A1603

An Act concerning the Public Employees’ Retirement System of New Jersey and amending P.L.1954, c.84 and P.L.1972, c.167.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. Section 7 of P.L.1954, c.84 (C.43:15A-7) is amended to read as follows:

7. There is hereby established the Public Employees' Retirement System of New Jersey in the Division of Pensions and Benefits of the Department of the Treasury. The membership of the retirement system shall include:

a. The members of the former "State Employees' Retirement System of New Jersey" enrolled as such as of December 30, 1954, who shall not have claimed for refund their accumulated deductions in said system as provided in this section;

b. Any person becoming an employee of the State or other employer after January 2, 1955 and every veteran, other than a retired member who returns to service pursuant to subsection b. of section 27 of P.L.1966, c.217 (C.43:15A-57.2) and other than those whose appointments are seasonal, becoming an employee of the State or other employer after such date, including a temporary employee with at least one year's continuous service; and

c. Every employee veteran in the employ of the State or other employer on January 2, 1955, who is not a member of any retirement system supported wholly or partly by the State.

d. Membership in the retirement system shall be optional for elected officials other than veterans, and for school crossing guards, who having become eligible for benefits under other pension systems are so employed on a part-time basis. Any such part-time school crossing guard who is eligible for benefits under any other pension system and who was hired as a part-time school crossing guard prior to March 4, 1976, may at any time terminate his membership in the retirement system by making an application in writing to the board of trustees of the retirement system. Upon receiving such application, the board of trustees shall terminate his enrollment in the system and direct the employer to cease accepting contributions from the member or deducting from the compensation paid to the member. State employees who become members of any other retirement system supported wholly or partly by the State as a condition of employment shall not be eligible for membership in this retirement system. Notwithstanding any other law to the contrary, all other persons accepting employment in the service of the State shall be required to enroll in the retirement system as a condition of their employment, regardless of age. No person in employment, office or position, for which the annual salary or remuneration is fixed at less than $1,500.00, shall be eligible to become a member of the retirement system.

e. Membership of any person in the retirement system shall cease if he shall discontinue his service for more than two consecutive years.

f. The accumulated deductions of the members of the former "State Employees' Retirement System" which have been set aside in a trust fund designated as Fund A as provided in section 5 of this act and which have not been claimed for refund prior to February 1, 1955 shall be transferred from said Fund A to the Annuity Savings Fund of the Retirement System, provided for in section 25 of this act. Each member whose accumulated deductions are so transferred shall receive the same prior service credit, pension credit, and membership credit in the retirement system as he previously had in the former "State Employees' Retirement System" and shall have such accumulated deductions credited to his individual account in the Annuity Savings Fund. Any outstanding obligations of such member shall be continued.

g. Any school crossing guard electing to terminate his membership in the retirement system pursuant to subsection d. of this section shall, upon his request, receive a refund of his accumulated deductions as of the date of his appointment to the position of school crossing guard. Such refund of contributions shall serve as a waiver of all benefits payable to the employee, to his dependent or dependents, or to any of his beneficiaries under the retirement system.

h. A temporary employee who is employed under the federal Job Training Partnership Act, Pub.L.97-300 (29 U.S.C.s.1501) shall not be eligible for membership in the system. Membership for temporary employees employed under the federal Job Training Partnership Act, Pub.L.97-300 (29 U.S.C.s.1501) who are in the system on September 19, 1986 shall be terminated, and affected employees shall receive a refund of their accumulated deductions as of the date of commencement of employment in a federal Job Training Partnership Act program. Such refund of contributions shall serve as a waiver of all benefits payable to the employee, to his dependent or dependents, or to any of his beneficiaries under the retirement system.

i. Membership in the retirement system shall be optional for a special service employee who is employed under the federal Older American Community Service Employment Act, Pub.L.94-135 (42 U.S.C.s.3056). Any special service employee employed under the federal Older American Community Service Employment Act, Pub.L.94-135 (42 U.S.C.s.3056), who is in the retirement system on the effective date of P.L.1996, c.139 may terminate membership in the retirement system by making an application in writing to the board of trustees of the retirement system. Upon receiving the application, the board shall terminate enrollment in the system and the member shall receive a refund of accumulated deductions as of the date of commencement of employment in a federal Older American Community Service Employment Act program. This refund of contributions shall serve as a waiver of all benefits payable to the employee, to any dependent or dependents, or to any beneficiary under the retirement system.

j. An employee of the South Jersey Port Corporation who was employed by the South Jersey Port Corporation as of the effective date of P.L.1997, c.150 (C.34:1B-144 et al.) and who shall be re-employed within 365 days of such effective date by a subsidiary corporation or other corporation, which has been established by the Delaware River Port Authority pursuant to subdivision (m) of Article I of the compact creating the Delaware River Port Authority (R.S.32:3-2), as defined in section 3 of P.L.1997, c.150 (C.34:1B-146), shall be eligible to continue membership while an employee of such subsidiary or other corporation.

The membership of the retirement system shall not include an employee who is employed or who commences employment with a county, municipality, or board of education, or an agency, commission, board, bureau, authority or instrumentality of a county, municipality, or board of education, while

(1) the employee is also subject to performance as an independent contractor under the terms of a public contract or agreement with that employer for the provision of goods, services, equipment, or construction, including services in the course of the employee's profession pursuant to a license, certificate or authorization issued by this State permitting the practice of the profession, or

(2) a corporation, partnership, company, association, organization, or other business entity, including a not for profit entity, or any officer, director, or employee thereof, is also subject to performance as an independent contractor under the terms of a public contract or agreement with that employer for the provision of goods, services, equipment, or construction, including services in the course of a profession pursuant to a license, certificate or authorization issued by this State permitting the practice of the profession, if the employee is an owner, partner, shareholder, officer, director, or a principal employee of the corporation, partnership, company, association, organization, or other business entity or if the employee is in a position of authority that permits the employee to designate the direction of, or to have control over, the work performed, the manner of performance, or the assignment of officers or employees to perform the work.

(cf: P.L.1997, c.150, s.23)

2. Section 25 of P.L.1954, c.84 (C.43:15A-25) is amended to read as follows:

25. The annuity savings fund shall be the fund in which shall be credited accumulated deductions and contributions by members or on their behalf to provide for their allowances. A single account shall be established in this fund for each person who is or shall become a member and all contributions deducted from each such member's compensation shall be credited to his account [regardless of the number of positions a member might hold or the number of employers as he might have].

A person who is or becomes a member of the retirement system and is or becomes employed in more than one position covered by the retirement system, or is or commences covered employment with more than one employer, shall be eligible for membership in the retirement system based upon only one position, which shall be designated by the member. Contributions shall be deducted only from the member's compensation for the position so designated and shall be credited to the member's single account established pursuant to this section. The member’s decision to designate one of the member's positions as the basis of membership in the retirement system shall be irrevocable as between or among the positions held at the time the designation is made. However, a member who leaves that position or acquires a different or additional position may make a new designation from among the positions then held. Service in a position other than the designated position shall not be deemed creditable service for the purposes of the retirement system.

Members enrolled in the retirement system on or after July 1, 1994 shall contribute 5% of compensation to the system. Members enrolled in the system prior to July 1, 1994 shall contribute 5% of compensation to the system effective with the payroll period for which the beginning date is closest to July 1, 1995, provided, however, that any member enrolled before July 1, 1994, whose full contribution rate under the system prior to the revisions by this act was less than 6%, shall pay 4% of compensation to the system effective with the payroll period for which the beginning date is closest to July 1, 1995, and 5% of compensation to the system effective with the payroll period for which the beginning date is closest to July 1, 1996.

The retirement system shall certify to each State department or subdivision thereof, and to each branch of the State service not included in a State department, and to every other employer, the proportion of each member's compensation to be deducted, if any, and to facilitate the making of deductions the retirement system may modify the deduction required by a member by such an amount as shall not exceed 1/10 of 1% of the compensation upon the basis of which the deduction is to be made.

If payment in full, representing the monthly or biweekly 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 6% per annum shall commence to run against the total transmittal of salary deductions for the period on the first day after such fifteenth day.

Every employee to whom this act applies shall be deemed to consent and agree to any deduction from his compensation required by this act and to all other provisions of this act. Notwithstanding any other law, rule or regulation affecting the salary, pay, compensation, other perquisites, or tenure of a person to whom this act applies, or shall apply, and notwithstanding that the minimum salary, pay, or compensation or other perquisites provided by law for him shall be reduced thereby, payment, less such deductions, shall be a full and complete discharge and acquittance of all claims and demands for service rendered by him during the period covered by such payment.

(cf: P.L.1994, c.62, s.9)

3. Section 1 of P.L.1972, c.167 (C.43:15A-135) is amended to read as follows:

1. Notwithstanding the provisions of section 7 of P.L.1954, c.84, [s.7d] (C. 43:15A-7[d]), all members of the Legislature shall become members of the retirement system, subject to all benefits and requirements of membership, except that a member of the Legislature who designates another position as the basis of membership in the retirement system pursuant to section 25 of P.L.1954, c.84 (C.43:15A-25) shall not be a member of the retirement system on the basis of service in the Legislature.

(cf: P.L.1972, c.167, s.1)

4. Section 2 of P.L.1972, c.167 (C.43:15A-136) is amended to read as follows:

2. Notwithstanding the provisions of section 25 of P.L.1954, c.84[, s.25] (C.43:15A-25), [(a)] a separate account shall be established in the annuity savings fund for each member of the Legislature and all contributions based on legislative salaries shall be credited to this account as distinguished from any other account that the legislator may have as a result of other public service covered by the retirement system[; and (b) the]. A member of the Legislature who, on the effective date of this act, P.L. , c. (pending before the Legislature as this bill), is a member of the retirement system and holds more than one position covered by the retirement system, or holds covered employment with more than one employer shall designate only one position as the basis for membership in the retirement system in accordance with section 25 of P.L.1954, c.84 (C.43:15A-25). A member of the Legislature who is or becomes a member of the retirement system on the basis of service in the Legislature shall contribute at a rate equal to 5% of his legislative salary, which contribution shall be deducted from his salary at the time or times it is paid, and which shall be exclusive of any other contribution required of the member for Social Security, contributory death benefits or deductions for any other purpose.

A member of the Legislature who is enrolled on the basis of other public service before, during, or after his service as a member of the Legislature shall contribute for such other service at the rate of contribution required of other members as provided by section 25.

(cf: P.L.1972, c.167, s.2)

5. This act shall take effect immediately.

STATEMENT

The purpose of this bill is to exclude from membership in the Public Employees’ Retirement System (PERS) certain county, municipal, or board of education employees who are also public contractors and to require members who hold more than one position to designate only one position for PERS enrollment purposes.

Specifically, the bill excludes from membership in PERS an employee who is employed or who commences employment with a county, municipality, or board of education, or an agency, commission, board, bureau, authority or instrumentality of a county, municipality, or board of education, while

(2) a business entity or a not for profit entity, or any officer, director, or employee thereof, is also subject to performance as an independent contractor under the terms of a public contract or agreement with that employer for the provision of goods, services, equipment, or construction, if the employee is an owner, partner, shareholder, officer, director, or a principal employee of the entity or in a position of authority that permits the employee to designate the direction of, or to have control over, the work performed, the manner of performance, or the assignment of officers or employees to perform the work.

In addition, the bill requires members of the PERS who hold multiple employment positions covered by PERS to select only one of those positions as the basis of membership in the retirement system. Once the member designates one position as the basis of membership, contributions to the retirement system will come from only that position. The member would be able to designate a new position for membership only if the member leaves the designated position or acquires new PERS-covered employment.

This bill would apply to all current and future PERS members.