Bill Text: NJ S1520 | 2018-2019 | Regular Session | Introduced
Bill Title: Reinstates automatic COLA for retirement benefits of members of the State-administered retirement systems.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Introduced - Dead) 2018-02-05 - Introduced in the Senate, Referred to Senate State Government, Wagering, Tourism & Historic Preservation Committee [S1520 Detail]
Download: New_Jersey-2018-S1520-Introduced.html
Sponsored by:
Senator SHIRLEY K. TURNER
District 15 (Hunterdon and Mercer)
SYNOPSIS
Reinstates automatic COLA for retirement benefits of members of the State-administered retirement systems.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning cost-of-living adjustments for retirement benefits of members of the State-administered retirement systems, and amending various parts of the statutory law.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. N.J.S.18A:66-56 is amended to read as follows:
18A:66-56. a. (1) 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, as specified, in the committee established pursuant to subsection b. of this section. Subject to the limitations of the law, the board shall annually establish rules and regulations for the administration and transaction of the board's and committee's business and for the control of the funds created by this article. Such rules and regulations shall be consistent with those adopted by the other pension funds within the Division of Pensions and Benefits in order to permit the most economical and uniform administration of all such retirement systems. The committee shall adopt such regulations as provided in subsection b. of this section.
(2) 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;
(b) Two trustees appointed by the Governor, with the advice and consent of the Senate, 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.), one shall be appointed for a term of two years and one for a term of three years;
(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.
(3) 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 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 or committee. The board shall keep a record of all its proceedings, which shall be open to public inspection.
The members of the board 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.
(4) The State Treasurer shall designate a medical board after consultation with the Director of the Division of Pensions and Benefits, 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.
b. There is established a committee to be composed of eight members, four of whom shall be appointed by the Governor as representatives of public employers whose employees are enrolled in the retirement system, three of whom shall be appointed by the head of the union representing the greatest number of members of the retirement system having union membership, and one of whom shall be appointed by the head of the union representing the second greatest number of members of the retirement system having union membership. The members of the committee shall not be appointed until the system, or part of the system, attains the target funded ratio.
The members of the committee shall serve for a term of three years and until a successor is appointed and qualified. Of the initial appointments by the Governor, two members shall serve for two years and until a successor is appointed and qualified, and one shall serve for one year and until a successor is appointed and qualified. Of the initial appointments by the head of the union representing the greatest number of members of the retirement system, one member shall serve for two years and until a successor is appointed and qualified, and one shall serve for one year and until a successor is appointed and qualified.
The members of the committee shall select a chairperson from among the members, who shall serve for a term of one year, with no member serving more than one term, until all the members of the committee have served a term in a manner alternating among the employer representatives and employee representatives, unless the committee determines otherwise with regard to this process.
The provisions of paragraph (3) of subsection a. of this section, and N.J.S.18A:66-60, shall apply to the committee and its members, as appropriate.
Upon the convening of any meeting of the committee, the members shall consider a motion to assume the authority provided in this subsection and shall proceed only if a majority of the members of the committee vote in the affirmative on that motion.
The committee may contract with such actuaries or consultants, or both, in accordance with the provisions of P.L.1954, c.48 (C.52:34-6 et seq.), as the committee may deem necessary to perform its duties, when the system or part of the system has attained the target funded ratio.
When the retirement system, or a part of the system, has attained the target funded ratio as defined in section 27 of P.L.2011, c.78 (C. ), the committee shall have the discretionary authority for the system or for that part, as appropriate, to [(1)] modify the: member contribution rate; formula for calculation of final compensation; the fraction of compensation applied to service credited after the modification; age at which a member may be eligible for and the benefits for service or early retirement; and benefits provided for disability retirement [; and (2) activate the application of the "Pension Adjustment Act," P.L.1958, c.143 (C.43:3B-1 et seq.) for retirees for the period that the system or part is at or above the target funded ratio and modify the basis for the calculation of the adjustment and set the duration and extent of the activation. The committee shall give priority consideration to subparagraph (2) of this paragraph]. The committee shall not have the authority to change the years of creditable service required for vesting.
The committee may consider a matter described above and render a decision notwithstanding that the provisions of the statutory law may set forth a specific requirement on that matter.
The committee may consider a matter described above and render a decision notwithstanding that the provisions of the statutory law do not set forth a specific requirement on the considered aspect of that matter or address that matter at all.
The members of the committee shall have the same duty and responsibility to the retirement system as do the members of the board of trustees. No decision of the committee shall be implemented if the direct or indirect result of the decision will be that the system's or part's funded ratio falls below the target funded ratio in any valuation period during the 30 years following the implementation of the decision. The actuary of the fund shall make a determination of the result in that regard and submit that determination in a written report to the committee and the board prior to the implementation of the decision.
If any matter before the committee receives at least five votes in the affirmative, the board of trustees shall approve and implement the committee's decision.
If any matter regarding benefits before the committee receives four votes in the affirmative and four votes in the negative or the committee otherwise reaches an impasse on a decision, the provisions of section 33 of P.L.2011, c.78 (C.43:3C-17) shall be followed.
A final action of the committee shall be made by the adoption of a regulation that shall identify the modifications to the system by reference to statutory section. The regulations shall also specify the effective date of the modification and the system members, including beneficiaries and retirees, to whom the modification applies. Regulations of the committee are considered to be part of the plan document for the system. A regulation adopted by the committee may be modified by regulation in order to comply with the requirements of this section.
c. No member of the board, committee, employee of the board, or employee of the Division of Pensions and Benefits in the Department of the Treasury shall accept from any person, whether directly or indirectly and whether by himself or through his spouse or any member of his family, or through any partner or associate, any gift, favor, service, employment or offer of employment, or any other thing of value, including contributions to the campaign of a member or employee as a candidate for elective public office, which he knows or has reason to believe is offered to him with intent to influence him in the performance of his public duties and responsibilities. As used in this paragraph, "person" means an (1) individual or business entity, or officer or employee of such an entity, who is seeking, or who holds, or who held within the prior three years, a contract with the board; (2) an active or retired member, or beneficiary, of the retirement system; or (3) an entity, or officer or employee of such an entity, in which the assets of the retirement system have been invested. A board or committee member or employee violating this prohibition shall be guilty of a crime of the third degree.
(cf: P.L.2011, c.78, s.1)
2. 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.
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 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 the other pension funds within the Division of Pensions and Benefits in order to permit the most economical and uniform administration of all such retirement systems.
e. The actuary of the system 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 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 and Benefits of the State Department of the Treasury shall be the secretary of the commission for purposes pertaining to the provisions of this act.
h. For purposes of this act, the State House Commission 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. The State Treasurer shall designate a medical board after consultation with the Director of the Division of Pensions and Benefits. 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.
j. When the retirement system has attained the target funded ratio as defined in section 27 of P.L.2011, c.78 (C.43:3C-16), the commission shall have the discretionary authority for the system to [(1)] modify the: member contribution rate; formula for calculation of final salary; age at which a member may be eligible for and the benefits for service or early retirement; and benefits provided for disability retirement [; and (2) activate the application of the "Pension Adjustment Act," P.L.1958, c.143 (C.43:3B-1 et seq.) for retirees for the period that the system is at or above the target funded ratio and modify the basis for the calculation of the adjustment and set the duration and extent of the activation. The commission shall give priority consideration to subparagraph (2) of this paragraph]. The commission shall not have the authority to change the years of creditable service required for vesting.
The commission may consider a matter described above and render a decision notwithstanding that the provisions of the statutory law may set forth a specific requirement on that matter.
The commission may consider a matter described above and render a decision notwithstanding that the provisions of the statutory law do not set forth a specific requirement on the considered aspect of that matter or address that matter at all.
No decision of the commission shall be implemented if the direct or indirect result of the decision will be that the system's funded ratio falls below the target funded ratio in any valuation period during the 30 years following the implementation of the decision. The actuary of the system shall make a determination of the result in that regard and submit that determination in a written report to the commission prior to the implementation of the decision.
If any matter before the commission receives a majority vote, the commission shall implement the decision.
A final action of the commission shall be made by the adoption of a regulation that shall identify the modifications to the system by reference to statutory section. The regulations shall also specify the effective date of the modification and the system members, including beneficiaries and retirees, to whom the modification applies. Regulations of the commission are considered to be part of the plan document for the system. A regulation adopted by the commission may be modified by regulation in order to comply with the requirements of this section.
k. No member of the commission, employee of the commission, or employee of the Division of Pensions and Benefits in the Department of the Treasury shall accept from any person, whether directly or indirectly and whether by himself or through his spouse or any member of his family, or through any partner or associate, any gift, favor, service, employment or offer of employment, or any other thing of value, including contributions to the campaign of a member or employee as a candidate for elective public office, which he knows or has reason to believe is offered to him with intent to influence him in the performance of his public duties and responsibilities. As used in this subsection, "person" means an (1) individual or business entity, or officer or employee of such an entity, who is seeking, or who holds, or who held within the prior three years, a contract with the commission; or (2) an active or retired member, or beneficiary, of the retirement system. A member or employee violating this prohibition shall be guilty of a crime of the third degree.
(cf: P.L.2011, c.78, s.2)
3. Section 17 of P.L.1954, c.84 (C.43:15A-17) is amended to read as follows:
17. a. (1) 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 board of trustees, and, as specified, the committees established pursuant to subsection b. of this section. Subject to the limitations of the law, the board shall annually establish rules and regulations for the administration and transaction of the board's and committees' business and for the control of the funds created by this subtitle. Such rules and regulations shall be consistent with those adopted by the other pension funds within the Division of Pensions and Benefits in order to permit the most economical and uniform administration of all such retirement systems. The committees shall adopt such regulations as provided in subsection b. of this section.
(2) The membership of the board shall consist of the following:
(a) Two trustees appointed by the Governor, with the advice and consent of the Senate, 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.), one shall be appointed for a term of two years and one for a term of three years.
(b) The State Treasurer or the Deputy State Treasurer, when designated for that purpose by the State Treasurer.
(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.
(3) 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 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.
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 shall keep a record of all its proceedings, which shall be open to public inspection.
The members of the board shall serve without compensation but shall be reimbursed for any necessary expenditures. No employee shall suffer loss of salary or wages through the serving on the board.
(4) The State Treasurer 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.
b. There are established two committees, to be composed of eight members each as follows, one for the State employees part of the retirement system and one for the part of the retirement system with employees of employers other than the State.
Each committee shall have four members who shall be appointed by the Governor as representatives of public employers whose employees are enrolled in the retirement system, and four members who shall be appointed by the Public Employee Committee of the AFL-CIO with the four appointments to be allocated among the unions representing members of the retirement system having union membership in a manner that results in the unions representing a greater number of members receiving more appointments than the unions representing fewer members. The members of the committees shall not be appointed until that part of the system attains the target funded ratio.
The members of each committees shall serve for a term of three years and until a successor is appointed and qualified. For each committee, of the initial appointments by the Governor, two members shall serve for two years and until a successor is appointed and qualified, and one shall serve for one year and until a successor is appointed and qualified. For each committee, of the initial appointments by the Public Employee Committee of the AFL-CIO, one member shall serve for two years and until a successor is appointed and qualified, and one shall serve for one year and until a successor is appointed and qualified.
For each committee, the members of the committee shall select a chairperson from among the members, who shall serve for a term of one year, with no member serving more than one term until all the members of that committee have served a term in a manner alternating among the employer representatives and employee representatives, unless the committee determines otherwise with regard to this process.
The provisions of paragraph (3) of subsection a. of this section, and section 36 of P.L.1954, c.84 (C.43:15A-36), shall apply to each committee and its members, as appropriate.
Upon the convening of any meeting of a committee, the members shall consider a motion to assume the authority provided in this subsection and shall proceed only if a majority of the members of the committee vote in the affirmative on that motion.
Each committee may contract with such actuaries or consultants, or both, in accordance with the provisions of P.L.1954, c.48 (C.52:34-6 et seq.), as the committee may deem necessary to perform its duties, when that part of the system has met the target funded ratio.
When a part of the system has attained the target funded ratio as defined in section 27 of P.L.2011, c.78 (C.43:3C-16), the committee for that part shall have the discretionary authority for that part to [(1)] modify the: member contribution rate; formula for calculation of final compensation; the fraction of compensation applied to service credited after the modification; age at which a member may be eligible for and the benefits for service or early retirement; and benefits provided for disability retirement [; and (2) activate the application of the "Pension Adjustment Act," P.L.1958, c.143 (C.43:3B-1 et seq.) for retirees for the period that the part is at or above the target funded ratio and modify the basis for the calculation of the adjustment and set the duration and extent of the activation. A committee shall give priority consideration to subparagraph (2) of this paragraph]. A committee shall not have the authority to change the years of creditable service required for vesting.
Each committee may consider a matter described above and render a decision notwithstanding that the provisions of the statutory law may set forth a specific requirement on that matter.
Each committee may consider a matter described above and render a decision notwithstanding that the provisions of the statutory law do not set forth a specific requirement on the considered aspect of that matter or address that matter at all.
The members of each committee shall have the same duty and responsibility to the retirement system as do the members of the board of trustees. No decision of a committee shall be implemented if the direct or indirect result of the decision will be that the funded ratio of that part falls below the target funded ratio in any valuation period during the 30 years following the implementation of the decision. The actuary of the fund shall make a determination of the result in that regard and submit that determination in a written report to the committee and the board prior to the implementation of the decision.
If any matter before a committee receives at least five votes in the affirmative, the board of trustees shall approve and implement the committee's decision.
If any matter regarding benefits before a committee receives four votes in the affirmative and four votes in the negative or a committee otherwise reaches an impasse on a decision, the provisions of section 33 of P.L.2011, c.78 (C.43:3C-17) shall be followed.
A final action of the committee shall be made by the adoption of a regulation that shall identify the modifications to the system by reference to statutory section. The regulations shall also specify the effective date of the modification and the system members, including beneficiaries and retirees, to whom the modification applies. Regulations of the committee are considered to be part of the plan document for the system. A regulation adopted by the committee may be modified by regulation in order to comply with the requirements of this section.
c. No member of the board, committee, employee of the board, or employee of the Division of Pensions and Benefits in the Department of the Treasury shall accept from any person, whether directly or indirectly and whether by himself or through his spouse or any member of his family, or through any partner or associate, any gift, favor, service, employment or offer of employment, or any other thing of value, including contributions to the campaign of a member or employee as a candidate for elective public office, which he knows or has reason to believe is offered to him with intent to influence him in the performance of his public duties and responsibilities. As used in this subsection, "person" means an (1) individual or business entity, or officer or employee of such an entity, who is seeking, or who holds, or who held within the prior three years, a contract with the board; (2) an active or retired member, or beneficiary, of the retirement system; or (3) an entity, or officer or employee of such an entity, in which the assets of the retirement system have been invested. A board or committee member or employee violating this prohibition shall be guilty of a crime of the third degree.
(cf: P.L.2011, c.78, s.3)
4. Section 13 of P.L.1944, c.255 (C.43:16A-13) is amended to read as follows:
13. a. (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 a board of trustees, and, as specified, the committees established pursuant to subsection b. of this section.
(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, 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.), 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, shall for a term of four years and until a successor is appointed.
(b) The State Treasurer or the deputy State Treasurer, when designated for that purpose by the State Treasurer.
(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 shall annually establish rules and regulations for the administration of the funds created by this act and for the transaction of the board's and committees' business. Such rules and regulations shall be consistent with those adopted by the other pension funds within the Division of Pensions and Benefits in order to permit the most economical and uniform administration of all such retirement systems. The committees shall adopt such regulations as provided in subsection b. of this section.
(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.
(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 or the committees on a matter affecting the retirement system, the board may select and employ legal counsel to advise and represent the board or the committees on that matter.
(11) The State Treasurer 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. He shall be the technical adviser of the board of trustees and the committees 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 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 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 or the committees 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 or the committees, and such time off shall include reasonable travel time required in connection therewith.
b. There are established two committees, to be composed of 10 members each as follows, one for the State employees part of the retirement system and one for the part of the retirement system with employees of employers other than the State.
Each committee shall have five members who shall be appointed by the Governor as representatives of public employers whose employees are enrolled in the retirement system, two members who shall be appointed by the head of the union representing the greatest number of police officer members of the retirement system having union membership, one member who shall be appointed by the head of the union representing the second greatest number of police officer members of the retirement system having union membership, one member who shall be appointed by the head of the union representing the greatest number of firefighter members of the retirement system having union membership, and one member who shall be appointed by the head of the union representing the second greatest number of firefighter members of the retirement system having union membership. The members of the committees shall not be appointed until that part of the system attains the target funded ratio.
The members of each committee shall serve for a term of three years and until a successor is appointed and qualified. For each committee, of the initial appointments by the Governor, two members shall serve for two years and until a successor is appointed and qualified, and two shall serve for one year and until a successor is appointed and qualified. For each committee, of the initial appointments by the head of the union representing the greatest number of police officer members of the retirement system, the members shall serve for two years and until a successor is appointed and qualified. For each committee, of the initial appointment by the head the union representing the greatest number of firefighter members of the retirement system, the member shall serve for one year and until a successor is appointed and qualified.
For each committee, the members of the committee shall select a chairperson from among the members, who shall serve for a term of one year, with no member serving more than one term until all the members of the committee have served a term in an manner alternating among the employer representatives and employee representatives, unless the committee determines otherwise with regard to this process.
The provisions of paragraphs (3) through (6), inclusive, and (17) of subsection a. of this section, and subsection (4) of section 14 of P.L.1944, c.255 (C.43:16A-14), shall apply to the committee and its members, as appropriate. The committee shall keep a record of all of its proceedings which shall be open to public inspection.
Upon the convening of any meeting of a committee, the members shall consider a motion to assume the authority provided in this subsection and shall proceed only if a majority of the members of the committee vote in the affirmative on that motion.
Each committee may contract with such actuaries or consultants, or both, in accordance with the provisions of P.L.1954, c.48 (C.52:34-6 et seq.), as the committee may deem necessary to perform its duties, when that part of the system has attained the target funded ratio.
When a part of the system, has attained the target funded ratio as defined in section 27 of P.L.2011, c.78 (C.43:3C-16), the committee for that part shall have the discretionary authority for that part to [(1)] modify the: member contribution rate; formula for calculation of final compensation; age at which a member may be eligible for and the benefits for service or special retirement; and benefits provided for disability retirement [; and (2) activate the application of the "Pension Adjustment Act," P.L.1958, c.143 (C.43:3B-1 et seq.) for retirees for the period that the part is at or above the target funded ratio and modify the basis for the calculation of the adjustment and set the duration and extent of the activation. A committee shall give priority consideration to subparagraph (2) of this paragraph]. A committee shall not have the authority to change the years of creditable service required for vesting.
Each committee may consider a matter described above and render a decision notwithstanding that the provisions of the statutory law may set forth a specific requirement on that matter.
Each committee may consider a matter described above and render a decision notwithstanding that the provisions of the statutory law do not set forth a specific requirement on the considered aspect of that matter or address that matter at all.
The members of each committee shall have the same duty and responsibility to the retirement system as do the members of the board of trustees. No decision of a committee shall be implemented if the direct or indirect result of the decision will be that the funded ratio of that part falls below the target funded ratio in any valuation period during the 30 years following the implementation of the decision. The actuary of the system shall make a determination of the result in that regard and submit that determination in a written report to the committee and the board prior to the implementation of the decision.
If any matter before a committee receives at least six votes in the affirmative, the board of trustees shall approve and implement the committee's decision.
If any matter regarding benefits before a committee receives five votes in the affirmative and five votes in the negative or the committee otherwise reaches an impasse on a decision, the provisions of section 33 of P.L.2011, c.78 (C.43:3C-17) shall be followed.
A final action of the committee shall be made by the adoption of a regulation that shall identify the modifications to the system by reference to statutory section. The regulations shall also specify the effective date of the modification and the system members, including beneficiaries and retirees, to whom the modification applies. Regulations of the committee are considered to be part of the plan document for the system. A regulation adopted by the committee may be modified by regulation in order to comply with the requirements of this section.
c. No member of the board, committee, employee of the board, or employee of the Division of Pensions and Benefits in the Department of the Treasury shall accept from any person, whether directly or indirectly and whether by himself or through his spouse or any member of his family, or through any partner or associate, any gift, favor, service, employment or offer of employment, or any other thing of value, including contributions to the campaign of a member or employee as a candidate for elective public office, which he knows or has reason to believe is offered to him with intent to influence him in the performance of his public duties and responsibilities. As used in this subsection, "person" means an (1) individual or business entity, or officer or employee of such an entity, who is seeking, or who holds, or who held within the prior three years, a contract with the board; (2) an active or retired member, or beneficiary, of the retirement system; or (3) an entity, or officer or employee of such an entity, in which the assets of the retirement system have been invested. A board or committee member or employee violating this prohibition shall be guilty of a crime of the third degree.
(cf: P.L.2011, c.78, s.4)
5. 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 board of trustees, and, as specified, the committee established pursuant to subsection o. of this section.
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, who shall serve at the pleasure of the superintendent 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, 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.), 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.
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 shall annually establish rules and regulations for the administration of the funds created by this act and for the transactions of the board's and committee's business. Such rules and regulations shall be consistent with those adopted by the other pension funds within the Division of Pensions and Benefits in order to permit the most economical and uniform administration of all such retirement systems. The committee shall adopt such regulations as provided in subsection o. of this section.
i. 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 board and the committee 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 or the committee on a matter affecting the retirement system, the board may select and employ legal counsel to advise and represent the board or the committee on that matter.
k. The Director of the Division of Pensions and Benefits of the State Department of the Treasury shall appoint a qualified member of the division who 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. The State Treasurer 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. 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).
o. There is established a committee to be composed of eight members, four of whom shall be appointed by the Governor as representatives of the public employer whose employees are enrolled in the retirement system, three of whom shall be appointed by the head of the State Troopers Fraternal Association, and one of whom shall be appointed by the head of the union representing the greatest number of members of the retirement system who are supervisory officers having union membership. The members of the committee shall not be appointed until the system attains the target funded ratio.
The members of the committee shall serve for a term of three years and until a successor is appointed and qualified. Of the initial appointments by the Governor, two members shall serve for two years and until a successor is appointed and qualified, and one shall serve for one year and until a successor is appointed and qualified. Of the initial appointments by the State Troopers Fraternal Association, one member shall serve for two years and until a successor is appointed and qualified, and one shall serve for one year and until a successor is appointed and qualified.
The members of the committee shall select a chairperson from among the members, who shall serve for a term of one year, with no member serving more than one term until all the members of the committee have served a term in an manner alternating among the employer representatives and employee representatives, unless the committee determines otherwise with regard to this process.
The provisions of subsections c. through g., inclusive, of this section shall apply to the committee and its members, as appropriate. The committee shall keep a record of all of its proceedings which shall be open to public inspection.
Upon the convening of any meeting of the committee, the members shall consider a motion to assume the authority provided in this subsection and shall proceed only if a majority of the members of the committee vote in the affirmative on that motion.
The committee may contract with such actuaries or consultants, or both, in accordance with the provisions of P.L.1954, c.48 (C.52:34-6 et seq.), as the committee may deem necessary to perform its duties, when the system has attained the target funded ratio.
When the retirement system has attained the target funded ratio as defined in section 27 of P.L. 2011, c.78 (C.43:3C-16), the committee shall have the discretionary authority for the system to [(1)] modify the: member contribution rate; formula for calculation of final compensation or final salary; age at which a member may be eligible for and the benefits for service or special retirement; and benefits provided for disability retirement [; and (2) activate the application of the "Pension Adjustment Act," P.L.1958, c.143 (C.43:3B-1 et seq.) for retirees for the period that the system is at or above the target funded ratio and modify the basis for the calculation of the adjustment and set the duration and extent of the activation. The committee shall give priority consideration to subparagraph (2) of this paragraph]. The committee shall not have the authority to change the years of creditable service required for vesting.
The committee may consider a matter described above and render a decision notwithstanding that the provisions of the statutory law may set forth a specific requirement on that matter.
The committee may consider a matter described above and render a decision notwithstanding that the provisions of the statutory law do not set forth a specific requirement on the considered aspect of that matter or address that matter at all.
The members of the committee shall have the same duty and responsibility to the retirement system as do the members of the board of trustees. No decision of the committee shall be implemented if the direct or indirect result of the decision will be that the system's funded ratio falls below the target funded ratio in any valuation period during the 30 years following the implementation of the decision. The actuary of the fund shall make a determination of the result in that regard and submit that determination in a written report to the committee and the board prior to the implementation of the decision.
If any matter before the committee receives at least five votes in the affirmative, the board of trustees shall approve and implement the committee's decision.
If any matter regarding benefits before the committee receives four votes in the affirmative and four votes in the negative or the committee otherwise reaches an impasse on a decision, the provisions of section 33 of P.L. , c.78 (C. ) shall be followed.
A final action of the committee shall be made by the adoption of a regulation that shall identify the modifications to the system by reference to statutory section. The regulations shall also specify the effective date of the modification and the system members, including beneficiaries and retirees, to whom the modification applies. Regulations of the committee are considered to be part of the plan document for the system. A regulation adopted by the committee may be modified by regulation in order to comply with the requirements of this section.
p. No member of the board, committee, employee of the board, or employee of the Division of Pensions and Benefits in the Department of the Treasury shall accept from any person, whether directly or indirectly and whether by himself or through his spouse or any member of his family, or through any partner or associate, any gift, favor, service, employment or offer of employment, or any other thing of value, including contributions to the campaign of a member or employee as a candidate for elective public office, which he knows or has reason to believe is offered to him with intent to influence him in the performance of his public duties and responsibilities. As used in this subsection, "person" means an (1) individual or business entity, or officer or employee of such an entity, who is seeking, or who holds, or who held within the prior three years, a contract with the board; (2) an active or retired member, or beneficiary, of the retirement system; or (3) an entity, or officer or employee of such an entity, in which the assets of the retirement system have been invested. A board or committee member or employee violating this prohibition shall be guilty of a crime of the third degree.
(cf: P.L.2011, c.78, s.5)
6. Section 2 of P.L.1958, c.143 (C.43:3B-2) is amended to read as follows:
2. The monthly retirement allowance or pension originally granted to any retirant and the pension or survivorship benefit originally granted to any beneficiary shall be adjusted in accordance with the provisions of this act provided, however, that:
[a.] the maximum retirement allowance, without option, shall be considered the retirement allowance originally granted to any retirant who, at retirement, elected an Option I allowance pursuant to the provisions of the statutes stipulated in subsection b. of section 1 of this act (C.43:3B-1); and b. the minimum pension granted to any beneficiary stipulated in subsection d. (4) of section 1 of this act (C.43:3B-1), shall be considered the pension originally granted to such beneficiary.
Pension adjustments shall not be paid to retirants or beneficiaries who are not receiving their regular, full, monthly retirement allowances, pensions or survivorship benefits. The adjustment granted under the provisions of this act shall be effective only on the first day of a month, shall be paid in monthly installments, and shall not be decreased, increased, revoked or repealed except as otherwise provided in this act. No adjustment shall be due to a retirant or a beneficiary unless it constitutes a payment for an entire month; provided, however, that an adjustment shall be payable for the entire month in which the retirant or beneficiary dies.
[Commencing with the effective date of P.L.2011, c.78 and thereafter, no further adjustments to the monthly retirement allowance or pension originally granted to any retirant and the pension or survivorship benefit granted to any beneficiary shall be made in accordance with the provisions of P.L.1958, c.143 (C.43:3B-1 et seq.), unless the adjustment is reactivated as permitted by law. This provision shall not reduce the monthly retirement benefit that a retirant or a beneficiary is receiving on the effective date of P.L.2011, c.78 when the benefit includes an adjustment granted prior to that effective date.]
(cf: P.L.2011, c.78, s.25)
7. This act shall take effect immediately.
STATEMENT
This bill reinstates automatic cost-of-living adjustments (COLAs) for retirement benefits under the "Pension Adjustment Act," P.L.1958, c.143 (C.43:3B-1 et seq.), 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. Provisions contained in P.L.2011, c.78 (C.43:3C-16 et al), signed into law on June 28, 2011, cancelled the automatic, annual adjustment for current and future retirees and beneficiaries of these State-administered retirement systems.
COLAs protect retirement benefits against erosion by inflation, the ills of which were addressed by the Legislature, both for the individual and the State, with the enactment of the "Pension Adjustment Act" in 1958.
Without the annual adjustment, retirees and beneficiaries will gradually see significant reductions in their purchasing power. The loss of COLAs will impact their everyday lives, and, over time, make it harder to afford more necessary elements of living, such as out-of-pocket medical costs, groceries, and utility bills. Retirees and beneficiaries will find it more prudent, or perhaps necessary, to leave this State for other states with a comparably lower cost of living.
For the State, such outbound migration will result in the loss of the economic activity of those retirees and beneficiaries, and any tax revenues concomitant with such activity. In addition, New Jersey's fiscal outlook may be further strained by the retirees and beneficiaries who remain. These persons will continue to slip further downward on the socioeconomic scale. In some cases, they will require, or at the least become eligible and utilize, greater levels of public assistance under the many taxpayer funded social programs administered by the State, counties, and municipalities, requiring more revenues to meet this increased demand.
In the interests of the retirees and beneficiaries of the State-administered retirement systems, and the State, this bill reinstates the automatic COLAs for retirement benefits under the "Pension Adjustment Act."
