Sponsored by:
Assemblyman GORDON M. JOHNSON
District 37 (Bergen)
SYNOPSIS
Adds option of receipt of employee's contributions plus portion of employer contributions when vested PERS member leaves PERS-covered service.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning the Public Employees' Retirement System of New Jersey and amending P.L.1954, c.84.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. 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, calculated in accordance with section 48 of this act, with optional
privileges provided for in section 50 of this act 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;
or
(c) The member's accumulated deductions standing to the credit of the individual member's account in the annuity savings fund together with regular interest plus a portion of the employer's contributions to the system in an amount equal to 2.5% of the compensation upon which contributions by the member to the annuity savings fund were based for the member's years of creditable service.
(cf: P.L.2001, c.133, s.11)
2. If the beneficiary or estate of a member who had 10 or more years of credited service at the time of severance from service and who elected to receive a deferred retirement allowance but died before achieving the retirement age has not been in receipt of the member's accumulated deductions, plus regular interest, pursuant to subsection (b) of section 38 of P.L.1954, c.84 (C.43:15A-38), prior to the effective date of this act, P.L. , c. (pending before the Legislature as this bill), that beneficiary or estate shall be eligible to receive the benefit of subsection (c) of section 38 of P.L.1954, c.84 (C.43:15A-38), as amended by P.L. , c. (pending before the Legislature as this bill), if the beneficiary or estate applies to the system for it within one year after the effective date.
3. This act shall take effect immediately.
STATEMENT
Under current law, when a member of the Public Employees' Retirement System (PERS), having completed 10 years of service, leaves service for any cause other than death or retirement, the member may elect to receive: (1) the member's accumulated deductions plus regular interest (N.J.S.A.43:15A-41a); (2) a retirement allowance, if the member has established 25 years of PERS creditable service before age 60 years (N.J.S.A.43:15A-41b pursuant to N.J.S.A.43:15A-38(a)); or (3) a deferred retirement allowance, beginning at the retirement age of 60 years (N.J.S.A.43:15A-38(b)).
This bill provides that a PERS member with 10 or more years of PERS credited service at the time of severance from PERS-covered employment, in addition to the options above, will have an additional option of electing to receive the member's accumulated deductions together with regular interest plus a portion of the employer's contributions to the system in an amount equal to 2.5% of the compensation upon which contributions by the member to the annuity savings fund were based for the member's years of creditable service.
The bill also provides that election of this option will be open for a period of one year from the effective date of the bill to the beneficiary or estate of a PERS member who had 10 or more years of credited service at the time of severance from service and who elected to receive a deferred retirement allowance but died before achieving the retirement age, if the beneficiary or estate has not been in receipt of the member's accumulated deductions, plus regular interest, pursuant to N.J.S.A.43:15A-38, prior to the bill's enactment.