New Jersey-2012-A4429-Introduced

An Act concerning the funding of post-retirement benefits other than pensions for public employees and supplementing various parts of the statutory law.

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

1. A board of education shall establish a separate fund to which it shall make annual contributions, the amount of which shall be based on an annual valuation of the assets and liabilities of the fund pursuant to consistent and generally accepted actuarial standards, to pay the premiums or periodic charges for health care benefits for retired employees and their dependents, and supplemental compensation for unused accrued vacation leave and unused accrued sick leave, for which the employer is required to pay pursuant to a law, ordinance, resolution, binding collective negotiations agreement applicable to employees for whom there is a majority representative for collective negotiations purposes, binding collective negotiations agreement deemed applicable to employees for whom there is no majority representative for collective negotiations purposes, or individual contract. The actuary of the fund shall compute annually a contribution to fund these benefits on a reserve basis, which contribution shall be the amount necessary to pay the anticipated premiums or periodic charges or supplemental compensation payments for the benefits earned during the year immediately succeeding the date of computation. The calculation of liabilities for the purposes of the fund shall commence with benefits earned on the date of enactment of P.L. , c. (C. ) (pending before the Legislature as this bill) and thereafter. The investment returns and assets of the fund shall be used for the purposes of the fund. If the assets in the fund are insufficient to pay the premiums or periodic charges or supplemental compensation payments due for the benefits, they shall be paid directly by the employer. Nothing herein shall alter the benefits for qualified retirees or relieve the employer from its acknowledged obligation to fund the benefits.

As used in this section, "board of education" shall have the same meaning as in N.J.S.18A:18A-2.

2. A political subdivision of the State, and an agency, authority, or instrumentality thereof, shall establish a separate fund to which it shall make annual contributions, the amount of which shall be based on an annual valuation of the assets and liabilities of the fund pursuant to consistent and generally accepted actuarial standards, to pay the premiums or periodic charges for health care benefits for retired employees and their dependents, and supplemental compensation for unused accrued vacation leave and unused accrued sick leave, for which the employer is required to pay pursuant to a law, ordinance, resolution, binding collective negotiations agreement applicable to employees for whom there is a majority representative for collective negotiations purposes, binding collective negotiations agreement deemed applicable to employees for whom there is no majority representative for collective negotiations purposes, or individual contract. The actuary of the fund shall compute annually a contribution to fund these benefits on a reserve basis, which contribution shall be the amount necessary to pay the anticipated premiums or periodic charges or supplemental compensation payments for the benefits earned during the year immediately succeeding the date of computation. The calculation of liabilities for the purposes of the fund shall commence with benefits earned on the date of enactment of P.L. , c. (C. ) (pending before the Legislature as this bill) and thereafter. The investment returns and assets of the fund shall be used for the purposes of the fund. If the assets in the fund are insufficient to pay the premiums or periodic charges or supplemental compensation payments due for the benefits, they shall be paid directly by the employer. Nothing herein shall alter the benefits for qualified retirees or relieve the employer from its acknowledged obligation to fund the benefits.

3. The State, an independent State authority, and a public institution of higher education shall establish a separate fund to which it shall make annual contributions, the amount of which shall be based on an annual valuation of the assets and liabilities of the fund pursuant to consistent and generally accepted actuarial standards, to pay the premiums or periodic charges for health care benefits for retired employees and their dependents, and supplemental compensation for unused accrued vacation leave and unused accrued sick leave, for which the employer is required to pay pursuant to a law, ordinance, resolution, binding collective negotiations agreement applicable to employees for whom there is a majority representative for collective negotiations purposes, binding collective negotiations agreement deemed applicable to employees for whom there is no majority representative for collective negotiations purposes, or individual contract. The actuary of the fund shall compute annually a contribution to fund these benefits on a reserve basis, which contribution shall be the amount necessary to pay the anticipated premiums or periodic charges or supplemental compensation payments for the benefits earned during the year immediately succeeding the date of computation. The calculation of liabilities for the purposes of the fund shall commence with benefits earned on the date of enactment of P.L. , c. (C. ) (pending before the Legislature as this bill) and thereafter. The investment returns and assets of the fund shall be used for the purposes of the fund. If the assets in the fund are insufficient to pay the premiums or periodic charges or supplemental compensation payments due for the benefits, they shall be paid directly by the employer. Nothing herein shall alter the benefits for qualified retirees or relieve the employer from its acknowledged obligation to fund the benefits.

As used in this section, "independent State authority" means a public authority, board, commission, corporation, or other agency or instrumentality of the State allocated, in but not of, a principal department of State government pursuant to Article V, Section IV, paragraph 1 of the New Jersey Constitution, or which is not subject to supervision or control by the department in which it is allocated, and a regional authority; and "public institution of higher education" means any public university or college, including Rutgers, The State University and New Jersey Institute of Technology.

4. This act shall take effect on the 180th day after enactment, but an employer may take such anticipatory administrative action in advance thereof as shall be necessary for the implementation of this act.

STATEMENT

This bill provides for prefunding of benefits other than pensions that are employer obligations to active public employees at the time of or after retirement. The bill requires the State, independent State authorities, public institutions of higher education, local government units, and boards of education each to establish a separate fund to which it will make annual contributions to pay health care benefits for retired employees and supplemental compensation for unused accrued vacation leave and unused accrued sick leave, for which the employer is required to pay. The public employer obligation may be pursuant to a law, ordinance, resolution, binding collective negotiations agreement applicable to employees for whom there is a majority representative for collective negotiations purposes, binding collective negotiations agreement deemed applicable to employees for whom there is no majority representative for collective negotiations purposes, or individual contract.

The bill provides that the actuary of the fund will compute annually a contribution to fund these benefits on a reserve basis pursuant to consistent and generally accepted actuarial standards. The calculation of liabilities for the purposes of the fund will commence with benefits earned on the bill's date of enactment and thereafter; both investment returns and assets will be used for the purposes of the fund. If the assets in the fund are insufficient to pay the premiums or periodic charges or supplemental compensation payments due for the benefits, they will be paid directly by the employer. The bill states that its requirements do not alter the benefits for qualified retirees or relieve the employer from its acknowledged obligation to fund the benefits.