Bill Text: NJ A833 | 2010-2011 | Regular Session | Introduced
Bill Title: Increases PFRS benefits for active members when PFRS funded at 101%, for retirees over three fiscal years thereafter.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2010-01-12 - Introduced, Referred to Assembly State Government Committee [A833 Detail]
Download: New_Jersey-2010-A833-Introduced.html
STATE OF NEW JERSEY
214th LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2010 SESSION
Sponsored by:
Assemblyman MATTHEW W. MILAM
District 1 (Cape May, Atlantic and Cumberland)
SYNOPSIS
Increases PFRS benefits for active members when PFRS funded at 101%, for retirees over three fiscal years thereafter.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel
An Act increasing member and retiree benefits of the Police and Firemen's Retirement System of New Jersey, amending P.L.1944, c.255 and P.L.1964, c.241 and supplementing P.L.1958, c.143 (C.43:3B-1 et seq.).
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 6 of P.L.1944, c.255 (C.43:16A-6) is amended to read as follows:
6. (1) Upon the written application by a member in service, by one acting in his behalf or by his employer, any member, under 55 years of age, who has had four or more years of creditable service may be retired on an ordinary disability retirement allowance; provided, that the medical board, after a medical examination of such member, shall certify that such member is mentally or physically incapacitated for the performance of his usual duty and of any other available duty in the department which his employer is willing to assign to him and that such incapacity is likely to be permanent and to such an extent that he should be retired.
(2) Upon retirement for ordinary disability, a member shall receive an ordinary disability retirement allowance which shall consist of:
(a) An annuity which shall be the actuarial equivalent of his aggregate contributions and
(b) A pension in the amount which, when added to the member's annuity, will provide a total retirement allowance of 1 1/2 % of final compensation multiplied by his number of years of creditable service but in no event shall the total allowance be less than [40%] 50% of the member's final compensation.
(3) Notwithstanding the provisions of subsection (2) of this section, a member who has more than 20 but less than 25 years of creditable service and who is required to retire upon application by the employer on or after the effective date of P.L.1999, c.428, shall receive an ordinary disability retirement allowance which shall consist of:
(a) An annuity which shall be the actuarial equivalent of the member's aggregate contributions; and
(b) A pension in the amount which, when added to the member's annuity, will provide a total retirement allowance of [50%] 55% of final compensation plus 3% of final compensation multiplied by the number of years of creditable service over 20 but not over 25.
(4) Upon the receipt of proper proofs of the death of a member who has retired on an ordinary disability retirement allowance, there shall be paid to such member's beneficiary, an amount equal to 3 1/2 times the compensation upon which contributions by the member to the annuity savings fund were based in the last year of creditable service; provided, however, that if such death shall occur after the member shall have attained 55 years of age the amount payable shall equal 1/2 of such compensation instead of 3 1/2 times such compensation.
(cf: P.L.1999, c.428, s.3)
2. Section 7 of P.L.1944, c.255 (C.43:16A-7) is amended to read as follows:
7. (1) Upon the written application by a member in service, by one acting in his behalf or by his employer any member may be retired on an accidental disability retirement allowance; provided, that the medical board, after a medical examination of such member, shall certify that the member is permanently and totally disabled as a direct result of a traumatic event occurring during and as a result of the performance of his regular or assigned duties and that such disability was not the result of the member's willful negligence and that such member is mentally or physically incapacitated for the performance of his usual duty and of any other available duty in the department which his employer is willing to assign to him. The application to accomplish such retirement must be filed within five years of the original traumatic event, but the board of trustees may consider an application filed after the five-year period if it can be factually demonstrated to the satisfaction of the board of trustees that the disability is due to the accident and the filing was not accomplished within the five-year period due to a delayed manifestation of the disability or to other circumstances beyond the control of the member.
(2) Upon retirement for accidental disability, a member shall receive an accidental disability retirement allowance which shall consist of:
(a) An annuity which shall be the actuarial equivalent of his aggregate contributions and
(b) A pension in the amount which, when added to the member's annuity, will provide a total retirement allowance of [2/3] 75% of (1) the member's actual annual compensation for which contributions were being made at the time of the occurrence of the accident or at the time of the member's retirement or (2) the amount of the highest compensation of the pay scale for the rank held at the time of the occurrence of the accident under the applicable contract , whichever provides the largest possible benefit to the member.
(3) Upon receipt of proper proofs of the death of a member who has retired on accidental disability retirement allowance, there shall be paid to such member's beneficiary, an amount equal to 3 1/2 times the compensation upon which contributions by the member to the annuity savings fund were based in the last year of creditable service; provided, however, that if such death shall occur after the member shall have attained 55 years of age the amount payable shall equal 1/2 of such compensation instead of 3 1/2 times such compensation.
(4) Permanent and total disability resulting from a cardiovascular, pulmonary or musculo-skeletal condition which was not a direct result of a traumatic event occurring in the performance of duty shall be deemed an ordinary disability.
(cf: P.L.1997, c.281, s.1)
3. Section 10 of P.L.1944, c.255 (C.43:16A-10) is amended to read as follows:
10. (1) Upon the death of a member in active service as a result of an accident met in the actual performance of duty at some definite time and place, and such death was not the result of the member's willful negligence, an accidental death benefit shall be payable if a report of the accident is filed in the office of the retirement system within 60 days next following the accident, but the board of trustees may waive such time limit, for a reasonable period, if in the judgment of the board the circumstances warrant such action. No such application shall be valid or acted upon unless it is filed in the office of the retirement system within five years of the date of such death.
The provisions of this subsection shall also apply to a member who is a fireman and who dies as a result of an accident met in the actual performance of duty as a volunteer fireman in any municipality in the State, provided the member's death was not the result of the member's willful negligence.
(2) Upon the receipt of proper proofs of the death of a member on account of which an accidental death benefit is payable, there shall be paid to his widow or widower a pension of [70%] 100% of (1) the compensation[,] upon which contributions by the member to the annuity savings fund were based in the last year of creditable service or (2) the amount of the highest compensation of the pay scale for the rank held at the time of the occurrence of the accident under the applicable contract, whichever compensation provides the largest possible benefit to the beneficiary , for the use of herself or himself and the children of the deceased member; if there is no surviving widow or widower or in case the widow or widower dies, [20%] 30% of [such] the amount of compensation providing the largest possible benefit will be payable to one surviving child, [35%] 50% of such compensation to two surviving children in equal shares and if there be three or more children, [50%] 70% of such compensation will be payable to such children in equal shares.
If there is no surviving widow, widower or child, [25%] 35% of (1) the compensation upon which contributions by the member to the annuity savings fund were based in the last year of creditable service or (2) the amount of the highest compensation of the pay scale for the rank held at the time of the occurrence of the accident under the applicable contract, whichever compensation provides the largest possible benefit to the beneficiary , will be payable to one surviving dependent parent or [40%] 60% of such compensation will be payable to two surviving parents in equal shares.
In the event of accidental death occurring in the first year of creditable service, the benefits, payable pursuant to this subsection, shall be computed at the annual rate of compensation.
(3) If there is no surviving widow, widower, child or dependent parent, there shall be paid to any other beneficiary of the deceased member, his aggregate contributions at the time of death.
(4) In no case shall the death benefit provided in subsection (2) be less than that provided under subsection (3).
(5) In addition to the foregoing benefits payable under subsection (2) or (3), there shall also be paid in one sum to such beneficiary, if living, as the member shall have nominated by written designation duly executed and filed with the retirement system, otherwise to the executor or administrator of the member's estate, an amount equal to 3 1/2 times the compensation upon which contributions by the member to the annuity savings fund were based in the last year of creditable service.
(6) In addition to the foregoing benefits, the State shall pay to the member's employer-sponsored health insurance program all health insurance premiums for the coverage of the member's surviving widow or widower and dependent children.
(cf: P.L.2003, c.181, s.2)
4. Section 16 of P.L.1964, c.241 (C.43:16A-11.1) is amended to read as follows:
16. a. Should a member resign after having established 25 years of creditable service, he may elect "special retirement," provided, that such election is communicated by such member to the retirement system by filing a written application, duly attested, stating at what time subsequent to the execution and filing thereof he desires to be retired. He shall receive, in lieu of the payment provided in section 11, a retirement allowance which shall consist of:
(1) An annuity which shall be the actuarial equivalent of his aggregate contributions, and
(2) A pension in the amount which, when added to the member's annuity, will provide a total retirement allowance of [65%] 70% of his final compensation, plus 1% of his final compensation multiplied by the number of years of creditable service over 25 but not over 30; [or, beginning in the fiscal year immediately following the adoption of the valuation report by the retirement system board of trustees in which the funded level is in excess of 104%, a pension in the amount which, when added to the member's annuity, will provide a total retirement allowance of 70% of final compensation, plus 1% of final compensation multiplied by the number of years of creditable service over 25 but not over 30;] provided, however, that any member who has earned, prior to July 1, 1979, more than 30 years of creditable service, shall receive an additional 1% of his final compensation for each year of his creditable service over 30.
The board of trustees shall retire him at the time specified or at such other time within one month after the date so specified as the board finds advisable.
Upon the receipt of proper proofs of the death of such a retired member, there shall be paid to his beneficiary an amount equal to one-half of the final compensation received by the member.
b. The "special retirement" allowance payable under subsection a. of this section to any person who retired under the retirement system prior to December 20, 1989 shall be increased by an amount equal to 5% of the person's final compensation or by such lesser amount as would, if added to the allowance payable at the time of retirement, provide a total retirement allowance of 70% of final compensation, except that in the case of such a retirant who retired on or after July 1, 1979 and had earned prior to that date more than 30 years of creditable service, the amount of the increase shall be equal to 5% of the person's final compensation irrespective of the total retirement allowance which such an increase would provide. The provisions of this subsection shall not be construed either to require a reduction in the retirement allowance payable to any retirant or to provide for the payment of any adjustment in such an allowance with respect to any period of time prior to the first day of the month following that effective date.
(cf: P.L.2003, c.108, s.2)
5. Section 15 of P.L.1944, c.255 (C.43:16A-15) is amended to read as follows:
15. (1) The contributions required for the support of the retirement system shall be made by members and their employers.
(2) The uniform percentage contribution rate for members shall be 8.5% of compensation.
(3) (Deleted by amendment, P.L.1989, c.204).
(4) Upon the basis of the tables recommended by the actuary which the board adopts and regular interest, the actuary shall compute annually, beginning as of June 30, 1991, the amount of contribution which shall be the normal cost as computed under the projected unit credit method attributable to service rendered under the retirement system for the year beginning on July 1 immediately succeeding the date of the computation. This shall be known as the "normal contribution."
(5) (Deleted by amendment, P.L.1989, c.204).
(6) (Deleted by amendment, P.L.1994, c.62.)
(7) Each employer shall cause to be deducted from the salary of each member the percentage of earnable compensation prescribed in subsection (2) of this section. To facilitate the making of deductions, the retirement system may modify the amount of deduction required of any member by an amount not to exceed 1/10 of 1% of the compensation upon which the deduction is based.
(8) The deductions provided for herein shall be made notwithstanding that the minimum salary provided for by law for any member shall be reduced thereby. Every member shall be deemed to consent and agree to the deductions made and provided for herein, and payment of salary or compensation less said deduction shall be a full and complete discharge and acquittance of all claims and demands whatsoever for the service rendered by such person during the period covered by such payment, except as to the benefits provided under this act. The chief fiscal officer of each employer shall certify to the retirement system in such manner as the retirement system may prescribe, the amounts deducted; and when deducted shall be paid into said annuity savings fund, and shall be credited to the individual account of the member from whose salary said deduction was made.
(9) With respect to employers other than the State, upon the basis of the tables recommended by the actuary which the board adopts and regular interest, the actuary shall compute the amount of the accrued liability as of June 30, 1991 under the projected unit credit method, which is not already covered by the assets of the retirement system, valued in accordance with the asset valuation method established in this section. Using the total amount of this unfunded accrued liability, the actuary shall compute the initial amount of contribution which, if the contribution is increased at a specific rate and paid annually for a specific period of time, will amortize this liability. The State Treasurer shall determine, upon the advice of the Director of the Division of Pensions and Benefits, the board of trustees and the actuary, the rate of increase for the contribution and the time period for full funding of this liability, which shall not exceed 40 years on initial application of this section as amended by this act, P.L.1994, c.62. This shall be known as the "accrued liability contribution." Any increase or decrease in the unfunded accrued liability as a result of actuarial losses or gains for the 10 valuation years following valuation year 1991 shall serve to increase or decrease, respectively, the unfunded accrued liability contribution. Thereafter, any increase or decrease in the unfunded accrued liability as a result of actuarial losses or gains for subsequent valuation years shall serve to increase or decrease, respectively, the amortization period for the unfunded accrued liability, unless an increase in the amortization period will cause it to exceed 30 years. If an increase in the amortization period as a result of actuarial losses for a valuation year would exceed 30 years, the accrued liability contribution shall be computed for the valuation year in the same manner provided for the computation of the initial accrued liability contribution under this section.
With respect to the State, upon the basis of the tables recommended by the actuary which the board adopts and regular interest, the actuary shall annually determine if there is an amount of the accrued liability, computed under the projected unit credit method, which is not already covered by the assets of the retirement system, valued in accordance with the asset valuation method established in this section. This shall be known as the "unfunded accrued liability." If there was no unfunded accrued liability for the valuation period immediately preceding the current valuation period, the actuary, using the total amount of this unfunded accrued liability, shall compute the initial amount of contribution which, if the contribution is increased at a specific rate and paid annually for a specific period of time, will amortize this liability. The State Treasurer shall determine, upon the advice of the Director of the Division of Pensions and Benefits, the board of trustees and the actuary, the rate of increase for the contribution and the time period for full funding of this liability, which shall not exceed 30 years. This shall be known as the "accrued liability contribution." Thereafter, any increase or decrease in the unfunded accrued liability as a result of actuarial losses or gains for subsequent valuation years shall serve to increase or decrease, respectively, the amortization period for the unfunded accrued liability, unless an increase in the amortization period will cause it to exceed 30 years. If an increase in the amortization period as a result of actuarial losses for a valuation year would exceed 30 years, the accrued liability contribution shall be computed for the valuation year in the same manner provided for the computation of the initial accrued liability contribution under this section. The State may pay all or any portion of its unfunded accrued liability under the retirement system from any source of funds legally available for the purpose, including, without limitation, the proceeds of bonds authorized by law for this purpose.
The value of the assets to be used in the computation of the contributions provided for under this section for valuation periods shall be the value of the assets for the preceding valuation period increased by the regular interest rate, plus the net cash flow for the valuation period (the difference between the benefits and expenses paid by the system and the contributions to the system) increased by one half of the regular interest rate, plus 20% of the difference between this expected value and the full market value of the assets as of the end of the valuation period. This shall be known as the "valuation assets." Notwithstanding the first sentence of this paragraph, the valuation assets for the valuation period ending June 30, 1995 shall be the full market value of the assets as of that date and, with respect to the valuation assets allocated to the State, shall include the proceeds from the bonds issued pursuant to the "Pension Bond Financing Act of 1997," P.L.1997, c.114 (C.34:1B-7.45 et seq.), paid to the system by the New Jersey Economic Development Authority to fund the unfunded accrued liability of the system. Notwithstanding the first sentence of this paragraph, the percentage of the difference between the expected value and the full market value of the assets to be added to the expected value of the assets for the valuation period ending June 30, 1998 for the State shall be 100% and for other employers shall be 57% plus such additional percentage as is equivalent to $150,000,000. Notwithstanding the first sentence of this paragraph, the amount of the difference between the expected value and the full market value of the assets to be added to the expected value of the assets for the valuation period ending June 30, 1999 shall include an additional amount of the market value of the assets sufficient to fund (1) the unfunded accrued liability for the supplementary "special retirement" allowances provided under subsection b. of section 16 of P.L.1964, c.241 (C.43:16A-11.1) and (2) the unfunded accrued liability for the full credit toward benefits under the retirement system for service credited in the Public Employees' Retirement System and transferred pursuant to section 1 of P.L.1993, c.247 (C.43:16A-3.8) and the reimbursement of the cost of any credit purchase pursuant to section 3 of P.L.1993, c.247 (C.43:16A-3.10) provided under section 1 of P.L.2001, c.201 (C.43:16A-3.14).
"Excess valuation assets" means, with respect to the valuation assets allocated to the State, the valuation assets allocated to the State for a valuation period less the actuarial accrued liability of the State for the valuation period, and beginning with the valuation period ending June 30, 1998, less the present value of the expected additional normal cost contributions attributable to the provisions of P.L.1999, c.428 [(C.43:16A-15.8 et al.)] payable on behalf of the active members employed by the State as of the valuation period over the expected working lives of the active members in accordance with the tables of actuarial assumptions applicable to the valuation period, and less the present value of the expected additional normal cost contributions attributable to the provisions of [P.L.2003, c.108 as amending section 16 of P.L.1964, c.241 (C.43:16A-11.1)] P.L. , c. (pending before the Legislature as this bill) payable on behalf of the active members employed by the State as of the valuation period over the expected working lives of the active members in accordance with the tables of actuarial assumptions applicable to the valuation period, if the sum is greater than zero. "Excess valuation assets" means, with respect to the valuation assets allocated to other employers, the valuation assets allocated to the other employers for a valuation period less the actuarial accrued liability of the other employers for the valuation period, excluding the unfunded accrued liability for early retirement incentive benefits pursuant to P.L.1993, c.99 for the other employers, and beginning with the valuation period ending June 30, 1998, less the present value of the expected additional normal cost contributions attributable to the provisions of P.L.1999, c.428 [(C.43:16A-15.8 et al.)] payable on behalf of the active members employed by other employers as of the valuation period over the expected working lives of the active members in accordance with the tables of actuarial assumptions applicable to the valuation period, and less the present value of the expected additional normal cost contributions attributable to the provisions of [P.L.2003, c.108 as amending section 16 of P.L.1964, c.241 (C.43:16A-11.1)] P.L. , c. (pending before the Legislature as this bill) payable on behalf of the active members employed by other employers as of the valuation period over the expected working lives of the active members in accordance with the tables of actuarial assumptions applicable to the valuation period, if the sum is greater than zero.
If there are excess valuation assets allocated to the State or to the other employers for the valuation period ending June 30, 1995, the normal contributions payable by the State or by the other employers for the valuation periods ending June 30, 1995, and June 30, 1996 which have not yet been paid to the retirement system shall be reduced to the extent possible by the excess valuation assets allocated to the State or to the other employers, respectively, provided that with respect to the excess valuation assets allocated to the State, the General Fund balances that would have been paid to the retirement system except for this provision shall first be allocated as State aid to public schools to the extent that additional sums are required to comply with the May 14, 1997 decision of the New Jersey Supreme Court in Abbott v. Burke.
If there are excess valuation assets allocated to the other employers for the valuation period ending June 30, 1998, the accrued liability contributions payable by the other employers for the valuation period ending June 30, 1997 shall be reduced to the extent possible by the excess valuation assets allocated to the other employers.
If there are excess valuation assets allocated to the State or to the other employers for a valuation period ending after June 30, 1998, the State Treasurer may reduce the normal contribution payable by the State or by other employers for the next valuation period as follows:
(1) for valuation periods ending June 30, 1996 through June 30, 2000, to the extent possible by up to 100% of the excess valuation assets allocated to the State or to the other employers, respectively;
(2) for the valuation period ending June 30, 2001, to the extent possible by up to 84% of the excess valuation assets allocated to the State or to the other employers, respectively;
(3) for the valuation period ending June 30, 2002, to the extent possible by up to 68% of the excess valuation assets allocated to the State or to the other employers, respectively; and
(4) for valuation periods ending June 30, 2003 through June 30, 2007, to the extent possible by up to 50% of the excess valuation assets allocated to the State or to the other employers, respectively.
Notwithstanding the discretion provided to the State Treasurer in the previous paragraph to reduce the amount of the normal contribution payable by employers other than the State, the State Treasurer shall reduce the amount of the normal contribution payable by employers other than the State by $150,000,000 in the aggregate for the valuation period ending June 30, 1998, and then the State Treasurer may reduce further pursuant to the provisions of the previous paragraph the normal contribution payable by such employers for that valuation period.
As of the valuation report in which the funded level is in excess of [104%] 101%, an amount equal to the present value of the future normal contributions for the benefits to active members provided by [P.L.2003, c.108 as amending section 16 of P.L.1964, c.241 (C.43:16A-11.1)] P.L. , c. (pending before the Legislature as this bill), shall be credited to the benefit enhancement fund. If there are excess valuation assets after reductions in normal contributions as authorized in the preceding paragraphs, for a valuation period beginning with the valuation period in which the benefits provided by [section 16 of P.L.1964, c.241 (C.43:16A-11.1), as amended by P.L.2003, c.108] P.L. , c. (pending before the Legislature as this bill) apply, an amount of excess valuation assets not to exceed the amount of the member contributions for the fiscal year in which the normal contributions are payable shall be credited to the benefit enhancement fund. The amount of excess valuation assets credited to the benefit enhancement fund shall not exceed the present value of the expected additional normal and accrued liability contributions attributable to the provisions of [section 16 of P.L.1964, c.241 (C.43:16A-11.1), as amended by P.L.2003, c.108] P.L. , c. (pending before the Legislature as this bill), payable on behalf of the active members over the expected working lives of the active members in accordance with the tables of actuarial assumptions for the valuation period. [No additional excess valuation assets shall be credited to the benefit enhancement fund after the maximum amount is attained.] Interest shall be credited to the benefit enhancement fund.
As of the valuation report in which the funded level is in excess of 101%, an amount equal to the present value of the future contributions for the benefits to retirants provided by P.L. , c. (pending before the Legislature as this bill) shall be credited to the benefit enhancement fund. If there are excess valuation assets after reductions in normal contributions as authorized in the preceding paragraphs, for a valuation period beginning with the valuation period in which the benefits to retirants provided by P.L. , c. (pending before the Legislature as this bill) apply, an amount of excess valuation assets not to exceed the present value of the expected additional accrued liability contributions attributable to the provisions of P.L. , c. (pending before the Legislature as this bill), payable on behalf of the retirants in accordance with the tables of actuarial assumptions for the valuation period shall be credited to the benefit enhancement fund. No additional excess valuation assets shall be credited to the benefit enhancement fund after the maximum amount is attained. Interest shall be credited to the benefit enhancement fund.
The normal and accrued liability contributions for the increased benefits for active employees and retirants under [section 16 of P.L.1964, c.241 (C.43:16A-11.1), as amended by P.L.2003, c.108] P.L. , c. (pending before the Legislature as this bill), shall be paid from the benefit enhancement fund. If assets in the benefit enhancement fund are insufficient to pay the normal and accrued liability contributions for the increased benefits for a valuation period, the retirement system shall pay the amount of normal and accrued liability contributions for the increased benefits not covered by assets from the benefit enhancement fund.
The normal and accrued liability contributions shall be certified annually by the retirement system and shall be included in the budget of the employer and levied and collected in the same manner as any other taxes are levied and collected for the payment of the salaries of members.
Notwithstanding the preceding sentence, the normal and accrued liability contributions to be included in the budget of and paid by the employer other than the State shall be as follows: for the payment due in the State fiscal year ending on June 30, 2004, 20% of the amount certified by the retirement system; for the payment due in the State fiscal year ending on June 30, 2005, a percentage of the amount certified by the retirement system as the State Treasurer shall determine but not more than 40%; for the payment due in the State fiscal year ending on June 30, 2006, a percentage of the amount certified by the retirement system as the State Treasurer shall determine but not more than 60%; and for the payment due in the State fiscal year ending on June 30, 2007, a percentage of the amount certified by the retirement system as the State Treasurer shall determine but not more than 80%.
(10) The treasurer or corresponding officer of the employer shall pay to the State Treasurer no later than April 1 of the State's fiscal year in which payment is due the amount so certified as payable by the employer, and shall pay monthly to the State Treasurer the amount of the deductions from the salary of the members in the employ of the employer, and the State Treasurer shall credit such amount to the appropriate fund or funds, of the retirement system.
If payment of the full amount of the employer's obligation is not made within 30 days of the due date established by this act, interest at the rate of 10% per annum shall commence to run against the unpaid balance thereof on the first day after such 30th day.
If payment in full, representing the monthly transmittal and report of salary deductions, is not made within 15 days of the due date established by the retirement system, interest at the rate of 10% per annum shall commence to run against the total transmittal of salary deductions for the period on the first day after such 15th day.
(11) The expenses of administration of the retirement system shall be paid by the State of New Jersey. Each employer shall reimburse the State for a proportionate share of the amount paid by the State for administrative expense. This proportion shall be computed as the number of members under the jurisdiction of such employer bears to the total number of members in the system. The pro rata share of the cost of administrative expense shall be included with the certification by the retirement system of the employer's contribution to the system.
(12) Notwithstanding anything to the contrary, the retirement system shall not be liable for the payment of any pension or other benefits on account of the employees or beneficiaries of any employer participating in the retirement system, for which reserves have not been previously created from funds, contributed by such employer or its employees for such benefits.
(13) (Deleted by amendment, P.L.1992, c.125.)
(14) Commencing with valuation year 1991, with payment to be made in Fiscal Year 1994, the Legislature shall annually appropriate and the State Treasurer shall pay into the pension accumulation fund of the retirement system an amount equal to 1.1% of the compensation of the members of the system for the valuation year to fund the benefits provided by section 16 of P.L.1964, c.241 (C.43:16A-11.1), as amended by P.L.1979, c.109.
(15) If the valuation assets are insufficient to fund the normal and accrued liability costs attributable to P.L.1999, c.428 (C.43:16A-15.8 et al.) as provided hereinabove, the normal and unfunded accrued liability contributions required to fund these costs for the State and other employers shall be paid by the State.
(16) The savings realized as a result of the amendments to this section by P.L.2001, c.44 in the payment of normal contributions computed by the actuary for the valuation periods ending June 30, 1998 for employers other than the State shall be used solely and exclusively by a county or municipality for the purpose of reducing the amount that is required to be raised by the local property tax levy by the county for county purposes or by the municipality for municipal purposes, as appropriate. The Director of the Division of Local Government Services in the Department of Community Affairs shall certify for each year that each county or municipality has complied with the requirements set forth herein. If the director finds that a county or municipality has not used the savings solely and exclusively for the purpose of reducing the amount that is required to be raised by the local property tax levy by the county for county purposes or by the municipality for municipal purposes, as appropriate, the director shall direct the county or municipal governing body, as appropriate, to make corrections to its budget.
(cf: P.L.2007, c.92, s.23)
6. (New section) On July 1 of the fiscal year immediately following the adoption of the valuation report by the retirement system board of trustees in which the funded level is in excess of 101%, the Division of Pensions and Benefits shall make a list, in descending order by age, of all retirants who retired under the retirement system prior to that date and all beneficiaries in receipt of accidental death benefits prior to that date. The retirement allowances payable under sections 6 and 7 of P.L.1944, c.255 (C.43:16A-6 and 7) and section 16 of P.L.1964, c.241 (C.43:16A-11.1) and the accidental death benefits payable under section 10 of P.L.1944, c.255 (C.43:16A-10) shall be increased as provided by amendment pursuant to this act, P.L. , c. (pending before the Legislature as this bill), for persons on the list as follows: for persons in the first 34 percent of the list, in the fiscal year immediately following the adoption of the valuation report by the retirement system board of trustees in which the funded level is in excess of 101%; for the persons in the second 33 percent of the list, in the first fiscal year after the fiscal year immediately following the adoption of that valuation report; and for the persons on the remainder of the list, in the second fiscal year after the fiscal year immediately following the adoption of that valuation report. The provisions of this section shall not be construed either to require a reduction in the retirement allowance or benefit payable to any retirant or beneficiary, or to provide for the payment of any adjustment in such an allowance or benefit with respect to any period of time prior to July 1 of the fiscal year immediately following the adoption of the valuation report by the retirement system board of trustees in which the funded level is in excess of 101%.
7. (New section) The provisions of section 7 of P.L.1969, c.169 (C.43:3B-8) shall not apply to P.L. , c. (pending before the Legislature as this bill) and the annual cost of living adjustment received by retirants and beneficiaries under P.L.1958, c.143 (C.43:3B-1 et seq.) shall be calculated as of the date of the benefit year of the member of the retirement system.
8. This act shall take effect immediately but shall be inoperative until the adoption of the valuation report by the retirement system board of trustees in which the funded level is in excess of 101%.
STATEMENT
This bill increases benefits for the members, the retirees and certain beneficiaries of the Police and Firemen's Retirement System (PFRS). The enhanced benefits for active PFRS members will take effect following the adoption of the PFRS valuation report which indicates a funded level of 101%. The enhanced benefits for PFRS retirees and PFRS accidental death beneficiaries will take effect over a three year period beginning with July 1 of the fiscal year following the adoption of the PFRS valuation report which indicates a funded level of 101%. Of a list, in descending order by age, of all retirees and all accidental death beneficiaries, the enhanced benefits with be payable to persons in the first 34 percent of the list, in that fiscal year; to persons in the second 33 percent of the list, in the fiscal year thereafter; and for those on the remainder of the list, in the third fiscal year after adoption of the valuation report.
The bill increases the special retirement benefit for PFRS members with 25 or more years of service from 65% to 70% of final compensation, plus, as currently provided, 1% multiplied by the number of years of service over 25 but not over 30. The benefits for PFRS members who retire on an ordinary disability benefit will increase from 40% to 50% of final compensation, except that the ordinary disability benefit of a PFRS member who has more than 20 but less than 25 years of service and who is required to retire upon application by the employer will increase from 50% to 55% of final compensation, plus, as currently provided, 3% of final compensation multiplied by the number of years of service over 20 but not over 25. The PFRS accidental disability benefit will increase from 66 2/3% to 75% of final compensation or 75% of the amount of the highest compensation of the pay scale for the rank held at the time of the occurrence of the accident under the applicable contract, whichever provides the largest possible benefit to the member.
The bill increases the PFRS accidental death benefit from 70% to 100% of final compensation, or 100% of the amount of the highest compensation of the pay scale for the rank held at the time of the occurrence of the accident under the applicable contract, whichever provides the largest possible benefit, for a surviving spouse; in the absence of a surviving spouse, from 20% to 30% for one surviving child, from 35% to 50% for two surviving children, from 50% to 70% for three or more surviving children; in the absence of a surviving spouse or children, from 25% to 35% for one surviving dependent parent and from 40% to 60% for two surviving parents.
P.L.2003, c.108 establishes in PFRS a benefit enhancement fund to which will be credited an amount of certain excess valuation assets for a valuation period beginning with the valuation report which indicates a funded level of 104%. This bill, instead, will credit the benefit enhancement fund with the appropriate amount of certain excess valuation assets for a valuation period beginning with the valuation report which indicates a funded level of 101%.
