SENATE, No. 2696

STATE OF NEW JERSEY

214th LEGISLATURE

 

INTRODUCED FEBRUARY 7, 2011

 


 

Sponsored by:

Senator  STEPHEN M. SWEENEY

District 3 (Salem, Cumberland and Gloucester)

 

 

 

 

SYNOPSIS

     Makes various changes to PERS, TPAF, PFRS, SPRS, JRS including to board membership, control of investments, adjustments to member contribution, adjustments to benefits, and benefit factor for TPAF and PERS.

 

CURRENT VERSION OF TEXT

     As introduced.

  


An Act concerning the membership and powers of the boards of trustees of, and the benefits provided by, certain State-administered retirement systems for public employees, and amending various parts of the statutory law, 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.  N.J.S.18A:66-56 is amended to read as follows:

     18A:66-56.  Subject to the provisions of chapter 70 of the laws of 1955, the general responsibility for the proper operation of the teachers' pension and annuity fund shall be vested in the board of trustees. Subject to the limitations of the law, the board shall annually establish rules and regulations for the administration and transaction of its business and for the control of the funds created by this article.  Such rules and regulations shall be consistent with those adopted by the other pension funds within the Division of Pensions and Benefits in order to permit the most economical and uniform administration of all such retirement systems.  The board may, in its discretion and at such time and in such manner as the board determines, enhance any benefit set forth in N.J.S.18A:66-1 et seq. as the board determines to be reasonable and appropriate, subject to the election of a member to receive that enhancement and to make an additional annual contribution for that enhancement at a rate to be determined by the board, or reduce any such benefit as an alternative to an increase in the member contribution rate, which increase the board determines to be reasonable, necessary, and appropriate, or reinstate, when appropriate, such reduced benefit to the statutory level without an additional contribution by the members.

     The membership of the board shall consist of [the following] eight members as follows:

     (a)   The State Treasurer or the deputy State Treasurer, when designated for that purpose by the State Treasurer;

     (b)   Two trustees appointed by the Governor[, with the advice and consent of the Senate, who shall serve for a term of office of three years and until their successors are appointed, and who shall be private citizens of the State of New Jersey and who are neither an officer thereof nor active or retired members of the system, except that of the two trustees initially appointed by the Governor pursuant to P.L.1992, c.41 (C.43:6A-33.1 et al.), one shall be appointed for a term of two years and one for a term of three years] who hold positions as a superintendent or administrator in a school district in this State and continue to hold such a position during the term of service on the board, for a term of office of three years and until the successor is appointed;

     (c)   [Three trustees from among the active or retired members of the retirement system, elected by the membership or by the delegates elected for this purpose by the membership, one of whom shall be elected each year for a three-year term commencing on January 1, following such election in such manner as the board of trustees may prescribe.  If the board of trustees determines that the election of trustees under this subsection is to be made by delegates elected by the membership, it shall prescribe that those delegates shall be chosen from among active and retired members of the retirement system] Deleted by amendment, P.L.    , c.        (pending before the Legislature as this bill);

     (d)   [One trustee not an active or retired teacher nor an officer of the State, elected by the other trustees, other than the State Treasurer, for a term of three years] Deleted by amendment, P.L.    , c.        (pending before the Legislature as this bill); and

     (e)  One trustee appointed by the President of the New Jersey School Boards Association, for a term of office of three years and until the successor is appointed.

     (f)  Four trustees appointed by the State heads of qualified unions in this State representing active members of the retirement system, for a term of three years and until the successor is appointed.  The Director of _the John J. Heldrich Center for Workforce Development at the Edward J. Bloustein School of Planning and Public Policy at Rutgers, the State University shall allocate the appointments on an approximately proportional basis among those unions based on the ratio that the number of members of a union in the retirement system bears to the total number of members of all such qualified unions in the retirement system.  Notwithstanding this allocation process and the definition of qualified union, the director shall ensure that at least two unions are eligible to make appointments.  As used in this paragraph, a “qualified union” is a union that represents at least 20 percent of the total union members in the retirement system, and “union” means an employee representative for collective negotiations purposes. The director shall determine and verify as necessary the number of union members and of members of each union in the retirement system.  The director shall allocate the appointments prior to the effective date of P.L.   , c.    (pending before the Legislature as this bill) and every three years thereafter prior to the expiration of the terms of the four trustees.

     The trustees appointed on or after the effective date of P.L.    , c.    (pending before the Legislature as this bill) pursuant to paragraph (b) shall serve an initial term of one year, and pursuant to paragraph (e) shall serve an initial term of two years.

     A vacancy occurring in the board of trustees shall be filled in the same manner as provided in this section for regular appointment [or election] to the position where the vacancy exists[, except that a vacancy occurring in the trustees elected from among the active or retired members of the retirement system shall be filled for the unexpired term].

     Each member of the board shall, upon appointment [or election], take an oath of office that, so far as it devolves upon him, he will diligently and honestly administer the board's affairs, and that he will not knowingly violate or willfully permit to be violated any provision of law applicable to this article.  The oath shall be subscribed to by the member making it, certified by the officer before whom it is taken and filed immediately in the office of the Secretary of State.

     Each trustee shall be entitled to one vote in the board and a majority of all the votes of the entire board shall be necessary for a decision by the board of trustees at a meeting of the board.  The board shall keep a record of all its proceedings, which shall be open to public inspection.

     The members of the board shall serve without compensation but shall be reimbursed for any necessary expenditures.  No employee shall suffer loss of salary or wages through serving on the board.

     The State Treasurer shall designate a medical board after consultation with the Director of the Division of Pensions and Benefits, subject to veto by the board for valid reason.  It shall be composed of three physicians who are not eligible to participate in the retirement system. The medical board shall pass upon all medical examinations required under the provisions of this article, shall investigate all essential statements and certificates by or on behalf of a member in connection with an application for disability retirement, and shall report in writing to the retirement system its conclusions and recommendations upon all matters referred to it.

     No member of the board shall accept from any person, whether directly or indirectly and whether by himself or through his spouse or any member of his family, or through any partner or associate, any gift, favor, service, employment or offer of employment, or any other thing of value, including contributions to the campaign of a member as a candidate for elective public office, which he knows or has reason to believe is offered to him with intent to influence him in the performance of his public duties and responsibilities.  As used in this paragraph, “person” means an (1) individual or business entity, or officer or employee of such an entity, who is seeking, or who holds, or who held within the prior three years, a contract with the board; (2) an active or retired member, or beneficiary, of the retirement system; or (3) an entity, or officer or employee of such an entity, in which the assets of the retirement system have been invested.  A board member violating this prohibition shall be guilty
of a crime of the third degree.

(cf:  P.L.1999, c.230, s.1)

 

     2.  Section 17 of P.L.1954, c.84 (C.43:15A-17) is amended to read as follows:

     17.  Subject to the provisions of P.L.1955, c.70 the general responsibility for the proper operation of the Public Employees' Retirement System shall be vested in the board of trustees.  Subject to the limitations of the law, the board shall annually establish rules and regulations for the administration and transaction of its business and for the control of the funds created by this subtitle. Such rules and regulations shall be consistent with those adopted by the other pension funds within the Division of Pensions and Benefits in order to permit the most economical and uniform administration of all such retirement systems.  The board may, in its discretion and at such time and in such manner as the board determines, enhance any benefit set forth in P.L.1954, c.84 (C.43:15A-1 et seq.) as the board determines to be reasonable and appropriate, subject to the election of a member to receive that enhancement and to make an additional annual contribution for that enhancement at a rate to be determined by the board, or reduce any such benefit as an alternative to an increase in the member contribution rate, which increase the board determines to be reasonable, necessary, and appropriate, or reinstate, when appropriate, such reduced benefit to the statutory level without an additional contribution by the members.

     The membership of the board shall consist of [the following] 12 members as follows:

     a.     [Two] Three  trustees appointed by the Governor[, with the advice and consent of the Senate, who shall serve for a term of office of three years and until their successors are appointed, who shall be private citizens of the State of New Jersey and who are neither an officer thereof nor active or retired members of the system.  Of the two trustees initially appointed by the Governor pursuant to P.L.1992, c.41 (C.43:6A-33.1 et al.), one shall be appointed for a term of two years and one for a term of three years] who hold a management or supervisory position in the Executive Branch of State government at the level of division director or above and continue to hold such a position during the term of service on the board, for a term of office of three years and until the successor is appointed.

     b.    The State Treasurer or the Deputy State Treasurer, when designated for that purpose by the State Treasurer. 

     c.     [Three trustees elected for a term of three years by the member employees of the State from among the active or retired State members of the retirement system in a manner prescribed by the board of trustees.] Deleted by amendment, P.L.  , c.        (pending before the Legislature as this bill) 

     d.    [One trustee elected for a term of three years by the member employees of counties from among the active or retired county members of the retirement system and the same method of holding an election from time to time used for the State employees' representatives shall be followed in elections held for county representatives.] Deleted by amendment, P.L.    , c.        (pending before the Legislature as this bill) 

     e.     [Two trustees elected for a term of three years by the member employees of municipalities from among the active or retired municipal members of the retirement system and the same method of holding an election from time to time used for the State employees' representatives shall be followed in elections held for municipal representatives.] Deleted by amendment, P.L.    , c.        (pending before the Legislature as this bill)

     f.     One trustee, appointed by the Governor, who holds an elective public office as a mayor and continues to hold that office during the term of service on the board, for a term of office of three years and until the successor is appointed.

     g.     One trustee, appointed by the Governor, who holds an elective public office as a member of a board of chosen freeholders and continues to hold that office during the term of service on the board, for a term of office of three years and until the successor is appointed.

     h.     Six trustees appointed by the State heads of qualified unions in this State representing active members of the retirement system, for a term of three years and until the successor is appointed.  The Director of the John J. Heldrich Center for Workforce Development at the Edward J. Bloustein School of Planning and Public Policy at Rutgers, the State University shall allocate the appointments on an approximately proportional basis among those unions based on the ratio that the number of members of a union in the retirement system bears to the total number of members of all such qualified unions in the retirement system.  Notwithstanding this allocation process and the definition of qualified union, the director shall ensure that at least two unions are eligible to make appointments.  As used in this paragraph, a “qualified union” is a union that represents at least 15 percent of the total union members in the retirement system, and “union” means an employee representative for collective negotiations purposes. The director shall determine and verify as necessary the number of union members and of members of each union in the retirement system.  The director shall allocate the appointments prior to the effective date of P.L.   , c.    (pending before the Legislature as this bill) and every three years thereafter prior to the expiration of the terms of the six trustees.

     The trustees appointed on or after the effective date of P.L.    , c.    (pending before the Legislature as this bill) pursuant to paragraph a. shall serve an initial term of one year, and pursuant to paragraphs f. and g. shall serve an initial term of two years.

     A vacancy occurring in the board of trustees shall be filled by the appointment [or election] of a successor in the same manner as his predecessor.

     Each member of the board shall, upon appointment [or election], take an oath of office that, so far as it devolves upon him, he will diligently and honestly administer the board's affairs, and that he will not knowingly violate or willfully permit to be violated any provision of law applicable to this act.  The oath shall be subscribed to by the member making it, certified by the officer before whom it is taken and filed immediately in the office of the Secretary of State. 

     Each trustee shall be entitled to one vote in the board and a majority of all the votes of the entire board shall be necessary for a decision by the board of trustees at a meeting of the board.  The board shall keep a record of all its proceedings, which shall be open to public inspection. 

     The members of the board shall serve without compensation but shall be reimbursed for any necessary expenditures.  No employee shall suffer loss of salary or wages through the serving on the board.

     The State Treasurer shall designate a medical board after consultation with the Director of the Division of Pensions and Benefits, subject to veto by the board of trustees for valid reason.  It shall be composed of three physicians who are not eligible to participate in the retirement system.  The medical board shall pass upon all medical examinations required under the provisions of this act, shall investigate all essential statements and certificates by or on behalf of a member in connection with an application for disability retirement, and shall report in writing to the retirement system its conclusions and recommendations upon all matters referred to it.

     No member of the board shall accept from any person, whether directly or indirectly and whether by himself or through his spouse or any member of his family, or through any partner or associate, any gift, favor, service, employment or offer of employment, or any other thing of value, including contributions to the campaign of a member as a candidate for elective public office, which he knows or has reason to  believe is offered to him with intent to influence him in the performance of  his public duties and responsibilities.  As used in this paragraph, “person” means an (1) individual or business entity, or officer or employee of such an entity, who is seeking, or who holds, or who held within the prior three years, a contract with the board; (2) an active or retired member, or beneficiary, of the retirement system; or (3) an entity, or officer or employee of such an entity, in which the assets of the retirement system have been invested.  A board member violating this prohibition shall be guilty of a crime of the third degree.

(cf:  P.L.1992, c.41, s.13)

 

     3.    Section 13 of P.L.1944, c.255 (C.43:16A-13) is amended to read as follows:

     13.  (1)  Subject to the provisions of P.L.1955, c.70 (C.52:18A-95 et seq.), the general responsibility for the proper operation of the retirement system is hereby vested in a board of trustees. The board may, in its discretion and at such time and in such manner as the board determines, enhance any benefit set forth in P.L.1944, c.255 (C.43:16A-1 et seq.) as the board determines to be reasonable and appropriate, subject to the election of a member to receive that enhancement and to make an additional annual contribution for that enhancement at a rate to be determined by the board, or reduce any such benefit as an alternative to an increase in the member contribution rate, which increase the board determines to be reasonable, necessary, and appropriate, or reinstate, when appropriate, such reduced benefit to the statutory level without an additional contribution by the members.

     (2)   The board shall consist of [11] 12 trustees as follows:

     (a)   [Five members] Three trustees to be appointed by the Governor[, with the advice and consent of the Senate, who shall serve for a term of office of four years and until their successors are appointed and who shall be private citizens of the State of New Jersey who are neither an officer thereof nor an active or retired member of any police or fire department thereof.  Of the four members initially appointed by the Governor pursuant to P.L.1992, c.125 (C.43:4B-1 et al.), one shall be appointed for a term of one year, one for a term of two years, one for a term of three years, and one for a term of four years.  The member appointed by the Governor pursuant to the provisions of this amendatory act, P.L.1995, c.238, shall] who hold a management or supervisory position in the Executive Branch of State government at the level of division director or above and continue to hold such a position during the term of service on the board, for a term of [four] three years and until a successor is appointed.

     (b)   The State Treasurer or the deputy State Treasurer, when designated for that purpose by the State Treasurer.

     (c)   [Two policemen and two firemen who shall be active members of the system and who shall be elected by the active members of the system for a term of four years according to such rules and regulations as the board of trustees shall adopt to govern such election.] Deleted by amendment, P.L.   , c.     (pending before the legislature as this bill)

     (d)   [One retiree from the system who shall be elected by retirees from the system for a term of four years according to such rules and regulations as the board of trustees shall adopt to govern the election.] Deleted by amendment, P.L.   , c.     (pending before the legislature as this bill)

     (e)  One trustee, appointed by the Governor, who holds an elective public office as a mayor and continues to hold that office during the term of service on the board, for a term of office of three years and until a successor is appointed.

     (f)  One trustee, appointed by the Governor, who holds an elective public office as a member of a board of chosen freeholders and continues to hold that office during the term of service on the board, for a term of office of three years and until a successor is appointed.

     (g)  Six trustees appointed by the State heads of qualified unions in this State representing active members of the retirement system, for a term of three years and until a successor is appointed.  The Director of the John J. Heldrich Center for Workforce Development at the Edward J. Bloustein School of Planning and Public Policy at Rutgers, the State University shall allocate the appointments on an approximately proportional basis among those unions based on the ratio that the number of members of a union in the retirement system bears to the total number of members of all such qualified unions in the retirement system.  Notwithstanding this allocation process and the definition of qualified union, the director shall ensure that at least two unions representing policemen and two unions representing firemen are eligible to make appointments.  As used in this paragraph, a “qualified union” is a union that represents at least 15 percent of the total union members in the retirement system, and “union” means an employee representative for collective negotiations purposes. The director shall determine and verify as necessary the number of union members and of members of each union in the retirement system.  The director shall allocate the appointments prior to the effective date of P.L.   , c.    (pending before the Legislature as this bill) and every three years thereafter prior to the expiration of the terms of the six trustees.

     The trustees appointed on or after the effective date of P.L.    , c.    (pending before the Legislature as this bill) pursuant to paragraph (a) shall serve an initial term of one year, and pursuant to paragraphs (e) and (f) shall serve an initial term of two years.

     (3)   Each trustee shall, after his appointment [or election], take an oath of office that, so far as it devolves upon him he will diligently and honestly fulfill his duties as a board member, and that he will not knowingly violate or willingly permit to be violated any of the provisions of the law applicable to the retirement system. Such oath shall be subscribed by the member making it, and certified by the officer before whom it is taken, and immediately filed in the office of the Secretary of State.

     (4)   If a vacancy occurs in the office of a trustee, the vacancy shall be filled in the same manner as the office was previously filled.

     (5)   The trustees shall serve without compensation, but they shall be reimbursed for all necessary expenses that they may incur through service on the board.

     (6)   Each trustee shall be entitled to one vote in the board.  [Six] Seven trustees [must] shall be present at any meeting of said board for the transaction of its business.

     (7)   Subject to the limitations of this act, the board of trustees shall annually establish rules and regulations for the administration of the funds created by this act and for the transaction of its business. Such rules and regulations shall be consistent with those adopted by the other pension funds within the Division of Pensions and Benefits in order to permit the most economical and uniform administration of all such retirement systems.

     (8)   The board of trustees shall elect from its membership a chairman.  The Director of the Division of Pensions and Benefits shall appoint a qualified employee of the division to be secretary of the board.  The administration of the program shall be performed by the personnel of the Division of Pensions and Benefits under the direction of the board.

     (9)   The board of trustees shall keep a record of all of its proceedings which shall be open to public inspection.  The retirement system shall publish annually a report showing the fiscal transactions of the retirement system for the preceding year, the amount of the accumulated cash and securities of the system, and the last balance sheet showing the financial condition of the system by means of an actuarial valuation of the assets and liabilities of the retirement system.

     (10)   The board may, in its discretion, select and employ or contract with legal counsel to advise and represent the board.  If the board does not select and employ or contract with legal counsel, the Attorney General of the State of New Jersey shall be the legal adviser of the retirement system, except that if the Attorney General determines that a conflict of interest would affect the ability of the Attorney General to represent the board on a matter affecting the retirement system, the board may select and employ or contract with legal counsel to advise and represent the board on that matter.

     (11)  The State Treasurer shall designate a medical board after consultation with the Director of the Division of Pensions and Benefits, subject to veto by the board of trustees for valid reason.  It shall be composed of three physicians who are not eligible to participate in the retirement system. The medical board shall pass upon all medical examinations required under the provisions of this act, shall investigate all essential statements and certificates by or on behalf of a member in connection with an application for disability retirement, and shall report in writing to the retirement system its conclusions and recommendations upon all matters referred to it.

     (12)  The actuary of the system shall be selected by the board pursuant to the provisions of P.L.1954, c.48 (C.52:34-6 et seq.), except that if the board is unable to agree upon the selection of an actuary, the Retirement Systems Actuary Selection Committee established by P.L.1992, c.125 shall select the actuary.  He shall be the technical adviser of the board of trustees on matters regarding the operation of the funds created by the provisions of this act, and shall perform such other duties as are required in connection therewith.

     (13)  At least once in each three-year period the actuary shall make an actuarial investigation into the mortality, service and compensation experience of the members and beneficiaries of the retirement system and, with the advice of the actuary, the board of trustees shall adopt for the retirement system such mortality, service and other tables as shall be deemed necessary and shall certify the rates of contribution payable under the provisions of this act.

     (14)  (Deleted by amendment, P.L.1970, c.57.)

     (15)  On the basis of such tables recommended by the actuary as the board of trustees shall adopt and regular interest, the actuary shall make an annual valuation of the assets and liability of the funds of the system created by this act.

     (16)  (Deleted by amendment, P.L.1987, c.330.)

     (17)  Each policeman or fireman member of the board of trustees shall be entitled to time off from his duty, with pay, during the periods of his attendance upon regular or special meetings of the board of trustees, and such time off shall include reasonable travel time required in connection therewith.

     (18)  No member of the board shall accept from any person, whether directly or indirectly and whether by himself or through his spouse or any member of his family, or through any partner or associate, any gift, favor, service, employment or offer of employment, or any other thing of value, including contributions to the campaign of a member as a candidate for elective public office, which he knows or has reason to believe is offered to him with intent to influence him in the performance of  his public duties and responsibilities.  As used in this subsection, “person” means an (1) individual or business entity, or officer or employee of such an entity, who is seeking, or who holds, or who held within the prior three years, a contract with the board; (2) an active or retired member, or beneficiary, of the retirement system; or (3) an entity, or officer or employee of such an entity, in which the assets of the retirement system have been invested.  A board member violating this prohibition shall be guilty of a crime of the third degree.

(cf: P.L.1995, c.238, s.1)


     4.  Section 30 of P.L.1965, c.89 (C.53:5A-30) is amended to read as follows:

     30.  a.  Subject to the provisions of P.L.1955, c.70 (C.52:18A-95 et seq.), the general responsibility for the proper operation of the retirement system is hereby vested in the board of trustees.  The board may, in its discretion and at such time and in such manner as the board determines, enhance any benefit set forth in P.L.1965, c.89 (C.53:5A-1 et seq.) as the board determines to be reasonable and appropriate, subject to the election of a member to receive that enhancement and to make an additional annual contribution for that enhancement at a rate to be determined by the board, or reduce any such benefit as an alternative to an increase in the member contribution rate, which increase the board determines to be reasonable, necessary, and appropriate, or reinstate, when appropriate, such reduced benefit to the statutory level without an additional contribution by the members.

     b.    The board shall consist of [five] eight  trustees as follows:

     (1)  [Two active or retired members of the system who shall be appointed by the] The Superintendent of State Police[, who shall serve at the pleasure of the superintendent and until their successors are appointed and one of whom shall be or shall have been a commissioned officer of the Division of State Police] or an assistant to the Superintendent, when designated for that purpose by the Superintendent.

     (2)  Two [members] trustees to be appointed by the Governor[, with the advice and consent of the Senate, who shall serve for a term of office of three years and until their successors are appointed and who shall be private citizens of the State of New Jersey who are neither an officer thereof nor active or retired members of the system.  Of the two members initially appointed by the Governor pursuant to P.L.1992, c.125 (C.43:4B-1 et al.), one shall be appointed for a term of two years and one for a term of three years] who hold a management or supervisory position in the Executive Branch of State government at the level of division director or above and continue to hold such a position during the term of service on the board, for a term of office of three years and until the successor is appointed

     (3)  The State Treasurer ex officio.  The Deputy State Treasurer, when designated for that purpose by the State Treasurer, may sit as a member of the board of trustees and when so sitting shall have all the powers and shall perform all the duties vested by this act in the State Treasurer. 

     (4)  Four trustees to be appointed by the President of the State Troopers Fraternal Association, who shall serve for a term of office of three years and until the successor is appointed.

     The trustees appointed on or after the effective date of P.L.    , c.    (pending before the Legislature as this bill) pursuant to paragraph (2) shall serve an initial term of one year, and two appointed pursuant to paragraph (4) shall serve an initial term of two years.

     c.     Each trustee shall, after his appointment, take an oath of office that, so far as it devolves upon him, he will diligently and honestly fulfill his duties as a board member, that he will not knowingly violate or permit to be violated any of the provisions of the law applicable to the retirement system.  Such oath shall be subscribed by the member taking it, and certified by the official before whom it is taken, and immediately filed in the office of the Secretary of State. 

     d.    If a vacancy occurs in the office of a trustee, the vacancy shall be filled in the same manner as the office was previously filled. 

     e.     The trustees shall serve without compensation, but they shall be reimbursed by the State for all necessary expenses that they may incur through service on the board.  No employee member shall suffer loss of salary through the serving on the board. 

     f.     Except as otherwise herein provided, no member of the board of trustees shall have any direct interest in the gains or profits of any investments of the retirement system; nor shall any member of the board of trustees directly or indirectly, for himself or as an agent in any manner use the moneys of the retirement system, except to make such current and necessary payments as are authorized by the board of trustees; nor shall any member of the board of trustees become an endorser or surety, or in any manner an obligor for moneys loaned to or borrowed from the retirement system. 

     g.     Each trustee shall be entitled to one vote in the board.  A majority vote of all trustees shall be necessary for any decision by the trustees at any meeting of said board. 

     h.     Subject to the limitations of this act, the board of trustees shall annually establish rules and regulations for the administration of the funds created by this act and for the transactions of its business. Such rules and regulations shall be consistent with those adopted by the other pension funds within the Division of Pensions and Benefits in order to permit the most economical and uniform administration of all such retirement systems. 

     i.      The actuary of the fund shall be selected by the board pursuant to the provisions of P.L.1954, c.48 (C.52:34-6 et seq.), except that if the board is unable to agree upon the selection of the actuary, the Retirement Systems Actuary Selection Committee established by P.L.1992, c.125 shall select the actuary.  He shall be the technical adviser of the board on matters regarding the operation of the funds created by the provisions of this act and shall perform such other duties as are required in connection herewith. 

     j.     The board may, in its discretion, select and employ or contract with legal counsel to advise and represent the board.  If the board does not select and employ or contract with legal counsel, the Attorney General shall be the legal adviser of the retirement system, except that if the Attorney General determines that a conflict of interest would affect the ability of the Attorney General to represent the board on a matter affecting the retirement system, the board may select and employ or contract with legal counsel to advise and represent the board on that matter. 

     k.    The [Chief of the Bureau of Police and Fire Funds of the] Director of the Division of Pensions and Benefits of the State Department of the Treasury shall appoint a qualified member of the division who shall be the secretary of the board. 

     l.      The board of trustees shall keep a record of all of its proceedings which shall be open to public inspection.  The retirement system shall publish annually a report showing the fiscal transactions of the retirement system for the preceding year, the amount of the accumulated cash and securities of the system and the last balance sheet showing the financial condition of the system by means of an actuarial valuation of the assets and liabilities of the retirement system. 

     m.    The State Treasurer shall designate a medical board after consultation with the Director of the Division of Pensions and Benefits, subject to veto by the board of trustees for valid reason.  It shall be composed of three physicians.  The medical board shall pass on all medical examinations required under the provisions of this act, and shall report in writing to the retirement system its conclusions and recommendations upon all matters referred to it. 

     n.     (Deleted by amendment, P.L.1987, c.330).

     o.    No member of the board shall accept from any person, whether directly or indirectly and whether by himself or through his spouse or any member of his family, or through any partner or associate, any gift, favor, service, employment or offer of employment, or any other thing of value, including contributions to the campaign of a member as a candidate for elective public office, which he knows or has reason to believe is offered to him with intent to influence him in the performance of his public duties and responsibilities.  As used in this subsection, “person” means an (1) individual or business entity, or officer or employee of such an entity, who is seeking, or who holds, or who held within the prior three years, a contract with the board; (2) an active or retired member, or beneficiary, of the retirement system; or (3) an entity, or officer or employee of such an entity, in which the assets of the retirement system have been invested.  A board member violating this prohibition shall be guilty of a crime of the third degree.

(cf:  P.L.1992, c.125, s.17)

 

     5.    N.J.S.18A:66-57 is amended to read as follows:

     18A:66-57.  The board shall elect annually from its membership a chairman and may also elect a vice chairman, who shall have all the power and authority of the chairman in the event of the death, absence or disability of the chairman.  The actuary of the fund shall be selected by the board pursuant to the provisions of P.L.1954, c.48 (C.52:34-6 et seq.), except that if the board is unable to agree upon the selection of the actuary, the Retirement Systems Actuary Selection Committee established by P.L.1992, c.125 shall select the actuary

     The actuary shall be the technical adviser of the board on matters regarding the operation of the funds created by the provisions of this article and shall perform such other duties as are required in connection therewith. 

     The board may, in its discretion, select and employ or contract with legal counsel to advise and represent the board.  If the board does not select and employ or contract with legal counsel, the Attorney General shall be the legal adviser of the retirement system, except that if the Attorney General determines that a conflict of interest would affect the ability of the Attorney General to represent the board on a matter affecting the retirement system, the board may select and employ or contract with legal counsel to advise and represent the board on that matter.

     The chief or assistant chief of the office of secretarial services of the Division of Pensions of the State Department of the Treasury, shall be the secretary of the board.  The chief and assistant chief of the office of secretarial services shall be in the competitive division of the State classified service.  The secretary presently in office shall hold the position as chief of the office of secretarial services subject to all of the provisions of Title 11 of the Revised Statutes and shall not be removed from said office except in the manner provided under the provisions of said title relating to permanent employees in the competitive division of the State classified service.  The board of trustees shall select its secretary from among the eligible candidates. 

(cf: P.L.1992, c.125, s.3)

 

     6.    Section 18 of P.L.1954, c.84 (C.43:15A-18) is amended to read as follows:

     18.  The board shall elect annually from its membership a chairman and may also elect a vice-chairman, who shall have all the power and authority of the chairman in the event of the death, absence or disability of the chairman.

     The actuary of the fund shall be selected by the board pursuant to the provisions of P.L.1954, c.48 (C.52:34-6 et seq.), except that if the board is unable to agree upon the selection of the actuary, the Retirement Systems Actuary Selection Committee established by P.L.1992, c.125 shall select the actuary

     The actuary shall be the technical adviser of the board on matters regarding the operation of the funds created by the provisions of this act and shall perform such other duties as are required in connection therewith. 

     The board may, in its discretion, select and employ or contract with legal counsel to advise and represent the board.  If the board does not select and employ or contract with legal counsel, the Attorney General shall be the legal adviser of the retirement system, except that if the Attorney General determines that a conflict of interest would affect the ability of the Attorney General to represent the board on a matter affecting the retirement system, the board may select and employ or contract with legal counsel to advise and represent the board on that matter. 

     The chief or assistant chief of the office of secretarial services of the Division of Pensions of the State Department of the Treasury shall be the secretary of the board.  The chief and assistant chief of the office of secretarial services shall be in the competitive division of the State classified service.  The secretary presently in office shall hold the position as assistant chief of the office of secretarial services subject to all of the provisions of Title 11 of the Revised Statutes and shall not be removed from said office except in the manner provided under the provisions of said Title relating to permanent employees in the competitive division of the State classified service.  The board of trustees shall select its secretary from among the eligible candidates. 

(cf:  P.L.1992, c.125, s.8) 

 

     7.    N.J.S.18A:66-61 is amended to read as follows:

     18A:66-61.  a.  (1)  The board of trustees shall be and are hereby constituted trustees of the various funds and accounts established by this article; provided, however, that all functions, powers and duties relating to the investment or reinvestment of moneys of, and purchase, sale or exchange of any investments or  securities, of or for any fund or account established under this article, shall be exercised and performed by the Director of the Division of Investment in accordance with the provisions of [chapter 270, of the laws of 1950] P.L.1950, c.270 (C.52:18A-79 et seq.).  

     (2)  The board upon the majority vote of all trustees may assume all functions, powers and duties relating to the investment or reinvestment of moneys of, and purchase, sale or exchange of any investments or securities, of or for any fund or account established under this article, and such functions, powers and duties shall be exercised and performed by the board.  The Director of the Division of Investment shall act in accordance with the provisions of P.L.1950, c.270 (C.52:18A-79 et seq.) on behalf of the board with regard to administration and implementation to the extent and in the manner authorized, approved, or directed by the board.

     b.    The  secretary of the board of trustees shall determine from time to time the cash  requirements of the various funds and accounts established by this article and  the amount available for investment, all of which shall be certified to the  Director of the Division of Investment.

     c.     A member of the board of trustees to be designated by a majority vote thereof shall serve on the state investment council as a representative of said  board of trustees, for a term of 1 year and until his successor is elected and  qualified.

     d.    The finance committee of the board of trustees shall be appointed on or before July 1 of each calendar year by the chairman of the board of trustees to  serve through June 30 of the ensuing calendar year and until their successors  are appointed.  The finance committee of the board of trustees shall consist of  three members of the board of trustees, one of whom shall be the State  Treasurer.

(cf:  P.L.1970, c.57, s.8)

 

     8.    Section 32 of P.L.1954, c.84 (C.43:15A-32) is amended to read as follows:

     32.  a.  (1)  The board of trustees shall be and are hereby constituted trustees of the various funds and accounts established by this act;  provided, however, that all functions, powers, and duties relating to the investment or reinvestment of  moneys of, and purchase, sale, or exchange of any investments or securities, of  or for any fund or account established under this act, shall be exercised and  performed by the Director of the Division of Investment in accordance with the  provisions of [chapter 270, P.L.1950, as amended and supplemented] P.L.1950, c.270 (C.52:18A-79 et seq.).  The secretary of the board of trustees shall determine from time to time the cash requirements of the various funds and accounts established by this act and the amount available for investment, all of which shall be certified to the Director of the Division of Investment.

     (2)  The board upon the majority vote of all trustees may assume all functions, powers, and duties relating to the investment or reinvestment of  moneys of, and purchase, sale, or exchange of any investments or securities, of  or for any fund or account established under this act, and such functions, powers and duties shall be exercised and performed by the board.  The Director of the Division of Investment shall act in accordance with the provisions of P.L.1950, c.270 (C.52:18A-79 et seq.) on behalf of the board with regard to administration and implementation to the extent and in the manner authorized, approved, or directed by the board.

     b.    The members of the finance committee of the board of trustees shall be appointed at or after July 1 of each calendar year by the chairman of the board of trustees to serve through June 30 of the ensuing calendar year and until  their successors are appointed.  The finance committee of the board of trustees shall consist of [five] three members of the board of trustees, one of whom shall be  the State Treasurer[, and one of whom shall be the member designated to serve on  the State Investment Council][At least three members of the finance committee  shall be members of the board of trustees who have been elected by members of  the system.]  A quorum of the finance committee shall consist of [three] two members  thereof.

     c.     A member of the board of trustees to be designated by a majority vote thereof shall serve on the State Investment Council as a representative of said  board of trustees, for a term of 1 year and until his successor is elected and  qualified.

(cf: P.L.1970, c.57, s.3)

 

     9.    Section 14 of P.L.1944, c.255 (C.43:16A-14) is amended to read as follows:

     14.  (1) The board of trustees shall be and are hereby constituted trustees of the various funds and accounts established by this act [;  provided, however, that all].  All functions, powers and duties relating to the investment or reinvestment of moneys of, and purchase, sale or exchange of any investments or  securities, of or for any fund or account established under this act, shall be  exercised and performed by the board, and the Director of the Division of Investment shall act in accordance with the provisions of [chapter 270, of the laws of 1950] P.L.1950, c.270 (C.52:18A-79 et seq.) on behalf of the board with regard to administration and implementation to the extent and in the manner authorized, approved, or directed by the board.  The secretary of the board of trustees shall determine from time to time the cash requirements of the various funds and accounts established by this act and the amount available for investment, all of which shall be certified to the Director of the Division of Investment.

     A member of the board of trustees to be designated by a majority vote thereof shall serve on the State Investment Council as a representative of said  board of trustees, for a term of 1 year and until his successor is elected and  qualified.

     (2) The Treasurer of the State of New Jersey shall be the custodian of the several funds created by this act, shall select all depositories and custodians  and shall negotiate and execute custody agreements in connection with the  assets or investments of any of said funds.  All payments from said funds shall  be made by him only upon vouchers signed by the chairman and countersigned by  the secretary of the board of trustees.  No voucher shall be drawn, except upon  the authority of the board duly entered in the records of its proceedings.

     (3) (Deleted by amendment.)

     (4) Except as otherwise herein provided, no trustee and no employee of the board of trustees shall have any direct interest in the gains or profits of any  investments of the retirement system;  nor shall any trustee or employee of the  board directly or indirectly, for himself or as an agent in any manner use the  moneys of the retirement system, except to make such current and necessary  payments as are authorized by the board of trustees; nor shall any trustee or  employee of the board of trustees become an endorser or surety, or in any  manner an obligor for moneys loaned to or borrowed from the retirement system.

     (5)   A finance committee of the board of trustees shall be appointed on or before July 1 of each calendar year by the chairman of the board to serve through June 30 of the ensuing calendar year and until their successors  are appointed.  The finance committee of the board of trustees shall consist of three members of the board, one of whom shall be the State Treasurer.

(cf:  P.L.1970, c.57, s.11)

 

     10.  Section 31 of P.L.1965, c.89 (C.53:5A-31) is amended to read as follows:

     31.  a.  The board of trustees shall be and are hereby constituted trustees of all the various funds established by this act except the group insurance premium fund[;  provided, however, that all] .  All functions, powers, and duties relating to the investment or reinvestment of moneys of, and purchase, sale, or  exchange of any investments or securities, of or for any fund established under  this act, shall be exercised and performed by the board, and the Director of the Division of Investment shall act in accordance with the provisions of [c.270, P.L.1950, as amended  and supplemented] P.L.1950, c.270 (C.52:18A-79 et seq.) on behalf of the board with regard to administration and implementation to the extent and in the manner authorized, approved, or directed by the board.

     b.    The secretary of the board shall determine from time to time the cash requirements of the various funds established by this act and the amount available for investment, all of which shall be certified to the Director of the Division of Investment.

     c.     A member of the board of trustees to be designated by a majority vote thereof shall serve on the State Investment Council as a representative of said  board of trustees, for a term of 1 year and until his successor is elected and  qualified.

     d.    The Treasurer of the State of New Jersey shall be the custodian of the several funds.  All payments from said funds shall be made by him only upon vouchers signed by the secretary and the chairman of the board of trustees.  A duly attested copy of the resolution of the board of trustees designating the chairman and bearing on its face specimen signatures of the chairman and the secretary shall be filed with the treasurer as his authority for making payments upon such vouchers.

     e.     The administration of the program shall be performed by the personnel of  the Division of Pensions and Benefits of the State Department of the Treasury and the costs  of administration shall be borne by the State.

     f.     A finance committee of the board of trustees shall be appointed on or before July 1 of each calendar year by the chairman of the board to serve through June 30 of the ensuing calendar year and until their successors  are appointed.  The finance committee of the board of trustees shall consist of three members of the board, one of whom shall be the State Treasurer.

(cf: P.L.1971, c.181, s.21)

 

     11.  Section 7 of P.L.1950, c.270 (C.52:18A-85) is amended to read as follows:

     7.    a.  The functions, powers and duties vested by law in [the following enumerated agencies]:

     The Board of Trustees of the Public Employees' Retirement System; [the Board of Trustees of the State Police Retirement System;] the Prison Officers' Pension Commission; the Board of Trustees of the Teachers' Pension and Annuity Fund; [the Board of Trustees of the Police and Firemen's Retirement System of New Jersey]; the State House Commission for the Judicial Retirement System; and the Consolidated Police and Firemen's Pension Fund Commission [;] , of, or relating to, investment or reinvestment of moneys of, and purchase, sale or exchange of any investments or securities of or for any funds or accounts under the control and management of such [agencies] boards or commissions, are hereby transferred to and shall be exercised and performed for such [agencies] boards or commissions by the Director of the Division of Investment established hereunder.

     b.  The functions, powers, and duties vested by law in the Board of Trustees of the State Police Retirement System and the Board of Trustees of the Police and Firemen's Retirement System, and, upon the assumption of those functions, powers and duties as provided by law, in the Board of Trustees of the Public Employees' Retirement System and the Board of Trustees of the Teachers' Pension and Annuity Fund, of, or relating to, investment or reinvestment of moneys of, and purchase, sale or exchange of any investments or securities of or for any funds or accounts under the control and management of such boards, shall be exercised and performed by each board, and the Director of the Division of Investment shall act on behalf of each board with regard to administration and implementation to the extent and in the manner authorized, approved, or directed by each board.

(cf:  P.L.1970, c.57, s.17)

 

     12.  Section 1 of P.L.1959, c.17 (C.52:18A-88.1) is amended to read as follows:

     1.    a.  The Director of the Division of Investment, in addition to other investments, presently or from time to time hereafter authorized by law, shall have authority to invest and reinvest the moneys in, and to acquire for or on behalf of the funds of [the following enumerated agencies]:

     The Consolidated Police and Firemen's Pension Fund Commission;

     [The Police and Firemen's Retirement System of New Jersey;]

     The Prison Officers' Pension Commission;

     The Public Employees' Retirement System of New Jersey;

     [The State Police Retirement System;]

     The Teachers' Pension and Annuity Fund;

     The State House Commission for the Judicial Retirement System of New Jersey;

     The Trustees for the Support of Public Schools;

and all other funds in the custody of the State Treasurer, unless otherwise provided by law;

     such investments which shall be authorized or approved for investment by regulation of the State Investment Council.

     b.    The Director of the Division of Investment, in addition to other investments, presently or from time to time hereafter authorized by law, shall have authority to invest and reinvest the moneys in, and to acquire for or on behalf of the funds of, the Board of Trustees of the Police and Firemen's Retirement System of New Jersey and the Board of Trustees of the State Police Retirement System, and, as appropriate, the Board of Trustees of the Public Employees' Retirement System of New Jersey and the Board of Trustees of the Teachers' Pension and Annuity Fund, such investments which shall be authorized or approved for investment by each board of trustees, to the extent and in the manner authorized, approved, or directed by each board.

     Each board shall formulate and establish, and may from time to time amend, modify, or repeal, such policies, objectives or guidelines as it may deem necessary and proper that shall govern the decisions, actions, methods, practices, or procedures for investment, reinvestment, purchase, sale or exchange transactions to be followed by the director.  Each board may agree with any other board to formulate and establish the same policies, objectives, or guidelines in order to have the monies and funds under its control combined for these purposes.  All actions and decisions of the director shall be authorized by either general policies, objectives, or guidelines or specific orders, or by approval by the board or the finance committee of the board of a specific action or decision, as each board shall determine.  Each board shall review and take into consideration the determinations of the State Investment Council, and conform to those determinations generally or specifically when each board determines necessary, reasonable, and appropriate.

     Each board shall consult from time to time with the State Investment Council regarding the work of the division and may consult with the council on other matters.

(cf:  P.L.1997, c.26, s.25)

     13.  Section 11 of P.L.1950, c.270 (C.52:18A-89) is amended to read as follows: 

     11.  a.  Limitations, conditions and restrictions contained in any law concerning the kind or nature of investment of any of the moneys of any of the funds or accounts referred to herein shall continue in full force and effect; provided, however, that subject to any acceptance required, or limitation or restriction contained herein: the Director of the Division of Investment shall at all times have authority to invest and reinvest any such moneys in investments as defined in subsection c. of this section and, for or on behalf of any such fund or account, to sell or exchange any such investments.  The director’s actions and decisions, as appropriate,  shall be exercised and performed under the authority and control of the various boards of trustees named in subsection b. of section 1 of P.L.1959, c.17 (C.52:18A-88.1), to the extent and in the manner authorized, approved, or directed by each board.

     b.    In investing and reinvesting any and all money and property committed to the director's investment discretion from any source whatsoever, and in acquiring, retaining, selling, exchanging and managing investments, the Director of the Division of Investment shall exercise the care, skill, prudence and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims.  In making each investment, the director may, depending on the nature and objectives of the portfolio, consider the whole portfolio, provided that, in making each investment, the director shall act with the reasonable expectation that the return on each investment shall be commensurate with the risk associated with each investment.  The director shall be under a duty to manage and invest the portfolio solely in the interests of the beneficiaries of the portfolio and for the exclusive purpose of providing financial benefits to the beneficiaries of the portfolio. 

     In investing and reinvesting any and all money and property committed to the investment discretion of each board of trustees named in subsection b. of section 1 of P.L.1959, c.17 (C.52:18A-88.1), from any source whatsoever, and in acquiring, retaining, selling, exchanging and managing investments, each board shall exercise the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims.  In making each investment, each board may, depending on the nature and objectives of the portfolio, consider the whole portfolio, provided that, in making each investment, the board shall act with the reasonable expectation that the return on each investment shall be commensurate with the risk associated with each investment.  Each board shall be under a duty to manage and invest the portfolio solely in the interests of the beneficiaries of the portfolio and for the exclusive purpose of providing financial benefits to the beneficiaries of the portfolio.

     c.     For the purposes of this section, "investments" means and includes property of every nature, real, personal and mixed, tangible and intangible, and specifically includes, solely by way of description and not by way of limitation, bonds, debentures and other corporate obligations, direct and indirect investments in equity real estate ,  mortgages and other direct or indirect interests in real estate or investments secured by real estate, capital stocks, common stocks, preferred stocks, diversified pools of venture capital which otherwise could be made consistent with the standard of care required by subsection b. of this section, common trust funds as defined in and regulated by sections 36 through 46 of P.L.1948, c.67 (C.17:9A-36 through 17:9A-46), repurchase agreements, securities loan transactions secured by cash, securities issued by the United States government or its agencies, or irrevocable bank letters of credit, whether directly or through a bank or similar financial institution acting as agent or trustee, mutual funds, and any other security issued by an investment company or investment trust, whether managed or not by third parties, registered under the "Investment Company Act of 1940," Title I of Pub.L. 76-768 (15 U.S.C.s.80a-1 et seq.).  No investment that is otherwise permissible under this subsection shall be considered to be unlawful solely because the investment is made indirectly or through a partnership, trust, or other legal entity.

(cf:  P.L.1997, c.26, s.26)

 

     14.  Section 1 of P.L.1970, c.270 (C.52:18A-90.1) is amended to read as follows:

     1.    Notwithstanding any statute or rule of law to the contrary, the Director of  the Division of Investment may, subject to the approval of the State Investment  Council and the State Treasurer, establish, maintain and operate one or more  common trust funds, in which may be combined for the purpose of investment,  money and property belonging to the various funds in the custody of the State  Treasurer;  provided, however, that there shall not be combined in any common  trust fund, excepting the State of New Jersey Cash Management Fund established  pursuant to section 1 of [this amendatory and supplementary act] P.L.1977, c.281 (C.52:18A-80.4), moneys and  property of any fund the income of which inures to the benefit of the General  State Fund and money and property of any fund the income of which inures to the  benefit of said fund.

     The director also shall obtain, as appropriate, the approval of each board of trustees named in subsection b. of section 1 of P.L.1959, c.17 (C.52:18A-88.1).

(cf: P.L.1977, c.281, s.2)


     15.  Section 13 of P.L.1950, c.270, (C.52:18A-91) is amended to read as follows:

     13.  a. The State Investment Council and each board of trustees named in subsection b. of section 1 of P.L.1959, c.17 (C.52:18A-88.1) shall consult with the Director of the Division of Investment from time to time with respect to the work of the division. [It] The council and each board shall have access to all files and records of the division and may require any officer or employee therein to provide such information as it may deem necessary in the performance of [its] the functions of the council and each board. The council and each board shall have authority to inspect and audit the respective accounts and funds administered through the Division of Investment.  [It]  The council and each board shall formulate and establish, and may from time to time amend, modify or repeal, such policies as it may deem necessary or proper, which shall govern the methods, practices or procedures for investment, reinvestment, purchase, sale or exchange transactions to be followed by the Director of the Division of Investment established hereunder.

     b.    (1)  On or before January first of each year, and at such other times as it may deem in the public interest, the council shall report to the Governor, the Legislature, each board of trustees named in subsection b. of section 1 of P.L.1959, c.17 (C.52:18A-88.1), and the State Treasurer with respect to its work and the work of the Division of Investment. In addition to the reports specified above and in section 14 of P.L.1950, c.270 (C.52:18A-92), the council shall issue a report by March 1 of each year on the investment activities for the prior calendar year, which shall include a summary of the current investment policies and strategies of the council and those in effect during the prior calendar year, a detailed summary for each financial product of the amount invested, whether the investments were made by employees of the Division of Investment or by external managers, performance benchmarks, and actual performance during the calendar year. The report shall be submitted to the Governor, the Legislature, each board of trustees named in subsection b. of section 1 of P.L.1959, c.17 (C.52:18A-88.1), and the State Treasurer, and shall be made available to the public through the official Internet site of the State.

     (2) Details of contracts with external managers, including information on types of investments, fees paid, and performance benchmarks and actual performance, shall be available for public inspection, examination, and copying as a government record in accordance with the provisions of P.L.1963, c.73 (C.47:1A-1 et seq.).

     c.     The council shall hold a meeting each year that shall be open to the public, and shall accept comments from the public at such  meeting. The matters that shall be open to discussion and public comment during this annual meeting shall include the investment policies and strategies of the council, the investment activities of the council, the financial disclosure statements filed by council members, and the certification of contributions filed by external managers, as well as other appropriate matters concerning the operations, activities and reports of the council.

     d.    An external manager shall be required to file a certification before being retained, and annually thereafter, that discloses the political contributions made, during the 12 months preceding the certification, by the manager or the manager's firm, or a political committee in which the manager or firm was active. The certification shall specify the political contributions made to candidates for elective public office in this State and any political committee established for the support of such candidates, and contributions made for the transition and inaugural expenses of any candidate who is elected to public office. As used in this subsection, "contribution" and "political committee" shall have the meaning set forth in "The New Jersey Campaign Contributions and Expenditures Reporting Act," P.L.1973, c.83 (C.19:44A-1 et al.). This certification shall be in addition to any other such disclosure required by law or executive order of the Governor.

(cf:  P.L.2007, c.103, s.51)

 

     16.  (New section)  a.  The Board of Trustees of the Public Employees' Retirement System, the Board of Trustees of the State Police Retirement System, the Board of Trustees of the Teachers' Pension and Annuity Fund, and the Board of Trustees of the Police and Firemen's Retirement System of New Jersey may elect, at the board’s discretion, to establish a division or unit, and use external managers, for the administration and implementation of matters with regard to its functions, powers, and duties vested by law for, or relating to, investment or reinvestment of moneys of, and purchase, sale or exchange of any investments or securities of or for any funds or accounts under the control and management of each board, consistent with applicable law and the policies, procedures, and regulations of the board.  If a board makes such an election, the board shall consult and coordinate with the Division of Investment in the Department of the Treasury and the State Investment Council for such transfers as deemed necessary and appropriate.  If the board makes such an election, the board shall comply with applicable provisions of P.L.1950, c.270 (C.52:18A-79 et seq.) to the extent not inconsistent with this section. 

     b.    The board shall formulate and establish, and may from time to time amend, modify or repeal, such policies, objectives, or guidelines as it may deem necessary and proper that shall govern the decisions, actions, methods, practices or procedures for investment, reinvestment, purchase, sale or exchange transactions to be followed by the division or unit or external managers.  All actions and decisions of the division or unit or external managers shall be authorized by either general policies, objectives, or guidelines or specific orders, or by approval by the board or the finance committee of the board of a specific action or decision, as each board shall determine. 

     c.     The board shall review and take into consideration the determinations of the State Investment Council, and conform to those determinations generally or specifically when each board determines necessary and appropriate. 

 

     17.  Section 2 of P.L.1958, c.143 (C.43:3B-2) is amended to read as follows:

     2.    a.  The monthly retirement allowance or pension originally granted to any retirant and the pension or survivorship benefit originally granted to any beneficiary shall be adjusted in accordance with the provisions of this act provided, however, that: 

     [a.]   the maximum retirement allowance, without option, shall be considered the retirement allowance originally granted to any retirant who, at retirement, elected an Option I allowance pursuant to the provisions of the statutes stipulated in subsection b. of section 1 of this act (C.43:3B-1); and [b.] the minimum pension granted to any beneficiary stipulated in subsection d. (4) of section 1 of this act (C.43:3B-1), shall be considered the pension originally granted to such beneficiary. 

     b.    Pension adjustments shall not be paid to retirants or beneficiaries who are not receiving their regular, full, monthly retirement allowances, pensions or survivorship benefits.  The adjustment granted under the provisions of this act shall be effective only on the first day of a month, shall be paid in monthly installments, and shall not be decreased, increased, revoked or repealed except as otherwise provided in this act.  No adjustment shall be due to a retirant or a beneficiary unless it constitutes a payment for an entire month; provided, however, that an adjustment shall be payable for the entire month in which the retirant or beneficiary dies. 

     c.     Commencing on the effective date of P.L.   , c.    (pending before the Legislature as this bill) and thereafter, adjustments to the monthly retirement allowance or pension or survivorship benefit granted to any member of the Teacher’s Pension and Annuity Fund, the Public Employees’ Retirement System, the Police and Firemen’s Retirement System, the Judicial Retirement System, and the State Police Retirement System who has less than five years of service credited in the system as of that effective date, or to any member who becomes a member on or after that effective date, or such member’s beneficiary, shall not be paid in accordance with the provisions of this act, P.L.1958, c.143 (C.43:3B-1 et seq.), unless authorized by the board of trustees of the system after a review of the financial condition of the system and consultation with the actuary of the system, and then only under such terms and conditions as the board provides in its authorization which shall at a minimum include the same condition as set forth in subsection d. of this section.

     d.    Commencing on the effective date of P.L.   , c.    (pending before the Legislature as this bill) and thereafter, adjustments to the monthly retirement allowance or pension or survivorship benefit granted to any member of the Teacher’s Pension and Annuity Fund, the Public Employees’ Retirement System, the Police and Firemen’s Retirement System, the Judicial Retirement System, and the State Police Retirement System who has five or more years of service credited in the system as of that effective date, or such member’s beneficiary, shall not be paid in accordance with the provisions of this act, P.L.1958, c.143 (C.43:3B-1 et seq.), for that portion of the allowance, pension, or benefit that is based on service credited in the system on or after that effective date unless the member elected to make the additional contribution to the system for the adjustment on that portion of the allowance, pension, or benefit as established pursuant to N.J.S.18A:66-29, section 25 of P.L.1954, c.84 (C.43:15A-25), section 2 of P.L.1972, c.167 (C.43:15A-136), section 3 of P.L.2001, c.259 (C.43:15A-144), section 3 of P.L.2001, c.366 (C.43:15A-157), section 15 of P.L.1944, c.255 (C.43:16A-15) section 26 of P.L.1981, c.470 (C.43:6A-34.1), and section 38 of P.L.1965, c.89 (C.53:5A-38).

(cf: P.L.1993, c.335, s.2)

 

     18.  Section 26 of P.L.1981, c.470 (C.43:6A-34.1) is amended to read as follows:

     26.  a.  The annuity savings fund shall be the fund to which shall be credited aggregate contributions made by members or on their behalf to provide for their allowances.  The aggregate contributions of a member withdrawn by him or paid to his estate or his designated beneficiary in the event of death as provided by this amendatory and supplementary act shall be paid from the annuity savings fund.  Upon the retirement of a member where the aggregate contributions of the member are to be provided in the form of an annuity, the aggregate contributions of the member shall be transferred from the annuity savings fund to the retirement reserve fund.

     b.    (1)  There shall be deducted from the payroll of each member of the system 3% of the amount of any difference between the salary on or after January 19, 1982 for any judicial position held by the member and the salary for that position on January 18, 1982, except that there shall be deducted from the payroll of each new member initially enrolled on or after January 1, 1996, in the retirement system, 3% of the salary for the judicial position held by the member.

     (2)  For the valuation period commencing after the effective date of P.L.  , c.   (pending before the Legislature as this bill) and for each period thereafter, the contribution rate for a member, expressed as a percentage of salary, shall be equal to the employer contribution, expressed as a percentage of the salary base, the sum of which percentage amounts shall equal the normal cost of the retirement system as determined in the annual valuation by the actuary, if permitted by law, except that, at the commencement of the valuation period commencing after the effective date of P.L.   , c.  (pending before the Legislature as this bill), (a) if the contributions of members based on the rate set forth in paragraph (1) of this subsection represent 40% or less of the normal cost of the retirement system, then the contribution rate set forth above in this paragraph shall not become effective and the contribution rate set forth in paragraph (1) of this subsection shall continue in effect until the commission increases, based on the recommendation of the actuary, the member contribution rate, or (b) if the contributions of members based on the rate set forth in paragraph (1) of this subsection represent more than 50% of the normal cost of the retirement system, then the contribution rate set forth in paragraph (1) of this subsection shall continue in effect, until the commission adjusts that rate.  The provision of this paragraph may commence on such date prior to the commencement of the valuation period commencing after the effective date as the commission shall determine.

     (3)  The commission shall establish, after consultation with and  recommendation of the actuary of the system, an additional contribution rate for the benefit specified in subsection d. of section 2 of P.L.1958, c.143 (C.43:3B-2), and for any enhancement of a benefit the commission has authorized.

     (4)  The State House Commission is authorized to make such annual uniform adjustment to a contribution rate of each member set forth in this section, as may be permitted by law, as the commission deems reasonable, necessary, and appropriate after consultation with and recommendation of the actuary for the system.  Any adjustment to a contribution rate shall be made at such time and in such manner as the commission shall determine. 

     c.     Every judge of the several courts to whom this amendatory and supplementary 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 person to whom this amendatory and supplementary 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.1995, c.424, s.4)

     19.  N.J.S.18A:66-29 is amended to read as follows:

     18A:66-29. [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.]

     a.     Members enrolled in the retirement system [on or after July 1, 2007 shall contribute 5.5% of compensation to the system. Members enrolled in the system prior to July 1, 2007] shall contribute 5.5% of compensation to the system [effective with the payroll period for which the beginning date is closest to July 1, 2007].

     b.    (1)  For the valuation period commencing after the effective date of P.L.  , c.   (pending before the Legislature as this bill) and for each period thereafter, the contribution rate for a member, expressed as a percentage of salary, shall be equal to the employer contribution, expressed as a percentage of the salary base, the sum of which percentage amounts shall equal the normal cost of the retirement system as determined in the annual valuation by the actuary, except that, at the commencement of the valuation period commencing after the effective date of P.L.   , c.     (pending before the Legislature as this bill), (a) if the contributions of members based on the rate set forth subsection a. of this section represent 40% or less of the normal cost of the retirement system, then the contribution rate set forth above in this paragraph shall not become effective and the contribution rate set forth in subsection a. of this section shall continue in effect until the board increases, based on the recommendation of the actuary, the member contribution rate, or (b) if the contributions of members based on the rate set forth in subsection a. of this section represent more than 50% of the normal cost of the retirement system, then the contribution rate set forth in subsection a. of this section shall continue in effect, until the board adjusts that rate.  The provision of this paragraph may commence on such date prior to the commencement of the valuation period commencing after the effective date as the board shall determine.

     (2)   The board of trustees shall establish, after consultation with and recommendation of the actuary of the system, an additional contribution rate for the benefit specified in subsection d. of section 2 of P.L.1958, c.143 (C.43:3B-2), and for any enhancement of a benefit the board has authorized.

     (3)   A member enrolled in the system prior to May 21, 2010 may contribute to the system the rate of compensation established by the board for the additional benefit, which rate shall not be less than 50% of the cost of the benefit as determined by the actuary of the system unless the board determines otherwise, for a total retirement allowance of 1/55 of final compensation for each year of service credited as class B service on and after the effective date of P.L.    , c.   (pending before the Legislature as this bill), pursuant to N.J.S.18A:66-36, N.J.S.18A:66-37, or N.J.S.18A:66-44.

     (4)   The board of trustees is authorized to make such annual uniform adjustment to a contribution rate of each member set forth in this section as the board deems reasonable, necessary, and appropriate after consultation with and recommendation of the actuary of the system.  Any adjustment to a contribution rate shall be made at such time and in such manner as the commission shall determine.

(cf:  P.L.2007, c.103, s.1)

 

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

     25.  a. 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 this single account.

     b.    (1) [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.

     (2)   Members enrolled in the retirement system on or after July 1, 2007 who are:

     employees of the State, other than employees of the Judicial Branch;

     employees of an independent State authority, board, commission, corporation, agency or organization;

     employees of a local school district, regional school district, county vocational school district, county special services school district, jointure commission, educational services commission, State-operated school district, charter school, county college, any officer, board, or commission under the authority of the Commissioner of Education or of the State Board of Education, and any other public entity which is established pursuant to authority provided by Title 18A of the New Jersey Statutes; or

     employees of a State public institution of higher education, other than employees of the University of Medicine and Dentistry of New Jersey shall contribute 5.5% of compensation to the system, and all such members described above enrolled in the system prior to July 1, 2007 shall contribute 5.5% of compensation to the system effective with the payroll period for which the beginning date is closest to July 1, 2007.]

     Members enrolled in the retirement system [on or after July 1, 2008, other than those described in the paragraph above, shall contribute 5.5% of compensation to the system. Members enrolled in the system prior to July 1, 2008, other than those described in the paragraph above,] shall contribute 5.5% of compensation to the system [effective with the payroll period that begins immediately after July 1, 2008].

     (2)   For the valuation period commencing after the effective date of P.L.  , c.   (pending before the Legislature as this bill) and for each period thereafter, the contribution rate for a member, expressed as a percentage of salary, shall be equal to the employer contribution, expressed as a percentage of the salary base, the sum of which percentage amounts shall equal the normal cost of the retirement system as determined in the annual valuation by the actuary, except that, at the commencement of the valuation period commencing after the effective date of P.L.   , c.     (pending before the Legislature as this bill), (a) if the contributions of members based on the rate set forth in paragraph (1) of this subsection represent 40% or less of the normal cost of the retirement system, then the contribution rate set forth above in this paragraph shall not become effective and the contribution rate set forth in paragraph (1) of this subsection shall continue in effect until the board increases, based on the recommendation of the actuary, the member contribution rate, or (b) if the contributions of members based on the rate set forth in paragraph (1) of this subsection represent more than 50% of the normal cost of the retirement system, then the contribution rate set forth in paragraph (1) of this subsection shall continue in effect, until the board adjusts that rate.  The provision of this paragraph may commence on such date prior to the commencement of the valuation period commencing after the effective date as the board shall determine.

     (3)   The board of trustees shall establish, after consultation with and recommendation of the actuary of the system, an additional contribution rate for the benefit specified in subsection d. of section 2 of P.L.1958, c.143 (C.43:3B-2), and for any enhancement of a benefit the board has authorized.

     (4)  A member enrolled in the system prior to May 21, 2010 may contribute to the system the rate of compensation established by the board for the additional benefit, which rate shall not be less than 50% of the cost of the benefit as determined by the actuary of the system unless the board determines otherwise, for a total retirement allowance of 1/55 of final compensation for each year of service credited as class B service on and after the effective date of P.L.    , c.   (pending before the Legislature as this bill), pursuant to section 38, 41 or 48 of P.L.1954, c.84 (C.43:15A-38, 43:15A-41 or 43:15A-48).

     (5)   The board of trustees is authorized to make such annual uniform adjustment to a contribution rate of each member set forth in this section as the board deems reasonable, necessary, and appropriate after consultation with and recommendation of the actuary of the system.  Any adjustment to a contribution rate shall be made at such time and in such manner as the board shall determine.  

     c.     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 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.

     d.    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.2010, c.1, s.26)

 

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

     2.    a. (1) Notwithstanding the provisions of section 25 of P.L.1954, c.84 (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 member of the Legislature shall contribute at a rate equal to [5%] 5.5% 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. [The contribution rate shall be 5.5% of the member's legislative salary beginning July 1, 2007.]

     (2)   For the valuation period commencing after the effective date of P.L.  , c.   (pending before the Legislature as this bill) and for each period thereafter, the contribution rate for a member, expressed as a percentage of salary, shall be equal to the employer contribution, expressed as a percentage of the salary base, the sum of which percentage amounts shall equal the normal cost of the retirement system as determined in the annual valuation by the actuary, except that, at the commencement of the valuation period commencing after the effective date of P.L.   , c.     (pending before the Legislature as this bill), (a) if the contributions of members based on the rate set forth in paragraph (1) of this subsection represent 40% or less of the normal cost of the retirement system, then the contribution rate set forth above in this paragraph shall not become effective and the contribution rate set forth in paragraph (1) of this subsection shall continue in effect until the board increases, based on the recommendation of the actuary, the member contribution rate, or (b) if the contributions of members based on the rate set forth in paragraph (1) of this subsection represent more than 50% of the normal cost of the retirement system, then the contribution rate set forth in paragraph (1) of this subsection shall continue in effect, until the board adjusts that rate.  The provision of this paragraph may commence on such date prior to the commencement of the valuation period commencing after the effective date as the board shall determine.

     (3)   The board of trustees shall establish, after consultation with and recommendation of the actuary of the system, an additional contribution rate for the benefit specified in subsection d. of section 2 of P.L.1958, c.143 (C.43:3B-2), and for any enhancement of a benefit the board has authorized.

     (4)   The board of trustees is authorized to make such annual uniform adjustment to a contribution rate of each member set forth in this section as the board deems reasonable, necessary, and appropriate after consultation with and recommendation of the actuary of the system.  Any adjustment to a contribution rate shall be made at such time and in such manner as the board shall determine.  

     b.    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.2007, c.103, s.3)

 

     22.  Section 3 of P.L.2001, c.259 (C.43:15A-144) is amended to read as follows:

     3.    a. Notwithstanding the provisions of section 25 of P.L.1954, c.84 (C.43:15A-25) to the contrary, a separate account shall be established in the annuity savings fund for each workers compensation judge and all contributions based on the judge's salary shall be credited to this account. This account shall be separate from any other account that the member may have as a result of other public service covered by the retirement system.

     b.    (1)  A workers compensation judge shall contribute at a rate equal to [5%] 5.5% of the judge's salary, which contribution shall be deducted from the 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. [The contribution rate shall be 5.5% of the judge's salary effective with the payroll period for which the beginning date is closest to July 1, 2007.]

     (2)   For the valuation period commencing after the effective date of P.L.  , c.   (pending before the Legislature as this bill) and for each period thereafter, the contribution rate for a member, expressed as a percentage of salary, shall be equal to the employer contribution, expressed as a percentage of the salary base, the sum of which percentage amounts shall equal the normal cost of the retirement system as determined in the annual valuation by the actuary, except that, at the commencement of the valuation period commencing after the effective date of P.L.   , c.     (pending before the Legislature as this bill), (a) if the contributions of members based on the rate set forth in paragraph (1) of this subsection represent 40% or less of the normal cost of the retirement system, then the contribution rate set forth above in this paragraph shall not become effective and the contribution rate set forth in paragraph (1) of this subsection shall continue in effect until the board increases, based on the recommendation of the actuary, the member contribution rate, or (b) if the contributions of members based on the rate set forth in paragraph (1) of this subsection represent more than 50% of the normal cost of the retirement system, then the contribution rate set forth in paragraph (1) of this subsection shall continue in effect, until the board adjusts that rate.  The provision of this paragraph may commence on such date prior to the commencement of the valuation period commencing after the effective date as the board shall determine.

     (3)   The board of trustees shall establish, after consultation with and recommendation of the actuary of the system, an additional contribution rate for the benefit specified in subsection d. of section 2 of P.L.1958, c.143 (C.43:3B-2), and for any enhancement of a benefit the board has authorized.

     (4)   The board of trustees is authorized to make such annual uniform adjustment to a contribution rate of each member set forth in this section as the board deems reasonable, necessary, and appropriate after consultation with and recommendation of the actuary.  Any adjustment to a contribution rate shall be made at such time and in such manner as the board shall determine.

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

(cf:  P.L.2007, c.103, s.5)

 

     23.  Section 3 of P.L.2001, c.366 (C.43:15A-157) is amended to read as follows:

     3.    a.  Notwithstanding the provisions of section 25 of P.L.1954, c.84 (C.43:15A-25) to the contrary, a separate account shall be established in the annuity savings fund for each prosecutor and all contributions based on the prosecutor's salary shall be credited to this account.

     b.    (1)  A prosecutor shall contribute at a rate [established by the board] of 8.5% of the prosecutor’s salary, which contribution shall be deducted from the salary at the time or times it is paid, and which shall be exclusive of any other contribution required of the prosecutor for Social Security, contributory death benefits or deductions for any other purpose.

     (2)   For the valuation period commencing after the effective date of P.L.  , c.   (pending before the Legislature as this bill) and for each period thereafter, the contribution rate for a member, expressed as a percentage of salary, shall be equal to the employer contribution, expressed as a percentage of the salary base, the sum of which percentage amounts shall equal the normal cost of the retirement system as determined in the annual valuation by the actuary, except that, at the commencement of the valuation period commencing after the effective date of P.L.   , c.     (pending before the Legislature as this bill), (a) if the contributions of members based on the rate set forth in paragraph (1) of this subsection represent 40% or less of the normal cost of the retirement system, then the contribution rate set forth above in this paragraph shall not become effective and the contribution rate set forth in paragraph (1) of this subsection shall continue in effect until the board increases, based on the recommendation of the actuary, the member contribution rate, or (b) if the contributions of members based on the rate set forth in paragraph (1) of this subsection represent more than 50% of the normal cost of the retirement system, then the contribution rate set forth in paragraph (1) of this subsection shall continue in effect, until the board adjusts that rate.  The provision of this paragraph may commence on such date prior to the commencement of the valuation period commencing after the effective date as the board shall determine.

     (3)   The board of trustees shall establish, after consultation with and recommendation of the actuary of the system, an additional contribution rate for the benefit specified in subsection d. of section 2 of P.L.1958, c.143 (C.43:3B-2), and for any enhancement of a benefit the board has authorized.

     (4)   The board of trustees is authorized to make such annual uniform adjustment to a contribution rate of each member set forth in this section as the board deems reasonable, necessary, and appropriate after consultation with and recommendation of the actuary of the system.  Any adjustment to a contribution rate shall be made at such time and in such manner as the board shall determine.

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

(cf:  P.L.2001, c.366, s.3)

 

     24.  Section 15 of P.L.1944, c.255 (C.43:16A-15) is amended to read as follows:

     15.  (1) The contributions required for the support of the retirement system shall be made by members and their employers.

     (2)   (i)  The uniform percentage contribution rate for members shall be 8.5% of compensation.

     (ii) For the valuation period commencing after the effective date of P.L.  , c.   (pending before the Legislature as this bill) and for each period thereafter, the contribution rate for a member, expressed as a percentage of salary, shall be equal to the employer contribution, expressed as a percentage of the salary base, the sum of which percentage amounts shall equal the normal cost of the retirement system as determined in the annual valuation by the actuary, except that, at the commencement of the valuation period commencing after the effective date of P.L.   , c.     (pending before the Legislature as this bill), (a) if the contributions of members based on the rate set forth in paragraph (i) of this subsection represent 40% or less of the normal cost of the retirement system, then the contribution rate set forth above in this paragraph shall not become effective and the contribution rate set forth in paragraph (i) of this subsection shall continue in effect until the board increases, based on the recommendation of the actuary, the member contribution rate, or (b) if the contributions of members based on the rate set forth in paragraph (i) of this subsection represent more than 50% of the normal cost of the retirement system, then the contribution rate set forth in paragraph (i) of this subsection shall continue in effect, until the board adjusts that rate.  The provision of this paragraph may commence on such date prior to the commencement of the valuation period commencing after the effective date as the board shall determine.

     (iii)     The board of trustees shall establish, after consultation with and recommendation of the actuary of the system, an additional contribution rate for the benefit specified in subsection d. of section 2 of P.L.1958, c.143 (C.43:3B-2), and for any enhancement of a benefit the board has authorized.

     (iv)  The board of trustees is authorized to make such annual uniform adjustment to a contribution rate of each member set forth in this subsection as the board deems reasonable, necessary, and appropriate after consultation with and recommendation of the actuary of the system.  Any adjustment to a contribution rate shall be made at such time and in such manner as the board shall determine.

     (3)   (Deleted by amendment, P.L.1989, c.204).

     (4)   Upon the basis of the tables recommended by the actuary which the board adopts and regular interest, the actuary shall compute annually, beginning as of June 30, 1991, the amount of contribution which shall be the normal cost as computed under the projected unit credit method attributable to service rendered under the retirement system for the year beginning on July 1 immediately succeeding the date of the computation.  This shall be known as the "normal contribution."

     (5)   (Deleted by amendment, P.L.1989, c.204).

     (6)   (Deleted by amendment, P.L.1994, c.62.)

     (7)   Each employer shall cause to be deducted from the salary of each member the percentage of earnable compensation prescribed in subsection (2) of this section.  To facilitate the making of deductions, the retirement system may modify the amount of deduction required of any member by an amount not to exceed 1/10 of 1% of the compensation upon which the deduction is based.

     (8)   The deductions provided for herein shall be made notwithstanding that the minimum salary provided for by law for any member shall be reduced thereby.  Every member shall be deemed to consent and agree to the deductions made and provided for herein, and payment of salary or compensation less said deduction shall be a full and complete discharge and acquittance of all claims and demands whatsoever for the service rendered by such person during the period covered by such payment, except as to the benefits provided under this act.  The chief fiscal officer of each employer shall certify to the retirement system in such manner as the retirement system may prescribe, the amounts deducted; and when deducted shall be paid into said annuity savings fund, and shall be credited to the individual account of the member from whose salary said deduction was made.

     (9)   With respect to employers other than the State, upon the basis of the tables recommended by the actuary which the board adopts and regular interest, the actuary shall compute the amount of the accrued liability as of June 30, 1991 under the projected unit credit method, which is not already covered by the assets of the retirement system, valued in accordance with the asset valuation method established in this section.  Using the total amount of this unfunded accrued liability, the actuary shall compute the initial amount of contribution which, if the contribution is increased at a specific rate and paid annually for a specific period of time, will amortize this liability.  The [State Treasurer] board shall determine, upon the advice of the Director of the Division of Pensions and Benefits, the [board of trustees] State Treasurer and the actuary, the rate of increase for the contribution and the time period for full funding of this liability, which shall not exceed 40 years on initial application of this section as amended by this act, P.L.1994, c.62.  This shall be known as the "accrued liability contribution."  Any increase or decrease in the unfunded accrued liability as a result of actuarial losses or gains for the 10 valuation years following valuation year 1991 shall serve to increase or decrease, respectively, the unfunded accrued liability contribution.  Thereafter, any increase or decrease in the unfunded accrued liability as a result of actuarial losses or gains for subsequent valuation years shall serve to increase or decrease, respectively, the amortization period for the unfunded accrued liability, unless an increase in the amortization period will cause it to exceed 30 years.  If an increase in the amortization period as a result of actuarial losses for a valuation year would exceed 30 years, the accrued liability contribution shall be computed for the valuation year in the same manner provided for the computation of the initial accrued liability contribution under this section.

     With respect to the State, upon the basis of the tables recommended by the actuary which the board adopts and regular interest, the actuary shall annually determine if there is an amount of the accrued liability, computed under the projected unit credit method, which is not already covered by the assets of the retirement system, valued in accordance with the asset valuation method established in this section.  This shall be known as the "unfunded accrued liability."  If there was no unfunded accrued liability for the valuation period immediately preceding the current valuation period, the actuary, using the total amount of this unfunded accrued liability, shall compute the initial amount of contribution which, if the contribution is increased at a specific rate and paid annually for a specific period of time, will amortize this liability.  The [State Treasurer] board of trustees shall determine, upon the advice of the Director of the Division of Pensions and Benefits, the [board of trustees] State Treasurer and the actuary, the rate of increase for the contribution and the time period for full funding of this liability, which shall not exceed 30 years. This shall be known as the "accrued liability contribution." Thereafter, any increase or decrease in the unfunded accrued liability as a result of actuarial losses or gains for subsequent valuation years shall serve to increase or decrease, respectively, the amortization period for the unfunded accrued liability, unless an increase in the amortization period will cause it to exceed 30 years. If an increase in the amortization period as a result of actuarial losses for a valuation year would exceed 30 years, the accrued liability contribution shall be computed for the valuation year in the same manner provided for the computation of the initial accrued liability contribution under this section.  The State may pay all or any portion of its unfunded accrued liability under the retirement system from any source of funds legally available for the purpose, including, without limitation, the proceeds of bonds authorized by law for this purpose.

     After consultation with and recommendation of the actuary, the board shall require, for the valuation period commencing after the effective date of P.L.   , c.   (pending before the Legislature as this bill) and for each period thereafter, the acceleration of payments by all employers for the unfunded accrued liability over such a designated period of time as  the board determines to be reasonable, necessary, and appropriate.

     The value of the assets to be used in the computation of the contributions provided for under this section for valuation periods shall be the value of the assets for the preceding valuation period increased by the regular interest rate, plus the net cash flow for the valuation period (the difference between the benefits and expenses paid by the system and the contributions to the system) increased by one half of the regular interest rate, plus 20% of the difference between this expected value and the full market value of the assets as of the end of the valuation period.  This shall be known as the "valuation assets."  Notwithstanding the first sentence of this paragraph, the valuation assets for the valuation period ending June 30, 1995 shall be the full market value of the assets as of that date and, with respect to the valuation assets allocated to the State, shall include the proceeds from the bonds issued pursuant to the "Pension Bond Financing Act of 1997," P.L.1997, c.114 (C.34:1B-7.45 et seq.), paid to the system by the New Jersey Economic Development Authority to fund the unfunded accrued liability of the system. Notwithstanding the first sentence of this paragraph, the percentage of the difference between the expected value and the full market value of the assets to be added to the expected value of the assets for the valuation period ending June 30, 1998 for the State shall be 100% and for other employers shall be 57% plus such additional percentage as is equivalent to $150,000,000.  Notwithstanding the first sentence of this paragraph, the amount of the difference between the expected value and the full market value of the assets to be added to the expected value of the assets for the valuation period ending June 30, 1999 shall include an additional amount of the market value of the assets sufficient to fund (1) the unfunded accrued liability for the supplementary "special retirement" allowances provided under subsection b. of section 16 of P.L.1964, c.241 (C.43:16A-11.1) and (2) the unfunded accrued liability for the full credit toward benefits under the retirement system for service credited in the Public Employees' Retirement System and transferred pursuant to section 1 of P.L.1993, c.247 (C.43:16A-3.8) and the reimbursement of the cost of any credit purchase pursuant to section 3 of P.L.1993, c.247 (C.43:16A-3.10) provided under section 1 of P.L.2001, c.201 (C.43:16A-3.14).

     "Excess valuation assets" means, with respect to the valuation assets allocated to the State, the valuation assets allocated to the State for a valuation period less the actuarial accrued liability of the State for the valuation period, and beginning with the valuation period ending June 30, 1998, less the present value of the expected additional normal cost contributions attributable to the provisions of P.L.1999, c.428 (C.43:16A-15.8 et al.) payable on behalf of the active members employed by the State as of the valuation period over the expected working lives of the active members in accordance with the tables of actuarial assumptions applicable to the valuation period, and less the present value of the expected additional normal cost contributions attributable to the provisions of P.L.2003, c.108 as amending section 16 of P.L.1964, c.241 (C.43:16A-11.1) payable on behalf of the active members employed by the State as of the valuation period over the expected working lives of the active members in accordance with the tables of actuarial assumptions applicable to the valuation period, if the sum is greater than zero.  "Excess valuation assets" means, with respect to the valuation assets allocated to other employers, the valuation assets allocated to the other employers for a valuation period less the actuarial accrued liability of the other employers for the valuation period, excluding the unfunded accrued liability for early retirement incentive benefits pursuant to P.L.1993, c.99 for the other employers, and beginning with the valuation period ending June 30, 1998, less the present value of the expected additional normal cost contributions attributable to the provisions of P.L.1999, c.428 (C.43:16A-15.8 et al.) payable on behalf of the active members employed by other employers as of the valuation period over the expected working lives of the active members in accordance with the tables of actuarial assumptions applicable to the valuation period, and less the present value of the expected additional normal cost contributions attributable to the provisions of P.L.2003, c.108 as amending section 16 of P.L.1964, c.241 (C.43:16A-11.1) payable on behalf of the active members employed by other employers as of the valuation period over the expected working lives of the active members in accordance with the tables of actuarial assumptions applicable to the valuation period, if the sum is greater than zero.

     If there are excess valuation assets allocated to the State or to the other employers for the valuation period ending June 30, 1995, the normal contributions payable by the State or by the other employers for the valuation periods ending June 30, 1995, and June 30, 1996 which have not yet been paid to the retirement system shall be reduced to the extent possible by the excess valuation assets allocated to the State or to the other employers, respectively, provided that with respect to the excess valuation assets allocated to the State, the General Fund balances that would have been paid to the retirement system except for this provision shall first be allocated as State aid to public schools to the extent that additional sums are required to comply with the May 14, 1997 decision of the New Jersey Supreme Court in Abbott v. Burke.

     If there are excess valuation assets allocated to the other employers for the valuation period ending June 30, 1998, the accrued liability contributions payable by the other employers for the valuation period ending June 30, 1997 shall be reduced to the extent possible by the excess valuation assets allocated to the other employers.

     If there are excess valuation assets allocated to the State or to the other employers for a valuation period ending after June 30, 1998, the State Treasurer may reduce the normal contribution payable by the State or by other employers for the next valuation period as follows:

     (1)   for valuation periods ending June 30, 1996 through June 30, 2000, to the extent possible by up to 100% of the excess valuation assets allocated to the State or to the other employers, respectively;

     (2)   for the valuation period ending June 30, 2001, to the extent possible by up to 84% of the excess valuation assets allocated to the State or to the other employers, respectively;

     (3)   for the valuation period ending June 30, 2002, to the extent possible by up to 68% of the excess valuation assets allocated to the State or to the other employers, respectively; and

     (4)   for valuation periods ending June 30, 2003 through June 30, 2007, to the extent possible by up to 50% of the excess valuation assets allocated to the State or to the other employers, respectively.

     Notwithstanding the discretion provided to the State Treasurer in the previous paragraph to reduce the amount of the normal contribution payable by employers other than the State, the State Treasurer shall reduce the amount of the normal contribution payable by employers other than the State by $150,000,000 in the aggregate for the valuation period ending June 30, 1998, and then the State Treasurer may reduce further pursuant to the provisions of the previous paragraph the normal contribution payable by such employers for that valuation period.

     The normal and accrued liability contributions shall be certified annually by the retirement system and shall be included in the budget of the employer and levied and collected in the same manner as any other taxes are levied and collected for the payment of the salaries of members.

     Notwithstanding the preceding sentence, the normal and accrued liability contributions to be included in the budget of and paid by the employer other than the State shall be as follows: for the payment due in the State fiscal year ending on June 30, 2004, 20% of the amount certified by the retirement system; for the payment due in the State fiscal year ending on June 30, 2005, a percentage of the amount certified by the retirement system as the State Treasurer shall determine but not more than 40%; for the payment due in the State fiscal year ending on June 30, 2006, a percentage of the amount certified by the retirement system as the State Treasurer shall determine but not more than 60%; and for the payment due in the State fiscal year ending on June 30, 2007, a percentage of the amount certified by the retirement system as the State Treasurer shall determine but not more than 80%.

     The State Treasurer shall reduce the normal and accrued liability contributions payable by employers other than the State to 50 percent of the amount certified annually by the retirement system for payments due in the State fiscal year ending June 30, 2009.  An employer that elects to pay the reduced normal and accrued liability contribution shall adopt a resolution, separate and apart from other budget resolutions, stating that the employer needs to pay the reduced contribution and providing an explanation of that need which shall include (1) a description of its inability to meet the levy cap without jeopardizing public safety, health, and welfare or without jeopardizing the fiscal stability of the employer, or (2) a description of another condition that offsets the long term fiscal impact of the payment of the reduced contribution.  An employer also shall document those actions it has taken to reduce its operating costs, or provide a description of relevant anticipated circumstances that could have an impact on revenues or expenditures.  This resolution shall be submitted to and approved by the Local Finance Board after making a finding that these fiscal conditions are valid and affirming the findings contained in the employer resolution.

     An employer that elects to pay 100 percent of the amount certified by the retirement system for the State fiscal year ending June 30, 2009 shall be credited with such payment and any such amounts shall not be included in the employer's unfunded liability.

     The actuaries for the retirement system shall determine the unfunded liability of the retirement system, by employer, for the reduced normal and accrued liability contributions provided under P.L.2009, c.19.  This unfunded liability shall be paid by the employer in level annual payments over a period of 15 years beginning with the payments due in the State fiscal year ending June 30, 2012 and shall be adjusted by the rate of return on the actuarial value of assets.

     The retirement system shall annually certify to each employer the contributions due to the contingent reserve fund for the liability under P.L.2009, c.19.  The contributions certified by the retirement system shall be paid by the employer to the retirement 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% per year shall be assessed against the unpaid balance on the first day after the thirtieth day.

     (10) The treasurer or corresponding officer of the employer shall pay to the State Treasurer no later than April 1 of the State's fiscal year in which payment is due the amount so certified as payable by the employer, and shall pay monthly to the State Treasurer the amount of the deductions from the salary of the members in the employ of the employer, and the State Treasurer shall credit such amount to the appropriate fund or funds, of the retirement system.

     If payment of the full amount of the employer's obligation is not made within 30 days of the due date established by this act, interest at the rate of 10% per annum shall commence to run against the unpaid balance thereof on the first day after such 30th day.

     If payment in full, representing the monthly 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 10% per annum shall commence to run against the total transmittal of salary deductions for the period on the first day after such 15th day.

     (11) The expenses of administration of the retirement system shall be paid by the State of New Jersey.  Each employer shall reimburse the State for a proportionate share of the amount paid by the State for administrative expense.  This proportion shall be computed as the number of members under the jurisdiction of such employer bears to the total number of members in the system.  The pro rata share of the cost of administrative expense shall be included with the certification by the retirement system of the employer's contribution to the system.

     (12) Notwithstanding anything to the contrary, the retirement system shall not be liable for the payment of any pension or other benefits on account of the employees or beneficiaries of any employer participating in the retirement system, for which reserves have not been previously created from funds, contributed by such employer or its employees for such benefits.

     (13) (Deleted by amendment, P.L.1992, c.125.)

     (14) Commencing with valuation year 1991, with payment to be made in Fiscal Year 1994, the Legislature shall annually appropriate and the State Treasurer shall pay into the pension accumulation fund of the retirement system an amount equal to 1.1% of the compensation of the members of the system for the valuation year to fund the benefits provided by section 16 of P.L.1964, c.241 (C.43:16A-11.1), as amended by P.L.1979, c.109.

     (15) If the valuation assets are insufficient to fund the normal and accrued liability costs attributable to P.L.1999, c.428 (C.43:16A-15.8 et al.) as provided hereinabove, the normal and unfunded accrued liability contributions required to fund these costs for the State and other employers shall be paid by the State.

     (16) The savings realized as a result of the amendments to this section by P.L.2001, c.44 in the payment of normal contributions computed by the actuary for the valuation periods ending June 30, 1998 for employers other than the State shall be used solely and exclusively by a county or municipality for the purpose of reducing the amount that is required to be raised by the local property tax levy by the county for county purposes or by the municipality for municipal purposes, as appropriate.  The Director of the Division of Local Government Services in the Department of Community Affairs shall certify for each year that each county or municipality has complied with the requirements set forth herein.  If the director finds that a county or municipality has not used the savings solely and exclusively for the purpose of reducing the amount that is required to be raised by the local property tax levy by the county for county purposes or by the municipality for municipal purposes, as appropriate, the director shall direct the county or municipal governing body, as appropriate, to make corrections to its budget.

     (17)  When the system has an unfunded accrued liability as determined by the actuary, the actuary of the system shall make a recommendation to the board with regard to how an amount resulting from an increase in the contribution rate set forth in paragraphs (i) and (ii) of subsection (2) of this section, as may be required by the board, will be recognized and allocated in an annual valuation report.  In no event shall that resulting amount be allocated toward the payment of the unfunded accrued liability that is the result, as determined by the actuary, of an employer not making the full payment of the certified annual actuarially required contribution as determined in the valuation of the system by the actuary, and including any loss of interest or earnings on those contributions not made, and of changes in investment interest or earnings. 

     The responsibility for the portion of any unfunded accrued liability that is not attributable to the employer not making the full certified contributions, the loss of interest or earnings on those contributions, and changes in investment interest and earnings shall be allocated equally between members and employers.  A reduction in the unfunded accrued liability resulting from a modification of benefits pursuant to this act, P.L.  , c.   (C.   )(pending before the Legislature as this bill), shall be solely attributable to the portion of unfunded accrued liability allocated to the members.  An unfunded liability that accrues after the effective date of this act the responsibility for which is shared equally by the employers and members shall be amortized using a 30-year closed amortization period.

     (18)  Upon the request of the board of trustees, the actuary of the system shall make a recommendation in the annual valuation report with regard to the contribution rate or rates for members of the system, based on the valuation of the assets and liabilities and the funded ratio of the system, in order to attain and maintain the financial condition of the system that the board has determined to be reasonable, necessary, and appropriate.  The board in making such a determination may consider the standards set or recommended by relevant national authorities for the financial condition of such similar systems and may consider the standards of the Governmental Accounting Standards Board for the purpose of valuing the assets and liabilities and calculating the funded ratio of the system. 

(cf: P.L.2010, c.1, s.32)

 

     25.  Section 38 of P.L.1965, c.89 (C.53:5A-38) is amended to read as follows:

     38.  a.  (1) There shall be deducted from the payroll of each active member of the system  7  1/2  % of the amount of his salary, which shall be turned over to the State  Treasurer and be credited by him to the account of the State Police Retirement  System. 

     (2)  For the valuation period commencing after the effective date of P.L.  , c.   (pending before the Legislature as this bill) and for each period thereafter, the contribution rate for a member, expressed as a percentage of salary, shall be equal to the employer contribution, expressed as a percentage of the salary base, the sum of which percentage amounts shall equal the normal cost of the retirement system as determined in the annual valuation by the actuary, except that, at the commencement of the valuation period commencing after the effective date of P.L.   , c.     (pending before the Legislature as this bill), (a) if the contributions of members based on the rate set forth in paragraph (1) of this subsection represent 40% or less of the normal cost of the retirement system, then the contribution rate set forth above in this paragraph shall not become effective and the contribution rate set forth in paragraph (1) of this subsection shall continue in effect until the board increases, based on the recommendation of the actuary, the member contribution rate, or (b) if the contributions of members based on the rate set forth in paragraph (1) of this subsection represent more than 50% of the normal cost of the retirement system, then the contribution rate set forth in paragraph (1) of this subsection shall continue in effect, until the board adjusts that rate.  The provision of this paragraph may commence on such date prior to the commencement of the valuation period commencing after the effective date as the board shall determine.

     (3)  The board of trustees shall establish, after consultation with and recommendation of the actuary of the system, an additional contribution rate for the benefit specified in subsection d. of section 2 of P.L.1958, c.143 (C.43:3B-2), and for any enhancement of a benefit the board has authorized.

     (4)  The board of trustees is authorized to make such annual uniform adjustment to a contribution rate of each member set forth in this section as the board deems reasonable, necessary, and appropriate after consultation with and recommendation of the actuary of the system.  Any adjustment to a contribution rate shall be made at such time and in such manner as the board shall determine.

     b. The deductions provided for herein shall be made notwithstanding that  the minimum salary provided for by law for any member shall be reduced thereby.  Every member shall be deemed to consent and agree to the deductions made and  provided for herein, and payment of salary or compensation less said deductions  shall be a full and complete discharge and acquittance of all claims and  demands whatsoever for the service rendered by such person during the period  covered by such payment, except as to the benefits provided under this act.

(cf:  P.L.1980, c.55, s.6)

 

     26.  N.J.S.18A:66-36 is amended to read as follows:

     18A:66-36.   Should a member of the Teachers' Pension and Annuity Fund, after having completed 10 years of service, be separated voluntarily or involuntarily from the service, before reaching service retirement age, and not by removal for conduct unbecoming a teacher or other just cause under the provisions of N.J.S.18A:28-4 to 18A:28-5 and 18A:28-9 to 18A:28-13 inclusive, such person may elect to receive, in lieu of the payment provided in N.J.S.18A:66-34:

     a.     The payments provided for in N.J.S.18A:66-37, if he so qualified under said section; or

     b.    A deferred retirement allowance beginning at age 60, or for a person who becomes a member of the retirement system on or after the effective date of P.L.2008, c.89 beginning at age 62, which shall be made up of an annuity derived from the member's accumulated deductions at the time of his severance from the service, and a pension in the amount which, when added to the member's annuity, will provide a total retirement allowance of (1) 1/64 of final compensation for each year of service credited as Class A service and 1/55 of final compensation for each year of service credited as class B service prior to the effective date of P.L.    , c.  (pending before the Legislature as this bill) and 1/60 of final compensation for each year of service credited on or after that effective date, or (2) 1/55 of final compensation for each year of service credited as class B service on and after the effective date of P.L.    , c.  (pending before the Legislature as this bill) if the member has contributed the rate of compensation established by the board pursuant to N.J.S.18A:66-29, or (3) for a person who becomes a member of the retirement system on or after the effective date of P.L.2010, c.1, 1/60 of final compensation for each year of service credited as class B service, calculated in accordance with N.J.S.18A:66-44, with optional privileges provided for in N.J.S.18A:66-47 if he exercises such optional privilege at least 30 days before his attainment of the normal retirement age; provided, that such election is communicated by such member to the retirement system in writing stating at what time subsequent to the execution and filing thereof he desires to be retired; and provided, further, that such member may later elect: (1) to receive the payments provided for in N.J.S.18A:66-37, if he had qualified under that section at the time of leaving service, except that in order to avail himself of the optional privileges pursuant to N.J.S.18A:66-47, he must exercise such optional privilege at least 30 days before the effective date of his retirement; or (2) to withdraw his accumulated deductions with interest as provided in N.J.S.18A:66-34.  If such member shall die before attaining service retirement age, then his accumulated deductions, plus regular interest after January 1, 1956, shall be paid in accordance with N.J.S.18A:66-38, and, in addition if such member shall die after attaining service retirement age and has not withdrawn his accumulated deductions, an amount equal to 3/16 of the compensation upon which contributions by the member to the annuity savings fund were based in the last year of creditable service shall be paid to such member's beneficiary.

     Any member who, having elected to receive a deferred retirement allowance, again becomes an employee covered by the retirement system while under the age of 60 or, if that person became a member of the retirement system on or after the effective date of P.L.2008, c.89, while under the age of 62, shall thereupon be reenrolled.  If he had discontinued his service for more than two consecutive years, subsequent contributions shall be at a rate applicable to the age resulting from the subtraction of his years of creditable service at the time of his last discontinuance of contributing membership from his age at the time of his return to service. He shall be credited with all service as a member standing to his credit at the time of his election to receive a deferred retirement allowance.

(cf: P.L.2010, c.1, s.8)


     27.  N.J.S.18A:66-37 is amended to read as follows:

     18A:66-37.  Should a member resign after having established 25 years of creditable service before reaching age 60, or before reaching the age of 62 if the person became a member of the retirement system on or after the effective date of P.L.2008, c.89, the member may elect "early retirement," provided, that such election is communicated by such member to the retirement system by filing a written application, duly attested, stating at what time subsequent to the execution and filing thereof the member desires to be retired. The member shall receive, in lieu of the payment provided in N.J.S.18A:66-34, an annuity which is the actuarial equivalent of the member's accumulated deductions and a pension in the amount which, when added to the member's annuity, will provide a total retirement allowance of (1) 1/64 of the member's final compensation for each year of service credited as class A service and 1/55 of the member's final compensation for each year of service credited as class B service prior to the effective date of P.L.    , c.  (pending before the Legislature as this bill) and 1/60 of final compensation for each year of service credited on or after that effective date, or (2) 1/55 of final compensation for each year of service credited as class B service on and after the effective date of P.L.    , c.  (pending before the Legislature as this bill) if the member has contributed the rate of compensation established by the board pursuant to N.J.S.18A:66-29, or (3) for a person who becomes a member of the retirement system on or after the effective date of P.L.2010, c.1, 1/60 of final compensation for each year of service credited as class B service, calculated in accordance with N.J.S.18A:66-44, reduced:

     (a)   by 1/4 of 1% for each month that the member lacks of being age 55; or

     (b)   for a person who becomes a member of the retirement system on or after July 1, 2007, by 1/4 of 1% for each month that the member lacks of being age 55 and by 1/12 of 1% for each month that the member lacks of being age 60 but over age 55; or

     (c)   for a person who becomes a member of the retirement system on or after the effective date of P.L.2008, c.89, by 1/4 of 1% for each month that the member lacks of being age 55 and by 1/12 of 1% for each month that the member lacks of being age 62 but over age 55; provided, however, that upon the receipt of proper proofs of the death of such a member there shall be paid to the member's beneficiary an amount equal to 3/16 of the compensation upon which contributions by the member to the annuity savings fund were based in the last year of creditable service or in the year of the member's highest contractual salary, whichever is higher.

     Subparagraph (b) or (c) of this section shall not apply to a person who at the time of enrollment in the retirement system on or after July 1, 2007 transfers service credit from another State-administered retirement system pursuant to N.J.S.18A:66-15.1, but shall apply to a former member of the retirement system who has been granted a retirement allowance and is reenrolled in the retirement system on or after July 1, 2007 pursuant to N.J.S.18A:66-53.2 after becoming employed again in a position that makes the person eligible to be a member of the retirement system.

     The board of trustees shall retire the member at the time specified or at such other time within one month after the date so specified as the board finds advisable.

(cf: P.L.2010, c.1, s.9)

 

     28.  N.J.S.18A:66-44 is amended to read as follows:

     18A:66-44. A member, upon retirement for service, shall receive a retirement allowance consisting of:

     (a)   an annuity which shall be the actuarial equivalent of his accumulated deductions, together with interest after January 1, 1956, less any excess contributions as provided in N.J.S.18A:66-20; and

     (b)   a pension in the amount which, when added to the member's annuity, will provide a total retirement allowance of (1) 1/64 of final compensation for each year of service credited as class A service and 1/55 of final compensation for each year of service credited as class B service prior to the effective date of P.L.    , c.  (pending before the Legislature as this bill) and 1/60 of final compensation for each year of service credited on or after that effective date, or (2) 1/55 of final compensation for each year of service credited as class B service on and after the effective date of P.L.    , c.  (pending before the Legislature as this bill) if the member has contributed the rate of compensation established by the board pursuant to N.J.S.18A:66-29, or (3) for a person who becomes a member of the retirement system on or after the effective date of P.L.2010, c.1, 1/60 of final compensation for each year of service credited as class B service.

     Upon the receipt of proper proofs of the death of a member who has retired on a service retirement allowance, there shall be paid to the member's beneficiary, an amount equal to 3/16 of the compensation upon which contributions by the member to the annuity savings fund were based in the last year of creditable service or in the year of the member's highest contractual salary, whichever is higher.

(cf: P.L.2010, c.1, s.10)

 

     29.  Section 38 of P.L.1954, c.84 (C.43:15A-38) is amended to read as follows:

     38.  Should a member of the Public Employees' Retirement System, after having completed 10 years of service, be separated voluntarily or involuntarily from the service, before reaching service retirement age, and not by removal for cause on charges of misconduct or delinquency, such person may elect to receive:

     (a)   The payments provided for in section 41b. of this act, if he so qualifies under said section; or

     (b)   A deferred retirement allowance, beginning at the retirement age, which shall be made up of an annuity derived from the accumulated deductions standing to the credit of the individual member's account in the annuity savings fund at the time of his severance from the service together with regular interest, and a pension which when added to the annuity will produce a total retirement allowance of (1) 1/64 of final compensation for each year of service credited as Class A service and 1/55 of final compensation for each year of service credited as Class B service prior to the effective date of P.L.    , c.  (pending before the Legislature as this bill) and 1/60 of final compensation for each year of service credited on or after that effective date, or (2) 1/55 of final compensation for each year of service credited as class B service on and after the effective date of P.L.    , c.  (pending before the Legislature as this bill) if the member has contributed the rate of compensation established by the board pursuant to subsection b. of section 25 of P.L.1954, c.84 (C.43:15A-25), or (3) for a person who becomes a member of the retirement system on or after the effective date of P.L.2010, c.1, 1/60 of final compensation for each year of service credited as Class B service, calculated in accordance with section 48 of this act, with optional privileges provided for in section 50 of this act if he exercises such optional privilege at least 30 days before his attainment of the normal retirement age; provided, that such election is communicated by such member to the retirement system in writing stating at what time subsequent to the execution and filing thereof he desires to be retired; and provided further, that such member, as referred to in this subsection may later elect:  (1) to receive the payments provided for in section 41b. of this act, if he had qualified under that section at the time of leaving service, except that in order to avail himself of the optional privileges pursuant to section 50, he must exercise such optional privilege at least 30 days before the effective date of his retirement; or (2) to withdraw his accumulated deductions with interest as provided in section 41a.  If such member shall die before attaining service retirement age then his accumulated deductions, plus regular interest, shall be paid in accordance with section 41c.; or if such member shall die after attaining service retirement age and has not withdrawn his accumulated deductions, an amount equal to 3/16 of the compensation received by the member in the last year of creditable service shall be paid to such person, if living, as he shall have nominated by written designation duly executed and filed with the retirement system; otherwise to the executor or administrator of the member's estate.

(cf: P.L.2010, c.1, s.11)


     30.  Section 41 of P.L.1954, c.84 (C.43:15A-41) is amended to read as follows:

     41.  a. A member who withdraws from service or ceases to be an employee for any cause other than death or retirement shall, upon the filing of an application therefor, receive all of his accumulated deductions standing to the credit of his individual account in the annuity savings fund, plus regular interest, less any outstanding loan, except that for any period after June 30, 1944, the interest payable shall be such proportion of the interest determined at the regular rate of 2% per annum bears to the regular rate of interest, and except that no interest shall be payable in the case of a member who has less than three years of membership credit for which he has made contributions. He shall cease to be a member two years from the date he discontinued service as an eligible employee, or, if prior thereto, upon payment to him of his accumulated deductions. If any such person or member shall die before withdrawing or before endorsing the check constituting the return of his accumulated deductions, such deductions shall be paid to the member's beneficiary. No member shall be entitled to withdraw the amounts contributed by his employer covering his military leave unless he shall have returned to the payroll and contributed to the retirement system for a period of 90 days.

     b.    Should a member resign after having established 25 years of creditable service before reaching age 60, or before reaching age 62 if the person became a member of the retirement system on or after the effective date of P.L.2008, c.89, he may elect "early retirement," provided, that such election is communicated by such member to the retirement system by filing a written application, duly attested, stating at what time subsequent to the execution and filing thereof he desires to be retired. He shall receive, in lieu of the payment provided in subsection a. of this section, an annuity which is the actuarial equivalent of his accumulated deductions together with regular interest, and a pension in the amount which, when added to the member's annuity, will provide a total retirement allowance of (1) 1/64 of final compensation for each year of service credited as Class A service and 1/55 of final compensation for each year of service credited as Class B service prior to the effective date of P.L.    , c.    (pending before the Legislature as this bill) and 1/60 of final compensation for each year of service credited on or after that effective date, or (2) 1/55 of final compensation for each year of service credited as class B service on and after the effective date of P.L.    , c.  (pending before the Legislature as this bill) if the member has contributed the rate of compensation established by the board pursuant to subsection b. of section 25 of P.L.1954, c.84 (C.43:15A-25), or (3) for a person who becomes a member of the retirement system on or after the effective date of P.L.2010, c.1, 1/60 of final compensation for each year of service credited as Class B service, calculated in accordance with section 48 (C.43:15A-48) of this act, reduced:

     (a)   by 1/4 of 1% for each month that the member lacks of being age 55; or

     (b)   for a person who becomes a member of the retirement system on or after July 1, 2007, by 1/4 of 1% for each month that the member lacks of being age 55 and by 1/12 of 1% for each month that the member lacks of being age 60 but over age 55; or

     (c)   for a person who becomes a member of the retirement system on or after the effective date of P.L.2008, c.89, by 1/4 of 1% for each month that the member lacks of being age 55 and by 1/12 of 1% for each month that the member lacks of being age 62 but over age 55; provided, however, that upon the receipt of proper proofs of the death of such a member there shall be paid to his beneficiary an amount equal to three-sixteenths of the compensation upon which contributions by the member to the annuity savings fund were based in the last year of creditable service.

     Paragraph (b) or (c) of this subsection shall not apply to a person who at the time of enrollment in the retirement system on or after July 1, 2007 transfers service credit from another State-administered retirement system pursuant to section 14 of P.L.1954, c.84 (C.43:15A-14), but shall apply to a former member of the retirement system who has been granted a retirement allowance and is reenrolled in the retirement system on or after July 1, 2007 pursuant to section 27 of P.L.1966, c.217 (C.43:15A-57.2) after becoming employed again in a position that makes the person eligible to be a member of the retirement system.

     The board of trustees shall retire him at the time specified or at such other time within one month after the date so specified as the board finds advisable.

     c.     Upon the receipt of proper proofs of the death of a member in service on account of which no accidental death benefit is payable under section 49 there shall be paid to such member's beneficiary:

     (1)   The member's accumulated deductions at the time of death together with regular interest; and

     (2)   An amount equal to one and one-half times the compensation upon which contributions by the member to the annuity savings fund were based in the last year of creditable service.

(cf: P.L.2010, c.1, s.12)

 

     31.  Section 48 of P.L.1954, c.84 (C.43:15A-48) is amended to read as follows:

     48.  A member, upon retirement for service, shall receive a retirement allowance consisting of:

     a.     An annuity which shall be the actuarial equivalent of his accumulated deductions together with regular interest; and

     b.    A pension in the amount which, when added to the member's annuity, will provide a total retirement allowance of (1) 1/64 of final compensation for each year of service credited as Class A service and 1/55 of final compensation for each year of service credited as Class B service prior to the effective date of P.L.    , c.  (pending before the Legislature as this bill) and 1/60 of final compensation for each year of service credited on or after that effective date, or (2) 1/55 of final compensation for each year of service credited as class B service on and after the effective date of P.L.    , c.  (pending before the Legislature as this bill) if the member has contributed the rate of compensation established by the board pursuant to subsection b. of section 25 of P.L.1954, c.84 (C.43:15A-25), or (3) for a person who becomes a member of the retirement system on or after the effective date of P.L.2010, c.1, 1/60 of final compensation for each year of service credited as Class B service.

     c.     Upon the receipt of proper proofs of the death of a member who has retired on a service retirement allowance, there shall be paid to the member's beneficiary, an amount equal to 3/16 of the compensation upon which contributions by the member to the annuity savings fund were based in the last year of creditable service.

(cf: P.L.2010, c.1, s.13)

 

     32.  Section 33 of P.L.1973, c.140 (C.43:6A-33) is amended to read as follows:

     33.  a. Upon the basis of the tables recommended by the actuary which the commission adopts and regular interest, the actuary shall compute annually, beginning as of June 30, 1992, the amount of the contribution which shall be the normal cost as computed under the projected unit credit method attributable to service rendered under the retirement system for the year beginning on July 1 immediately succeeding the date of the computation.  This shall be known as the "normal contribution."

     b.    Upon the basis of the tables recommended by the actuary which the commission adopts and regular interest, the actuary shall annually determine if there is an amount of the accrued liability of the retirement system, computed under the projected unit credit method, which is not already covered by the assets of the retirement system, valued in accordance with the asset valuation method established in this section.  This shall be known as the "unfunded accrued liability."  If there was no unfunded accrued liability for the valuation period immediately preceding the current valuation period, the actuary, using the total amount of this unfunded accrued liability, shall compute the initial amount of contribution which, if the contribution is increased at a specific rate and paid annually for a specific period of time, will amortize this liability.  The [State Treasurer] commission shall determine, upon the advice of the Director of the Division of Pensions and Benefits, the [commission] State Treasurer and the actuary, the rate of increase for the contribution and the time period for full funding of this liability, which shall not exceed 30 years. This shall be known as the "accrued liability contribution." Thereafter, any increase or decrease in the unfunded accrued liability as a result of actuarial losses or gains for subsequent valuation years shall serve to increase or decrease, respectively, the amortization period for the unfunded accrued liability, unless an increase in the amortization period will cause it to exceed 30 years.  If an increase in the amortization period as a result of actuarial losses for a valuation year would exceed 30 years, the accrued liability contribution shall be computed for the valuation year in the same manner provided for the computation of the initial accrued liability contribution under this section.  The State may pay all or any portion of its unfunded accrued liability under the retirement system from any source of funds legally available for the purpose, including, without limitation, the proceeds of bonds authorized by law for this purpose.

     After consultation with and recommendation of the actuary, the commission shall require, for the valuation period commencing after the effective date of P.L.   , c.   (pending before the Legislature as this bill) and for each period thereafter, the acceleration of payments by the State for the unfunded accrued liability over such a designated period of time as  the commission determines to be reasonable, necessary, and appropriate.

     The value of the assets to be used in the computation of the contributions provided for under this section for valuation periods shall be the value of the assets for the preceding valuation period increased by the regular interest rate, plus the net cash flow for the valuation period (the difference between the benefits and expenses paid by the system and the contributions to the system) increased by one half of the regular interest rate, plus 20% of the difference between this expected value and the full market value of the assets as of the end of the valuation period.  This shall be known as the "valuation assets."  Notwithstanding the first sentence of this paragraph, the valuation assets for the valuation period ending June 30, 1996 shall be the full market value of the assets as of that date and shall include the proceeds from the bonds issued pursuant to the Pension Bond Financing Act of 1997, P.L.1997, c.114 (C.34:1B-7.45 et seq.), paid to the system by the New Jersey Economic Development Authority to fund the unfunded accrued liability of the system.

     "Excess valuation assets" means the valuation assets for a valuation period less the actuarial accrued liability for the valuation period, if the sum is greater than zero.  If there are excess valuation assets for the valuation period ending June 30, 1996, the normal contributions for the valuation periods ending June 30, 1996 and June 30, 1997 which have not yet been paid to the retirement system shall be reduced to the extent possible by the excess valuation assets, provided that the General Fund balances that would have been paid to the retirement system except for this provision shall first be allocated as State aid to public schools to the extent that additional sums are required to comply with the May 14, 1997 decision of the New Jersey Supreme Court in Abbott v. Burke.  If there are excess valuation assets for a valuation period ending after June 30, 1996, the State Treasurer may reduce the normal contribution payable for the next valuation period as follows:

     (1)   for valuation periods ending June 30, 1997 through June 30, 2001, to the extent possible by up to 100% of the excess valuation assets;

     (2)   for the valuation period ending June 30, 2002, to the extent possible by up to 84% of the excess valuation assets;

     (3)   for the valuation period ending June 30, 2003, to the extent possible by up to 68% of the excess valuation assets; and

     (4)   for valuation periods ending  June 30, 2004 through June 30, 2007, to the extent possible by up to 50% of the excess valuation assets.

     c.     The actuary shall certify annually the aggregate amount payable to the contingent reserve fund in the ensuing year, which amount shall be equal to the sum of the amounts described in this section.  The State shall pay into the contingent reserve fund during the ensuing year the amount so determined.

     The cash death benefits, payable as the result of contribution by the State under the provisions of this act upon the death of a member in active service and after retirement, shall be paid from the contingent reserve fund.

     d.    (Deleted by amendment, P.L.1992, c.125.)

     e.     When the system has an unfunded accrued liability as determined by the actuary, the actuary of the system shall make a recommendation to the commission with regard to how an amount resulting from an increase in the contribution rate set forth in paragraphs (1) and (2) of subsection b. of section 26 of P.L.1981, c.470 (C.43:6A-34.1), as may be required by the commission, will be recognized and allocated in an annual valuation report. In no event shall that resulting amount be allocated toward the payment of the unfunded accrued liability that is the result, as determined by the actuary, of the employer not making the full payment of the certified annual actuarially required contribution as determined in the valuation of the system by the actuary, and including any loss of interest or earnings on those contributions not made, and of changes in investment interest or earnings. 

     The responsibility for the portion of any unfunded accrued liability that is not attributable to the employer not making the full certified contributions, the loss of interest or earnings on those contributions, and changes in investment interest and earnings shall be allocated equally between members and employers.  A reduction in the unfunded accrued liability resulting from a modification of benefits pursuant to this act, P.L.  , c.   (C.   )(pending before the Legislature as this bill), shall be solely attributable to the portion of unfunded accrued liability allocated to the members.  An unfunded liability that accrues after the effective date of this act the responsibility for which is shared equally by the employers and members shall be amortized using a 30-year closed amortization period.

     f.     Upon the request of the commission, the actuary of the system shall make a recommendation in the annual valuation report with regard to the contribution rate or rates for members of the system, based on the valuation of the assets and liabilities and the funded ratio of the system, in order to attain and maintain the financial condition of the system that the commission has determined to be reasonable, necessary, and appropriate.  The commission in making such a determination may consider the standards set or recommended by relevant national authorities for the financial condition of such similar systems and may consider the standards of the Governmental Accounting Standards Board for the purpose of valuing the assets and liabilities and calculating the funded ratio of the system. 

(cf:  P.L.2007, c.92, s.25)

 

     33.  Section 24 of P.L.1954, c.84 (C.43:15A-24) is amended to read as follows:

     24.  The contingent reserve fund shall be the fund in which shall be credited contributions made by the State and other employers.

     a.     Upon the basis of the tables recommended by the actuary which the board adopts and regular interest, the actuary shall compute annually, beginning as of March 31, 1992, the amount of contribution which shall be the normal cost as computed under the projected unit credit method attributable to service rendered under the retirement system for the year beginning on July 1 immediately succeeding the date of the computation.  This shall be known as the "normal contribution."

     b.    With respect to employers other than the State, upon the basis of the tables recommended by the actuary which the board adopts and regular interest, the actuary shall compute the amount of the accrued liability of the retirement system as of March 31, 1992 under the projected unit credit method, excluding the liability for pension adjustment benefits for active employees funded pursuant to section 2 of P.L.1990, c.6 (C.43:15A-24.1), which is not already covered by the assets of the retirement system, valued in accordance with the asset valuation method established in this section. Using the total amount of this unfunded accrued liability, the actuary shall compute the initial amount of contribution which, if the contribution is increased at a specific rate and paid annually for a specific period of time, will amortize this liability.  The [State Treasurer] board shall determine, upon the advice of the Director of the Division of Pensions and Benefits, the [board of trustees] State Treasurer and the actuary, the rate of increase for the contribution and the time period for full funding of this liability, which shall not exceed 40 years on initial application of this section as amended by this act, P.L.1994, c.62.  This shall be known as the "accrued liability contribution." Any increase or decrease in the unfunded accrued liability as a result of actuarial losses or gains for the 10 valuation years following valuation year 1992 shall serve to increase or decrease, respectively, the unfunded accrued liability contribution. Thereafter, any increase or decrease in the unfunded accrued liability as a result of actuarial losses or gains for subsequent valuation years shall serve to increase or decrease, respectively, the amortization period for the unfunded accrued liability, unless an increase in the amortization period will cause it to exceed 30 years. If an increase in the amortization period as a result of actuarial losses for a valuation year would exceed 30 years, the accrued liability contribution shall be computed for the valuation year in the same manner provided for the computation of the initial accrued liability contribution under this section.

     With respect to the State, upon the basis of the tables recommended by the actuary which the commission adopts and regular interest, the actuary shall annually determine if there is an amount of the accrued liability of the retirement system, computed under the projected unit credit method, which is not already covered by the assets of the retirement system, valued in accordance with the asset valuation method established in this section.  This shall be known as the "unfunded accrued liability."  If there was no unfunded accrued liability for the valuation period immediately preceding the current valuation period, the actuary, using the total amount of this unfunded accrued liability, shall compute the initial amount of contribution which, if the contribution is increased at a specific rate and paid annually for a specific period of time, will amortize this liability.  The [State Treasurer] board of trustees shall determine, upon the advice of the Director of the Division of Pensions and Benefits, the [commission] State Treasurer and the actuary, the rate of increase for the contribution and the time period for full funding of this liability, which shall not exceed 30 years.  This shall be known as the "accrued liability contribution."  Thereafter, any increase or decrease in the unfunded accrued liability as a result of actuarial losses or gains for subsequent valuation years shall serve to increase or decrease, respectively, the amortization period for the unfunded accrued liability, unless an increase in the amortization period will cause it to exceed 30 years.  If an increase in the amortization period as a result of actuarial losses for a valuation year would exceed 30 years, the accrued liability contribution shall be computed for the valuation year in the same manner provided for the computation of the initial accrued liability contribution under this section.  The State may pay all or any portion of its unfunded accrued liability under the retirement system from any source of funds legally available for the purpose, including, without limitation, the proceeds of bonds authorized by law for this purpose.

     After consultation with and recommendation of the actuary, the board shall require, for the valuation period commencing after the effective date of P.L.   , c.   (pending before the Legislature as this bill) and for each period thereafter, the acceleration of payments by all employers for the unfunded accrued liability over such a designated period of time as  the board determines to be reasonable, necessary, and appropriate.

     The value of the assets to be used in the computation of the contributions provided for under this section for valuation periods shall be the value of the assets for the preceding valuation period increased by the regular interest rate, plus the net cash flow for the valuation period (the difference between the benefits and expenses paid by the system and the contributions to the system) increased by one half of the regular interest rate, plus 20% of the difference between this expected value and the full market value of the assets as of the end of the valuation period.  This shall be known as the "valuation assets."  Notwithstanding the first sentence of this paragraph, the valuation assets for the valuation period ending March 31, 1996 shall be the full market value of the assets as of that date and, with respect to the valuation assets allocated to the State, shall include the proceeds from the bonds issued pursuant to the "Pension Bond Financing Act of 1997," P.L.1997, c.114 (C.34:1B-7.45 et seq.), paid to the system by the New Jersey Economic Development Authority to fund the unfunded accrued liability of the system.  Notwithstanding the first sentence of this paragraph, the valuation assets for the valuation period ending June 30, 1999 shall be the full market value of the assets as of that date.

     "Excess valuation assets" for a valuation period means, with respect to the valuation assets allocated to the State:

     (1)   the valuation assets allocated to the State; less

     (2)   the actuarial accrued liability of the State for basic benefits and pension adjustment benefits under the retirement system; less

     (3)   the contributory group insurance premium fund, created by section 4 of P.L.1955, c.214 (C.43:15A-91), as amended by section 4 of P.L.1960, c.79; less

     (4)   the post retirement medical premium fund, created pursuant to section 2 of P.L.1990, c.6 (C.43:15A-24.1), as amended by section 8 of P.L.1994, c.62; less

     (5)   the present value of the projected total normal cost for pension adjustment benefits in excess of the projected total phased-in normal cost for pension adjustment benefits for the State authorized by section 2 of P.L.1990, c.6 (C.43:15A-24.1) over the full phase-in period, determined in the manner prescribed for the determination and amortization of the unfunded accrued liability of the system, if the sum of the foregoing items is greater than zero.

     "Excess valuation assets" for a valuation period means, with respect to the valuation assets allocated to other employers:

     (1)   the valuation assets allocated to the other employers; less

     (2)   the actuarial accrued liability of the other employers for basic benefits and pension adjustment benefits under the retirement system, excluding the unfunded accrued liability for early retirement incentive benefits pursuant to P.L.1991, c.229, P.L.1991, c.230, P.L.1993, c.138, and P.L.1993, c.181, for employers other than the State; less

     (3)   the contributory group insurance premium fund, created by section 4 of P.L.1955, c.214 (C.43:15A-91), as amended by section 4 of P.L.1960, c.79; less

     (4)   the present value of the projected total normal cost for pension adjustment benefits in excess of the projected total phased-in normal cost for pension adjustment benefits for the other employers authorized by section 2 of P.L.1990, c.6 (C.43:15A-24.1) over the full phase-in period, determined in the manner prescribed for the determination and amortization of the unfunded accrued liability of the system, if the sum of the foregoing items is greater than zero.

     If there are excess valuation assets allocated to the State or to the other employers for the valuation period ending March 31, 1996, the normal contributions payable by the State or by the other employers for the valuation periods ending March 31, 1996 and March 31, 1997 which have not yet been paid to the retirement system shall be reduced to the extent possible by the excess valuation assets allocated to the State or to the other employers, respectively, provided that with respect to the excess valuation assets allocated to the State, the General Fund balances that would have been paid to the retirement system except for this provision shall first be allocated as State aid to public schools to the extent that additional sums are required to comply with the May 14, 1997 decision of the New Jersey Supreme Court in Abbott v. Burke.  If there are excess valuation assets allocated to the State or to the other employers for a valuation period ending after March 31, 1996, the State Treasurer may reduce the normal contribution payable by the State or by the other employers for the next valuation period as follows:

     (1)   for valuation periods ending March 31, 1997 through March 31, 2001, to the extent possible by up to 100% of the excess valuation assets allocated to the State or to the other employers, respectively;

     (2)   for the valuation period ending March 31, 2002, to the extent possible by up to 84% of the excess valuation assets allocated to the State or to the other employers, respectively;

     (3)   for the valuation period ending March 31, 2003, to the extent possible by up to 68% of the excess valuation assets allocated to the State or to the other employers, respectively; and

     (4)   for valuation periods ending March 31, 2004 through June 30, 2007, to the extent possible by up to 50% of the excess valuation assets allocated to the State or to the other employers, respectively.

     For calendar years 1998 and 1999, the rate of contribution of members of the retirement system under section 25 of P.L.1954, c.84 (C.43:15A-25) shall be reduced by 1/2 of 1% from excess valuation assets and for calendar years 2000 and 2001, the rate of contribution shall be reduced by 2% from excess valuation assets. Thereafter, through calendar year 2007, the rate of contribution of members of the retirement system under that section for a calendar year shall be reduced equally with normal contributions to the extent possible, but not by more than 2%, from excess valuation assets if the State Treasurer determines that excess valuation assets shall be used to reduce normal contributions by the State and local employers for the fiscal year beginning immediately prior to the calendar year, or for the calendar year for local employers whose fiscal year is the calendar year, and excess valuation assets above the amount necessary to fund the reduction for that calendar year in the member contribution rate plus an equal reduction in the normal contribution shall be available for the further reduction of normal contributions, subject to the limitations prescribed by this subsection.

     If there are excess valuation assets after reductions in normal contributions and member contributions as authorized in the preceding paragraphs for a valuation period beginning with the valuation period ending June 30, 1999, an amount of excess valuation assets not to exceed the amount of the member contributions for the fiscal year in which the normal contributions are payable shall be credited to the benefit enhancement fund.  The amount of excess valuation assets credited to the benefit enhancement fund shall not exceed the present value of the expected additional normal contributions attributable to the provisions of P.L.2001, c.133 payable on behalf of the active members over the expected working lives of the active members in accordance with the tables of actuarial assumptions for the valuation period.  No additional excess valuation assets shall be credited to the benefit enhancement fund after the maximum amount is attained. Interest shall be credited to the benefit enhancement fund as provided under section 33 of P.L.1954, c.84 (C.43:15A-33).

     The normal contribution for the increased benefits for active employees under P.L.2001, c.133 shall be paid from the benefit enhancement fund.  If assets in the benefit enhancement fund are insufficient to pay the normal contribution for the increased benefits for a valuation period, the State shall pay the amount of normal contribution for the increased benefits not covered by assets from the benefit enhancement fund.

     c.     The retirement system shall certify annually the aggregate amount payable to the contingent reserve fund in the ensuing year, which amount shall be equal to the sum of the amounts described in this section.

     The State Treasurer shall reduce the normal and accrued liability contributions payable by employers other than the State, excluding the contribution payable from the benefit enhancement fund, to a percentage of the amount certified annually by the retirement system, which percentage shall be: for payments due in the State fiscal year ending June 30, 2005, 20%; for payments due in the State fiscal year ending June 30, 2006, not more than 40%; for payments due in the State fiscal year ending June 30, 2007, not more than 60%; and for payments due in the State fiscal year ending June 30, 2008, not more than 80%.

     The State Treasurer shall reduce the normal and accrued liability contributions payable by employers other than the State, excluding the contribution payable from the benefit enhancement fund, to 50 percent of the amount certified annually by the retirement system, for payments due in the State fiscal year ending June 30, 2009.  An employer that elects to pay the reduced normal and accrued liability contribution shall adopt a resolution, separate and apart from other budget resolutions, stating that the employer needs to pay the reduced contribution and providing an explanation of that need which shall include (1) a description of its inability to meet the levy cap without jeopardizing public safety, health, and welfare or without jeopardizing the fiscal stability of the employer, or (2) a description of another condition that offsets the long term fiscal impact of the payment of the reduced contribution.  An employer also shall document those actions it has taken to reduce its operating costs, or provide a description of relevant anticipated circumstances that could have an impact on revenues or expenditures.  This resolution shall be submitted to and approved by the Local Finance Board after making a finding that these fiscal conditions are valid and affirming the findings contained in the employer resolution.

     An employer that elects to pay 100 percent of the amount certified by the retirement system for the State fiscal year ending June 30, 2009 shall be credited with such payment and any such amounts shall not be included in the employer's unfunded liability.

     The actuaries for the retirement system shall determine the unfunded liability of the retirement system, by employer, for the reduced normal and accrued liability contributions provided under P.L.2009, c.19.  This unfunded liability shall be paid by the employer in level annual payments over a period of 15 years beginning with the payments due in the State fiscal year ending June 30, 2012 and shall be adjusted by the rate of return on the actuarial value of assets.

     The retirement system shall annually certify to each employer the contributions due to the contingent reserve fund for the liability under P.L.2009, c.19.  The contributions certified by the retirement system shall be paid by the employer to the retirement 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% per year shall be assessed against the unpaid balance on the first day after the thirtieth day.

     The State shall pay into the contingent reserve fund during the ensuing year the amount so determined.  The death benefits, payable as a result of contribution by the State under the provisions of this chapter upon the death of an active or retired member, shall be paid from the contingent reserve fund.

     d.    The disbursements for benefits not covered by reserves in the system on account of veterans shall be met by direct contributions of the State and other employers.

     e.  When the system has an unfunded accrued liability as determined by the actuary, the actuary of the system shall make a recommendation to the board with regard to how an amount resulting from an increase in the contribution rate set forth in paragraphs (1) and (2) of subsection b. of section 25 of P.L.1954, c.84 (C.43:15A-25), paragraphs (1) and (2) of subsection a. of section 2 of P.L.1972, c.167 (C.43:15A-136), paragraphs (1) and (2) of subsection b. of section 3 of P.L.2001, c.259 (C.43:15A-144), and paragraphs (1) and (2) of subsection b. of section 3 of P.L.2001, c.366 (C.43:15A-157), as may be required by the board, will be recognized and allocated in an annual valuation report. In no event shall that resulting amount be allocated toward the payment of the unfunded accrued liability that is the result, as determined by the actuary, of an employer not making the full payment of the certified annual actuarially required  contribution as determined in the valuation of the system by the actuary, and including any loss of interest or earnings on those contributions not made, and of changes in investment interest or earnings. 

     The responsibility for the portion of any unfunded accrued liability that is not attributable to the employer not making the full certified contributions, the loss of interest or earnings on those contributions, and changes in investment interest and earnings shall be allocated equally between members and the employers.  A reduction in the unfunded accrued liability resulting from a modification of benefits pursuant to this act, P.L.  , c.   (C.   ) (pending before the Legislature as this bill), shall be solely attributable to the portion of unfunded accrued liability allocated to the members.  An unfunded liability that accrues after the effective date of this act the responsibility for which is shared equally by the employers and members shall be amortized using a 30-year closed amortization period.

     f.  Upon the request of the board of trustees, the actuary of the system shall make a recommendation in the annual valuation report with regard to the contribution rate or rates for members of the system, based on the valuation of the assets and liabilities and the funded ratio of the system, in order to attain and maintain the financial condition of the system that the board has determined to be reasonable, necessary, and appropriate.  The board in making such a determination may consider the standards set or recommended by relevant national authorities for the financial condition of such similar systems and may consider the standards of the Governmental Accounting Standards Board for the purpose of valuing the assets and liabilities and calculating the funded ratio of the system. 

(cf:  P.L.2009, c.19, s.1)

 

     34.  N.J.S.18A:66-18 is amended to read as follows:

     18A:66-18.  The contingent reserve fund shall be the fund in which shall be credited contributions made by the State and other employers.

     a.     Upon the basis of the tables recommended by the actuary which the board of trustees adopts and regular interest, the actuary of the board shall compute annually, beginning as of March 31, 1992, the amount of contribution which shall be the normal cost as computed under the projected unit credit method attributable to service rendered under the retirement system for the year beginning on July 1 immediately succeeding the date of the computation. This shall be known as the "normal contribution."

     b.    Upon the basis of the tables recommended by the actuary which the board of trustees adopts and regular interest, the actuary of the board shall annually determine if there is an  amount of the accrued liability of the retirement system, computed under the projected unit credit method, including the liability for pension adjustment benefits for active employees funded pursuant to section 2 of P.L.1987, c.385 (C.18A:66-18.1), which is not already covered by the assets of the retirement system, valued in accordance with the asset valuation method established in this section. This shall be known as the "unfunded accrued liability."  If there was no unfunded accrued liability for the valuation period immediately preceding the current valuation period, the actuary, using the total amount of this unfunded accrued liability, shall compute the initial amount of contribution which, if the contribution is increased at a specific rate and paid annually for a specific period of time, will amortize this liability.  The [State Treasurer] board of trustees shall determine, upon the advice of the Director of the Division of Pensions and Benefits, the [board of trustees] State Treasurer and the actuary, the rate of increase for the contribution and the time period for full funding of this liability, which shall not exceed 30 years. This shall be known as the "accrued liability contribution." Thereafter, any increase or decrease in the unfunded accrued liability as a result of actuarial losses or gains for subsequent valuation years shall serve to increase or decrease, respectively, the amortization period for the unfunded accrued liability, unless an increase in the amortization period will cause it to exceed 30 years.  If an increase in the amortization period as a result of actuarial losses for a valuation year would exceed 30 years, the accrued liability contribution shall be computed for the valuation year in the same manner provided for the computation of the initial accrued liability contribution under this section.  The State may pay all or any portion of its unfunded accrued liability under the retirement system from any source of funds legally available for the purpose, including, without limitation, the proceeds of bonds authorized by law for this purpose.

     After consultation with and recommendation of the actuary, the board shall require, for the valuation period commencing after the effective date of P.L.   , c.   (pending before the Legislature as this bill) and for each period thereafter, the acceleration of payments by the State and other employers for the unfunded accrued liability over such a designated period of time as the board determines to be reasonable, necessary, and appropriate.

     The value of the assets to be used in the computation of the contributions provided for under this section for valuation periods shall be the value of the assets for the preceding valuation period increased by the regular interest rate, plus the net cash flow for the valuation period (the difference between the benefits and expenses paid by the system and the contributions to the system) increased by one half of the regular interest rate, plus 20% of the difference between this expected value and the full market value of the assets as of the end of the valuation period.  This shall be known as the "valuation assets."  Notwithstanding the first sentence of this paragraph, the valuation assets for the valuation period ending March 31, 1996 shall be the full market value of the assets as of that date and shall include the proceeds from the bonds issued pursuant to the Pension Bond Financing Act of 1997, P.L.1997, c.114 (C.34:1B-7.45 et seq.), paid to the system by the New Jersey Economic Development Authority to fund the unfunded accrued liability of the system.  Notwithstanding the first sentence of this paragraph, the valuation assets for the valuation period ending June 30, 1999 shall be the full market value of the assets as of that date.

     "Excess valuation assets" for a valuation period means:

     (1)   the valuation assets; less

     (2)   the actuarial accrued liability for basic benefits and pension adjustment benefits, excluding the unfunded accrued liability for early retirement incentive benefits pursuant to P.L.1991, c.231 and P.L.1993, c.163 for employers other than the State; less

     (3)   the contributory group insurance premium fund created by N.J.S.18A:66-77; less

     (4)   the post-retirement medical premium fund created pursuant to section 2 of P.L.1987, c.385 (C.18A:66-18.1), as amended by section 3 of P.L.1994, c.62; less

     (5)   the present value of the projected total normal cost for pension adjustment benefits in excess of the projected total phased-in normal cost for pension adjustment benefits as originally authorized by section 2 of P.L.1987, c.385 (C.18A:66-18.1) over the full phase-in period, determined in the manner prescribed for the determination and amortization of the unfunded accrued liability of the system, if the sum of the foregoing items is greater than zero.

     If there are excess valuation assets for the valuation period ending March 31, 1996, the normal contributions for the valuation periods ending March 31, 1996 and March 31, 1997 which have not yet been paid to the retirement system shall be reduced to the extent possible by the excess valuation assets, provided that the General Fund balances that would have been paid to the retirement system except for this provision shall first be allocated as State aid to public schools to the extent that additional sums are required to comply with the May 14, 1997 decision of the New Jersey Supreme Court in Abbott v. Burke, and provided further that the normal contribution for the valuation period ending March 31, 1996 shall not be less than $54,000,000.  If there are excess valuation assets for a valuation period ending after March 31, 1996, the State Treasurer may reduce the normal contribution payable for the next valuation period as follows:

     (1)   for valuation periods ending March 31, 1997 through March 31, 2001, to the extent possible by up to 100% of the excess valuation assets;

     (2)   for the valuation period ending March 31, 2002, to the extent  possible by up to 84% of the excess valuation assets;

     (3)   for the valuation period ending March 31, 2003, to the extent possible by up to 68% of the excess valuation assets;  and

     (4)   for valuation periods ending  March 31, 2004 through June 30, 2007, to the extent possible by up to 50% of the excess valuation assets.

     For calendar years 1998 and 1999, the rate of contribution of members of the retirement system under N.J.S.18A:66-29 shall be reduced by 1/2 of 1% from excess valuation assets.  For calendar years 2000 and 2001, the rate of contribution of members of the retirement system shall be reduced equally with normal contributions to the extent possible, but not more than 1/2 of 1%, from excess valuation assets.  Thereafter, through calendar year 2007, the rate of contribution of members of the retirement system under that section for a calendar year shall be reduced equally with normal contributions to the extent possible, but not by more than 2%, from excess valuation assets if the State Treasurer determines that excess valuation assets shall be used to reduce normal contributions by the State for the fiscal year beginning immediately prior to the calendar year, and excess valuation assets above the amount necessary to fund the reduction for that calendar year in the member contribution rate plus an equal reduction in the normal contribution shall be available for the further reduction of normal contributions, subject to the limitations prescribed by this subsection.

     If there are excess valuation assets after reductions in normal contributions and member contributions as authorized in the preceding paragraphs for a valuation period beginning with the valuation period ending June 30, 1999, an amount of excess valuation assets not to exceed the amount of the member contributions for the fiscal year in which the normal contributions are payable shall be credited to the benefit enhancement fund.  The amount of excess valuation assets credited to the benefit enhancement fund shall not exceed the present value of the expected additional normal contributions attributable to the provisions of P.L.2001, c.133 payable on behalf of the active members over the expected working lives of the active members in accordance with the tables of actuarial assumptions for the valuation period.  No additional excess valuation assets shall be credited to the benefit enhancement fund after the maximum amount is attained.  Interest shall be credited to the benefit enhancement fund as provided under N.J.S.18A:66-25.

     The normal contribution for the increased benefits for active members under P.L.2001, c.133 shall be paid from the benefit enhancement fund.  If assets in the benefit enhancement fund are insufficient to pay the normal contribution for the increased benefits for a valuation period, the State shall pay the amount of normal contribution for the increased benefits not covered by assets from the benefit enhancement fund.

     c.     (Deleted by amendment, P.L.1992, c.125.)

     d.    The retirement system shall certify annually the aggregate amount payable to the contingent reserve fund in the ensuing year, which amount shall be equal to the sum of the amounts described in this section, and which shall be paid into the contingent reserve fund in the manner provided by section 18A:66-33.

     e.     Except as provided in sections 18A:66-26 and 18A:66-53, the death benefits payable under the provisions of this article upon the death of an active or retired member shall be paid from the contingent reserve fund.

     f.     The disbursements for benefits not covered by reserves in the system on account of veterans shall be met by direct contribution of the State.

     g. When the system has an unfunded accrued liability as determined by the actuary, the actuary of the system shall make a recommendation to the board with regard to how an amount resulting from an increase in the contribution rate set forth in subsection a. and paragraph (1) of subsection b. of N.J.S.18A:66-29, as may be required by the board, will be recognized and allocated in an annual valuation report.  In no event shall that resulting amount be allocated toward the payment of the unfunded accrued liability that is the result, as determined by the actuary, of the State or other employer not making the full payment of the certified annual actuarially required contribution as determined in the valuation of the system by the actuary, and including any loss of interest or earnings on those contributions not made, and of changes in investment interest or earnings. 

     The responsibility for the portion of any unfunded accrued liability that is not attributable to the employer not making the full certified contributions, the loss of interest or earnings on those contributions, and changes in investment interest and earnings shall be allocated equally between members and employers.  A reduction in the unfunded accrued liability resulting from a modification of benefits pursuant to this act, P.L.  , c.   (C.   )(pending before the Legislature as this bill), shall be solely attributable to the portion of unfunded accrued liability allocated to the members.  An unfunded liability that accrues after the effective date of this act the responsibility for which is shared equally by the employers and members shall be amortized using a 30-year closed amortization period.

     h.  Upon the request of the board of trustees, the actuary of the system shall make a recommendation in the annual valuation report with regard to the contribution rate or rates for members of the system, based on the valuation of the assets and liabilities and the funded ratio of the system, in order to attain and maintain the financial condition of the system that the board has determined to be reasonable, necessary, and appropriate.  The board in making such a determination may consider the standards set or recommended by relevant national authorities for the financial condition of such similar systems and may consider the standards of the Governmental Accounting Standards Board for the purpose of valuing the assets and liabilities and calculating the funded ratio of the system. 

(cf:  P.L.2007, c.92, s.24)

 

     35.  Section 34 of P.L.1965, c.89 (C.53:5A-34) is amended to read as follows:

     34.  The Contingent Reserve Fund shall be the fund in which shall be credited contributions made by the State. 

     a.     Upon the basis of the tables recommended by the actuary which the board adopts and regular interest, the actuary shall compute annually, beginning as of June 30, 1992, the amount of the contribution which shall be the normal cost as computed under the projected unit credit method attributable to service rendered under the retirement system for the year beginning on July 1 immediately succeeding the date of the computation.  This shall be known as the "normal contribution." 

     b.    Upon the basis of the tables recommended by the actuary which the board adopts and regular interest, the actuary shall annually determine if there is an amount of the accrued liability of the retirement system, computed under the projected unit credit method, which is not already covered by the assets of the retirement system, valued in accordance with the asset valuation method established in this section.  This shall be known as the "unfunded accrued liability."  If there was no unfunded accrued liability for the valuation period immediately preceding the current valuation period, the actuary, using the total amount of this unfunded accrued liability, shall compute the initial amount of contribution which, if the contribution is increased at a specific rate and paid annually for a specific period of time, will amortize this liability.  The [State Treasurer] board of trustees shall determine, upon the advice of the Director of the Division of Pensions and Benefits, the [board of trustees] State Treasurer and the actuary, the rate of increase for the contribution and the time period for full funding of this liability, which shall not exceed 30 years. This shall be known as the "accrued liability contribution."  Thereafter, any increase or decrease in the unfunded accrued liability as a result of actuarial losses or gains for subsequent valuation years shall serve to increase or decrease, respectively, the amortization period for the unfunded accrued liability, unless an increase in the amortization period will cause it to exceed 30 years.  If an increase in the amortization period as a result of actuarial losses for a valuation year would exceed 30 years, the accrued liability contribution shall be computed for the valuation year in the same manner provided for the computation of the initial accrued liability contribution under this section. The State may pay all or any portion of its unfunded accrued liability under the retirement system from any source of funds legally available for the purpose, including, without limitation, the proceeds of bonds authorized by law for this purpose.

     After consultation with and recommendation of the actuary, the board shall require, for the valuation period commencing after the effective date of P.L.   , c.   (pending before the Legislature as this bill) and for each period thereafter, the acceleration of payments by the State for the unfunded accrued liability over such a designated period of time as  the board determines to be reasonable, necessary, and appropriate.  

     The value of the assets to be used in the computation of the contributions provided for under this section for valuation periods shall be the value of the assets for the preceding valuation period increased by the regular interest rate, plus the net cash flow for the valuation period (the difference between the benefits and expenses paid by the system and the contributions to the system) increased by one half of the regular interest rate, plus 20% of the difference between this expected value and the full market value of the assets as of the end of the valuation period.  This shall be known as the "valuation assets."  Notwithstanding the first sentence of this paragraph, the valuation assets for the valuation period ending June 30, 1996 shall be the full market value of the assets as of that date and shall include the proceeds from the bonds issued pursuant to the Pension Bond Financing Act of 1997, P.L.1997, c.114 (C.34:1B-7.45 et seq.), paid to the system by the New Jersey Economic Development Authority to fund the unfunded accrued liability of the system.

     "Excess valuation assets" means the valuation assets for a valuation period less the actuarial accrued liability for the valuation period, if the sum is greater than zero.  If there are excess valuation assets for the valuation period ending June 30, 1996, the normal contributions for the valuation periods ending June 30, 1996 and June 30, 1997 which have not yet been paid to the retirement system shall be reduced to the extent possible by the excess valuation assets, provided that the General Fund balances that would have been paid to the retirement system except for this provision shall first be allocated as State aid to public schools to the extent that additional sums are required to comply with the May 14, 1997 decision of the New Jersey Supreme Court in Abbott v. Burke.  If there are excess valuation assets for a valuation period ending after June 30, 1996, the State Treasurer may reduce the normal contribution payable for the next valuation period as follows:

     (1)   for valuation periods ending June 30, 1997 through June 30, 2001, to the extent possible by up to 100% of the excess valuation assets;

     (2)   for the valuation period ending June 30, 2002, to the extent possible by up to 84% of the excess valuation assets;

     (3)   for the valuation period ending June 30, 2003, to the extent possible by up to 68% of the excess valuation assets;  and

     (4)   for valuation periods ending June 30, 2004 through June 30, 2007, to the extent possible by up to 50% of the excess valuation assets.

     c.     The actuary shall certify annually the aggregate amount payable to the Contingent Reserve Fund in the ensuing year, which amount shall be equal to the sum of the amounts described in this section.  The State shall pay into the Contingent Reserve Fund during the ensuing year the amount so certified. In the event the amount certified to be paid by the State includes amounts due for services rendered by members to specific instrumentalities or authorities the total amounts so certified shall be paid to the retirement system by the State; provided, however, the full cost attributable to such services rendered to such instrumentalities and authorities shall be computed separately by the actuary and the State shall be reimbursed for such amounts by such instrumentalities or authorities. 

     The cash death benefits, payable as the result of contribution by the State under the provisions of this act upon the death of a member in active service and after retirement shall be paid from the Contingent Reserve Fund. 

     d.  When the system has an unfunded accrued liability as determined by the actuary, the actuary of the system shall make a recommendation to the board with regard to how an amount resulting from an increase in the contribution rate set forth in paragraphs (1) and (2) of subsection a. of section 38 of P.L.1965, c.89 (C.53:5A-38), as may be required by the board, will be recognized and allocated in an annual valuation report. In no event shall that resulting amount be allocated toward the payment of the unfunded accrued liability that is the result, as determined by the actuary, of the employer not making the full payment of the certified annual actuarially required contribution as determined in the valuation of the system by the actuary, and including any loss of interest or earnings on those contributions not made, and of changes in investment interest or earnings. 

     The responsibility for the portion of any unfunded accrued liability that is not attributable to the employer not making the full certified contributions, the loss of interest or earnings on those contributions, and changes in investment interest and earnings shall be allocated equally between members and employers.  A reduction in the unfunded accrued liability resulting from a modification of benefits pursuant to this act, P.L.  , c.   (C.   )(pending before the Legislature as this bill), shall be solely attributable to the portion of unfunded accrued liability allocated to the members.  An unfunded liability that accrues after the effective date of this act the responsibility for which is shared equally by the employers and members shall be amortized using a 30-year closed amortization period.

     e.  Upon the request of the board of trustees, the actuary of the system shall make a recommendation in the annual valuation report with regard to the contribution rate or rates for members of the system, based on the valuation of the assets and liabilities and the funded ratio of the system, in order to attain and maintain the financial condition of the system that the board has determined to be reasonable, necessary, and appropriate.  The board in making such a determination may consider the standards set or recommended by relevant national authorities for the financial condition of such similar systems and may consider the standards of the Governmental Accounting Standards Board for the purpose of
valuing the assets and liabilities and calculating the funded ratio of the system.

(cf: P.L.2007, c.92, s.27)

 

     36.  Section 19 of P.L.1992, c.125 (C.43:4B-1) is amended to read as follows:

     19.  There is hereby established the Retirement Systems Actuary Selection Committee which shall consist of the State Treasurer, and the [directors] director of the [Divisions] Division of Pensions and Benefits [and Investment, and Office of Management and Budget], or their designated representatives, and one member designated by each of the boards of trustees of the Public Employees' Retirement System, the Teachers' Pension and Annuity Fund, the Judicial Retirement System, the State Police Retirement System, and the Police and Firemen's Retirement System.  [The]  If a board of trustees is unable to agree upon the selection of an actuary or actuaries for the system, the committee shall select the actuary or actuaries for the State retirement [systems] system in accordance with the provisions of P.L.1954, c.48 (C.52:34-6 et seq.), provided, however, that the boards shall have the power to veto the selection of the actuary for valid reason. 

(cf:  P.L.1992, c.125, s.19) 

 

     37.  Section 38 of P.L.1992, c.41 (C.43:3C-11) is amended to read as follows:

     38.  No present or future retirees of the Teachers' Pension and Annuity Fund, the Judicial Retirement System, the Public Employees' Retirement System, the Consolidated Police and Firemen's Pension Fund, the Police and Firemen's Retirement System, or the State Police Retirement System shall receive any reduction in benefits or incur any additional costs as a result of the provisions of P.L.1992, c.41 (C.43:6A-33.1 et al.), except as may be provided by law.

(cf:  P.L.1992, c.41, s.38) 

 

     38.  Section 29 of P.L.1973, c.140 (C.43:6A-29) is amended to read as follows:

     29.  a. Subject to the provisions of P.L.1955, c.70 (C.52:18A-95 to 52:18A-104), the general responsibility for the proper operation of the retirement system is hereby vested in the State House Commission.

     The commission may, in its discretion and at such time and in such manner as the board determines, enhance any benefit set forth in P.L.1973, c.140 (C.43:6A-1 et seq.) as the commission determines to be reasonable and appropriate, subject to the election of a member to receive that enhancement and to make an additional annual contribution for that enhancement at a rate to be determined by the commission, or reduce any such benefit as an alternative to an increase in the member contribution rate, which increase the commission determines to be reasonable, necessary, and appropriate, or reinstate, when appropriate, such reduced benefit to the statutory level without an additional contribution by the members.

     b.    Except as otherwise herein provided, no member of the State House Commission shall have any direct interest in the gains or profits of any investments of the retirement system, nor shall any member of the State House Commission directly or indirectly, for himself or as an agent in any manner use the moneys of the retirement system, except to make such current and necessary payments as are authorized by the commission; nor shall any member of the State House Commission become an endorser or surety, or in any manner an obligor for moneys loaned to or borrowed from the retirement system. 

     c.     For purposes of this act, each member of the State House Commission shall be entitled to one vote and a majority vote of all members shall be necessary for any decision by the commission at any meeting of said commission. 

     d.    Subject to the limitations of this act, the State House Commission shall annually establish rules and regulations for the administration of the funds created by this act and for the transaction of its business. Such rules and regulations shall be consistent with those adopted by the other pension funds within the Division of Pensions in order to permit the most economical and uniform administration of all such retirement systems. 

     e      The actuary of the system shall be selected by the commission pursuant to the provisions of P.L.1954, c.48 (C.52:34-6 et seq.), except that if the commission is unable to agree upon the selection of an actuary, the  Retirement Systems Actuary Selection Committee established by P.L.1992, c.125 shall select the actuary.  He shall be the technical adviser of the commission on matters regarding the operation of the funds created by the provisions of this act and shall perform such other duties as are required in connection herewith. 

     f.     The commission may, in its discretion, select and employ or contract with legal counsel to advise and represent the commission.  If the commission does not select and employ or contract with legal counsel, the Attorney General shall be the legal adviser of the retirement system, except that if the Attorney General determines that a conflict of interest would affect the ability of the Attorney General to represent the commission on a matter affecting the retirement system, the commission may select and employ or contract with legal counsel to advise and represent the commission on that matter. 

     g.     The Director of the Division of Pensions of the State Department of the Treasury shall be the secretary of the commission for purposes pertaining to the provisions of this act. 

     h.     For purposes of this act, the State House Commission shall keep a record of all of its proceedings which shall be open to public inspection. The retirement system shall publish annually a report showing the fiscal transactions of the retirement system for the preceding year, the amount of the accumulated cash and securities of the system and the last balance sheet showing the financial condition of the system by means of any actuarial valuation of the assets and liabilities of the retirement system. 

     i.      The State Treasurer shall designate a medical board after consultation with the Director of the Division of Pensions.  It shall be composed of three physicians.  The medical board shall pass on all medical examinations required under the provisions of this act, and shall report in writing to the retirement system its conclusions and recommendations upon all matters referred to it. 

     j.     No member of the commission shall accept from any person, whether directly or indirectly and whether by himself or through his spouse or any member of his family, or through any partner or associate, any gift, favor, service, employment or offer of employment, or any other thing of value, including contributions to the campaign of a member as a candidate for elective public office, which he knows or has reason to believe is offered to him with intent to influence him in the performance of  his public duties and responsibilities.  As used in this subsection, “person” means an (1) individual or business entity, or officer or employee of such an entity, who is seeking, or who holds, or who held within the prior three years, a contract with the board; or (2) an active or retired member, or beneficiary, of the retirement system.  A board member violating this prohibition shall be guilty of a crime of the third degree.

(cf:  P.L.1992, c.125, s.5) 

 

     39.  Section 5 of P.L.1997, c.113 (C.43:3C-9.5) is amended to read as follows:

     5.    a.  For purposes of this section, a "non-forfeitable right to receive benefits" means that the benefits program, for any employee for whom the right has attached, cannot be reduced.  The provisions of this section shall not apply to post-retirement medical benefits which are provided pursuant to law.

     b.    Vested members of the Teachers' Pension and Annuity Fund, the Judicial Retirement System, the Prison Officers' Pension Fund, the Public Employees' Retirement System, the Consolidated Police and Firemen's Pension Fund, the Police and Firemen's Retirement System, and the State Police Retirement System, upon the attainment of five years of service credit in the retirement system or fund or on the date of enactment of this bill, whichever is later, shall have a non-forfeitable right to receive benefits as provided under the laws governing the retirement system or fund upon the attainment of five years of service credit in the retirement system or fund or on the effective date of this act, whichever is later.  This subsection shall not be applicable to a person who becomes a member of these systems or funds on or after the effective date of P.L.2010, c.1, except that such person shall not include a person who at the time of enrollment in the retirement system or fund on or after that effective date transfers service credit, as permitted, from another State-administered retirement system or fund of which the person was a member immediately prior to the effective date and continuously thereafter, but shall include a former member of the retirement system or fund who has been granted a retirement allowance and is reenrolled in the retirement system or fund on or after that effective date after becoming employed again in a position that makes the person eligible to be a member of the retirement system.

     c.     (1)  The State and all other employers shall make [an] their  annual normal contribution [and an] to each system or fund as determined by the board in consultation with the system’s or fund’s actuary.  The State and all other employers shall also make their annual unfunded accrued liability contribution to each system or fund as determined by the board in consultation with the system’s or fund’s actuary, pursuant to standard actuarial practices authorized by law, unless both of the following conditions are met:  (1) there is no existing unfunded accrued liability contribution due to the system or fund at the close of the valuation period applicable to the upcoming fiscal year; and (2) there are excess valuation assets in excess of the actuarial accrued liability of the system or fund at the close of the valuation period applicable to the upcoming fiscal year.  The annual normal contribution plus the annual unfunded accrued liability contribution shall together be the annual required contribution.  For the State, section 38 of P.L.2010, c.1 (C.43:3C-14) shall apply with regard to the State’s annual required contribution.

     (2)  Each member of the Teachers' Pension and Annuity Fund, the Judicial Retirement System, the Prison Officers' Pension Fund, the Public Employees' Retirement System, the Consolidated Police and Firemen's Pension Fund, the Police and Firemen's Retirement System, and the State Police Retirement System shall have a contractual right to a securely funded retirement system in which contributions are made at the annual required contribution amount by the member’s employer or by any other public entity if so designated to make such contributions by law.  A contractual right to a securely funded retirement system means that the employer or other public entity shall make the annual required contributions on a timely basis such that the retirement benefits to which the members are entitled by statute or the actions of the boards of trustees, or both, and in consideration for their public service and in compensation for their work will be paid upon retirement.  This contractual right includes the right to have all employers and other public entities, including the State, make all annually required contributions as determined by the system actuary and the board of trustees.  The failure of any employer or other public entity, including the State, to make the annually required contributions shall be deemed to be an impairment of the contractual right of each employee to a securely funded retirement system.  The amount of the State’s annually required contributions shall be included in all annual appropriations acts as a dedicated line item.  Any member of any retirement system and any board of trustees may bring an action in the Superior Court, Law Division to enforce the contractual rights set forth in this subsection and the State and other employers waive any right to contest the jurisdiction of the court or to assert any immunity to suit.  If a member or board prevails in such action, the court shall award that party their reasonable attorney’s fees, in addition to directing that all required funding be paid.

     d.    This act shall not be construed to preclude forfeiture, suspension or reduction in benefits for dishonorable service.

     e.     Except as expressly provided herein and only to the extent so expressly provided, nothing in this act shall be deemed to (1) limit the right of the State to alter, modify or amend such retirement systems and funds, or (2) create in any member a right in the corpus or management of a retirement system or pension fund.  The rights reserved to the State in this subsection shall not diminish the contractual right of employees to non-forfeitable benefits established by subsections a. and b. of this section and to securely funded retirement systems established by subsection c. of this section.

(cf:  P.L.2010, c.1, s.29)

 

     40.  Section 3 of P.L.1973, c.140 (C.43:6A-3) is amended to read as follows:

     3.    As used in this act:

     a.     "Accumulated deductions" means the sum of all amounts, deducted from the compensation of a member or contributed by him or on his behalf, standing to the credit of his individual account in the annuity saving fund. 

     b.    "Annuity" means payments for life derived from the accumulated deductions of a member as provided in this amendatory and supplementary act. 

     c.     "Annuity reserve" means the present value of all payments to be made on account of any annuity or benefit in lieu of an annuity computed on the basis of such mortality tables recommended by the actuary as the State House Commission adopts with regular interest. 

     d.     "Beneficiary" means any person entitled to receive any benefit pursuant to the provisions of this act by reason of the death of a member or retirant. 

     e.     "Child" means a deceased member's or retirant's unmarried child who is either (a) under the age of 18; (b) of any age who, at the time of the member's or retirant's death, is disabled because of mental retardation or physical incapacity, is unable to do any substantial, gainful work because of the impairment and his impairment has lasted or can be expected to last for a continuous period of not less than 12 months, as affirmed by the medical board; or (c) under the age of 21 and is attending school full time.

     f.     "Compensation" means the base salary, for services as a member as defined in this act, which is in accordance with established salary policies of the State for all employees in the same position but shall not include individual salary adjustments which are granted primarily in anticipation of the member's retirement or additional remuneration for performing temporary duties beyond the regular work schedule.

     g.     "Final salary" means the annual salary received by the member at the time of his retirement or death. 

     h.     "Fiscal year" means any year commencing with July 1 and ending with June 30 next following.

     i.      "Medical board" means the board of physicians provided for in section 29 of this act. 

     j.     "Member" means the Chief Justice and associate justices of the Supreme Court, judges of the Superior Court and tax court of the State of New Jersey required to be enrolled in the retirement system established by this act.

     For purposes of this act, the person holding the office of standing master by appointment pursuant to N.J.S.2A:1-7 shall have the same privileges and obligations under this act as a judge of a Superior Court. 

     k.    "Parent" means the parent of a member who was receiving at least one-half of his support from the member in the 12-month period immediately preceding the member's death or the accident which was the direct cause of the member's death. The dependency of such a parent will be considered terminated by marriage of the parent subsequent to the death of the member. 

     l.      "Pension" means payment for life derived from contributions by the State. 

     m.    "Pension reserve" means the present value of all payments to be made on account of any pension or benefit in lieu of a pension computed on the basis of such mortality tables recommended by the actuary as shall be adopted by the State House Commission with regular interest. 

     n.     "Regular interest" means interest as determined by the [State Treasurer] commission, after consultation with and recommendation of the [Directors of the Divisions of Investment and Pensions, the State House Commission and the] actuary.  [It shall bear a reasonable relationship to the percentage rate of earnings on investments based on the market value of assets but shall not exceed the assumed percentage rate of increase applied to salaries plus 3%, provided however that the commission shall not set the average percentage rate of increase applied to salaries below 6%.] 

     o.    "Retirant" means any former member receiving a pension or retirement allowance as provided by this act. 

     p.    "Retirement allowance" means the pension plus the annuity.

     q.    "Retirement system" or "system" herein refers to the "Judicial Retirement System of New Jersey," which is the corporate name of the arrangement for the payment of pensions, retirement allowances and other benefits under the provisions of this act including the several funds placed under said system. By that name, all of its business shall be transacted, its funds invested, warrants for money drawn, and payments made and all of its cash and securities and other property held. 

     r.     "Service" means public service rendered for which credit is allowed on the basis of contributions made by the State. 

     s.     "Several courts" means the Supreme, Superior, and tax courts.

     t.     "Widow" means the woman to whom a member or a retirant was married, or a domestic partner as defined in section 3 of P.L.2003, c.246 (C.26:8A-3), at least four years before the date of his death and to whom he continued to be married or a domestic partner until the date of his death. The eligibility of such a widow to receive a survivor's benefit will be considered terminated by the marriage of, or establishment of a domestic partnership by, the widow subsequent to the member's or the retirant's death. In the event of accidental death the four-year qualification shall be waived. When used in this act, the term "widow" shall mean and include "widower" as may be necessary and appropriate to the particular situation.      

     u.     "Widower" means the man to whom a member or a retirant was married, or a domestic partner as defined in section 3 of P.L.2003, c.246 (C.26:8A-3), at least four years before the date of her death and to whom she continued to be married or a domestic partner until the date of her death. The eligibility of such a widower to receive a survivor's benefit will be considered terminated by the marriage of, or establishment of a domestic partnership by, the widower subsequent to the member's or retirant's death. In the event of accidental death the four-year qualification shall be waived. 

     v.     "Spouse" means the husband or wife, or domestic partner as defined in section 3 of P.L.2003, c.246 (C.26:8A-3), of a member or retirant.

(cf: P.L.2003, c.246, s.44)

 

     41.  Section 6 of P.L.1954, c.84 (C.43:15A-6) is amended to read as follows:

     6.    As used in this act:

     a.     "Accumulated deductions" means the sum of all the amounts, deducted from the compensation of a member or contributed by or on behalf of the member, standing to the credit of the member's individual account in the annuity savings fund.

     b.    "Annuity" means payments for life derived from the accumulated deductions of a member as provided in this act.

     c.     "Annuity reserve" means the present value of all payments to be made on account of any annuity or benefit in lieu of an annuity, granted under the provisions of this act, computed on the basis of such mortality tables recommended by the actuary as the board of trustees adopts, with regular interest.

     d.    "Beneficiary" means any person receiving a retirement allowance or other benefit as provided in this act.

     e.     "Child" means a deceased member's unmarried child either (1) under the age of 18 or (2) of any age who, at the time of the member's death, is disabled because of an intellectual disability or physical incapacity, is unable to do any substantial, gainful work because of the impairment and the impairment has lasted or can be expected to last for a continuous period of not less than 12 months, as affirmed by the medical board.

     f.     "Parent" shall mean the parent of a member who was receiving at least 1/2 of the parent's support from the member in the 12-month period immediately preceding the member's death or the accident which was the direct cause of the member's death. The dependency of such a parent will be considered terminated by marriage of the parent subsequent to the death of the member.

     g.     (1) "Widower," for employees of the State, means the man to whom a member was married, or a domestic partner as defined in section 3 of P.L.2003, c.246 (C.26:8A-3), at least five years before the date of her death and to whom she continued to be married or a domestic partner until the date of her death and who was receiving at least 1/2 of his support from the member in the 12-month period immediately preceding the member's death or the accident which was the direct cause of the member's death. The dependency of such a widower will be considered terminated by marriage of, or establishment of a domestic partnership by, the widower subsequent to the death of the member. In the event of the payment of an accidental death benefit, the five-year qualification shall be waived.

     (2)   Subject to the provisions of paragraph (3) of this subsection, "widower," for employees of public employers other than the State, means the man to whom a member was married at least five years before the date of her death and to whom she continued to be married until the date of her death and who was receiving at least 1/2 of his support from the member in the 12-month period immediately preceding the member's death or the accident which was the direct cause of the member's death. The dependency of such a widower shall be considered terminated by marriage of the widower subsequent to the death of the member. In the event of the payment of an accidental death benefit, the five-year qualification shall be waived.

     (3)   A public employer other than the State may adopt a resolution providing that the term "widower" as defined in paragraph (2) of this subsection shall include domestic partners as provided in paragraph (1) of this subsection.

     h. (1) "Final compensation" means the average annual compensation for which contributions are made for the three years of creditable service in New Jersey immediately preceding the member's retirement or death, or it shall mean the average annual compensation for New Jersey service for which contributions are made during any three fiscal years of his or her membership providing the largest possible benefit to the member or the member's beneficiary.

     (2)   In the case of a person who becomes a member of the retirement system on or after the effective date of P.L.2010, c.1, "final compensation" means the average annual compensation for which contributions are made for the five years of creditable service in New Jersey immediately preceding the member's retirement or death, or it shall mean the average annual compensation for New Jersey service for which contributions are made during any five fiscal years of his or her membership providing the largest possible benefit to the member or the member's beneficiary.

     i.      "Fiscal year" means any year commencing with July 1 and ending with June 30 next following.

     j.     "Medical board" shall mean the board of physicians provided for in section 17 of P.L.1954, c.84 (C.43:15A-17).

     k.    "Pension" means payments for life derived from appropriations made by the employer as provided in this act.

     l.      "Pension reserve" means the present value of all payments to be made on account of any pension or benefit in lieu of a pension granted under the provisions of this act, computed on the basis of such mortality tables recommended by the actuary as the board of trustees adopts, with regular interest.

     m.    "Public Employees' Retirement System of New Jersey," hereinafter referred to as the "retirement system" or "system," is the corporate name of the arrangement for the payment of retirement allowances and other benefits under the provisions of this act including the several funds placed under said system. By that name all of its business shall be transacted, its funds invested, warrants for money drawn, and payments made and all of its cash and securities and other property held.

     n.     "Regular interest" shall mean interest as determined by the [State Treasurer] board, after consultation with and recommendation of the [Directors of the Divisions of Investment and Pensions, the board of trustees and the] actuary. [It shall bear a reasonable relationship to the percentage rate of earnings on investments based on the market value of the assets but shall not exceed the assumed percentage rate of increase applied to salaries plus 3%, provided however that the board of trustees shall not set the average percentage rate of increase applied to salaries below 6%.]

     o.    "Retirement allowance" means the pension plus the annuity.

     p.    "Veteran" means any honorably discharged officer, soldier, sailor, airman, marine or nurse who served in any Army, Air Force or Navy of the Allies of the United States in World War I, between July 14, 1914, and November 11, 1918, or who served in any Army, Air Force or Navy of the Allies of the United States in World War II, between September 1, 1939, and September 2, 1945, and who was inducted into such service through voluntary enlistment, and was a citizen of the United States at the time of such enlistment, and who did not, during or by reason of such service, renounce or lose United States citizenship, and any officer, soldier, sailor, marine, airman, nurse or army field clerk, who has served in the active military or naval service of the United States and has or shall be discharged or released therefrom under conditions other than dishonorable, in any of the following wars, uprisings, insurrections, expeditions, or emergencies, and who has presented to the retirement system evidence of such record of service in form and content satisfactory to said retirement system:

     (1)   The Indian wars and uprisings during any of the periods recognized by the War Department of the United States as periods of active hostility;

     (2)   The Spanish-American War between April 20, 1898, and April 11, 1899;

     (3)   The Philippine insurrections and expeditions during the periods recognized by the War Department of the United States as of active hostility from February 4, 1899, to the end of 1913;

     (4)   The Peking relief expedition between June 20, 1900, and May 27, 1902;

     (5)   The army of Cuban occupation between July 18, 1898, and May 20, 1902;

     (6)   The army of Cuban pacification between October 6, 1906, and April 1, 1909;

     (7)   The Mexican punitive expedition between March 14, 1916, and February 7, 1917;

     (8)   The Mexican border patrol, having actually participated in engagements against Mexicans between April 12, 1911, and June 16, 1919;

     (9)   World War I, between April 6, 1917, and November 11, 1918;

     (10) World War II, between September 16, 1940, and December 31, 1946, who shall have served at least 90 days in such active service, exclusive of any period of assignment (1) for a course of education or training under the Army Specialized Training Program or the Navy College Training Program which course was a continuation of a civilian course and was pursued to completion, or (2) as a cadet or midshipman at one of the service academies any part of which 90 days was served between said dates; provided, that any person receiving an actual service-incurred injury or disability shall be classed as a veteran whether or not that person has completed the 90-day service as herein provided;

     (11) Korean conflict on or after June 23, 1950, and on or prior to January 31, 1955, who shall have served at least 90 days in such active service, exclusive of any period of assignment (1) for a course of education or training under the Army Specialized Training Program or the Navy College Training Program which course was a continuation of a civilian course and was pursued to completion, or (2) as a cadet or midshipman at one of the service academies, any part of which 90 days was served between said dates; provided, that any person receiving an actual service-incurred injury or disability shall be classed as a veteran whether or not that person has completed the 90-day service as herein provided; and provided further, that any member classed as a veteran pursuant to this paragraph prior to August 1, 1966, shall continue to be classed as a veteran whether or not that person completed the 90-day service between said dates as herein provided;

     (12) Lebanon crisis, on or after July 1, 1958, who has served in Lebanon or on board any ship actively engaged in patrolling the territorial waters of that nation for a period, continuous or in the aggregate, of at least 14 days commencing on or before November 1, 1958 or the date of termination of that conflict, as proclaimed by the President of the United States or Congress, whichever date of termination is the latest, in such active service; provided, that any person receiving an actual service-incurred injury or disability shall be classed as a veteran whether or not that person has completed the 14 days' service as herein provided;

     (13) Vietnam conflict on or after December 31, 1960, and on or prior to May 7, 1975, who shall have served at least 90 days in such active service, exclusive of any period of assignment (1) for a course of education or training under the Army Specialized Training Program or the Navy College Training Program which course was a continuation of a civilian course and was pursued to completion, or (2) as a cadet or midshipman at one of the service academies, any part of which 90 days was served between said dates; and exclusive of any service performed pursuant to the provisions of section 511(d) of Title 10, United States Code, pursuant to an enlistment in the Army National Guard or as a reserve for service in the Army Reserve, Naval Reserve, Air Force Reserve, Marine Corps Reserve, or Coast Guard Reserve; provided, that any person receiving an actual service-incurred injury or disability shall be classed as a veteran whether or not that person has completed the 90 days' service as herein provided;

     (14) Lebanon peacekeeping mission, on or after September 26, 1982, who has served in Lebanon or on board any ship actively engaged in patrolling the territorial waters of that nation for a period, continuous or in the aggregate, of at least 14 days commencing on or before December 1, 1987 or the date of termination of that mission, as proclaimed by the President of the United States or Congress, whichever date of termination is the latest, in such active service; provided, that any person receiving an actual service-incurred injury or disability shall be classed as a veteran whether or not that person has completed the 14 days' service as herein provided;

     (15) Grenada peacekeeping mission, on or after October 23, 1983, who has served in Grenada or on board any ship actively engaged in patrolling the territorial waters of that nation for a period, continuous or in the aggregate, of at least 14 days commencing on or before November 21, 1983 or the date of termination of that mission, as proclaimed by the President of the United States or Congress, whichever date of termination is the latest, in such active service; provided, that any person receiving an actual service-incurred injury or disability shall be classed as a veteran whether or not that person has completed the 14 days' service as herein provided;

     (16) Panama peacekeeping mission, on or after December 20, 1989 or the date of inception of that mission, as proclaimed by the President of the United States or Congress, whichever date of inception is earliest, who has served in Panama or on board any ship actively engaged in patrolling the territorial waters of that nation for a period, continuous or in the aggregate, of at least 14 days commencing on or before January 31, 1990 or the date of termination of that mission, as proclaimed by the President of the United States or Congress, whichever date of termination is the latest, in such active service; provided, that any person receiving an actual service-incurred injury or disability shall be classed as a veteran whether or not that person has completed the 14 days' service as herein provided;

     (17) Operation "Desert Shield/Desert Storm" mission in the Arabian peninsula and the Persian Gulf, on or after August 2, 1990 or the date of inception of that operation, as proclaimed by the President of the United States or Congress, whichever date of inception is earliest, who has served in the Arabian peninsula or on board any ship actively engaged in patrolling the Persian Gulf for a period, continuous or in the aggregate, of at least 14 days commencing on or before the date of termination of that mission, as proclaimed by the President of the United States or Congress, whichever date of termination is the latest, in such active service; provided, that any person receiving an actual service-incurred injury or disability shall be classed as a veteran whether or not that person has completed the 14 days' service as herein provided;

     (18) Operation Northern Watch and Operation Southern Watch, on or after August 27, 1992, or the date of inception of that operation, as proclaimed by the President of the United States, Congress or United States Secretary of Defense, whichever date of inception is earliest, who served in the theater of operation, including in the Arabian peninsula and the Persian Gulf, and in direct support of that operation for a period, continuously or in the aggregate, of at least 14 days in such active service, commencing on or before the date of termination of that operation, as proclaimed by the President of the United States, Congress or United States Secretary of Defense, whichever date of termination is the latest; provided, that any person receiving an actual service-incurred injury or disability while engaged in such service shall be classed as a veteran whether or not that person has completed the 14 days' service as herein provided;

     (19) Operation "Restore Hope" in Somalia, on or after December 5, 1992, or the date of inception of that operation as proclaimed by the President of the United States or Congress, whichever date is earliest, who has served in Somalia or on board any ship actively engaged in patrolling the territorial waters of that nation for a period, continuously or in the aggregate, of at least 14 days in such active service commencing on or before March 31, 1994; provided that any person receiving an actual service-incurred injury or disability shall be classed as a veteran whether or not that person has completed the 14-day service as herein provided;

     (20) Operations "Joint Endeavor" and "Joint Guard" in the Republic of Bosnia and Herzegovina, on or after November 20, 1995, who served in such active service in direct support of one or both of the operations for at least 14 days, continuously or in the aggregate, commencing on or before June 20, 1998 and (1) was deployed in that nation or in another area in the region, or (2) was on board a United States naval vessel operating in the Adriatic Sea, or (3) operated in airspace above the Republic of Bosnia and Herzegovina; provided that any person receiving an actual service-incurred injury or disability shall be classed as a veteran whether or not that person completed the 14-day service requirement;

     (21) Operation "Enduring Freedom", on or after September 11, 2001, who served in a theater of operation and in direct support of that operation for a period, continuously or in the aggregate, of at least 14 days in such active service commencing on or before the date the President of the United States or the United States Secretary of Defense designates as the termination date of that operation; provided, that any person receiving an actual service-incurred injury or disability while engaged in such service shall be classed as a veteran whether or not that person has completed the 14 days' service as herein provided; and

     (22) Operation "Iraqi Freedom", on or after the date the President of the United States or the United States Secretary of Defense designates as the inception date of that operation, who served in Iraq or in another area in the region in direct support of that operation for a period, continuously or in the aggregate, of at least 14 days in such active service commencing on or before the date the President of the United States or the United States Secretary of Defense designates as the termination date of that operation; provided, that any person receiving an actual service-incurred injury or disability while engaged in such service shall be classed as a veteran whether or not that person has completed the 14 days' service as herein provided.

     "Veteran" also means any honorably discharged member of the American Merchant Marine who served during World War II and is declared by the United States Department of Defense to be eligible for federal veterans' benefits.

     q.    (1) "Widow," for employees of the State, means the woman to whom a member was married, or a domestic partner as defined in section 3 of P.L.2003, c.246 (C.26:8A-3), at least five years before the date of his death and to whom he continued to be married or a domestic partner until the date of his death and who was receiving at least 1/2 of her support from the member in the 12-month period immediately preceding the member's death or the accident which was the direct cause of the member's death. The dependency of such a widow will be considered terminated by the marriage of, or establishment of a domestic partnership by, the widow subsequent to the member's death. In the event of the payment of an accidental death benefit, the five-year qualification shall be waived.

     (2)   Subject to the provisions of paragraph (3) of this subsection, "widow," for employees of public employers other than the State, means the woman to whom a member was married at least five years before the date of his death and to whom he continued to be married until the date of his death and who was receiving at least 1/2 of her support from the member in the 12-month period immediately preceding the member's death or the accident which was the direct cause of the member's death. The dependency of such a widow shall be considered terminated by the marriage of the widow subsequent to the member's death. In the event of the payment of an accidental death benefit, the five-year qualification shall be waived.

     (3)   A public employer other than the State may adopt a resolution providing that the term "widow" as defined in paragraph (2) of this subsection shall include domestic partners as provided in paragraph (1) of this subsection.

     r. (1) "Compensation" means the base or contractual salary, for services as an employee, which is in accordance with established salary policies of the member's employer for all employees in the same position but shall not include individual salary adjustments which are granted primarily in anticipation of the member's retirement or additional remuneration for performing temporary or extracurricular duties beyond the regular workday or the regular work year.

     (2)   In the case of a person who becomes a member of the retirement system on or after July 1, 2007, "compensation" means the amount of base or contractual salary equivalent to the annual maximum wage contribution base for Social Security, pursuant to the Federal Insurance Contributions Act, for services as an employee, which is in accordance with established salary policies of the member's employer for all employees in the same position but shall not include individual salary adjustments which are granted primarily in anticipation of the member's retirement or additional remuneration for performing temporary or extracurricular duties beyond the regular workday or the regular work year. This paragraph shall not apply to a person who at the time of enrollment in the retirement system on or after July 1, 2007 transfers service credit from another State-administered retirement system pursuant to section 14 of P.L.1954, c.84 (C.43:15A-14), but shall apply to a former member of the retirement system who has been granted a retirement allowance and is reenrolled in the retirement system on or after July 1, 2007 pursuant to section 27 of P.L.1966, c.217 (C.43:15A-57.2) after becoming employed again in a position that makes the person eligible to be a member of the retirement system.

     In cases where salary includes maintenance, the retirement system shall fix the value of that part of the salary not paid in money which shall be considered under this act.

     For the period of July 1, 2009 through June 30, 2011, "contractual salary" for State employees shall include across the board negotiated wage increases under a collective negotiations agreement that were payable to all State employees covered by that agreement notwithstanding that, by amendment to that collective negotiations agreement, the effective date of the contractual increase has been deferred.  For the purpose of this paragraph, "State employee" means an employee in the Executive Branch or the Judicial Branch of State government of New Jersey or an employee of the State University authorized to participate in the system under subsection b. of section 73 of P.L.1954, c.84 (C.43:15A-73), but shall not include employees of agencies authorized to participate in the system under subsections a., c., d., e., f., and g. of section 73 of P.L.1954, c.84 (C.43:15A-73) or under P.L.1990, c.25 (C.43:15A-73.2 et al.).

     For the period of July 1, 2009 through June 30, 2011, "contractual salary" for county and municipal employees shall include across the board negotiated wage increases under a collective negotiations agreement that were payable to all county or all municipal employees covered by that agreement notwithstanding that, by amendment to that collective negotiations agreement which has been filed with the Division of Pensions and Benefits, the effective date of the contractual increase has been deferred.  For the purpose of this paragraph, "county and municipal employees" means all persons employed by a county or municipality in this State.

(cf:  P.L.2010, c.50, s.71)

 

     42.  Section 1 of P.L.1944, c.255 (C.43:16A-1) is amended to read as follows:

     1.    As used in this act:

     (1)   "Retirement system" or "system" shall mean the Police and Firemen's Retirement System of New Jersey as defined in section 2 of this act.

     (2) (a) "Policeman" shall mean a permanent, full-time employee of a law enforcement unit as defined in section 2 of P.L.1961, c.56 (C.52:17B-67) or the State, other than an officer or trooper of the Division of State Police whose position is covered by the State Police Retirement System, whose primary duties include the investigation, apprehension or detention of persons suspected or convicted of violating the criminal laws of the State and who:

     (i)    is authorized to carry a firearm while engaged in the actual performance of his official duties;

     (ii)   has police powers;

     (iii) is required to complete successfully the training requirements prescribed by P.L.1961, c.56 (C.52:17B-66 et seq.) or comparable training requirements as determined by the board of trustees; and

     (iv)  is subject to the physical and mental fitness requirements applicable to the position of municipal police officer established by an agency authorized to establish these requirements on a Statewide basis, or comparable physical and mental fitness requirements as determined by the board of trustees.

     The term shall also include an administrative or supervisory employee of a law enforcement unit or the State whose duties include general or direct supervision of employees engaged in investigation, apprehension or detention activities or training responsibility for these employees and a requirement for engagement in investigation, apprehension or detention activities if necessary, and who is authorized to carry a firearm while in the actual performance of his official duties and has police powers.

     (b)   "Fireman" shall mean a permanent, full-time employee of a firefighting unit whose primary duties include the control and extinguishment of fires and who is subject to the training and physical and mental fitness requirements applicable to the position of municipal firefighter established by an agency authorized to establish these requirements on a Statewide basis, or comparable training and physical and mental fitness requirements as determined by the board of trustees.  The term shall also include an administrative or supervisory employee of a firefighting unit whose duties include general or direct supervision of employees engaged in fire control and extinguishment activities or training responsibility for these employees and a requirement for engagement in fire control and extinguishment activities if necessary.  As used in this paragraph, "firefighting unit" shall mean a municipal fire department, a fire district, or an agency of a county or the State which is responsible for control and extinguishment of fires.

     (3)   "Member" shall mean any policeman or fireman included in the membership of the retirement system pursuant to this amendatory and supplementary act, P.L.1989, c.204 (C.43:16A-15.6 et al.).

     (4)   "Board of trustees" or "board" shall mean the board provided for in section 13 of this act.

     (5)   "Medical board" shall mean the board of physicians provided for in section 13 of this act.

     (6)   "Employer" shall mean the State of New Jersey, the county, municipality or political subdivision thereof which pays the particular policeman or fireman.

     (7)   "Service" shall mean service as a policeman or fireman paid for by an employer.

     (8)   "Creditable service" shall mean service rendered for which credit is allowed as provided under section 4 of this act.

     (9)   "Regular interest" shall mean interest as determined by the [State Treasurer] board, after consultation with and recommendation of the [Directors of the Divisions of Investment and Pensions, the board of trustees and the] actuary.  [It shall bear a reasonable relationship to the percentage rate of earnings on investments based on the market value of assets but shall not exceed the assumed percentage rate of increase applied to salaries plus 3%, provided however that the board of trustees shall not set the average percentage rate of increase applied to salaries below 6%.]

     (10) "Aggregate contributions" shall mean the sum of all the amounts, deducted from the compensation of a member or contributed by him or on his behalf, standing to the credit of his individual account in the annuity savings fund.

     (11) "Annuity" shall mean payments for life derived from the aggregate contributions of a member.

     (12) "Pension" shall mean payments for life derived from contributions by the employer.

     (13) "Retirement allowance" shall mean the pension plus the annuity.

     (14) "Earnable compensation" shall mean the full rate of the salary that would be payable to an employee if he worked the full normal working time for his position.  In cases where salary includes maintenance, the retirement system shall fix the value of that part of the salary not paid in money which shall be considered under this act.

     (15) "Average final compensation" shall mean final compensation.

     (16) "Retirement" shall mean the termination of the member's active service with a retirement allowance granted and paid under the provisions of this act.

     (17) "Annuity reserve" shall mean the present value of all payments to be made on account of any annuity or benefit in lieu of any annuity computed upon the basis of such mortality tables recommended by the actuary as shall be adopted by the board of trustees, and regular interest.

     (18) "Pension reserve" shall mean the present value of all payments to be made on account of any pension or benefit in lieu of any pension computed upon the basis of such mortality tables recommended by the actuary as shall be adopted by the board of trustees, and regular interest.

     (19) "Actuarial equivalent" shall mean a benefit of equal value when computed upon the basis of such mortality tables recommended by the actuary as shall be adopted by the board of trustees, and regular interest.

     (20) "Beneficiary" shall mean any person receiving a retirement allowance or other benefit as provided by this act.

     (21) "Child" shall mean a deceased member's or retirant's unmarried child (a) under the age of 18, or (b) 18 years of age or older and enrolled in a secondary school, or (c) under the age of 24 and enrolled in a degree program in an institution of higher education for at least 12 credit hours in each semester, provided that the member died in active service as a result of an accident met in the actual performance of duty at some definite time and place, and the death was not the result of the member's willful misconduct, or (d) of any age who, at the time of the member's or retirant's death, is disabled because of an intellectual disability or physical incapacity, is unable to do any substantial, gainful work because of the impairment and his impairment has lasted or can be expected to last for a continuous period of not less than 12 months, as affirmed by the medical board.

     (22) "Parent" shall mean the parent of a member who was receiving at least one-half of his support from the member in the 12-month period immediately preceding the member's death or the accident which was the direct cause of the member's death.  The dependency of such a parent will be considered terminated by marriage of the parent subsequent to the death of the member.

     (23) (a) "Widower," for employees of the State, means the man to whom a member or retirant was married, or a domestic partner as defined in section 3 of P.L.2003, c.246 (C.26:8A-3), on the date of her death and who has not since remarried or established a domestic partnership. In the event of the payment of accidental death benefits, pursuant to section 10 of P.L.1944, c.255 (C.43:16A-10), the restriction concerning remarriage or establishment of a domestic partnership shall be waived.

     (b)   Subject to the provisions of paragraph (c) of this subsection, "widower," for employees of public employers other than the State, means the man to whom a member or retirant was married on the date of her death and who has not remarried.

     (c)   A public employer other than the State may adopt a resolution providing that the term "widower" as defined in paragraph (b) of this subsection shall include domestic partners as provided in paragraph (a) of this subsection.

     (24) (a) "Widow," for employees of the State, means the woman to whom a member or retirant was married, or a domestic partner as defined in section 3 of P.L.2003, c.246 (C.26:8A-3), on the date of his death and who has not since remarried or established a domestic partnership.  In the event of the payment of accidental death benefits, pursuant to section 10 of P.L.1944, c.255 (C.43:16A-10), the restriction concerning remarriage or establishment of a domestic partnership shall be waived.

     (b)   Subject to the provisions of paragraph (c) of this subsection, "widow," for employees of public employers other than the State, means the woman to whom a member or retirant was married on the date of his death and who has not remarried.

     (c)   A public employer other than the State may adopt a resolution providing that the term "widow" as defined in paragraph (b) of this subsection shall include domestic partners as provided in paragraph (a) of this subsection.

     (25) "Fiscal year" shall mean any year commencing with July 1, and ending with June 30, next following.

     (26) (a) "Compensation" shall mean the base salary, for services as a member as defined in this act, which is in accordance with established salary policies of the member's employer for all employees in the same position but shall not include individual salary adjustments which are granted primarily in anticipation of the member's retirement or additional remuneration for performing temporary duties beyond the regular workday.

     (b)   In the case of a person who becomes a member of the retirement system on or after the effective date of P.L.2010, c.1, "compensation" means the amount of base salary equivalent to the annual maximum wage contribution base for Social Security, pursuant to the Federal Insurance Contributions Act, for services as a member as defined in this act, which is in accordance with established salary policies of the member's employer for all employees in the same position but shall not include individual salary adjustments which are granted primarily in anticipation of the member's retirement or additional remuneration for performing temporary duties beyond the regular workday.

     (27) "Department" shall mean any police or fire department of a municipality or a fire department of a fire district located in a township or a county police or park police department or the appropriate department of the State or instrumentality thereof. (28) (a) "Final compensation" means the compensation received by the member in the last 12 months of creditable service preceding his retirement or death.

     (b)   In the case of a person who becomes a member of the retirement system on or after the effective date of P.L.2010, c.1, "final compensation" means the average annual compensation for service for which contributions are made during any three fiscal years of membership providing the largest possible benefit to the member or the member's beneficiary.

     (29) (Deleted by amendment, P.L.1992, c.78).

     (30) (Deleted by amendment, P.L.1992, c.78).

     (31) (a) "Spouse," for employees of the State, means the husband or wife, or domestic partner as defined in section 3 of P.L.2003, c.246 (C.26:8A-3), of a member.

     (b)   Subject to the provisions of paragraph (c) of this subsection, "spouse," for employees of public employers other than the State, means the husband or wife of a member.

     (c)   A public employer other than the State may adopt a resolution providing that the term "spouse" as defined in paragraph (b) of this subsection shall include domestic partners as provided in paragraph (a) of this subsection.

(cf: P.L.2010, c.50, s.74) 

 

     43.  N.J.S.18A:66-2 is amended to read as follows:

     18A:66-2.  As used in this article:

     a.     "Accumulated deductions" means the sum of all the amounts, deducted from the compensation of a member or contributed by or in behalf of the member, including interest credited to January 1, 1956, standing to the credit of the member's individual account in the annuity savings fund.

     b.    "Annuity" means payments for life derived from the accumulated deductions of a member as provided in this article.

     c.     "Beneficiary" means any person receiving a retirement allowance or other benefit as provided in this article.

     d. (1) "Compensation" means the contractual salary, for services as a teacher as defined in this article, which is in accordance with established salary policies of the member's employer for all employees in the same position but shall not include individual salary adjustments which are granted primarily in anticipation of the member's retirement or additional remuneration for performing temporary or extracurricular duties beyond the regular school day or the regular school year.

     (2)   In the case of a person who becomes a member of the retirement system on or after July 1, 2007, "compensation" means the amount of the contractual salary equivalent to the annual maximum wage contribution base for Social Security, pursuant to the Federal Insurance Contributions Act, for services as a teacher as defined in this article, which is in accordance with established salary policies of the member's employer for all employees in the same position but shall not include individual salary adjustments which are granted primarily in anticipation of the member's retirement or additional remuneration for performing temporary or extracurricular duties beyond the regular school day or the regular school year. This paragraph shall not apply to a person who at the time of enrollment in the retirement system on or after July 1, 2007 transfers service credit from another State-administered retirement system pursuant to N.J.S.18A:66-15.1, but shall apply to a former member of the retirement system who has been granted a retirement allowance and is reenrolled in the retirement system on or after July 1, 2007 pursuant to N.J.S.18A:66-53.2 after becoming employed again in a position that makes the person eligible to be a member of the retirement system.

     For the period of July 1, 2009 through June 30, 2011, "contractual salary" for State employees shall include wage increases under a collective negotiations agreement notwithstanding that, by amendment to that collective negotiations agreement, the effective date of the contractual increase has been deferred.  For the purpose of this paragraph, "State employee" means an employee in the Executive Branch of State government of New Jersey.

     e.     "Employer" means the State, the board of education or any educational institution or agency of or within the State by which a teacher is paid.

     f. (1) "Final compensation" means the average annual compensation for which contributions are made for the three years of creditable service in New Jersey immediately preceding the member's retirement or death, or it shall mean the average annual compensation for New Jersey service for which contributions are made during any three fiscal years of his or her membership providing the largest possible benefit to the member or the member's beneficiary.

     (2)   In the case of a person who becomes a member of the retirement system on or after the effective date of P.L.2010, c.1, "final compensation" means the average annual compensation for which contributions are made for the five years of creditable service in New Jersey immediately preceding the member's retirement or death, or it shall mean the average annual compensation for New Jersey service for which contributions are made during any five fiscal years of his or her membership providing the largest possible benefit to the member or the member's beneficiary.

     g.     "Fiscal year" means any year commencing with July 1, and ending with June 30, next following.

     h.     "Pension" means payments for life derived from appropriations made by the State or employers to the Teachers' Pension and Annuity Fund.

     i.      "Annuity reserve" means the present value of all payments to be made on account of any annuity or benefit in lieu of an annuity, granted under the provisions of this article, computed on the basis of such mortality tables recommended by the actuary as the board of trustees adopts, with regular interest.

     j.     "Pension reserve" means the present value of all payments to be made on account of any pension or benefit in lieu of a pension granted to a member from the Teachers' Pension and Annuity Fund, computed on the basis of such mortality tables recommended by the actuary as the board of trustees adopts, with regular interest.

     k.    "Present-entrant" means any member of the Teachers' Pension and Annuity Fund who had established status as a "present-entrant member" of said fund prior to January 1, 1956.

     l.      "Rate of contribution initially certified" means the rate of contribution certified by the retirement system in accordance with N.J.S.18A:66-29.

     m.    "Regular interest" shall mean interest as determined by the [State Treasurer] board, after consultation with and recommendation of the [Directors of the Divisions of Investment and Pensions, the board of trustees and the] actuary. [It shall bear a reasonable relationship to the percentage rate of earnings on investments based on the market value of assets but shall not exceed the assumed percentage rate of increase applied to salaries plus 3%, provided however that the board of trustees shall not set the average percentage rate of increase applied to salaries below 6%.]

     n.     "Retirement allowance" means the pension plus the annuity.

     o.    "School service" means any service as a "teacher" as defined in this section.

     p.    "Teacher" means any regular teacher, special teacher, helping teacher, teacher clerk, principal, vice-principal, supervisor, supervising principal, director, superintendent, city superintendent, assistant city superintendent, county superintendent, State Commissioner or Assistant Commissioner of Education, members of the State Department of Education who are certificated, unclassified professional staff and other members of the teaching or professional staff of any class, public school, high school, normal school, model school, training school, vocational school, truant reformatory school, or parental school, and of any and all classes or schools within the State conducted under the order and superintendence, and wholly or partly at the expense of the State Board of Education, of a duly elected or appointed board of education, board of school directors, or board of trustees of the State or of any school district or normal school district thereof, and any persons under contract or engagement to perform one or more of these functions. It shall also mean any person who serves, while on an approved leave of absence from regular duties as a teacher, as an officer of a local, county or State labor organization which represents, or is affiliated with an organization which represents, teachers as defined in this subsection. No person shall be deemed a teacher within the meaning of this article who is a substitute teacher. In all cases of doubt the board of trustees shall determine whether any person is a teacher as defined in this article.

     q.    "Teachers' Pension and Annuity Fund," hereinafter referred to as the "retirement system" or "system," is the corporate name of the arrangement for the payment of retirement allowances and other benefits under the provisions of this article, including the several funds placed under said system. By that name all its business shall be transacted, its funds invested, warrants for money drawn, and payments made and all of its cash and securities and other property held.

     r.     "Veteran" means any honorably discharged officer, soldier, sailor, airman, marine or nurse who served in any Army, Air Force or Navy of the Allies of the United States in World War I between July 14, 1914, and November 11, 1918, or who served in any Army, Air Force or Navy of the Allies of the United States in World War II, between September 1, 1939, and September 2, 1945, and who was inducted into such service through voluntary enlistment, and was a citizen of the United States at the time of such enlistment, and who did not, during or by reason of such service, renounce or lose United States citizenship, and any officer, soldier, sailor, marine, airman, nurse or army field clerk who has served in the active military or naval service of the United States and has or shall be discharged or released therefrom under conditions other than dishonorable, in any of the following wars, uprisings, insurrections, expeditions or emergencies, and who has presented to the retirement system evidence of such record of service in form and content satisfactory to said retirement system:

     (1)   The Indian wars and uprisings during any of the periods recognized by the War Department of the United States as periods of active hostility;

     (2)   The Spanish-American War between April 20, 1898, and April 11, 1899;

     (3)   The Philippine insurrections and expeditions during the periods recognized by the War Department of the United States as of active hostility from February 4, 1899, to the end of 1913;

     (4)   The Peking relief expedition between June 20, 1900, and May 27, 1902;

     (5)   The army of Cuban occupation between July 18, 1898, and May 20, 1902;

     (6)   The army of Cuban pacification between October 6, 1906, and April 1, 1909;

     (7)   The Mexican punitive expedition between March 14, 1916, and February 7, 1917;

     (8)   The Mexican border patrol, having actually participated in engagements against Mexicans between April 12, 1911, and June 16, 1919;

     (9)   World War I, between April 6, 1917, and November 11, 1918;

     (10) World War II, between September 16, 1940, and December 31, 1946, who shall have served at least 90 days in such active service, exclusive of any period of assignment (1) for a course of education or training under the Army Specialized Training Program or the Navy College Training Program, which course was a continuation of a civilian course and was pursued to completion, or (2) as a cadet or midshipman at one of the service academies, any part of which 90 days was served between said dates; provided that any person receiving an actual service-incurred injury or disability shall be classed as a veteran, whether or not that person has completed the 90-day service as herein provided;

     (11) Korean conflict on or after June 23, 1950, and on or prior to January 31, 1955, who shall have served at least 90 days in such active service, exclusive of any period of assignment (1) for a course of education or training under the Army Specialized Training Program or the Navy College Training Program, which course was a continuation of a civilian course and was pursued to completion, or (2) as a cadet or midshipman at one of the service academies, any part of which 90 days was served between said dates; provided that any person receiving an actual service-incurred injury or disability shall be classed as a veteran, whether or not that person has completed the 90-day service as herein provided; and provided further that any member classed as a veteran pursuant to this subsection prior to August 1, 1966, shall continue to be classed as a veteran, whether or not that person completed the 90-day service between said dates as herein provided;

     (12) Lebanon crisis, on or after July 1, 1958, who has served in Lebanon or on board any ship actively engaged in patrolling the territorial waters of that nation for a period, continuous or in the aggregate, of at least 14 days commencing on or before November 1, 1958 or the date of termination of that conflict, as proclaimed by the President of the United States or Congress, whichever date of termination is the latest, in such active service; provided, that any person receiving an actual service-incurred injury or disability shall be classed as a veteran whether or not that person has completed the 14 days' service as herein provided;

     (13) Vietnam conflict, on or after December 31, 1960, and on or prior to May 7, 1975, who shall have served at least 90 days in such active service, exclusive of any period of assignment (1) for a course of education or training under the Army Specialized Training Program or the Navy College Training Program, which course was a continuation of a civilian course and was pursued to completion, or (2) as a cadet or midshipman at one of the service academies, any part of which 90 days was served between said dates; and exclusive of any service performed pursuant to the provisions of section 511(d) of Title 10, United States Code, pursuant to an enlistment in the Army National Guard or as a reserve for service in the Army Reserve, Naval Reserve, Air Force Reserve, Marine Corps Reserve, or Coast Guard Reserve; provided that any person receiving an actual service-incurred injury or disability shall be classed as a veteran, whether or not that person has completed the 90-day service as herein provided;

     (14) Lebanon peacekeeping mission, on or after September 26, 1982, who has served in Lebanon or on board any ship actively engaged in patrolling the territorial waters of that nation for a period, continuous or in the aggregate, of at least 14 days commencing on or before December 1, 1987 or the date of termination of that mission, as proclaimed by the President of the United States or Congress, whichever date of termination is the latest, in such active service; provided, that any person receiving an actual service-incurred injury or disability shall be classed as a veteran whether or not that person has completed the 14 days' service as herein provided;

     (15) Grenada peacekeeping mission, on or after October 23, 1983, who has served in Grenada or on board any ship actively engaged in patrolling the territorial waters of that nation for a period, continuous or in the aggregate, of at least 14 days commencing on or before November 21, 1983 or the date of termination of that mission, as proclaimed by the President of the United States or Congress, whichever date of termination is the latest, in such active service; provided, that any person receiving an actual service-incurred injury or disability shall be classed as a veteran whether or not that person has completed the 14 days' service as herein provided;

     (16) Panama peacekeeping mission, on or after December 20, 1989 or the date of inception of that mission, as proclaimed by the President of the United States or Congress, whichever date of inception is earliest, who has served in Panama or on board any ship actively engaged in patrolling the territorial waters of that nation for a period, continuous or in the aggregate, of at least 14 days commencing on or before January 31, 1990 or the date of termination of that mission, as proclaimed by the President of the United States or Congress, whichever date of termination is the latest, in such active service; provided, that any person receiving an actual service-incurred injury or disability shall be classed as a veteran whether or not that person has completed the 14 days' service as herein provided;

     (17) Operation "Desert Shield/Desert Storm" mission in the Arabian peninsula and the Persian Gulf, on or after August 2, 1990 or the date of inception of that operation, as proclaimed by the President of the United States or Congress, whichever date of inception is earliest, who has served in the Arabian peninsula or on board any ship actively engaged in patrolling the Persian Gulf for a period, continuous or in the aggregate, of at least 14 days commencing on or before the date of termination of that mission, as proclaimed by the President of the United States or Congress, whichever date of termination is the latest, in such active service; provided, that any person receiving an actual service-incurred injury or disability shall be classed as a veteran whether or not that person has completed the 14 days' service as herein provided;

     (18) Operation Northern Watch and Operation Southern Watch, on or after August 27, 1992, or the date of inception of that operation, as proclaimed by the President of the United States, Congress or United States Secretary of Defense, whichever date of inception is earliest, who served in the theater of operation, including in the Arabian peninsula and the Persian Gulf, and in direct support of that operation for a period, continuously or in the aggregate, of at least 14 days in such active service, commencing on or before the date of termination of the operation, as proclaimed by the President of the United States, Congress or United States Secretary of Defense, whichever date of termination is latest; provided, that any person receiving an actual service-incurred injury or disability while engaged in such service shall be classed as a veteran whether or not that person has completed the 14 days' service as herein provided;

     (19) Operation "Restore Hope" in Somalia, on or after December 5, 1992, or the date of inception of that operation as proclaimed by the President of the United States or Congress, whichever date is earliest, who has served in Somalia or on board any ship actively engaged in patrolling the territorial waters of that nation for a period, continuously or in the aggregate, of at least 14 days in such active service commencing on or before March 31, 1994; provided that any person receiving an actual service-incurred injury or disability shall be classed as a veteran whether or not that person has completed the 14-day service as herein provided;

     (20) Operations "Joint Endeavor" and "Joint Guard" in the Republic of Bosnia and Herzegovina, on or after November 20, 1995, who served in such active service in direct support of one or both of the operations for at least 14 days, continuously or in the aggregate, commencing on or before June 20, 1998, and (1) was deployed in that nation or in another area in the region, or (2) was on board a United States naval vessel operating in the Adriatic Sea, or (3) operated in airspace above the Republic of Bosnia and Herzegovina; provided that any person receiving an actual service-incurred injury or disability shall be classed as a veteran whether or not that person completed the 14-day service requirement;

     (21) Operation "Enduring Freedom", on or after September 11, 2001, who served in a theater of operation and in direct support of that operation for a period, continuously or in the aggregate, of at least 14 days in such active service commencing on or before the date the President of the United States or the United States Secretary of Defense designates as the termination date of that operation; provided, that any person receiving an actual service-incurred injury or disability while engaged in such service shall be classed as a veteran whether or not that person has completed the 14 days' service as herein provided; and

     (22) Operation "Iraqi Freedom", on or after the date the President of the United States or the United States Secretary of Defense designates as the inception date of that operation, who served in Iraq or in another area in the region in direct support of that operation for a period, continuously or in the aggregate, of at least 14 days in such active service commencing on or before the date the President of the United States or the United States Secretary of Defense designates as the termination date of that operation; provided, that any person receiving an actual service-incurred injury or disability while engaged in such service shall be classed as a veteran whether or not that person has completed the 14 days' service as herein provided.

     "Veteran" also means any honorably discharged member of the American Merchant Marine who served during World War II and is declared by the United States Department of Defense to be eligible for federal veterans' benefits.

     s.     "Child" means a deceased member's unmarried child either (a) under the age of 18 or (b) of any age who, at the time of the member's death, is disabled because of mental retardation or physical incapacity, is unable to do any substantial, gainful work because of the impairment and the impairment has lasted or can be expected to last for a continuous period of not less than 12 months, as affirmed by the medical board.

     t. (1) "Widower," for employees of the State, means the man to whom a member was married, or a domestic partner as defined in section 3 of P.L.2003, c.246 (C.26:8A-3), at least five years before the date of her death and to whom she continued to be married or a domestic partner until the date of her death and who was receiving at least one-half of his support from the member in the 12-month period immediately preceding the member's death or the accident which was the direct cause of the member's death. The dependency of such a widower will be considered terminated by marriage of, or establishment of a domestic partnership by, the widower subsequent to the death of the member. In the event of the payment of an accidental death benefit, the five-year qualification shall be waived.

     (2)   Subject to the provisions of paragraph (3) of this subsection, "widower," for employees of public employers other than the State, means the man to whom a member was married at least five years before the date of her death and to whom she continued to be married until the date of her death and who was receiving at least one-half of his support from the member in the 12-month period immediately preceding the member's death or the accident which was the direct cause of the member's death. The dependency of such a widower shall be considered terminated by marriage of the widower subsequent to the death of the member. In the event of the payment of an accidental death benefit, the five-year qualification shall be waived.

     (3)   A public employer other than the State may adopt a resolution providing that the term "widower" as defined in paragraph (2) of this subsection shall include domestic partners as provided in paragraph (1) of this subsection.

     u. (1) "Widow," for employees of the State, means the woman to whom a member was married, or a domestic partner as defined in section 3 of P.L.2003, c.246 (C.26:8A-3), at least five years before the date of his death and to whom he continued to be married or a domestic partner until the date of his death and who was receiving at least one-half of her support from the member in the 12-month period immediately preceding the member's death or the accident which was the direct cause of the member's death. The dependency of such a widow will be considered terminated by the marriage of, or establishment of a domestic partnership by, the widow subsequent to the member's death. In the event of the payment of an accidental death benefit, the five-year qualification shall be waived.

     (2)   Subject to the provisions of paragraph (3) of this subsection, "widow," for employees of public employers other than the State, means the woman to whom a member was married at least five years before the date of his death and to whom he continued to be married until the date of his death and who was receiving at least one-half of her support from the member in the 12-month period immediately preceding the member's death or the accident which was the direct cause of the member's death. The dependency of such a widow shall be considered terminated by the marriage of the widow subsequent to the member's death. In the event of the payment of an accidental death benefit, the five-year qualification shall be waived.

     (3)   A public employer other than the State may adopt a resolution providing that the term "widower" as defined in paragraph (2) of this subsection shall include domestic partners as provided in paragraph (1) of this subsection.

     v.     "Parent" means the parent of a member who was receiving at least one-half of the parent's support from the member in the 12-month period immediately preceding the member's death or the accident which was the direct cause of the member's death. The dependency of such a parent will be considered terminated by marriage of the parent subsequent to the death of the member.

     w.    "Medical board" means the board of physicians provided for in N.J.S.18A:66-56.

     x.     (1) "Spouse," for employees of the State, means the husband or wife, or domestic partner as defined in section 3 of P.L.2003, c.246 (C.26:8A-3), of a member.

     (2)   Subject to the provisions of paragraph (1) of this subsection, "spouse," for employees of public employers other than the State, means the husband or wife of a member.

     (3)   A public employer other than the State may adopt a resolution providing that the term "spouse" as defined in paragraph (2) of this subsection shall include domestic partners as provided in paragraph (1) of this subsection.

(cf:  P.L.2010, c.1, s.20)

 

     44.  Section 3 of P.L.1965, c.89 (C.53:5A-3) is amended to read as follows:

     3.    As used in this act:

     a.     "Aggregate contributions" means the sum of all the amounts, deducted from the salary of a member or contributed by him or on his behalf, standing to the credit of his individual account in the Annuity Savings Fund.  Interest credited on contributions to the former "State Police Retirement and Benevolent Fund" shall be included in a member's aggregate contributions.

     b.    "Annuity" means payments for life derived from the aggregate contributions of a member.

     c.     "Annuity reserve" means the present value of all payments to be made on account of any annuity or benefit in lieu of an annuity, computed upon the basis of such mortality tables recommended by the actuary as the board of trustees adopts and regular interest.

     d.    "Beneficiary" means any person entitled to receive any benefit pursuant to the provisions of this act by reason of the death of a member or retirant.

     e.     "Board of trustees" or "board" means the board provided for in section 30 of this act.

     f.     "Child" means a deceased member's or retirant's unmarried child either (a) under the age of 18 or (b) of any age who, at the time of the member's or retirant's death, is disabled because of an intellectual disability or physical incapacity, is unable to do any substantial, gainful work because of the impairment and his impairment has lasted or can be expected to last for a continuous period of not less than 12 months, as affirmed by the medical board.

     g.     "Creditable service" means service rendered for which credit is allowed on the basis of contributions made by the member or the State.

     h.     "Parent" means the parent of a member who was receiving at least one-half of his support from the member in the 12-month period immediately preceding the member's death or the accident which was the direct cause of the member's death.  The dependency of such a parent will be considered terminated by marriage of the parent subsequent to the death of the member.

     i. (1) "Final compensation" means the average compensation received by the member in the last 12 months of creditable service preceding his retirement or death.  Such term includes the value of the member's maintenance allowance for this same period.

     (2)   In the case of a person who becomes a member of the retirement system on or after the effective date of P.L.2010, c.1, "final compensation" means the average annual compensation for service for which contributions are made during any three fiscal years of membership providing the largest possible benefit to the member or the member's beneficiary.  Such term includes the value of the member's maintenance allowance for this same period.

     j. (1) "Final salary" means the average salary received by the member in the last 12 months of creditable service preceding his retirement or death.  Such term shall not include the value of the member's maintenance allowance.

     (2)   In the case of a person who becomes a member of the retirement system on or after the effective date of P.L.2010, c.1, "final salary" means the average annual salary for service for which contributions are made during any three fiscal years of membership providing the largest possible benefit to the member or the member's beneficiary.  Such term shall not include the value of the member's maintenance allowance.

     k.    "Fiscal year" means any year commencing with July 1 and ending with June 30 next following.

     l.      "Medical board" means the board of physicians provided for in section 30 of this act.

     m.    "Member" means any full-time, commissioned officer, non-commissioned officer or trooper of the Division of State Police of the Department of Law and Public Safety of the State of New Jersey enrolled in the retirement system established by this act.

     n.     "Pension" means payment for life derived from contributions by the State.

     o.    "Pension reserve" means the present value of all payments to be made on account of any pension or benefit in lieu of any pension computed on the basis of such mortality tables recommended by the actuary as shall be adopted by the board of trustees and regular interest.

     p.    "Regular interest" means interest as determined by the [State Treasurer] board, after consultation with and recommendation of the [Directors of the Divisions of Investment and Pensions, the board of trustees and the] actuary.  [It shall bear a reasonable relationship to the percentage rate of earnings on investments based on the market value of the assets but shall not exceed the assumed percentage rate of increase applied to salaries plus 3%, provided however that the board of trustees shall not set the average percentage rate of increase applied to salaries below 6%.]

     q.    "Retirant" means any former member receiving a retirement allowance as provided by this act.

     r.     "Retirement allowance" means the pension plus the annuity.

     s.     "State Police Retirement System of New Jersey," herein also referred to as the "retirement system" or "system," is the corporate name of the arrangement for the payment of retirement allowances and of the benefits under the provisions of this act including the several funds placed under said system.  By that name, all of its business shall be transacted, its funds invested, warrants for moneys drawn, and payments made and all of its cash and securities and other property held.  All assets held in the name of the former "State Police Retirement and Benevolent Fund" shall be transferred to the retirement system established by this act.

     t.     "Surviving spouse" means the person to whom a member or a retirant was married, or a domestic partner as defined in section 3 of P.L.2003, c.246 (C.26:8A-3), on the date of the death of the member or retirant. The dependency of such a surviving spouse will be considered terminated by the marriage of, or establishment of a domestic partnership by, the surviving spouse subsequent to the member's or the retirant's death, except that in the event of the payment of accidental death benefits, pursuant to section 14 of P.L.1965, c.89 (C.53:5A-14), the dependency of such a surviving spouse or domestic partner will not be considered terminated by the marriage of, or establishment of a domestic partnership by, the surviving spouse subsequent to the member's death.

     u. (1) "Compensation" for purposes of computing pension contributions means the base salary, for services as a member as defined in this act, which is in accordance with established salary policies of the State for all employees in the same position but shall not include individual salary adjustments which are granted primarily in anticipation of the member's retirement or additional remuneration for performing temporary duties beyond the regular workday or shift.

     (2)   In the case of a person who becomes a member of the retirement system on or after the effective date of P.L.2010, c.1, "compensation" means the amount of base salary equivalent to the annual maximum wage contribution base for Social Security, pursuant to the Federal Insurance Contributions Act, for services as a member as defined in this act, which is in accordance with established salary policies of the State for all employees in the same position but shall not include individual salary adjustments which are granted primarily in anticipation of the member's retirement or additional remuneration for performing temporary duties beyond the regular workday or shift.

(cf: P.L.2010, c.50, s.80)

 

     45.  The terms of service of those appointed and elected members serving on the boards of trustees of the Teachers’ Pension and Annuity Fund, the Public Employees’ Retirement System, the Police and Firemen’s Retirement System, and the State Police Retirement System on the effective date of this act, P.L.   , c.     (pending before the Legislature as this bill), shall be terminated as of that effective date so that the composition of those boards as provided for in this act shall be attained.  A trustee whose service on the board has been terminated pursuant to this section may be appointed to serve as a trustee after that effective date if qualified.

 

     46.  Section 1 of P.L.1997, c.63 (C.18A:66-56.1) is repealed.

 

     47.  This act shall take effect on the 120th day after enactment, except that sections 7 through 16, inclusive, shall take effect the first day of the thirteenth month following enactment.  The Division of Pensions and Benefits in the Department of the Treasury, the Commissioner of the Department of Labor and Workforce Development, and the various boards of trustees shall take such anticipatory action as may be deemed necessary and appropriate to effectuate the implementation of this act.

 

 

STATEMENT

 

     This bill makes various changes to Teachers’ Pension and Annuity Fund (TPAF), the Public Employees’ Retirement System (PERS), the Police and Firemen’s Retirement System (PFRS), the Judicial Retirement System (JRS), and the State Police Retirement System (SPRS).

     The bill changes the membership of the board of trustees of the TPAF, PERS, PFRS, and SPRS to ensure that there are an equal number of trustees representing public employers and an equal number representing public employees.  The trustees representing public employees will be appointed by the heads of pubic employee unions in this State and the Director of the John J. Heldrich Center for Workforce Development at the Edward J. Bloustein School of Planning and Public Policy at Rutgers, the State University will allocate the number of trustees to be appointed by each union head.  Election of trustees is eliminated.

     The bill prohibits any trustee of the board of the TPAF, PERS, PFRS, SPRS, and JRS from accepting from any person, whether directly or indirectly and whether by himself or through his spouse or any member of his family, or through any partner or associate, any gift, favor, service, employment or offer of employment, or any other thing of value, including contributions to the campaign of a member as a candidate for elective public office, which he knows or has reason to  believe is offered to him with intent to influence him in the performance of  his public duties and responsibilities.  As defined, “person” means an (1) individual or business entity, or officer or employee of such an entity, who is seeking, or who holds, or who held within the prior three years, a contract with the board; (2) an active or retired member, or beneficiary, of the retirement system; or (3) an entity, or officer or employee of such an entity, in which the assets of the retirement system have been invested.  A board member violating this prohibition will guilty of a crime of the third degree.

     The bill vests with the board of trustees of the PFRS and SPRS, and permits the board of the PERS and TPAF to assume, all the functions, powers, and duties for, or relating to, investment or reinvestment of moneys, and purchase, sale or exchange of any investments or securities, of or for any funds or accounts under the control and management of each board.  These functions, powers, and duties are currently performed by the Division of Investment in the Department of the Treasury.  The bill authorizes the director of that division to administer all the activities and implement all the decisions of each board to the extent and in the manner authorized, approved, or directed by each board. 

     The bill authorizes the boards of the TPAF, PERS, PFRS, and SPRS, at the board’s discretion, to establish a division or unit, and use external managers, for the administration and implementation of matters with regard to its functions, powers, and duties vested by law for, or relating to, investment or reinvestment of moneys of, and purchase, sale or exchange of any investments or securities of or for any funds or accounts under the control and management of each board, consistent with applicable law and the policies, procedures, and regulations of the board.  If a board makes such an election, the board must consult and coordinate with the Division of Investment in the Department of the Treasury and the State Investment Council for such transfers as deemed necessary and appropriate.  If the board makes such an election, the board must comply with applicable provisions of P.L.1950, c.270 (C.52:18A-79 et seq.). 

     All actions and decisions of any division or unit or external manager regarding investments must be authorized by either general policies, objectives, or guidelines or specific orders of the board, or by approval by the board or the finance committee of the board of a specific action or decision. 

     The bill provides that the details of contracts with external managers used by the Division of Investment in the Department of the Treasury for investment of pension system assets, including information on types of investments, fees paid, and performance benchmarks and actual performance, must be available for public inspection, examination, and copying as a government record in accordance with the open public records act (P.L.1963, c.73; C.47:1A-1 et seq.).

     The bill changes the member contribution rate for TPAF, PERS, PFRS, SPRS, and JRS so that, for the valuation period commencing after the effective date of the bill, or at such earlier date as the board determines, the contribution rate for a member, expressed as a percentage of salary, will be equal to the employer contribution, expressed as a percentage of the salary base, the sum of which percentage amounts will equal the normal cost of the retirement system as determined in the annual valuation by the actuary.  If the contributions of members based on the statutory rate represent 40% or less of the normal cost of the retirement system, then the statutory rate will remain in effect until the board increases that rate.  If the contributions of members based on the statutory rate represent more than 50% of the normal cost of the retirement system, then the statutory rate will remain in effect until the board adjusts that rate.

     The bill also authorizes the board of trustees of the TPAF, PERS, PFRS, SPRS, and JRS to adjust the contribution rate of the members of the system, after consultation with and recommendation of the actuary of the system, as determined by the board to be reasonable, necessary, and appropriate. 

     The actuary of the system will recommend how the amount resulting from an increase in the contribution rate should be recognized and allocated in an annual valuation report.  In no event can that resulting amount be allocated toward the payment of the unfunded accrued liability that is the result, as determined by the actuary, of an employer not making the full payment of the certified annual actuarially required contribution as determined in the valuation of the system by the actuary, and including any loss of interest or earnings on those contributions not made, and of changes in investment interest or earnings. 

     The bill also allocates the responsibility for the portion of any unfunded accrued liability that is not attributable to the employer not making the full certified contributions, the loss of interest or earnings on those contributions, and changes in investment interest and earnings equally between members and employers.  A reduction in the unfunded accrued liability resulting from a modification of benefits pursuant to this bill must be solely attributable to the portion of unfunded accrued liability allocated to the members.  An unfunded liability that accrues after the effective date of the bill the responsibility for which is shared equally by the employers and members must be amortized using a 30-year closed amortization period.

     Upon the request of the board of trustees, the actuary of the system is to make a recommendation in the annual valuation report with regard to the contribution rate or rates for members of the system, based on the valuation of the assets and liabilities and the funded ratio of the system, in order to attain and maintain the financial condition of the system that the board has determined to be reasonable, necessary, and appropriate.  The board in making such a determination may consider the standards set or recommended by relevant national authorities for the financial condition of such similar systems and may consider the standards of the Governmental Accounting Standards Board for the purpose of valuing the assets and liabilities and calculating the funded ratio of the system. 

     The bill provides that the board may, in its discretion and at such time and in such manner as the board determines, enhance any benefit set forth in statute for the JRS, TPAF, PERS, PFRS, and SPRS as the board determines to be reasonable and appropriate, subject to the election of a member to receive that enhancement and to make an additional annual contribution for that enhancement at a rate to be determined by the board, or reduce any such benefit as an alternative to an increase in the member contribution rate, which increase the board determines to be reasonable, necessary, and appropriate, or reinstate, when appropriate, such reduced benefit to the statutory level without an additional contribution by the members.

     The bill terminates the application of the “Pension Adjustment Act,” P.L.1958, c.143 (C.43:3B-1 et seq.), for members of the TPAF, PERS, PFRS, SPRS, and JRS with less than five years of service credit in the system on the bill’s effective date.  For those members with five or more years of service on that effective date, the application of the act may continue if the member elects to contribute such an additional amount to the retirement system as determined by the board of trustees for the benefit going forward.  Contributions by the employer will also continue for those members who make such an election.

     The bill provides that the multiplier of final compensation used in the calculation of the deferred, early, and service retirement allowances for members of the TPAF and the PERS will change from 1/55 to 1/60 for service credited on and after the bill’s effective date.  The bill allows a TPAF or PERS member to contribute an additional amount to the system representing the additional benefit as determined by the board of trustees, which amount cannot be less than 50% of the cost of the benefit as determined by the actuary of the system unless the board determines otherwise, in order to continue to have a deferred, early, or service retirement allowance calculated using 1/55 for all service credited on and after the effective date. Contributions by the employer will also continue for those members who make such an election.

     The bill requires the board of trustees of the TPAF, PERS, PFRS, SPRS , and JRS to select the actuary for the system.  If the board cannot agree on the selection, the Retirement Systems Actuary Selection Committee, which currently makes the selection, will do so.  The bill changes the membership of the committee to consist of the State Treasurer and the Director of the Division of Pensions and Benefits, and one member designated by each board of trustees of the PERS, TPAF, JRS, SPRS, and PFRS.  The bill removes from the committee the Director of the Division of Investment and of the Office of Management and Budget, and adds a representative of the board of the JRS and the SPRS.

     The bill authorizes the board of trustees of the TPAF, PERS, PFRS, SPRS, and JRS to determine, upon the advice of the Director of the Division of Pensions and Benefits, the State Treasurer, and the actuary of the system, the rate of increase for the contribution toward the unfunded accrued liability of the system and the time period for full funding of this liability, which cannot exceed 30 years.  Currently, the State Treasurer makes this determination and the board is consulted for advice.   

     The bill requires that, after consultation with and recommendation of the actuary, each board is to require, for the pension valuation period commencing after the effective date of the bill and for each period thereafter, the acceleration of payments by employers for the unfunded accrued liability over such a designated period of time as the board determines to be reasonable, necessary, and appropriate.

     The bill provides that each member of the TPAF, JRS, Prison Officers' Pension Fund, PERS, Consolidated Police and Firemen's Pension Fund, PFRS, and SPRS will have a contractual right to a securely funded retirement system in which contributions are made at the annual required contribution level by the employer or by any other public entity if so designated to make such contributions by law.  A contractual right to a  securely funded retirement system means that the employer or other public entity will make the annual required contributions on a timely basis such that the retirement benefits to which the members are entitled by statute or the actions of the boards of trustees, or both, and in consideration for their public service and in compensation for their work will be paid upon retirement.  This contractual right includes the right to have all employers and other public entities, including the State, make all annually required contributions as determined by the system actuary and the board of trustees.  The failure of any employer or other public entity, including the State, to make the annually required contributions will be deemed to be an impairment of the contractual right of each employee to a securely funded retirement system.  The amount of the State’s annually required contribution must be included in all annual appropriations acts as a dedicated line item.  Any member of any retirement system and any board of trustees may bring an action in the Superior Court, Law Division to enforce the contractual rights and the State and other employers waive any right to contest the jurisdiction of the court or to assert any immunity to suit.  If a member or board prevails in such action, the court must award that party their reasonable attorney’s fees, in addition to directing that all required funding be paid.

     The bill also provides that the rights reserved to the State in current law to alter, modify, or amend such retirement systems and funds, or to create in any member a right in the corpus or management of a retirement system or pension fund, cannot diminish the contractual right of employees to non-forfeitable benefits established by law and to securely funded retirement systems established by this bill.

     Finally, the bill changes the definition of "regular interest" in the JRS, PERS, PFRS, TPAF, and SPRS to mean interest as determined by the board of trustees after consultation and recommendation of the actuary.  Current law defines “regular interest” to mean interest as determined by the State Treasurer, after consultation with the Directors of the Divisions of Investment and Pensions and Benefits, the board of trustees, and the actuary, which bears a reasonable relationship to the percentage rate of earnings on investments based on the market value of the assets but not exceeding the assumed percentage rate of increase applied to salaries plus 3%, provided however, that the board of trustees must not set the average percentage rate of increase applied to salaries below 6%.

     The bill repeals one section of law that concerns the terms of office of elected members of the TPAF board of trustees.

     The bill, if enacted, will take effect 120 days after enactment, except that the provisions concerning the transfer of authority over investment of pension system assets will take effect one year after enactment.