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ABP TRANSITION QUESTIONS AND ANSWERS



QUESTIONS
ANSWERS
1. What will happen to investments currently with Lincoln Financial

We have reached an agreement with Lincoln Financial Group (Lincoln) that will permit members to keep their current assets with Lincoln.

Lincoln has agreed to:

1) Servicing the existing accounts of program members pursuant to the terms and conditions under the expiring contract; and

2) Continuing reporting requirements to the Division pursuant to the terms and conditions under the expiring contract for as long as assets are held by the provider in program member accounts.

As a result, program members with accounts maintained by Lincoln may leave accumulated account balances with that provider until such time as Lincoln is unable to fulfill its requirements under the contract. If that were to occur, affected members would be notified with sufficient time given to make other financial arrangements.

However, members who were directing their ABP contributions to Lincoln need to execute a new election to direct all future investments to one or more of the six providers approved under the new contract taking effect on April 1, 2004. If a member fails to make such an election, contributions after March 31, 2004, must be directed by the employer to the default carrier, CitiStreet, to be placed into the default investment vehicle, Travelers Money Market.

2. What will happen to investments currently with MetLife? We have reached an agreement with MetLife Resources (MetLife) that will permit members to keep their current assets with MetLife.

MetLife has agreed to:

1) Servicing the existing accounts of program members pursuant to the terms and conditions under the expiring contract; and

2) Continuing reporting requirements to the Division pursuant to the terms and conditions under the expiring contract for as long as assets are held by the provider in program member accounts.

As a result, program members with accounts maintained by MetLife may leave accumulated account balances with that provider until such time as MetLife is unable to fulfill its requirements under the contract. If that were to occur, affected members would be notified with sufficient time given to make other financial arrangements.

However, members who were directing their ABP contributions to MetLife need to execute a new election to direct all future investments to one or more of the six providers approved under the new contract taking effect on April 1, 2004. If a member fails to make such an election, contributions after March 31, 2004, must be directed by the employer to the default carrier, CitiStreet, to be placed into the default investment vehicle, Travelers Money Market.

3. What is the timeline for initiating the use of the providers under the new contract? Under the provisions of the new contract, there is a 60-day mobilization and implementation period that each provider has agreed to and has provided a detailed timetable for this period. It is expected that each provider will be fully operational by April 1, 2004; the starting date for the new agreement.
4. Which provider will be Default Provider? The Division of Pensions and Benefits has considered the concerns of our members, human resource managers, and the investment providers for the Alternate Benefit Program and Additional Contribution Tax Sheltered Program. As a result the default investment provider for the remainder of calendar year 2004 will be CitiStreet.
5. What investment option will be utilized when a member fails to make an election (i.e., forced enrollments)?

If a member chooses a provider but fails to make an investment election, the administrator has instructed each provider to credit contributions to the most conservative investment option available. Under the new contract, those options will be:

Provider Investment Option
AIG-VALIC Money Market II
CitiStreet Travelers Money Market
Equitable Alliance Money Market
The Hartford Hartford Money Market
ING ING VP Money Market
TIAA/CREF CREF Money Market
6. How long must funds stay with the default provider before a member may transfer them to another approved provider? Contributions will continue to be sent to the default carrier until the employee designates a provider by completing the appropriate application(s). The employer will redirect the contributions to the provider(s) of choice upon notification of the election and a reasonable period for administrative implementation. The employee, even if he or she is under a delayed vesting status (NJAC 17:7-3.23), may choose to transfer funds from the default provider to another provider.
7. What investment options will be available from the new carriers? The new carriers will have options comparable to those offered by the other carriers that have been participating in the program. We will provide you a list of these options, along with new options being offered by carriers under the previous contract, no later than February 15, 2004. Initially the information will be distributed by accessing the information on the Internet. Later, a print version will be available.
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Copyright State of New Jersey, 1996-2003
Division of Pensions and Benefits
PO Box 295
Trenton, NJ 08625-0295

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Last Updated: March 26, 2004