Bill Text: NJ S964 | 2010-2011 | Regular Session | Introduced
Bill Title: Permits county, county college, or municipality to offer additional retirement benefits to certain employees; permits issuance of refunding bonds to fund benefits.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2010-02-04 - Introduced in the Senate, Referred to Senate State Government, Wagering, Tourism & Historic Preservation Committee [S964 Detail]
Download: New_Jersey-2010-S964-Introduced.html
Sponsored by:
Senator JOSEPH F. VITALE
District 19 (Middlesex)
SYNOPSIS
Permits county, county college, or municipality to offer additional retirement benefits to certain employees; permits issuance of refunding bonds to fund benefits.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning retirement benefits for certain employees of counties, county colleges, and municipalities and the funding of liabilities for those benefits, and amending P.L.2002, c.42.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. If the governing body of a county, county college, or municipality adopts the resolution required by section 2 of this act, P.L. , c. (pending before the Legislature as this bill), an employee of the county, county college, or municipality, who has at least 25 years of service credit under the Public Employees' Retirement System (PERS) or the Teachers' Pension and Annuity Fund (TPAF) or has at least 25 years of service with public employers in this State participating in the Alternate Benefit Program (ABP) for which contributions were made by the employee before the effective date of retirement, shall receive a benefit of (1) one, two or three additional years of PERS or TPAF service credit as provided in the resolution adopted by the governing body in accordance with section 2 of this act, or (2) an additional pension in the amount of 1/55, 2/55, or 3/55 of the compensation on which the retirement allowance is based for a PERS or TPAF special veteran's retirement as provided in the resolution adopted by the governing body in accordance with section 2 of this act, or (3) an amount equal to 100% of base annual salary at the time of retirement from ABP participation.
To receive the benefit, the employee shall be required to file an application to retire within one month, and to retire within three months, after the effective date of the resolution adopted by the governing body of the county, county college, or municipality.
b. If a member of PERS or TPAF is under 55 years of age at the time of retirement, the member's retirement allowance shall not be reduced.
The payment to an ABP participant shall be made to the employee's retirement annuity contract under the ABP up to the maximum contribution allowable under section 415 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.415. Any payment amount in excess of the section 415 contribution limit shall be contributed to a contract on behalf of the employee that meets the requirements of subsection (b) of section 403 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.403, to the extent that the payment may be contributed on a before-tax basis under the maximum limits allowed under the Internal Revenue Code of 1986. Payment amounts in excess of the section 403(b) limit shall be paid directly to the employee.
c. The additional retirement benefit provided shall be applicable only to the full-time employment with the employer that elects to provide the benefit and from which the employee retires to receive the benefit and the compensation for that employment.
d. A county college shall be responsible for the full cost of health care benefits in retirement provided under section 3 of P.L.1987, c.384 (C.52:14-17.32f) and section 2 of P.L.1992, c.126 (C.52:14-17.32f1) for employees retiring under this act for a period of three years following the employee's retirement.
The payments for ABP participants shall be funded by the employer from appropriations to the employer for annual operating expenses or from funds otherwise available to the employer for operating expenses.
e. For the purposes of this act, "employee" means a full-time employee of a county, county college, or municipality who is eligible to participate in the employer's health care benefits plan. The term does not include an employee of a public agency or organization as defined in section 71 of P.L.1954, c.84 (C.43:15A-71) nor does it include an employee participating in PERS under the provisions of P.L.2001, c.366 (C.43:15A-155 et seq.).
2. The governing body of a county, county college, or municipality may elect to provide the benefits authorized under section 1 of this act by adopting a resolution within one year of the effective date of this act and by filing a certified copy of the resolution with the Director of the Division of Pensions and Benefits in the Department of the Treasury within three business days after its adoption. The resolution shall set forth the benefit as one additional year of PERS or TPAF service credit and an additional pension in the amount of 1/55 of the compensation on which the retirement allowance is based for a PERS or TPAF special veteran's retirement, or as two additional years and an additional pension of 2/55, or as three additional years and an additional pension of 3/55.
The adopted resolution shall be made effective on the first day of a month, which shall fall within the one-year period following the effective date of this act.
The governing body may elect to provide the benefits only once during the one-year period. The employer shall submit to the director any information necessary to provide the benefits or to determine the liability for them. With respect to county colleges, the governing body shall be the board of trustees.
3. When the needs of the employer require the service of an employee who elects to retire and receive a benefit under this act, the employer, with the approval of the governing body of the employer and with the consent of the employee, may delay the effective date of retirement of the employee until the first day of any calendar month following the third month after the effective date of the resolution adopted by the governing body pursuant to section 2 of this act, but not later than one year after that three-month period. A delay in the effective date of retirement of an employee shall not extend the period set forth in section 1 of this act to qualify for the benefit.
For a member of the PERS or TPAF whose effective retirement date is delayed and who dies before the retirement becomes effective, the retirement shall be effective as of the first day of the month after the date of death of the member if the member's beneficiary requests in writing to the board of trustees of the retirement system that the retirement be effective under the option settlement selected by the member, or under Option 3 if the member did not select an option.
4. The actuary for the PERS and the actuary for the TPAF shall determine the liability of the retirement system for the additional service credit or pension provided under this act and for the early retirement of employees in accordance with the tables of actuarial assumptions adopted by the board of trustees of the retirement system.
For the PERS, this liability shall be added to the unfunded accrued liability of the employer under the retirement system and shall be paid by the employer over a period of 15 years in the same manner as provided for the employer's unfunded accrued liability of the retirement system under sections 24, 68 and 81 of P.L.1954, c.84 (C.43:15A-24, 68 and 81).
For the TPAF, this liability and contribution requirements for each employer shall be determined by the actuary of the system in the same manner as provided for the unfunded accrued liability of the retirement system under N.J.S.18A:66-18 and shall be paid by the employer over a period of 15 years.
The retirement system shall annually certify to each employer the contributions due to the contingent reserve fund for the liability. The contributions certified by the retirement system shall be paid by the employer to the system on or before the date prescribed by law for payment of employer contributions for basic retirement benefits. If payment of the full amount of the contribution certified is not made within 30 days after the last date for payment of employer contributions for basic retirement benefits, interest at the rate of 10 percent per year shall be assessed against the unpaid balance on the first day after the 30th day.
The employer shall pay the cost of the actuarial work to determine the additional liability of the retirement system for the benefits provided and that cost shall be included in the initial contribution required from the employer.
5. The provisions of this act shall be applicable to employers and employees participating in a county pension fund created under Article 1 or Article 6 of Chapter 10 of Title 43 of the Revised Statutes, P.L.1943, c.160 (C.43:10-18.1 et seq.), or P.L.1948, c.310 (C.43:10-18.50 et seq.), or in a municipal retirement system created under P.L.1954, c.218 (C.43:13-22.3 et seq.) or P.L.1964, c.275 (C.43:13-22.50 et seq.), and shall become operative upon the adoption of the provisions of this act by the employer.
The provisions of this act shall apply to counties of the first class with a population of more than 500,000 persons and a population density of more than 11,000 persons per square mile granting a pension pursuant to the "General Noncontributory Pension Act", P.L.1955, c.263 (C.43:8B-1 et seq.).
6. a. An employee who receives a benefit under this act shall forfeit all tenure rights.
b. An employee purchasing service credit on or after the effective date of this act to qualify for a benefit may purchase a portion of the credit that the employee is eligible to purchase.
c. Prior to the end of the one-year period following the effective date of this act, each employer covered by the provisions of this act shall meet and consult with the representatives of the collective bargaining unit or units representing the employees who would be eligible for benefits.
d. The Director of the Division of Pensions and Benefits in the Department of the Treasury may promulgate rules and regulations that the director deems necessary for the effective implementation of this act.
7. a. The governing body of a county, county college, or municipality that adopts the resolution required by section 2 of this act shall report in writing to the Division of Local Government Services in the Department of Community Affairs or in the case of a county college to the Department of the Treasury, beginning on the 60th day after the effective date of the adopted resolution and annually thereafter for a period of 10 years, on the results of the additional retirement benefit provided pursuant to this act. The report shall provide an analysis of the impact of this act in order to document the aggregate costs incurred and aggregate savings realized by the governing body as a result of this act. The report shall include, but need not be limited to, the number of applications to retire filed; the number of applications to retire approved; the number of delayed retirements; total annual savings; total additional one-time costs; and the corresponding retirement systems unfunded liability. The department may require the report to include such additional information or analysis is the department deems necessary and appropriate.
b. The number of employees hired by the county, county college, or municipality to fill the vacancies created directly or indirectly because eligible employees retired to receive the retirement benefit provided by this act shall not exceed, in total for the county, county college, or municipality, 50 percent of the total number of employees who retired pursuant to this act, including the employees for whom the effective date of retirement was delayed. A vacancy created directly shall mean a vacancy in the position held by the retiring employee at the time of retirement. A vacancy created indirectly shall mean a vacancy in a position created directly or indirectly by promotion or transfer to fill a vacancy in a position caused by the retiring employee.
c. The governing body shall certify to the Division of Local Government Services in the Department of Community Affairs or in the case of a county college to the Department of the Treasury, every six months for the first two years following the effective date of the resolution adopted pursuant to section 2 of this act and annually thereafter for a total period of 10 years, compliance with subsection b. of this section, and report on the impact of the adoption of the resolution on the workforce of the county, county college, or municipality, including an analysis of the allocation of position reductions that occur in each department, division, or agency of the county, county college, or municipality as a result of the act and the plans adopted by each department, division, or agency to maintain the essential governmental services provided by that governing body.
d. If a county, county college, or municipality fails to comply with the requirement of subsection b. of this section, the Department of Community Affairs or the Department of the Treasury in the case of a county college shall withhold, annually for the period specified in subsection c. of this section, from State aid from all sources provided to the county, county college, or municipality an amount equal to one percent of that aid for each employee who is hired to fill a vacancy over the 50 percent limit. The department may require the county, county college, or municipality to provide, and the governing body shall provide, such information at such time as may be deemed necessary by the department to assess and verify compliance.
8. Section 1 of P.L.2002, c.42 (C.40A:2-51.3) is amended to read as follows:
1. Notwithstanding the provisions of N.J.S.40A:2-51 to the contrary, a county or municipality may incur indebtedness, borrow money, authorize and issue negotiable refunding bonds, in any amount determined to be necessary by the county or the municipality and approved by the Local Finance Board to effect the refunding for the purpose of retiring the present value of the unfunded accrued liability for early retirement incentive benefits granted pursuant to P.L.1991, c.229, P.L.1991, c.230, P.L.1993, c.138, P.L.1993, c.181, P.L.1993, c.99, P.L.1999, c.59, P.L.2003, c.128, [and] P.L.2003, c.130, and P.L. , c. (pending before the Legislature as this bill), in addition to the other purposes for which it may do the same under N.J.S.40A:2-51. The system actuary shall calculate the present value of the unfunded liability due and owing by the municipality or county on a date certain upon the request of the county or municipality. For purposes of this section, "county" means any county of any class and all boards or commissions organized under such county, including but not limited to welfare boards, boards of social services, park commissions and mosquito control authorities.
(cf: P.L.2003, c.130, s.12)
9. This act shall take effect immediately.
STATEMENT
This bill permits counties, county colleges, and municipalities to provide additional retirement benefits to certain employees who are eligible to retire under the Public Employees' Retirement System (PERS), the Teachers' Pension and Annuity Fund (TPAF), or the Alternate Benefit Program (ABP). To provide the benefits, the governing body of the county, county college, or municipality must adopt a resolution within one year after the enactment of this bill. Once a resolution is adopted and effective, employees will have 30 days to file an application and 90 days to retire. Employers participating in several locally-administered county and municipal pension systems may also adopt the provisions of this bill.
The benefits are available to employees who have at least 25 years of service credit as of the effective date of retirement. Employees who are members of the PERS or TPAF would receive an additional one, two, or three years of service credit, as determined by the governing body. A member of PERS or TPAF who is under age 55 at the time of retirement would be exempt from the reduction in the retirement allowance otherwise required by law. Employees who are members of the PERS or TPAF who retire on a special veteran's retirement would receive an additional pension in the amount of 1/55, 2/55, or 3/55 of the compensation on which the retirement allowance is based, as determined by the governing body. Participants in ABP would receive an amount equal to 100% of base annual salary at the time of retirement.
Employers covered by this bill must meet with the employee union representatives during the one-year period following the bill's enactment. The actuaries of the PERS and TPAF will calculate the system liability for the additional benefits provided and each employer will be responsible for the payment of this liability over a period of 15 years.
When the needs of an employer require the services of an employee who elects to retire and receive a benefit under this bill, the employer, with the approval of the governing body and the consent of the employee, may delay the effective retirement date of the employee for up to one year. The delay will not extend the period set forth in the bill for qualification for a benefit.
The governing body of a county, county college, or municipality that adopts the resolution required by this bill must report in writing to the Division of Local Government Services in the Department of Community Affairs or in the case of a county college to the Department of the Treasury, beginning on the 60th day after the effective date of the adopted resolution and annually thereafter for a period of 10 years, on the results of the additional retirement benefits provided pursuant to this bill. The report is to provide an analysis of the resolution's impact in order to document the aggregate costs incurred and aggregate savings realized by the governing body.
The number of employees hired by the county, county college, or municipality after the effective date of the adopted resolution to fill the vacancies created directly or indirectly because eligible employees retired to receive a retirement benefit cannot exceed in total for the county, county college, or municipality 50 percent of the total number of employees who retired, including the employees for whom the effective date of retirement was delayed. The bill requires periodic certification of compliance with this provision. If a county, county college, or municipality fails to comply with this requirement, the Department of Community Affairs or the Department of the Treasury in the case of a county college is authorized to withhold, for a period of 10 years, from State aid from all sources provided to the county, county college, or municipality an amount equal to one percent of that aid for each vacancy filled that exceeds the 50 percent limit.
The governing body must report to the Division of Local Government Services in the Department of Community Affairs or in the case of a county college to the Department of the Treasury every six months for the first two years following the effective date of the resolution, and annually thereafter for a total of 10 years, on the impact of the adoption of the resolution on the workforce of the county, county college, or municipality, including an analysis of the allocation of position reductions that occur in each department, division, or agency of the county, county college, or municipality as a result of that resolution and the plans adopted by each department, division, or agency to maintain the essential governmental services provided by that governing body.
The bill authorizes counties and municipalities to issue refunding bonds to retire the present value of the unfunded accrued pension liabilities for these early retirement incentive benefits.
