Bill Text: NJ S2705 | 2010-2011 | Regular Session | Introduced

New Jersey Senate Bill 2705 (Prior Session Legislation)

Introduced

Bill Title: Makes changes to retirement benefits for members of the State-administered retirement systems and eliminates future COLAs.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2011-02-17 - Introduced in the Senate, Referred to Senate State Government, Wagering, Tourism & Historic Preservation Committee [S2705 Detail]

Download: New_Jersey-2010-S2705-Introduced.html

SENATE, No. 2705

STATE OF NEW JERSEY

214th LEGISLATURE

INTRODUCED FEBRUARY 17, 2011

Sponsored by:

Senator JOSEPH PENNACCHIO

District 26 (Morris and Passaic)

SYNOPSIS

Makes changes to retirement benefits for members of the State-administered retirement systems and eliminates future COLAs.

CURRENT VERSION OF TEXT

As introduced.

An Act concerning the retirement benefits of public employees and the State-administered retirement systems, and amending, supplementing and repealing various parts of the statutory law.

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

1. (New section) The Legislature finds and declares:

a. The State's pension plans have experienced increasing deterioration in their funded status which has been exacerbated by recent declines in the market value of the fund assets. The probability of investment returns making up for the shortfall is very low even if economic conditions improved.

b. In the past, the State has authorized expensive benefit enhancements, but the funding for these benefits has not followed, further impeding the sustainability of the pension systems at these current level of benefits.

c. As a consequence of such factors, including these poor investment returns and increased benefits, the funded status of the pension plans has drastically decreased over the past ten years. Currently, the pension systems are estimated to be underfunded by $54 billion, and if current benefits continue, the underfunding could grow to $181 billion by 2041.

d. In order to maintain the long term fiscal integrity of the pension funds and their ability to pay required benefits to the members of the pension plans, it is necessary to enact reforms that will protect the pension systems.

e. Such reforms are intended to bring solvency and long-term stability to the pension systems and thereby protect the retirement benefits of all members participating in the systems. These reforms are essential in order to contain the increasing costs of employee pension benefits and the burden placed on current and future generations of taxpayers who must support these costs.

f. These reforms are also intended to bring uniformity and consistency to the area of disability retirement by making benefits uniform among the several pension plans, eliminating the complicated and costly benefit formula under current law that has resulted in substantial litigation, and more closely aligning these benefits with our workers' compensation laws.

g. The reforms contain technical changes that are required in order to ensure the pension plans operate as qualified plans under federal tax law.

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 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) In the case of a member with 25 or more years of creditable service or who has attained normal retirement age on the effective date of this section of P.L. , c. (pending before the Legislature as this bill), "[Final] final compensation" means the average annual compensation for which contributions are made for the three years of creditable service in New Jersey immediately preceding the member's retirement or death, or it shall mean the average annual compensation for New Jersey service for which contributions are made during any three fiscal years of his or her membership providing the largest possible benefit to the member or the member's beneficiary.

(2) In the case of a member with fewer than 25 years of creditable service and who has not attained normal retirement age on the effective date of this section of P.L. , c. (pending before the Legislature as this bill) and 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, 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] an intellectual disability or physical incapacity, is unable to do any substantial, gainful work because of the impairment and the impairment has lasted or can be expected to last for a continuous period of not less than 12 months, as affirmed by the medical board.

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.

y. "Normal retirement age" means the age at which the member is first eligible for a service retirement based on age under N.J.S.18A:66-43.

(cf: P.L.2010, c.1, s.20)

3. N.J.S.18A:66-4 is amended to read as follows:

18A:66-4. a. The membership of the retirement system shall consist of:

(a) all members of the teachers' pension and annuity fund enrolled as such as of December 31, 1955;

(b) any person becoming a teacher on or after January 1, 1956, except any person who has attained the age of 60 years prior to becoming a teacher after June 30, 1958 but before July 1, 1968;

(c) every teacher veteran as of January 1, 1956, who is not a member of the "Teachers' Pension and Annuity Fund" as of such date and who shall not have notified the board of trustees within 30 days of such date that he does not desire to become a member;

(d) any teacher employed on January 1, 1956, who is not a member of the Teachers' Pension and Annuity Fund and who elects to become a member under the provisions of N.J.S.18A:66-10.

b. (1) Before or on November 1, 2008, no person in employment, office or position, for which the annual salary or remuneration is fixed at less than $500.00 shall be eligible to become a member of the retirement system.

(2) After November 1, 2008, a person who was a member of the retirement system on that date and continuously thereafter shall be eligible to be a member of the retirement system in employment, office or position, for which the annual salary or remuneration is fixed at $500 or more.

(3) After November 1, 2008 and before or on the effective date of P.L.2010, c.1, a person who was not a member of the retirement system on November 1, 2008, or who was a member of the retirement system on that date but not continuously thereafter, and who is in employment, office or position, for which the annual salary or remuneration is certified by the applicable public entity at $7,500 or more, shall be eligible to become a member of the retirement system. The $7,500 minimum annual salary or remuneration amount shall be adjusted annually by the Director of the Division of Pensions and Benefits, by regulation, in accordance with changes in the Consumer Price Index but by no more than 4 percent. "Consumer Price Index" means the average of the annual increase, expressed as a percentage, in the consumer price index for all urban consumers in the New York City and Philadelphia metropolitan statistical areas during the preceding calendar year as reported by the United States Department of Labor.

(4) After the effective date of P.L.2010, c.1, no person in an employment, office or position of the State, or an agency, board, commission, authority or instrumentality of the State, for which the hours of work are fixed at fewer than 35 per week shall be eligible to become a member of the retirement system; and no person in employment, office or position with a board of education or other education employer for which the hours of work are fixed by a resolution of the board of education or other education employer at fewer than 32 per week shall be eligible to become a member of the retirement system. Any hour or part thereof, during which the person does not work due to the person's participation in a voluntary or mandatory furlough program shall not be deducted in determining if a person's hours of work are fixed at fewer than 35 or 32 per week, as appropriate, for the purpose of eligibility. This subsection shall not apply to prohibit the enrollment or reenrollment of a retiree whose retirement was not bona fide within the meaning of section 92 of P.L. , c. (C. ) (pending before the Legislature as this bill).

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

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

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

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

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

"Excess valuation assets" for a valuation period means:

(1) the valuation assets; less

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(cf: P.L.2007, c.92, s.24)

5. N.J.S.18A:66-20 is amended to read as follows:

18A:66-20. (a) Any contributions made by a member in excess of those required shall be refunded with regular interest to January 1, 1956, which rate of interest shall be 4 percent commencing with the effective date of this section of P.L. , c. (pending before the Legislature as this bill), to the member or his beneficiary or estate or shall, at his request, be used at retirement with regular interest to provide an annuity of equivalent actuarial value which shall be in addition to his retirement allowance as computed in accordance with section 18A:66-44.

(b) Upon the submission of such evidence as the retirement system may require, the system shall refund to any member, that part of his accumulated deductions paid into the retirement system as a result of deductions based on payments to him over and above compensation as defined in this article.

(c) Until July 1, 1974 contributions, made by a member employed by an institution of higher education prior to July 1, 1969, on the basis of compensation earned during summer sessions may be refunded with regular interest to January 1, 1956 to the member at his request or shall be included in the computation of his retirement allowance.

(cf: P.L.1971, c.121, s.10)

6. N.J.S.18A:66-21 is amended to read as follows:

18A:66-21. The retirement reserve fund shall be the fund from which all retirement allowances shall be paid except those payable from the pension fund as provided in section 18A:66-22. Upon the retirement of a member other than a present-entrant, his accumulated deductions together with regular interest after January 1, 1956, shall be transferred to the retirement reserve fund from the annuity savings fund. The reserve needed to produce the balance of the retirement allowance shall be transferred from the contingent reserve fund. If the retirement allowance of a member who has been retired is subsequently canceled, the appropriate reserve shall be transferred to the annuity savings fund and the contingent reserve fund. Commencing with the effective date of this section of P.L. , c. (pending before the Legislature as this bill), the regular interest rate applicable to the annuity savings fund shall be 4 percent.

Any surplus or deficit developing in the retirement reserve fund shall be adjusted from time to time by transfer to or from the contingent reserve fund by appropriate action of the retirement system upon the advice of the actuary.

(cf: P.L.1971, c.121, s.11)

7. N.J.S.18A:66-25 is amended to read as follows:

18A:66-25. The board of trustees at the end of each fiscal year shall allow interest on the balance of the contingent reserve fund, the annuity savings fund, the retirement reserve fund, pension fund, benefit enhancement fund and the members' death benefit fund as of the beginning of said fiscal year at the regular interest rate applicable thereto to cover the interest creditable to the respective funds for the year. Commencing with the effective date of this section of P.L. , c. (pending before the Legislature as this bill), the regular interest rate applicable to the annuity savings fund shall be 4 percent. The amount so allowed shall be due and payable to said funds and shall be credited annually thereto by the board.

(cf: P.L.2001, c.133, s.3)

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

18A:66-29. Members enrolled in the retirement system on or after July 1, 1994 shall contribute 5% of compensation to the system. Members enrolled in the system prior to July 1, 1994 shall contribute 5% of compensation to the system effective with the payroll period for which the beginning date is closest to July 1, 1995, provided, however, that any member enrolled before July 1, 1994, whose full contribution rate under the system prior to the revisions by this act was less than 6%, shall pay 4% of compensation to the system effective with the payroll period for which the beginning date is closest to July 1, 1995, and 5% of compensation to the system effective with the payroll period for which the beginning date is closest to July 1, 1996.

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

Commencing with the payroll period for which the payroll date occurs on or immediately following July 1, 2011, all members shall contribute an additional 3% of compensation to the system. This additional contribution, however, shall not be used to reduce the employer normal contribution required pursuant to N.J.S.18A:66-18.

(cf: P.L.2007, c.103, s.1)

9. N.J.S.18A:66-32.1 is amended to read as follows:

18A:66-32.1. a. If any member of the retirement system receives periodic benefits payable under the workers' compensation law during the course of his active service, in lieu of his normal compensation, his regular salary deductions shall be paid to the retirement system by his employer. Such payments shall be computed, in accordance with N.J.S.18A:66-29, at the rate of contribution on the base salary subject to the retirement system, just prior to the receipt of the workers' compensation benefits. The moneys paid by the employer shall be credited to the member's account in the annuity savings fund and shall be treated as employee contributions for all purposes. The employer will terminate the payment of these moneys when the periodic benefits payable under the workers' compensation law are terminated or when the member retires.

The member for whom the employer is making such payments, will be considered as if he were in the active service.

b. An application for retirement benefits may be approved by the board of trustees while the member, applying for such benefits, is in receipt of periodic benefits under the workers' compensation law. If a retirant receiving a work-related disability retirement or an accidental disability retirement allowance approved prior to the effective date of P.L. , c. (pending before the Legislature as this bill) becomes a recipient of periodic benefits under the workers' compensation law after the date of retirement, the pension portion of the retirement allowance payable to the retirant shall be reduced, during the period of the payment of the periodic benefits, dollar-for-dollar in the amount of the periodic benefits received after the date of retirement, subject to the provisions of N.J.S.18A:66-69. The reduction provided for herein shall not affect the retirant's pension adjustment benefits or survivor benefits that may be payable upon the death of the retirant.

If a work-related disability retirant or an accidental disability retirant approved prior to the effective date of P.L. , c. (pending before the Legislature as this bill) receives a retirement allowance without reduction and periodic benefits under the workers' compensation law for any period of time after the date of retirement, the retirant shall repay to the retirement system the amount of the pension portion of the retirement allowance which should have been subject to reduction under this subsection. The repayment may be in the form of a lump sum payment or scheduled as deductions from the retirant's retirement allowance and pension adjustment benefits. If the retirant dies before full repayment of the amount required, the remaining balance shall be deducted from any death benefits payable on behalf of the retirant. Notwithstanding the provisions of R.S.34:15-26 and R.S.34:15-40, the amount of the dollar-for-dollar reduction from the receipt of workers' compensation periodic benefits shall not be reduced by a payment for legal services or by receipt of a third party recovery.

(cf: P.L.1995, c.369, s.1)

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

18A:66-34. A member who withdraws from service or ceases to be a teacher for any cause other than death or retirement shall, upon the filing of an application therefor, receive all of his accumulated deductions standing to the credit of his individual account in the annuity savings fund, plus regular interest on contributions made after January 1, 1956, less any loan outstanding, and except that for any period after June 30, 1944, the interest payable shall be such proportion of the interest determined at the regular rate as 2% per annum bears to the regular rate of interest which shall be 4 percent commencing with the effective date of this section of P.L. , c. (pending before the Legislature as this bill); provided, however, that no interest shall be payable if such a member does not have 3 years of membership service at the time of withdrawal from service or cessation of employment.

He shall cease to be a member 2 years from the date he discontinued service as a teacher, or, if prior thereto, upon payment to him of his accumulated deductions. If any such person or member shall die before withdrawing or before endorsing the check constituting the return of his accumulated deductions, such deductions shall be paid to the member's beneficiary. No member shall be entitled to withdraw the amounts contributed by his employer covering his military leave unless he shall have returned to the payroll and contributed to the retirement system for a period of 90 days.

(cf: P.L.1971, c.121, s.17)

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

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

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

b. A deferred retirement allowance beginning at age 60 for a member who has established 25 or more years of creditable service on the effective date of this section of P.L. , c. (pending before the Legislature as this bill), or for a member who has established fewer than 25 years of creditable service on that effective date or a person who becomes a member of the retirement system on or after [the] that effective date [of P.L.2008, c.89] beginning at age [62] 65, which shall be made up of an annuity derived from the member's accumulated deductions at the time of his severance from the service, and a pension in the amount which, when added to the member's annuity, will provide a total retirement allowance of (1) 1/64 of final compensation for each year of service credited as Class A service [and] , 1/55 of final compensation for each year of service credited as class B service, [or] and 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, prior to the effective date of this section of P.L. , c. (pending before the Legislature as this bill), plus (2) 1/65 of final compensation for each year of service credited on or after the effective date if this section of P.L. , c. (pending before the Legislature as this bill), 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, which shall be 4 percent commencing with the effective date of this provision of this section of P.L. , c. (pending before the Legislature as this bill) and 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] 65, shall thereupon be reenrolled. If he had discontinued his service for more than two consecutive years, [subsequent contributions shall be at a rate applicable to the age resulting from the subtraction of his years of creditable service at the time of his last discontinuance of contributing membership from his age at the time of his return to service. He shall be credited with all service as a member standing to his credit at the time of his election to receive a deferred retirement allowance] he shall be enrolled in the retirement system under a new membership account and shall be subject to such benefits and requirements as shall apply to new members of the retirement system as of the date of such new enrollment. The member may elect to transfer all service credit associated with the previously vested membership to the new membership account and such service credit will be subject to the benefit and requirements as shall apply to new members of the retirement system as of the date of such new enrollment. Should the member elect not to transfer the service credit associated with the vested membership to the new membership account, no benefits shall be payable from the previous application for deferred retirement until such time as the member has terminated all Teachers' Pension and Annuity Fund eligible employment.

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

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

18A:66-37. Should a member with 25 or more years of creditable service credit on the effective date of this section of P.L. , c. (pending before the Legislature as this bill) 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] should a member with fewer than 25 years of creditable service on the effective date of this section of P.L. , c. (pending before the Legislature as this bill) or a person who becomes a member of the retirement system on or after that effective date, resign after having established 30 years of creditable service before reaching age 65, the member may elect "early retirement," provided, that such election is communicated by such member to the retirement system by filing a written application, duly attested, stating at what time subsequent to the execution and filing thereof the member desires to be retired. The member shall receive, in lieu of the payment provided in N.J.S.18A:66-34, an annuity which is the actuarial equivalent of the member's accumulated deductions and a pension in the amount which, when added to the member's annuity, will provide a total retirement allowance of (1) 1/64 of the member's final compensation for each year of service credited as class A service [and] , 1/55 of the member's final compensation for each year of service credited as class B service, [or] and 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, prior to the effective date of this section of P.L. , c. (pending before the Legislature as this bill), plus (2) 1/65 of final compensation for each year of service credited on or after the effective date of this section of P.L. , c. (pending before the Legislature as this bill), 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, if the member has established 25 or more years of creditable service credit on the effective date of this section of P.L. , c. (pending before the Legislature as this bill); or

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

(c) for a person who becomes a member of the retirement system on or after the effective date of P.L.2008, c.89,] by 1/4 of 1% for each month that the member lacks of being age [55 and by 1/12 of 1% for each month that the member lacks of being age 62 but over age 55] 65 , if the member established fewer than 25 years of creditable service credit on the effective date of this section of P.L. , c. (pending before the Legislature as this bill) or the person becomes a member of the retirement system on or after that effective date; provided, however, that upon the receipt of proper proofs of the death of such a member there shall be paid to the member's beneficiary an amount equal to 3/16 of the compensation upon which contributions by the member to the annuity savings fund were based in the last year of creditable service or in the year of the member's highest contractual salary, whichever is higher.

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

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

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

13. N.J.S.18A:66-38 is amended to read as follows:

18A:66-38. Upon the receipt of proper proofs of the death of a member in service on account of which no accidental death benefit is payable under section 18A:66-46, there shall be paid to such member's beneficiary:

(a) The member's accumulated deductions at the time of death together with regular interest after January 1, 1956, which rate of interest shall be 4 percent commencing with the effective date of this section of P.L. , c. (pending before the Legislature as this bill); and

(b) An amount equal to 1 1/2 times the compensation upon which contributions by the member to the annuity savings fund were based in the last year of creditable service.

For the purpose of this section, section 18A:66-46e and section 18A:66-53, a member of the retirement system shall be deemed to be an active member (1) while he is disabled due to sickness or injury arising out of or in the course of his employment as a teacher to whom this article applies, is not engaged in any gainful occupation, and is receiving or entitled to receive periodic benefits (including any commutation of, or substitute for, such benefits) for loss of time on account of such disability under or by reason of workmen's compensation law, occupational disease law or similar legislation and has not retired or terminated his membership; or (2) for a period of no more than two years while on official leave of absence without pay if satisfactory evidence is presented to the retirement system that such leave of absence without pay is due to the member's personal illness other than an illness to which (1) above applies. For the purpose of this section, section 18A:66-46e and section 18A:66-53, a member of the retirement system shall be deemed to be an active member for a period of not more than one year in the event of an official leave (1) due to the member's maternity or (2) to fulfill a residency requirement for an advanced degree or (3) as a full-time student at an institution of higher education, and for a period of not more than 93 days while on official leave of absence without pay when such leave of absence is due to any reason other than illness. In order for a member to be covered for the optional death benefits provided by section 18A:66-53, he shall continue to make contributions for same during the period such member is on official leave of absence without pay, except that when such official leave of absence without pay is due to illness, no contributions shall be required of the member during the period he is deemed to be an active member while on such leave of absence.

If a member dies within 30 days after the date of retirement or the date of board approval, whichever is later, a death benefit shall be payable only if he is deemed to be an active member in accordance with this section; provided, however, a member applying for disability benefits shall be deemed an active member if he was covered by the death benefit provisions of the act at the termination of employment, filed the application for disability retirement with the retirement system within 30 days following such termination of employment and dies within 30 days after the date of retirement or the date of board approval, whichever is later.

(cf: P.L.1984, c.132, s.1)

14. 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] (Deleted by amendment, P.L. , c. (pending before the Legislature as this bill).

b. On and after June 9, 1971, a member, under [60 years of] normal retirement 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 his usual duty or of any other available duty that his employer is willing to assign to him 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.]

c. A member, under [65 years of] normal retirement 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] a work-related disability allowance, if he meets the requirements of the medical examination set forth in subsection b. of this section and the incapacity from the performance of duties is the direct result of a work-related accident or occupational exposure occurring during and as a result of his regular assigned duties and not the result of willful negligence. [A traumatic event] An accident or occupational exposure 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.] In order to qualify for a work-related disability benefit, the member shall have received a workers' compensation award of permanent disability under R.S.34:15-1 et seq. The board may, in its discretion, waive the requirement for a medical examination under this subsection when the Division of Workers' Compensation in the Department of Labor and Workforce Development has determined that the member is 100 percent totally and permanently disabled.

The application to accomplish [such] a work-related disability retirement must be filed within five years of the original [traumatic event] accident or occupational exposure, 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 or occupational exposure 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)

15. N.J.S.18A:66-41 is amended to read as follows:

18A:66-41. A member upon retirement for ordinary disability or work-related disability shall receive a retirement allowance which shall consist of:

(a) an annuity which shall be the actuarial equivalent of his accumulated deductions at the time of his retirement together with regular interest after January 1, 1956 which rate of interest shall be 4 percent commencing with the effective date of this provision of this section of P.L. , c. (pending before the Legislature as this bill); 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 multiplied by his number of years of creditable service; and provided further, that in no event shall the allowance be less than [43.6%] 40% of final compensation.

Upon the receipt of proper proofs of the death of a member who has retired on an ordinary or work-related disability retirement allowance, there shall be paid to such member's beneficiary, an amount equal to 1 1/2 times 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; provided, however, that if such death shall occur after the member shall have attained age 60, the amount payable shall equal 3/16 of such compensation. The death benefits provided in this section shall apply to any member who has retired or shall retire on or after January 1, 1956.

(cf: P.L.2001, c.353, s.1)

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

18A:66-43. 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] who has attained age 60 on the effective date of this section of P.L. , c. (pending before the Legislature as this bill) or who has 25 or more years of creditable service on that effective date of this section upon attaining 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] who has attained age 62 on the effective date of this section of P.L. , c. (pending before the Legislature as this bill) or who has 25 or more years of creditable service on that effective date upon attaining 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 member who has established fewer than 25 years of creditable service and who is not eligible for retirement under subsection (a) or (b) of this section on the effective date of this section of P.L. , c. (pending before the Legislature as this bill) and a person who becomes a member on or after that effective date and who 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.2008. c.89, s.21)

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

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

(a) an annuity which shall be the actuarial equivalent of his accumulated deductions, together with interest after January 1, 1956 which rate of interest shall be 4 percent commencing with the effective date of this provision of this section of P.L. , c. (pending before the Legislature as this bill), less any excess contributions as provided in N.J.S.18A:66-20; and

(b) a pension in the amount which, when added to the member's annuity, will provide a total retirement allowance of (1) 1/64 of final compensation for each year of service credited as class A service [and] , 1/55 of final compensation for each year of service credited as class B service, [or] and 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, prior to the effective date of this section of P.L. , c. (pending before the Legislature as this bill), plus (2) 1/65 of final compensation for each year of service credited on or after the effective date of this section of P.L. , c. (pending before the Legislature as this bill).

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)

18. N.J.S.18A:66-53.1 is amended to read as follows:

18A:66-53.1. The designation of beneficiary by a member or retirant shall be made in writing on a form satisfactory to the retirement system, and filed with the retirement system. The member or retirant may, from time to time and without the consent of his death benefit designee, change the beneficiary by filing written notice of the change with the system on a form satisfactory to it. The new nomination will be effective on the date the notice, in proper form, is received by the system, and any prior nomination shall thereupon become void.

If more than one beneficiary is nominated and in such nomination the member or retirant has failed to specify their respective interests, the beneficiaries shall share equally. If any beneficiary predeceases the member or retirant, the interest of such beneficiary shall terminate and shall be shared equally by such of the beneficiaries as survive the member or retirant, unless the member or retirant has made written request to the contrary in his beneficiary nomination.

Any amounts due for which there is no beneficiary at the death of a member, retirant or beneficiary shall be payable to the estate of such member, retirant or beneficiary.

Except with regard to the payment of the member's accumulated deductions with regular interest which rate of interest shall be 4 percent commencing with the effective date of this section of P.L. , c. (pending before the Legislature as this bill) and the payment, upon the death of (1) a retirant after attaining the age of 60 or receiving an allowance pursuant to section 18A:66-37, or (2) a member after attaining the age of 70 years, of the death benefits provided in sections 18A:66-36, 18A:66-37, 18A:66-41, 18A:66-42, and 18A:66-44, a member may elect, by making written request to the retirement system, that the whole or any part of his death benefits be made payable to his beneficiary either as a life annuity or in equal installments over a period of years specified in such election, and may alter such election from time to time during his lifetime by again making such written request. In the event of a change of beneficiary, any previous arrangement by the member or retirant under this paragraph shall be void. The election set forth in this paragraph shall not apply or be available when the beneficiary is an estate, or a corporation, partnership, association, institution, trustee or any fiduciary.

If, at the member's or retirant's death, an amount of death benefit would be payable to the beneficiary in a single sum, any election with regard to such amount which was available to the member or retirant immediately prior to his death in accordance with the provisions of the immediately preceding paragraph shall then be available to such beneficiary for the benefit of such beneficiary.

(cf: P.L.1984, c.132, s.4)

19. N.J.S.18A:66-71 is amended to read as follows:

18A:66-71. a. (1) Any public employee veteran member in office, position or employment of this State or of a county, municipality, or school district, board of education or other employer who on or before the effective date of this section of P.L. , c. (pending before the Legislature as this bill) [(1)] (a) has or shall have attained the age of 60 years and has or shall have been for 20 years continuously or in the aggregate in office, position or employment of this State or of a county, municipality or school district, board of education or other employer, or [(2)] (b) has or shall have attained the age of 55 years and has or shall have been for 25 years continuously or in the aggregate in that office, position or employment, shall have the privilege of retiring for service and of receiving, instead of the retirement allowance provided under N.J.S.18A:66-44, a retirement allowance of 54.5% of the compensation for which contributions are made during the 12-month period of membership providing the largest possible benefit to the member or the member's beneficiary.

(2) After the effective date of this section of P.L. , c. (pending before the Legislature as this bill) any public employee veteran member in office, position or employment of this State or of a county, municipality, public agency, school district or board of education and who (a) shall have attained 60 years of age and who has 20 years of aggregate service credit in such office, position or employment, or (b) shall have attained 55 years of age and who has 25 years of aggregate service credit in such office, position or employment, shall have the privilege of retiring for service and receiving, instead of the retirement allowance provided under section N.J.S.18A:66-44, a retirement allowance of 54.5% of the compensation for which contributions are made during the 12-month period of membership providing the largest possible benefit to the member or the member's beneficiary for service accrued prior to that effective date multiplied by the number of years of service accrued prior to that effective date divided by the total number of years of service accrued, plus 50% of the compensation for which contributions are made during the 36-month period of membership providing the largest possible benefit to the member or the member's beneficiary for service accrued after that effective date multiplied by the number of years of service accrued after that effective date divided by the total number of years of service accrued.

b. (Deleted by amendment, P.L.1984, c.69.)

c. Any public employee veteran member who has been for 20 years in the aggregate in office, position or employment of this State or of a county, municipality or school district, board of education or other employer as of January 1, 1955, shall have the privilege of retiring for ordinary disability and of receiving, instead of the retirement allowance provided under N.J.S.18A:66-41, a retirement allowance of one-half of the compensation received during the last year of employment upon which contributions to the annuity savings fund or contingent reserve fund are made. Such retirement shall be subject to the provisions governing ordinary disability retirement in N.J.S.18A:66-39 and N.J.S.18A:66-40.

d. (1) Any public employee veteran member who shall be in office, position or employment of this State or of a county, municipality, school district, board of education or other employer and who on or before the effective date of this section of P.L. , c. (pending before the Legislature as this bill) shall have attained 55 years of age and who has at least 35 years of aggregate service credit in such office, position or employment, shall have the privilege of retiring for service and receiving a retirement allowance of 1/55 of the compensation the member received during the 12-month period of membership providing the largest possible benefit to the member or the member's beneficiary for each year of creditable service.

(2) After the effective date of this section of P.L. , c. (pending before the Legislature as this bill), any public employee veteran member who shall be in office, position or employment of this State or of a county, municipality, public agency, school district or board of education and who shall have attained 55 years of age and who has 35 years of aggregate service credit in such office, position or employment, shall have the privilege of retiring for service and receiving a retirement allowance equal to 1/55 of the compensation the member received during the 12-month period of membership providing the largest possible benefit to the member or the member's beneficiary for each year of creditable service for service accrued prior to that effective date multiplied by the number of years of service accrued prior to that effective date divided by the total number of years of service accrued, plus 1/60 of the compensation the member received during the 36-month period of membership providing the largest possible benefit to the member or the member's beneficiary for each year of creditable service for service accrued after that effective date multiplied by the number of years of service accrued after that effective date divided by the total number of years of service accrued.

e. The death benefit provided in N.J.S.18A:66-44 shall apply in the case of any member retiring under the provisions of subsections a. and d. of this section and in the case of any member who has previously retired under the provisions of subsection b. of this section before said subsection was amended by P.L.1984, c.69. The death benefit provided in N.J.S.18A:66-41 shall apply in the case of any member retired under the provisions of subsection c. of this section.

f. A member who purchases service credit pursuant to any provision of the "Teachers' Pension and Annuity Fund Law" (N.J.S.18A:66-1 et seq.) is entitled to apply the credit for the purpose of satisfying any of the service requirements of that act.

(cf: P.L.2004, c.177, s.1)

20. Section 3 of P.L.1969, c.242 (C.18A:66-169) is amended to read as follows:

3. As used in this act:

a. "Accumulated deductions" means those contributions as defined in N.J.S.18A:66-2 or in section 6 of P.L.1954, c.84 (C.43:15A-6).

b. "Base salary" means a participant's regular base or contractual salary. It shall exclude bonus, overtime or other forms of extra compensation such as (1) longevity lump sum payments, (2) lump sum terminal sick leave or vacation pay, (3) the value of maintenance, (4) individual pay adjustments made within or at the conclusion of the participant's final year of service, (5) retroactive salary adjustments or other pay adjustments made in the participant's final year of service unless such adjustment was made as a result of a general pay adjustment for all personnel of the department or institution, (6) any unscheduled individual adjustment made in the final year to place the member at the maximum salary level within his salary range and (7) any pay for services rendered during the summer vacation period by a participant who is required to work only 10 months of the year.

c. "Base annual salary" means the base salary upon which contributions by the member and his employer to the alternate benefit program were based during the last year of creditable service.

d. (Deleted by amendment, P.L.1994, c.48).

e. "University of Medicine and Dentistry" means the University of Medicine and Dentistry of New Jersey established pursuant to the terms of section 3 of P.L.1970, c.102 (C.18A:64G-3).

f. "County colleges" means the colleges so defined in N.J.S.18A:64A-1.

g. "Division of Pensions" means the division established in the Department of the Treasury pursuant to section 1 of P.L.1955, c.70 (C.52:18A-95) and is the agency responsible for the administration of the alternate benefit program of the State and county colleges and for the administration of the group life and disability insurances of all alternate benefit programs established in the State for public employees.

h. "Full-time officers" and "full-time members of the faculty" shall include the president, vice president, secretary and treasurer of the respective school. "Full-time" shall also include eligible full-time officers and full-time members of the faculty who are granted sabbaticals or leaves of absence with pay where the compensation paid is 50% or more of the base salary at the time the leave commences and the period of eligibility terminates with the end of the school year following the year in which the sabbatical began. "Part-time" shall be defined as an appointment where the employee receives a salary or wages for a period of less than 50% of the normal work week. These definitions shall apply to teaching or administrative staff members or to employees serving in a dual capacity where the appointment includes teaching as well as administrative duties.

i. "Group Annuity Plan" refers to the Group Annuity Contract R-134 between the Board of Trustees of the New Jersey Institute of Technology and the Prudential Insurance Company of America.

j. "Member" or "participant" means a full-time officer or a full-time member of the faculty participating in the alternate benefit program, and after the effective date of P.L.2008, c.89, means an adjunct faculty member or a part-time instructor whose employment agreement begins after that effective date.

k. "New Jersey Institute of Technology" means the Newark College of Engineering.

l. "Pension reserve" means those moneys as defined in N.J.S.18A:66-2 or in section 6 of P.L.1954, c.84 (C.43:15A-6).

m. "Rutgers, The State University" means the institution of higher education described in chapter 65 of Title 18A of the New Jersey Statutes.

n. "State Colleges" means the colleges so described in chapter 64 of Title 18A of the New Jersey Statutes.

o. "Mutual fund company" means an investment company or trust regulated by the federal "Investment Company Act of 1940," 15 U.S.C.s. 80a-1 et seq.

p. "Normal retirement age" means age 65.

(cf: P.L.2008, c.89, s.12)

21. (New section) Notwithstanding any law, rule or regulation to the contrary, the Director of the Division of Pensions and Benefits in the Department of the Treasury has the authority to adopt an Alternate Benefits Program plan document by rule or regulation and to adopt such other rules and regulations as necessary to implement the provisions of P.L.1969, c.242 (C.18A:66-167 et seq.).

22. Section 3 of P.L.1993, c.385 (C.18A:66-172.1) is amended to read as follows:

3. There is established in but not of the Division of Pensions in the Department of the Treasury the Pension Provider Selection Board, which shall consist of the Director of the Division of Pensions or a representative of that director; the Director of the Division of Investment or a representative of that director; the Commissioner of the Department of Insurance or a representative of that commissioner; the Director of the Division of Purchase and Property or a representative of that director; and a person appointed by the Director of the Division of Pensions who is an active participant or receiving a benefit from the alternate benefit program.

The Pension Provider Selection Board shall select through a competitive bidding process [at least three] one or more unrelated insurance or mutual fund companies licensed or otherwise authorized to transact business in New Jersey from which alternate benefit contracts will be purchased. [These new insurers or mutual fund companies shall be selected by competitive bidding in accordance with all applicable State laws and regulations not later than the 270th day following the effective date of P.L.1993, c.385 (C.18A:66-172.1 et al.).] The selected carriers shall be authorized to receive contributions within 60 days of their selection. Each contract shall be awarded for a period not to exceed six years with a renewal option for a period not to exceed three years. All carriers shall be subject to a performance review by the Pension Provider Selection Board every [seven] three years and must meet such standards as the Pension Provider Selection Board shall establish by regulation in order to be renewed for another term [of seven years] not to exceed six years with a renewal option for a period not to exceed three years as carriers. Removal of a carrier for cause [during a seven-year term] is not waived. In establishing by regulation the criteria for the initial selection and any performance review of a carrier, the Pension Provider Selection Board shall consider, among other things, the following:

a. the portability of the contracts offered or to be offered by the company, based on the number of states in which the company provides contracts under similar plans;

b. the efficacy of the contracts in the recruitment and retention of employees for the various State public institutions of higher education;

c. the nature and extent of the rights and benefits to be provided by the contracts for participating employees and their beneficiaries;

d. the relation of the rights and benefits to the amount of contributions to be made pursuant to the provisions of this article;

e. the suitability of the rights and benefits to the needs and interests of participating employees and the various State public institutions of higher education;

f. he ability of the company to provide the rights and benefits under such contracts;

g. he financial soundness of the company, the extent of the company's financial commitment to the contracts, and whether the company meets the minimum financial criteria established by the Division of Pensions;

h. the company's overall quality of service, its investment performance considering return on investments and risk, the administrative fee to be charged to participating employees, and the offering of a balanced array of investment opportunities; and

i. the nature of the informational or promotional materials to be provided to prospective participants.

The Pension Provider Selection Board may not designate a company which serves as a disbursement system for other providers or which charges third party administrative fees.

[A company that has been designated as of January 1, 1993 by the Division of Pensions as a designated provider shall continue to be so designated until its status as a designated provider is terminated for cause by the division or by the Pension Provider Selection Board.]

All designated providers shall be selected by a competitive bidding process.

(cf: P.L.1994, c.48, s.193)

23. Section 9 of P.L.1969, c.242 (C.18A:66-175) is amended to read as follows:

9. Membership or participation in the alternate benefit program shall terminate and the individual shall be considered retired once he or she has (a) attained normal retirement age as defined under section 3 of P.L.1969, c.242 (C.18A:66-169) or accrued sufficient service credit to qualify for and elect to receive benefits under subsection c. of section 8 of P.L.1961, c.49 (C.52:14-17.32) and (b) elected to receive a cash distribution upon separation from service or an annuity option from the designated insurer or insurers or a designated mutual fund company or companies, as appropriate.

Notwithstanding the foregoing provision, a member receiving a cash distribution or an annuity option upon separation from service from the designated insurer or insurers or a designated mutual fund company or companies, as appropriate, the amount of such computed by using only those funds provided through employee contributions, as provided under section 8 of P.L.1969, c.242 (C.18A:66-174), plus or minus any investment gains or losses, shall not be considered retired from the alternate benefit program.

(cf: P.L.1993, c.385, s.7)

24. Section 22 of P.L.1969, c.242 (C.18A:66-188) is amended to read as follows:

22. The alternate benefit programs shall provide an option for cash surrender upon separation from service. The cash surrender shall be applicable only to employee contributions and accumulations prior to the participant's [55th] 65th birthday, and thereafter to the full amount of all employee and employer contributions and accumulations. Additionally, a participant may borrow from his employee account accumulations up to the amounts allowed under federal law while still employed. Employee and employer account accumulations shall be used to qualify for the amount of a policy loan. In the event a participant in the alternate benefit program terminates his employment for reasons other than retirement or disability and requests repurchase of his annuity or annuities, such repurchase shall be allowed provided it meets the conditions under which the insurer or mutual fund company will repurchase annuities automatically, and provided that the portion of the repurchase value attributable to employer contributions made pursuant to this act shall be refunded to the employer.

The amendments to this section made by P.L.1993, c.385 (C.18A:66-172.1 et al.) shall apply to all contributions made to a plan under the alternate benefit program on or after the 90th day following the effective date of that P.L.1993, c.385. Any plan contributions invested in the College Retirement Equities Fund prior to that date shall be fully subject to distribution as cash if those contributions shall not have been annuitized prior to that 90th day. Any plan contributions invested in the Teachers Insurance and Annuity Association prior to that 90th day shall become subject to distribution as cash to the maximum extent permitted by the contract if those contributions shall not have been annuitized prior to that 90th day.

(cf: P.L.1993, c.385, s.9)

25. Section 8 of P.L.1973, c.140 (C.43:6A-8) is amended to read as follows:

8. a. Any member who shall have served at least 10 years as a judge of the several courts and having attained the age of 70 years, shall be retired.

b. Any member who shall have served at least 15 years as a judge of the several courts and having attained the age of 65 years but not the age of 70 years, may retire.

c. Any member who shall have served at least 20 years as a judge of the several courts and having attained the age of 60 years but not the age of 65 years, may retire.

d. Service in the several courts as given in subsections a., b. and c. of this section shall include service in the office of the Chancellor, Chief Justice of the old Supreme Court, associate justice of the old supreme court, judge of the circuit court, Vice-Chancellor, judge of the court of errors and appeals, judge of the court of common pleas, and advisory master to the superior court.

e. Any member of the retirement system eligible to retire under the provisions of this section, shall receive a retirement allowance consisting of an annuity which shall be the actuarial equivalent of his accumulated deductions together with regular interest, which rate of interest shall be 4 percent commencing with the effective date of this section of P.L. , c. (pending before the Legislature as this bill), and a pension which, when added to the member's annuity, will provide a retirement allowance during the remainder of his life in the amount equal to three-quarters of his final salary.

(cf: P.L.1981, c.470, s.2)

26. Section 9 of P.L.1973, c.140 (C.43:6A-9) is amended to read as follows:

9. a. Any judge of the several courts, who shall have served at least 5 years successively as such judge and shall have attained the age of 65 years or more while serving in such office and shall have served at least 15 years in the aggregate, including such service as a judge, or in office, position, or employment of this State or of a county, municipality, board of education or public agency of this State, may retire.

b. Any judge of the several courts, who shall have served at least 5 years successively as such judge and shall have attained the age of 60 years or more while serving in such office and shall have served at least 20 years in the aggregate, including such service as a judge, or in office, position, or employment of this State or of a county, municipality, board of education or public agency of this State, may retire.

c. Any member of the retirement system, eligible to retire under the provisions of this section, shall receive a retirement allowance consisting of an annuity which shall be the actuarial equivalent of his accumulated deductions together with regular interest, which rate of interest shall be 4 percent commencing with the effective date of this section of P.L. , c. (pending before the Legislature as this bill), and a pension which, when added to the member's annuity, will provide a retirement allowance during the remainder of his life in an amount equal to one-half of his final salary.

(cf: P.L.1981, c.470, s.3)

27. Section 5 of P.L.1973, c.304 (C.43:6A-9.1) is amended to read as follows:

5. Any judge of the several courts who shall have attained the age of 60 years or more and who shall have served at least 5 years successively as a judge of the several courts and at least 15 years in the aggregate including such service as a judge or in office, position or employment of this State or a county, municipality, board of education, or public agency of this State may retire; provided that election is communicated by such judge to the retirement system by filing a written application duly attested stating at what time subsequent to the execution and filing thereof he desires to be retired. He shall receive an annuity which is the actuarial equivalent of his accumulated deductions together with regular interest, which rate of interest shall be 4 percent commencing with the effective date of this section of P.L. , c. (pending before the Legislature as this bill), and a pension which, when added to the member's annuity, will provide a retirement allowance in the amount of 2% of his final salary multiplied by his number of years of service up to 25 plus 1% of his final salary multiplied by his number of years of service over 25.

The State House Commission shall retire him at the time specified or at such other time within 1 month after the date so specified as the commission finds advisable.

(cf: P.L.1981, c.470, s.23)

28. Section 6 of P.L.1973, c.304 (C.43:6A-9.2) is amended to read as follows:

6. Any judge of the several courts who shall have attained the age of 60 years or more while serving as such judge may retire; provided that such election is communicated by such member to the retirement system by filing a written application duly attested stating at what time subsequent to the execution and filing thereof he desires to be retired. He shall receive an annuity which is the actuarial equivalent of his accumulated deductions together with regular interest, which rate of interest shall be 4 percent commencing with the effective date of this section of P.L. , c. (pending before the Legislature as this bill), and a pension which, when added to the member's annuity, will provide a retirement allowance in the amount of 2% of his final salary multiplied by his number of years of judicial service up to 25 plus 1% of his final salary multiplied by his number of years of service over 25.

The State House Commission shall retire him at the time specified or at such other time within 1 month after the date so specified as the commission finds advisable.

(cf: P.L.1981, c.470, s.24)

29. Section 10 of P.L.1973, c.140 (C.43:6A-10) is amended to read as follows:

10. Should any member resign, or fail of reappointment who shall have served at least 5 years successively as a judge of the several courts and at least 25 years in the aggregate, including such service as a judge or in office, position, or employment of this State or a county, municipality, board of education, or public agency of this State, before reaching age 60, he may elect "early" retirement, provided, that such election is communicated by such member to the retirement system by filing a written application, duly attested, stating at what time subsequent to the execution and filing thereof he desires to be retired. He shall receive an annuity which is the actuarial equivalent of his accumulated deductions together with regular interest, which rate of interest shall be 4 percent commencing with the effective date of this section of P.L. , c. (pending before the Legislature as this bill), and a pension which, when added to the member's annuity, will provide a retirement allowance in the amount of 2% of his final salary multiplied by his number of years of service up to 25 plus 1% of his final salary multiplied by his number of years of service over 25; provided, however, that such retirement allowance shall be reduced in accordance with a table of actuarial equivalents recommended by the actuary and adopted by the retirement system reflecting all months that the member lacks of being age 60.

The State House Commission shall retire him at the time specified or at such other time within 1 month after the date so specified as the commission finds advisable.

(cf: P.L.1981, c.470, s.4)

30. Section 11 of P.L.1973, c.140 (C.43:6A-11) is amended to read as follows:

11. Should any member resign, or fail of reappointment who shall have served at least 5 years successively as a judge of the several courts and at least 10 years in the aggregate, including such service as a judge or in office, position, or employment of this State or a county, municipality, board of education, or public agency of this State, before reaching age 60, and not by removal for cause on charges of misconduct or delinquency, he may elect to receive:

a. All of his accumulated deductions standing to the credit of his individual account in the annuity savings fund, or

b. A deferred retirement allowance, beginning on the first day of the month following his attainment of age 60 and the filing of an application therefor, which shall consist of an annuity derived from the accumulated deductions standing to the credit of the member's account in the annuity savings fund at the time of his severance from service together with regular interest which shall be 4 percent commencing with the effective date of this section of P.L. , c. (pending before the Legislature as this bill), and a pension which, when added to the annuity, will produce a retirement allowance in the amount of 2% of his final salary multiplied by his number of years of service up to 25 plus 1% of his final salary multiplied by his number of years of service over 25, provided that such inactive member may elect to receive payments provided under section 10 if he had qualified under that section at the time of leaving service, except that in order to avail himself of the option, he must exercise such option at least 1 month before the effective date of his retirement. If such inactive member shall die after attaining age 60 but before filing an application for retirement benefits pursuant to this section or section 10 and for which benefits he would have qualified, or in the event of death after retirement, there shall be paid to such member's beneficiary the death benefits prescribed by section 19.

No beneficiary shall be eligible for a pension or survivor's benefit if the member who elected to receive a deferred pension prior to the effective date of this amendatory and supplementary act or who elects to receive a deferred retirement allowance following the effective date of this amendatory and supplementary act shall die before attaining age 60. Upon receipt of the proper proofs of death, the beneficiary of a member who elects to receive a deferred retirement allowance shall be paid the member's accumulated deductions at the time of death together with regular interest.

Any member who, having elected to receive a deferred pension or deferred retirement allowance, again becomes a member while under the age of 60, shall thereupon be reenrolled. He shall be credited with all service as a member standing to his credit at the time of his election to receive a deferred pension or deferred retirement allowance.

(cf: P.L.1981, c.470, s.5)

31. Section 12 of P.L.1973, c.140 (C.43:6A-12) is amended to read as follows:

12. Whenever the Supreme Court shall certify to the Governor, any member who shall have served as a judge of the several courts, may be retired for disability if the member has become physically or otherwise incapacitated for full and efficient service to the State in his judicial capacity. The Governor shall thereupon refer the disability claim to three physicians of skill and repute in their profession and residents of this State who shall examine the member and report to the Governor as to his physical or other disability and whether in all reasonable probability, if they find the disability existent, it will continue permanently and does and will continue to prevent the member from giving full and efficient service in the performance of his judicial duties. If the report confirms the existence of the disability, and if the Governor approves the report, the member shall be retired not less than 1 month next following the date of filing of an application with the retirement system, and he shall receive a retirement allowance which shall consist of an annuity which is the actuarial equivalent of his accumulated deductions together with regular interest which shall be 4 percent commencing with the effective date of this section of P.L. , c. (pending before the Legislature as this bill), and a pension which, when added to the member's annuity, will provide a retirement allowance during the remainder of his life in an amount equal to three-fourths of his final salary.

(cf: P.L.1981, c.470, s.6)

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

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

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

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

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

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

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

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

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

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

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

(cf: P.L.2007, c.92, s.25)

33. Section 34 of P.L.1973, c.140 (C.43:6A-34) is amended to read as follows:

34. The retirement reserve fund shall be the fund from which all pensions and retirement allowances shall be paid.

Upon the retirement of the member his accumulated deductions together with regular interest, which shall be 4 percent commencing with the effective date of this section of P.L. , c. (pending before the Legislature as this bill), shall be transferred to the retirement reserve fund from the annuity savings fund. The reserve needed to produce the pension shall be transferred from the contingent reserve fund. If the pension of a member who has been retired is subsequently canceled, the appropriate reserve shall be transferred to the contingent reserve fund. If the retirement allowance of a member who has been retired is subsequently cancelled, the appropriate reserve shall be transferred to the annuity savings fund and the contingent reserve fund.

(cf: P.L.1981, c.470, s.15)

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

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

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

(2) Commencing with the payroll period for which the payroll date occurs on or immediately following July 1, 2011, there shall be deducted from the payroll of each member of the system an additional 5.5% of the amount of any difference between the salary after that effective date for any judicial position held by the member and the salary for that position on that effective date, except that there shall be deducted from the payroll of each new member initially enrolled on or after that effective date in the retirement system, an additional 5.5% of the salary for the judicial position held by the member. The additional deduction, however, shall not be used to reduce the employer normal contribution required pursuant to section 33 of P.L.1973, c.140 (C.43:6A-33).

Every judge of the several courts to whom this amendatory and supplementary act applies shall be deemed to consent and agree to any deduction from his compensation required by this act and to all other provisions of this act. Notwithstanding any other law, rule or regulation affecting the salary, pay, compensation, other perquisites, or tenure of person to whom this amendatory and supplementary act applies, or shall apply, and notwithstanding that the minimum salary, pay, or compensation or other perquisites provided by law for him shall be reduced thereby, payment, less such deductions, shall be a full and complete discharge and acquittance of all claims and demands for service rendered by him during the period covered by such payment.

(cf: P.L.1995, c.424, s.4)

35. Section 27 of P.L.1981, c.470 (C.43:6A-34.2) is amended to read as follows:

27. The State House Commission at the end of each fiscal year shall allow interest on the balance of the annuity savings fund, contingent reserve fund and the retirement reserve fund as of the beginning of said fiscal year at the regular interest rate applicable thereto to cover the interest creditable to the respective funds for the year. The amount so allowed shall be due and payable to the funds and shall be credited annually thereto by the commission. Commencing with the effective date of this section of P.L. , c. (pending before the Legislature as this bill), the regular interest rate applicable to the annuity savings fund shall be 4 percent.

(cf: P.L.1981, c.470, s.27)

36. Section 35 of P.L.1973, c.140 (C.43:6A-35) is amended to read as follows:

35. The retirement system at the end of each fiscal year shall allow interest on the balance of the contingent reserve fund, the annuity savings fund, and the retirement reserve fund as of the beginning of said fiscal year at the regular interest rate applicable thereto to cover the interest creditable to the respective funds for the year. Commencing with the effective date of this section of P.L. , c. (pending before the Legislature as this bill), the regular interest rate applicable to the annuity savings fund shall be 4 percent. The amount so allowed shall be due and payable to said funds and shall be credited annually.

(cf: P.L.1981, c.470, s.16)

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

6. As used in this act:

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

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

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

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

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

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

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

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

h. (1) In the case of a member with 25 or more years of creditable service or who has attained normal retirement age on the effective date of this section of P.L. , c. (pending before the Legislature as this bill), "[Final] 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.

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

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

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

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

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

n. "Regular interest" shall mean interest as determined by the State Treasurer, 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 the assets but shall not exceed the assumed percentage rate of increase applied to salaries plus 3%, provided however that the board of trustees shall not set the average percentage rate of increase applied to salaries below 6%.

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

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