Bill Text: NJ S2226 | 2020-2021 | Regular Session | Introduced
Bill Title: Provides that PFRS member who retires but continues certain employment with former employer has bona fide severance for compliance with State and federal law.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2020-09-21 - Reported from Senate Committee, 2nd Reading [S2226 Detail]
Download: New_Jersey-2020-S2226-Introduced.html
Sponsored by:
Senator VIN GOPAL
District 11 (Monmouth)
SYNOPSIS
Provides that PFRS member who retires but continues certain employment with former employer has bona fide severance for compliance with State and federal law.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning certain public employment after retirement from the Police and Firemen's Retirement System and supplementing P.L.1944, c.255 (C.43:16A-1 et seq.).
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. A former member of the Police and Firemen's Retirement System, established pursuant to P.L.1944, c.255 (C.43:16A-1 et seq.), who has been granted a retirement allowance, for any cause other than disability, may become employed again with the former employer after the retirement allowance becomes due and payable if: (1) the former member had retired with 25 or more years of service credit as of the date of retirement; (2) the retiree returned to employment in a position covered by a retirement system or fund other than the Police and Firemen's Retirement System; and (3) the new employment is in a position as a managerial executive. The retirement shall be deemed a bona fide severance from employment if the former member meets the requirements for the return to employment set forth in this section, notwithstanding that there may have been an arrangement made with the former employer prior to retirement for the resumption of the employment relationship after retirement.
As used in this section: "former employer" means the municipality with which the former member held employment immediately prior to retirement; and
"managerial executive" means an individual with the title, or responsibilities equivalent to such title, as set forth by regulations of the Division of Local Government Services in the Department of Community Affairs for the purposes of the Local Government Ethics law, P.L.1991, c.29 (C.40A:9-22.1 et seq.).
This section shall be effective if the qualified status of the retirement system under federal law can be maintained upon its application, and such modifications to the system as may be available shall be made to allow for its application.
2. This act shall take effect immediately.
STATEMENT
This bill permits a retired member of the Police and Firemen's Retirement System (PFRS) to return to employment with the municipality with which the retiree held employment immediately prior to retirement. The retiree may return after the retirement allowance becomes due and payable, which is generally 30 days after retirement. The retiree could return to employment if: (1) the retiree had retired with 25 or more years of service credit as of the date of retirement; (2) the retiree returned to employment in a position covered by a retirement system or fund other than the PFRS; and (3) the new employment is in a position as a managerial executive, which includes business administrator, municipal clerk, certain attorneys and engineers, and tax collector and assessor.
If these requirements are met, the retirement would be deemed a bona fide severance from employment, notwithstanding that there may have been an arrangement made with the former employer prior to retirement for the resumption of the employment relationship after retirement.
A regulation of the Division of Pensions and Benefits in the Department of the Treasury, in compliance with the federal Internal Revenue Code, provides, "'Bona fide severance from employment' means a complete termination of the employee's employment relationship with the employer for a period of at least 180 days." N.J.A.C.17:1-17.14(a)2. The division has advised that a retired employee's return to the same employer in any capacity within 180 days, including as a volunteer, will invalidate the retirement because the employer/employee relationship will not have been completely severed.
The bill provides that a retiree could return to employment after 30 days under the circumstances described if the qualified status of PFRS under federal law can be maintained. The bill directs modifications to the PFRS to be made to allow for the bill's application while maintaining the qualified status of the plans.
