Public Employees' Retirement System(PERS) Member Guidebook - NJ.gov
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Pensions & Benefits
Public Employees’
Retirement System(PERS)
Member Guidebook
SP-0333-0319Public Employee’s Retirement System
Table Of Contents Supplementing your Pension. . . . . . . . . . . . . . . . 23
PERS General Information. . . . . . . . . . . . . . . . . . . 3 Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Foreword . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Retirements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
The Retirement System. . . . . . . . . . . . . . . . . . . . 4 Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Contacting the New Jersey Division of Types of Retirement. . . . . . . . . . . . . . . . . . . . . . 26
Pensions & Benefits (NJDPB) . . . . . . . . . . . . . . . 4 Optional Settlements at Retirement. . . . . . . . . . 30
Plan Information. . . . . . . . . . . . . . . . . . . . . . . . . . 5 The Retirement Process . . . . . . . . . . . . . . . . . . 31
Eligibility. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Reduction or Suspension of Your Benefits. . . . . 35
Membership. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Employment After Retirement . . . . . . . . . . . . . . 35
Part-time Crossing Guards. . . . . . . . . . . . . . . . . . 8 Active and Retired Death Benefits. . . . . . . . . . . . 36
Elected or Appointed Officials . . . . . . . . . . . . . . . 8 Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Enrollments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Choosing a Beneficiary . . . . . . . . . . . . . . . . . . . 38
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Payment of Group Life Insurance. . . . . . . . . . . . 38
Multiple and Dual Membership. . . . . . . . . . . . . . 11 Group Life Insurance and
Transfers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Leave of Absence. . . . . . . . . . . . . . . . . . . . . . . . 38
Service Credit . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Taxation of Group Life
Insurance Premiums . . . . . . . . . . . . . . . . . . . . . 39
Vesting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Waiving Noncontributory Group
Purchasing Service Credit. . . . . . . . . . . . . . . . . . 14
Life Insurance over $50,000. . . . . . . . . . . . . . . . 39
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Conversion of Group Life Insurance. . . . . . . . . . 40
Types of Service Eligible for Purchase. . . . . . . . 15
Accidental Death Benefit. . . . . . . . . . . . . . . . . . 40
Important Purchase Notes. . . . . . . . . . . . . . . . . 16
Withdrawal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Cost and Procedures for
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Purchasing Service Credit. . . . . . . . . . . . . . . . . 16
Withdrawing Contributions. . . . . . . . . . . . . . . . . 44
Applying to Purchase Service Credit. . . . . . . . . 17
Workers’ Compensation. . . . . . . . . . . . . . . . . . . 44
Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Appeals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Applying for a Loan . . . . . . . . . . . . . . . . . . . . . . 20
Internal Revenue Service (IRS)
Requirements. . . . . . . . . . . . . . . . . . . . . . . . . . . 21
PERS Member Guidebook March 2019 Page 2PERS General Information
Public Employee’s Retirement System
FOREWORD New Jersey Division of Pensions & Benefits Health Benefits Program (SHBP) or School Employees’
ATTN: Office of Communications Health Benefits Program (SEHBP) is also available.
The New Jersey Public Employees’ Retirement Sys-
P.O. Box 295
tem (PERS) Member Guidebook provides a summary Retirees may use MBOS to: view retirement account
Trenton, NJ 08625-0295
description of the benefits of the plan and outlines the information; update an address; change direct deposit
rules and regulations governing the plan. The PERS THE RETIREMENT SYSTEM information; change a beneficiary designation; or up-
Member Guidebook should provide you with all the in- The State of New Jersey established the PERS in 1955 date federal and/or New Jersey State income tax with-
formation you need about your PERS benefits. How- to replace the former State Employees’ Retirement holding.
ever, if there is a conflict with statutes governing the System. The NJDPB is assigned all administrative
Before you can begin using MBOS, you must be reg-
plan or regulations implementing the statutes, the functions of the retirement system except for invest-
istered with MBOS and the MyNewJersey website.
statutes and regulations will take precedence. Com- ment.
Registration information can be found on the NJDPB
plete terms governing any employee benefit program The PERS Board of Trustees has the responsibility website.
are set forth in the New Jersey Statutes Annotated. for the proper operation of the retirement system. The
Regulations, new or amended, are published in the If you need assistance registering for MBOS, call
Board consists of six employee representatives, the
New Jersey Register by the State Office of Adminis- the MBOS Help Line at (609) 292-7524 or send
State Treasurer, and two individuals appointed by the
trative Law supplementing the New Jersey Admin- an email with the subject line “MBOS Email” to:
Governor with the advice and consent of the Senate.
istrative Code. This guidebook, containing current pensions.nj@treas.nj.gov
The Board meets once per month. A PERS member
updates, is available for viewing on our website at: who wishes to be a candidate upon a vacancy for the Telephone Numbers
www.nj.gov/treasury/pensions While at the New Jer- PERS Board of Trustees must be nominated by peti-
sey Division of Pensions & Benefits (NJDPB) website, • For computerized information about your individ-
tions bearing the signatures of 500 active members.
be sure to check for PERS-related forms, fact sheets, ual pension account 24 hours a day, seven days
Nominating petition forms, along with instructions
and news affecting the PERS. a week, call our Automated Information System at
for filing, are available upon written request to the
(609) 292-7524. With Interactive Voice Response
Addenda guidebooks have been created for the Law New Jersey Division of Pensions & Benefits, Secretary
and added services, all you need is your Social
Enforcement Officers, Legislative Retirement System, of the PERS Board of Trustees, P.O. Box 295, Trenton,
Security number and membership number to hear
Prosecutors Part, and Workers’ Compensation Judges NJ 08625-0295.
personalized benefits information on purchases,
Part, which are components of the PERS, but have sig-
CONTACTING THE NEW JERSEY retirement benefits, and withdrawal.
nificantly different benefits. The addenda are available
for viewing on our website. DIVISION OF PENSIONS & BENEFITS (NJDPB) • To speak with a representative about your PERS
account or health benefits account, call (609) 292-
The purpose of this guidebook is to provide you with Member Benefits Online System
7524 weekdays between 7:00 a.m. and 4:30 p.m.
information about the retirement system to assist you
The Member Benefits Online System (MBOS) allows (except State holidays); hours are extended until
in making decisions concerning you and your family’s
registered PERS members access to their pension 6:45 p.m. on Thursdays. If you require the services
future. If you have questions concerning your retire-
and, if applicable, health benefits account information of a relay operator please dial 711 and provide the
ment system benefits, please see the “Contacting the
online. Resources available through MBOS include: operator with the following phone number, (609)
State of New Jersey Division of Pensions & Benefits
member account information; beneficiary designation; 292-6683. You will then be connected to a Client
(NJDPB)” section.
pension loan; purchase of service credit; withdrawal Services phone representative for assistance.
Since this is your guidebook, we would appreciate any application and retirement applications. If applicable,
• To speak with a plan representative about the
comments or suggestions for improvement that you account information for the New Jersey State Employ-
NJSEDCP, also known as Deferred Comp, call
might have. Please send them to the address listed ees’ Deferred Compensation Plan (NJSEDCP), Sup-
Prudential at 1-866-NJSEDCP (1-866-657-3327)
below: plemental Annuity Collective Trust (SACT), and State
weekdays between 8:00 a.m. and 9:00 p.m. (ex-
PERS Member Guidebook March 2019 Page 4Public Employee’s Retirement System
cept State holidays). A plan representative will an- PLAN INFORMATION Plan Year
swer your questions and provide enrollment and For record-keeping purposes, the plan year is July 1
distribution forms. Name of Plan
through June 30.
• To speak with a plan representative about the The Public Employees’ Retirement System of New Jer-
SACT, call (609) 292-7524 weekdays between sey (PERS) Service of Legal Process
7:00 a.m. and 4:30 p.m. (except State holidays). Legal process must be served on the Attorney General
Administration
SACT representatives will answer your questions of New Jersey pursuant to New Jersey Court Rules, R.
and provide enrollment and distribution forms. The PERS is a defined benefit plan administered by the 4:4-4(7).
New Jersey Division of Pensions & Benefits (NJDPB).
Internet, Email, and Mailing Address Employment Rights Not Implied
Provisions of Law
General information and most publications of the Membership in the PERS does not give you the right to
NJDPB can be found on the NJDPB website. You can The PERS was established by New Jersey Statute and be retained in the employ of a participating employer,
email the NJDPB at: pensions.nj@treas.nj.gov can be found in the New Jersey Statutes Annotated, nor does it give you a right of claim to any benefit you
Title 43, Chapter 15A. Changes in the law can only be have not accrued under terms of the system.
Our postal address is:
made by an act of the State Legislature. Rules govern-
New Jersey Division of Pensions & Benefits ing the operation and administration of the system may
P.O. Box 295 be found in Title 17, Chapters 1 and 2 of the New Jersey Benefits and provisions of the PERS are subject
Trenton, NJ 08625-0295 Administrative Code. to changes by the legislature, courts, and other
officials. While this guidebook outlines the ben-
On all correspondence, be sure to include your mem-
Funding efit and contribution schedules of the PERS, it is
bership number or the last four digits of your Social Se-
not a final statement. Complete terms govern-
curity number. The funds used to pay benefits come from three sourc-
ing any employee benefit program are set forth
es: employer contributions, employee contributions,
Counseling Services in the New Jersey Statutes Annotated. Regu-
and investment income from those contributions. All
lations, new or amended, are published in the
The NJDPB offers counseling services to members of contributions not required for current operations are in-
New Jersey Register by the State Office of Ad-
the retirement systems and benefit programs. Coun- vested by the State Division of Investment.
ministrative Law supplementing the New Jersey
selors are available by appointment Monday through Administrative Code.
Friday, 8:00 a.m. to 4:00 p.m. (with the last interviews
taken at 3:30 p.m.). Walk-in counseling services are
also available on a first come, first served basis; how-
ever, clients with scheduled appointments will be seen
first. Therefore, it is recommended you make an ap-
pointment. Appointments can be made on our website.
Page 5 March 2019 PERS Member GuidebookEligibility
Public Employee’s Retirement System
MEMBERSHIP imum pensionable salary of $1,500. • You are not required to be a member of any other
State or local government retirement system on
Eligibility rules and regulations are described in general • Membership Tier 2 — Members who were en-
the basis of the same position;
terms in this guidebook and may not cover all situa- rolled on or after July 1, 2007, and prior to Novem-
tions. If you have been a public employee for several ber 2, 2008, and who have a minimum pension- or if:
years, you should be aware that the present rules and able salary of $1,500. • You are receiving a monthly retirement allowance
regulations governing enrollment in the retirement sys- • Membership Tier 3 — Members enrolled on or from the PERS and you work more than the mini-
tem differ from past rules and regulations. If you have after November 2, 2008, and on or before May 21, mum number of hours per week required for PERS
specific questions concerning your date of enrollment 2010, and who meet or exceed the minimum pen- Tier 5 enrollment.
or membership status, you may wish to contact the sionable salary set for the current year, subject to
NJDPB for additional information. Note: See the Employment after Retirement Restric-
future adjustment. tions Fact Sheet about federal tax implications if retired
PERS Special Employee Groups • Membership Tier 4 — Members enrolled after and returning to public employment.
May 21, 2010, and prior to June 28, 2011, and who
The information contained in this guidebook applies Although most employees are required to enroll in the
work the minimum number of hours per week (fixed
to the majority of the members enrolled in the PERS. retirement system when hired, in some instances you
hours of 35 hours for State employees or 32 hours
However, certain members of the PERS qualify for en- may not qualify for enrollment in the system until up to
for local government, local education, or State ed-
rollment into special employee groups: one year from your date of employment.
ucation employees), with no minimum pensionable
• Law Enforcement Officers (LEO); salary requirement. Example: If you are hired as a temporary or provision-
al employee by an employer covered by Civil Service,
• Prosecutors Part of the PERS (closed to new • Membership Tier 5 — Members enrolled on or you would not be eligible for enrollment until the begin-
members May 22, 2010); after June 28, 2011, and who work the minimum ning of the 13th month of continuous employment or
• State Legislative Retirement System (LRS) of the number of hours per week (fixed hours of 35 hours the date of regular appointment, whichever comes first.
PERS (closed to new members July 1, 2007); and for State employees or 32 hours for local govern-
ment, local education, or State education employ- Factors for Ineligibility
• Workers’ Compensation Judges (WCJ) Part of the
ees), with no minimum pensionable salary require-
PERS (closed to new members July 1, 2007). You cannot join the PERS if:
ment.
Members of these special employee groups should re- • You are a provisional or temporary employee cov-
Unless otherwise indicated by membership tier — with
fer to the PERS Guidebook Addendum specific to their ered by Civil Service with less than 12 months of
the exceptions noted above for LEO, LRS, Prosecutors
employee group for exceptions to the regular PERS continuous service.
Part, and WCJ Part members — the benefits listed in
rules and benefits. These exceptions are also noted
this guidebook are the same for all PERS members. • You do not meet the minimum salary requirements
under the section headings in this guidebook. for Tier 1, 2, or 3 membership or the minimum
Eligibility Criteria hourly requirements for Tier 4 or 5 membership.
PERS Membership Tiers
Membership in the retirement system is generally re- • Your position is not covered by Social Security.
PERS members are categorized by specific “member-
quired as a condition of employment for most employ-
ship tiers” based on enrollment date. Membership tiers • You are a seasonal employee (defined as occa-
ees of the State, or any county, municipality, school
affect a member’s enrollment and retirement eligibility. sionally working in a position that does not lead
district, or public agency.
These membership tiers, pursuant to N.J.S.A. 43:1A-7 to permanent employment, and does not extend
are defined as follows: You are required to enroll in the PERS if: beyond six consecutive months for employing lo-
• You are employed on a regular basis in a position cations that report on a 12-month basis, or five
• Membership Tier 1 — Members who were en-
covered by Social Security; and months for employing locations that report on a
rolled prior to July 1, 2007, and who have a min-
10-month basis).
Page 7 March 2019 PERS Member GuidebookPublic Employee’s Retirement System
• You are a retired PERS member, with a bona fide • A crossing guard who had previously retired from Elected officials who are PERS “multiple members”
retirement, who returns to public employment on a any public retirement system in New Jersey, oth- should see the “Note” in the “Multiple Membership”
part-time basis. er than the PERS, was ineligible for enrollment, section.
though he or she could still be employed in the A State or local official who is newly appointed by the
• You are a PERS disability retiree who has been
crossing guard position. Governor on or after July 1, 2007, is ineligible for enroll-
approved to return to PERS-covered employment,
but do not earn the minimum annual salary for en- • If a crossing guard was retired from the PERS, and ment in the PERS. This includes: those requiring the
rollment under your original PERS membership earned more than $15,000 total from PERS em- advice and consent of the Senate; those appointed by
tier. ployment, then enrollment was mandatory. the Governor to serve at the pleasure of the Governor
only during his or her term of office; or those appointed
• You are retired and receiving a monthly retirement If you had the option and chose to join the retirement
in a substantially similar manner by the governing body
allowance from another public retirement system system, you cannot withdraw your funds until you end
of a local entity (county, municipality, etc.). Newly ap-
in New Jersey. your employment.
pointed officials are eligible for enrollment in the DCRP
• You received a lump-sum retirement distribution Elected or Appointed Officials (see the “Defined Contribution Retirement Program
from the Alternate Benefit Program (ABP) or De- (DCRP)” section).
fined Contribution Retirement Program (DCRP), State or local officials who are newly elected and take
office on or after July 1, 2007, are ineligible for enroll- If the State or local appointee was a PERS member pri-
regardless of distribution amount.
ment in the PERS. Elected officials may be eligible for or to July 1, 2007, the individual may continue to receive
• You are employed under a Professional Services enrollment in the DCRP. PERS service credit while serving in the same, or any
Contract. new or subsequent appointment, provided that there
Prior to July 1, 2007, elected officials who qualified as
• You are a newly elected State or local official (see has not been a break in PERS service of more than two
veterans were required to enroll in the PERS and en-
section to follow). consecutive years prior to the appointment.
rollment was optional for non-veteran elected officials.
• You are a newly appointed State or local official These members may continue to receive PERS service In addition, an appointee may be enrolled in the PERS
and do not have an existing PERS account (see credit while serving continuously in the same elected if the individual holds a professional license or certifi-
below). office. If, however, an individual is elected to a different cate and is appointed to one of the following titles that
elected office, PERS membership will end and the new- are excluded from DCRP enrollment: certified health
If you are in doubt about the eligibility of a position,
ly elected official may only be eligible for membership officer; tax assessor; tax collector; municipal planner;
have your employer contact the NJDPB.
in the DCRP (see the “Defined Contribution Retirement chief financial officer; registered municipal clerk; con-
Part-time Crossing Guards Program (DCRP)” section). struction code official; licensed uniform subcode in-
spector; qualified purchasing agent; or certified public
Part-time crossing guards hired after May 21, 2010, are Note: Service in either House of the State Legislature
works manager.
ineligible for enrollment in the PERS, as they do not is considered a single elected public office — see ad-
work the minimum number of hours per week required ditional information in the PERS Guidebook Addendum
for Tier 4 or 5 membership. Prior to May 21, 2010, en- for the LRS.
rollment of part-time crossing guards depended on sev- In addition, any non-veteran elected official who was
eral factors: elected prior to July 1, 2007, and opted not to enroll in
• Enrollment was optional if the part-time crossing the PERS, will immediately become eligible for mem-
guard was receiving periodic retirement benefits bership in the DCRP upon re-election to the same
from the federal government (whether military, ci- elected office or if elected to a different elected office
vilian, or Social Security benefits). (see the “Defined Contribution Retirement Program
(DCRP)” section).
PERS Member Guidebook March 2019 Page 8Enrollments
Public Employee’s Retirement System
OVERVIEW • Naturalization or immigration papers. cal information is restricted from public access.
(Prosecutors Part members see addendum) Unacceptable documentation includes military records Further restrictions to personal health information ex-
indicating your age, expired documentation, out-of- ist under the privacy provisions of the federal Health
Enrollment/Certification of Payroll Deductions state driver’s licenses (except P.A. and N.Y.), hospital Insurance Portability and Accountability Act (HIPAA).
Your employer must complete an Enrollment Applica- birth certificates, marriage certificates, census records, Members may be required to provide specific written
tion through the Employer Pensions and Benefits baptismal records, or affidavits from older family mem- authorization for the release of medical information to
Information Connection (EPIC). bers. a third party who is not a doctor, hospital, or business
partner of the NJDPB or the health benefit programs.
Online enrollments are processed immediately by the Designating a Beneficiary Information about HIPAA is available on the NJDPB
NJDPB. You and the employer receive a confirmation
When the Enrollment Application is submitted, the new website.
that includes your PERS membership number.
member should also submit a Designation of Benefi- The NJDPB has implemented additional protection for
When enrollment processing is complete, you and your ciary through MBOS. Your PERS membership number members in accordance with the New Jersey Identity
employer will receive a Certification of Payroll Deduc- is required and is included in the confirmation of your Theft Prevention Act, N.J.S.A. 56:11-28 et seq. “Secu-
tions with the date pension deductions will begin, your online enrollment. rity Freeze” procedures are available to restrict access
rate of contribution, and any back deductions due.
Note: The new member’s estate is the beneficiary on to the accounts of members who are, or have a serious
You may wish to keep the Certification of Payroll De- record until the NJDPB receives a properly completed risk of becoming, victims of identity theft. Additional
ductions on file with your other important papers so designation. information is available in the Identity Theft and Your
that you have a record of your enrollment in the retire- Benefits Fact Sheet.
ment system. For your protection, beneficiary designations cannot
be accepted or confirmed over the telephone or by Member Contribution Rate
Proof of Age email. Members can verify beneficiary designations on
N.J.S.A. 43:15A-25, the Pension and Health Benefit
MBOS. Otherwise, the NJDPB will only accept a writ-
All members of the PERS must provide documentation Reform Law, increased the PERS member contribution
ten request for verification from the member.
that proves their age. If possible, you should provide rate over seven years (each July 1st) to bring the total
your proof of age to the NJDPB when you enroll; how- Life Insurance Over Age 60 contribution rate to 7.5 percent of base salary as of July
ever, it does not delay the processing of your enroll- 1, 2018.
ment application if you do not. Proof of age will be re- A member must prove insurability when age 60 or older
at the time of enrollment — this is validated by Pruden- Note: For PERS Prosecutors Part members, the con-
quired to be eligible to retire.
tial Financial. tribution rate is 10 percent of base salary with no addi-
Acceptable evidence of your age includes a photocopy tional increases.
of: Public Information and Restrictions
Increases in the member contribution rate also in-
• Birth certificate — with visible seal; Most of the information maintained by the retirement creased the minimum repayment amount for pension
• Passport or U.S. Passport Card; system, including member salary and/or pension ben- loans or for the cost of a purchase of service credit
efit information, is considered a public record under if the repayment is certified after the date of the rate
• A current digital New Jersey driver’s license or N.J.S.A. 47:1A-1 et seq., the Open Public Records Act change.
identification card (for non-drivers) issued by the (OPRA). However, certain personal information, such
N.J. Motor Vehicle Commission; Pensionable Salary — Your contribution rate is ap-
as a member’s address, telephone number, Social Se-
plied to your base salary to determine pension deduc-
• A current digital Pennsylvania or New York driver’s curity number, pension membership numbers, benefi-
tions. Base salary does not include overtime, bonuses,
license; or ciary information while the member is living, and medi-
or large increases in compensation paid primarily in
PERS Member Guidebook March 2019 Page 10Public Employee’s Retirement System
anticipation of retirement. Your pension contributions MULTIPLE & DUAL MEMBERSHIP PERS member enrolled after May 21, 2010, be eligible
are deducted from your salary each pay period and re- for Tier 4 or Tier 5 membership based upon only one
ported to the PERS by your employer. Multiple Membership position.
• The PERS contribution rate for Tier 1 members You are considered a multiple member if you are em- The retirement system will designate the position pro-
is applied to the full pensionable salary (up to the ployed and reported to the retirement system by more viding the highest compensation for the member from
“federal pensionable maximum” described later in than one PERS-participating employer at the same among any concurrently held eligible positions. This
this section). time. designated position will be used as the basis for eligi-
Note: If terminating PERS employment and accepting bility for membership, service credit, the compensation
• The PERS contribution rate for Tier 2, Tier 3, Tier
employment at a new PERS employer, see the “Trans- base for pension contributions, and for other pension
4, and Tier 5 members is applied to the pension-
fers” section. calculations.
able salary up to a compensation limit based on
the annual maximum wage for Social Security de- Tier 1, Tier 2, and Tier 3 Members — Under the provi- If a Tier 4 or Tier 5 member leaves a designated posi-
ductions. Tier 2, Tier 3, Tier 4, and Tier 5 members sions of N.J.S.A. 43:15A-7, multiple membership is only tion or acquires a different position — or an additional
who earn in excess of the annual compensation available to Tier 1, Tier 2, and Tier 3 members; only position with higher compensation — the member will
limit will be enrolled in the DCRP in addition to the for PERS-eligible positions when enrolled on or before receive a new designation by the retirement system, if
PERS. A contribution of 5.5 percent of the salary in May 21, 2010; and provided that there has not been a it is deemed appropriate.
excess of the limit (plus three percent from the em- break in service in any concurrently held PERS-eligible For Tiers 1, 2, and 3 — any new, concurrently held
ployer) will be forwarded to a DCRP account (see position. PERS-eligible position begun after May 21, 2010, will
the “Defined Contribution Retirement Program
Note: A break in service is any pension-reporting peri- not qualify for service credit or the compensation base
(DCRP)” section).
od without pay — a monthly or a biweekly pay period as for pension contributions and calculation of retirement
Federal Pensionable Maximum — Since the PERS appropriate to the employer’s reporting method — with for any PERS member.
is a “qualified” pension plan under the provisions of the the exception of approved leaves of absence, lay-off,
Internal Revenue Code (IRC), Section 401(a)(17), the abolishment of position, military leave, Workers’ Com- Dual Membership
current federal ceiling on pensionable compensation pensation, litigation, or suspension. You are considered a dual member if you are a mem-
applies to the base salaries of PERS members. ber of more than one New Jersey State-administered
If there is a break in service with any concurrently held
Tax Deferral — Since January 1987, all mandatory PERS-eligible position after May 21, 2010, that employ- retirement system at the same time.
pension contributions to the PERS have been feder- er will no longer be permitted to submit pension con- Example: If you are a State employee enrolled in the
ally tax-deferred. Under the 414(h) provisions of the tributions for a multiple member. Furthermore, service PERS and an educator enrolled in the Teachers’ Pen-
IRC, this reduces your gross wages subject to federal credit or salary from any future employment with that sion and Annuity Fund (TPAF), you are a dual member.
income tax. Purchases of service credit are voluntary employer will not qualify for the compensation base for
When establishing dual membership, an Enrollment
and are not tax-deferred unless funded by a rollover pension contributions and calculation of retirement for
Application is filed by each employer with the different
from another tax-deferred plan (see the “Rollover for the PERS multiple member.
retirement systems.
Purchase Payment” section).
Once you have established multiple membership, you
Unlike a multiple member, a dual member’s contribu-
cannot withdraw or collect retirement benefits until you
tions and service credit are kept separate, and bene-
have retired or terminated employment from every po-
fits for a dual member are paid separately from each
sition covered by the PERS.
retirement system in the event of retirement, death, or
Tier 4 and Tier 5 Members — N.J.S.A. 43:15A-25.2 withdrawal.
eliminated multiple membership and requires that a
Page 11 March 2019 PERS Member GuidebookPublic Employee’s Retirement System
A dual member may also retire from one retirement “Tier-to-Tier Transfer” and is completed by submitting • It has not been more than two consecutive years
system and remain an active, contributing member of a Tier-to-Tier Transfer Form at the time of enrollment. since your last pension contribution;
the second retirement system, except ABP and DCRP It is important to note that by completing a Tier-to-Tier • You are not a dual member with more than three
members. Transfer Form you waive all rights to retirement bene- years of concurrent service in the TPAF* or with
fits as provided under the original, inactive membership any concurrent service in any other retirement sys-
TRANSFERS tier. tem (see the “Dual Membership” section); and
(Prosecutors Part members see addendum) If you are not vested in your prior, inactive PERS ac- • You meet the eligibility requirements of the new re-
count, you may withdraw your contributions (see the tirement system; and
Intrafund Transfer
“Withdrawal from the Retirement System” section).
An Intrafund Transfer is the transfer of your account • You apply for the Interfund Transfer within 30 days
If you have withdrawn your prior PERS account, wheth- of the date you meet the eligibility requirements of
from one PERS employer to another PERS employer.
er you have a break in service of more than two con- the new retirement system.
If you terminate your current PERS position and accept secutive years or not, the new employer must submit
a PERS position with a different employer, you are eli- an Enrollment Application through EPIC and you will be Note: A PERS member who meets the criteria listed
gible to transfer your PERS account and maintain your enrolled in a new PERS account under the membership above and transfers to a position covered by the TPAF
original PERS membership tier status provided: tier in effect at the time you return to PERS member- is eligible to maintain his/her original PERS member-
ship. The service credit under the prior, inactive mem- ship tier status under the TPAF account.
• You have not withdrawn your membership (see the
“Withdrawal from the Retirement System” section); bership may then be eligible for purchase as Former Similarly, a member of a different New Jersey State-ad-
Membership (see the “Purchasing Service Credit” sec- ministered retirement system (except the ABP or DCRP)
• It has not been more than two consecutive years tion). who meets the criteria listed above and transfers to a
since your last pension contribution; and
Note: If you are continuing employment with your first position covered by the PERS will be enrolled in the
• You meet the eligibility requirements of your PERS PERS employer and adding employment with a second PERS membership tier that corresponds to the original
membership tier with the new PERS employer. (or subsequent) PERS employer, see the limitations in date of enrollment in the prior retirement system.
If you meet the criteria listed above, your new employer the “Multiple Membership” section. If eligible, in order to transfer your membership ac-
should file a Report of Transfer form with the NJDPB. count, an Enrollment Application for the new retirement
Interfund Transfer system and an Application for Interfund Transfer should
If there has been a break in service of more than two
consecutive years since your last pension contribution, An Interfund Transfer is the transfer of your account be submitted to the NJDPB. Applications must be re-
you cannot continue contributions under your prior from a PERS employer to employment covered by a ceived within 30 days of the date you meet the eligibility
PERS membership. The new employer should submit different New Jersey State-administered retirement requirements of the new retirement system.
a new Enrollment Application through EPIC with the system (or vice versa). If there is a break in service of more than two consec-
NJDPB. You will be enrolled in a new PERS account If you terminate your current PERS position and accept utive years since your last pension contribution — or
under the membership tier in effect at the time you re- a position covered by a different New Jersey State-ad- you have withdrawn your account — you cannot trans-
turn to PERS employment. ministered retirement system, you may transfer your fer your prior PERS contributions and service credit to
If you are vested in your prior, inactive PERS account contributions and service credit to the new retirement the new retirement system. You will be enrolled in a
(see the “Vesting” section) you may be eligible for a system provided: new account with the new retirement system. Your new
transfer of your old membership account to your new employer must file an online Enrollment Application for
• You have not withdrawn your membership (see the
membership account. This type of transfer is called a the new retirement system with the NJDPB.
“Withdrawal from the Retirement System” section);
*A PERS member with three years or less of concurrent service in the TPAF may, under certain conditions, transfer all service credit from one fund to the other, less any concurrent service credit.
PERS Member Guidebook March 2019 Page 12Public Employee’s Retirement System
Note: Members enrolling into the PERS or TPAF after not left. service in — the existing pension account.
a break in service of two or more years will be enrolled When an employee returns from uniformed military Example: A PERS Tier 1 member with 15 years
under the membership tier in effect at the time the new service to PERS-covered employment, the employ- of service terminates employment at age 45 and
PERS or TPAF employment begins. er should notify the NJDPB no later than 30 days af- accepts another PERS-eligible position six months
ter the employee’s return by submitting a Request for later. In this case, the member can resume making
SERVICE CREDIT
USERRA-Eligible Service form. Once notified, the contributions to the existing PERS account and will
(Prosecutors Part members see addendum) NJDPB will provide the employee with a quotation for retain his Tier 1 membership status.
Since retirement benefits are based in part on accu- the cost for purchasing the service credit (see also the • If you are vested, terminate your employment
mulated service credit, it is important that you receive “Military Service after Enrollment” section). without retiring or withdrawing, and return to
the correct amount of credit for the amount of time you There is a time-sensitive element to the USERRA pur- PERS-covered employment two or more years
work. chase which differs from the other purchase of service after the last pension contribution, you cannot re-
• Employees whose employers report service and credit provisions available to PERS members (see the sume contributions to the vested account. Instead
contributions on a monthly basis will receive one USERRA - Military Service after Enrollment Fact Sheet you would be enrolled in a new PERS account.
month of service credit for each month a full contri- for more information). Example: A PERS Tier 1 member with 15 years of
bution is made. service terminates employment at age 45 and ac-
VESTING
• Employees whose employers report service and cepts another PERS-eligible position three years
(LEO, LRS, and Prosecutors Part members later. In this case, it has been over two consecu-
contributions biweekly will receive one pay period
see addendum) tive years since the last PERS contribution, and
of service credit for each pay period a full pension
contribution is made. You are vested in the PERS after you have attained the member will be required to enroll under a new
10 years of service credit. Being vested in the PERS PERS account as a Tier 5 member (see “Excep-
• Employees paid on a 10-month contract from
means that you are guaranteed the right to receive a tions” section if laid off or terminated through no
September through June will receive credit for the
retirement benefit when you reach “normal retirement fault of your own).
July and August that preceded September if a full
age.” For Tier 1 and Tier 2 members, normal retirement • If you are not vested and you terminate employ-
month’s pension deduction is taken for September.
age is 60. For Tier 3 and Tier 4 members it is age 62. ment before retiring, your options vary depending
Credit For Military Service For Tier 5 members it is age 65. on the nature of your termination and/or your age
After Enrollment • If you are vested and terminate your employment, at the time of your termination (see the “Terminat-
The federal Uniformed Services Employment and Re- you must file a retirement application prior to re- ing Employment” section).
employment Rights Act of 1994 (USERRA) provides ceipt of any benefits for which you may qualify (see
that a member who leaves employment to serve on ac- the “Types of Retirement” section). Alternatively,
tive duty is entitled to certain pension rights upon return you may voluntarily withdraw from the retirement
to employment with the same employer. If the member system (see “Withdrawal from the Retirement Sys-
makes the pension contributions that would have been tem” section).
normally required upon return and within the specif- • If you are vested, terminate your employment
ic time frames specified under USERRA, the military without retiring or withdrawing, and return to
service will count for vesting, retirement eligibility, the PERS-covered employment within two consecu-
calculation of the retirement benefit and, if applicable, tive years of the last pension contribution, you may
health benefits eligibility, as though the employee had continue to make contributions to — and accrue
Page 13 March 2019 PERS Member GuidebookPurchasing Service Credit
Public Employee’s Retirement System
OVERVIEW eligible for purchase. Former Membership Service
Since your retirement allowance is based in part on the • Service through the Job Training Partnership Act Members may be eligible to purchase all service cred-
amount of service credit posted to your account at the (JTPA), and its successor program established un- ited under a previous membership in a New Jersey
time of retirement, it may help you to purchase addition- der the Workforce Investment Act of 1998, is not State-administered retirement system (PERS, TPAF,
al service credit if you are eligible to do so. eligible. PFRS, SPRS) which has been terminated after two
continuous years of inactivity in accordance with stat-
Only active members of the retirement systems are
Leave of Absence without Pay ute; or following the withdrawal of the contributions
permitted to purchase service credit. An active member
Members may be eligible to purchase service credit for made under such membership by the member.
is one who has not retired or withdrawn, and who has
made a contribution to the retirement system within two official leaves of absence without pay. The amount of
Out-of-State Service
consecutive years of the purchase request. time eligible for purchase depends on the type of leave
that was taken. Members may be eligible to purchase up to 10 years
In no case can you receive more than one year of of service credit for public employment rendered with
service credit for any calendar or fiscal year. A dual • Up to two years may be purchased for leaves taken
any state, county, municipality, school district, or public
member (see the “Dual Membership” section) cannot for personal illness.
agency outside the State of New Jersey, provided the
purchase concurrent service from any other retirement • Up to three months may be purchased for leaves service rendered would have been eligible for mem-
system. taken for personal reasons. bership in a New Jersey State-administered retirement
• Maternity leave is considered personal illness.* system had the service been rendered as a public
TYPES OF SERVICE ELIGIBLE FOR PURCHASE
employee in this State. This service is only eligible for
(Prosecutors Part members see addendum) • Child care leave is considered personal reasons.
purchase if the member is not receiving or eligible to
If a type of service is not listed below, it is not eligible A leave of absence without pay under a former mem- receive retirement benefits from the out-of-state public
for purchase. bership in a New Jersey State-administered retirement retirement system.
system may be eligible for purchase.
Note: Out-of-State Service requested for purchase af-
Temporary Service
If a member who is employed 10 months per year goes ter November 1, 2008, cannot be used to qualify for
Members may be eligible to purchase service credit on an approved unpaid leave for personal reasons for any State-paid or employer-paid health benefits in re-
for temporary or provisional employment provided the the months of May, June, and/or September, the mem- tirement.
employment was continuous and immediately preced- ber will be allowed to purchase credit for the months of
ed a permanent or regular appointment in a position July and August as part of the leave of absence — up U.S. Government Service
covered by the PERS. to a maximum of five months. Members may be eligible to purchase up to 10 years
• Members are allowed to purchase temporary ser- Note: Leave of absence for union representation may of service credit for civilian service rendered with the
vice rendered under a former membership in a also be available for purchase. This type of leave must U.S. government if the public employment would have
New Jersey State-administered retirement system be purchased quarterly and within 30 days of the end been eligible for credit in a New Jersey State-adminis-
(PERS, TPAF, Police and Firemen’s Retirement of each fiscal quarter. See the Application to Purchase tered retirement system had the service been rendered
System (PFRS), and State Police Retirement Sys- Service Credit for Union Representation for additional as a public employee in this State. This service is only
tem (SPRS)). information and instructions. eligible for purchase if the member is not receiving or
eligible to receive retirement benefits from the federal
• Part-time, hourly, and substitute service may be
government based in whole or in part on this service.
* A certification from a physician that a member was disabled due to pregnancy and resulting disability for the period in excess of three months is required. Otherwise, three
months is the maximum period of purchase for maternity.
Page 15 March 2019 PERS Member GuidebookPublic Employee’s Retirement System
Note: U.S. Government Service requested for pur- Note: There is a time-sensitive element to this pur- of-State, or Military Service cannot be used to
chase after November 1, 2008, cannot be used to qual- chase (see the USERRA – Military Service after Enroll- qualify for this type of retirement.
ify for any State-paid or employer-paid health benefits ment Fact Sheet.). • Purchases of service credit are voluntary and are
in retirement. not tax-deferred unless funded by a rollover from
Uncredited Service
another tax-deferred plan (see the “Rollover for
Military Service before Enrollment Members may be eligible to purchase any regular Purchase Payment” section).
Members may be eligible to purchase service credit for employment with a public employer in New Jersey for
up to 10 years of active military service rendered prior which the member did not receive service credit but COST AND PROCEDURES FOR
to enrollment, provided the member is not receiving or which would have required compulsory membership in PURCHASING SERVICE CREDIT
eligible to receive a military pension or a pension from the retirement system at the time it was rendered. You can receive an estimate of the cost of purchas-
any other state or local source for such military service. ing service credit by calling the Automated Information
Local Retirement System Service
Active military service eligible for purchase means full- System at (609) 292-7524 or by using the online Pur-
time duty in the active military service of the United Members may be eligible to purchase service cred- chase Calculator on MBOS.
States and includes full-time training duty, annual train- it established within a local retirement system in New
The cost of a purchase is based on four factors:
ing duty, and attendance at a school designated as a Jersey if they were ineligible to transfer that service to
service school by law or by the secretary of the military the PERS upon withdrawal from the local retirement • A purchase factor based on your nearest age at
department concerned. It cannot include periods of system. This service is only eligible for purchase if the the time the NJDPB receives your purchase appli-
service of less than 30 days. It does not include week- member is not receiving nor eligible to receive retire- cation (see the “Purchase Rate Chart”);
end drills, annual summer training of a national guard ment benefits from that public retirement system. • The higher of either your current annual salary or
or reserve unit or time spent as a cadet or midshipman highest fiscal year salary (July - June) posted to
IMPORTANT PURCHASE NOTES
at one of the military academies. your membership account;
• If you qualify as a non-veteran, you are eligible
Active military service that has been combined with re- • The years and months of service being purchased;
to purchase an aggregate of 10 years of service
serve component service to qualify for a military pen- and
credit for work outside New Jersey (Out-of-State,
sion as a reserve component member may be eligible
Military, and U.S. Government Service). • The type of service purchased.
for purchase.
• Out-of-State Service, or U.S. Government Service, The cost of the purchase will rise with an increase in
If you qualify as a veteran, you may be eligible to pur-
or service with a bi-state or multi-state agency re- your age and/or salary.
chase up to an additional five years of military service
quested for purchase after November 1, 2008, The cost of purchasing service is borne by both you
(see “Important Purchase Notes” to follow).
cannot be used to qualify for any State-paid or em- and the participating employers with the important ex-
Military Service after Enrollment ployer-paid health benefits in retirement. ceptions of Military Service before Enrollment, U.S.
Under the requirements of USERRA, members may • If you qualify as a military veteran, you may be el- Government Service, and Local Retirement System
receive credit for military service rendered after Oc- igible to purchase up to an additional five years of Service — where statute specifically provides that the
tober 13, 1994. However, under N.J.A.C. 17:1-3.10, military service rendered during periods of war for employer will not be liable for any costs of the pur-
USERRA-eligible service will only be used toward an aggregate of 15 years of service outside New chase. If you purchase U.S. Government Service, Mil-
vesting, retirement eligibility, the calculation of the Jersey (Out-of-State, Military, and U.S. Govern- itary Service before Enrollment, or Local Retirement
retirement benefit, and, if applicable, health benefits ment Service). System Service, you, as the member, are responsible
eligibility, if the employee pays the required pension for the full cost; therefore, the cost quoted to you for
• To qualify for an Ordinary Disability Retirement,
contributions that would have been required if the em- purchasing these types of service will be twice the cost
members need 10 years of New Jersey service;
ployee had not left. for other types of purchase.
therefore, the purchase of U.S. Government, Out-
PERS Member Guidebook March 2019 Page 16Public Employee’s Retirement System
Partial Purchases An online Purchase Cost Calculator and additional pur- Applying to Purchase Service Credit
chase of service credit resources are available on the
You may purchase all or part of any eligible service. If All purchase requests must be submitted using the Pur-
NJDPB website.
you make a partial purchase, you may purchase any chase Application available through MBOS.
remaining eligible service at a later date. The cost of Purchase Rate Chart
any later purchase will be based upon your age and the Exceptions to the MBOS Purchase Application
Purchase Purchase
annual salary or highest fiscal year salary at the time of While PERS members are usually required to process
Age Factor Age Factor
your subsequent request to purchase. purchase requests through MBOS, members are not
20 0.031379 46 0.049932 able to use the MBOS Purchase Application for the fol-
Estimating the Cost of a Purchase 21 0.031759 47 0.051155 lowing types of purchase:
To estimate the cost of a shared purchase, multiply the 22 0.032158 48 0.052433 • Members applying for the purchase of Military
higher of your current annual salary or highest fiscal
23 0.032578 49 0.053768 Service after Enrollment under the provisions of
year salary times the purchase factor corresponding
24 0.033018 50 0.055163 USERRA. To purchase this service the employ-
to your nearest age (see the “Purchase Rate Chart”). er must submit the Request for USERRA-Eligible
The result is the cost of one year of service. Multiply 25 0.33480 51 0.056620
Service form within the time frames required under
this cost by the appropriate number of years being pur- 26 0.033964 52 0.058144 the law (see the USERRA – Military Service After
chased. This procedure can be used for calculating
27 0.034471 53 0.059737 Enrollment Fact Sheet).
the cost of Temporary Service, Former Membership,
Leaves of Absence, Uncredited Service, and Out-of- 28 0.035002 54 0.061403 • Members applying for the purchase of Leave of Ab-
State Service. 29 0.035558 55 0.063145 sence for Union Representation. This type of leave
must be purchased quarterly and within 30 days of
To calculate the purchase cost of Military Service be- 30 0.036139 56 0.064967
the end of each fiscal quarter. See the Application
fore Enrollment, U.S. Government Service, Leave of 31 0.036748 57 0.066873
to Purchase Service Credit for Union Representa-
Absence for Union Representation, or Local Retire- 32 0.037384 58 0.068868 tion for additional information and instructions.
ment System Service, the same procedure is used,
33 0.038048 59 0.070956 Please note that these are the only circumstances
except the resulting cost is doubled.
34 0.038743 60 0.073142 where paper purchase requests are permitted. Any
Note: The cost of a purchase of Military Service after
35 0.039469 61 0.072021 paper application to purchase service credit received
Enrollment under USERRA is based on the required by mail will not be processed and the member will be
pension contributions for the period of military service. 36 0.040227 62 0.070853
mailed instructions on submitting the request through
Example: A member, age 45, earning $60,000 a year, 37 0.041019 63 0.069637 MBOS.
wishes to purchase 18 months Temporary Service: Pur- 38 0.041847 64 0.068380
Upon receipt of your MBOS Purchase Application —
chase Factor (from chart) = 0.048761 39 0.042711 65 0.067083 and any required supporting documentation — a quota-
Purchase Factor x Annual Salary x Time Being Pur- 40 0.043613 66 0.065746 tion of cost will be calculated provided that all purchase
chased = Purchase Cost 41 0.044555 67 0.064376 eligibility criteria are met. Processing times vary and a
request cannot be completed until the NJDPB receives
0.048761 x $60,000 x 1.5 years = $4,388.49 42 0.045539 68 0.062973
all required verification of eligibility. It is the member’s
If the same member were to purchase 18 months of 43 0.046567 69 0.061545 responsibility to obtain certification of employment from
Military Service, the purchase cost would be $8,776.98 44 0.047640 70 & older 0.060100 a former employer for the purchase of Out-of-State or
(twice the amount of the Temporary Service). U.S. Government Service.
45 0.048761
Page 17 March 2019 PERS Member GuidebookPublic Employee’s Retirement System
After the NJDPB verifies employment, you will receive chase the remaining service credit will be based on the – Simplified Employee Pension (SEP) Plan;
a Purchase Cost Quotation Letter indicating the cost of laws and rules in effect on the date that the subsequent – Conduit IRA; or
any service approved for purchase. You must respond request is received.
to the quotation letter within the specified time period. – Rollover IRA.
If you have an outstanding arrears obligation for the
When you agree to purchase a certain amount of ser- purchase of additional service credit, interest may be Note: The NJDPB cannot accept rollovers from a Roth
vice credit, the NJDPB assumes that you will complete assessed if there is a lapse of two years or more in IRA or a Coverdell Education Savings Account (former-
the purchase and credits your account with the entire payments toward the purchase. ly known as an Education IRA).
amount of service, even if you are paying the cost Additional information on requesting a transfer or roll-
If you have not made installment payments for the pur-
through payroll deductions. Any estimates of retirement over of tax-deferred funds for the purchase of service
chase of additional service credit for two years, your
allowance you receive are based on the full amount of credit is included in the Purchase Cost Quotation Letter
purchase will be canceled. You will receive pro rata
credit you agreed to purchase. you receive upon the NJDPB’s determination of your
credit for the service purchased to the date that the in-
You may pay the cost of purchasing service credit: stallment payments ceased. Any subsequent requests eligibility to purchase service.
to purchase the remaining service credit will be based
• In one lump-sum payment;
on the laws and rules in effect on the date the subse-
• By having extra payroll deductions withheld from quent request is received in the NJDPB.
your pay. The minimum deduction is equal to one-
If you return from an approved leave of absence after
half of your normal rate of contribution to the retire-
two years, you may request that the original purchase
ment system over a maximum period of 10 years
be resumed. The purchase will be recalculated to in-
and includes interest at the assumed return rate of
clude additional regular interest accrued between two
the retirement system;
years after the date of the last installment payment and
• By paying a single down payment and having the the date the purchase is resumed.
remainder paid through payroll deductions; or
Rollover for Purchase Payment
• With a direct rollover or trustee-to-trustee transfer
of tax-deferred funds from a qualified retirement Members may pay for all or part of a purchase by trans-
plan (see “Rollover For Purchase Payment”). ferring or rolling over tax-deferred funds from an eligible
or qualified retirement savings plan. The types of plans
If you retire before completing a purchase, you may
from which a transfer or rollover can be made are:
choose to receive prorated credit for the amount of ser-
vice you have paid for, or you can pay the balance at • 401(a) qualified plan (including 401(k) plan) and
the time of retirement to receive full credit (see the “Un- 403(a) qualified annuity;
satisfied Balances” section). • 403(b) - Tax-Sheltered Annuity Plan;
A member who authorizes a purchase of service cred- • 457(b) - State and Local Government Deferred
it through payroll deductions may cancel those de- Compensation Plan; or
ductions at any time. No refunds will be made of any
lump-sum payments, partial payments, or installment • IRA - With tax-deferred funds:
payments. The member will receive prorated service – Traditional IRA;
credit for the service purchased to the date installment
– SIMPLE IRA (must have been open for two or
payments cease. Any subsequent requests to pur-
more years);
PERS Member Guidebook March 2019 Page 18You can also read
