New Jersey-2010-A3325-Introduced

An Act concerning retirement and health care benefits for public employees, and amending various parts of the statutory law, supplementing Title 43 of the Revised Statutes, and repealing various parts of the statutory law.

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

1. (New section) There is established the New Jersey Public Employee Benefits Board in, but not of, the Department of the Treasury in the Executive Branch of State government. For the purpose of complying with the provisions of Article V, Section IV, paragraph 1 of the New Jersey Constitution, the New Jersey Public Employee Benefits Board is allocated within the Department of the Treasury, but, notwithstanding this allocation, the board shall be independent of any supervision or control by the department or by any officer or employee thereof. Under this name, all business of the board shall be conducted and transacted, all moneys under the authority and control of the board shall be invested, all payments from various funds and accounts under the authority and control of the board shall be made, and all the cash, securities, and other property under the authority and control of the board shall be held.

The board shall have all the authority, functions, duties, and responsibilities as shall be necessary and appropriate to create, implement, administer, operate, or modify, or terminate when specifically permitted, the pension and health care benefit systems, funds, plans, or programs administered by the State, and the policies, procedures, and regulations thereof, provided to public employees of the State and of the political subdivisions of the State, and their dependents, beneficiaries, and survivors, in accordance with this act, P.L. , c. (C. )(pending before the Legislature as this bill), and in accordance with various statutes providing for and regulating such pension and health care benefits.

A used in this act, P.L. , c. (C. )(pending before the Legislature as this bill), "board" means the New Jersey Public Employee Benefits Board.

2. (New section) a. The board shall be composed of 16 members as follows:

(1) the State Treasurer, ex officio, or a designee;

(2) the Chairperson of the Civil Service Commission, ex officio; or a designee;

(3) the Director of the Administrative Office of the Courts, ex officio, or a designee;

(4) two persons serving in an elective public office as a mayor, appointed by the Governor;

(5) two persons serving in an elective public office as a member of a board of chosen freeholders, appointed by the Governor;

(6) a public employees' representative serving as an officer of the Communication Workers' of America, appointed by the Governor;

(7) a public employees' representative serving as an officer of the New Jersey Education Association, appointed by the Governor;

(8) a public employees' representative serving as an officer of the American Federation of State, County, and Municipal Employees, appointed by the Governor;

(9) a public employees' representative serving as an officer of the Policemen's Benevolent Association, appointed by the Governor;

(10) a public employees' representative serving as an officer of the Fraternal Order of Police, appointed by the Governor;

(11) a public employees' representative serving as an officer of the International Federation of Professional and Technical Engineers, appointed by the Governor;

(12) a public employees' representative serving as an officer of the State Troopers Fraternal Association, appointed by the Governor;

(13) one member of the public appointed by the Governor from among persons recommended by the Speaker of the General Assembly, who shall not be a holder of an elective public office or an active or retired public officer or employee; and

(14) one member of the public appointed by the Governor from among persons recommended by the President of the Senate, who shall not be a holder of an elective public office or an active or retired public officer or employee.

All the appointments made by the Governor in accordance with paragraphs (4) through (12) of this subsection shall be made with the advice and consent of the Senate.

b. Members of the board appointed pursuant to paragraphs (4) through (14), inclusive, of subsection a. of this section shall serve while qualified for a term of five years and until the qualified successor is appointed. Of the initial appointments, three members shall serve for a term of three years, five members shall serve for a term of four years, and five members shall serve for a term of five years.

Members of the board appointed pursuant to paragraphs (4) and (5) of subsection a. of this section shall be qualified to serve only while holding the elective public office held at the time of the appointment.

Members of the board appointed pursuant to paragraphs (6) through (12), inclusive, of subsection a. of this section shall be qualified to serve only while holding the office held at the time of the appointment.

A vacancy in the membership of the board occurring other than by expiration of term shall be filled in the same manner as the original appointment, but for the unexpired term only.

c. Members of the board appointed pursuant to paragraphs (4) through (12), inclusive, of subsection a. of this section may be removed from the board by the Governor for cause, upon notice and opportunity to be heard at a public hearing. Members of the board appointed pursuant to paragraphs (4) through (12), inclusive, of subsection a. of this section who shall miss three consecutive meetings of the full board without being excused for good cause by the chairperson shall be deemed to have vacated the office.

d. A member of the board shall, upon appointment, take an oath of office that, so far as it devolves upon the member, the member will diligently and honestly fulfill the duties of member of the board, and that the member will not knowingly violate or willingly permit to be violated any provision of law. The oath shall be subscribed by the member making it, certified by the officer before whom it is taken, and immediately filed in the office of the Secretary of State.

3. (New section) a. The members of the board shall serve without compensation, but the board may reimburse its members, other than those serving ex officio, for actual and necessary expenses incurred in the discharge of their duties as approved by the chairperson of the board, within the limits of any funds made available by the board for that purpose. A member who is a public employee shall not suffer loss of salary or wages during service on the board.

b. A member or an employee of the board shall not have a direct interest in the gains or profits of any investments under the authority and control of the board, nor shall a member or an employee of the board directly or indirectly, for himself or as an agent, in any manner use the funds or accounts under the authority and control of the board except to make such current and necessary payments as are authorized by the board, nor shall a member or an employee of the board become an endorser or surety, or in any manner an obligor, for moneys loaned to or borrowed from the funds or accounts.

4. (New section) a. The members of the board shall elect annually a chairperson from among the members. The member of the board so elected shall serve as the chairperson for a term of one year and until a successor is elected. The chairperson shall be the presiding officer of the board.

b. Actions of the board shall require the affirmative vote of a majority of the members present at a meeting at which a majority of the full authorized membership is present.

c. If the Director of the Division of Investment in the Department of the Treasury is administering all activities and implementing all decisions of the board concerning investment matters, the members of the board shall elect from among the members four members to serve on the State Investment Council as representatives of the board. The members so elected shall serve as such for a period of three years from the date of their election and until their respective successors are elected.

5. (New section) The board shall to the extent deemed necessary and appropriate for the purposes of the board or to carry out any power expressly given by law:

a. appoint such employees as needed to cause the work of the board to be performed in such manner and according to such procedures as the board determines;

b. establish bureaus, divisions, committees, or units to cause the work of the board to be performed in such manner and according to such procedures as the board determines;

c. assign and reassign personnel within the board's bureaus, divisions, committees, or units;

d. retain actuaries and consultants;

e. maintain a management information system;

f. audit reports and transactions for conformity with the law and regulations promulgated thereto and with the requirements of the board;

g. conduct studies of various matters;

h. issue special or periodic reports;

i. establish subcommittees and advisory bodies;

j. assess fees or costs;

k. develop and maintain a program for the continuing training and education of public employers and certifying officers in regard to their responsibilities under the law;

l. award contracts in accordance with the law governing the awarding of contracts by the State;

m. enter into an agreement or contract, execute a legal document, or perform any act or thing necessary, convenient, or desirable;

n. call to its assistance and avail itself of the services of the employees of any State, county, or municipal department, board, commission, or agency as made available for the purposes of the board;

o. establish programs for public employers and public employees;

p. delegate decision making authority to the various bureaus, divisions, committees, or units established by the board or to the various boards or commissions placed under the authority and control of the board; and

q. promulgate and enforce rules or regulations in accordance with the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.).

6. (New section) a. The board shall appoint an executive director. The executive director shall be the chief administrative officer and secretary of the board who shall be charged with the responsibility of administering all activities and implementing all decisions of the board. The executive director shall be appointed by the board to serve at its pleasure and shall receive such compensation as the board shall determine.

The executive director shall be a person qualified by training and experience to perform the duties of the office. The executive director shall serve as a member of the senior executive or unclassified service and may be appointed without regard to Title 11A of the New Jersey Statutes.

b. The executive director shall serve as, or shall designate from among the employees of the board, the secretary for the board of trustees of each State-administered retirement system or retirement plan created by statute or by the board, for the State Health Benefits Commission, and for any other board or commission that is under the authority or control of the board.

7. (New section) The board shall develop and implement a plan for the consolidation and coordination of personnel of the board, including, but not limited to, classification, compensation, and workforce planning, and for transfer to the board of such employees, positions, funding, facilities, equipment, powers, and duties from the Executive Branch of State government in accordance with this act, P.L. , c. (C. )(pending before the Legislature as this bill), as necessary and appropriate to effectuate such consolidation and coordination.

8. (New section) a. The board shall keep a record of all of its proceedings. The records of the board shall be open to the public for inspection, copying, or examination in accordance with P.L.1963, c.73 (C.47:1A-1 et seq.). The board shall comply with the "Senator Byron M. Baer Open Public Meetings Act," P.L.1975, c.231 (C.10:4-6 et seq.).

b. The board shall provide for the conduct of such audits, valuations, and financial reports with regard to the various pension and health care benefits systems, funds, plans, and programs as shall provide a clear and direct understanding of their financial condition. The audits, valuations, and reports shall be conducted in compliance with any reporting standards as may be required by federal or State law or by prevailing national and professional standards, rules, and practices relating to the government environment.

Each State-administered retirement system and the State Health Benefits Commission shall publish annually any report as may be required by law, with such details as may be required by law or the board.

c. The board shall publish annually a report describing the actions, decisions, and transactions of the board for the preceding calendar year, and providing financial information on the various pension and health care benefits systems, funds, plans, and programs under the authority and control of the board. The report shall include pertinent information from any audit, actuarial valuation of assets and liabilities, or financial reports that may be complete and available. The board shall submit the report to the Governor and the Legislature, and shall post a copy on the Internet site of the board for the use of public employers, public employees, and the public.

9. (New section) The Attorney General shall be the legal adviser to the board, to the boards of trustees or commissions of the various State-administered retirement systems and retirements plans created by statute or by the board, to the State Health Benefits Commission and the School Employees' Health Benefits Program, and to any other board or commission that is under the authority or control of the board. If the Attorney General determines that a conflict of interest would affect the ability of the Attorney General to render such representation on a matter, the board may select and employ legal counsel to advise and render such representation on that matter.

10. (New section) a. The board shall select, in accordance with the law governing the awarding of contracts by the State and under such terms and conditions as the board shall deem necessary and appropriate, the actuary or actuaries for the State-administered retirement systems and retirement plans created by statute or by the board. The actuary shall be the technical adviser of the board and the boards of trustees or commissions of the State-administered retirement systems and retirement plans on matters regarding the operation of the systems or plans and shall perform such other duties as are required in connection therewith.

b. The board shall select, in accordance with the law governing the awarding of contracts by the State and under such terms and conditions as the board shall deem necessary and appropriate, such other consultants or professionals as the board shall deem necessary and appropriate for the purposes of the board or to carry out any power expressly given by law.

11. (New section) The board shall establish a finance committee. The committee shall have such authority, functions, duties, and responsibilities as the board shall direct.

The finance committee shall consist of five members of the board, one of whom shall be the State Treasurer and one of whom shall be from among the members, if any, elected by the members of the board to serve on the State Investment Council. The members of the board shall elect annually from among the members, the four members, other than the State Treasurer, to serve on the finance committee. The members of the finance committee shall elect annually from among the members of the committee a chairperson to serve for a term of one year and until the successor is elected. A quorum of the finance committee shall consist of three members thereof.

12. (New section) The board shall have the power to administer oaths, take affidavits and depositions of witnesses, and issue subpoenas for and compel the attendance of witnesses and the production of papers, books, accounts, payrolls, documents, records, testimony and other evidence of whatever description. In the case of the failure of any person to comply with any order of the board or subpoena, lawfully issued, or on the refusal of any witness to produce evidence or to testify as to any matter regarding which the person may be lawfully interrogated, it shall be the duty of the Superior Court, or the judge thereof, upon application by the board to compel obedience by proceedings for contempt, as in the case of disobedience of a subpoena issued for such court or a refusal to testify therein. The boards of trustees and commissions under the authority and control of the board shall also have this power when the board so provides.

13. (New section) a. The board shall have all the authority, functions, duties, and responsibilities as shall be necessary and appropriate to administer the State-administered retirement systems in accordance with this act, P.L. , c. (C. )(pending before the Legislature as this bill), and in accordance with various statutes providing for and regulating such systems and the policies, procedures, and regulations of those systems.

As used in this act, P.L. , c. (C. )(pending before the Legislature as this bill), "State-administered retirement systems" means, unless a different meaning clearly appears from the context:

the Teachers' Pension and Annuity Fund, established pursuant to N.J.S.18A:66-1 et seq.;

the Public Employees' Retirement System, established pursuant to P.L.1954, c.84 (C.43:15A-1 et seq.);

the Police and Firemen's Retirement System, established pursuant to P.L.1944, c.255 (C.43:16A-1 et seq.);

the State Police Retirement System, established pursuant to P.L.1965, c.89 (C.53:5A-1 et seq.);

the Judicial Retirement System, established pursuant to P.L.1973, c.140 (C.43:6A-1 et seq.);

the Prison Officers' Pension Fund, established pursuant to P.L.1941, c.220 (C.43:7-7 et seq.);

the Consolidated Police and Firemen's Pension Fund, established pursuant to R.S.43:16-1 et seq.;

the Alternate Benefit Program, established pursuant to P.L.1969, c.242 (C.18A:66-167 et seq.);

the Defined Contribution Retirement Program, established pursuant to P.L.2007, c.92 (C.43:15C-1 et seq.); and

such other system or program as the Division of Pensions and Benefits in the Department of the Treasury may be administering on the effective date of this act, P.L. , c. (C. )(pending before the Legislature as this bill).

The boards of trustees established by law for the State-administered retirement systems shall continue to operate after the effective date of this act, P.L. , c. (C. )(pending before the Legislature as this bill), under the authority and control of the board. The board may delegate such authority, function, duty, or responsibility to the boards of trustees as it may deem necessary and appropriate for the efficient administration of the State-administered retirement systems. The boards of trustees shall serve such advisory role as the board shall determine necessary and appropriate. The board shall retain final decision authority on such matters as the board shall deem necessary and appropriate for the efficient administration of the State-administered retirement systems. A reference in a statute, rule, or regulation to an authority, function, duty, or responsibility of a board of trustees of a State-administered retirement system shall mean and be a reference to the board, or the board of trustees, or both, as appropriate in accordance with this act and various relevant law.

The authority, functions, duties, and responsibilities of the board shall not include the purchase of life insurance for the provision of a death benefit for a member of a State-administered retirement system when a statute specifically provides for that function, duty, or responsibility to be performed by the State Treasurer, except that the board may elect to assume the authority, functions, duties, and responsibilities for the matter at any time. If the board makes such an election, the board shall consult and coordinate with the State Treasurer on the matter as is necessary and appropriate for the transfer. The board may elect to return the authority, functions, duties, and responsibilities to the State Treasurer at any time with the consent of the State Treasurer.

b. The board shall have all the authority, functions, duties, and responsibilities as shall be necessary and appropriate to administer the State Health Benefits Program and the School Employees' Health Benefits Program, in accordance with this act, P.L. , c. (C. )(pending before the Legislature as this bill), and in accordance with various statutes providing for and regulating the programs and the policies, procedures, and regulations of the programs

The State Health Benefits Commission established by law for the administration of the State Health Benefits Program and the School Employees' Health Benefits Commission established by law for the administration of the School Employees' Health Benefits Program shall continue to operate after the effective date of this act, P.L. , c. (C. )(pending before the Legislature as this bill), under the authority and control of the board. The board may delegate such authority, function, duty, or responsibility to the commissions as it may deem necessary and appropriate for the efficient administration of the programs. The commissions shall serve such advisory role as the board shall determine necessary and appropriate. The board shall retain final decision authority on such matters as the board shall deem necessary and appropriate for the efficient administration of the programs. A reference in a statute, rule, or regulation to an authority, function, duty, or responsibility of a commission shall mean and be a reference to the board, or the commission, or both, as appropriate in accordance with this act and various relevant law.

c. The board shall have all the authority, functions, duties, and responsibilities as shall be necessary and appropriate to administer the following programs in accordance with this act, P.L. , c. (C. )(pending before the Legislature as this bill), and in accordance with the various statutes providing for and regulating the programs and the policies, procedures, and regulations of the programs:

the Supplemental Annuity Collective Trust, established pursuant to P.L.1963, c.123 (C.52:18A-107 et seq.);

the New Jersey State Employees Deferred Compensation Plan, established pursuant to P.L.1978, c.39 (C.52:18A-163 et seq.);

the Additional Contributions Tax-Sheltered (ACTS) Program;

the State Employees Tax Savings Program;

the State Employees Commuter Tax Savings Program, authorized under section 1 of P.L.2001, c.162 (C.52:14-15.1b);

the Volunteer Emergency-Worker's Survivors Pension, authorized under sections 1 and 2 of P.L.1957, c.168 (C.43:12-28.1 and 28.2); and

such other program as the Division of Pensions and Benefits in the Department of the Treasury and the State Health Benefits Commission may be administering on the effective date of this act, P.L. , c. (C. )(pending before the Legislature as this bill).

14. (New section) a. The board shall have all the authority, functions, duties, and responsibilities to create, implement, administer, operate, modify, and terminate several defined benefit retirement plans, not to exceed four in number, in addition to the State-administered retirement systems defined in section 13 of this act, P.L. , c. (C. )(pending before the Legislature as this bill), in order to provide a range of benefits and cost options for pensions available to public employers and public employees. A public employer or public employee may elect, in accordance with this act, P.L. , c. (C. )(pending before the Legislature as this bill), various relevant statutes, and the policies, procedures, and regulations of the board, to participate in such plans as an alternative to the mandatory participation in the State-administered retirement systems. Any such plan created shall be consistent with (1) the requirements of federal law, the Internal Revenue Code, and the rulings of the Internal Revenue Service, (2) the policies inherent in State laws concerning pensions for public employees, and (3) the public interest. The board shall reserve the authority under each such plan created to periodically adjust the contribution rate required of the public employer and public employee based on valuation reports prepared by the actuary of the plan.

For a plan created, the board shall, in writing, describe the benefits, terms, conditions, and procedures of the plan with specificity. The board shall determine the rate of contribution by, or the manner in which the contribution is to be calculated for, the public employee and public employer; the types of retirements for which benefits are provided; the formula or means by which the benefits are to be calculated; and the benefit options that may be chosen. A board may, but need not, provide in the plan for a death benefit, for loans, or for the purchase of service credit. The board may exclude from the plan the application of the "Pension Adjustment Act," P.L.1958, c.143 (C.43:3B-1 et seq.). The board shall follow generally the procedural and administrative provisions of the Public Employees' Retirement System for each plan created. The board shall provide for a board of trustees for each such plan created. Provisions of law that reference generally a pension or retirement system or fund shall apply to a retirement plan created by the board, to ensure consistency in operation among the various pension or retirement funds, systems, or plans, unless modification or exclusion of that application is permitted by this act or by the nature of the retirement plan.

b. The board shall administer the State Health Benefits Program, established pursuant to P.L.1961, c.49 (C.52:14-17.27), in a manner that provides several health care benefit plans for public employers and public employees, in order to provide a range of benefits and cost options for health care available to public employers and public employees. The board shall ensure that the program offers at all times a basic benefits health care plan that would provide adequate health care at a highly competitive cost to the public employers and public employees electing to participate in the plan.

c. The board is empowered to create, implement, administer, operate, modify or terminate such additional retirement or health care benefit programs as the board determines to be necessary and appropriate and not inconsistent with this act, P.L. , c. (C. )(pending before the Legislature as this bill).

d. In considering the creation, implementation, administration, operation, modification or termination of a retirement or health care benefits plan or program under the authority provided by this section, the board may retain the services of consultants in the private sector on employee benefits matters as the board determines to be necessary and appropriate.

15. (New section) a. A person who commences service in an employment, office, or position that makes the person eligible to be a member of the Teachers' Pension and Annuity Fund, the Judicial Retirement System, the Public Employees' Retirement System, the Police and Firemen's Retirement System, or the State Police Retirement System, or a member of one of these retirement systems with less than 10 years of service credit, shall have the option to choose either to be enrolled in the relevant retirement system or enrolled in a defined benefit retirement plan created, implemented, administered, and operated by the board with regard to that particular employment, office, or position by irrevocably waiving all rights and benefits which would otherwise be provided by the relevant retirement system.

b. When a member of the Teachers' Pension and Annuity Fund, the Judicial Retirement System, the Public Employees' Retirement System, the Police and Firemen's Retirement System, or the State Police Retirement System elects to transfer to a defined benefit retirement plan created, implemented, administered and operated by the board by filing the proper application form declaring the election to participate in the plan, the respective retirement system shall transfer the amount of all of the member's accumulated deductions standing to the credit of the member in the annuity savings fund, plus regular interest, less any outstanding loan, except that no interest shall be payable in the case of a member who has less than three years of membership credit for which the member has made contributions. 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.

c. A public employer and public employee may through a collective negotiations agreement or individual contract of employment provide for the enrollment in, or the transfer to, a defined benefit retirement plan created, implemented, administered, and operated by the board of a public employee who commences service in an employment, office, or position while the agreement is in effect or of a public employee with less than 10 years of service credit in a defined benefit retirement system or plan.

A public employee with 10 or more years of service credit in Teachers' Pension and Annuity Fund, the Judicial Retirement System, the Public Employees' Retirement System, the Police and Firemen's Retirement System, and the State Police Retirement System, or a retirement plan created, implemented, administered, and operated by the board, shall not be eligible to transfer enrollment to another fund, system, or plan in the course of an employment, office, or position.

16. (New section) a. The board shall have all the authority, functions, powers, and duties relating to the investment or reinvestment of moneys, and purchase, sale, or exchange of any investments or securities, of or for any fund or account established for the State-administered retirement systems and such retirement plans as established by the board under this act, P.L. , c. (C. )(pending before the Legislature as this bill).

(1) The Director of the Division of Investment in the Department of the Treasury shall be responsible in this regard for the administration of all activities and implementation of all decisions of the board, consistent with applicable law and the policies, procedures, and regulations of the board, the division, and the State Investment Council.

(2) In the alternative, the board may elect to establish a division or unit within the board and retain employees for the administration of all activities and implementation of all decisions of the board regarding such investments, consistent with applicable law and the policies, procedures, and regulations of the board. Such an election shall be irrevocable. If the board makes such an election, the board shall consult and coordinate with the Division of Investment in the Department of the Treasury and the State Investment Council on such matters as necessary and appropriate for the transfer of the administration of the activities and implementation of decisions regarding investments. If the board makes such an election, the applicable provisions of P.L.1950, c.270 (C.52:18A-79 et seq.) to the extent not inconsistent with this act shall govern the investment matters under the authority, functions, duties, responsibilities of the board and the board's employees.

b. The board shall formulate and establish, and may from time to time amend, modify or repeal, such policies or guidelines as it may deem necessary and proper that shall govern the methods, practices or procedures for investment, reinvestment, purchase, sale or exchange transactions to be followed by the Director of the Division of Investment or the employees of the board, as appropriate. The board shall determine from time to time the cash requirements of the various funds and accounts and the amount available for investment, all of which shall be certified to the Director of the Division of Investment or the employees of the board, as appropriate.

As used in this section, "State-administered retirement systems" shall not include the Alternate Benefit Program and the Defined Contribution Retirement Program due to the defined contribution nature of those programs.

c. All actions and decisions of the Director of the Division of Investment or the employees of the board, as appropriate, with regard to the funds and accounts of State-administered retirement systems and retirement plans created by the board shall be authorized by the board either by general guidelines or specific orders or by approval by the board or the finance committee of the board of a specific action or decision, as the board shall determine and communicate to the director or the employees. The board shall review and take into consideration the determinations of the State Investment Council, and conform to those determinations generally or specifically when the board determines necessary and appropriate, when the Director of the Division of Investment is involved. The director shall meet with the board not less than once a month to discuss and review investment actions and decisions. The board shall have access to all files and records of the division and may require any officer or employee therein to provide such information as it may deem necessary and appropriate in the performance of the board's authority, functions, duties, and responsibilities. The board shall have authority to inspect and audit the respective accounts and funds administered through the Division of Investment.

d. The board shall consult with the State Investment Council from time to time with respect to the work of the Division of Investment.

17. (New section) The board shall designate the medical boards required for each State-administered retirement system and retirement plan created by the board. The board may designate one medical board to serve all such systems and plans, or may delegate the designation to the board of trustees of each State-administered retirement system or plan, subject to the approval of the board. The board shall require a medical board to be composed of not less than three physicians.

A physician serving on a medical board shall not be eligible to participate in a State-administered retirement system or retirement plan or in a health care benefit program of a public employer for public employees.

A medical board shall pass upon the medical examinations required by retirement system or plan, shall investigate the essential statements and certificates made by or on behalf of a member of a retirement system or plan in connection with an application for disability retirement, and shall report in writing to the board, and the board of trustees of the retirement system or plan, its conclusions and recommendations upon all matters referred to it.

18. (New section) a. Except as the board may elect pursuant to subsection b. of this section, the State Treasurer shall be the custodian of the several funds and accounts for the State-administered retirement systems and retirement plans created by the board pursuant to this act, P.L. , c. (C. )(pending before the Legislature as this bill), shall select all depositories and custodians, and shall negotiate and execute custody agreements in connection with the assets or investments of any of the funds and accounts. All payments from the funds and accounts shall be made by the State Treasurer only upon vouchers signed by the chairperson of the board and countersigned by the secretary of the board. No voucher shall be drawn, except upon the authority of the board duly entered in the records of its proceedings.

b. The board may elect to be the custodian of the several funds and accounts for the State-administered retirement systems and retirement plans created by the board pursuant to this act, P.L. , c. (C. )(pending before the Legislature as this bill). If the board makes the election, the board shall select all depositories and custodians and shall negotiate and execute custody agreements in connection with the assets or investments of any of the funds and accounts. All payments from the funds and accounts shall be made by the board only upon vouchers signed by the chairperson of the board and countersigned by the secretary of the board. No voucher shall be drawn, except upon the authority of the board duly entered in the records of its proceedings.

19. (New section) The expenses incurred by the board as a result of its operations in accordance with this act, P.L. , c. (C. )(pending before the Legislature as this bill), shall be funded by an annual charge upon each public employer for a proportionate share of the cost of each system, plan, or program operated by the board in which the public employer and its employees participate. This proportion shall be computed as the number of employees of the public employer bears to the total number of public employees in the system, plan, or program. The pro rata share of the administrative costs shall be certified annually to each public employer by the board. If a public employer fails to pay the charge in the manner and in accordance with the schedule required by the board, the board shall notify the State Treasurer and the Commissioner of the Department of Community Affairs who shall deduct from any State aid or grant appropriated and allocated to that public employer an amount equal to the unpaid charge and any interest imposed and remit that amount to the board. The board may assess interest against a public employer that has failed to pay the administrative charge in a timely manner. The provisions of this section shall not be deemed to change any requirement in law assigning responsibility for administrative costs to a public employer on behalf of another public employer.

No significant costs shall be incurred by the State on behalf of public employers other than the State or on behalf of public employees other than employees of the State as a result of the establishment of the board and its operations in accordance with this act, P.L. , c. (C. )(pending before the Legislature as this bill).

20. (New section) The Division of Pensions and Benefits as constituted in the Department of the Treasury, with its functions, powers, and duties, and those of the director, is continued and transferred to the New Jersey Public Employee Benefits Board. The functions, powers, and duties of the division and its personnel shall be allocated within the board as the board shall determine. The board shall organize the division's functions in such manner as the board determines to be necessary and appropriate for the efficient operation of the work of the board and in such a manner as will provide the public employers and public employees with proper support in benefit matters.

21. (New section) a. Any law, rule, regulation, order, reorganization plan, contract, document, judicial or administrative proceeding, appropriation or otherwise which refers to a State-administered retirement system, its board of trustees, or the Division of Pensions and Benefits in the Department of the Treasury shall also mean the New Jersey Public Employee Benefits Board established by P.L. , c. (C. )(pending before the Legislature as this bill).

b. The transfers directed by this act, P.L. , c. (C. )(pending before the Legislature as this bill), except as otherwise provided, shall be made in accordance with the "State Agency Transfer Act," P.L.1971, c.375 (C.52:14D-1 et seq.).

c. Any statute that is inconsistent with this act, P.L. , c. (C. )(pending before the Legislature as this bill), is, to the extent of the inconsistency, hereby superseded.

22. Section 33 of P.L.2007, c.103 (C.52:14-17.46.3) is amended to read as follows:

33. a. There is hereby created a School Employees' Health Benefits Commission, consisting of nine members:

(1) [the State Treasurer and the Commissioner of the Department of Banking and Insurance serving ex officio] Two members who are members of the New Jersey Public Employee Benefits Board appointed by the chairperson of the board;

(2) a member appointed by the [Governor] chairperson of the New Jersey Public Employee Benefit Board who is a New Jersey resident and is qualified by experience, education, or training in the review, administration, or design of health insurance plans for self-insured employers;

(3) a member appointed by the [Governor] chairperson of the New Jersey Public Employee Benefits Board from among three persons nominated by the New Jersey School Boards' Association, which member shall be qualified by experience, education, or training in the review, administration, or design of health insurance plans for self-insured employers;

(4) three members appointed by the [Governor] chairperson of the New Jersey Public Employee Benefits Board from among five persons nominated by the New Jersey Education Association, of whom two shall be qualified by experience, education, or training in the review, administration, or design of health insurance plans for self-insured employers;

(5) a member appointed by the [Governor] chairperson of the New Jersey Public Employee Benefits Board from among three persons nominated by the education section of the New Jersey State AFL-CIO, which member shall be qualified by experience, education, or training in the review, administration, or design of health insurance plans for self-insured employers; and

(6) a member appointed pursuant to subsection b. of this section who shall be the chairperson.

b. The [Governor] chairperson of the New Jersey Public Employee Benefits Board shall appoint the chairperson from among three persons nominated jointly by at least six of the eight members appointed pursuant to subsection a. of this section.

c. If the [Governor] chairperson of the New Jersey Public Employee Benefit Board declines to make an appointment from among the persons nominated for membership, the [Governor] chairperson shall request that a new list of nominees be provided in compliance with subsection a. of this section. If the [Governor] chairperson declines to make an appointment from the new list, the process set forth in this subsection shall be repeated until the [Governor] chairperson makes an appointment from a list of nominees. Except with respect to the appointment of the chairperson, if a new list of nominees is not submitted within 45 days of the [Governor's] chairperson's request, the [Governor] chairperson shall make the appointment without the need to select from any list of nominees.

d. The initial terms of the members of the commission appointed after the effective date of P.L. , c. (pending before the Legislature as this bill) shall be as follows:

(1) the member appointed pursuant to paragraph (3) of subsection a. of this section and the two members appointed pursuant to paragraph (4) of subsection a. of this section who are required to be qualified by experience, education, or training shall serve for a term of three years;

(2) the member appointed pursuant to paragraph (2) of subsection a. of this section, the member appointed pursuant to paragraph (4) of subsection a. of this section who is not required to be qualified by experience, education, or training, and the member appointed pursuant to paragraph (5) of subsection a. of this section shall serve for a term of two years; and

(3) the chairperson shall serve for a term of six years.

All subsequent terms shall be for three years, except that the term of the chairperson shall be five years. A member of the commission may be reappointed to succeeding terms without limit in the same manner as the original appointment. A vacancy occurring on the commission shall be filled in the same manner as the original appointment and only for the unexpired term.

The commission shall be under the authority and control of the New Jersey Public Employee Benefits Board in accordance with P.L. , c. (C. )(pending before the Legislature as this bill). The term of a member serving on the date on which P.L. , c. (C. )(pending before the Legislature as this bill) becomes operative is terminated as of the 60th date following that operative date.

(cf: P.L.2007, c.103, s.33)

23. Section 34 of P.L.2007, c.103 (C.52:14-17.46.4) is amended to read as follows:

34. The School Employees' Health Benefits Program, authorized by sections 31 through 41 of P.L.2007, c.103 (C.52:14-17.46.1 through C.52:14-17.46.11), shall be administered [in the Department of the Treasury] by the New Jersey Public Employee Benefits Board. Administrative services required by the commission shall be provided through the [Division of Pensions and Benefits, and the Director of the Division of Pensions and Benefits shall be the secretary of the commission] board. The board and the commission shall establish a health benefits program for the school employees of the State, the cost of which shall be paid as specified in this act. The [commission] board shall[, by a majority vote of its full authorized membership,] establish and change rules and regulations as may be deemed reasonable and necessary for the administration of this act. Until such rules and regulations are established, the rules and regulations of the State Health Benefits Commission shall be deemed to apply to the School Employees' Health Benefits Program.

[The Attorney General shall be the legal advisor of the commission.]

The members of the commission shall serve without compensation but shall be reimbursed for any necessary expenditure.

The commission shall ensure that audits and reviews are performed as required by section 40 of P.L.2007, c.103 (C.52:14-17.46.10). Actions of the commission related to such audits and reviews shall require a majority vote of the full authorized membership of the commission to be approved.

Except as otherwise specified in this act, actions of the commission shall require the affirmative vote of a majority of the members present at a meeting at which a majority of the full authorized membership is present.

(cf: P.L.2007, c.103, s.34)

24. N.J.S.18A:66-56 is amended to read as follows:

18A:66-56 Board of trustees; duties, appointment or election, terms, vacancies, oaths, voting, expenses.

Subject to the provisions of chapter 70 of the laws of 1955, the general responsibility for the proper operation of the teachers' pension and annuity fund shall be vested in the board of trustees and the New Jersey Public Employee Benefits Board in accordance with P.L. , c. (C. )(pending before the Legislature as this bill). Subject to the limitations of the law, the [board] New Jersey Public Employee Benefits Board shall annually establish rules and regulations for the administration and transaction of [its] business and for the control of the funds created by this article. Such rules and regulations shall be consistent with those adopted [by] for the other pension funds [within the Division of Pensions] , systems, and plans under the authority and control of the New Jersey Public Employee Benefits Board in order to permit the most economical and uniform administration of all such retirement systems, funds, or plans. The membership of the board shall consist of the following:

(a) [The State Treasurer or the deputy State Treasurer, when designated for that purpose by the State Treasurer] One trustee who is a member of the New Jersey Public Employee Benefits Board appointed by the chairperson of the board;

(b) Two trustees appointed by the [Governor, with the advice and consent of the Senate,] chairperson of the New Jersey Public Employee Benefit Board who shall serve for a term of office of three years and until their successors are appointed, and who shall be private citizens of the State of New Jersey and who are neither an officer thereof nor active or retired members of the system, except that of the two trustees initially appointed by the [Governor pursuant to P.L.1992, c.41 (C.43:6A-33.1 et al.)] chairperson, one shall be appointed for a term of two years and one for a term of three years. The term of a member serving on the date on which P.L. , c. (C. )(pending before the Legislature as this bill) becomes operative is terminated as of the 60th date following that operative date;

(c) Three trustees from among the active or retired members of the retirement system, elected by the membership or by the delegates elected for this purpose by the membership, one of whom shall be elected each year for a three-year term commencing on January 1, following such election in such manner as the board of trustees may prescribe. If the board of trustees determines that the election of trustees under this subsection is to be made by delegates elected by the membership, it shall prescribe that those delegates shall be chosen from among active and retired members of the retirement system;

(d) One trustee not an active or retired teacher nor an officer of the State, elected by the other trustees[, other than the State Treasurer], for a term of three years.

A vacancy occurring in the board of trustees shall be filled in the same manner as provided in this section for regular appointment or election to the position where the vacancy exists, except that a vacancy occurring in the trustees elected from among the active or retired members of the retirement system shall be filled for the unexpired term.

Each member of the board of trustees shall, upon appointment or election, take an oath of office that, so far as it devolves upon him, he will diligently and honestly administer the board's affairs, and that he will not knowingly violate or willfully permit to be violated any provision of law applicable to this article. The oath shall be subscribed to by the member making it, certified by the officer before whom it is taken and filed immediately in the office of the Secretary of State.

Each trustee shall be entitled to one vote in the board and a majority of all the votes of the entire board shall be necessary for a decision by the board of trustees at a meeting of the board. The board of trustees shall keep a record of all its proceedings, which shall be open to public inspection.

The members of the board of trustees shall serve without compensation but shall be reimbursed for any necessary expenditures. No employee shall suffer loss of salary or wages through serving on the board.

The [State Treasurer] New Jersey Public Employee Benefits Board shall designate a medical board [after consultation with the Director of the Division of Pensions, subject to veto by the board for valid reason. It shall be composed of three physicians who are not eligible to participate in the retirement system]. The medical board shall pass upon all medical examinations required under the provisions of this article, shall investigate all essential statements and certificates by or on behalf of a member in connection with an application for disability retirement, and shall report in writing to the retirement system its conclusions and recommendations upon all matters referred to it.

(cf: P.L.1999, c.230, s.1)

25. N.J.S.18A:66-57 is amended to read as follows:

18A:66-57. Officers[, actuary, legal adviser, secretary]

The board of trustees shall elect annually from its membership a chairman and may also elect a vice chairman, who shall have all the power and authority of the chairman in the event of the death, absence or disability of the chairman. The actuary of the fund shall be selected by the [Retirement Systems Actuary Selection Committee established by P.L.1992, c.125] New Jersey Public Employee Benefits Board in accordance with P.L. , c. (C. )(pending before the Legislature as this bill).

The actuary shall be the technical adviser of the board on matters regarding the operation of the funds created by the provisions of this article and shall perform such other duties as are required in connection therewith.

[The Attorney General shall be the legal adviser of the retirement system, except that if the Attorney General determines that a conflict of interest would affect the ability of the Attorney General to represent the board on a matter affecting the retirement system, the board may select and employ legal counsel to advise and represent the board on that matter.

The chief or assistant chief of the office of secretarial services of the Division of Pensions of the State Department of the Treasury, shall be the secretary of the board. The chief and assistant chief of the office of secretarial services shall be in the competitive division of the State classified service. The secretary presently in office shall hold the position as chief of the office of secretarial services subject to all of the provisions of Title 11 of the Revised Statutes and shall not be removed from said office except in the manner provided under the provisions of said title relating to permanent employees in the competitive division of the State classified service. The board of trustees shall select its secretary from among the eligible candidates.]

(cf: P.L.1992, c.125, s.3)

26. N.J.S.18A:66-61 is amended to read as follows:

18A:66-61. Trustees to control funds[, investment council member]

The [board of trustees] New Jersey Public Employee Benefits Board shall [be and are hereby constituted trustees of] have authority and control over the various funds and accounts established by this article[; provided, however, that], and shall have all functions, powers and duties relating to the investment or reinvestment of moneys of, and purchase, sale or exchange of any investments or securities, of or for any fund or account established under this article, which shall be exercised and performed by the Director of the Division of Investment in accordance with the provisions of [chapter 270, of the laws of 1950] P.L.1950, c.20 (C.52:18A-79 et seq.) and of P.L. , c. (C. )(pending before the Legislature as this bill). [The secretary of the board of trustees shall determine from time to time the cash requirements of the various funds and accounts established by this article and the amount available for investment, all of which shall be certified to the Director of the Division of Investment.

A member of the board of trustees to be designated by a majority vote thereof shall serve on the state investment council as a representative of said board of trustees, for a term of 1 year and until his successor is elected and qualified.]

The finance committee of the board of trustees, if such a committee is authorized by the New Jersey Public Employee Benefits Board, shall be appointed on or before July 1 of each calendar year by the chairman of the board of trustees to serve through June 30 of the ensuing calendar year and until their successors are appointed. The finance committee of the board of trustees shall consist of three members of the board of trustees, one of whom shall be the State Treasurer.

(cf: P.L.1970, c.57, s.8)

27. Section 3 of P.L.1993, c.385 (C.18A:66-172.1) is amended to read as follows:

3. There is established in [but not of the Division of Pensions in the Department of the Treasury] the New Jersey Public Employee Benefits Board the Pension Provider Selection Board, which shall consist of the Executive Director of the [Division of Pensions] New Jersey Public Employee Benefits Board or a representative of that director; [the Director of the Division of Investment or a representative of that director; the Commissioner of the Department of Insurance or a representative of that commissioner; the Director of the Division of Purchase and Property or a representative of that director] three members of the New Jersey Public Employee Benefits Board appointed by the chairperson of that board; and a person appointed by the [Director of the Division of Pensions] chairperson of the New Jersey Public Employee Benefits Board who is an active participant or receiving a benefit from the alternate benefit program. The Pension Provider Selection Board shall be under the authority and control of the New Jersey Public Employee Benefits Board in accordance with the provisions of P.L. , c. (C. )(pending before the Legislature as this bill).

The Pension Provider Selection Board shall select through a competitive bidding process at least three unrelated insurance or mutual fund companies licensed or otherwise authorized to transact business in New Jersey from which alternate benefit contracts will be purchased. [These new insurers or mutual fund companies shall be selected by competitive bidding in accordance with all applicable State laws and regulations not later than the 270th day following the effective date of P.L.1993, c.385 (C.18A:66-172.1 et al.).] The selected carriers shall be authorized to receive contributions within 60 days of their selection. Each contract shall be awarded for a period not to exceed six years with a renewal option for a period not to exceed three years. All carriers shall be subject to a performance review by the Pension Provider Selection Board every seven years and must meet such standards as the Pension Provider Selection Board shall establish by regulation in order to be renewed for another term of seven years as carriers. Removal of a carrier for cause during a seven-year term is not waived. In establishing by regulation the criteria for the initial selection and any performance review of a carrier, the Pension Provider Selection Board shall consider, among other things, the following:

a. the portability of the contracts offered or to be offered by the company, based on the number of states in which the company provides contracts under similar plans;

b. the efficacy of the contracts in the recruitment and retention of employees for the various State public institutions of higher education;

c. the nature and extent of the rights and benefits to be provided by the contracts for participating employees and their beneficiaries;

d. the relation of the rights and benefits to the amount of contributions to be made pursuant to the provisions of this article;

e. the suitability of the rights and benefits to the needs and interests of participating employees and the various State public institutions of higher education;

f. the ability of the company to provide the rights and benefits under such contracts;

g. the financial soundness of the company, the extent of the company's financial commitment to the contracts, and whether the company meets the minimum financial criteria established by the [Division of Pensions] New Jersey Public Employee Benefits Board;

h. the company's overall quality of service, its investment performance considering return on investments and risk, the administrative fee to be charged to participating employees, and the offering of a balanced array of investment opportunities; and

i. the nature of the informational or promotional materials to be provided to prospective participants.

The Pension Provider Selection Board may not designate a company which serves as a disbursement system for other providers or which charges third party administrative fees.

A company that has been designated as of January 1, 1993 by the Division of Pensions as a designated provider shall continue to be so designated until its status as a designated provider is terminated for cause by the division or by the Pension Provider Selection Board.

(cf: P.L.1994, c.48, s.193)

28. Section 1 of P.L.1995, c.408 (C.43:1-3) is amended to read as follows:

1. a. The receipt of a public pension or retirement benefit is hereby expressly conditioned upon the rendering of honorable service by a public officer or employee.

b. The New Jersey Public Employee Benefits Board, upon recommendation of the board of trustees of any State or locally-administered pension fund or retirement system created under the laws of this State, is authorized to order the forfeiture of all or part of the earned service credit or pension or retirement benefit of any member of the fund or system for misconduct occurring during the member's public service which renders the member's service or part thereof dishonorable and to implement any pension forfeiture ordered by a court pursuant to section 2 of P.L.2007, c.49 (C.43:1-3.1).

c. In evaluating a member's misconduct to determine whether it constitutes a breach of the condition that public service be honorable and whether forfeiture or partial forfeiture of earned service credit or earned pension or retirement benefits is appropriate, the New Jersey Public Employee Benefits Board and board of trustees shall consider and balance the following factors in view of the goals to be achieved under the pension laws:

(1) the member's length of service;

(2) the basis for retirement;

(3) the extent to which the member's pension has vested;

(4) the duties of the particular member;

(5) the member's public employment history and record covered under the retirement system;

(6) any other public employment or service;

(7) the nature of the misconduct or crime, including the gravity or substantiality of the offense, whether it was a single or multiple offense and whether it was continuing or isolated;

(8) the relationship between the misconduct and the member's public duties;

(9) the quality of moral turpitude or the degree of guilt or culpability, including the member's motives and reasons, personal gain and similar considerations;

(10) the availability and adequacy of other penal sanctions; and

(11) other personal circumstances relating to the member which bear upon the justness of forfeiture.

d. Whenever [a board of trustees] the New Jersey Public Employee Benefits Board determines, pursuant to this section, that a partial forfeiture of earned service credit or earned pension or retirement benefits is warranted, it shall order that benefits be calculated as if the accrual of pension rights terminated as of the date the misconduct first occurred or, if termination as of that date would in light of the nature and extent of the misconduct result in an excessive pension or retirement benefit or in an excessive forfeiture, a date reasonably calculated to impose a forfeiture that reflects the nature and extent of the misconduct and the years of honorable service.

(cf: P.L.2007, c.49, s.1)

29. Section 3 of P.L.2007, c.49 (C.43:1-3.2) is amended to read as follows:

3. The New Jersey Public Employee Benefits Board and board of trustees of any State or locally-administered pension fund or retirement system created under the laws of this State may subpoena witnesses and compel their attendance, and also may require the production of books, papers or documents in a matter concerning the rendering of honorable service by a public officer or employee seeking to receive a public pension or retirement benefit. If any person shall refuse to obey any subpoena so issued, or shall refuse to testify or produce any books, papers or documents, the board may apply ex parte to the Superior Court to compel the person to comply forthwith with the subpoena.

(cf: P.L.2007, c.49, s.3)

30. Section 1 of P.L.1986, c.188 (C.43:3C-9) is amended to read as follows:

1. The mandatory contributions by members or participants to the Teachers' Pension and Annuity Fund required by N.J.S.18A:66-31, to alternate benefit providers under the alternate benefit program required by section 8 of P.L.1969, c.242 (C.18A:66-174), to the Judicial Retirement System required by section 26 of P.L.1981, c.470 (C.43:6A-34.1), to the Prison Officers' Pension Fund required by section 7 of P.L.1941, c.220 (C.43:7-13), to the Public Employees' Retirement System required by section 25 of P.L.1954, c.84 (C.43:15A-25), to the Defined Contribution Retirement Program required by section 3 of P.L.2007, c.92 (C.43:15C-3), to the Consolidated Police and Firemen's Pension Fund required by R.S.43:16-5, to the Police and Firemen's Retirement System required by section 15 of P.L.1944, c.255 (C.43:16A-15), and to the State Police Retirement System required by section 38 of P.L.1965, c.89 (C.53:5A-38), and to a retirement plan created by the New Jersey Public Employee Benefits Board pursuant to P.L. , c. (C. )(pending before the Legislature as this bill), shall be picked up by their employers and shall be treated as employer contributions as provided by section 414(h) of the United States Internal Revenue Code. The amount of contributions on behalf of each member shall continue to be included as regular compensation for all other purposes, except that the amount shall not be included in the computation of federal income taxes withheld from the member's compensation.

(cf: P.L.2007, c.92, s.16)

31. Section 1 of P.L.1997, c.113 (C.43:3C-9.1) is amended to read as follows:

1. In accordance with the provisions of section 401 (a) (2) of the federal Internal Revenue Code, and subject to such exceptions as may be permitted for governmental plans under section 401 (a) (2) of the federal Internal Revenue Code, at no time prior to the satisfaction of all liabilities with respect to members and their beneficiaries under the Teachers' Pension and Annuity Fund, established pursuant to N.J.S.18A:66-1 et seq., the Judicial Retirement System, established pursuant to P.L.1973, c.140 (C.43:6A-1 et seq.), the Prison Officers' Pension Fund, established pursuant to P.L.1941, c.220 (C.43:7-7 et seq.), the Public Employees' Retirement System, established pursuant to P.L.1954, c.84 (C.43:15A-1 et seq.), the Consolidated Police and Firemen's Pension Fund, established pursuant to R.S.43:16-1 et seq., the Police and Firemen's Retirement System, established pursuant to P.L.1944, c.255 (C.43:16A-1 et seq.), the State Police Retirement System, established pursuant to P.L.1965, c.89 (C.53:5A-1 et seq.), and the Alternate Benefit Program, established pursuant to P.L.1969, c.242 (C.18A:66-167 et seq.), and a retirement plan created by the New Jersey Public Employee Benefits Board pursuant to P.L. , c. (C. )(pending before the Legislature as this bill), shall any part of the corpus or income of the respective retirement systems and plans, within the taxable year or thereafter, be used for or diverted to purposes other than for the exclusive benefit of the members or their beneficiaries.

(cf: P.L.1997, c.113, s.1)

32. Section 2 of P.L.1997, c.113 (C.43:3C-9.2) is amended to read as follows:

2. Notwithstanding any law, rule or regulation to the contrary, the contributions to and benefits payable under the Teachers' Pension and Annuity Fund, the Judicial Retirement System, the Prison Officers' Pension Fund, the Public Employees' Retirement System, the Consolidated Police and Firemen's Pension Fund, the Police and Firemen's Retirement System, the State Police Retirement System and the Alternate Benefit Program, and a retirement plan created by the New Jersey Public Employee Benefits Board pursuant to P.L. , c. (C. )(pending before the Legislature as this bill), shall not exceed the limitations provided under section 415 of the federal Internal Revenue Code. The [Division of Pensions and Benefits in the Department of the Treasury] New Jersey Public Employee Benefits Board shall be responsible for implementation and enforcement of these limitations.

(cf: P.L.1997, c.113, s.2)

33. Section 3 of P.L.1997, c.113 (C.43:3C-9.3) is amended to read as follows:

3. Notwithstanding any law, rule or regulation to the contrary, for members of the Teachers' Pension and Annuity Fund, the Judicial Retirement System, the Public Employees' Retirement System, the Police and Firemen's Retirement System, and the State Police Retirement System, and a retirement plan created by the New Jersey Public Employee Benefits Board pursuant to P.L. , c. (C. )(pending before the Legislature as this bill), the amount of compensation which may be used for member contributions and benefits under the retirement systems after June 30, 1996 shall not exceed the compensation limitation of section 401 (a) (17) of the federal Internal Revenue Code of 1986, (26 U.S.C. s.401 (a) (17) ), as amended pursuant to section 13212 of the Omnibus Budget Reconciliation Act of 1993, Pub. L.103-66, 107 Stat. 312 or as hereafter amended or supplemented, to the extent applicable to governmental plans. The provisions of this section shall not be applicable to members enrolled prior to July 1, 1996 if the employer of the members certifies to the Director of the Division of Pensions and Benefits, in the form and manner prescribed by the director, prior to July 1, 1997, that the employer will pay the additional cost for not applying the limit to the members.

(cf: P.L.1997, c.113, s.3)

34. Section 41 of P.L.2007, c.92 (C.43:3C-9.6) is amended to read as follows:

41. a. Upon the termination of the Teachers' Pension and Annuity Fund, the Public Employees' Retirement System, the Judicial Retirement System, the Police and Firemen's Retirement System, the State Police Retirement System, the Prison Officers' Pension Fund, or the Consolidated Police and Firemen's Fund, or a retirement plan created by the New Jersey Public Employee Benefits Board pursuant to P.L. , c. (C. )(pending before the Legislature as this bill), or upon complete discontinuance of contributions to any of the retirement systems or plans, the rights of all members of such retirement system or plan to benefits accrued to the date of such termination or discontinuance, to the extent then funded, are non-forfeitable.

b. Notwithstanding any law, rule or regulation to the contrary, the form and timing of all distributions from the Teachers' Pension and Annuity Fund, the Public Employees' Retirement System, the Judicial Retirement System, the Police and Firemen's Retirement System, the State Police Retirement System, the Prison Officers' Pension Fund, or the Consolidated Police and Firemen's Fund, or a retirement plan created by the New Jersey Public Employee Benefits Board pursuant to P.L. , c. (C. )(pending before the Legislature as this bill), to a member, or to the beneficiary of a member if the member dies before the member's entire interest has been distributed, shall conform to the required distribution provisions of section 401(a)(9) of the federal Internal Revenue Code and the regulations issued by the United States Department of the Treasury under that Code section, including the incidental death benefit requirements of section 401(a)(9)(G) of the federal Internal Revenue Code. In addition, in no event shall payments under any of the retirement systems or plans commence to be paid to a member later than the member's required beginning date, without regard to whether the member has filed application therefor. For this purpose, a member's required beginning date is the April 1 of the calendar year following the later of (1) the calendar year in which the member attains age 70 1/2 or (2) the calendar year in which the member retires. The actuarial adjustment described in section 401(a)(9)(C)(iii) of the federal Internal Revenue Code shall not apply.

(cf: P.L.2007, c.92, s.41)

35. Section 21 of P.L.2007, c.92 (C.43:3C-12) is amended to read as follows:

21. a. With respect to all claims for benefits under the Teachers' Pension and Annuity Fund, the Public Employees' Retirement System, the Judicial Retirement System, the Police and Firemen's Retirement System, or the State Police Retirement System submitted on or after the effective date of P.L.2007, c.92 (C.43:15C-1 et al.), or under a retirement plan created by the New Jersey Public Employee Benefits Board pursuant to P.L. , c. (C. )(pending before the Legislature as this bill), the [Division of Pensions and Benefits] New Jersey Public Employee Benefits Board shall investigate increases in compensation reported for credit that exceed reasonably anticipated annual compensation increases for members of the retirement system or plan based upon consideration of the Consumer Price Index for the time period of the increases, the table of assumed salary increases recommended by the system's or plan's actuary and adopted by the [board of trustees of the retirement system] New Jersey Public Employee Benefits Board, and the annual percentage increases of salaries as indicated in data from the Public Employment Relations Commission established pursuant to P.L.1941, c.100 (C.34:13A-1 et seq.) or through other reliable industry sources of information regarding average annual salary increases.

b. Those cases in which a violation of the relevant statute or regulation is suspected shall be referred to the New Jersey Public Employee Benefits Board and board of trustees of the relevant retirement system or plan for further action.

(cf: P.L.2007, c.92, s.21)

36. Section 28 of P.L.2007, c.92 (C.43:3C-13) is amended to read as follows:

28. The Teachers' Pension and Annuity Fund, the Judicial Retirement System, the Prison Officers' Pension Fund, the Public Employees' Retirement System, the Consolidated Police and Firemen's Pension Fund, the Police and Firemen's Retirement System, and the State Police Retirement System, and a retirement plan created by the New Jersey Public Employee Benefits Board pursuant to P.L. , c. (C. )(pending before the Legislature as this bill), shall use consistent and generally-accepted actuarial standards, as established by the Governmental Accounting Standards Board or its successor, for the purpose of determining fund or system or plan asset values, obligations and annual employer contributions. Any modification of the assumptions or actuarial methodology at the direction of the State that changes asset values, obligations or annual contributions shall require public disclosure prior to adoption, including a financial impact analysis.

(cf: P.L.2007, c.92, s.28)

37. Section 20 of P.L.1992, c.125 (C.43:4B-2) is amended to read as follows:

20. The Executive Director of the [Division of Pensions] New Jersey Public Employee Benefits Board shall annually communicate to the board of trustees of each pension system or retirement plan the relevant factors used in calculating the State's contributions to that system's or plan's accrued liability. Further, the pension boards shall have access to all relevant actuarial information relating to any actuarial matter under consideration by the boards, subject to financial restraints imposed by the contract agreement.

(cf: P.L.1992, c.125, s.20)

38. Section 3 of P.L.1973, c.140 (C.43:6A-3) is amended to read as follows:

3. As used in this act:

a. "Accumulated deductions" means the sum of all amounts, deducted from the compensation of a member or contributed by him or on his behalf, standing to the credit of his individual account in the annuity saving fund.

b. "Annuity" means payments for life derived from the accumulated deductions of a member as provided in this amendatory and supplementary act.

c. "Annuity reserve" means the present value of all payments to be made on account of any annuity or benefit in lieu of an annuity computed on the basis of such mortality tables recommended by the actuary as the [State House Commission] New Jersey Public Employee Benefits Board adopts with regular interest.

d. "Beneficiary" means any person entitled to receive any benefit pursuant to the provisions of this act by reason of the death of a member or retirant.

e. "Child" means a deceased member's or retirant's unmarried child who is either (a) under the age of 18; (b) of any age who, at the time of the member's or retirant's death, is disabled because of mental retardation or physical incapacity, is unable to do any substantial, gainful work because of the impairment and his impairment has lasted or can be expected to last for a continuous period of not less than 12 months, as affirmed by the medical board; or (c) under the age of 21 and is attending school full time.

f. "Compensation" means the base salary, for services as a member as defined in this act, which is in accordance with established salary policies of the State for all employees in the same position but shall not include individual salary adjustments which are granted primarily in anticipation of the member's retirement or additional remuneration for performing temporary duties beyond the regular work schedule.

g. "Final salary" means the annual salary received by the member at the time of his retirement or death.

h. "Fiscal year" means any year commencing with July 1 and ending with June 30 next following.

i. "Medical board" means the board of physicians provided for in section 29 of this act.

j. "Member" means the Chief Justice and associate justices of the Supreme Court, judges of the Superior Court and tax court of the State of New Jersey required to be enrolled in the retirement system established by this act.

For purposes of this act, the person holding the office of standing master by appointment pursuant to N.J.S.2A:1-7 shall have the same privileges and obligations under this act as a judge of a Superior Court.

k. "Parent" means the parent of a member who was receiving at least one-half of his support from the member in the 12-month period immediately preceding the member's death or the accident which was the direct cause of the member's death. The dependency of such a parent will be considered terminated by marriage of the parent subsequent to the death of the member.

l. "Pension" means payment for life derived from contributions by the State.

m. "Pension reserve" means the present value of all payments to be made on account of any pension or benefit in lieu of a pension computed on the basis of such mortality tables recommended by the actuary as shall be adopted by the [State House Commission] New Jersey Public Employee Benefits Board with regular interest.

n. "Regular interest" means interest as determined by the [State Treasurer, after consultation with the Directors of the Divisions of Investment and Pensions, the State House Commission] New Jersey Public Employee Benefits Board and the actuary. It shall bear a reasonable relationship to the percentage rate of earnings on investments based on the market value of assets but shall not exceed the assumed percentage rate of increase applied to salaries plus 3%, provided however that the [commission] board shall not set the average percentage rate of increase applied to salaries below 6%.

o. "Retirant" means any former member receiving a pension or retirement allowance as provided by this act.

p. "Retirement allowance" means the pension plus the annuity.

q. "Retirement system" or "system" herein refers to the "Judicial Retirement System of New Jersey," which is the corporate name of the arrangement for the payment of pensions, retirement allowances and other benefits under the provisions of this act including the several funds placed under said system. By that name, all of its business shall be transacted, its funds invested, warrants for money drawn, and payments made and all of its cash and securities and other property held.

r. "Service" means public service rendered for which credit is allowed on the basis of contributions made by the State.

s. "Several courts" means the Supreme, Superior, and tax courts.

t. "Widow" means the woman to whom a member or a retirant was married, or a domestic partner as defined in section 3 of P.L.2003, c.246 (C.26:8A-3), at least four years before the date of his death and to whom he continued to be married or a domestic partner until the date of his death. The eligibility of such a widow to receive a survivor's benefit will be considered terminated by the marriage of, or establishment of a domestic partnership by, the widow subsequent to the member's or the retirant's death. In the event of accidental death the four-year qualification shall be waived. When used in this act, the term "widow" shall mean and include "widower" as may be necessary and appropriate to the particular situation.

u. "Widower" means the man to whom a member or a retirant was married, or a domestic partner as defined in section 3 of P.L.2003, c.246 (C.26:8A-3), at least four years before the date of her death and to whom she continued to be married or a domestic partner until the date of her death. The eligibility of such a widower to receive a survivor's benefit will be considered terminated by the marriage of, or establishment of a domestic partnership by, the widower subsequent to the member's or retirant's death. In the event of accidental death the four-year qualification shall be waived.

v. "Spouse" means the husband or wife, or domestic partner as defined in section 3 of P.L.2003, c.246 (C.26:8A-3), of a member or retirant.

(cf: P.L.2003, c.246, s.44)

39. Section 29 of P.L.1973, c.140 (C.43:6A-29) is amended to read as follows:

29. a. Subject to the provisions of P.L.1955, c.70 (C.52:18A-95 to 52:18A-104), the general responsibility for the proper operation of the retirement system is hereby vested in the [State House Commission] New Jersey Public Employee Benefits Board in accordance with the provisions of P.L. , c. (C. )(pending before the Legislature as this bill). A reference to the State House Commission in P.L.1973, c.140 (C.43:6A-1 et seq.) shall mean the New Jersey Public Employee Benefits Board.

b. [Except as otherwise herein provided, no member of the State House Commission shall have any direct interest in the gains or profits of any investments of the retirement system, nor shall any member of the State House Commission directly or indirectly, for himself or as an agent in any manner use the moneys of the retirement system, except to make such current and necessary payments as are authorized by the commission; nor shall any member of the State House Commission become an endorser or surety, or in any manner an obligor for moneys loaned to or borrowed from the retirement system.

c. For purposes of this act, each member of the State House Commission shall be entitled to one vote and a majority vote of all members shall be necessary for any decision by the commission at any meeting of said commission.

d.] Subject to the limitations of this act, the [State House Commission] New Jersey Public Employee Benefits Board shall annually establish rules and regulations for the administration of the funds created by this act and for the transaction of [its] business. Such rules and regulations shall be consistent with those adopted [by] for the other pension funds [within the Division of Pensions] , systems, or plans under the authority and control of the New Jersey Public Employee Benefits Board in order to permit the most economical and uniform administration of all such retirement systems, funds or plans.

[e.] c. The actuary of the system shall be selected by the [Retirement Systems Actuary Selection Committee established by P.L.1992, c.125] New Jersey Public Employee Benefits Board. He shall be the technical adviser of the commission on matters regarding the operation of the funds created by the provisions of this act and shall perform such other duties as are required in connection herewith.

[f. The Attorney General shall be the legal adviser of the retirement system, except that if the Attorney General determines that a conflict of interest would affect the ability of the Attorney General to represent the commission on a matter affecting the retirement system, the commission may select and employ legal counsel to advise and represent the commission on that matter.

g. The Director of the Division of Pensions of the State Department of the Treasury shall be the secretary of the commission for purposes pertaining to the provisions of this act.

h.] d. For purposes of this act, the [State House Commission] board shall keep a record of all of its proceedings which shall be open to public inspection. The retirement system shall publish annually a report showing the fiscal transactions of the retirement system for the preceding year, the amount of the accumulated cash and securities of the system and the last balance sheet showing the financial condition of the system by means of any actuarial valuation of the assets and liabilities of the retirement system.

[i.] e. The [State Treasurer] New Jersey Public Employee Benefits Board shall designate a medical board [after consultation with the Director of the Division of Pensions. It shall be composed of three physicians]. The medical board shall pass on all medical examinations required under the provisions of this act, and shall report in writing to the retirement system its conclusions and recommendations upon all matters referred to it.

(cf: P.L.1992, c.125, s.5)

40. Section 30 of P.L.1973, c.140 (C.43:6A-30) is amended to read as follows:

30. a. The [State House Commission] New Jersey Public Employee Benefits Board shall [be and is hereby constituted the trustee of] have authority and control over all the various funds established by this act except the group insurance premium fund[; provided, however, that], and shall have all functions, powers, and duties relating to the investment or reinvestment of moneys of, and purchase, sale, or exchange of any investments or securities, of or for any fund established under this act, which shall be exercised and performed by the Director of the Division of Investment in accordance with the provisions of P.L.1950, c.270 (C.52:18A-79 et seq.) and of P.L. , c. (C. )(pending before the Legislature as this bill).

b. [The secretary of the commission shall determine from time to time the cash requirements of the various funds established by this act and the amount available for investment, all of which shall be certified to the Director of the Division of Investment.

c.] The Treasurer of the State of New Jersey shall be the custodian of the several funds. All payments from said funds shall be made by him only upon vouchers signed by the secretary and chairperson of the New Jersey Public Employee Benefits Board. [A duly attested copy of the resolution of the State House Commission bearing on its face the specimen signature of the secretary shall be filed with the treasurer as his authority for making payments upon such vouchers.

d.] c. The administration of the program shall be performed by the personnel of the [Division of Pensions of the State Department of the Treasury] New Jersey Public Employee Benefits Board and the costs of administration shall be borne by the State in accordance with the provisions of P.L. , c. (C. )(pending before the Legislature as this bill).

(cf: P.L.1973, c.140, s.30)

41. Section 12 of P.L.1941, c. 220 (C.43:7-18) is amended to read as follows:

12. [For] The New Jersey Public Employee Benefits Board and the Prison Officers' Pension Commission shall have the general administration authority and responsibility for the proper operation of this pension fund[, there is hereby established a pension commission, which shall be known as the Prison Officers' Pension Commission]. Said commission shall consist of the following members:

(a) [The Treasurer of the State of New Jersey, ex officio] One member who is a member of the New Jersey Public Employee Benefits Board appointed by the chairperson of the board;

(b) One member to be appointed by the [Governor] chairperson of the New Jersey Public Employee Benefit Board;

(d) A citizen of the State who holds no office under such State, who shall be selected by the other 5 members of the commission and shall hold office for the term of 3 years.

The term of a member serving pursuant to paragraph (b) of this section on the date on which P.L. , c. (C. )(pending before the Legislature as this bill) becomes operative is terminated as of the 60th date following that operative date.

All members of the commission shall hold office for 3 years commencing on July 1 and ending on June 30 in the third year thereafter[, except that the members first appointed shall hold office from October 1, 1957 until June 30, 1960, and the first members elected shall be elected and hold office, 1 for a term commencing on October 1, 1957 and ending on June 30, 1958, 1 for a term commencing on October 1, 1957 and ending on June 30, 1959 and 1 for a term commencing on October 1, 1957 and ending on June 30, 1960. The terms of office of all members of the commission in office on the effective date of this act shall be terminated on September 30, 1957].

In case of a vacancy in the commission for any cause, the vacancy shall be filled for the unexpired term in the same manner as the office was previously filled.

The commission shall hold an annual meeting in July in each year and elect from its membership its president and such other officers as it deems advisable. The commission shall [also, at such meeting select a secretary and] appoint [its] a finance committee, if such a committee is authorized by the New Jersey Public Employee Benefits Board.

Each member of the commission shall be entitled to 1 vote in the commission and a majority of all the votes for the entire commission shall be necessary for a decision by the commission at its meetings. The commission shall keep a record of all its proceedings, which shall be open to public inspection.

The members of the commission shall serve without compensation but shall be reimbursed for all necessary expenditures incurred through service on the commission. No State employee shall suffer loss of salary or wages through serving on the commission.

All retirements shall be made and pensions allowed under this act by this commission and the board.

(cf: P.L.1957, c.118, s.1)

42. Section 4 of P.L.1973, c. 155 (C.43:7-18.1) is amended to read as follows:

4. The pension commission and the New Jersey Public Employee Benefits Board shall have the general responsibility for the proper operation of the pension fund, subject to the provisions of P.L.1955, c.70 (C.52:18A-95 et seq.) and of P.L. , c. (C. )(pending before the Legislature as this bill).

The [commission] New Jersey Public Employee Benefits Board may make all necessary rules and regulations. Such rules and regulations shall be consistent with those adopted [by] for the other pension funds [within the Division of Pensions] , systems, and plans under the authority and control of the New Jersey Public Employee Benefits Board in order to permit the most economical and uniform administration of all such retirement systems, funds, and plans.

A reference to a board of trustees in P.L. , c. (C. )(pending before the Legislature as this bill) shall include the commission.

(cf: P.L.1973, c.155, s.4)

43. Section 13 of P.L.1941 c.220 (C.43:7-19) is amended to read as follows:

13. The [said] pension commission and the New Jersey Public Employee Benefits Board shall have control and management of said fund and of the retirement of said prison officers, and they are hereby empowered to make all necessary rules and regulations regarding the same not inconsistent with this act. All moneys belonging to said pension fund shall be received and paid over to the Treasurer of the State of New Jersey, whose official bond shall cover the same. All moneys paid out of such pension fund shall be paid by the said treasurer upon warrants signed by the [president] chairperson and secretary of [said pension commission] the New Jersey Public Employee Benefits Board, or such other officers [at] as the [pension commission] board shall designate.

(cf: P.L.1941, c.220, s.13)

44. Section 5 of P.L.1973 c.155 (C.43:7-19.1) is amended to read as follows:

5. The [State Treasurer] New Jersey Public Employee Benefits Board shall designate a medical board [after consultation with the Director of the Division of Pensions, subject to veto by the commission for valid reason. It shall be composed of three physicians who are not eligible to participate in the pension fund]. The medical board shall pass upon all medical examinations required under the provisions of the act, shall investigate all essential statements and certificates by or on behalf of a member in connection with an application for disability retirement, and shall report in writing to the pension fund its conclusions and recommendations upon all matters referred to it.

(cf: P.L.1973, c.155, s.5)

45. Section 14 of P.L.1941, c.220 (C.43:7-20) is amended to read as follows:

14. [Said pension commission] The New Jersey Public Employee Benefits Board shall deposit such fund in any of the banks or trust companies of the State, and shall invest the same in bonds secured by first mortgages on improved property worth at least twice the amount loaned, or in bonds of the United States or of this State, or any city or county in this State. All income, interest or dividend which shall be paid or agreed to be paid on account of any loan or deposit shall belong to and constitute a part of said fund.

(cf: P.L.1941, c.220, s.14)

46. Section 15 of P.L.1941, c.220 (C.43:7-21) is amended to read as follows:

15. The [president] New Jersey Public Employee Benefits Board and [secretary] Executive Director of the board shall, on behalf of the said pension commission, execute any and all releases, acquittances, receipts or discharges of any and all written evidences of indebtedness [to said pension commission].

(cf: P.L.1941, c.220, s.15)

47. Section 16 of P.L.1941, c.220 (C.43:7-22) is amended to read as follows:

16. The pension commission and the New Jersey Public Employee Benefits Board shall make an annual report of the conditions of such fund and the manner in which same is invested.

(cf: P.L.1941, c.220, s.16)

48. Section 17 of P.L.1954, c.84 (C.43:15A-17) is amended to read as follows:

17. Subject to the provisions of P.L.1955, c. 70 the general responsibility for the proper operation of the Public Employees' Retirement System shall be vested in the New Jersey Public Employee Benefits Board and the board of trustees. Subject to the limitations of the law, the [board] New Jersey Public Employee Benefits Board shall annually establish rules and regulations for the administration and transaction of [its] business and for the control of the funds created by this subtitle. Such rules and regulations shall be consistent with those adopted [by] for the other pension funds [within the Division of Pensions] , systems, and plans under the authority and control of the New Jersey Public Employee Benefits Board in order to permit the most economical and uniform administration of all such retirement systems, funds, and plans.

The membership of the board of trustees shall consist of the following:

a. Two trustees appointed by the [Governor, with the advice and consent of the Senate,] chairperson of the New Jersey Public Employee Benefit Board who shall serve for a term of office of three years and until their successors are appointed, who shall be private citizens of the State of New Jersey and who are neither an officer thereof nor active or retired members of the system. Of the two trustees initially appointed by the [Governor pursuant to P.L.1992, c.41 (C.43:6A-33.1 et al.)] board, one shall be appointed for a term of two years and one for a term of three years. The term of a member serving on the date on which P.L. , c. (C. )(pending before the Legislature as this bill) becomes operative is terminated as of the 60th date following that operative date.

b. [The State Treasurer or the Deputy State Treasurer, when designated for that purpose by the State Treasurer] One trustee who is a member of the New Jersey Public Employee Benefits Board appointed by the chairperson of the board.

c. Three trustees elected for a term of three years by the member employees of the State from among the active or retired State members of the retirement system in a manner prescribed by the board of trustees.

d. One trustee elected for a term of three years by the member employees of counties from among the active or retired county members of the retirement system and the same method of holding an election from time to time used for the State employees' representatives shall be followed in elections held for county representatives.

e. Two trustees elected for a term of three years by the member employees of municipalities from among the active or retired municipal members of the retirement system and the same method of holding an election from time to time used for the State employees' representatives shall be followed in elections held for municipal representatives.

A vacancy occurring in the board of trustees shall be filled by the appointment or election of a successor in the same manner as his predecessor.

Each member of the board of trustees shall, upon appointment or election, take an oath of office that, so far as it devolves upon him, he will diligently and honestly administer the board's affairs, and that he will not knowingly violate or willfully permit to be violated any provision of law applicable to this act. The oath shall be subscribed to by the member making it, certified by the officer before whom it is taken and filed immediately in the office of the Secretary of State.

The [State Treasurer] New Jersey Public Employee Benefits Board shall designate a medical board [after consultation with the Director of the Division of Pensions, subject to veto by the board of trustees for valid reason. It shall be composed of three physicians who are not eligible to participate in the retirement system]. The medical board shall pass upon all medical examinations required under the provisions of this act, shall investigate all essential statements and certificates by or on behalf of a member in connection with an application for disability retirement, and shall report in writing to the retirement system its conclusions and recommendations upon all matters referred to it.

(cf: P.L.1992, c.41, s.13)

49. Section 18 of P.L.1954, c.84 (C.43:15A-18) is amended to read as follows:

18. The board of trustees shall elect annually from its membership a chairman and may also elect a vice-chairman, who shall have all the power and authority of the chairman in the event of the death, absence or disability of the chairman.

The actuary of the fund shall be selected by the [Retirement Systems Actuary Selection Committee established by P.L.1992, c.125] New Jersey Public Employee Benefits Board.

The actuary shall be the technical adviser of the board on matters regarding the operation of the funds created by the provisions of this act and shall perform such other duties as are required in connection therewith.

The chief or assistant chief of the office of secretarial services of the Division of Pensions of the State Department of the Treasury shall be the secretary of the board. The chief and assistant chief of the office of secretarial services shall be in the competitive division of the State classified service. The secretary presently in office shall hold the position as assistant chief of the office of secretarial services subject to all of the provisions of Title 11 of the Revised Statutes and shall not be removed from said office except in the manner provided under the provisions of said Title relating to permanent employees in the competitive division of the State classified service. The board of trustees shall select its secretary from among the eligible candidates.]

(cf: P.L.1992, c.125, s.8)

50. Section 32 of P.L.1954, c.84 (C.43:15A-32) is amended to read as follows:

32. The [board of trustees] New Jersey Public Employee Benefits Board shall [be and are hereby constituted trustees of] have authority and control over the various funds and accounts established by this act[; provided, however, that] , and shall have all functions, powers, and duties relating to the investment or reinvestment of moneys of, and purchase, sale, or exchange of any investments or securities, of or for any fund or account established under this act, which shall be exercised and performed by the Director of the Division of Investment in accordance with the provisions of [chapter 270, P.L.1950, as amended and supplemented] P.L.1950, c.20 (C.52:18A-79 et seq.) and of P.L. , c. (C. )(pending before the Legislature as this bill). [The secretary of the board of trustees shall determine from time to time the cash requirements of the various funds and accounts established by this act and the amount available for investment, all of which shall be certified to the Director of the Division of Investment.]

The members of the finance committee of the board of trustees, if such a committee is authorized by the New Jersey Public Employee Benefits Board, shall be appointed at or after July 1 of each calendar year by the chairman of the board of trustees to serve through June 30 of the ensuing calendar year and until their successors are appointed. The finance committee of the board of trustees shall consist of five members of the board of trustees, one of whom shall be the State Treasurer[, and one of whom shall be the member designated to serve on the State Investment Council]. At least three members of the finance committee shall be members of the board of trustees who have been elected by members of the system. A quorum of the finance committee shall consist of three members thereof.

[A member of the board of trustees to be designated by a majority vote thereof shall serve on the State Investment Council as a representative of said board of trustees, for a term of 1 year and until his successor is elected and qualified.]

(cf: P.L.1970, c.57, s.3)

51. Section 4 of P.L.2007, c.92 (C.43:15C-4) is amended to read as follows:

4. There is established in[, but not of, the Division of Pensions and Benefits in the Department of the Treasury] the New Jersey Public Employee Benefits Board the Defined Contribution Retirement Program Board, that shall consist of the Chairperson and Executive Director of the [Division of Pensions and Benefits] New Jersey Public Employee Benefits Boards or a designee[; the Director of the Division of Investment or a designee; the Commissioner of the Department of Banking and Insurance or a designee; the Director of the Office of Management and Budget or a designee;] and a person appointed by the Executive Director [of the Division of Pensions and Benefits] who is an active participant or retiree of the Defined Contribution Retirement Program. The Defined Contribution Retirement Program Board shall be under the authority and control of the New Jersey Public Employee Benefits Board in accordance with the provisions of _P.L. , c. (C. )(pending before the Legislature as this bill).

In order to expedite implementation of the Defined Contribution Retirement Program, the current third party administrator for the New Jersey State Employees Deferred Compensation Program selected through a competitive bidding process may be utilized as the initial provider for a period not to exceed the term of the contract in effect on the effective date of this section of P.L.2007, c.92 (C.43:15C-4) including extensions, to administer this program. Subsequent to the initial contract, the Defined Contribution Retirement Program Board shall select through a competitive bidding process a provider licensed or otherwise authorized to transact business in New Jersey. This provider shall be selected by competitive bidding in accordance with all applicable State laws and regulations.

(cf: P.L.2007, c.92, s.4)

52. Section 5 of P.L.1952, c.358 (C.43:16-6.1) is amended to read as follows

5. There is hereby established in the [Division of Pensions in the Department of the Treasury] New Jersey Public Employee Benefits Board a commission which shall be known as the Consolidated Police and Firemen's Pension Fund Commission, and shall consist of nine members; two of whom shall be elected by the policemen, and two of whom shall be elected by the firemen, who are active or retired members of the consolidated fund, four of which members shall be appointed by the [Governor, with the advice and consent of the Senate] chairperson of the New Jersey Public Employee Benefits Board who shall serve for a term of office of four years and until their successors are appointed and who shall be private citizens of the State of New Jersey who are neither an officer thereof nor active or retired public employees, and the remaining member whereof shall be [the State Treasurer, or, when so designated by him, the Deputy State Treasurer] a member of the New Jersey Public Employee Benefits Board appointed by the chairperson of the board. The term of any member serving on the date on which P.L. , c. (C. )(pending before the Legislature as this bill) becomes operative who was appointed by the Governor is terminated as of the 60th date following that operative date. Of the members initially appointed by the [Governor pursuant to P.L.1992, c.41 (C.43:6A-33.1 et al.)] board, one shall be appointed for a term of one year, one for a term of two years, one for a term of three years, and one for a term of four years. The term of office of elected members of the commission shall be four years. Any vacancy occurring in said commission shall be filled as the office was originally filled. In each municipality and county in which a pension fund consolidated by the provisions of this act existed, elections shall be held on the second Wednesday of June in each year in which a member of said commission is to be elected by the policemen or firemen hereunder. At every such election each policeman and fireman who was a member of any pension fund consolidated and a member of the pension fund created by this act shall be eligible to vote for any of such candidates who shall have been nominated for the office of elective member of said commission. The elections shall be held according to such rules and regulations as the commission shall adopt, subject to the provisions of this act, to govern the holding of such elections and the method of nominating candidates for the office to be voted for thereat.

Each member of the commission shall after his appointment or election, take and subscribe an oath that, so far as it devolves upon him, he will diligently and honestly fulfill his duties as a member, and that he will not knowingly violate nor willingly permit to be violated any of the provisions of law applicable to such fund. Each of such oaths, when certified by the officer before whom it is taken, shall be filed in the office of the Secretary of State. The members of the commission shall serve without compensation, but shall be reimbursed for all necessary expenses incurred in discharging their duties as members of said commission.

The [State Treasurer] New Jersey Public Employee Benefits Board shall designate a medical board [after consultation with the Director of the Division of Pensions, subject to veto by the commission for valid reason. It shall be composed of three physicians who are not eligible to participate in the pension fund]. The medical board shall pass upon all medical examinations required under the provisions of the act, shall investigate all essential statements and certificates by or on behalf of a member in connection with an application for disability retirement, and shall report in writing to the pension fund its conclusions and recommendations upon all matters referred to it.

(cf: P.L.1992, c.41, s.20)

53. Section 7 of P.L.1952, c.358 (C.43:16-6.2) is amended to read as follows:

7. On July 1, 1952, and in each succeeding year, or, when July 1 is a legal holiday, upon the first business day thereafter, the members of the commission shall meet in annual meeting at which a chairman shall be elected from the membership thereof. The [commission] New Jersey Public Employee Benefits Board shall keep, in convenient form, such data as may be necessary for the actuarial evaluation of the fund committed to its charge and to serve as a record of its experience in the administration of the pension system dependent upon such fund. A record shall be kept of all proceedings of the commission, which shall be open to public inspection. [The Attorney General shall act as the legal adviser of the commission, except that if the Attorney General determines that a conflict of interest would affect the ability of the Attorney General to represent the commission on a matter affecting the retirement system, the commission may select and employ legal counsel to advise and represent the commission on that matter. The actuary of the fund shall be selected by the Retirement Systems Actuary Selection Committee established by P.L.1992, c.125. He shall be the technical adviser of the commission on all matters regarding the operation of the pension fund not otherwise prescribed by law.]

(cf: P.L.1992, c.125, s.11)

54. R.S.43:16-7 is amended to read as follows:

43:16-7. The commission shall be and are hereby constituted trustees of all the funds established by this act. The [commission] New Jersey Public Employee Benefits Board may make all necessary rules and regulations with regard thereto. Such rules and regulations shall be consistent with those adopted [by] for the other pension funds [within the Division of Pensions] , systems, and plans under the authority and control of the New Jersey Public Employee Benefits Board in order to permit the most economical and uniform administration of all such retirement systems, funds, and plans. All moneys and assets of and belonging to the funds consolidated and required by this chapter to be consolidated and transferred to the pension fund, together with all increments and contributions thereto shall be received and paid over to the State Treasurer, whose official bond shall cover the same. No moneys shall be paid out of the consolidated fund except upon the warrant of the fund, signed by the chairman and secretary of the New Jersey Public Employee Benefits Board. All pensions granted under this chapter shall be exempt from execution, garnishment, attachment, sequestration or other legal process. All moneys not needed for the immediate payment of pensions under this chapter shall be invested [for the commission] by the board through the Director of the Division of Investment [established pursuant to] in accordance with the provisions of [chapter 270 of the laws of 1950] P.L.1950, c.270 (C.52:18A-79 et seq.) and of P.L. , c. (C. )(pending before the Legislature as this bill), subject to the limitations contained in section 11 of said chapter. [A member of the commission, to be designated by a majority vote thereof, shall serve on the State Investment Council as a representative of said commission.]

A reference to a board of trustees in P.L. , c. (C. )(pending before the Legislature as this bill) shall include the commission.

(cf: P.L.1971, c.179, s.2)

55. Section 3 of P.L.1992, c.78 (C.43:16A-16.10) is amended to read as follows:

3. The New Jersey Public Employee Benefits Board through the Director of the Division of Investment shall at all times have authority to invest and reinvest the monies in, and to acquire for or on behalf of, the Police and Firemen's Retirement System of New Jersey mortgage loans on residential property.

(cf: P.L.1992, c.78, s.3)

56. Section 13 of P.L.1944, c.255 (C.43:16A-13) is amended to read as follows:

13. (1) Subject to the provisions of P.L.1955, c.70 (C.52:18A-95 et seq.), the general responsibility for the proper operation of the retirement system is hereby vested in the New Jersey Public Employee Benefits Board and a board of trustees.

(2) The board shall consist of 11 trustees as follows:

(a) Five members to be appointed by the [Governor, with the advice and consent of the Senate,] chairperson of the New Jersey Public Employee Benefit Board who shall serve for a term of office of four years and until their successors are appointed and who shall be private citizens of the State of New Jersey who are neither an officer thereof nor an active or retired member of any police or fire department thereof. Of the four members initially appointed by the [Governor pursuant to P.L.1992, c.125 (C.43:4B-1 et al.)] chairperson, one shall be appointed for a term of one year, one for a term of two years, one for a term of three years, and one for a term of four years. The member appointed by the [Governor pursuant to the provisions of this amendatory act, P.L.1995, c.238] chairperson, shall serve for a term of four years and until a successor is appointed. The term of a member serving on the date on which P.L. , c. (C. )(pending before the Legislature as this bill) becomes operative who was appointed by the Governor is terminated as of the 60th date following that operative date.

(b) [The State Treasurer or the deputy State Treasurer, when designated for that purpose by the State Treasurer] One trustee who is a member of the New Jersey Public Employee Benefits Board appointed by the chairperson of the board.

(c) Two policemen and two firemen who shall be active members of the system and who shall be elected by the active members of the system for a term of four years according to such rules and regulations as the board of trustees shall adopt to govern such election.

(d) One retiree from the system who shall be elected by retirees from the system for a term of four years according to such rules and regulations as the board of trustees shall adopt to govern the election.

(3) Each trustee shall, after his appointment or election, take an oath of office that, so far as it devolves upon him he will diligently and honestly fulfill his duties as a board member, and that he will not knowingly violate or willingly permit to be violated any of the provisions of the law applicable to the retirement system. Such oath shall be subscribed by the member making it, and certified by the officer before whom it is taken, and immediately filed in the office of the Secretary of State.

(4) If a vacancy occurs in the office of a trustee, the vacancy shall be filled in the same manner as the office was previously filled.

(5) The trustees shall serve without compensation, but they shall be reimbursed for all necessary expenses that they may incur through service on the board.

(6) Each trustee shall be entitled to one vote in the board. Six trustees must be present at any meeting of said board for the transaction of its business.

(7) Subject to the limitations of this act, the [board of trustees] New Jersey Public Employee Benefits Board shall annually establish rules and regulations for the administration of the funds created by this act and for the transaction of [its] business. Such rules and regulations shall be consistent with those adopted [by] for the other pension funds [within the Division of Pensions and Benefits] , systems, and plans under the authority and control of the New Jersey Public Employee Benefits Board in order to permit the most economical and uniform administration of all such retirement systems, funds, and plans.

(8) The board of trustees shall elect from its membership a chairman. [The Director of the Division of Pensions and Benefits shall appoint a qualified employee of the division to be secretary of the board.] The administration of the program shall be performed by the personnel of the [Division of Pensions and Benefits] New Jersey Public Employee Benefits Board.

(9) The board of trustees shall keep a record of all of its proceedings which shall be open to public inspection. The retirement system shall publish annually a report showing the fiscal transactions of the retirement system for the preceding year, the amount of the accumulated cash and securities of the system, and the last balance sheet showing the financial condition of the system by means of an actuarial valuation of the assets and liabilities of the retirement system.

(10) [The Attorney General of the State of New Jersey shall be the legal adviser of the retirement system, except that if the Attorney General determines that a conflict of interest would affect the ability of the Attorney General to represent the board on a matter affecting the retirement system, the board may select and employ legal counsel to advise and represent the board on that matter.] Deleted by amendment, P.L. , c. (C. )(pending before the Legislature as this bill).

(11) The [State Treasurer] New Jersey Public Employee Benefits Board shall designate a medical board [after consultation with the Director of the Division of Pensions and Benefits, subject to veto by the board of trustees for valid reason. It shall be composed of three physicians who are not eligible to participate in the retirement system]. The medical board shall pass upon all medical examinations required under the provisions of this act, shall investigate all essential statements and certificates by or on behalf of a member in connection with an application for disability retirement, and shall report in writing to the retirement system its conclusions and recommendations upon all matters referred to it.

(12) The actuary of the system shall be selected by the [Retirement Systems Actuary Selection Committee established by P.L.1992, c.125] New Jersey Public Employee Benefits Board. He shall be the technical adviser of the board of trustees on matters regarding the operation of the funds created by the provisions of this act, and shall perform such other duties as are required in connection therewith.

(13) At least once in each three-year period the actuary shall make an actuarial investigation into the mortality, service and compensation experience of the members and beneficiaries of the retirement system and, with the advice of the actuary, the [board of trustees] New Jersey Public Employee Benefits Board shall adopt for the retirement system such mortality, service and other tables as shall be deemed necessary and shall certify the rates of contribution payable under the provisions of this act.

(14) (Deleted by amendment, P.L.1970, c.57.)

(15) On the basis of such tables recommended by the actuary as the [board of trustees] New Jersey Public Employee benefits Board shall adopt and regular interest, the actuary shall make an annual valuation of the assets and liability of the funds of the system created by this act.

(16) (Deleted by amendment, P.L.1987, c.330.)

(17) Each policeman or fireman member of the board of trustees shall be entitled to time off from his duty, with pay, during the periods of his attendance upon regular or special meetings of the board of trustees, and such time off shall include reasonable travel time required in connection therewith.

(cf: P.L.1995, c.238, s.1)

57. Section 14 of P.L.1944, c.255 (C.43:16A-14) is amended to read as follows:

14. (1) The [board of trustees] New Jersey Public Employee Benefits Board shall [be and are hereby constituted trustees of] have authority and control over the various funds and accounts established by this act[; provided, however, that] , and shall have all functions, powers and duties relating to the investment or reinvestment of moneys of, and purchase, sale or exchange of any investments or securities, of or for any fund or account established under this act , which shall be exercised and performed by the director of the Division of Investment in accordance with the provisions of [chapter 270, of the laws of 1950] P.L.1950, c.20 (C.52:18A-79 et seq.) and of P.L. , c. (C. )(pending before the Legislature as this bill). The [secretary of the board of trustees] New Jersey Public Employee Benefits Board shall determine from time to time the cash requirements of the various funds and accounts established by this act and the amount available for investment, all of which shall be certified to the Director of the Division of Investment.

(2) The Treasurer of the State of New Jersey shall be the custodian of the several funds created by this act, shall select all depositories and custodians and shall negotiate and execute custody agreements in connection with the assets or investments of any of said funds. All payments from said funds shall be made by him only upon vouchers signed by the chairman and countersigned by the secretary of the [board of trustees] New Jersey Public Employee Benefits Board. No voucher shall be drawn, except upon the authority of the board duly entered in the records of its proceedings.

(3) (Deleted by amendment.)

(4) Except as otherwise herein provided, no trustee and no employee of the board of trustees shall have any direct interest in the gains or profits of any investments of the retirement system; nor shall any trustee or employee of the board of trustees directly or indirectly, for himself or as an agent in any manner use the moneys of the retirement system, except to make such current and necessary payments as are authorized by the board of trustees; nor shall any trustee or employee of the board of trustees become an endorser or surety, or in any manner an obligor for moneys loaned to or borrowed from the retirement system.

(cf: P.L.1970, c.57, s.11)

58. Section 6 of P.L.1992, c.78 (C.43:16A-16.13) is amended to read as follows:

6. The [State Treasurer] New Jersey Public Employee Benefits Board, with the advice of the State Investment Council, the Board of Trustees of the Police and Firemen's Retirement System, and the New Jersey Housing and Mortgage Finance Agency, shall set mortgage loan standards and guidelines for loans made pursuant to this act, including mortgage loan maturity terms, participation fees, mortgage loan insurance requirements, lender compensation rates, servicing fees, loan-to-value ratios, minimum and maximum
mortgage loan amounts and eligibility standards consistent with section 4 of this act.

(cf: P.L.1992, c.78, s.6)

59. Section 9 of P.L.1992, c.78 (C.43:16A-16.16) is amended to read as follows:

9. The [State Treasurer] Executive Director of the New Jersey Public Employee Benefits Board shall, with the advice of the [State Investment Council, the Director of the Division of Pensions and the] Executive Director of the New Jersey Housing and Mortgage Finance Agency and in accordance with the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), promulgate any rules and regulations necessary to accomplish the purposes of this act.

(cf: P.L.1992, c.78, s.9)

60. Section 3 of P.L.1961, c.49 (C.52:14-17.27) is amended to read as follows:

3. There is hereby created a State Health Benefits Commission, consisting of five members: [the State Treasurer; the Commissioner of Banking and Insurance; the Chairperson of the Civil Service Commission] three members who are members of the New Jersey Public Employee Benefits Board appointed by the chairperson of the board; a State employees' representative chosen by the Public Employees' Committee of the AFL-CIO; and[, through June 30, 2008, when employers of employees, as defined in section 32 of P.L.2007, c.103 (C.52:14-17.46.2), will no longer be eligible to participate in the State Health Benefits Program authorized by P.L.1961, c.49, a representative chosen by the New Jersey Education Association, which represents the largest number of employees of employers other than the State participating in the State Health Benefits Program. Beginning July 1, 2008, the fifth member of the commission shall be] a local employees' representative chosen by the Public Employees' Committee of the AFL-CIO.

[The treasurer] A member appointed by the chairperson of the New Jersey Public Employee Benefits Board shall be chairman of the commission and the health benefits program authorized by P.L.1961, c.49 shall be administered [in] by the [Treasury Department] New Jersey Public Employee Benefits Board. [The Director of the Division of Pensions and Benefits shall be the secretary of the commission.] The commission shall establish a health benefits program for the employees of the State, the cost of which shall be paid as specified in section 6 of P.L.1961, c.49. The [commission] board shall establish rules and regulations as may be deemed reasonable and necessary for the administration of P.L.1961, c.49.

[The Attorney General shall be the legal advisor of the commission.]

The members of the commission shall serve without compensation but shall be reimbursed for any necessary expenditures. The public employee members shall not suffer loss of salary or wages during service on the commission.

The commission shall publish annually a report showing the fiscal transactions of the program for the preceding year and stating other facts pertaining to the plan. The commission shall submit the report to the Governor and furnish a copy to every employer for use of the participants and the public.

(cf: P.L.2008, c.29, s.108)

61. Section 5 of P.L.1950, c.270 (C.52:18A-83) is amended to read as follows:

5. a. There is hereby established in the Division of Investment a State Investment Council which shall consist of 13 members.

(1) [Each of the following agencies, namely, the Board of Trustees of the Public Employees' Retirement System, the Board of Trustees of the State Police Retirement System, the Board of Trustees of the Teachers' Pension and Annuity Fund, and the Board of Trustees of the Police and Firemen's Retirement System of New Jersey,] The New Jersey Public Employee Benefits Board shall elect [one of the active members of its retirement system, or one of the retirees of its retirement system who is receiving a retirement allowance,] four of its members to serve as [a member] members of the State Investment Council herein established. In the event the New Jersey Public Employee Benefits Board makes the election provided in paragraph (2) of subsection a. of section 16 of P.L. , c. (C. )(pending before the Legislature as this bill), the Governor shall appoint the four members, with the advice and consent of the Senate. The four members of the council so elected or appointed shall serve as such for a period of three years from the date of their election or appointment and until their respective successors are in like manner elected or appointed, and the members elected shall serve only during their term of service on the New Jersey Public Employee Benefits Board. The term of a member serving on the date on which P.L. , c. (C. )(pending before the Legislature as this bill) becomes operative is terminated as of the 60th date following that operative date.

(2) Six of the members of the State Investment Council shall be appointed by the Governor, with the advice and consent of the Senate, for a term of five years and shall serve until the member's successor is appointed and has qualified.

(3) One member of the State Investment Council shall be appointed by the Governor from among three persons nominated jointly by the President of the Senate and the Speaker of the General Assembly and shall serve for a term of five years and until the member's successor is appointed and has qualified.

(4) One member of the State Investment Council shall be appointed by the Governor from among three persons nominated by the Public Employee Committee of the New Jersey State AFL-CIO and shall serve for a term of three years and until the member's successor is appointed and has qualified. If the persons nominated are not acceptable to the Governor for appointment, the Governor may request submission of new nominees.

(5) One member of the State Investment Council shall be appointed by the Governor from among three persons nominated by the New Jersey Education Association and shall serve for a term of three years and until the member's successor is appointed and has qualified. If the persons nominated are not acceptable to the Governor for appointment, the Governor may request submission of new nominees.

The two members appointed pursuant to paragraphs (4) and (5) of this subsection by the Governor to the council shall be qualified by training, experience or long-term interest in the direct management, analysis, supervision or investment of assets, and this training, experience or long-term interest shall have been supplemented by academic training in the fields of economics, business, law, finance or actuarial science or by actual employment in those fields.

At least five of the seven members appointed pursuant to paragraphs (2) and (3) of this subsection by the Governor to the council shall be qualified by training and experience in the direct management, analysis, supervision or investment of assets, which training and experience shall have been acquired through academic training or through actual employment in those fields.

b. No member of the State Investment Council shall hold any office, position or employment in any political party nor shall any such member benefit directly or indirectly from any transaction made by the Director of the Division of Investment provided for herein.

The members of the council shall elect annually from their number a chairman of such council. Any member of the council so elected shall serve as such chairman for a term of one year and until a successor is, in like manner, elected. The chairman of the council shall be its presiding officer.

The members of the council shall serve without compensation but shall be reimbursed for necessary expenses incurred in the performance of their duties as approved by the chairman of the council. The members of the council shall be required to file the same annual financial disclosure statements as those required to be filed by members of other State boards and commissions who are not compensated for their services, as such statements shall be required by law or executive order of the Governor. The financial disclosure statements of council members shall be made available to the public in the same manner as the statements of members of other State boards and commissions are made available to the public.

Each member of the council, except the member appointed from among persons nominated by the President of the Senate and the Speaker of the General Assembly , and except the members elected from among the members of the New Jersey Public Employee Benefits Board, may be removed from office by the Governor, for cause, upon notice and opportunity to be heard at a public hearing. Any vacancy in the membership of the council occurring other than by expiration of term shall be filled in the same manner as the original appointment, but for the unexpired term only.

c. The terms of the members of the council serving on the effective date specified for this section of P.L.2007, c.103, other than the five members appointed by the Governor with the advice and consent of the Senate to serve for terms of five years and the one member appointed by the Governor from persons nominated jointly by the President of the Senate and the Speaker of the General Assembly to serve for a term of five years, are terminated as of that effective date. A member terminated pursuant to this subsection shall be eligible for reappointment.

(cf: P.L.2007, c.103, s.50)

62. Section 7 of P.L.1950, c. 270 (C.52:18A-85) is amended to read as follows:

7. The functions, powers and duties vested by law in the following enumerated agencies:

The Board of Trustees of the Public Employees' Retirement System; the Board of Trustees of the State Police Retirement System; the Prison Officers' Pension Commission; the Board of Trustees of the Teachers' Pension and Annuity Fund; the Board of Trustees of the Police and Firemen's Retirement System of New Jersey; and the Consolidated Police and Firemen's Pension Fund Commission; of, or relating to, investment or reinvestment of moneys of, and purchase, sale or exchange of any investments or securities of or for any funds or accounts under the control and management of such agencies, are hereby transferred to and shall be exercised and performed for such agencies by the Director of the Division of Investment established hereunder in accordance with the authority and control over such matters and such agencies vested in the New Jersey Public Employee Benefits Board pursuant to P.L. , c. (C. )(pending before the Legislature as this bill).

(cf: P.L.1970, c.57, s.17)

63. Section 1 of P.L.1959, c. 17 (C.52:18A-88.1) is amended to read as follows:

1. The Director of the Division of Investment, in addition to other investments, presently or from time to time hereafter authorized by law, shall have authority to invest and reinvest the moneys in, and to acquire for or on behalf of the funds of the following enumerated agencies:

The Consolidated Police and Firemen's Pension Fund Commission;

The Police and Firemen's Retirement System of New Jersey;

The Prison Officers' Pension Commission;

The Public Employees' Retirement System of New Jersey;

The State Police Retirement System;

The Teachers' Pension and Annuity Fund;

The Judicial Retirement System of New Jersey;

The Trustees for the Support of Public Schools;

and all other funds in the custody of the State Treasurer, unless otherwise provided by law;

such investments which shall be authorized or approved for investment by regulation of the State Investment Council and the New Jersey Public Employee Benefits Board as provided in P.L. , c. (C. )(pending before the Legislature as this bill).

(cf: P.L.1997, c.26, s.25)

64. Section 11 of P.L.1950, c.270 (C.52:18A-89) is amended to read as follows:

11. a. Limitations, conditions and restrictions contained in any law concerning the kind or nature of investment of any of the moneys of any of the funds or accounts referred to herein shall continue in full force and effect; provided, however, that subject to any acceptance required, or limitation or restriction contained herein: the Director of the Division of Investment shall at all times have authority to invest and reinvest any such moneys in investments as defined in subsection c. of this section and, for or on behalf of any such fund or account, to sell or exchange any such investments. The director's actions and decisions shall be exercised and performed under the authority and control of the New Jersey Public Employee Benefits Board and in accordance with the provisions of P.L. , c. (C. )(pending before the Legislature as this bill).

b. In investing and reinvesting any and all money and property committed to the director's investment discretion from any source whatsoever, and in acquiring, retaining, selling, exchanging and managing investments, the Director of the Division of Investment shall exercise the care, skill, prudence and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims. In making each investment, the director may, depending on the nature and objectives of the portfolio, consider the whole portfolio, provided that, in making each investment, the director shall act with the reasonable expectation that the return on each investment shall be commensurate with the risk associated with each investment. The director shall be under a duty to manage and invest the portfolio solely in the interests of the beneficiaries of the portfolio and for the exclusive purpose of providing financial benefits to the beneficiaries of the portfolio.

c. For the purposes of this section, "investments" means and includes property of every nature, real, personal and mixed, tangible and intangible, and specifically includes, solely by way of description and not by way of limitation, bonds, debentures and other corporate obligations, direct and indirect investments in equity real estate, mortgages and other direct or indirect interests in real estate or investments secured by real estate, capital stocks, common stocks, preferred stocks, diversified pools of venture capital which otherwise could be made consistent with the standard of care required by subsection b. of this section, common trust funds as defined in and regulated by sections 36 through 46 of P.L.1948, c.67 (C.17:9A-36 through 17:9A-46), repurchase agreements, securities loan transactions secured by cash, securities issued by the United States government or its agencies, or irrevocable bank letters of credit, whether directly or through a bank or similar financial institution acting as agent or trustee, mutual funds, and any other security issued by an investment company or investment trust, whether managed or not by third parties, registered under the "Investment Company Act of 1940," 15 U.S.C.s.80a-1 et seq. No investment that is otherwise permissible under this subsection shall be considered to be unlawful solely because the investment is made indirectly or through a partnership, trust, or other legal entity.

(cf: P.L.1997, c.26, s.26)

65. Section 1 of P.L.1970, c. 270 (C.52:18A-90.1) is amended to read as follows:

1. Notwithstanding any statute or rule of law to the contrary, the Director of the Division of Investment may, subject to the approval of the State Investment Council, the New Jersey Public Employee Benefits Board when appropriate, and the State Treasurer, establish, maintain and operate one or more common trust funds, in which may be combined for the purpose of investment, money and property belonging to the various funds in the custody of the State Treasurer; provided, however, that there shall not be combined in any common trust fund, excepting the State of New Jersey Cash Management Fund established pursuant to section 1 of this amendatory and supplementary act, moneys and property of any fund the income of which inures to the benefit of
the General State Fund and money and property of any fund the income of which inures to the benefit of said fund.

(cf: P.L.1970, c.270, s.1)

66. Section 13 of P.L.1950, c.270 (C.52:18A-91) is amended to read as follows:

13. a. The State Investment Council and the New Jersey Public Employee Benefits Board shall consult with the Director of the Division of Investment from time to time with respect to the work of the division. [It] The council and the board shall have access to all files and records of the division and may require any officer or employee therein to provide such information as [it] they may deem necessary in the performance of [its] their functions. The council and the board shall have authority to inspect and audit the respective accounts and funds administered through the Division of Investment. [It] They shall formulate and establish, and may from time to time amend, modify or repeal, such policies as [it] they may deem necessary or proper, which shall govern the methods, practices or procedures for investment, reinvestment, purchase, sale or exchange transactions to be followed by the Director of the Division of Investment established hereunder. The New Jersey Public Employee Benefits Board shall have the authority and control as provided in P.L. , c. (C. )(pending before the Legislature as this bill).

b. On or before January first of each year, and at such other times as it may deem in the public interest, the council shall report to the Governor, the Legislature, New Jersey Public Employee Benefits Board, and the State Treasurer with respect to its work and the work of the Division of Investment. In addition to the reports specified above and in section 14 of P.L.1950, c.270 (C.52:18A-92), the council shall issue a report by March 1 of each year on the investment activities for the prior calendar year, which shall include a summary of the current investment policies and strategies of the council and those in effect during the prior calendar year, a detailed summary for each financial product of the amount invested, whether the investments were made by employees of the Division of Investment or by external managers, performance benchmarks, and actual performance during the calendar year. The report shall be submitted to the Governor, the Legislature, the New Jersey Public Employee Benefits Board, and the State Treasurer, and shall be made available to the public through the official Internet site of the State.

c. The council shall hold a meeting each year that shall be open to the public, and shall accept comments from the public at such meeting. The matters that shall be open to discussion and public comment during this annual meeting shall include the investment policies and strategies of the council, the investment activities of the council, the financial disclosure statements filed by council members, and the certification of contributions filed by external managers, as well as other appropriate matters concerning the operations, activities and reports of the council.

d. An external manager shall be required to file a certification before being retained, and annually thereafter, that discloses the political contributions made, during the 12 months preceding the certification, by the manager or the manager's firm, or a political committee in which the manager or firm was active. The certification shall specify the political contributions made to candidates for elective public office in this State and any political committee established for the support of such candidates, and contributions made for the transition and inaugural expenses of any candidate who is elected to public office. As used in this subsection, "contribution" and "political committee" shall have the meaning set forth in "The New Jersey Campaign Contributions and Expenditures Reporting Act," P.L.1973, c.83 (C.19:44A-1 et al.). This certification shall be in addition to any other such disclosure required by law or executive order of the Governor.

(cf: P.L.2007, c.103, s.51)

67. Section 4 of P.L.1963, c.123 (C.52:18A-110) is amended to read as follows:

4. There is hereby established in the Department of the Treasury the Supplemental Annuity Collective Trust of New Jersey, which shall accept amounts received for supplemental annuities from the State administered retirement systems and retirement plans created by the New Jersey Public Employee Benefits Board in accordance with P.L. , c. (C. )(pending before the Legislature as this bill) and combine the same for purposes of this act. The Supplemental Annuity Collective Trust shall also accept amounts paid by employers for the purchase of annuities on behalf of employees as hereinafter provided. The funds paid by employers to purchase annuities for their employees shall be accounted for separately from other funds received by the Supplemental Annuity Collective Trust. The Supplemental Annuity Collective Trust hereby established shall consist of a Variable Division and a Fixed Division.

(cf: P.L.1965, c.90, s.2)

68. N.J.S.52:18A-111 is amended to read as follows:

52:18A-111. In order to facilitate the administration of the supplemental annuity programs of the State administered retirement systems and retirement plans created by the New Jersey Public Employee Benefits Board in accordance with P.L. , c. (C. )(pending before the Legislature as this bill), the [State administered retirement systems] New Jersey Public Employee Benefits Board shall [vest] have the general responsibility for control and management of [their] the supplemental annuity programs in the Supplemental Annuity Collective Trust [under the direction of a council consisting of the State Treasurer, who shall be the chairman, the Commissioner of the Department of Insurance, and the State Budget Director. In the event of a vacancy in one of the above enumerated offices, the official assuming the responsibility of that office shall act as a member of the council.

The Director of the Division of Pensions shall be the secretary of the council.] The administration of the programs shall be performed by the personnel of the [Division of Pensions] New Jersey Public Employee Benefits Board and the costs of administration shall be borne by the State in accordance with the provisions of P.L. , c. (C. )(pending before the Legislature as this bill).

[The Attorney General shall be the legal advisor of the council.]

The [council] New Jersey Public Employee Benefits Board shall retain the services of an actuary. The actuary shall make an actuarial review of the Supplemental Annuity Collective Trust at least once in every three-year period and at such other times as the [council] board, in its discretion, shall deem advisable.

The [council] New Jersey Public Employee Benefits Board shall promulgate such rules and regulations, not inconsistent with the provisions of this act, as it shall deem necessary for the effective operation of the trust.

The [council] board shall publish annually a report of its operations and the financial condition of the Supplemental Annuity Collective Trust. It shall also give each participant who has not commenced to receive annuity payments an annual statement of his account.

The [council] board shall not commingle the assets of the Variable Division and the assets of the Fixed Division.

The records of the Supplemental Annuity Collective Trust shall be subject to audit by the State Auditor.

Any reference in law to the council for the Supplemental Annuity Collective Trust shall mean the New Jersey Public Employee Benefits Board.

(cf: P.L.1987, c.330, s.2)

69. N.J.S.52:18A-163 is amended to read as follows:

52:18A-163. State employees deferred compensation board; establishment; members; compensation; meetings

There is hereby established in the [Department of the Treasury the New Jersey] New Jersey Public Employee Benefits Board a State Employees Deferred Compensation Board [(hereinafter called the board)]. The membership of the board shall consist of [the State Treasurer, who shall serve as chairman, the Commissioner of Insurance, and the Director of the Division of Budget and Accounting in the Department of the Treasury, who shall be members ex officio, or the designee of any of said officials] three members of the New Jersey Public Employee Benefits Board appointed by the chairperson of the board. The members of the board shall receive no compensation for service on said board. The board shall meet at such time as called by the chairman or a majority of the board. The board shall be under the authority and control of the New Jersey Public Employee Benefits Board as provided in P.L. , c. (C. )(pending before the Legislature as this bill).

(cf: N.J.S.52:18A-163)

70. N.J.S.52:18A-167 is amended to read as follows:

52:18A-167. Powers

a. The [board] New Jersey Public Employee Benefits Board, and the State Employees Deferred Compensation Board, when authorized by the New Jersey Public Employee Benefits Board, is empowered to take all measures necessary for the implementation and administration of this act, including but not limited to the following:

(1) [The delegation of all or part of the administration of the Plan, including the management and investment of deferred and deducted salary funds, to any division or divisions within the Department of the Treasury] Deleted by amendment, P.L. , c. (pending before the Legislature a this bill);

(2) Contracting with one or more private organizations for the administration of all or part of the plan, including the management and investment or either thereof of deferred and deducted salary funds, provided that any such contract or contracts be in compliance with applicable bidding requirements for award of State contracts; [and further provided that a board determination to contract for the investment of any or all of said funds is subject to the prior approval of the State Investment Council and when said approval has been received, the board shall delegate the responsibility for said contracting to the Division of Investment];

(3) Establishment of a plan or plan option which permits a participating employee to request the administrator of the plan to invest all or a specified percentage of said employee's deferred salary in one of or a specified combination of the following kinds of investments: (a) life insurance contracts, (b) annuity contracts, and (c) mutual fund shares; provided that the administrator retains the discretion to reject said request and further provided that the specific investment so made is selected and determined by the [Division of Investment ] New Jersey Public Employee Benefits Board acting on behalf of the administrator or by a private organization operating under a contract pursuant to subsection 5a(2) of this section and subject to the approval of the [Division of Investment] New Jersey Public Employee Benefits Board;

(4) The establishment, either in the plan or through separate rules and regulations, of the requirements, limitations and conditions for participation in the plan, including but not limited to the setting forth of those State employees deemed eligible for participation in the plan; the amount of current salary an employee may defer and have deducted for disposition by the board; when and under what circumstances such deferrals and deductions may be made, changed or revoked; when and under what circumstances a participating employee or designated beneficiaries may withdraw funds from the plan; and when and under what circumstances records and data concerning benefits under the plan shall remain confidential;

(5) Consultation with any State agency or with majority representatives of State employees for the purpose of receiving their views and comments.

b. The board shall provide in the plan for any distribution of investment earnings, gains or losses, consistent with the requirements of the United States Internal Revenue Service. The distribution shall be allocated to each employee when he or she withdraws from the plan or receives benefits from the plan in accordance with the terms of the plan and the provisions of this act.

c. The board shall provide in the plan for a uniform system of accounting for each participating employee and for the investment of deferred compensation funds with annual or more frequent reports to the participants in the plan[, provided however, that said uniform system of accounting as it applies to the investment of said funds shall be subject to the prior approval of and modification by the State Investment Council].

d. A private organization operating under a contract pursuant to subsection 5a(2) of this section or seeking or planning to seek such a contract may not distribute or make public any written material concerning any deferred compensation program or benefits authorized under this act without the prior approval by the [Division of Investment] New Jersey Public Employee Benefits Board of the form and content or the material.

(cf: N.J.S.52:18A-167)

71. N.J.S.52:18A-169 is amended to read as follows:

52:18A-169. Immunity from liability for loss

The State, the [board] New Jersey Public Employee Benefits Board and the State Employees Deferred Compensation Board and the members of the board, the Division of Investment and its employees, and the State Investment Council and its members shall
not be liable for any loss incurred by any employee by reason of participation in the plan.

(cf: N.J.S.52:18A-169)

72. Section 30 of P.L.1965, c.89 (C.53:5A-30) is amended to read as follows:

30. a. Subject to the provisions of P.L.1955, c.70 (C.52:18A-95 et seq.), the general responsibility for the proper operation of the retirement system is hereby vested in the New Jersey Public Employee Benefits Board and the board of trustees.

b. The board shall consist of five trustees as follows:

(1) Two active or retired members of the system who shall be appointed by the [Superintendent of State Police] chairperson of the New Jersey Public Employee Benefits Board, who shall serve at the pleasure of the [superintendent] chairperson and until their successors are appointed and one of whom shall be or shall have been a commissioned officer of the Division of State Police.

(2) Two members to be appointed by the [Governor, with the advice and consent of the Senate] chairperson of the New Jersey Public Employee Benefit Board, who shall serve for a term of office of three years and until their successors are appointed and who shall be private citizens of the State of New Jersey who are neither an officer thereof nor active or retired members of the system. Of the two members initially appointed by the [Governor pursuant to P.L.1992, c.125 (C.43:4B-1 et al.)] chairperson, one shall be appointed for a term of two years and one for a term of three years.

(3) [The State Treasurer ex officio. The Deputy State Treasurer, when designated for that purpose by the State Treasurer, may sit as a member of the board of trustees and when so sitting shall have all the powers and shall perform all the duties vested by this act in the State Treasurer] One member who is a member of the New Jersey Public Employee Benefits Board appointed by the chairperson of the board.

The term of a member serving on the date on which P.L. , c. (C. )(pending before the Legislature as this bill) becomes operative is terminated as of the 60th date following that operative date.

c. Each trustee shall, after his appointment, take an oath of office that, so far as it devolves upon him, he will diligently and honestly fulfill his duties as a board member, that he will not knowingly violate or permit to be violated any of the provisions of the law applicable to the retirement system. Such oath shall be subscribed by the member taking it, and certified by the official before whom it is taken, and immediately filed in the office of the Secretary of State.

d. If a vacancy occurs in the office of a trustee, the vacancy shall be filled in the same manner as the office was previously filled.

e. The trustees shall serve without compensation, but they shall be reimbursed by the State for all necessary expenses that they may incur through service on the board. No employee member shall suffer loss of salary through the serving on the board.

f. Except as otherwise herein provided, no member of the board of trustees shall have any direct interest in the gains or profits of any investments of the retirement system; nor shall any member of the board of trustees directly or indirectly, for himself or as an agent in any manner use the moneys of the retirement system, except to make such current and necessary payments as are authorized by the board of trustees; nor shall any member of the board of trustees become an endorser or surety, or in any manner an obligor for moneys loaned to or borrowed from the retirement system.

g. Each trustee shall be entitled to one vote in the board. A majority vote of all trustees shall be necessary for any decision by the trustees at any meeting of said board.

h. Subject to the limitations of this act, the [board of trustees] New Jersey Public Employee Benefits Board shall annually establish rules and regulations for the administration of the funds created by this act and for the transactions of [its] business. Such rules and regulations shall be consistent with those adopted [by] for the other pension funds [within the Division of Pensions] , systems, and plans under the authority and control of the New Jersey Public Employee Benefits Board in order to permit the most economical and uniform administration of all such retirement systems, funds, and plans.

i. The actuary of the fund shall be selected by the [Retirement Systems Actuary Selection Committee established by P.L.1992, c.125] New Jersey Public Employee Benefits Board. He shall be the technical adviser of the board on matters regarding the operation of the funds created by the provisions of this act and shall perform such other duties as are required in connection herewith.

j. [The Attorney General shall be the legal adviser of the retirement system, except that if the Attorney General determines that a conflict of interest would affect the ability of the Attorney General to represent the board on a matter affecting the retirement system, the board may select and employ legal counsel to advise and represent the board on that matter.

k. The Chief of the Bureau of Police and Fire Funds of the Division of Pensions of the State Department of the Treasury shall be the secretary of the board.

l.] The board of trustees shall keep a record of all of its proceedings which shall be open to public inspection. The retirement system shall publish annually a report showing the fiscal transactions of the retirement system for the preceding year, the amount of the accumulated cash and securities of the system and the last balance sheet showing the financial condition of the system by means of an actuarial valuation of the assets and liabilities of the retirement system.

[m.] k. The [State Treasurer] New Jersey Public Employee Benefits Board shall designate a medical board [after consultation with the Director of the Division of Pensions, subject to veto by the board of trustees for valid reason. It shall be composed of three physicians]. The medical board shall pass on all medical examinations required under the provisions of this act, and shall report in writing to the retirement system its conclusions and recommendations upon all matters referred to it.

[n. (Deleted by amendment, P.L.1987, c.330).]

(cf: P.L.1992, c.125, s.17)

73. Section 31 of P.L.1965, c.89 (C.53:5A-31) is amended to read as follows:

31. a. The [board of trustees] New Jersey Public Employee Benefits Board shall [be and are hereby constituted trustees of all] have authority and control over the various funds established by this act except the group insurance premium fund[; provided, however, that] , and shall have all functions, powers, and duties relating to the investment or reinvestment of moneys of, and purchase, sale, or exchange of any investments or securities, of or for any fund established under this act, which shall be exercised and performed by the Director of the Division of Investment in accordance with the provisions of [c. 270, P.L.1950, as amended and supplemented] P.L.1950, c.270 (C.52:18A-79 et seq.) and of P.L. , c. (C. )(pending before the Legislature as this bill)..

b. The [secretary of the board] New Jersey Public Employee Benefits Board shall determine from time to time the cash requirements of the various funds established by this act and the amount available for investment, all of which shall be certified to the Director of the Division of Investment.

c. [A member of the board of trustees to be designated by a majority vote thereof shall serve on the State Investment Council as a representative of said board of trustees, for a term of 1 year and until his successor is elected and qualified.

d. ] The Treasurer of the State of New Jersey shall be the custodian of the several funds. All payments from said funds shall be made by him only upon vouchers signed by the secretary and the chairman of the [board of trustees] New Jersey Public Employee Benefits Board. [A duly attested copy of the resolution of the board of trustees designating the chairman and bearing on its face specimen signatures of the chairman and the secretary shall be filed with the treasurer as his authority for making payments upon such vouchers.

e.] d. The administration of the program shall be performed by the personnel of the [Division of Pensions of the State Department of the Treasury] New Jersey Public Employee Benefits Board and the costs of administration shall be borne by the State in accordance with the provisions of P.L. , c. (C. )(pending before the Legislature as this bill).

(cf: P.L.1971, c.181, s.21)

74. Section 19 of P.L.1992, c.125 (C.43:4B-1) is repealed.

75. This act shall take effect immediately but shall remain inoperative until the 90th day following enactment.

STATEMENT

This bill establishes the New Jersey Public Employee Benefits Board, to be allocated in, but not of, the Department of the Treasury in the Executive Branch of State government. Notwithstanding this allocation, the board will be independent of any supervision or control by the department or by any officer or employee thereof. The board will have all the authority, functions, duties, and responsibilities as determined to be necessary and appropriate to create, implement, administer, operate, or modify, or terminate when specifically permitted, the pension and health care benefit systems, funds, plans administered by the State, or programs, and the policies, procedures, and regulations thereof, provided to public employees, and their dependents, beneficiaries, and survivors, of the State and of the political subdivisions of the State, in accordance with this bill, and in accordance with various statutes providing for and regulating such pension and health care benefits.

The board will be composed of 16 members as follows: