Bill Text: NJ S3315 | 2020-2021 | Regular Session | Introduced
Bill Title: Extends suspension of pension loan repayments for certain qualified public employees until one year after end of COVID-19 public health emergency.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2021-01-07 - Introduced in the Senate, Referred to Senate State Government, Wagering, Tourism & Historic Preservation Committee [S3315 Detail]
Download: New_Jersey-2020-S3315-Introduced.html
Sponsored by:
Senator BRIAN P. STACK
District 33 (Hudson)
SYNOPSIS
Extends suspension of pension loan repayments for certain qualified public employees until one year after end of COVID-19 public health emergency.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning the suspension of the repayment of loans from certain State-administered retirement systems for public employees.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. For the purposes of the suspension of the repayments of pension loans by a qualified individual who is an active or retired member of the Public Employees' Retirement System, the Teachers' Pension and Annuity Fund, the Police and Firemen's Retirement System, the State Police Retirement System, or the Judicial Retirement System, as such suspension was initially authorized by the federal CARES Act until December 31, 2020, the suspension granted to a qualified individual prior to the effective date of P.L. , c. (pending before the Legislature as this bill) shall be extended until one year after the expiration date of the State public health emergency due to COVID-19 declared by the Governor on March 9, 2020 in Executive Order No. 103 and the extensions. A suspension of the repayments of pension loans may also be granted upon a request submitted on or after that effective date, but before that expiration date, by a qualified individual, and, if granted, the repayments by that qualified individual shall be suspended until one year after the expiration date of that State public health emergency.
As used in this section:
"Qualified individual" means an active or retired member of the Public Employees' Retirement System, the Teachers' Pension and Annuity, the Police and Firemen's Retirement System, the State Police Retirement System, or the Judicial Retirement System who:
(1) is diagnosed with COVID-19 by a test approved by the federal Centers for Disease Control and Prevention; or
(2) has a spouse or dependent diagnosed with COVID-19 by a test approved by the federal Centers for Disease Control and Prevention; or
(3) experiences adverse financial consequences as a result of being quarantined, furloughed, laid off, or having to work hours reduced due to COVID-19; being unable to work due to lack of child care due to COVID-19; being unable to work due to closing or reduced hours of a business owned or operated by the individual due to COVID-19; or other factors as determined by the Secretary of the Treasury.
b. If suspended, interest shall continue to accrue on the outstanding loan balance, and the individual shall not be eligible to take an additional loan for the duration of the suspension. As of the end of the suspension period, the loan balance shall be recertified to include accrued interest, the loan repayments shall resume on a revised schedule, and the repayment shall increase in accordance with federal guidelines. The recertification of suspended loans shall be in accordance with specific guidance from the Internal Revenue Service.
c. If an active member retires during a repayment suspension, the loan balance and accrued interest shall be carried into the member's retirement account. As of the end of the suspension period, the loan balance shall be recertified to include accrued interest and loan repayments shall resume on a recalculated repayment schedule as a deduction from the member's monthly retirement allowance until the loan balance plus interest is satisfied.
d. A suspension shall not be applied to a loan which is in default and has been designated as a deemed distribution, even if the five-year repayment period has not reached maturity.
e. This section shall be implemented to the extent that the qualified status of the specified retirement systems under federal law can be maintained upon that implementation, and such modifications to the systems as may be available shall be made to allow for its implementation.
f. The rules and regulations deemed necessary to implement this section shall be effective immediately upon filing with the Office of Administrative Law and shall be in effect for a period not to exceed 18 months, and shall, thereafter, be amended, adopted, or readopted in accordance with the provisions of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.).
2. This act shall take effect immediately.
STATEMENT
Under the federal Cares Act, certain qualified active employees and retirees of the Public Employees' Retirement System, the Teachers' Pension and Annuity Fund, the Police and Firemen's Retirement System, the State Police Retirement System, or the Judicial Retirement System had the option to request the suspension of pension loan repayments until December 31, 2020.
This bill will extend the suspension of the repayments on those pension loans until one year after the expiration date of the COVID-19 public health emergency that was declared by the Governor on March 9, 2020 in Executive Order 103.
This bill will extend those suspensions that were granted before the effective date and will permit new requests for suspensions to be submitted after the effective date. This bill will be implemented to the extent that the qualified status of the specified retirement systems under federal law can be maintained upon that implementation.
