirement system based in whole or in part upon that service. The member may purchase credit for the service by paying into the annuity savings fund the amount required by applying the factor, supplied by the actuary as being applicable to the member's age at the time of the purchase, to the member's salary at that time, or to the highest annual compensation for service in this State for which contributions were made during any prior fiscal year of membership, whichever is greater. The purchase may be made in regular installments, equal to at least 1/2 of the full normal contribution to the retirement system, over a maximum period of 10 years. The employer of a member who applies, pursuant to this section, to purchase credit for public employment with the United States Government or for military service in the Armed Forces of the United States, including any period of enrollment in a military service academy, shall not be liable for any payment to the retirement system on behalf of the member for the purchase of this credit.

Notwithstanding any provision of this act to the contrary, a member shall not be liable for any costs associated with the financing of pension adjustment benefits and health care benefits for retirees when purchasing credit for public employment in other states or with the United States Government or military service in the Armed Forces of the United States, including any period of enrollment in a military service academy, or with a bi-state or multi-state agency.

Any member electing to make a purchase pursuant to this section who retires prior to completing payments as agreed with the retirement system will receive pro rata credit for the purchase prior to the date of retirement, but if the member so elects at the time of retirement, the member may make the additional lump sum payment required at that time to provide full credit.

(cf: P.L.2008, c.89, s.4)

3. Section 3 of P.L.1991, c.153 (C.43:16A-11.11) is amended to read as follows:

3. A member of the Police and Firemen's Retirement System may file a detailed statement of public employment in other states or with the United States Government which would be eligible for credit in a State-administered retirement system if the employment was with a public employer in this State, or of military service in the Armed Forces of the United States, including any period of enrollment in a military service academy, rendered prior to becoming a member, for which the member desires credit, and of such other facts as the retirement system may require. The member may purchase credit for all or a portion of the service evidenced in the statement up to the nearest number of years and months, but not exceeding 10 years, provided however, that a member purchasing that maximum credit may purchase up to five additional years for additional military service qualifying the member as a veteran as defined in section 1 of P.L.1983, c.391 (C.43:16A-11.7). No application shall be accepted for the purchase of credit for the service if, at the time of application, the member has a vested right to retirement benefits in another retirement system based in whole or in part upon that service.

The member may purchase credit for the service by paying into the annuity savings fund the amount required by applying the factor, supplied by the actuary as being applicable to the member's age at the time of the purchase, to the member's salary at that time, or to the highest annual compensation for service in this State for which contributions were made during any prior fiscal year of membership, whichever is greater. The purchase may be made in regular installments equal to at least 1/2 of the full normal contribution to the retirement system, over a maximum period of 10 years. The employer of a member who applies, pursuant to this section, to purchase credit for public employment with the United States Government or for military service in the Armed Forces of the United States, including any period of enrollment in a military service academy, shall not be liable for any payment to the retirement system on behalf of the member for the purchase of this credit.

Notwithstanding any provision of this act to the contrary, a member shall not be liable for any costs associated with the financing of pension adjustment benefits and health care benefits for retirees when purchasing credit for public employment in other states or with the United States Government or military service in the Armed Forces of the United States, including any period of enrollment in a military service academy.

(cf: P.L.1991, c.153, s.3)

4. Section 2 of P.L.2013, c.87 (C.53:5A-6.1) is amended to read as follows:

2. A member may file a detailed statement of military service in the Armed Forces of the United States, including any period of enrollment in a military service academy, rendered prior to becoming a member, for which the member desires credit, and of such other facts as the retirement system may require. The member may purchase credit for all or a portion of the service evidenced in the statement up to the nearest number of years and months, but not exceeding 10 years, provided however, that a member purchasing that maximum credit may purchase up to five additional years for additional military service qualifying the member as a veteran as defined in section 3 of P.L.1965, c.89 (C.53:5A-3). If such credit is established, it shall be considered the same as creditable service as a full-time commissioned officer, noncommissioned officer or trooper rendered as a member. No application shall be accepted for the purchase of credit for the service if, at the time of application, the member has a vested right to retirement benefits in another retirement system based in whole or in part upon that service. The member may purchase credit for the service by paying into the annuity savings fund the amount required by applying the factor, supplied by the actuary as being applicable to the member's age at the time of the purchase, to the member's salary at that time, or to the highest annual compensation for service in this State for which contributions were made during any prior fiscal year of membership, whichever is greater. The purchase may be made in regular installments, equal to at least 1/2 of the full normal contribution to the retirement system, over a maximum period of 10 years.

The employer of a member who applies, pursuant to this section, to purchase credit for military service in the Armed Forces of the United States, including any period of enrollment in a military service academy, shall not be liable for any payment to the retirement system on behalf of the member for the purchase of this credit. The Adjutant General of the Department of Military and Veterans' Affairs shall be responsible for determining whether any person seeking to be considered a "veteran" under section 3 of P.L.1965, c.89 (C.53:5A-3), for the purpose of purchasing military service credit, meets the criteria set forth therein and adjudicating an appeal from any person disputing this determination. The determination of the Adjutant General shall be binding upon the Division of Pensions and Benefits.

Notwithstanding any provision of this act to the contrary, a member shall not be liable for any costs associated with the financing of pension adjustment benefits and health care benefits for retirees when purchasing credit for military service in the Armed Forces of the United States, including any period of enrollment in a military service academy.

(cf: P.L.2013, c.87, s.2)

5. This act shall take effect immediately.

STATEMENT

Under current law, a period of service in the United States Armed Forces qualifies as military service that a member of the Public Employees' Retirement System (PERS), Teachers' Pension and Annuity Fund (TPAF), the Police and Firemen's Retirement System (PFRS), and State Police Retirement System (SPRS) may purchase for retirement purposes.

This bill permits the purchase of the period of enrollment in a United States military service academy.

The four service academies affiliated with the United States military educate young people to serve as commissioned officers in the various branches of the United States Armed Forces. They are the only academies whose students are on active duty in the United State Armed Forces from the day they enter the academy, with the rank of cadet and midshipman and subject to the Uniform Code of Military Justice.

The military service academies are the United States Military Academy, Naval Academy, Air Force Academy, and the Coast Guard Academy.