A1439

Sponsored by:

Assemblyman PATRICK J. DIEGNAN, JR.

District 18 (Middlesex)

Assemblyman VINCENT PRIETO

District 32 (Bergen and Hudson)

Assemblyman RALPH R. CAPUTO

District 28 (Essex)

Co-Sponsored by:

Assemblymen Conaway, Egan and Wisniewski

SYNOPSIS

Increases from $15,000 to $25,000 annual compensation PERS retiree may earn in PERS-covered employment without reenrollment.

CURRENT VERSION OF TEXT

Introduced Pending Technical Review by Legislative Counsel

An Act concerning reenrollment in the Public Employees' Retirement System of New Jersey and amending P.L.1966, c.217.

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

1. Section 27 of P.L.1966, c.217 (C.43:15A-57.2) is amended to read as follows:

27. a. Except as provided in subsections b. and c. of this section, if a former member of the State Employees' Retirement System or the retirement system, who has been granted a retirement allowance for any cause other than disability, becomes employed again in a position which makes him eligible to be a member of the retirement system, his retirement allowance and the right to any death benefit as a result of his former membership, shall be canceled until he again retires.

Such person shall be re-enrolled in the retirement system and shall contribute thereto at a rate based on his age at the time of re-enrollment. Such person shall be treated as an active member for determining disability or death benefits while in service and no benefits pursuant to an optional selection with respect to his former membership shall be paid if his death shall occur during the period of such re-enrollment.

Upon subsequent retirement of such member, his former retirement allowance shall be reinstated together with any optional selection, based on his former membership. In addition, he shall receive an additional retirement allowance based on his subsequent service as a member computed in accordance with applicable provisions of chapter 84 of the laws of 1954; provided, however, that his total retirement allowance upon such subsequent retirement shall not be a greater proportion of his final compensation than the proportion to which he would have been entitled had he remained in service during the period of his prior retirement. Any death benefit to which such member shall be eligible shall be based on his latest retirement, but shall not be less than the death benefit that was applicable to his former retirement.

b. The cancellation, re-enrollment, and additional retirement allowance provisions of subsection a. of this section shall not apply to a former member of the retirement system who, after having been granted a retirement allowance, becomes employed again by: (1) an employer or employers in a position or positions for which the aggregate compensation does not exceed [$15,000] $25,000 per year; or (2) [if the compensation exceeds $10,000 per year, by] an employer that is a public institution of higher education as defined in N.J.S.18A:62-1 in a teaching staff position, without regard to the amount of annual compensation. The Director of the Division of Pensions and Benefits may from time to time adjust the amount in paragraph (1) of this subsection. This adjustment shall be 3/5 of the percentage of change in the index, as defined in section 1 of P.L.1958, c.143 (C.43:3B-1), over a period of time as determined by the director.

c. The cancellation, reenrollment, and additional retirement allowance provisions of subsection a. and the compensation limitations of subsection b. of this section shall not apply to a former member of the retirement system who, after having been granted a retirement allowance, becomes employed by the State Department of Education in a position of critical need as determined by the State Commissioner of Education, or becomes employed by a board of education in a position of critical need as determined by the superintendent of the district on a contractual basis for a term of not more than one year; except that the cancellation, reenrollment, and additional retirement allowance provisions and the compensation limitations shall apply if the former member becomes employed within 120 days of retirement in a position with the employer from which the member retired. Nothing herein shall preclude a former member so reemployed by a board of education from renewing a contract for one additional year, provided that the total period of employment with any individual board of education does not exceed a two-year period

(cf: P.L.2001, c.355, s.2)

2. This act shall take effect immediately.

STATEMENT

This bill increases to $25,000 the maximum aggregate annual compensation a person receiving a retirement allowance from the Public Employees' Retirement System of New Jersey (PERS) may earn from one or more PERS-covered public employment positions without being reenrolled in the system.

Generally under current law, if a member of the PERS who retires and receives a retirement allowance for any cause other than disability subsequently becomes employed again in a position which makes the retiree eligible to be a member of PERS, the retiree is required to reenroll in the retirement system and the payment of a retirement allowance ceases unless the annual compensation of the subsequent employment does not exceed $15,000. This limitation applies to aggregate compensation from all employers for all PERS-covered positions. Absent reenrollment, the retiree collects the compensation of the subsequent employment and continues to receive the retirement allowance based upon the retiree's former PERS membership.

This reenrollment exemption was initially created in 1997 and was set at $10,000. The amount was increased to $15,000 in 2001.

Current law permits the Director of the Division of Pensions and Benefits to increase this amount from time to time by 3/5 of the percentage of change in the consumer price index over a period of time as determined by the director. The director has made no adjustment and the maximum remains at $15,000.

The bill also revises the language concerning employment after retirement as a teacher with an institution of higher education to clarify that such employment without reenrollment is permitted regardless of the annual compensation received. The compensation for such a position has not been, and will not be, included in the annual aggregate limit received for other PERS-covered positions.