S4632

An Act concerning the benefits provided to members and certain retirees of the Teachers’ Pension and Annuity Fund, amending various parts of the statutory law, and supplementing N.J.S.18A:66-1 et seq.

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

1. (New section) a. (1) Notwithstanding the provisions of P.L.2008, c.89; P.L.2010, c.1; P.L.2010, c.3; P.L.2011, c.78; or any other law, rule, or regulation to the contrary, all current, non-retired members of the Teachers’ Pension and Annuity Fund enrolled in the system after May 21, 2010 shall be entitled to and shall receive the same benefits received by members of the retirement system who enrolled in the system within the period starting after November 1, 2008, and ending on or before May 21, 2010, including, but not limited to, service retirement, deferred retirement, early retirement, veterans retirement, ordinary disability retirement, and accidental disability retirement benefits.

(2) Notwithstanding the provisions of any other law, rule, or regulation to the contrary, all new members of the Teachers’ Pension and Annuity Fund who enroll in the system on or after the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), shall be entitled to and shall receive the same benefits received by members of the retirement system who enrolled in the system within the period starting after November 1, 2008, and ending on or before May 21, 2010, including, but not limited to, service retirement, deferred retirement, early retirement, veterans retirement, ordinary disability retirement, and accidental disability retirement benefits.

(3) Notwithstanding the provisions of any other law, rule, or regulation to the contrary, a member of the Teachers’ Pension and Annuity Fund who enrolled in the system after May 21, 2010, whose application for retirement has been approved on or after the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), shall be entitled to and shall receive the same retirement benefits received by members who enrolled in the system within the period starting after November 1, 2008, and ending on or before May 21, 2010.

b. Notwithstanding the provisions of any other law, rule, or regulation to the contrary, any members of the Teachers’ Pension and Annuity Fund receiving long term disability insurance pursuant to section 10 of P.L.2010, c.3 (C.18A:66-39.1), shall be considered eligible to apply for ordinary or accidental disability retirement benefits pursuant to N.J.S.18A:66-1 et seq., eligible to be received by members enrolled in the retirement system within the period starting after November 1, 2008, and ending on or before May 21, 2010. If the member elects to apply for disability retirement benefits under the Teachers’ Pension and Annuity Fund in accordance with this section, the member shall do so no later than two calendar years following the date of the member’s eligibility to file an application.

2. 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] Except as provided in section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill), 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] Except as provided in section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill), 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, after consultation with 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, renaissance school project established pursuant to P.L.2011, c.176 (C.18A:36C-1 et seq.) upon commencement of employment, 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.

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.2018, c.129, s.1)

3. Section 34 of P.L.2010, c.1 (C.18A:66-4.2) is amended to read as follows:

34. [The] Except as provided in section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill), the provisions of N.J.S.18A:66-2, N.J.S.18A:66-36, N.J.S.18A:66-37, N.J.S.18A:66-44, and N.J.S.18A:66-71 concerning persons who become members of the retirement system on or after the effective date of P.L.2010, c.1 shall not apply to a person who at the time of enrollment in the retirement system on or after that effective date transfers service credit, as permitted, from another State-administered retirement system of which the person was a member immediately prior to the effective date and continuously thereafter, 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 that effective date after becoming employed again in a position that makes the person eligible to be a member of the retirement system.

(cf: P.L.2010, c.1, s.34)

4. Section 39 of P.L.1971, c.121 (C.18A:66-6.1) is amended to read as follows:

39. a. In the case of any person who was required to become a member of the retirement system as a condition of employment, and whose application for enrollment in the retirement system or whose application for transfer from one employer to another within the system was filed beyond the effective date for his compulsory enrollment in the system or his transfer within the system, such person shall be required to purchase membership credit for his compulsory coverage by paying into the annuity savings fund the amount required by applying, in accordance with N.J.S.18A:66-29, his rate of contribution on his current base salary subject to the retirement system for each year of previous service during which he was required to have been a member.

b. If more than 1 year has elapsed from the time that contributions would have been required from such person, 1/2 of the employee's cost established by the computation provided by subsection a. of this section, will be required of his employer and shall be included in the next budget subsequent to the certification of this special liability by the retirement system. The amount certified by the system shall be payable by the employer to the contingent reserve fund and shall be due and owing to the system even if the employee is no longer in the employ of the employer by the date such moneys are to be paid to the system.

c. The employee's obligation may be satisfied by regular installments, equal to at least 1/2 of the normal contribution to the retirement system, over a maximum period of 10 years, but not more than 2 years in the case of any employee who has attained or will attain age 60 within the 2-year period or, for a person who became a member of the retirement system on or after the effective date of P.L.2008, c.89, has attained or will attain age 62 within the 2-year period, except as provided in section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill).

d. In the case of any person coming under the provisions of this section, full pension credit for the period of employment for which arrears are being paid by the employee shall be given upon the payment of at least 1/2 of the total employee's arrearage obligation and the completion of 1 year of membership and the making of such arrears payments, except that in the case of retirement pursuant to N.J.S.18A:66-36, 18A:66-37, 18A:66-44 and 18A:66-71, the total membership credit for such service shall be in direct proportion as the amount paid bears to the total amount of the arrearage obligation of the employee.

(cf: P.L.2008, c.89, s.18)

5. 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 N.J.S.18A:28-5 and N.J.S.18A:28-9 to N.J.S.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] Except as provided in section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill), 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 1/64 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 or 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 10 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.2025, c.147, s.4)

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

18A:66-37. [Should] Except as provided in section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill), 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, or after having established 30 years of creditable service before reaching the age of 65 if the person became a member of the retirement system on or after the effective date of P.L.2011, c.78, 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 1/64 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, or 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;

(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; or

(d) for a person who becomes a member of the retirement system on or after the effective date of P.L.2011, c.78, by 1/4 of 1% for each month that the member lacks of being age 65; 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, except as provided in section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill).

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.2011, c.78, s.17)

7. N.J.S.18A:66-39 is amended to read as follows:

18A:66-39. a. Before June 9, 1971, a member, who shall have been a teacher and a member of the retirement system for each of the 10 years next preceding his retirement, shall, upon the application of his employer or upon his own application or the application of one acting in his behalf, be retired for ordinary disability by the board of trustees, on a regular disability allowance if he is under 60 years of age and on a service allowance if he has reached or passed that age. The physician or physicians designated by the board shall have first made a medical examination of him at his residence or at any other place mutually agreed upon and shall have certified to the board that the member is physically or mentally incapacitated for the performance of duty and should be retired.

b. On and after June 9, 1971, a member, under 60 years of age, who has 10 or more years of credit for New Jersey service, shall, upon the application of his employer or upon his own application or the application of one acting in his behalf, be retired for ordinary disability by the board of trustees. The physician or physicians designated by the board shall have first made a medical examination of him at his residence or at any other place mutually agreed upon and shall have certified to the board that the member is physically or mentally incapacitated for the performance of duty and should be retired. No person who becomes a member of the retirement system on or after the effective date of P.L.2010, c.3 shall be eligible for retirement pursuant to this subsection, except as provided in section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill).

c. A member, under 65 years of age, shall, upon the application of his employer or upon his own application or the application of one acting in his behalf, be retired by the board of trustees, if said member is permanently and totally disabled as a direct result of a traumatic event occurring during and as a result of the performance of his regular or assigned duties, on an accidental disability allowance. A traumatic event occurring during voluntary performance of regular or assigned duties at a place of employment before or after required hours of employment which is not in violation of any valid work rule of the employer or otherwise prohibited by the employer shall be deemed as occurring during the performance of regular or assigned duties. No person who becomes a member of the retirement system on or after the effective date of P.L.2010, c.3 shall be eligible for retirement pursuant to this subsection, except as provided in section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill).

The application to accomplish such retirement must be filed within five years of the original traumatic event, but the board of trustees may consider an application filed after the five-year period if it can be factually demonstrated to the satisfaction of the board of trustees that the disability is due to the accident and the filing was not accomplished within the five-year period due to a delayed manifestation of the disability or to circumstances beyond the control of the member.

Permanent and total disability resulting from a cardiovascular, pulmonary or musculo-skeletal condition which was not a direct result of a traumatic event occurring in the performance of duty shall be deemed an ordinary disability.

Before consideration of an application for accidental disability allowance by the board of trustees, the physician or physicians designated by the board shall have first made a medical examination of the member at his residence or at any other place mutually agreed upon and shall have certified to the board that he is physically or mentally incapacitated for the performance of duty, and should be retired, and the employer shall have certified to the board that the member is permanently and totally disabled as a direct result of a traumatic event occurring during and as a result of the performance of his regular and assigned duties, the time and place where the duty causing the disability was performed, that the disability was not the result of his willful negligence and that the member should be retired.

(cf: P.L.2010, c.3, s.7)

8. Section 10 of P.L.2010, c.3 (C.18A:66-39.1) is amended to read as follows:

10. a. [A] Except as provided in section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill), a person who becomes a member of the Teachers' Pension and Annuity Fund, N.J.S.18A:66-1 et seq., on or after the effective date of P.L.2010, c.3 shall not be eligible for an ordinary or accidental disability retirement allowance, but shall be eligible for disability insurance coverage pursuant to this section.

b. The State Treasurer is hereby authorized and permitted to purchase from one or more insurance companies, as determined by him, group disability benefit coverage to provide for the disability benefit in the amounts specified herein. The group disability benefit coverage may be provided under one or more policies issued to the State Treasurer specifically for this purpose or, in the discretion of the State Treasurer, under one or more policies issued to the State Treasurer which provide group life insurance coverage for members of the retirement system designated in subsection a. of this section. Any dividend or retrospective rate credit allowed by an insurance company attributable to this program shall be credited in an equitable manner to the funds available to meet the employers' obligations under such retirement system.

Premiums for such group insurance coverage shall be paid from a special fund, hereby created, called the "Teachers Group Disability Insurance Premium Fund." The State Treasurer shall estimate annually the amount which shall be required for premiums for such benefits for the ensuing fiscal year and shall certify such amounts which shall be applied against the total employer contributions due for the members of the retirement system whose members are covered, depositing such amounts in the premium fund.

During the period such group insurance policy or policies are in effect with respect to members of the retirement system, the State Treasurer shall in no way commingle moneys in this fund with any retirement system.

c. A person shall not be allowed the group disability benefit coverage if on the date the person enrolls in the retirement system, the person is 60 or more years of age, unless the person furnishes satisfactory evidence of insurability and, on the effective date of the person's enrollment, is actively at work and performing all the regular duties at the customary place of employment.

The effective date of coverage for such a benefit shall be the first day of the month which immediately follows the date when such evidence is determined to be satisfactory.

Such evidence of insurability shall not be required of any person enrolling in the retirement system upon transfer from another retirement system, if such retirement system provided a benefit of a similar nature and the transferring person was covered by such a benefit at the time of the transfer. If such transferring person was not covered by such a benefit at the time of the transfer, the person may be allowed the benefit under the group policy or policies; however, any such person shall furnish satisfactory evidence of insurability if he had been unable or failed to give such evidence as a member of the retirement system from which the person transferred.

Any person who must furnish satisfactory evidence of insurability, and who ceases to be enrolled in the retirement system without such evidence having been given, shall continue to be subject to the same requirement if the person subsequently becomes a member.

d. The disability benefit coverage provided under such group policy or policies shall provide a monthly income if the member becomes totally disabled from occupational or nonoccupational causes for a period of at least six consecutive months following the effective date of the coverage. The monthly disability benefit may be paid by the insurance company so long as the member remains disabled up to the seventieth birthday, provided the disability commenced prior to the sixtieth birthday. The benefit shall terminate when the member is no longer considered totally disabled or begins to receive retirement benefits.

The member shall be considered totally disabled if the member is unable to perform each duty of the member's occupation and is under the regular care of a physician. After the 12 months following the commencement of such disability benefit payments, the member shall be unable to engage in any gainful occupation for which the member is reasonably fitted by education, training or experience. Total disability shall not be considered to exist if the member is gainfully employed. Following an agreement with the insurance company and the policyholder, the member may continue to receive disability benefits for a limited time while performing some type of work. During the period of rehabilitation, the monthly benefit shall be the regular payment less 80% of the member's earnings from such rehabilitative position.

e. A member shall be deemed to be in service and covered by the disability benefit insurance provisions for a period of no more than six months while on official leave of absence without pay if satisfactory evidence is presented to the Division of Pensions and Benefits that such leave of absence without pay is due to illness and that the member was not actively engaged in any gainful occupation during such period of leave of absence without pay.

Disability benefit insurance provisions of the group policy or policies shall not cover disability resulting from or contributed to by pregnancy, act of war, intentionally self-inflicted injury, or attempted suicide whether or not sane. For purposes of such disability benefit coverage, the member shall not be considered to be disabled while the member is imprisoned or while outside the United States, its territories or possessions, or Canada.

If the member has recovered from the disability for which the member had received benefits and again becomes totally disabled while insured, the later disability shall be regarded as a continuation of the prior one unless the member has returned to full-time covered employment for at least six months. If the later absence is due to an unrelated cause and the member had returned to full-time work, it shall be considered a new disability. The disability benefit insurance cannot be converted to an individual policy.

No person shall be covered by the disability benefit provision of the group policy or policies except upon the completion of one year of full-time continuous employment in a position eligible for participation in a retirement system designated in subsection a. of this section.

f. The disability benefit provided under such group policy or policies shall be in an amount equal to 60% of the member's base monthly salary, reduced by periodic benefits to which the member may be entitled during the period of total disability. The minimum monthly disability benefit shall be $50.

The periodic benefit by which the monthly disability benefit may be reduced shall include salary or wages, retirement benefits or benefits from any source for which the State or other public employer has paid any part of the cost or made payroll deductions, Social Security disability or other benefits, including dependents' benefits, and benefits paid by Social Security at the option of the participant before the age of 65, but not including any increase in Social Security benefits enacted after the disability benefit under such group policy or policies has commenced, and any other periodic benefits provided by law except on account of military service.

When a member begins to receive a disability benefit under such group policy or policies, the insurance company shall pay an amount equal to the employee contribution which would have been required of the member and deducted from the member's base salary in order to meet the member's obligation for the purchase of the member's individual retirement annuity. Such amount shall be paid by the insurance company without reduction by any other periodic benefit which the member is eligible to receive. Such amount shall be paid by the insurance company to the insurer or insurers for the member's retirement annuity.

g. Notwithstanding any other provision of law, an insurance company or companies issuing such policy or policies may credit the policyholder either directly or in the form of reduced premiums, with savings by the company or companies in the event that no brokerage commission or commissions are paid by the company or companies on the issuance of such policy or policies.

No employer obligations shall be paid when the member is on a leave of absence without pay or when the member no longer is enrolled in the retirement system designated in subsection a. of this section.

h. The group disability insurance policy or policies shall provide a member with an opportunity to purchase additional coverage.

i. A member who is disabled and begins receiving a benefit under this section on or after January 1, 2027 shall be eligible to enroll in health care benefits coverage under the “School Employees’ Health Benefits Program Act” P.L.2007, c.103 (C.52:14-17.46.1 et seq.), in accordance with the provisions of section 5 of P.L. , c. (C. ) (pending before the Legislature as this bill).

j. The State Treasurer shall establish appeals processes to be used when an employer or employee disagrees with the administration of disability insurance coverage provided for in this section, including but not limited to, the employee's ability to return to employment; issues related to physical examinations; eligibility for disability insurance coverage as provided for in this section; and eligibility for health care benefits coverage under the “School Employees’ Health Benefits Program Act” P.L.2007, c.103 (C.52:14-17.46.1 et seq.), pursuant to subsection i. of this section, including a member’s required contributions determined pursuant to section 5 of P.L. , c. (C. ) (pending before the Legislature as this bill).

(cf: P.L.2025, c.370, s.3)

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

18A:66-43. [Retirement] Except as provided in section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill), retirement for service shall be as follows: (a) A person who was a member before the effective date of P.L.2008, c.89 and has attained 60 years of age may retire on a service retirement allowance by filing with the retirement system a written application, duly attested, stating at which time subsequent to the execution and filing thereof he desires to be retired. The board of trustees shall retire him at the time specified or at such other time within 1 month after the date so specified as the board finds advisable.

(b) A person who becomes a member on or after the effective date of P.L.2008, c.89 and has attained 62 years of age may retire on a service retirement allowance by filing with the retirement system a written application, duly attested, stating at which time subsequent to the execution and filing thereof the member desires to be retired. The board of trustees shall retire the member at the time specified or at such other time within 1 month after the date so specified as the board finds advisable.

(c) A person who becomes a member on or after the effective date of P.L.2011, c.78 and has attained 65 years of age may retire on a service retirement allowance by filing with the retirement system a written application, duly attested, stating at which time subsequent to the execution and filing thereof the member desires to be retired. The board of trustees shall retire the member at the time specified or at such other time within 1 month after the date so specified as the board finds advisable.

(cf: P.L.2011, c.78, s.37)

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

18A:66-44. [A] Except as provided in section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill), 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 1/64 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, or 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)

11. This act shall take effect immediately.

STATEMENT

This bill provides for the restoration of certain benefits to certain members and retirees of the Teachers’ Pension and Annuity Fund (TPAF) to match benefits provided to members enrolled in the retirement system under Tier 3.

Under current law, TPAF members are enrolled into certain pension tiers based on when they became eligible to be enrolled in the pension system. Tier 1 consists of members who were enrolled before July 1, 2007; Tier 2 consists of members who were enrolled on or after July 1, 2007, and on or before November 1, 2008; Tier 3 consists of members who were enrolled after November 1, 2008, and on or before May 21, 2010; Tier 4 consists of members who were enrolled after May 21, 2010, and before June 28, 2011; and Tier 5 consists of members who were enrolled on or after June 28, 2011. TPAF member benefits differ depending on which tier the member is enrolled in, with Tier 1 providing the most generous benefits and each subsequent tier offering less generous benefits.

Under this bill, current TPAF members who are enrolled in Tier 4 and Tier 5, and future TPAF members who would normally be enrolled in Tier 5, will be enrolled into Tier 3. These members will be entitled to receive all of the benefits associated with that Tier. These benefits include a decrease in the retirement age for members of Tier 5, a more favorable calculation of pension benefits, and the ability to receive ordinary and accidental disability retirement benefits instead of long term disability insurance.