Bill Text: NJ S2446 | 2016-2017 | Regular Session | Introduced
Bill Title: Provides public employee in State-administered retirement system who continues preexisting volunteer relationship with employer from whom employee retires has bona fide severance from employment for compliance with NJ and federal regulations.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2016-06-30 - Introduced in the Senate, Referred to Senate State Government, Wagering, Tourism & Historic Preservation Committee [S2446 Detail]
Download: New_Jersey-2016-S2446-Introduced.html
Sponsored by:
Senator JEFF VAN DREW
District 1 (Atlantic, Cape May and Cumberland)
SYNOPSIS
Provides public employee in State-administered retirement system who continues preexisting volunteer relationship with employer from whom employee retires has bona fide severance from employment for compliance with NJ and federal regulations.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning retirement from public employment covered by any State-administered pension fund or retirement system and supplementing P.L.1968, c.23 (C.43:3C-1 et seq.).
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Notwithstanding any other law or regulation to the contrary, the retirement of a member of any pension fund or retirement system, contributory or noncontributory, established under any law of this State, who: (1) on the date of retirement has attained the service retirement age applicable to that member and is serving in a volunteer capacity in an office or position not related to the paid job title with the same employer from whose employment the member retires; and (2) remains in that volunteer capacity after the date of retirement, shall be a bona fide severance from employment, notwithstanding that the retired employee maintains the volunteer relationship with the same employer from whose employment the member retired. This act 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 provides that the retirement of a member of any pension fund or retirement system established under any law of this State who: (1) on the date of retirement has attained the service retirement age applicable to that member and is serving in a volunteer capacity in an office or position not related to the paid job title with the same employer from whose employment the member retires; and (2) remains in that volunteer capacity after retirement, will be a bona fide severance from employment, notwithstanding that the retired employee maintains the volunteer relationship with the same employer from whom the member retired.
It is the sponsor's intention to permit retirees who worked for public entities to continue serving their communities without interruption in volunteer positions such as firefighters or members of a first aid squad, planning board, or recreation committee.
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's August 22, 2014 letter to local government certifying officers of the defined benefit pension systems states: "If the employer and employee make an arrangement prior to the employee's retirement to return to the same employer in any capacity, including as a volunteer - at any future time, regardless whether the position is covered by the former retirement system - the employer/employee relationship is not completely severed and the retirement will be invalid." This bill will allow persons with a preexisting volunteer relationship with their employer to retire from service as an employee covered by a State-administered pension fund or retirement system and continue to serve that employer as a volunteer.
The bill also provides that it will be effective if the qualified status of the State-administered pension funds or retirement systems under federal law can be maintained upon its application, and such modifications to the system as may be available will be made to allow for its application.
