Bill Text: NJ S192 | 2024-2025 | Regular Session | Introduced
Bill Title: Requires public employers that offer deferred compensation retirement plans to also offer Roth contribution option.
Spectrum: Bipartisan Bill
Status: (Introduced) 2024-01-09 - Introduced in the Senate, Referred to Senate State Government, Wagering, Tourism & Historic Preservation Committee [S192 Detail]
Download: New_Jersey-2024-S192-Introduced.html
STATE OF NEW JERSEY
221st LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2024 SESSION
Sponsored by:
Senator VINCENT J. POLISTINA
District 2 (Atlantic)
Senator JAMES BEACH
District 6 (Burlington and Camden)
SYNOPSIS
Requires public employers that offer deferred compensation retirement plans to also offer Roth contribution option.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel.
An Act requiring public employers that offer a deferred compensation retirement plan to their employees to also offer a Roth contribution option and supplementing P.L.1977, c.381 (C.43:15B-1 et seq. ), P.L.1978, c.39 (C.52:18A-163 et seq.), and chapter 66 of Title 18A of the New Jersey Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. As used in this section, "Roth contribution option" means an employee retirement plan that permits employees to make after-tax contributions to a retirement account through salary deductions in a manner consistent with the federal Internal Revenue Code and regulations.
b. Any municipality, county, or an authority created by one or more counties or municipalities that establishes a deferred compensation plan pursuant to P.L.1977, c.381 (C.43:15B-1 et seq.) and the federal Internal Revenue Code and regulations shall ensure that a Roth contribution option is also offered to participants of the plan. The provisions of P.L.1977, c.381 (C.43:15B-1 et seq.) shall be applicable to the extent necessary for the implementation of this section.
2. a. As used in this section, "Roth contribution option" means an employee retirement plan established pursuant to the federal Internal Revenue Code and regulations that permits employees to make after-tax contributions to a retirement account through salary deductions in a manner consistent with the federal Internal Revenue Code and regulations.
b. The New Jersey State Employees Deferred Compensation Board in the Department of the Treasury shall ensure that the New Jersey State Employees Deferred Compensation Plan established pursuant to P.L.1978, c.39 (C.52:18A-163 et seq.) and the federal Internal Revenue Code and regulations also offers a Roth contribution option to participants of the plan. The provisions of P.L.1978, c.39 (C.52:18A-163 et seq.) shall be applicable to the extent necessary for the implementation of this section.
3. a. As used in this section, "Roth contribution option" means an employee retirement plan that permits employees to make after-tax contributions to a retirement account through salary deductions in a manner consistent with the federal Internal Revenue Code and regulations.
b. Any board of education that establishes a deferred compensation plan pursuant to N.J.S.18A:66-127 through 129, inclusive, shall ensure that a Roth contribution option is also offered to participants of the plan. The provisions of N.J.S.18A:66-127 through 129, inclusive, shall be applicable to the extent necessary for the implementation of this section.
4. This act shall take effect 60 days following the date of enactment.
STATEMENT
This bill requires that any public entity within the State that offers to its employees a deferred compensation plan to also offer a Roth contribution option for the employees who participate in the plan. Roth contribution options permit employees to make after-tax contributions to the retirement account through salary deductions. These after-tax contributions, and any subsequent earnings, can be withdrawn tax-free in retirement.
Under current law, there is no requirement that a Roth contribution option be made available to public employees who choose to participate in their respective deferred compensation retirement plan.
Under current law, public employers may offer a deferred compensation plan to their employees. Deferred compensation plans provide an opportunity to voluntarily shelter a portion of an employee's salary from federal income taxes to save for retirement to supplement Social Security and any other retirement plan provided by public employers to their employees.
