Bill Text: NJ A4759 | 2020-2021 | Regular Session | Introduced
Bill Title: Addresses repayment of pension loans by certain retired members of State-administered retirement systems and requiring annual audits of such repayments.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2020-10-08 - Introduced, Referred to Assembly State and Local Government Committee [A4759 Detail]
Download: New_Jersey-2020-A4759-Introduced.html
Sponsored by:
Assemblyman RONALD S. DANCER
District 12 (Burlington, Middlesex, Monmouth and Ocean)
SYNOPSIS
Addresses repayment of pension loans by certain retired members of State-administered retirement systems and requiring annual audits of such repayments.
CURRENT VERSION OF TEXT
As introduced.
An Act addressing repayment of pension loans by certain retired members of State-administered retirement systems and requiring annual audits of loan repayments, and supplementing Title 43 of the Revised Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Notwithstanding the provisions of any other law to the contrary, a retired member of any State-administered retirement system who at the time of the member's retirement, whether occurring heretofore or hereafter, has an outstanding loan from the system that is to be repaid through a deduction from the member's monthly retirement allowance shall be required to pay only the amount borrowed and the amount of interest agreed to between the parties at the inception of the loan and shall not be required to pay any additional interest or penalties that may result from the failure of the retirement system or the Division of Pensions and Benefits in the State Department of the Treasury to withhold loan payments from the member's retirement allowance. The total period of time for repayment of such a loan shall not exceed five years exclusive of the period of time during which the system or the division failed to withhold payments.
2. Beginning on the 60th day after the effective date of this act and annually thereafter, the Division of Pensions and Benefits shall conduct an annual audit of each State-administered retirement system for the specific purpose of determining whether pension loan payments have failed to be withheld, on a timely basis, from the monthly retirement allowance of any retired member. The division shall file a report of its findings with the Legislature pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1).
3. This act shall take effect immediately, except that section 1 thereof shall remain inoperative until the Division of Pensions and Benefits obtains a ruling from the federal Internal Revenue Service that implementation of that section is permissible under federal law.
STATEMENT
This bill provides that a retired member of a State-administered retirement system who at the time of the member's retirement, whether occurring heretofore or hereafter, has an outstanding loan from the system that is to be repaid through a deduction from the member's monthly retirement allowance must pay only the amount borrowed and the amount of interest agreed to between the parties at the inception of the loan and will not be required to pay any additional interest or penalties that may result from the failure of the retirement system or the Division of Pensions and Benefits in the State Department of the Treasury to withhold loan payments from the member's retirement allowance. The total period of time for repayment of such a loan is limited to five years exclusive of the period of time during which the system or the division failed to withhold payments.
Beginning on the 60th day after the bill's effective date, and annually thereafter, the Division of Pensions and Benefits will conduct an audit of each State-administered retirement system for the specific purpose of determining whether pension loan payments have failed to be withheld, on a timely basis, from the monthly retirement allowance of any retired member. The division shall file a report of its findings with the Legislature.
The bill will take effect immediately, except that section 1, which prohibits the payment of additional interest or penalties, will remain inoperative until the Division of Pensions and Benefits obtains a ruling from the federal Internal Revenue Service that implementation of that section is permissible under federal law.
Information provided by constituents indicates that there have been numerous instances in which retirees of different State-administered pension funds were informed years after retirement that loan payments had not been withheld from the retirees' monthly benefit and that they would now have to repay the loan amount plus additional interest and penalties.
