CERTIFYING OFFICER LETTERS 2002

CERTIFYING OFFICER LETTERS FROM OTHER YEARS

December 18, 2002

TO: Public Employees' Retirement System Certifying Officer, Division of Criminal Justice, Department of Law and Public Safety

FROM: Janice C. Curtin, Assistant Director, Pension Operations

SUBJECT: Prosecutors Part Benefit Employee Contribution Rate

The Board of Trustees of the Public Employees' Retirement System (PERS) established, at their meeting on December 18, 2002, the employee contribution rate for members of the Prosecutors Part of the PERS at 7.5% of pensionable salary.  We are making arrangements with Centralized Payroll to change pension deductions for your employees in the Prosecutors Part of the PERS from 3% to 7.5% effective Pay Period 2 of 2003. 

Please note that, because of the enhanced benefit, prosecutors will pay the full established rate; there is no reduction of 2% from this rate. This situation is similar to other groups in the PERS with special benefits who pay the full, established rate, e.g., the Legislative and Workers' Compensation Judge groups.

The new rate for the Prosecutors Part of the PERS is retroactive to the later of either Pay Period 2 of 2002 or the date of the member's appointment to a position covered by the Prosecutors Part of the PERS.  Therefore, a shortage exists in member accounts equal to the difference between the 3% rate that was collected and the new 7.5% rate.  The lump sum owed for the rate shortage will be billed as back deductions and the schedule will be collected over 52 biweekly payments without interest.  The Division will be sending a Certification of Payroll Deductions to you in late February or early March for these individuals, with back deductions to start in May, 2003.  Each Certification will list the lump sum amount owed to pay off the shortage.  If members wish to pay the amount owed in a lump sum, they should work through their Personnel Office.  The Personnel Office should then contact Charlie D'Angelo of Special Case Processing and Adjustments at (609) 292-4280 to get an updated payoff figure and date of payment. (Please do not disseminate this telephone number to employees; it is only for use of Personnel Officers).  If the member wishes to have the payment schedule extended beyond 52 pay periods, the member must write to the Adjustments Section of the Division and include justification for the request.  Any payment schedules beyond 52 pay periods will be scheduled with interest at the rate of 8.75%.

Attached is a letter that you should reproduce and provide to each of your Prosecutor Part members.  It notifies them of the establishment of the new Prosecutor Part rate and explains how the additional contributions due since January 2002 will be collected.  You need not communicate with retired Prosecutors Part members as the Division will contact them directly about this matter.

BACKGROUND

Chapter 366, P.L. 2002, which was enacted on January 7, 2002, established the Prosecutors Part within the PERS.  This law provided significantly enhanced retirement benefits to employees in designated prosecutor positions at the County and State levels.  The designated positions for State employees included the Director of the Division of Criminal Justice, any assistant director, deputy director, assistant attorney general, and deputy attorney general employed by the Department of Law and Public Safety and assigned to the Division of Criminal Justice.  Criminal Investigators assigned to the Division of Criminal Justice who are ineligible for membership in the Police and Firemen's Retirement System are also eligible for the Prosecutors Part of the PERS.  The law also provided for a higher employee contribution rate and required the PERS Board of Trustees to establish that rate.

If you have any questions about this issue, please contact the Office of Client Services at (609) 292-7524.  We will be contacting you later this month with more information on the administration of the Prosecutors Part of the PERS.

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December 18, 2002

TO: Public Employees' Retirement System County Certifying Officers

FROM: Janice C. Curtin, Assistant Director, Pension Operations

SUBJECT: Prosecutors Part Benefit Employee Contribution Rate

The Board of Trustees of the Public Employees' Retirement System (PERS) established, at their meeting on December 18, 2002, the employee contribution rate for members of the Prosecutors Part of the PERS at 7.5% of pensionable salary.  You should change pension deductions for your employees in the Prosecutors Part of the PERS from 3% to 7.5% effective January 1, 2003.  If it is too late to affect deductions for the first pay period in January, start taking the new rate as soon as possible and make whatever adjustments are necessary to collect and report the correct amount of pension deductions for the first quarter of 2003 before the end of the quarter. 

Please note that because of the enhanced benefit, prosecutors will pay the full established rate; there is no reduction of 2% from this rate. This situation is similar to other groups in the PERS with special benefits who pay the full, established rate, e.g., the Legislative and Workers' Compensation Judge groups.

The new rate for the Prosecutors Part of the PERS is retroactive to the later of either January 2002 or the date of the member's appointment to a position covered by the Prosecutors Part of the PERS.  Therefore, a shortage exists in member accounts equal to the difference between the 3% rate that was collected and the new 7.5% rate.  The lump sum owed for this rate shortage will be billed as back deductions and the schedule will be collected over 24 monthly payments without interest.  The Division will be sending a Certification of Payroll Deductions to you in late February or early March for these individuals, with the back deductions to start in May, 2003.  Each Certification will list the lump sum amount owed to pay off the shortage.  If the member wishes to pay the amount owed in a lump sum, the member must make arrangements with you (the employer) and you can remit payment through Transmittal Electronic Payment System (TEPS) and report the payment on the Report of Contributions (ROC).  The check cannot come directly from the member to the Division of Pensions and Benefits.  If the member wishes to have the payment schedule extended beyond two years, the member must write to the Adjustment Section of the Division and include justification for the request.  Any payment schedules beyond two years will be scheduled with interest at the rate of 8.75%.

Attached is a letter that you should reproduce and provide to each of your Prosecutor Part members.  It notifies them of the establishment of the new Prosecutor Part rate and explains how the additional contributions due since January 2002 will be collected.  You need not communicate with retired Prosecutors Part members as the Division will contact them directly about this matter.

BACKGROUND

Chapter 366, P.L. 2002, which was enacted on January 7, 2002, established the Prosecutors Part within the PERS.  This law provided significantly enhanced retirement benefits to employees in designated prosecutor positions at the County and State levels.  The designated positions for County employees included the county prosecutor, first assistant prosecutor, and assistant prosecutor.  The law also provided for a higher employee contribution rate and required the PERS Board of Trustees to establish that rate.

If you have any questions about this issue, please contact the Office of Client Services at (609) 292-7524.  We will be contacting you early in January with more information on the administration of the Prosecutors Part of the PERS.

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December 2002

TO: Public Employees' Retirement System, State Employees Eligible for Prosecutor Benefits

FROM: Janice C. Curtin, Assistant Director, Pension Operations

SUBJECT: Prosecutors Part Benefit Employee Contribution Rate

Chapter 366, P.L. 2002, which was enacted on January 7, 2002, established the Prosecutors Part within the Public Employees' Retirement System (PERS).  This law provides significantly enhanced retirement benefits to employees in designated prosecutor positions at the County and State levels.  The law also provides for a higher employee contribution rate and requires the PERS Board of Trustees to establish the rate.

The Board of Trustees of the PERS, at their meeting on December 18, 2002, established the employee contribution rate for members of the Prosecutors Part of the PERS at 7.5 percent of pensionable salary.  As with the other PERS groups with enhanced benefits, e.g., legislative and Workers Compensation Judges, this contribution rate is not reduced by 2 percent like the regular PERS contribution rate.  Your pension deduction will change from 3 percent to 7.5 percent, effective Pay Period 2 (January 17^th pay date). 

The new rate for the Prosecutors Part of the PERS is retroactive to January 7, 2002, or the date of your appointment to a prosecutor position, whichever is later.  Because commencement of pension deductions was delayed, additional pension contributions are owed for the retroactive period as indicated above.  Normally the amount due would be scheduled through payroll deductions over a one-year repayment period.  However, because of the financial impact of this increase, the amount owed will be collected over a two-year period with no interest being incurred during that time period.  You can expect to receive a Certification of Payroll Deductions in late February or early March for the amount due with scheduled repayments beginning in May 2003.  If you prefer to pay off the back deductions in a lump sum, you may do so.  Further instructions regarding lump sum repayment will be included in the Certification.

Within the coming months, you will receive additional information regarding your enhanced Prosecutor Part benefits and a statement of service credit reflecting the amount of service credited to your account.  Your patience during program implementation is greatly appreciated.

December 2002

TO: Public Employees' Retirement System, County Employees Eligible for Prosecutor Benefits

FROM: Janice C. Curtin, Assistant Director, Pension Operations

SUBJECT: Prosecutors Part Benefit Employee Contribution Rate

Chapter 366, P.L. 2002, which was enacted on January 7, 2002, established the Prosecutors Part within the Public Employees' Retirement System (PERS).  This law provides significantly enhanced retirement benefits to employees in designated prosecutor positions at the County and State levels.  The law also provides for a higher employee contribution rate and requires the PERS Board of Trustees to establish the rate.

The Board of Trustees of the PERS, at their meeting on December 18, 2002, established the employee contribution rate for members of the Prosecutors Part of the PERS at 7.5 percent of pensionable salary.  As with the other PERS groups with enhanced benefits, e.g., legislative and Workers Compensation Judges, this contribution rate is not reduced by 2 percent like the regular PERS contribution rate.  Your employer has been asked to change your pension deduction, effective January 1, 2003 from 3 percent to 7.5 percent.  If it is too late to affect deductions for the first pay period in January, your employer will start making them as soon as practical and make whatever adjustments are necessary to collect and report the correct amount of pension deductions for the first quarter of 2003 before the end of the quarter.

The new rate for the Prosecutors Part of the PERS is retroactive to January 2002 or the date of your appointment to a prosecutor position, whichever is later.  Because commencement of pension deductions was delayed, additional pension contributions are owed for the retroactive period as indicated above.  Normally the amount due would be scheduled through payroll deductions over a one-year repayment period.  However, because of the financial impact of this increase, the amount owed will be collected over a two-year period with no interest being incurred during that time period.  You can expect to receive a Certification of Payroll Deductions in mid-February for the amount due with scheduled repayments beginning in May 2003.  If you prefer to pay off the back deductions in a lump sum, you may do so.  Further instructions regarding lump sum repayment will be included in the Certification.

Within the coming months, you will receive additional information regarding your enhanced Prosecutor Part benefits and a statement of service credit reflecting the amount of service credited to your account.  Your patience during program implementation is greatly appreciated.

December 2002

TO: State Health Benefits Program Participating Employers

FROM: Florence J. Sheppard, Assistant Director, State Health Benefits Program

SUBJECT: Health Insurance Portability and Accountability Act (HIPAA) Update

The federal Health Insurance Portability and Accountability Act (HIPAA) of 1996 contained a number of provisions that affected the State Health Benefits Program (SHBP) and its participating employers.  The SHBP implemented several actions to comply with the requirements of HIPAA. These actions included:

• establishing procedures to provide departing employees with certificates of coverage for use with their next health carrier;
  
  
• amending SHBP rules to comply with HIPAA coverage requirements;
  
  
• filing exemptions each year since 1998 to the Traditional Plan and NJ PLUS provisions of mental health parity in accordance with HIPAA procedures; and
  
  
• providing employers with a required notice of compliance with HIPAA to be distributed to all employees and their family members upon enrollment.

Since the mental health limitations currently in effect are detailed in the law governing the SHBP, a change in plan design would require legislative action.  Therefore, the SHBP must file a mental health parity exemption each plan year as long as a group plan is not HIPAA compliant.  The Commission has voted to file an exemption for 2003.  Therefore, mental health benefits will remain unchanged through 2003 unless the statute governing the SHBP is amended.  Since HIPAA has a continuing notification requirement, a revised compliance notice reflecting this exemption from federal mental health parity requirements is attached for your use with newly enrolling employees and family members.  You should send it at the same time you send the initial notice of COBRA rights.

If you have questions, contact Client Services at (609) 292-7524 or call the Employer's SHBP Hotline at (609) 292-5353 and leave a message.  A staff member will return your call on the next business day.

encl.

Notice to State Health Benefits Program Participants
about Compliance with Federal Health Insurance Requirements

This notice is being provided to inform you about State Health Benefits Program (SHBP) conformance with federal health insurance regulations.

The Health Insurance Portability and Accountability Act (HIPAA), the Mental Health Parity Act, and the Newborns' and Mothers' Health Protection Act, federal laws enacted in 1996, contain a number of provisions that have affected the SHBP since January 1998. HIPAA required all group health plans to implement the following provisions that are contained in the three federal laws:

1. Limit the use of pre-existing condition restrictions to a maximum of twelve months;
   
   
2. Offer a special enrollment period to employees and dependents who do not enroll in the plan when initially eligible because they have other coverage, and who subsequently lose that coverage;
   
   
3. Eliminate discrimination against participants and beneficiaries based on health status;
   
   
4. Provide a minimum level of hospital coverage for newborns and mothers, generally 48 hours for a vaginal delivery and 96 hours for a cesarean delivery; and
   
   
5. Provide parity in mental health benefits, that is, any dollar limitations applied to mental health treatment cannot be lower than those on medical and surgical benefits.

Since January 1, 1998, all SHBP plans have met or exceeded HIPAA requirements #1 through #4 above. SHBP HMOs also have complied with requirement #5 above. The State Health Benefits Commission has filed exemptions from HIPAA compliance on mental health parity (requirement #5) each year since 1998 for the Traditional Plan and NJ PLUS, as self-insured, non-federal governmental plans are permitted to do. The Commission has voted to continue that exemption through 2003. As a result, the mental health limits for the Traditional Plan and NJ PLUS that are described in the SHBP Summary Program Description and the Traditional Plan and NJ PLUS Member Handbooks will remain in effect throughout 2003.

December 2002

TO: Certifying Officer, Teachers' Pension and Annuity Fund, Public Employees' Retirement System, Police and Firemen's Retirement System

FROM: John D. Megariotis, Assistant Director, Finance

SUBJECT: Report of Contributions, Fourth Quarter 2002 (October 1^st to December 31^st)

This memorandum has pertinent information concerning the completion of your Report of Contributions.  Please read this memorandum before you make any changes to the Report.

DEADLINE FOR FILING

REPORTING PROCEDURES

Through the Transmittal Electronic Payments System (TEPS), employers must submit monthly transmittal remittances of approximately 1/3 of the total quarterly amounts due for pension contributions, contributory life insurance premiums and regular SACT. Token payments are not acceptable.  Your December 2002 transmittal remittance, which represents the deductions due for the balance of the quarter, should be made through TEPS.  The portion of the remittance for total pension deductions should reflect the sum of normal pension contributions, back deductions, loan payments, and arrears/purchase deductions.  The TEPS remittance is also due by January 10, 2003.

With the Report of Contributions, you must complete and return the Transmittal Summary form for the 4^th quarter 2002.  This document is used to assist your office and this Division in reconciling your transmittal remittances to the quarterly Report.

If your quarterly Report and total contributions are not received in a timely manner, we cannot update the pension accounts of your employees.  This may adversely affect any claim for benefits, including loan applications, filed by your employees.  Also, any delay affects our scheduling in posting contributions to all members' accounts as well as the mailing of Reports of Contributions for the following quarter.  Interest will be assessed, as prescribed by statute and administrative code, when monthly transmittal remittances and the quarterly Report of Contributions are not received within fifteen days of the due dates.

When you receive your quarterly Report, you should review it immediately.  If you think you will have a problem in meeting the filing deadline, or if there is anything you do not understand, contact the Audit/Billing Section at (609) 292-3630.  Normally reporting inquiries can be resolved with a telephone call.  Please make all necessary corrections to the Report before you return it to the Division of Pensions and Benefits.  Verify that all changes are explained, the Report is added correctly, and the totals agree with the sum of the transmittal remittances.

Please show on the quarterly Report the telephone number of the individual to be contacted if our auditors have questions concerning any items.

SIGNATURE

Your quarterly Report of Contributions must be signed.  Any Report not bearing a signature will be considered delinquent until an affidavit is submitted by the Certifying Authority attesting to its contents.  Initials will not be accepted.

CHANGE TO MEMBER PENSION RATES - TEACHERS' PENSION AND ANNUITY FUND

Chapter 133, P.L. 2001 reduced the member's pension rate from 4.5% to 3% for members of the Teachers' Pension and Annuity Fund. The pension rate for calendar year 2003 will remain at 3%. This is not a permanent change to the normal contribution rate of 5% of salary.  The minimum repayment for pension loans and the minimum deduction for the purchase of service credit, which is based on the full 5% contribution rate, will not change.

Retroactive increases paid on or after January 1, 2002 should be deducted at 3%, including any portion of the retroactive salary that covered a period prior to January 1, 2002.

CHANGE TO MEMBER PENSION RATES - PUBLIC EMPLOYEES' RETIREMENT SYSTEM

Chapter 415, P.L. 1999 reduced the pension rate for members of the Public Employees' Retirement System from 4.5% to 3%.  The pension rate for calendar year 2003 will remain at 3%.

Retroactive increases paid on or after January 1, 2000 should be deducted at 3%, including any portion of the retroactive salary that covered a period prior to January 1, 2000. Because the change is a temporary reduction, the minimum repayment for pension loans and the minimum deduction for the purchase of service credit will not change.  The minimum deduction for the single payment value will continue to be computed on 5% of base salary.

SACT TAX-SHELTERED ANNUITY - REMITTANCE OF 403(b) CONTRIBUTIONS, CHAPTER 247, P.L. 1999

Chapter 247, P.L. 1999 requires 403(b) salary reductions on behalf of an employee to be transmitted and credited within five business days from the pay date.  Employees of local boards of education may participate in the SACT 403(b) program or a 403(b) plan administered by their employer.  This law impacts both arrangements.

Members of the Public Employees' Retirement System, Teachers' Pension and Annuity Fund and Police and Firemen's Retirement System in the Supplemental Annuity (SACT) Tax Sheltered Annuity Program are required to have 403(b) salary reductions remitted to the Division of Pensions and Benefits within the timeframes prescribed by law.  Contributions for these members will be made through the Transmittal Electronic Payments System (TEPS).

REPORTING ACTUAL SALARIES FOR PART-TIME EMPLOYEES

(Rule Change N.J.A.C. 17:2-4.7)

The Public Employees' Retirement System's Board of Trustees at its November 17, 1999 meeting adopted a rule change for N.J.A.C. 17:2-4.7 that became effective on January 1, 2000.  The amendment requires reporting districts to use the actual creditable salary earned by employees, not estimated salary, for part-time hourly, on-call and per diem employees. 

The enrollment criteria for part-time hourly, on-call, and per diem employees remains unchanged.  However, once membership is established, an employee must only meet the $1,500 minimum salary regulation to continue membership; the number of hours worked in a month or a year is no longer applicable.  This provides greater equity in granting service credit.  A member is entitled to a month of service as long as the actual creditable salary being reported exceeds the monthly minimum for enrollment.  In other words, when a 10-month member has a monthly reportable salary exceeding $150 (one tenth of $1,500), the member should be reported for that month.  Similarly, $125 (one twelfth of $1,500) is the minimum monthly reportable salary for a 12-month member.  If the member does not make $1,500 in the current calendar year, and is not expected to make $1,500 in the following year, that employee is no longer eligible for the retirement system.

TEPS - TRANSMITTAL SHORTAGE PAYMENTS

The Division sends transmittal shortage statements when the sum of the transmittal remittances does not equal the due figure on the quarterly Report of Contributions.  Transmittal shortage statement payments can only be paid through TEPS.  Checks received for payment of transmittal shortages will be returned.  If you have questions related to TEPS, contact the TEPS Helpline at (888) 835-3345 or FAX your inquiries to the Audit/Billing Section at (609) 633-1708.

CHANGING BANKING INFORMATION FOR TEPS

Notice of Changes for TEPS should be submitted to the Division of Pensions and Benefits on or after the date that the new checking account becomes effective.  Every Notice of Change is prenoted to ensure that the Division has the correct banking information.  This normally takes 12 to 15 days. 

CHANGE TO BASE SALARY

It is important to review the salary shown in column 6 and verify that it correctly reflects the member's base salary for the quarter.  If the salary shown is not correct, draw a line through it and write the correct salary above it.  Pension Contributions, Contributory Insurance, SACT, and Tax-Sheltered Annuity deductions must be changed to reflect amounts due on the new salary.

If your employees received a salary increase that is retroactive to a prior quarter, change column 6 to reflect the COMBINED TOTAL of:

           (a) the new base salary for the quarter, plus,

           (b) the additional base salary for the retroactive period.

The new quarterly base salary should be written in column 1 of the Report.  This salary will be projected in column 6 of your next quarterly Report.  This will eliminate the need to make numerous changes on your 1^st quarter Report of Contributions.  Also, in the "Remarks Column" of the current Report you should indicate that the members had a salary increase and the effective date.

REPORTING RETROACTIVE SALARY AFTER RETIREMENT

If a member receives a retroactive salary adjustment after retirement, do not write the member's name on the Report of Contributions.  Complete a new Certification of Service and Final Salary and indicate that it is a retroactive adjustment after retirement by writing on the top of the Certification "Revised Due to Retro."  Deduct the pension contributions and contributory life insurance, if applicable, from the retroactive check and remit that amount on behalf of the member to the Audit/Billing Section of this Division.

STATEMENTS OF OVERAGES/SHORTAGES

Overages and shortages that affect a member's Annuity Savings Fund identify whether or not the pension contributions are subject to the 414(h) provision.  These statements should be reviewed to determine when adjustments are required to your payroll records in calculating year-to-date mandatory pension contributions under 414(h).  All overage and shortage statements that cover a period prior to January 1, 1987 are not subject to the 414(h) provision.  Please note that all member shortages are to be paid by separate check.  Do not remit through TEPS.

Should you have any questions or need assistance in completing the Report, please telephone us at (609) 292-3630.

Enclosures:

1. Quarterly Report of Contributions
2. Transmittal Summary for 4^th Quarter 2002
3. Envelope for Report
4. Report of Salary Change - PFRS and PERS non boards of education
5. Report of Salary Change Instruction Memorandum

December 2002

TO: Certifying Officer, Public Employees' Retirement System (Non Boards of Education), Police and Firemen's Retirement System

FROM: John D. Megariotis, Assistant Director, Finance

SUBJECT: Report of Salary Change Instructions

The enclosed Report of Salary Change lists those members projected on your fourth quarter 2002 Report of Contributions. The list shows the membership number, member's name, payment plan (10/12), and provides space to insert the base salary to be projected on the quarterly Report of Contributions for the first calendar quarter of 2003.

Do not add members (new enrollments, transfers, employees returning from leave of absence) to this report, nor should you reflect a name change.

You should insert only the member's quarterly base salary, rounded to the nearest dollar for January, February, and March of 2003; this amount will be projected on the quarterly Report of Contributions for the first quarter of 2003.  For example, if a member is paid over 12 months and has an annual salary of $25,642, you should show a salary of $6,411 to be projected for the first quarter 2003.

Project only three full months of contractual base salary even if an employee will be on leave of absence or terminating employment.  It has been our experience that employers reporting one or two months of salary on the Report of Salary Change have the correct base salary and contributions on the next quarterly Report of Contributions, but the months of service column is not changed to reflect the correct service credit.  (A projection for the 3^rd quarter to a 10 month member is the only situation when the salary projection would not be for 3 full months of base salary.)

There is sometimes a delay in a municipality adopting its new budget, and although salary changes are effective January 1st, the retroactive increase is not paid until the second quarter.  Under these circumstances, it is suggested that you forward the Report of Salary Change for the second quarter to this Division before May 15th with the new quarterly base salary for the second quarter plus the retroactive increase covering the first quarter.  This should be one combined figure.  In this case, you must denote on the first page of the projection sheet that this is a second quarter salary projection.  In addition, you should request a Report of Salary Change for the third quarter to insert the quarterly base salaries for the third quarter Report of Contributions.  If you follow this procedure, it will avoid numerous changes on your Report of Contributions, because the Division will project salaries and deductions for each quarter.

The Division will furnish a Report of Salary Change for any quarter upon request.  To avoid delays in submitting your Report of Contributions, it is recommended that you use the Report of Salary Change, rather than column 1 of the Report, whenever you have numerous salary projections.  To process a Report of Salary Change, it must be returned to the Division of Pensions and Benefits by the 15th of the second month of a calendar quarter for the salaries to be projected for that quarter.

To project the salaries on your first quarter 2003 Report of Contributions, the changes must be received no later than
February 15^th.

In Summary

• Project only 3 months of base salary (plus retro, if applicable)
  
  
• Do not add members    
   
• Do not make name changes 
      
• Make no entry if the member's salary did not change from last quarter's reported salary 
      
• Return the report of salary change by February 15^th

November 2002

TO: Certifying Officers, State Colleges and Universities, County Community Colleges

FROM: Janice C. Curtin, Assistant Director, Pension Operations

SUBJECT: Membership in ABP and PERS with the Same Employer

N.J.S.A. 18A:66-170 prohibits a full-time employee, who is in the Alternate Benefit Program (ABP), to be enrolled concurrently in the Public Employees' Retirement System (PERS) on the basis of other employment with the same employer. The ABP administrative code had contained language to implement this aspect of the statute, but it was inadvertently dropped from the last revision of the code. The Division recently adopted revised code for the ABP after posting it for public comment. This revised code reincorporates language (N.J.A.C. 17:7-2.3) that corrects the omission from the previous code.

Employees are not permitted to be members, concurrently, in the ABP and the PERS based on employment with a single employer. They may, however, be enrolled in the ABP because of full-time employment in an ABP covered position with one employer, while concurrently being in the PERS based on employment in a PERS-covered position with a different employer.

If you have employees enrolled in both the ABP and the PERS based on employment at your institution, you must stop taking deductions for PERS service before the end of this calendar year. No service or salary should be reported for these individuals for the PERS beyond the fourth quarter of 2002. The employees may retain their employment in these PERS-covered positions. However, they will receive no PERS credit and any salary earned for these positions will be considered as extra compensation for ABP purposes. Extra compensation is not subject to pension deductions.

Employees in this situation who have a vested account, or who are currently participating in the PERS because of employment with a different employer, will be able to retain their credit for all previous PERS service. Affected employees who are not vested in the PERS, and who are not currently participating in the PERS because of employment with a different employer, will have two years before their accounts expire unless they obtain PERS-covered employment with a different employer.

Attached for your use is a letter that can be provided to your affected employees that explains why their participation in the PERS, on the basis of employment at your institution, must cease.

Please contact the Employer Group of the Division's Office of Client Services at (609) 292-7524 if you have any questions regarding this matter.

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November 2002

Dear Alternate Benefit Program Member,

You have been identified as being enrolled concurrently in the Alternate Benefit Program (ABP) and the Public Employees' Retirement System (PERS) on the basis of employment in two different positions with the same employer. This situation is prohibited by the statute that governs the ABP, N.J.S.A. 18A:66-170. Therefore, your participation in the PERS on the basis of your employment with the same employer that provides your ABP membership must cease.

Because you may have relied on your PERS membership for future plans, your PERS participation with your current employer will end prospectively. That is, it will be terminated by the end of the 4^th quarter of this calendar year rather than being terminated retroactively to the date of the erroneous enrollment. You will be able to retain your credit for all previous PERS service in accordance with the following circumstances.

• If you are currently participating in the PERS because of employment with another employer, your account will remain active.
  
  
• If you are vested in the PERS (ten years of credited service or age 60), your account will stay active indefinitely and you will be able to draw a retirement allowance from your service when you become age 60).
  
  
• If you are not vested (less than ten years of credited service), and are not currently participating in the PERS because of employment with another employer, then your account will stay active for two years. At that time, if you have not obtained other PERS-covered employment, your account will expire and you must withdraw your contributions if you have not already done so. If you turn 60 before your account expires, you may retire at that time,

We regret that the provisions of the law do not allow your continued participation in the PERS on the basis of your employment with your current employer. If you have questions about this, please speak with your campus Benefits Administrator or Human Resource Office or you may write the Division of Pensions and Benefits' Office of Client Services at the address above, e-mail to (pension.nj@treas.state.nj.us), or call us at (609) 292-7524.

September 2002

TO: Participating State Health Benefits Program Local Education Employers

FROM: Florence J. Sheppard, Assistant Director, Health Benefits

SUBJECT: Local Group Open Enrollment - Local Education Employers

The State Health Benefits Program (SHBP) Open Enrollment period for local education employees begins on October 1, and ends on October 31, 2002. Completed employer certified health benefit applications must arrive at the Health Benefits Bureau no later than November 8, 2002. Changes to coverage made during this open enrollment will be effective on January 1, 2003 for your employees.

Medical trend rates continue to rise for employer-sponsored health plans. Beyond general inflation, some of the forces that are driving these increased healthcare costs can be attributed to increased consumer demand, prescription drug costs, medical advances, government mandates and rising provider expenses. The State Health Benefits Commission's actuarial consultant, Milliman USA, reports that as a result of increasing trends over the last several years, the overall claims experience for the Local Education group has been worse than expected.

Since the SHBP self-funds most of its plans, the claims experience used in projecting 2003 costs are based upon the actual claims experience of the group. The State Health Benefits Commission approved the recommended increases in order to ensure that the SHBP would have sufficient premium to cover the anticipated claims for the period.

Health plan increases for the Local Education group are shown in the following chart:

The Employee Prescription Drug Plan increase of 10.5% is lower than industry trends of 17%-24%. The favorable increase is a result of lower than anticipated trend for this program, as well as projected additional savings resulting from the July 1, 2002 change in the prescription drug vendor to AdvancePCS.

Enclosed you will find approved rates for SHBP health and prescription drug plans. We have included rate charts for employees with and without prescription drug coverage. The listed rates are effective January 1, 2003 through December 31, 2003.

Also included with this letter are:

• A sample copy of the fall 2002 Health Capsule newsletter. The Health Capsule provides additional detail on the health plans for the 2003 plan year. The newsletters are scheduled for delivery to employers prior to the start of the Open Enrollment. Please distribute the newsletter to your employees.

• A flier to publicize the SHBP's Unified Provider Directory. Please post this flier where your employees will see it or distribute copies to your employees. The Unified Provider Directory is an online service that provides a comprehensive listing of health care providers and facilities that deliver their services through one or more of the SHBP's health care plans. It is updated monthly. You can access the Unified Provider Directory through the SHBP home page at: www.state.nj.us/treasury/pensions/shbp.htm

• A listing of marketing contacts for the various health plans. Use these contacts to obtain provider directories or other plan specific literature. (These telephone numbers are not for member services. Please do not give these telephone numbers to your employees.)

Also scheduled for distribution, at the start of the Open Enrollment, are revised copies of the SHBP Summary Program Description (SPD) and the SHBP Plan Comparison Chart.

Due to time constraints and the fact that there are no benefits changes for active employees, the SHBP is not offering any Employer Regional Training Seminars for this Open Enrollment period.

If you have questions about the Open Enrollment, contact the Division's Office of Client Services at (609) 292-7524 or call the Employer Hotline at (609) 777-1082 and leave a message. A staff member will return your call on the next business day.

Enclosures:

1. Health Plan Rate Charts
2. Unified Provider Directory Flier
3. Health Capsule newsletter
4. Health Plan Marketing Contacts

September 2002

TO: Participating State Health Benefits Program Local Government Employers

FROM: Florence J. Sheppard, Assistant Director, Health Benefits

SUBJECT: Local Group Open Enrollment - Government Employers

The State Health Benefits Program (SHBP) Open Enrollment period for local government employees begins on October 1, and ends on October 31, 2002. Completed employer certified health benefit applications must arrive at the Health Benefits Bureau no later than November 8, 2002. Changes to coverage made during this open enrollment will be effective on January 1, 2003 for your employees.

Medical trend rates continue to rise for employer-sponsored health plans. Beyond general inflation, some of the forces that are driving these increased healthcare costs can be attributed to increased consumer demand, prescription drug costs, medical advances, government mandates and rising provider expenses. The State Health Benefits Commission's actuarial consultant, Milliman USA, reports that as a result of increasing trends over the last several years, the overall claims experience for the Local Government group has been worse than expected.

Since the SHBP self-funds most of its plans, the claims experience used in projecting 2003 costs are based upon the actual claims experience of the group. The State Health Benefits Commission approved the recommended increases in order to ensure that the SHBP would have sufficient premiums to cover the anticipated claims for the period.

Health plan increases for the Local Government group are shown in the following chart:

The Employee Prescription Drug Plan increase of 10.5% is lower than industry trends of 17%-24%. The favorable increase is a result of lower than anticipated trend for this program, as well as projected additional savings resulting from the July 1, 2002 change in prescription drug vendor to AdvancePCS.

Enclosed you will find approved rates for SHBP health and prescription drug plans. We have included rate charts for employees with and without prescription drug coverage. The listed rates are effective January 1, 2003 through December 31, 2003.

Also included with this letter are:

• A sample copy of the fall 2002 Health Capsule newsletter. The Health Capsule provides additional detail on the health plans for the 2003 plan year. The newsletters are scheduled for delivery to employers prior to the start of the Open Enrollment. Please distribute the newsletter to your employees.

• A flier to publicize the SHBP's Unified Provider Directory. Please post this flier where your employees will see it or distribute copies to your employees. The Unified Provider Directory is an online service that provides a comprehensive listing of health care providers and facilities that deliver their services through one or more of the SHBP's health care plans. It is updated monthly. You can access the Unified Provider Directory through the SHBP home page at: www.state.nj.us/treasury/pensions/shbp.htm

• A listing of marketing contacts for the various health plans. Use these contacts to obtain provider directories or other plan specific literature. (These telephone numbers are not for member services. Please do not give these telephone numbers to your employees.)

Also scheduled for distribution, at the start of the Open Enrollment, are revised copies of the SHBP Summary Program Description (SPD) and the SHBP Plan Comparison Chart.

Due to time constraints and the fact that there are no benefits changes for active employees, the SHBP is not offering any Employer Regional Training Seminars for this Open Enrollment period.

If you have questions about the Open Enrollment, contact Division's Office of Client Services at (609) 292-7524 or call the Employer Hotline at (609) 777-1082 and leave a message. A staff member will return your call on the next business day.

Enclosures:

1. Health Plan Rate Charts
2. Unified Provider Directory Flier
3. Health Capsule newsletter
4. Health Plan Marketing Contacts

September 2002

TO: Campus Human Resource Directors

FROM: Florence J. Sheppard, Assistant Director, Health Benefits

SUBJECT: Fall 2002 State Health Benefits Program (SHBP) Open Enrollment

The State Health Benefits Program (SHBP) Open Enrollment period for all State employees begins on October 1, and ends on October 31, 2002. Completed employer certified health benefit and/or dental applications must arrive at the Health Benefits Bureau no later than November 8, 2002. Changes to coverage made during this open enrollment will be effective on January 1, 2003 for your employees.

Unions representing most State employees have contracts in effect that provide for premium sharing arrangements with the State. The contracts are identical with respect to their premium sharing provisions. There is no premium cost to any employee who enrolls in NJ PLUS. Employees will pay 5 percent of the premium cost if enrolled in an HMO, or 25 percent of the premium cost if enrolled in the Traditional Plan. These percentages apply regardless of salary level or date of hire.

Enclosed you will find rate charts for your use, as well as a sample Open Enrollment announcement flier that provides a list of medical and dental plans and the premium sharing costs for your employees. This is a master copy tailored to your location that can be reproduced for distribution to your employees. This flier is designed to assist your employees in making informed decisions concerning their health care. Please distribute it to your employees prior to the start of the Open Enrollment.

Also included with this letter are:

• A sample copy of the fall 2002 Health Capsule newsletter. The Health Capsule provides additional detail on the health and dental plans for the 2003 plan year. The newsletters are scheduled for delivery to monthly employers prior to the start of the Open Enrollment.

• A flier to publicize the SHBP's Unified Provider Directory. Please post this flier where your employees will see it or distribute copies to your employees. The Unified Provider Directory is an online service that provides a comprehensive listing of health care providers and facilities that deliver their services through one or more of the SHBP's health care plans. Updated monthly, you can access the Unified Provider Directory through the SHBP homepage at: www.state.nj.us/treasury/pensions/shbp.htm

• A listing of marketing contacts for the various health and dental plans. Use these contacts to obtain provider directories or other plan specific literature. (These telephone numbers are not for member services. Please do not give these telephone numbers to your employees.)

Also scheduled for distribution, at the start of the Open Enrollment, are revised copies of the SHBP Summary Program Description (SPD), SHBP Plan Comparison Chart, and the Employee Prescription Drug Plan Member Handbook.

Due to time constraints and the fact that there are no benefits changes for active employees, the SHBP is not offering any State Employer Regional Training Seminars for this Open Enrollment period.

Also now in progress is the State Employees Tax Savings Program (Tax$ave) Open Enrollment. Tax$ave is a benefit program, available to State employees who are eligible for the SHBP. Tax$ave can save your employees tax money by paying health benefit premiums and eligible unreimbursed medical and/or dependent care expenses from before-tax dollars. See the Tax$ave 2002 Open Enrollment materials (distributed earlier in September) for more information.

If you have any questions about the Open Enrollment, please contact our Office of Client Services at (609) 292-7524. Thank you for your cooperation.

Enclosures:

1. Health and Dental Plan Rate Charts/Fliers
2. Unified Provider Directory Flier
3. Health Capsule newsletter
4. Health/Dental Plan Marketing Contacts

September 2002

TO: State Monthly Human Resource Directors/Benefits Administrators

FROM: Florence J. Sheppard, Assistant Director, Health Benefits

SUBJECT: Fall 2002 State Health Benefits Program (SHBP) Open Enrollment

The State Health Benefits Program (SHBP) Open Enrollment period for all State employees begins on October 1, and ends on October 31, 2002. Completed employer certified health benefit and/or dental applications must arrive at the Health Benefits Bureau no later than November 8, 2002. Changes to coverage made during this open enrollment will be effective on January 1, 2003 for your employees.

Unions representing most State employees have contracts in effect that provide for premium sharing arrangements with the State. The contracts are identical with respect to their premium sharing provisions. There is no premium cost to any employee who enrolls in NJ PLUS. Employees will pay 5 percent of the premium cost if enrolled in an HMO, or 25 percent of the premium cost if enrolled in the Traditional Plan. These percentages apply regardless of salary level or date of hire.

Enclosed you will find rate charts for your use, as well as sample Open Enrollment announcement fliers that provide a list of medical and dental plans and the premium sharing costs for State employees not paid through Centralized Payroll. These fliers are master copies that can be reproduced for distribution to your employees. The fliers are provided for three different payroll schedules (Monthly, 24 Pay Periods, and 26 Pay Periods). Choose the flier that corresponds to your payroll schedule.

These fliers are designed to assist your employees in making informed decisions concerning their health care. Please distribute them to your employees prior to the start of the Open Enrollment.

Also included with this letter are:

• A sample copy of the fall 2002 Health Capsule newsletter. The Health Capsule provides additional detail on the health and dental plans for the 2003 plan year. The newsletters are scheduled for delivery to monthly employers prior to the start of the Open Enrollment.

• A flier to publicize the SHBP's Unified Provider Directory. Please post this flier where your employees will see it or distribute copies to your employees. The Unified Provider Directory is an online service that provides a comprehensive listing of health care providers and facilities that deliver their services through one or more of the SHBP's health care plans. Updated monthly, you can access the Unified Provider Directory through the SHBP homepage at: www.state.nj.us/treasury/pensions/shbp.htm

• A listing of marketing contacts for the various health and dental plans. Use these contacts to obtain provider directories or other plan specific literature. (These telephone numbers are not for member services. Please do not give these telephone numbers to your employees.)

Also scheduled for distribution, at the start of the Open Enrollment, are revised copies of the SHBP Summary Program Description (SPD), SHBP Plan Comparison Chart, and the Employee Prescription Drug Plan Member Handbook.

Due to time constraints and the fact that there are no benefits changes for active employees, the SHBP is not offering any State Employer Regional Training Seminars for this Open Enrollment period.

Also now in progress is the State Employees Tax Savings Program (Tax$ave) Open Enrollment. Tax$ave is a benefit program, available to State employees who are eligible for the SHBP. Tax$ave can save your employees tax money by paying health benefit premiums and eligible unreimbursed medical and/or dependent care expenses from before-tax dollars. See the Tax$ave 2002 Open Enrollment materials (distributed earlier in September) for more information.

If you have any questions about the Open Enrollment, please contact our Office of Client Services at (609) 292-7524. Thank you for your cooperation.

Enclosures:

1. Health and Dental Plan Rate Charts/Fliers
2. Unified Provider Directory Flier
3. Health Capsule newsletter
4. Health/Dental Plan Marketing Contacts

September 2002

TO: State Departmental Human Resource Directors, State Biweekly Human Resources Representatives

FROM: Florence J. Sheppard, Assistant Director, Health Benefits

SUBJECT: Fall 2002 State Health Benefits Program (SHBP) Open Enrollment

The State Health Benefits Program (SHBP) Open Enrollment period for all State employees begins on October 1, and ends on October 31, 2002. Completed employer certified health benefit and/or dental applications must arrive at the Health Benefits Bureau no later than November 8, 2002. Changes to coverage made during this open enrollment will be effective on December 28, 2002 for State biweekly employees paid through the State Centralized Payroll Unit.

Unions representing most State employees have contracts in effect that provide for premium sharing arrangements with the State. The contracts are identical with respect to their premium sharing provisions. There is no premium cost to any employee who enrolls in NJ PLUS. Employees will pay 5 percent of the premium cost if enrolled in an HMO, or 25 percent of the premium cost if enrolled in the Traditional Plan. These percentages apply regardless of salary level or date of hire.

Enclosed you will find rate charts for your use, as well as a sample Open Enrollment announcement flier that provides a list of medical and dental plans and the premium sharing costs for your employees. This flier is designed to assist your employees in making informed decisions concerning their health care coverage during this open enrollment.

• State employees paid through the State's Centralized Payroll Unit are being provided with this flier with their September 27 paychecks. (A supply of the flier is scheduled for delivery to payroll locations on September 20, 2002.)

Also included with this letter are:

• A sample copy of the fall 2002 Health Capsule newsletter. The Health Capsule provides additional detail on the health and dental plans for the 2003 plan year. The newsletters are scheduled for delivery to payroll locations on September 20, 2002.

• A flier to publicize the SHBP's Unified Provider Directory. Please post this flier where your employees will see it or distribute copies to your employees. The Unified Provider Directory is an online service that provides a comprehensive listing of health care providers and facilities that deliver their services through one or more of the SHBP's health care plans. Updated monthly, you can access the Unified Provider Directory through the SHBP homepage at: www.state.nj.us/treasury/pensions/shbp.htm

• A listing of marketing contacts for the various health and dental plans. Use these contacts to obtain provider directories or other plan specific literature. (These telephone numbers are not for member services. Please do not give these telephone numbers to your employees.)

Also scheduled for distribution, at the start of the Open Enrollment, are revised copies of the SHBP Summary Program Description (SPD), SHBP Plan Comparison Chart, and the Employee Prescription Drug Plan Member Handbook.

Due to time constraints and the fact that there are no benefits changes for active employees, the SHBP is not offering any State Employer Regional Training Seminars for this Open Enrollment period.

Also now in progress is the State Employees Tax Savings Program (Tax$ave) Open Enrollment. Tax$ave is a benefit program, available to State employees who are eligible for the SHBP. Tax$ave can save your employees tax money by paying health benefit premiums and eligible unreimbursed medical and/or dependent care expenses from before-tax dollars. See the Tax$ave 2002 Open Enrollment materials (distributed September 13, 2002) for more information.

If you have any questions about the Open Enrollment, please contact our Office of Client Services at (609) 292-7524. Thank you for your cooperation.

Enclosures:

1. Health and Dental Plan Rate Charts/Flier
2. Unified Provider Directory Flier
3. Health Capsule newsletter
4. Health/Dental Plan Marketing Contacts

September 6, 2002

TO: State Department Benefits Administrators, College and University Benefits Administrators

FROM: William H. Kale, Assistant Director, Client Services

SUBJECT: New Employee Long Term Care Insurance Orientation

As you are aware, the special enrollment period for the State of New Jersey Long Term Care Insurance Plan (Plan) closed on June 14th. There was a high level of interest from employees and retirees with approximately 6,000 telephone calls, 1,300 e-mails, 17,000 web page hits, and 4,500 mail inquiries. Prudential mailed over 22,000 enrollment kits and received about 3,500 enrollment applications. Applications have been processed and payroll deductions have started for those employees who were enrolled. Prudential has sent the certificates of coverage to the individuals who have been approved for coverage.

Your involvement in the marketing of the Plan, through the scheduling of educational seminars, distribution of literature, and referral of employees with questions to the experts at Prudential, was instrumental in the initial success we experienced. We thank you for your support.

Now that the special open enrollment is behind us, we need to focus our efforts on establishing procedures to ensure that all newly hired employees are provided the opportunity to enroll in the State of New Jersey Long Term Care Insurance Plan. Every newly hired full-time employee has 90-days from the date of hire in which to apply for coverage using the short-form application, that is, without having to provide detailed evidence of insurability. In your benefits orientation for new hires, you should

• Advise them of the existence of the State of New Jersey Long Term Care Insurance Plan;
  
  
• Provide a copy of the brochure (attached) that discusses long term care in general terms (Prudential will be mailing a supply of these brochures to each employer location, within the next few weeks;
  
  
• Tell employees that they can obtain more information on the Plan from the Division of Pensions and Benefits Long Term Care Web Site or by calling Prudential Insurance Company's Long Term Care Customer Service Center at 800-732-0416;
  
  
• Emphasize to those newly hired employees that they have 90 days in which to enroll without having to provide detailed evidence of insurability;
  
  
• Inform the employees that all of their family members are eligible to apply for coverage; and
  
  
• Encourage employees to send in the business reply card that is attached to the back cover of the brochure to request an enrollment kit. This will result in their receiving detailed plan information and costs as well as the National Association of Insurance Commissioners' publication, A Shopper's Guide to Long Term Care Insurance.

Although the open enrollment is over, eligible employees can always apply for coverage at any time. Fulltime employees, who did not apply for the coverage during the open enrollment or during their first 90-days of employment with the State, and their eligible family members may apply for coverage at any time by completing a long-form application. This application requires the review and approval by Prudential's underwriting department before coverage can take effect. All part-time, seasonal, intermittent and per diem employees and their family members may also apply for coverage at any time.

If you have any questions about this program, contact Larry Lenahan from the Division of Pensions and Benefits at (609) 292-3648 or e-mail him at Lenahan_l@tre.state.nj.us.

attachment

August 21, 2002

TO: State Health Benefits Program Participating Local Employers, State Health Benefits Program Participating Local Education Employers

FROM: Florence J. Sheppard, Assistant Director for Health Benefits

SUBJECT: SHBP Open Enrollment 2002

The State Health Benefits Program (SHBP) Open Enrollment period for local government and local Board of Education employees will begin on October 1, 2002 and end on October 31, 2002. Completed employer certified health benefit applications should be forwarded to the Health Benefits Bureau as soon as they are received from employees. (The last day that certified applications must arrive at the Health Benefits Bureau to be effective for the start of the new plan year is November 8, 2002.) All changes to coverage made during this open enrollment will be effective January 1, 2003.

OPEN ENROLLMENT SUPPORT

The State Health Benefits Commission is in the process of reviewing consultant recommendations and rates for the new plan year. Once this information is available in mid-September, the SHBP will be preparing materials that explain any changes made, if any are made, to both you and your employees. This mailing includes a milestone chart that lists key Open Enrollment events and dates, and the projected delivery schedule for Open Enrollment publications.

PRINT MATERIALS

In September, benefits administrators will receive the SHBP's Open Enrollment Announcement letter along with a preview issue of the Health Capsule newsletter and an updated list of medical plans and their costs.

The Health Capsule is written to announce the SHBP Open Enrollment period to employees and to present important information and changes that may affect their benefit selection. All participating local and education employers will receive a supply of newsletters for distribution to their employees for the Open Enrollment period.

Benefits administrators will also receive copies of the SHBP Plan Comparison Summary chart, and Summary Program Description booklet for distribution to their employees. These publications will be revised for the Open Enrollment and provide an overview of the SHBP, a description of each plan offered, and plan by plan comparisons of selected benefits to help employees make an informed health plan choice.

Revisions are also being made to the Employee Prescription Drug Plan Member Handbook with distribution for the Open Enrollment period to those employers that participate in the plan.

ONLINE INFORMATION

In addition to our printed materials, Web-based presentations on the SHBP Open Enrollment will be available for both employers and employees 24 hours a day, seven days a week. These will be available for viewing during the Open Enrollment period. Once Open Enrollment begins you will find the link on the SHBP homepage at: www.state.nj.us/treasury/pensions/shbp.htm

Participating provider information for all SHBP plans is available in the Unified Provider Directory (UPD). The UPD is an online service that provides a comprehensive listing of health care providers and facilities that deliver their services through one or more of the SHBP's health care plans. Updated monthly, you can access the UPD through the SHBP home page at: www.state.nj.us/treasury/pensions/shbp.htm

HEALTH FAIRS DISCONTINUED

In keeping with the policy adopted last year, the SHBP will not provide health fairs during this year's Open Enrollment.

ADDITIONAL INFORMATION

If you have any questions about the Open Enrollment or the information in this letter, please contact our Office of Client Services at (609) 292-5353, and select option #2 on the phone. When prompted, leave a message and a representative will return your call.

Thank you for your assistance in making the Open Enrollment a success for your employees.

Enclosure:

2002 SHBP Open Enrollment Milestone Chart

August 21, 2002

TO: State Departmental Human Resource Directors, State Biweekly Human Resources Representatives, State Monthly Universities, Colleges and Authorities

FROM: Florence J. Sheppard, Assistant Director for Health Benefits

SUBJECT: SHBP Open Enrollment 2002

The State Health Benefits Program (SHBP) Open Enrollment period for all State employees will begin on October 1, 2002 and end on October 31, 2002. Completed employer certified health benefit and/or dental applications should be forwarded to the Health Benefits Bureau as soon as they are received from employees. (The last day that certified applications must arrive at the Health Benefits Bureau to be effective for the start of the new plan year is November 8, 2002.) All changes to coverage made during this open enrollment will be effective on December 28, 2002 for State biweekly employees paid through State Centralized Payroll Unit and on January 1, 2003 for all other State employees.

State biweekly Human Resources Representatives will note that this year's October dates for Open Enrollment are new for State biweekly employees. We ask that you make your employees aware of this change from last year's September time frame.

OPEN ENROLLMENT SUPPORT

The State Health Benefits Commission is in the process of reviewing consultant recommendations and rates for the new plan year. Once this information is available in mid-September, the SHBP will be preparing materials that explain any changes made, if any are made, to both you and your employees. This mailing includes a milestone chart that lists key Open Enrollment events and dates, and the projected delivery schedule for Open Enrollment publications.

PRINT MATERIALS

In September, Human Resources Representatives will receive the SHBP's Open Enrollment Announcement letter along with a preview issue of the Health Capsule newsletter and an updated list of medical and dental plans and their costs.

The Health Capsule is written to announce the SHBP Open Enrollment period to employees and to present important information and changes that may affect their benefit selection. On September 27, the Health Capsule newsletter and Open Enrollment fliers will be distributed with paychecks to all employees paid through the State's Centralized Payroll Unit. All other State monthly Human Resources Representatives will receive a supply of newsletters for distribution to their employees for the Open Enrollment period.

Human Resources Representatives will also receive copies of the SHBP Plan Comparison Summary chart, and Summary Program Description booklet for distribution to their employees. These publications will be revised for the Open Enrollment and provide an overview of the SHBP, a description of each plan offered, and plan by plan comparisons of selected benefits to help employees make an informed health plan choice.

Revisions are also being made to the State Dental Program Member Handbook and the Employee Prescription Drug Plan Member Handbook with distribution planned for the Open Enrollment period.

ONLINE INFORMATION

In addition to our printed materials, Web-based presentations on the SHBP Open Enrollment will be available for both employers and employees 24 hours a day, seven days a week. These will be available for viewing during the Open Enrollment period. Once Open Enrollment begins you will find the link on the SHBP homepage at: www.state.nj.us/treasury/pensions/shbp.htm

Participating provider information for all SHBP plans is available in the Unified Provider Directory (UPD). The UPD is an online service that provides a comprehensive listing of health care providers and facilities that deliver their services through one or more of the SHBP's health care plans. Updated monthly, you can access the UPD through the SHBP home page at: www.state.nj.us/treasury/pensions/shbp.htm

HEALTH FAIRS DISCONTINUED

In keeping with the policy adopted last year, the SHBP will not provide health fairs during this year's Open Enrollment.

ADDITIONAL INFORMATION

If you have any questions about the Open Enrollment or the information in this letter, please contact our Office of Client Services at (609) 292-5353, and select option #2 on the phone. When prompted, leave a message and a representative will return your call.

Thank you for your assistance in making the Open Enrollment a success for your employees.

Enclosure:

2002 SHBP Open Enrollment Milestone Chart

August 16, 2002

TO: State University and College Benefits Administrators, State Monthly Benefits Administrators

FROM: John D. Megariotis, Assistant Director, Finance

SUBJECT: Open Enrollment For The New Jersey State Employees Tax Savings Program (Tax$ave 2003)

The annual open enrollment for the calendar year 2003 New Jersey State Employees Tax Savings Program (Tax$ave 2003) will be conducted from September 13 through October 31, 2002. Employees of the State, State authorities, State universities, and State colleges who are eligible for participation in the New Jersey State Health Benefits Program (SHBP) may participate in Tax$ave.

About Tax$ave

Tax$ave consists of three components:

1.The Premium Option Plan (POP);

2.The Unreimbursed Medical Spending Account (UMSA); and

3.The Dependent Care Spending Account (DCSA).

Tax$ave offers eligible employees the opportunity to increase their available income by reducing their federal tax liability. Each year eligible employees should review their personal financial circumstances and decide if they wish to participate or not. Open Enrollment offers employees the opportunity to conduct this review and then act on their decision.

Premium Option Plan

Enrollment in the Premium Option Plan is automatic. This saves your employees tax money by paying health and dental premiums from pre-tax dollars and reducing their tax liability. If an employee does not wish to take advantage of the Premium Option Plan in 2003 (and therefore pay more in federal, Social Security, and Medicare taxes) he or she should file a Declination of Premium Option Plan (POP) form.

Flexible Spending Accounts

The Unreimbursed Medical Spending Account (UMSA); and the Dependent Care Spending Account (DCSA) are also referred to as Flexible Spending Accounts (FSA's).

Unlike the POP or the plans of the SHBP, prior participation in a Tax$ave FSA in 2002 does not carry over automatically into 2003. Employees must enroll again to participate in an FSA for calendar year 2003.

Employees have three ways of enrolling in the Tax$ave FSA accounts this year: mail, telephone, and Internet. The Tax$ave publications will provide the following instructions to employees:

• Mail: FSA Election Applications must be mailed directly to Horizon Healthcare by the employee. All election forms must be postmarked no later than October 31, 2002, to be accepted. Those postmarked after October 31, 2002 will be returned without action. Benefits offices should not be involved in processing or mailing FSA Election Applications.
  
  
• Telephone: Employees may either enroll (or reenroll) in the UMSA or DCSA plans for 2003 over the phone by calling Horizon Healthcare's automated voice response unit at 1-800-224-4426. This is a great opportunity to quickly and easily go through the process of a new or repeat enrollment. Horizon will inform current participating employees of this opportunity through a direct mailing in September. The deadline for enrollment by telephone is midnight, October 31, 2002.
  
  
• Internet: Again this year employees have the ability to enroll (or reenroll) over the Internet. Go to the Horizon Healthcare Web page through a link from the Division of Pensions and Benefits' Tax$ave page at: www.state.nj.us/treasury/pensions/taxsave.htm and follow the simple directions. The deadline for enrollment over the Internet is midnight, October 31, 2002.

Tax$ave Support Materials

The remainder of this letter provides information on the Tax$ave Open Enrollment publications and support available to assist you in explaining this important benefit program to your employees. Please do your best to make a concerted effort to inform your employees of the open enrollment and to educate them on the valuable benefits that Tax$ave offers them. We believe that more employees will participate in Tax$ave if they are made aware and understand the value of the tax savings offered by the program.

Enclosed is the Tax$ave Open Enrollment Milestones chart that lists the critical dates of the Tax$ave 2003 Annual Open Enrollment and outlines the efforts being made to educate employees. Please use this chart as a checklist to guide your activities during the open enrollment.

The Division will also provide State Monthly employers, State Universities, and State Colleges with sufficient copies of the Tax$ave 2003 Open Enrollment News and the Premium Option Plan 2003 pamphlet for all eligible employees. Horizon Healthcare will provide sufficient copies of the FSA pamphlet for distribution to all of your eligible employees.

• The Tax$ave 2003 Open Enrollment News announces the open enrollment, outlines the components of the program with emphasis on its tax saving advantages, and identifies the October 31, 2002 deadline for submission of all election materials.

• The Premium Option Plan 2003 pamphlet explains the advantages and disadvantages of participation.
  
  
• The FSA pamphlet describes the Unreimbursed Medical Spending Account (UMSA) and the Dependent Care Spending Account (DCSA).

These publications will be shipped to employers early in September and you should distribute them to your employees before the Open Enrollment start date on September 13, 2002. Preview copies of these publications are enclosed with this letter.

We also encourage you to provide your employees with reminders of the Tax$ave Open Enrollment to ensure they don't allow this opportunity to slip by without action.

The other open enrollment materials you will need are the FSA Election Kits and the Declination of Premium Option Plan (POP) for Plan Year 2003 form.

• FSA Election Kits for 2003 will be sent directly to benefits administrators by Horizon Healthcare, along with a request form for additional kits. Please provide the FSA Election Kits to those employees who request them.

• This letter includes a minimal supply of the declination forms. These can be copied for use by those few employees who do not wish to participate in the POP and, therefore, pay more in tax. (Note: do not distribute POP Declination forms to employees unless they ask for one.) If an employee chooses not to save tax dollars under the Tax$ave Premium Option Plan and wants to pay more federal income, Social Security, and Medicare taxes on the salary used to pay their medical and dental premiums in 2003, they must complete a POP form declining the federal tax break they could receive. Employees should request these forms from you. We will be instructing employees to return the Declination of Premium Option Plan (POP) forms to benefits administrators by October 31, 2002. Benefits administrators must then forward declination forms to payroll.

We appreciate your cooperation. Your involvement in the Tax$ave Open Enrollment is key to your employees receiving the valuable benefits offered by this program. If you have any questions about Tax$ave 2003 or the open enrollment, call the Horizon Healthcare Insurance Agency, Inc. at 1-800-224-4426, or visit the Division of Pensions and Benefits' Tax$ave Internet site at: www.state.nj.us/treasury/pensions/taxsave.htm

Enclosures:

Tax$ave 2003 Open Enrollment Milestones
Tax$ave 2003 Open Enrollment News (sample)
The Premium Option Plan 2003 Pamphlet (sample)
Tax$ave Pamphlet - Savings You Can Bank On.(sample)
Declination of Premium Option Plan (POP) for Plan Year 2003 (three copies enclosed)

August 16, 2002

TO: State Department Human Resource Directors, State Biweekly Payroll Locations Benefits Administrators

FROM: John D. Megariotis, Assistant Director, Finance

SUBJECT: Open Enrollment For The New Jersey State Employees Tax Savings Program (Tax$ave 2003)

The annual open enrollment for the calendar year 2003 New Jersey State Employees Tax Savings Program (Tax$ave 2003) will be conducted from September 13 through October 31, 2002. Employees of the State who are eligible for participation in the New Jersey State Health Benefits Program (SHBP) may participate in Tax$ave.

About Tax$ave

Tax$ave consists of three components:

1.The Premium Option Plan (POP);

2.The Unreimbursed Medical Spending Account (UMSA); and

3.The Dependent Care Spending Account (DCSA).

Tax$ave offers eligible employees the opportunity to increase their available income by reducing their federal tax liability. Each year eligible employees should review their personal financial circumstances and decide if they wish to participate or not. Open Enrollment offers employees the opportunity to conduct this review and then act on their decision.

Premium Option Plan

Enrollment in the Premium Option Plan is automatic. This saves your employees tax money by paying health and dental premiums from pre-tax dollars and reducing their tax liability. If an employee does not wish to take advantage of the Premium Option Plan in 2003 (and therefore pay more in federal, Social Security, and Medicare taxes) he or she should file a Declination of Premium Option Plan (POP) form.

Flexible Spending Accounts

The Unreimbursed Medical Spending Account (UMSA); and the Dependent Care Spending Account (DCSA) are also referred to as Flexible Spending Accounts (FSA's).

Unlike the POP or the plans of the SHBP, prior participation in a Tax$ave FSA in 2002 does not carry over automatically into 2003. Employees must enroll again to participate in an FSA for calendar year 2003.

Employees have three ways of enrolling in the Tax$ave FSA accounts this year: mail, telephone, and Internet. The Tax$ave publications will provide the following instructions to employees:

• Mail: FSA Election Applications must be mailed directly to Horizon Healthcare by the employee. All election forms must be postmarked no later than October 31, 2002, to be accepted. Those postmarked after October 31, 2002 will be returned without action. Benefits offices should not be involved in processing or mailing FSA Election Applications.
  
  
• Telephone: Employees may either enroll (or reenroll) in the UMSA or DCSA plans for 2003 over the phone by calling Horizon Healthcare's automated voice response unit at 1-800-224-4426. This is a great opportunity to quickly and easily go through the process of a new or repeat enrollment. Horizon will inform current participating employees of this opportunity through a direct mailing in September. The deadline for enrollment by telephone is midnight, October 31, 2002.
  
  
• Internet: Again this year employees have the ability to enroll (or reenroll) over the Internet. Go to the Horizon Healthcare Web page through a link from the Division of Pensions and Benefits' Tax$ave page at: www.state.nj.us/treasury/pensions/taxsave.htm and follow the simple directions. The deadline for enrollment over the Internet is midnight, October 31, 2002.

Tax$ave Support Materials

The remainder of this letter provides information on the Tax$ave Open Enrollment publications and support available to assist you in explaining this important benefit program to your employees. Please do your best to make a concerted effort to inform your employees of the open enrollment and to educate them on the valuable benefits that Tax$ave offers them. We believe that more employees will participate in Tax$ave if they are made aware and understand the value of the tax savings offered by the program.

Enclosed is the Tax$ave Open Enrollment Milestones chart that lists the critical dates of the Tax$ave 2003 Annual Open Enrollment and outlines the efforts being made to educate employees. Please use this chart as a checklist to guide your activities during the open enrollment.

The initial announcement of the open enrollment to employees paid through Centralized Payroll will be made in an August 30 paycheck message. On the September 13 paychecks there will be another Tax$ave 2003 Open Enrollment announcement message and three payroll inserts. These inserts are:

• The Tax$ave 2003 Open Enrollment News that announces the open enrollment, outlines the components of the program with emphasis on its tax saving advantages, and identifies the October 31, 2002 deadline for submission of all election materials;
  
  
• An FSA pamphlet that describes the Unreimbursed Medical Spending Account (UMSA) and the Dependent Care Spending Account (DCSA); and
  
  
• The Premium Option Plan 2003 pamphlet that explains the advantages and disadvantages of participation.

A copy of the check message announcements and preview copies of the Tax$ave publications are enclosed with this letter.

In addition to announcing the open enrollment to employees paid through Centralized Payroll in the August 30 and September 13 paychecks, we will provide "reminder messages" about the Tax$ave 2003 Open Enrollment to employees through paycheck messages on September 27, October 11, and October 25.

The other open enrollment materials you will need are the FSA Election Kits and the Declination of Premium Option Plan (POP) for Plan Year 2003 form.

• FSA Election Kits for 2003 will be sent directly to benefits administrators by Horizon Healthcare, along with a request form for additional kits. Please provide the FSA Election Kits to those employees who request them.

• This letter includes a minimal supply of the declination forms. These can be copied for use by those few employees who do not wish to participate in the POP and, therefore, pay more in tax. (Note: do not distribute POP Declination forms to employees unless they ask for one.) If an employee chooses not to save tax dollars under the Tax$ave Premium Option Plan and wants to pay more federal income, Social Security, and Medicare taxes on the salary used to pay their medical and dental premiums in 2003, they must complete a POP form declining the federal tax break they could receive. Employees should request these forms from you. We will be instructing employees to return the Declination of Premium Option Plan (POP) forms to benefits administrators by October 31, 2002. Benefits administrators must then forward declination forms to Centralized Payroll by November 15, 2002.

We appreciate your cooperation. Your involvement in the Tax$ave Open Enrollment is key to your employees receiving the valuable benefits offered by this program. If you have any questions about Tax$ave 2003 or the open enrollment, call the Horizon Healthcare Insurance Agency, Inc. at 1-800-224-4426, or visit the Division of Pensions and Benefits' Tax$ave Internet site at: www.state.nj.us/treasury/pensions/taxsave.htm

Enclosures:

Tax$ave 2003 Open Enrollment Milestones
Open Enrollment Check Messages #1 and #2
Tax$ave 2003 Open Enrollment News (sample)
The Premium Option Plan 2003 Pamphlet (sample)
Tax$ave Pamphlet - Savings You Can Bank On.(sample)
Declination of Premium Option Plan (POP) for Plan Year 2003 (three copies enclosed)

MEMORANDUM

July 15, 2002

TO: Benefits Managers, New Jersey State Colleges and Universities

FROM: John Megariotis, Assistant Director, Finance

SUBJECT: PAYMENT OF BENEFITS UNDER ERI CATEGORIES 1 & 3

Under the provisions of the 2002 Early Retirement Incentive (ERI) legislation, Chapter 23, P.L. 2002, the employing agency is responsible for the payment of the Category 1 and 3 incentive for employees enrolled in the Alternate Benefit Program (ABP). The Category 1 incentive is 60 percent of one year's base salary in two equal payments made one month and thirteen months after retirement. The category 3 incentive is $500 a month for 24 months. Sections 2d and 4d of Chapter 23 require that these payments be made to the retiree's ABP retirement annuity account and/or 403(b) account. Therefore, provisions must be made to ensure that retirement accounts for eligible ERI retirees remain active or that new accounts be established by the participants with the respective Investment Carrier(s). The Division of Pensions and Benefits has instructed the six participating ABP carriers of this requirement. Colleges and universities must notify the carriers, however, of which of their ABP retirees are eligible under Categories 1 and 3 of the ERI.

The enclosed list identifies your former employees enrolled in the Alternate Benefit Program who retired between February 1, 2002, and June 1, 2002, and who meet the specific criteria for eligibility under the Early Retirement Incentive Program. Since Chapter 23 was retroactive to February 1, 2002, the benefit applicable to the category noted should be paid along with benefits for the employees who retired effective July 1, 2002. Be sure to include these employees on the lists you send the carriers to ensure accounts are available to accept payments.

Enclosure(s)

MEMORANDUM

July 15, 2002

TO: Participating Investment Carrier For the NJ Alternate Benefit Program

FROM: John Megariotis, Assistant Director, Finance

SUBJECT: Receipt of Employer paid benefits under ERI Categories 1 & 3

Under the provisions of the 2002 Early Retirement Incentive (ERI) legislation, Chapter 23, P.L. 2002, the employing agency is responsible for the payment of the Category 1 and 3 incentive for employees enrolled in the Alternate Benefit Program (ABP). The Category 1 incentive is 60 percent of one year's base salary in two equal payments made one month and thirteen months after retirement. The category 3 incentive is $500 a month for 24 months. Sections 2d and 4d of Chapter 23 require that these payments be made to the retiree's ABP retirement annuity account and/or 403(b) account. Therefore, provisions must be made to ensure that retirement accounts for eligible ERI retirees remain active or that new accounts be established by the participants with the respective Investment Carrier(s).

As the participating ABP carriers Division of Pensions and Benefits is instructing you of this requirement. The eligible colleges and universities must notify you, however, of which of their ABP retirees are eligible under Categories 1 and 3 of the ERI.

If you should have any questions concerning this matter, you may contact the Defined Contribution Plans Unit directly at (609) 777-0887.

July 2002

To: Certifying Officers

From: Janice C. Curtin, Assistant Director, Operations

Subject: Revised Application for Withdrawal

The Application for Withdrawal has been revised to incorporate additional rollover options. The major areas revised in this application are as follows:

• The Rollover Election, previously a separate form, has been added to the Application for Withdrawal.
  
  
• The Employer Certification is now a separate form from the Application for Withdrawal.
  
  
• Fact Sheet #27, The Taxability and Mandatory Withholding of Income Tax from your Pension Distribution, Adobe PDF (35K) has been revised and added to the booklet. It includes information regarding the Internal Revenue Service regulations that result in the changes to the Division of Pensions and Benefits' withdrawal policies.
  
  
• In addition to the three options that have been available for withdrawal in the past, there are now two more options when rolling over pension contributions to an Individual Retirement Account (IRA). Now the member can choose to rollover the entire taxable and non-taxable portions of their pension account (Selection #2), or rollover the entire taxable amount and a portion of the non-taxable amount (Selection #5).

Please recycle your supply of the former version of the Application for Withdrawal and begin using the new version immediately.

We have enclosed one copy of the new Application for Withdrawal. When you require more, please call the designated employer line for forms and publications, (609) 777-4357, which is available 24 hours a day, 7 days a week. Or e-mail your request to us at pensions.nj@treas.state.nj.us The Application for Withdrawal can be downloaded from the Division of Pensions and Benefits' home page at: www.state.nj.us/treasury/pensions/

July 2002

To: Certifying Officer, State Autonomous Authorities

From: Thomas P. Bryan, Director

SUBJECT: 2002 State Early Retirement Incentive Program

This letter outlines the assistance the Division will provide for informing your employees enrolled in the Public Employees' Retirement System (PERS) of their eligibility to participate in the State Early Retirement Incentive (ERI) Program that your organization recently adopted.

Implementation for PERS Members

The Division of Pensions and Benefits will provide you with the following:

• ERI information packages (described below) for each ERI category, to be sent by courier to your work site, for delivery to eligible employees,
  
  
• On-site ERI Workshops for eligible employees, and
  
  
• A special State ERI web page. The URL for the site is www.state.nj.us/treasury/pensions/stateeri.htm

The list of eligible employees in the PERS that we previously provided to you is derived from our pension records as of May 22, 2002. These records cannot distinguish between full-time and part-time employees. Therefore, an employee meeting the age and service criteria may appear on the list of ERI-eligible employees when they are not eligible because of part-time status. Additionally, eligible employees will not appear on the list if they were on an approved leave of absence at the time the eligibility was determined. (The employee must be eligible to receive employer-provided health benefits coverage while on a leave of absence to be eligible to participate in the ERI).

Notify us by e-mail or fax if an employee should be deleted or added to the list and provide the reason for the change. The e-mail address is pensions_eri@tre.state.nj.us and the fax number is (609) 341-3410.

The eligible PERS employee ERI information packages, that we will courier to you, will include the following items:

• An eligibility letter that describes the ERI Program and notifies the employee of the specific incentive for which he or she qualifies;
  
  
• An Application for Retirement Allowance kit;
  
  
• Fact Sheet #12, Taxation of Retirement Benefits Adobe PDF (14K) and
  
  
• For Category 3 eligible employees only - An incentive payment rollover kit which includes an explanatory letter, a Rollover Request Form and an ERI Fact Sheet, Taxability and Rollover Options for Your $500 Monthly Retirement Incentive Payment.

If your Authority participates in the State Health Benefits Program (SHBP), the packets will also include the following:

• A letter offering the opportunity to continue SHBP coverage into retirement;
  
  
• A State Health Benefits Retired Status Application for enrollment in the retired group of the State Health Benefits Program;
  
  
• A SHBP rate chart showing the rates for the various health plans for those employees who do not qualify for employer-paid SHBP coverage in retirement or who must premium share; and
  
  
• Fact Sheet #11, Enrolling in the State Health Benefits Program When You Retire Adobe PDF (32K)

The Division will also courier to you a retirement estimate for each of your eligible employees based on the last retirement date in your ERI window. The estimate will include only Maximum Option and Option 1 information. The estimate letter will provide information on ERI workshops and how to obtain an estimate that includes joint and survivor benefits.

ERI Workshop Program

Upon request, the Division of Pensions and Benefits will conduct retirement workshops at your work sites. We require a minimum attendance of 20 employees per session with a maximum of 50 employees. If you are interested in hosting these workshops for your employees, you should schedule dates with us as soon as possible.

We will also schedule ERI workshops at our offices at 50 West State Street, Trenton. These workshops are by appointment only and will provide eligible employees a complete estimate that includes joint and survivor options.

The retirement workshops last approximately two and one-half hours. There is a 75 minute presentation followed by 75 minutes devoted to answering questions and assisting employees with application completion. You may schedule morning and afternoon sessions with us for the same day.

Scheduling Workshops.

To schedule an ERI Workshop at your location, call our dedicated ERI Workshop voice mailbox at (609) 984-4521 and press Option "1". A Client Services representative will return your call to schedule the workshop date(s) with you.

At least one week before the scheduled date of each workshop, fax to us an ERI Workshop Reservation Form (attached) for each scheduled workshop. We need sufficient time to prepare personalized retirement estimates for your employees. The ERI Workshop Reservation Form is available on the State ERI Web site and can be completed online and then printed and faxed.Resources that will be required of you to schedule and conduct an on-site ERI workshop will include:

• A minimum of 20 and maximum of 50 eligible attendees;
  
  
• A suitable meeting room of sufficient size to hold all scheduled attendees (It must be appropriate for a Power Point presentation, i.e., must be able to be darkened, has at least one accessible power outlet, and has a projection screen or an easily visible blank, light-colored wall);
  
  
• A flip chart, chalk board, or dry erase board;
  
  
• A photocopier immediately accessible and dedicated as a resource to the workshop;
  
  
• Sufficient work/table space for your employees and Division of Pensions and Benefits staff to complete and accept retirement related forms and applications; and
  
  
• The completed ERI Workshop Reservation Form (sent to the Division of Pensions and Benefits a week before the workshop).

The workshop leader will bring to the workshop an individualized Retirement Estimate for each of the employees scheduled to attend. The estimate will include all of the Survivorship Options, (provided the beneficiary information was provided to us on the ERI Workshop Reservation Form), for the requested retirement date. The employees should bring to the workshop the ERI package materials (previously mailed to them and described above) and a photocopy of proof of age documents for themselves and for their pension beneficiary(ies), if considering a survivor option.Workshop Aims. The Division has two primary aims for these workshops. First, they are to provide your ERI-eligible employees the opportunity to learn as much as possible about the ERI. The second aim is to facilitate the submission of the necessary forms at the workshop should they decide to take advantage of the ERI and retire.

At the conclusion of each seminar, we will provide you with a list of those employees who filed for retirement and their requested retirement date so you can complete the Certification of Service and Final Salary in a timely manner.

Almost Eligible PERS/TPAF Members

You may have some PERS covered employees who would be eligible for this ERI if they purchased other eligible public service they had performed earlier in their careers. If you have employees in this situation, you may include them in the workshops you schedule, but we may not be able to prepare estimates for them for the workshops. Include their names on the ERI Workshop Reservation Form, but annotate that they must purchase service to qualify.

Extension of Retirement Dates

The Governor's ERI proposal allows Autonomous Authorities to extend the retirement date for essential individuals for any number of months up until September 1, 2003, assuming that the individual consents to the extension. The individual will still need to formally file an application for retirement prior to the end of the window with a retirement effective within the window. The approval authority for these extension requests is the Governing Body of the Autonomous Authority. Only individuals who are deemed mission critical should be considered for an extension. Please submit the list of employees granted extensions as soon as possible on our form, Report of Approved Delayed Retirements. The Report of Approved Delayed Retirements, attached, is also available online through the State ERI Web site.

June 2002

TO: Certifying Officer: Teachers' Pension and Annuity Fund, Public Employees' Retirement System & Police and Firemen's Retirement System

FROM: John D. Megariotis, Assistant Director, Finance

SUBJECT: Report of Contributions, Second Quarter 2002 (April 1^st to June 30^th)

This memorandum has pertinent information concerning the completion of your Report of Contributions.
Please read this memorandum before you make any changes to the Report.

DEADLINE FOR FILING

Teachers' Pension and Annuity Fund July 10, 2002

Public Employees' Retirement System July 10, 2002

Police and Firemen's Retirement System July 10, 2002

REPORTING PROCEDURES

Through the Transmittal Electronic Payments System (TEPS), employers must submit monthly
transmittal remittances of approximately 1/3 of the total quarterly amounts due for pension
contributions, contributory life insurance premiums and regular SACT. Token payments are not acceptable.

Your June 2002 transmittal remittance, which represents the deductions due for the balance of the quarter, should be made through TEPS. The portion of the remittance for total pension deductions should reflect the sum of normal pension contributions, back deductions, loan payments, and arrears/purchase deductions. The TEPS remittance is also due by July 10, 2002.

With the Report of Contributions, you must complete and return the Transmittal Summary form for the 2^nd quarter 2002. This document is used to assist your office and this Division in reconciling your transmittal remittances to the quarterly Report.

If your quarterly Report and total contributions are not received in a timely manner, we cannot update the pension accounts of your employees. This may adversely affect any claim for benefits, including loan applications, filed by your employees. Also, any delay affects our scheduling in posting contributions to all members' accounts as well as the mailing of Reports of Contributions for the following quarter. Interest will be assessed, as prescribed by statute and administrative code, when

monthly transmittal remittances and the quarterly Report of Contributions are not received within fifteen days of the due dates.

When you receive your quarterly Report, you should review it immediately. If you think you will have a problem in meeting the filing deadline, or if there is anything you do not understand, contact the Audit/Billing Section at (609) 292-3630. Normally reporting inquiries can be resolved with a telephone call. Please make all necessary corrections to the Report before you return it to the Division of Pensions and Benefits. Verify that all changes are explained, the Report is added correctly, and the totals agree with the sum of the transmittal remittances.

Please show on the quarterly Report the telephone number of the individual to be contacted if our auditors have questions concerning any items.

SIGNATURE - Your quarterly Report of Contributions must be signed. Any Report not bearing a signature will be considered delinquent until an affidavit is submitted by the Certifying Authority attesting to its contents. Initials will not be accepted.

CHANGE TO MEMBER PENSION RATES - TEACHERS' PENSION AND ANNUITY FUND

Effective January 1, 2002 Chapter 133, P.L. 2001 reduced the member's pension rate from 4.5% to 3% for members of the Teachers' Pension and Annuity Fund. This TPAF employee contribution rate will remain in effect through 2002 and will continue thereafter as long as the excess assets of the TPAF permit. This is not a permanent change to the normal contribution rate of 5% of salary. The minimum repayment for pension loans and the minimum deduction for the purchase of service credit, which is based on the full 5% contribution rate, will not change.

Retroactive increases paid on or after January 1, 2002 should be deducted at 3%, including any portion of the retroactive salary that covered a period prior to January 1, 2002.

CHANGE TO MEMBER PENSION RATES - PUBLIC EMPLOYEES' RETIREMENT SYSTEM

Chapter 415, P.L. 1999 reduced the pension rate for members of the Public Employees' Retirement System for calendar years 2000 and 2001 from 4.5% to 3%. The pension rate for calendar year 2002 will remain at 3%.

Retroactive increases paid on or after January 1, 2000 should be deducted at 3%, including any portion of the retroactive salary that covered a period prior to January 1, 2000. Because the change is a temporary reduction, the minimum repayment for pension loans and the minimum deduction for the purchase of service credit will not change. The minimum deduction for the single payment value will continue to be computed on 5% of base salary.

SACT TAX-SHELTERED ANNUITY - REMITTANCE OF 403(b) CONTRIBUTIONS, CHAPTER 247, P.L. 1999

Chapter 247, P.L. 1999 requires 403(b) salary reductions on behalf of an employee to be transmitted and credited within five business days from the pay date. Employees of local boards of education may participate in the SACT 403(b) program or a 403(b) plan administered by their employer. This law impacts both arrangements.

Members of the Public Employees' Retirement System, Teachers' Pension and Annuity Fund and Police and Firemen's Retirement System in the Supplemental Annuity (SACT) Tax Sheltered Annuity Program are required to have 403(b) salary reductions remitted to the Division of Pensions and Benefits within the timeframes prescribed by law. Contributions for these members will be made through the Transmittal Electronic Payments System (TEPS).

REPORTING ACTUAL SALARIES FOR PART-TIME EMPLOYEES

(Rule Change N.J.A.C. 17:2-4.7)

The Public Employees' Retirement System's Board of Trustees at its November 17, 1999 meeting adopted a rule change for N.J.A.C. 17:2-4.7 that became effective on January 1, 2000. The amendment requires reporting districts to use the actual creditable salary earned by employees, not estimated salary, for part-time hourly, on-call and per diem employees.

The enrollment criteria for part-time hourly, on-call, and per diem employees remains unchanged. However, once membership is established, an employee must only meet the $1,500 minimum salary regulation to continue membership; the number of hours worked in a month or a year is no longer applicable. This provides greater equity in granting service credit. A member is entitled to a month of service as long as the actual creditable salary being reported exceeds the monthly minimum for enrollment. In other words, when a 10-month member has a monthly reportable salary exceeding $150 (one tenth of $1,500), the member should be reported for that month. Similarly, $125 (one twelfth of $1,500) is the minimum monthly reportable salary for a 12-month member. If the member does not make $1,500 in the current calendar year, and is not expected to make $1,500 in the following year, that employee is no longer eligible for the retirement system.

TEPS - TRANSMITTAL SHORTAGE PAYMENTS

The Division sends transmittal shortage statements when the sum of the transmittal remittances does not equal the due figure on the quarterly Report of Contributions. Transmittal shortage statement payments can only be paid through TEPS. Checks received for payment of transmittal shortages will be returned. If you have questions related to TEPS, contact the TEPS Helpline at (888) 835-3345 or FAX your inquiries to the Audit/Billing Section at (609) 633-1708.

CHANGING BANKING INFORMATION FOR TEPS

Notice of Changes for TEPS should be submitted to the Division of Pensions and Benefits on or after the date that the new checking account becomes effective. Every Notice of Change is prenoted to ensure that the Division has the correct banking information. This normally takes 12 to 15 days.

CHANGE TO BASE SALARY

It is important to review the salary shown in column 6 and verify that it correctly reflects the member's base salary for the quarter. If the salary shown is not correct, draw a line through it and write the correct salary above it. Pension Contributions, Contributory Insurance, SACT, and Tax-Sheltered Annuity deductions must be changed to reflect amounts due on the new salary.

If your employees received a salary increase that is retroactive to a prior quarter, change column 6 to reflect the COMBINED TOTAL of:

(a) the new base salary for the quarter, plus,

(b) the additional base salary for the retroactive period.

The new quarterly base salary should be written in column 1 of the Report. This salary will be projected in column 6 of your next quarterly Report. This will eliminate the need to make numerous changes on your 3^rd quarter Report of Contributions. Also, in the "Remarks Column" of the current Report you should indicate that the members had a salary increase and the effective date.

REPORTING RETROACTIVE SALARY AFTER RETIREMENT

If a member receives a retroactive salary adjustment after retirement, do not write the member's name on the Report of Contributions. Complete a new Certification of Service and Final Salary and indicate that it is a retroactive adjustment after retirement by writing on the top of the Certification "Revised Due to Retro." Deduct the pension contributions and contributory life insurance, if applicable, from the retroactive check and remit that amount on behalf of the member to the Audit/Billing Section of this Division.

STATEMENTS OF OVERAGES/SHORTAGES

Overages and shortages that affect a member's Annuity Savings Fund identify whether or not the pension contributions are subject to the 414(h) provision. These statements should be reviewed to determine when adjustments are required to your payroll records in calculating year-to-date mandatory pension contributions under 414(h). All overage and shortage statements that cover a period prior to January 1, 1987 are not subject to the 414(h) provision. Please note that all member shortages are to be paid by separate check. Do not remit through TEPS.

Should you have any questions or need assistance in completing the Report, please telephone us at
(609) 292-3630.

Enclosures:

1. Quarterly Report of Contributions
2. Transmittal Summary for 2^nd Quarter 2002
3. Envelope for Report
4. Report of Salary Change for 3^rd qtr 2002 (TPAF and PERS boards of education)
5. Report of Salary Change Instruction Memo

June 2002

To: Certifying Officer. Public Employees' Retirement System (Boards of Education), Teachers' Pension and Annuity Fund

From: John D. Megariotis, Assistant Director, Finance

Subject: Report of Salary Change Instructions

The enclosed Report of Salary Change lists those members projected on your second quarter 2002 Report of Contributions. The list shows the membership number, member's name, payment plan (10/12), and provides space to insert the base salary to be projected on the quarterly Report of Contributions for the third calendar quarter of 2002.

You should insert only the member's quarterly base salary, rounded to the nearest dollar, which will correctly reflect the member's base wage for the third quarter Report of Contributions. Do not add members (new enrollments, transfers, employees returning from leave of absence) to this report, nor should you reflect a name change.

For example, a 12-month employee whose annual salary is $24,000 effective July 1^st will be shown at a quarterly salary of $6,000. This is the salary that will be paid for the months of July, August, and September. Teachers who are on a "Summer Payment Plan" are not to be reported as 12-month employees.

A 10-month employee at the same annual base salary of $24,000 will be reported at $2,400, because the member will be paid for only one month in the third quarter - the month of September. If the member's payment plan will change in the third quarter from a 10-month basis to a 12-month basis or a 12-month basis to a 10-month basis, please make this correction on the Report of Salary Change.

For 12 month members project only three full months of contractual base salary even if an employee will be on leave of absence or terminating employment. It has been our experience that employers reporting one or two months of salary on the Report of Salary Change have the correct base salary and contributions on the next quarterly Report of Contributions, but the months of service column is not changed to reflect the correct service credit.

There is sometimes a delay in a board of education adopting its new salary budget, and although salary changes are effective July 1st for 12-month members and September 1st for 10-month members, the retroactive increase is not paid until the fourth quarter. Under these circumstances, it is suggested that you forward the Report of Salary Change to this Division before November 10th with the new quarterly base salary for the fourth quarter plus the retroactive increase covering the third quarter. This should be one combined figure. In this case, you must denote on the first page of the projection sheet that this is a fourth quarter salary projection. In addition, you should request a Report of Salary Change for the first quarter 2003 to insert the quarterly base salaries to be projected on the first quarter 2003 Report of Contributions. If you follow this procedure, it will avoid numerous changes on your Report of Contributions, because the Division will project the proper salary and deductions for each quarter.

The Division will furnish a Report of Salary Change for any quarter upon request. To avoid delays in submitting your Report of Contributions, it is recommended that you use the Report of Salary Change, rather than column 1 of the Report, whenever you have numerous salary projections. To process a Report of Salary Change, it must be returned to the Division of Pensions and Benefits by the 15th of the second month of a calendar quarter for the salaries to be projected for that quarter.

To project the salaries on your third quarter 2002 Report of Contributions, the changes must be received no later than August 15^th.

In Summary

• Project only 3 months of base salary for 12 month members (plus retro, if applicable)
• Do not add members
• Do not make name changes
• Return the report of salary change by August 15^th

June 18, 2002

TO: State Biweekly Human Resource Directors/Benefits Administrators

FROM: State Health Benefits Program

SUBJECT: University Health Plans (UHP), Termination in SHBP

Effective July 27, 2002 University Health Plans HMO will terminate its participation in the State Health Benefits Program (SHBP) and will no longer be available to your employees.

We request that you not allow new employees to enroll in UHP. Other employees, who might make health plan changes outside of the regular Open Enrollment period - employees returning from leave of absence, COBRA enrollees, etc. - should also be informed that UHP is no longer available.

Revised health plan descriptions (that do not reference UHP) are being prepared and will be available for the fall Open Enrollment.

Employees and retirees currently enrolled in UHP are being contacted individually and are being given an opportunity to transfer to another SHBP participating health plan.

If you have any questions regarding this matter, please contact the Division of Pensions and Benefits, Office of Client Services at (609) 292-7524.

June 18, 2002

TO: SHBP Participating Local Government Employers, SHBP Participating Local Education Employers, State Monthly Human Resource Directors/Benefits Administrators

FROM: State Health Benefits Program

SUBJECT: University Health Plans (UHP), Termination in SHBP

Effective August 1, 2002 University Health Plans HMO will terminate its participation in the State Health Benefits Program (SHBP) and will no longer be available to your employees.

We request that you not allow new employees to enroll in UHP. Other employees, who might make health plan changes outside of the regular Open Enrollment period - employees returning from leave of absence, COBRA enrollees, etc. - should also be informed that UHP is no longer available.

Revised health plan descriptions (that do not reference UHP) are being prepared and will be available for the fall Open Enrollment.

Employees and retirees currently enrolled in UHP are being contacted individually and are being given an opportunity to transfer to another SHBP participating health plan.

If you have any questions regarding this matter, please contact the Division of Pensions and Benefits, Office of Client Services at (609) 292-7524.

January 2002

TO: Certifying Officers, State Employers

FROM: Janice A. Vasil, Manager, Operations

SUBJECT: Certification of Payroll Deductions - Revision

The Division of Pensions and Benefits is changing the Certification of Payroll Deductions form that authorizes payroll deductions for pension, loans, arrears, etc. The current mailers with the carbon paper copies, that are sometimes difficult to read, will be replaced by the type of mailer currently used for the annual Personal Benefits Statements.

You will receive only a member copy of the certification (no employer copy) which will be an original print. There is no employer copy of the certification, so there is no need to open the certification. Just give the certification to your employee as their notice that the deductions will begin. Employers will be able to access prior certifications online through the Division's Employer Pensions and Benefits Information Connection (EPIC) when it debuts later this year. Centralized Payroll receives the Certification of Payroll Deductions in a computerized format.

The new form will be used for certifications to begin March 1, 2002. A copy of the revised certification is enclosed for your information.

You will note that, except for the heading of the certification, the rest of the form is the same as the current form. What is missing is the information that appeared on the back of the certifications to explain some of the information on the form. That same information is now available over the Internet at www.state.nj.us/treasury/pensions/cert.htm or you may call the Office of Client Services at (609) 292-7524 for assistance.

We continue to look to technology for ways to improve our service to employers and our members. This is one small step in that direction.

Enclosure

January 2002

TO: Certifying Officers, Local Employers

FROM: Janice Vasil, Manager, Operations

SUBJECT: Certification of Payroll Deductions - Revision

The Division of Pensions and Benefits is changing the Certification of Payroll Deductions form that authorizes you to begin employee deductions for pension, loans, arrears, etc. The current mailers with the carbon paper copies, that are sometimes difficult to read, will be replaced by the type of mailer currently used for the annual Personal Benefits Statements.

Both the employer copy and the member copy of the certification will be an original print. As always, you should keep the employer copy and give the employee copy to your employee.

The new form will be used for certifications of deductions to begin March 1, 2002. A copy of the revised certification is enclosed for your information.

You will note that, except for the heading of the certification, the rest of the form is the same as the current form. What is missing is the information that appeared on the back of the certifications to explain some of the information on the form. That same information is now available over the Internet at www.state.nj.us/treasury/pensions/cert.htm or you may the Office of Client Services at (609) 292-7524 for assistance.

We continue to look to technology for ways to improve our service to employers and our members. This is one small step in that direction.

Enclosure

MEMORANDUM

February 14, 2002

TO: State of New Jersey Human Resources Managers

FROM: Florence J. Sheppard, Assistant Director, State Health Benefits Program

SUBJECT: Long Term Care Plan Orientation for State Personnel Officers

The Division of Pensions and Benefits will present an orientation on the new Long Term Care Insurance Plan for Department Personnel Officers and their benefits managers on February 28, 2002. The meetings will last about an hour and will be held in the first floor boardroom at One State Street Square starting at 9:30 a.m., 11:00 a.m., and 2:00 p.m. You may attend whichever meeting best fits your schedule.

The purpose of the orientation is to give you an overview of the new plan, explain how it will be marketed to your employees, and outline how it will be administered. The presentation will encompass a summary of the following items: plan design, eligibility, the conduct of the open enrollment, the application process, costs, the premium payment arrangements available to participants, and general plan administration. The program has been designed to not place any administrative requirements on either the Division of Pensions and Benefits or your benefits managers and payroll personnel, with the one exception that is mentioned below.

The open enrollment period for State employees and retirees is scheduled to commence on March 1 and end on May 31 of this year. All employees of the State, including part-time, seasonal, intermittent and per diem employees, will be eligible to enroll in the Plan. Prudential Insurance Company, the administrator of the Plan, will be mailing your employees informational materials to their home addresses. We would also like to offer informational sessions at your job sites during the open enrollment. We need your assistance in scheduling these sessions and, once confirmed, in notifying your employees of their time and location. Representatives of Prudential Insurance Company will conduct these sessions. Each session will run about an hour including answering questions the employees may have. The size and number of sessions will be determined by the capacity of the facility you are able to provide and any special scheduling considerations you may have. Please develop and bring to the orientation session a tentative listing of the locations where you would like the informational sessions to be given and the approximate number of sessions needed to accommodate your employees at each location. Scheduling will be finalized with you by Prudential representatives.

I apologize for the late scheduling and notification of this meeting, but events beyond our control have prevented us from doing this any earlier. Please call or e-mail Larry Lenahan in the Division of Pensions and Benefits to confirm which session you will attend and provide the names of anyone else in your organization you wish to attend. Larry's telephone number is (609) 292-3648, and his e-mail address is Lenahan_L@tre.state.nj.us

January 23, 2002

TO: Certifying Officer for the Division of Criminal Justice, Public Employees' Retirement System

FROM: Janice C. Curtin, Assistant Director, Operations

SUBJECT: Prosecutor Pension Benefits

Chapter 366, P.L. 2001 establishes the Prosecutors Part of the Public Employees' Retirement System (PERS). This essentially provides enhanced pension benefits for selected individuals within County Prosecutor Offices and in the Division of Criminal Justice. The law is rather complex and it will be some time before the Division of Pensions and Benefits will be ready to distribute detailed information on the benefits it provides and the procedures for implementing those benefits. However, the first step in implementation is the identification of affected employees and the certification of their service as prosecutors. More information regarding this process follows.

Reporting Eligibility for the Prosecutors Part Benefits

Chapter 366, P.L. 2001 defines positions within the Division of Criminal Justice eligible to be included in the new Prosecutors Part of the PERS as

• The Division Director,
  
  
• Any assistant director, deputy director, assistant attorney general, and deputy attorney general, and
  
  
• All criminal investigators not in the Police and Firemen's Retirement System.

For the purposes of Chapter 366, these positions are called prosecutor positions.

Please complete the attached form and return it to the attention of the Special Case Processing Unit, Enrollment and Purchase Bureau at the address on the letterhead by February 15, 2002. We need information on the employees in your prosecutor positions on January 7^th (and those appointed to them since that date). Please include name, PERS membership number, social security number, job title, the dates appointed to that prosecutor position, and, if applicable, any other prosecutor position they previously held in the Division of Criminal Justice and the dates they were in that position. Do not include information on individuals who previously served in prosecutor positions, but who were not in them on the effective date of Chapter 366. A completed sample form is enclosed as a guide to assist you in providing the information requested.

Notification to Eligible Employees

There is a letter enclosed that we request you use to notify employees of their eligibility for Prosecutor Part benefits. It provides information currently available about the new benefit. It also includes a form that the employee should use to report prior prosecutor service with other employers. The letter instructs the employee to return the form directly to the Division of Pensions and Benefits, not to the employer. We request that you provide each of the employees you identify as eligible with a copy of the attached letter and accompanying form.

Procedures When Making New Appointments To Prosecutor Positions

When you appoint employees to prosecutor positions in the future, you need to specifically identify them as eligible for participation in the Prosecutor Part of PERS. Do this by writing "Chapter 366 applies" in the certification section of the Enrollment Application or the Report of Transfer Form. If the employee is being appointed from within your organization (where no applications would normally be required), send a letter identifying the employee, the new position, and the date of appointment to the Division, Attention: Special Case Processing Unit, Enrollment and Purchase Bureau.

If you have questions about this letter, please contact our Office of Client Services at (609) 292-7524.

January 23, 2002

TO: County Certifying Officers, PERS

FROM: Janice C. Curtin, Assistant Director, Operations

SUBJECT: Prosecutor Pension Benefits

Chapter 366, P.L. 2001 establishes the Prosecutors Part of the Public Employees' Retirement System. This essentially provides enhanced pension benefits for selected individuals within County Prosecutor Offices and in the Division of Criminal Justice. The law is rather complex and it will be some time before the Division of Pensions and Benefits will be ready to distribute detailed information on the benefits it provides and the procedures for implementing those benefits. However, the first step in implementation is the identification of effected employees and the certification of their service as prosecutors. More information regarding this process follows.

Reporting Eligibility for the Prosecutors Part Benefits

Chapter 366, P.L. 2001 defines positions in county prosecutor offices eligible to be included in the new Prosecutors Part of the PERS as

• the county prosecutor,
  
  
• the first assistant prosecutor, and
  
  
• assistant prosecutor as defined in N.J.S.2A:158-1 et seq.

Please complete the attached form and return it to the attention of the Special Case Processing Unit, Enrollment and Purchase Bureau at the address on the letterhead by February 15, 2002. We need information on the employees in your prosecutor positions on January 7^th (and those appointed to them since that date). Please include name, PERS number, social security number, job title, the dates appointed to that prosecutor position, and, if applicable, any other prosecutor position they previously held in your county prosecutor's office and the dates they were in that position. Do not include information on individuals who previously served in prosecutor positions, but who were not in them on the effective date of Chapter 366. A completed sample form is enclosed as a guide to assist you in providing the information requested.

Notification to Eligible Employees

There is a letter enclosed that we request you use to notify employees of their eligibility for Prosecutor Part benefits. It provides information currently available about the new benefit. It also includes a form that the employee should use to report prior prosecutor service with other employers. The letter instructs the employee to return the form directly to the Division of Pensions and Benefits, not to the employer. We request that you provide each of the employees you identify as eligible with a copy of the attached letter and accompanying form.

Procedures When Making New Appointments To Prosecutor Positions

When you appoint employees to prosecutor positions in the future, you need to specifically identify them as eligible for participation in the Prosecutor Part of PERS. Do this by writing "Chapter 366 applies" in the certification section of the Enrollment Application or the Report of Transfer Form. If the employee is being appointed from within your organization (where no applications would normally be required), send a letter identifying the employee, the new position, and the date of appointment to the Division, Attention: Special Case Processing Unit, Enrollment and Purchase Section.

If you have questions about this letter, please contact our Office of Client Services at (609) 292-7524.

January 2002

TO: Employees Eligible for Prosecutor Part Benefits, Public Employees' Retirement System

FROM: Janice C. Curtin, Assistant Director, Operations

SUBJECT: Prosecutor Pension Benefits

Chapter 366, P.L. 2001 establishes the Prosecutors Part of the Public Employees' Retirement System (PERS). This essentially provides enhanced pension benefits for selected individuals within County Prosecutor Offices and in the Division of Criminal Justice. The law is rather complex and it will be some time before the Division of Pensions and Benefits will be ready to distribute detailed information on the benefits it provides and the procedures for implementing those benefits. However, we have begun the first step in implementation by asking employers to identify the affected employees and to certify their service as prosecutors.

Eligibility for the Prosecutors Part Benefits

Chapter 366, P.L. 2001 defines positions in county prosecutor offices eligible to be included in the new Prosecutors Part of the PERS as

• the county prosecutor,
  
  
• the first assistant prosecutor, and
  
  
• assistant prosecutor as defined in N.J.S.2A:158-1 et seq.

The law also defines positions in the Division of Criminal Justice eligible to be included in the new Prosecutors Part of the PERS as

• The Division Director,
  
  
• Any assistant director, deputy director, assistant attorney general, and deputy attorney general, and
  
  
• All criminal investigators not in the Police and Firemen's Retirement System.

For the purposes of Chapter 366, these positions are called prosecutor positions.

Reporting other Prosecutor Service

Your employer has identified you as eligible for Prosecutor Part benefits and will be reporting on all your prosecutor service with them. However, if you have prior prosecutor service with another employer, you need to identify that service to the Division of Pensions and Benefits. Please complete the attached form and return it to the attention of the Special Case Processing Unit, Enrollment and Purchase Bureau at the address on the letterhead by February 28, 2002. Include your name, PERS membership number, social security number, prosecutor job title(s), the dates served in the prosecutor position(s), and the employer for whom that prosecutor service was worked. The Division will verify that service with your previous employer and notify you of your credited service in the Prosecutor Part of PERS.

As stated previously, the implementation of this law will take considerable time. You will be contacted through your employer when we have resolved all the outstanding questions, modified our computer programs, and begun to calculate Prosecutor Part benefits.

If you have questions about this letter, please contact our Office of Client Services at (609) 292-7524.

enclosure

January 2002

TO: All Systems Certifying Officers

FROM: William H. Kale, Assistant Director, Client Services

SUBJECT: Recent Benefits Legislation

Former Acting Governor DiFrancesco signed several bills into law over the past two months that effect employee benefits. This letter provides chapter numbers, effective dates, programs effected, and a brief summarization of those laws that impact a large number of employers and members. All chapters listed are from the 2001 legislative session. You can obtain more detail on these new laws from other documents in this package and from our Internet web site (www.state.nj.us/treasury/pensions). Other benefit laws recently enacted that effect only a single employer or a very small number of members are not covered in this letter. Information about them can be found on the Division Web site.

Chapter 253 - 11/15/01; PERS; allows PERS retirees to take employment in a teaching position at an institution of higher education without having to reenroll in the retirement system. An institution of higher education includes all state colleges and universities and county community colleges. There must be a 30-day break between retirement and starting employment.

Chapter 278 - 12/27/01; PERS; changes the earnings limit that PERS retirees can make before having to reenroll in the retirement system from $10,000 to $15,000 per year. The new earnings limit is an aggregate limit from all public employment in PERS-covered positions. Previously, the limit only applied to earnings from a single public employer. See the enclosed separate letter and Fact Sheet #21 Adobe PDF (36K)

Chapter 341 - 1/5/02; PERS, TPAF; allows dual members of the PERS and the TPAF with up to three years of concurrent dual membership to merge their non-concurrent service credit into one system. Chapter 6 had previously allowed the merger of non-concurrent service if the concurrent period was less than two years. Prior to that law, members were not allowed to merge service into one system if concurrent dual membership existed.

Chapter 353 - 1/6/02 retroactive to 10/1/01; PERS, TPAF; increases retirement benefit formulas by nine percent for Veteran, Ordinary Disability, and Accidental Disability Retirements to 54.5%, 43.6%, and 72.7%, respectively; increases retirement benefits of retirees/beneficiaries of these type retirements by nine percent back to the effective date of the law; makes PERS Veteran Retirement criteria identical to those in the TPAF. A PERS member with veteran status now qualifies for a Veteran Retirement with (1) 20 years of service and age 60, (2) 25 years of service and age 55, and (3) 35 years of service and age 55. The Division will automatically review eligibility for a veteran retirement of all PERS retirees who have established veteran status and who retired on or after 10/1/01 on a service or early retirement. PERS retirees eligible for veteran status, but who did not establish that status, and who retired on or after 10/1/01 will have to self-identify if they believe they may now be eligible for a veteran retirement under this law. The Division will contact retirees affected by this law within the next several weeks. Benefit increases will be made by May or June.

Chapter 355 - 1/6/02; TPAF, PERS; provides a one year exemption from employment after retirement restrictions for certificated superintendents and certificated administrators who are employed by the Commissioner of Education or a school board in positions of critical need. Exemptions can be extended for one additional year. Provides a similar exemption for PERS retirees who obtain employment with a Board of Education in positions of critical need. The exemption does not pertain to employees who return to work within 120 days with the same employer from which they retired. See the enclosed Fact Sheet # 28 Adobe PDF (27K)

Chapter 366 - 1/7/02; PERS; creates separate retirement benefits for prosecutors, Criminal Justice Deputy Attorney Generals, and other designated personnel within the PERS. The Division is just beginning review of the details of this law; it may take several months to finalize its implementation.

Chapter 367 - 1/8/02; SHBP; requires managed care plans in the SHBP to pay in-network facilities at in-network rates for all services, regardless of whether treating physician was in-network or out-of-network.

If you have questions about these laws, check our Internet Web site, e-mail us at Pensions_nj@state.nj.us, or call our Office of Client Services at (609) 292-7524.

January 2002

TO: Certifying Officers, Public Employees Retirement System

FROM: Janice C. Curtin, Assistant Director of Pension Operations

SUBJECT: Change to PERS Retiree Return to Employment Law

Acting Governor DiFrancesco signed Chapter 278, P.L. 2001 into law on December 31, 2001. This law changes the earnings limit for a retiree of the Public Employees Retirement System (PERS) who is working in a PERS-covered position for one or more public employers. The new law requires suspension of the retirement and re-enrollment in the retirement system if the PERS retiree will earn more than $15,000 in a calendar year from all PERS-covered employment. Previously, the earnings limit was $10,000 and it was not an aggregate limit; rather, it was an earnings limit at any one employer.

You should process PERS re-enrollments using the guidance provided here.

Since the new $15,000 earnings limit for PERS retirees is an aggregate limit from all PERS covered employment, you may need to obtain information from PERS retirees about other public employment at the time you hire them, and each year thereafter, to determine whether they should be re-enrolled in the PERS. We recommend that you make this issue a checklist item with new hires. We also recommend that you give PERS retirees you are considering hiring, or have hired, a copy of the attached fact sheet that addresses this issue so they are aware of the ramifications of work after retirement in a PERS-covered position.

Chapter 278 only applies to public employment in positions that normally lead to membership in the PERS. It does not apply to public employment as a seasonal or intermittent employee or in positions covered only by other pension systems.

Currently Employed PERS Retirees

You will have to ask currently employed PERS retirees that have not been re-enrolled in the PERS if they have other public employment in a PERS-covered position.

• Employees with no other public employment in a PERS-covered position. Regardless of the type of position (except hourly), enroll the employee effective March 1^st if the contractual compensation will exceed $15,000 in 2002. If the employee is an hourly employee, enroll the employee as soon as the compensation exceeds $15,000 in a calendar year.

• Employees with other public employment in a PERS-covered position. Regardless of the type of position (except hourly), enroll the employee effective March 1^st if the compensation from all PERS-covered positions in 2001 exceeded $15,000 and is expected to remain at that level in 2002. If you are not notified until after March 1^st that the earnings limit will be exceeded this year, enroll the employee immediately upon notification. If the enrollment date has to be adjusted, we will do so at the Division. If the PERS retiree is an hourly employee, enroll the employee as soon as the compensation you pay exceeds $15,000 in the calendar year or when the employee notifies you that compensation from all PERS-covered positions exceeds $15,000 in the calendar year.

Future New Hires of PERS Retirees

You should ask new hires that will not make $15,000 per year with you if they have other public employment in a PERS-covered position.

• New hires with no other public employment in a PERS-covered position. Regardless of the type of position (except hourly), enroll the new employee immediately if the contractual compensation is more than $15,000 per year. If the new hire will be an hourly employee, enroll the employee as soon as the compensation exceeds $15,000 in a calendar year.

• New hires with other public employment in a PERS-covered position. Regardless of the type of position, enroll the employee immediately if the compensation from you will exceed $15,000 per year or when the employee advises you that the combined salaries from all PERS-covered employment will exceed $15,000 per year. If the new hire will be an hourly employee, enroll the employee as soon as the compensation exceeds $15,000 in a calendar year.

Suspension of PERS Retirements

When we receive an enrollment application for a PERS retiree, the Division will suspend the retiree's current retirement allowance as of the effective date of the new enrollment. The ramifications of the suspension of a retirement are discussed in the attached Fact Sheet Adobe PDF (36K). These should be specifically pointed out to any individual considering a return to employment because they could have a severe financial impact upon benefits payable to a member's beneficiary in the case of the member's death while actively employed.

PERS Retirees Already Reenrolled in the PERS

PERS retirees who have returned to employment and reenrolled in the retirement system must remain in the system as active employees until they terminate all PERS-covered employment and retire again. Falling below the Chapter 278 earnings limit does not automatically cause the member to not have to continue to contribute to the system.

Retiree Notification of Chapter 278

The Division of Pensions and Benefits will provide current PERS retirees a very brief summary of the changes made by this law in their February 1st pension check. We will tell those making over $15,000 a year in the aggregate from public employment in PERS-covered positions to contact the Division or their employer to determine how this law will affect them.

The Division will notify future PERS retirees of the requirements of Chapter 278 when we send them the letter of approval of their retirement. We will also publish annual reminders of the employment after retirement earnings limitations in the January issues of our retiree newsletter, Pension-News.

Enforcement

Each year, the Division compares retirement lists against Department of Labor wage reporting records from public employers in New Jersey. Therefore, PERS retirees who exceed the $15,000 earnings limit without reenrolling in the retirement system will be identified. Normally, this will result in a retroactive suspension of their retirement and reenrollment into the PERS as of the date they exceeded the earnings limit. It also will require repayment of pension checks that should not have been issued and payment of employee pension contributions back to the date of reenrollment. We want to avoid this action because of the hardship and recrimination it causes. We wish to ensure that retirees are aware of the impact of working in public employment after retirement and that they and their employers take appropriate action in a timely manner. We appreciate your support in this effort.

The requirements of Chapter 278 are covered in the Pension Processing and Employer Responsibilities course offered to all employer representatives working with the administration of pension benefits. Check our Internet Web site at http://www.state.nj.us/treasury/pensions for course schedules and enrollment information. If you have questions about this new law, please E-mail us at pensions.nj@treas.state.nj.us or call our Office of Client Services at (609) 292-7524.

January 2002

TO: State Health Benefits Program Participating Employers

FROM: Florence J. Sheppard, Assistant Director, State Health Benefits Program

SUBJECT: Health Insurance Portability and Accountability Act (HIPAA) Update

The federal Health Insurance Portability and Accountability Act (HIPAA) of 1996 contained a number of provisions that affected the State Health Benefits Program (SHBP) and its participating employers. The SHBP implemented several actions to comply with the requirements of HIPAA. These actions included:

• establishing procedures to provide departing employees with certificates of coverage for use with their next health carrier;
  
  
• amending SHBP rules to comply with HIPAA coverage requirements;
  
  
• filing exemptions for 1998, 1999, 2000, and 2001 to the provisions of mental health parity in accordance with HIPAA procedures for the Traditional Plan and NJ PLUS; and
  
  
• providing employers with a required notice of compliance with HIPAA to be distributed to all employees and their family members upon enrollment.

Since the mental health limitations currently in effect are detailed in the law governing the SHBP, a change in plan design would require legislative action. Therefore, the SHBP must file a mental health parity exemption each plan year as long as a group plan is not HIPAA compliant. The Commission has voted to file an exemption for 2002. Therefore, mental health benefits will remain unchanged through 2002 unless the statute governing the SHBP is amended. Since HIPAA has a continuing notification requirement, a revised compliance notice reflecting this exemption from federal mental health parity requirements is attached for your use with newly enrolling employees and family members. You should send it at the same time you send the initial notice of COBRA rights.

A brief refresher on HIPAA is also attached for your information. If you have questions, contact Client Services at (609) 292-7524 or call the Employer's SHBP Hotline at (609) 292-5353 and leave a message. A staff member will return your call on the next business day.

Notice to State Health Benefits Program Participants about
Compliance with Federal Health Insurance Requirements

This notice is being provided to inform you about State Health Benefits Program (SHBP) conformance with federal health insurance regulations.

The Health Insurance Portability and Accountability Act (HIPAA), the Mental Health Parity Act, and the Newborns' and Mothers' Health Protection Act, federal laws enacted in 1996, contain a number of provisions that have affected the SHBP since January 1998. HIPAA required all group health plans to implement the following provisions that are contained in the three federal laws:

#1 - Limit the use of pre-existing condition restrictions to a maximum of twelve months;

#2 - Offer a special enrollment period to employees and dependents who do not enroll in the plan when initially eligible because they have other coverage, and who subsequently lose that coverage;

#3 - Eliminate discrimination against participants and beneficiaries based on health status;

#4 - Provide a minimum level of hospital coverage for newborns and mothers, generally 48 hours for a vaginal delivery and 96 hours for a cesarean delivery; and

#5 - Provide parity in mental health benefits, that is, any dollar limitations applied to mental health treatment cannot be lower than those on medical and surgical benefits.

Since January 1, 1998, all SHBP plans have met or exceeded HIPAA requirements #1 through #4 above. SHBP HMOs also have complied with requirement #5 above. The State Health Benefits Commission filed exemptions from HIPAA compliance on mental health parity (requirement #5) for 1998, 1999, 2000, and 2001 for the Traditional Plan and NJ PLUS, as self-insured, non-federal governmental plans are permitted to do. The Commission has voted to continue that exemption through 2002. As a result, the mental health limits for the Traditional Plan and NJ PLUS that are described in the SHBP Summary Program Description and the Traditional Plan and NJ PLUS Member Handbooks will remain in effect throughout 2002.

January 2002

TO: Certifying Officers for the Public Employees' Retirement System, Teachers' Pension and Annuity Fund, Police and Firemen's Retirement System, and State Police Retirement System

FROM: Janice C. Curtin, Assistant Director, Operations

SUBJECT: Revised Loan Application

The Loan Application has been revised to incorporate changes to loan policies. The major areas revised in this application are as follows:

• The overall look of the application has changed. It is now in a booklet format - a perforated and folded 11 x 17 sheet. The first half describes step-by-step how to take a loan and fill out the application. The other half is the detachable application to complete and submit to the Division with the terms and conditions stated on the reverse side.
  
  
• A notary's signature is no longer required on the application.
  
  
• The application promotes the use of the Automated Information System.
  
  
• Information is included regarding the new Internal Revenue Service regulations effective January 1, 2002 that result in changes to the Division of Pensions and Benefits' loan policies. Internal Revenue Section Code 72(p) requires that loan balances may not exceed $50,000 and loan balances must be repaid within five years.

Please recycle your supply of the former version of the Loan Application and begin using the new version immediately.

We have enclosed five copies of the new Loan Application. When you require more, please call the designated employer line for forms and publications, (609) 777-4357, which is available 24 hours a day, 7 days a week. Or e-mail your request to us at pensions.nj@treas.state.nj.us

May 2002

TO: Certifying Officers, All Systems, Department Human Resource Directors

FROM: William H. Kale, Assistant Director, Client Services

SUBJECT: New Employer Pension and Benefits Administration Manual

The Division of Pensions and Benefits is pleased to announce the release of the new Employers' Pension and Benefits Administration Manual (EPBAM) for general employer use.

The new EPBAM can be accessed using your internet browser on the Division of Pensions and Benefits' Web site. The URL (address) of the Division's Home Page is: www.state.nj.us/treasury/pensions

Once you have accessed the Home Page, click on the link for the manual.

The EPBAM is user friendly and has been designed to meet the specific needs of those employers who participate in the NJ State-administered benefit systems. Information is organized according the particular pension and other benefit administration tasks that employers regularly face. The instructions don't just describe a benefit or a rule. They tell you what you, the employer, are expected to do and how you can best do it. In addition, forms and informational documents are easily accessible for viewing and downloading.

Some EPBAM highlights:

Instructions on Common Employee Related Tasks You Perform:

Pension enrollment - Retirement processing - Making a purchase - Taking a loan - Withdrawing from the pension systems - Death of an employee

Instructions on Common Employer Tasks You Perform:

Financial reporting - Remitting employee contributions - Certification of service and final salary - State Health Benefits Forms and Instructions

Communications included in the EPBAM:

Certifying Officer Memos sent since 1999 - Legislative changes affecting benefits - Proposed rule (Administrative Code) changes - All benefit publications including member handbooks and fact sheets - Annual Reports

The greatest advantage of this new EPBAM format is that the Division of Pensions and Benefits is able to quickly update the manual whenever there are changes in law and policy. This means that

• You needn't worry if you have the most recent information on hand or the latest copy of a handbook.
  
  
• You will always have the most recent forms and publications on hand - they will always be on-line;

• You will not need to keep large numbers of forms on hand to meet employee needs. You can download what you need when you need it. Within the near future, you will be able to complete the forms on line and then download them. Eventually, you will be able to electronically transmit the forms to us, thereby eliminating all paper.

Another advantage of the new format is the extensive use of links within the manual that makes finding the specific information you need both quick and easy. Quick refreshers are easy if you haven't done a particular task in a while. Instructions on forms are complete and simple to follow. Beginners or back-ups will also find it easy to use the manual.

It is our hope that you will find the EPBAM a useful tool that will allow you to accomplish your regular benefit administration tasks easier, quicker, and more accurately. Accessing the manual is free and available 24-hours per day, seven days per week.

If you have questions about the Employer Pensions and Benefits Administration Manual, contact our Client Services counselors at (609) 292-7564. For those employing locations without Internet access, the EPBAM is available on CD-ROM. You may request a copy by contacting the Employer Education Unit at the Division of Pensions and Benefits.

Mail:
Employer Education Unit
Division of Pensions and Benefits
PO Box 295
Trenton, NJ 08625-0295

Email: pensions.nj@treas.state.nj.us

Phone: (609) 777-2111

May 2002

TO: Certifying Officers, Public Employees' Retirement System

FROM: William H. Kale, Assistant Director, Client Services

SUBJECT: Proposed Amendments to the New Jersey Administrative Code

The enactment of Public Law 2001, Chapter 5, which revises the administrative rule-making process, requires administrative agencies to further publicize any proposed rule making. Proposed new rules and amendments are currently published in The New Jersey Register, a bi-weekly publication of the Office of Administrative Law, and posted to www.state.nj.us/treasury/pensions, the Division of Pensions and Benefits web page.

Therefore, the Division of Pensions and Benefits would like to bring to your attention the following proposed amendments to N.J.A.C. 17:2, the rules of the Public Employees' Retirement System. If you wish to view the text of any of these proposals, go to our web page and click on proposed rule changes.

The proposed amendment to N.J.A.C. 17:2-2.3, Ineligible persons, is necessary due to the enactment of P.L. 2001, c.278. This law changed the earnings limit for a retiree of the Public Employees' Retirement System (PERS) who is working in a PERS covered position for one or more public employers. It also requires cancellation of retirement and re-enrollment if the PERS retiree earns more than $15,000 in a calendar year from all PERS covered employment. Previously, the limit was $10,000 and it was not an aggregate limit; rather, it was a limit at any one employer.

The proposed amendments to N.J.A.C. 17:2-6.21 and 6.25 are necessary due to the enactment of P.L. 2001, c.353 which provides that a PERS member with veteran status now qualifies for the increased veteran's benefit if they retire with 20 years of service at age 60 or older, or with 25 years of service and age 55 or older. P.L. 2001, c.133 also changed the age requirement for veterans with 35 years of service to 55 or older. The proposed amendments to N.J.A.C. 17:2-6.21 and 6.25 would change the ages at which a member qualifies for benefits to correspond with those recently enacted.

The proposed amendment to N.J.A.C. 17:2-7.1 would allow for the transfer of service credit from the Teachers' Pension and Annuity Fund (TPAF) to the PERS, or PERS to TPAF for nonconcurrent service if the period of concurrent service is less than three years. Previously, nonconcurrent service could not be transferred into the new retirement system if a member of TPAF at the time of enrollment in PERS unless the member had fewer than two years of concurrent service. This amendment is necessary due to the enactment of P.L. 2001, c.341.

The proposed amendment to N.J.A.C. 17:2-4.9, Eligibility for Loan, would clarify what the member's maximum outstanding loan balance can be. New Internal Revenue Service regulations, effective January 1, 2002, have resulted in changes to the Division's loan policies. Specifically, 26 U.S.C. § 72(p) requires that loan balances not exceed $50,000.

The proposed amendment to N.J.A.C. 17:2-6.4, Outstanding Loan, would delete the option to pay an outstanding loan balance by having the member's entire pension check withheld until the loan was satisfied. P.L. 1999, c.132 changed the repayment method of outstanding loans at retirement and removed the provision that the Division of Pensions and Benefits could withhold the entire retirement allowance until the loan was satisfied. The proposed amendment would, therefore, also remove the provision that allows the member to elect that the entire retirement check be withheld until the loan is satisfied.

P.L. 2001, c.120 (N.J.S.A. 43:15A-50) provides for the creation of a fifth option which members may select to receive their retirement benefits. This fifth option provides four additional payment options that provide a lifetime pension to a beneficiary upon the death of a member. These selections under the new, fifth, option will be referred to as Options A, B, C and D. Therefore, the Board proposes to amend N.J.A.C. 17:2-6.1, Applications, by adding a new subsection to define these new options.

The Board proposes to amend N.J.A.C. 17:3-6.10, Involuntary Disability Application, by changing "maximum retirement allowance (without option)" to "the maximum retirement option." The Division, until recently, did not classify the maximum retirement allowance as an option. The amendment at N.J.A.C. 17:2-6.17, Approved Allowance, would also replace the reference to "allowance (maximum or option)" because as stated above, the maximum allowance is now called "the maximum retirement option"; therefore, it does not need to be distinguished by the use of a parenthetical phrase.

If you have any comments on any of these proposed amendments, please submit them within 60 days of the receipt of this memorandum to Mindy Smith-Sopko, Administrative Practice Officer, at the Division's address.

Last update: June 28, 2010