Bill Text: NJ S1984 | 2010-2011 | Regular Session | Introduced
Bill Title: Calculates future service of active members at 1/60 of final compensation for TPAF and PERS pensions.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2010-11-19 - Reviewed by the Pension and Health Benefits Commission Recommend to enact if amended [S1984 Detail]
Download: New_Jersey-2010-S1984-Introduced.html
Sponsored by:
Senator JENNIFER BECK
District 12 (Mercer and Monmouth)
SYNOPSIS
Calculates future service of active members at 1/60 of final compensation for TPAF and PERS pensions.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning the fractional multipliers used to calculate the retirement allowances of active members of the Teachers' Pension and Annuity Fund and the Public Employees' Retirement System, 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:66-36 is amended to read as follows:
18A:66-36. Should a member of the Teachers' Pension and Annuity Fund, after having completed 10 years of service, be separated voluntarily or involuntarily from the service, before reaching service retirement age, and not by removal for conduct unbecoming a teacher or other just cause under the provisions of N.J.S.18A:28-4 to 18A:28-5 and 18A:28-9 to 18A:28-13 inclusive, such person may elect to receive, in lieu of the payment provided in N.J.S.18A:66-34:
a. The payments provided for in N.J.S.18A:66-37, if he so qualified under said section; or
b. A deferred retirement allowance beginning at age 60, or for a person who becomes a member of the retirement system on or after the effective date of P.L.2008, c.89 beginning at age 62, which shall be made up of an annuity derived from the member's accumulated deductions at the time of [his] severance from the service, and a pension in the amount which, when added to the member's annuity, will provide a total retirement allowance of 1/64 of [his] final compensation for each year of service credited as Class A service [and], 1/55 of [his] final compensation for each year of service credited as class B service prior to the effective date of P.L. , c. (pending before the Legislature as this bill), and 1/60 of final compensation for each year of service credited on or after that effective date, calculated in accordance with N.J.S.18A:66-44, with optional privileges provided for in N.J.S.18A:66-47 if he exercises such optional privilege at least 30 days before his attainment of the normal retirement age; provided, that such election is communicated by such member to the retirement system in writing stating at what time subsequent to the execution and filing thereof he desires to be retired; and provided, further, that such member may later elect: (1) to receive the payments provided for in N.J.S.18A:66-37, if he had qualified under that section at the time of leaving service, except that in order to avail himself of the optional privileges pursuant to N.J.S.18A:66-47, he must exercise such optional privilege at least 30 days before the effective date of his retirement; or (2) to withdraw his accumulated deductions with interest as provided in N.J.S.18A:66-34. If such member shall die before attaining service retirement age, then his accumulated deductions, plus regular interest after January 1, 1956, shall be paid in accordance with N.J.S.18A:66-38, and, in addition if such member shall die after attaining service retirement age and has not withdrawn his accumulated deductions, an amount equal to 3/16 of the compensation upon which contributions by the member to the annuity savings fund were based in the last year of creditable service shall be paid to such member's beneficiary.
Any member who, having elected to receive a deferred retirement allowance, again becomes an employee covered by the retirement system while under the age of 60 or, if that person became a member of the retirement system on or after the effective date of P.L.2008, c.89, while under the age of 62, shall thereupon be reenrolled. If he had discontinued his service for more than two consecutive years, subsequent contributions shall be at a rate applicable to the age resulting from the subtraction of his years of creditable service at the time of his last discontinuance of contributing membership from his age at the time of his return to service. He shall be credited with all service as a member standing to his credit at the time of his election to receive a deferred retirement allowance.
(cf: P.L.2008, c.89, s.19)
2. N.J.S.18A:66-37 is amended to read as follows:
18A:66-37. Should a member resign after having established 25 years of creditable service before reaching age 60, or before reaching the age of 62 if the person became a member of the retirement system on or after the effective date of P.L.2008, c.89, the member may elect "early retirement," provided, that such election is communicated by such member to the retirement system by filing a written application, duly attested, stating at what time subsequent to the execution and filing thereof the member desires to be retired. The member shall receive, in lieu of the payment provided in N.J.S.18A:66-34, an annuity which is the actuarial equivalent of the member's accumulated deductions and a pension in the amount which, when added to the member's annuity, will provide a total retirement allowance of 1/64 of the member's final compensation for each year of service credited as class A service [and], 1/55 of the member's final compensation for each year of service credited as class B service prior to the effective date of P.L. , c. (pending before the Legislature as this bill), and 1/60 of final compensation for each year of service credited on or after that effective date, calculated in accordance with N.J.S.18A:66-44, reduced:
(a) by 1/4 of 1% for each month that the member lacks of being age 55; or
(b) for a person who becomes a member of the retirement system on or after July 1, 2007, by 1/4 of 1% for each month that the member lacks of being age 55 and by 1/12 of 1% for each month that the member lacks of being age 60 but over age 55; or
(c) for a person who becomes a member of the retirement system on or after the effective date of P.L.2008, c.89, by 1/4 of 1% for each month that the member lacks of being age 55 and by 1/12 of 1% for each month that the member lacks of being age 62 but over age 55; provided, however, that upon the receipt of proper proofs of the death of such a member there shall be paid to the member's beneficiary an amount equal to 3/16 of the compensation upon which contributions by the member to the annuity savings fund were based in the last year of creditable service or in the year of the member's highest contractual salary, whichever is higher.
Subparagraph (b) or (c) of this section shall not apply to a person who at the time of enrollment in the retirement system on or after July 1, 2007 transfers service credit from another State-administered retirement system pursuant to N.J.S.18A:66-15.1, but shall apply to a former member of the retirement system who has been granted a retirement allowance and is reenrolled in the retirement system on or after July 1, 2007 pursuant to N.J.S.18A:66-53.2 after becoming employed again in a position that makes the person eligible to be a member of the retirement system.
The board of trustees shall retire the member at the time specified or at such other time within one month after the date so specified as the board finds advisable.
(cf: P.L.2008, c.89, s.20)
3. N.J.S.18A:66-44 is amended to read as follows:
18A:66-44. A member, upon retirement for service, shall receive a retirement allowance consisting of:
(a) an annuity which shall be the actuarial equivalent of his accumulated deductions, together with interest after January 1, 1956, less any excess contributions as provided in N.J.S.18A:66-20; and
(b) a pension in the amount which, when added to the member's annuity, will provide a total retirement allowance of 1/64 of [his] final compensation for each year of service credited as class A service [and] , 1/55 of [his] final compensation for each year of service credited as class B service prior to the effective date of P.L. , c. (pending before the Legislature as this bill), and 1/60 of final compensation for each year of service credited on or after that effective date.
Upon the receipt of proper proofs of the death of a member who has retired on a service retirement allowance, there shall be paid to the member's beneficiary, an amount equal to 3/16 of the compensation upon which contributions by the member to the annuity savings fund were based in the last year of creditable service or in the year of the member's highest contractual salary, whichever is higher.
(cf: P.L.2001, c.133, s.6)
4. Section 38 of P.L.1954, c.84 (C.43:15A-38) is amended to read as follows:
38. Should a member of the Public Employees' Retirement System, after having completed 10 years of service, be separated voluntarily or involuntarily from the service, before reaching service retirement age, and not by removal for cause on charges of misconduct or delinquency, such person may elect to receive:
(a) The payments provided for in section 41b. of this act, if he so qualifies under said section, or;
(b) A deferred retirement allowance, beginning at the retirement age, which shall be made up of an annuity derived from the accumulated deductions standing to the credit of the individual member's account in the annuity savings fund at the time of [his] severance from the service together with regular interest, and a pension which when added to the annuity will produce a total retirement allowance of 1/64 of [his] final compensation for each year of service credited as Class A service [and], 1/55 of [his] final compensation for each year of service credited as Class B service prior to the effective date of P.L. , c. (pending before the Legislature as this bill), and 1/60 of final compensation for each year of service credited on or after that effective date, calculated in accordance with section 48 of [this act] P.L.1954, c.84 (C.43:15A-48), with optional privileges provided for in section 50 of [this act] P.L.1954, c.84 (C.43:15A-50) if he exercises such optional privilege at least 30 days before his attainment of the normal retirement age; provided, that such election is communicated by such member to the retirement system in writing stating at what time subsequent to the execution and filing thereof he desires to be retired; and provided further, that such member, as referred to in this subsection may later elect: (1) to receive the payments provided for in section 41b. of this act, if he had qualified under that section at the time of leaving service, except that in order to avail himself of the optional privileges pursuant to section 50, he must exercise such optional privilege at least 30 days before the effective date of his retirement; or (2) to withdraw his accumulated deductions with interest as provided in section 41a. If such member shall die before attaining service retirement age then his accumulated deductions, plus regular interest, shall be paid in accordance with section 41c.; or if such member shall die after attaining service retirement age and has not withdrawn his accumulated deductions, an amount equal to 3/16 of the compensation received by the member in the last year of creditable service shall be paid to such person, if living, as he shall have nominated by written designation duly executed and filed with the retirement system; otherwise to the executor or administrator of the member's estate.
(cf: P.L.2001, c.133, s.11)
5. Section 41 of P.L.1954, c.84 (C.43:15A-41) is amended to read as follows:
41. a. A member who withdraws from service or ceases to be an employee for any cause other than death or retirement shall, upon the filing of an application therefor, receive all of his accumulated deductions standing to the credit of his individual account in the annuity savings fund, plus regular interest, less any outstanding loan, except that for any period after June 30, 1944, the interest payable shall be such proportion of the interest determined at the regular rate of 2% per annum bears to the regular rate of interest, and except that no interest shall be payable in the case of a member who has less than three years of membership credit for which he has made contributions. He shall cease to be a member two years from the date he discontinued service as an eligible employee, or, if prior thereto, upon payment to him of his accumulated deductions. If any such person or member shall die before withdrawing or before endorsing the check constituting the return of his accumulated deductions, such deductions shall be paid to the member's beneficiary. No member shall be entitled to withdraw the amounts contributed by his employer covering his military leave unless he shall have returned to the payroll and contributed to the retirement system for a period of 90 days.
b. Should a member resign after having established 25 years of creditable service before reaching age 60, or before reaching age 62 if the person became a member of the retirement system on or after the effective date of P.L.2008, c.89, he may elect "early retirement," provided, that such election is communicated by such member to the retirement system by filing a written application, duly attested, stating at what time subsequent to the execution and filing thereof he desires to be retired. He shall receive, in lieu of the payment provided in subsection a. of this section, an annuity which is the actuarial equivalent of his accumulated deductions together with regular interest, and a pension in the amount which, when added to the member's annuity, will provide a total retirement allowance of 1/64 of his final compensation for each year of service credited as Class A service [and], 1/55 of his final compensation for each year of service credited as Class B service prior to the effective date of P.L. , c. (pending before the Legislature as this bill), and 1/60 of final compensation for each year of service credited on or after that effective date, calculated in accordance with section 48 (C.43:15A-48) of this act, reduced:
(a) by 1/4 of 1% for each month that the member lacks of being age 55; or
(b) for a person who becomes a member of the retirement system on or after July 1, 2007, by 1/4 of 1% for each month that the member lacks of being age 55 and by 1/12 of 1% for each month that the member lacks of being age 60 but over age 55; or
(c) for a person who becomes a member of the retirement system on or after the effective date of P.L.2008, c.89, by 1/4 of 1% for each month that the member lacks of being age 55 and by 1/12 of 1% for each month that the member lacks of being age 62 but over age 55; provided, however, that upon the receipt of proper proofs of the death of such a member there shall be paid to his beneficiary an amount equal to three-sixteenths of the compensation upon which contributions by the member to the annuity savings fund were based in the last year of creditable service.
Paragraph (b) or (c) of this subsection shall not apply to a person who at the time of enrollment in the retirement system on or after July 1, 2007 transfers service credit from another State-administered retirement system pursuant to section 14 of P.L.1954, c.84 (C.43:15A-14), but shall apply to a former member of the retirement system who has been granted a retirement allowance and is reenrolled in the retirement system on or after July 1, 2007 pursuant to section 27 of P.L.1966, c.217 (C.43:15A-57.2) after becoming employed again in a position that makes the person eligible to be a member of the retirement system.
The board of trustees shall retire him at the time specified or at such other time within one month after the date so specified as the board finds advisable.
c. Upon the receipt of proper proofs of the death of a member in service on account of which no accidental death benefit is payable under section 49 there shall be paid to such member's beneficiary:
(1) The member's accumulated deductions at the time of death together with regular interest; and
(2) An amount equal to one and one-half times the compensation upon which contributions by the member to the annuity savings fund were based in the last year of creditable service.
(cf: P.L.2008, c.89, s.23)
6. Section 48 of P.L.1954, c.84 (C.43:15A-48) is amended to read as follows:
48. A member, upon retirement for service, shall receive a retirement allowance consisting of:
a. An annuity which shall be the actuarial equivalent of his accumulated deductions together with regular interest; and
b. A pension in the amount which, when added to the member's annuity, will provide a total retirement allowance of 1/64 of [his] final compensation for each year of service credited as Class A service [and], 1/55 of [his] final compensation for each year of service credited as Class B service prior to the effective date of P.L. , c. (pending before the Legislature as this bill), and 1/60 of final compensation for each year of service credited on or after that effective date.
c. Upon the receipt of proper proofs of the death of a member who has retired on a service retirement allowance, there shall be paid to the member's beneficiary, an amount equal to 3/16 of the compensation upon which contributions by the member to the annuity savings fund were based in the last year of creditable service.
(cf: P.L.2001, c.133, s.13)
7. This act shall take effect on January 1, 2011.
STATEMENT
This bill provides that the multiplier of final compensation used in the calculation of the deferred, early, and service retirement allowances for members of the Teachers' Pension and Annuity Fund and the Public Employees' Retirement System will change from 1/55 to 1/60 for service credited on and after January 1, 2011.
