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Pensions and Benefits
CERTIFYING OFFICER LETTERS 2009

Also available: Archived E-Messages to Certifying Officers and EPIC Users

SUBJECT DATE
Report of Contributions, 4th Qtr. 2009 (October 1, 2009 to December 31, 2009) - Teachers’ Pension and Annuity Fund, Public Employees’ Retirement System & Police and Firemen’s Retirement System December 2009
Report of Contributions, 4th Qtr. 2009 (October 1, 2009 to December 31, 2009) - Certifying Officer, Autonomous State College / University/State Employers December 2009
Increase in the Minimum Salary Required for PERS or TPAF Enrollment - Certifying Officers of the Public Employees’ Retirement System (PERS), Teachers’ Pension and Annuity Fund (TPAF), and Defined Contribution Retirement Program (DCRP) December 11, 2009
Announcement of Medco as Administrator of Prescription Drug Benefits - Participating Employers in the SHBP and SEHBP November 24, 2009
Terms and Conditions of Retirement - Certifying Officers September 28, 2009
Report of Contributions, 3rd Quarter 2009 (July 1st to September 30th) - Certifying Officers – Teachers’ Pension and Annuity Fund, Public Employees’ Retirement System & Police and Firemen’s Retirement System September 20, 2009
SHBP Open Enrollment 2009 — State Biweekly Employers - State Departmental Certifying Officers; State Human Resources Directors; State Biweekly Human Resources Representatives

September 10, 2009

SHBP Open Enrollment 2009 — State Monthly Employers - State Monthly Certifying Officers; State Monthly Human Resources Representatives

September 10, 2009

SHBP Open Enrollment 2009 — Local Government Employers - State Health Benefits Program Participating Local Government Employers

September 10, 2009

SEHBP Open Enrollment 2009 — Local Education Employers - School Employees’ Health Benefits Program Participating Local Education Employers

September 10, 2009

New Health Benefit Application on EPIC - Local Government and Local Education Certifying Officers, State Biweekly and State Monthly Certifying Officers August 2009
Open Enrollment For The New Jersey State Employees Tax Savings Program (Tax$ave 2010) - State Biweekly Certifying Officers, Human Resource and Benefit Administrators August 18, 2009
Open Enrollment For The New Jersey State Employees Tax Savings Program (Tax$ave 2010) - State Monthly Agency and Authority, College, and University Certifying Officers, Human Resource and Benefit Administrators August 18, 2009
Dependent Eligibility Verification Audit - State Biweekly Certifying Officers and State Monthly Certifying Officers August 7, 2009
Report of Contributions, 2nd Quarter 2009 (April 1st to June 30th) - Certifying Officers - Teachers’ Pension and Annuity Fund, Public Employees’ Retirement System & Police and Firemen’s Retirement System June 30, 2009
Report of Contributions, 2nd Quarter 2009 (April 1st to June 30, 2009) - Certifying Officers - Autonomous State College/University/State Employers June 30, 2009
COBRA and the American Recovery and Reinvestment Act of 2009 — Employee Notification - State and Local Certifying Officers participating in the SHBP or SEHBP April 9, 2009
Report of Contributions, 1st Quarter 2009 (January 1st to March 31, 2009) - Certifying Officers - Teachers’ Pension and Annuity Fund, Public Employees’ Retirement System & Police and Firemen’s Retirement System March 20, 2009
Report of Contributions, 1st Quarter 2009 (January 1st to March 31, 2009) - Certifying Officers - Autonomous State College/University/State Employers March 20, 2009
COBRA and the American Recovery and Reinvestment Act of 2009 — Request for Information - State Biweekly Certifying Officers; State Monthly Certifying Officers March 11, 2009
COBRA and the American Recovery and Reinvestment Act of 2009 — Request for Information - Certifying Officers of Local Government Employers in the SHBP; Certifying Officers of Local Education Employers in the SEHBP March 11, 2009
Pension Eligibility — Adjunct Faculty and Part-Time Instructors — Supplemental Questions and Answers — 2nd Set - Certifying Officers, State and County Colleges and Universities

March 4, 2009

Future Reporting of Retroactive Salary Increases - Certifying Officers - Teachers’ Pension and Annuity Fund, Public Employees’ Retirement System, and Police and Firemen’s Retirement System

February 24, 2009

Dependent Eligibility Verification Audit - State Departmental Certifying Officers; State Departmental Human Resources Directors; State Biweekly Human Resources Representatives February 4, 2009
Dependent Eligibility Verification Audit - State Monthly Certifying Officers; State Monthly Human Resources Representatives February 4, 2009
SHBP Special Open Enrollment — State Biweekly Employers - State Departmental Certifying Officers; State Departmental Human Resources Directors; State Biweekly Human Resources Representatives January 29, 2009
SHBP Special Open Enrollment — State Monthly Employers -State Monthly Certifying Officers; State Monthly Human Resources Representatives January 29, 2009
SHBP Special Open Enrollment — Local Government Employers - State Health Benefits Program Participating Local Government Employers January 29, 2009
SEHBP Special Open Enrollment — Local Education Employers - School Employees’ Health Benefits Program Participating Local Education Employers January 29, 2009
IRS Compliance for New Jersey ABP and ACTS 403(b) Programs - Certifying Officers, State and County Colleges and Universities January 12, 2009


CERTIFYING OFFICER LETTERS FROM OTHER YEARS

2014 CO Letters 2013 CO Letters 2012 CO Letters 2011 CO Letters 2010 CO Letters
2009 CO Letters 2008 CO Letters 2007 CO Letters 2006 CO Letters 2005 CO Letters
2004 CO Letters 2003 CO Letters 2002 CO Letters 2001 CO Letters 2000 CO Letters
1999 CO Letters 1998 CO Letters 1997 CO Letters    

Also available Archived E-Messages to Certifying Officers and EPIC Users.


December 2009

TO: Teachers’ Pension and Annuity Fund, Public Employees’ Retirement System & Police and Firemen’s Retirement System
FROM: John D. Megariotis
Deputy Director, Finance
SUBJECT: Report of Contributions, 4th Qtr. 2009 (October 1, 2009 to December 31, 2009)

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

Should you have any questions or need assistance in completing the Report, please refer to www.state.nj.us/treasury/pensions/epbam/finance/roc.htm

>> New << New Due Dates for IROC and Transmittal Payments

The regulation that establishes the due dates for the remittance of the monthly transmittal payments and the submission of the Reports of Contributions was amended January 9, 2009. The regulation now states that the monthly transmittal payments are to be transmitted through the electronic funds transfer system by the seventh day of the month following the close of the preceding month for which contributions are required. Also, the Reports of Contributions are due in the Division by the seventh day of the month following the close of the preceding quarter.

The new due dates took effect beginning with the 4th Quarter 2009 monthly transmittal payments and Report of Contribution. The due date for the October 2009 monthly transmittal payment was November 7, 2009, the due date for the November transmittal payment was December 7, 2009 and the due date for the December 2009 monthly transmittal payment and the 4th quarter 2009 Report of Contributions is January 7, 2010.

If your monthly transmittal payments or your Report of Contributions are not received by the Division within 15 days of their respective due dates interest penalties will be assessed and Reports of Contributions may not be used to update members’ accounts.

>> New << Notice of Increase in the Minimum Annual Base Salary
As a result of Ch 89, PL 2008, the Director of the Division of Pensions and Benefits shall adjust each year the minimum annual base salary for participation in the Teachers’ Pension and Annuity Fund (TPAF) and the Public Employees Retirement System (PERS) for those members in Tier 3 service (Tier 3 service covers those individuals eligible to enroll in TPAF or PERS on or after November 2, 2008). The adjustment is made annually in accordance with changes in the Consumer Price Index, pursuant to N.J.A.C. 17:3-2.1(g) for TPAF membership and N.J.A.C. 17:2-2.1(c) for PERS membership.

Please take note that, pursuant to these provisions, the Division of Pensions and Benefits is raising the annual base salary for participation in the TPAF and PERS from $7,500 to $7,700 for Tier 3 membership. This increase in the minimum annual base salary is effective January 1, 2010. 
Employees who fall below the minimum annual base salary amount in calendar year 2010 may be eligible to participate in the Defined Contribution Retirement Program. Please review Fact Sheet #82, Defined Contribution Retirement Program (DCRP) If Ineligible for PERS or TPAF, for additional information.

The minimum annual base salary amount for TPAF members under Tier 1 & Tier 2 will remain at $500 for 2010.  The minimum annual base salary amount for PERS members under Tier 1 & Tier 2 will remain at $1,500.

>> Reminder << Reporting of Retroactive Salary Increases

As a result of the implementation of Chapter 103, PL 2007, and the establishment of maximum compensation limits for certain members of the Public Employees’ Retirement System (PERS) and the Teachers’ Pension and Annuity Fund (TPAF), the Division of Pension and Benefits has determined that retroactive salary increases can no longer be reported through the Internet-based Report of Contributions (IROC) if they affect reporting periods prior to the current reporting quarter.

UPDATE- REPORTING OF RETROACTIVE SALARY - PROCEDURES

The current procedures in place to allow employers to report retroactive salary increases are as follows:

Once the new contract is received by the Division of Pensions and Benefits and reviewed, a spreadsheet will be sent to the employer. This spreadsheet will contain all data submitted for each member for the period of the retroactive salary adjustment. The employer must then supply the new base salary for each quarter affected for members receiving a retroactive salary adjustment. The total additional pension and contributory insurance contribution due will appear at the top of the spreadsheet page.  Please submit a check for the necessary contributions, payable to the retirement system, and return the spreadsheet via e-mail to the sending party at the Division of Pensions and Benefits.

Addition to IROC

Due to the implementation of Chapter 103, PL 2007, and Chapter 89, PL 2008, a new column has been added to the IROC to identify any members affected by these laws. The column heading will be “TIER”, Ch. 103, PL 2007, members will be identified as Tier 2 and Ch. 89, PL 2008, members will be identified as Tier 3. A letter from the Division dated December 5, 2008, defined what each Tier means for assisting you to properly prepare the IROC.

Treatment of Retirees Returning to Employment

The Division is becoming increasingly aware of public employees returning to employment under circumstances that would make these individuals ineligible for continuing the receipt of their retirement benefit. We want to take this opportunity to review the employer’s responsibilities when making offers of employment to retirees from any of the State’s retirement systems.

Retirees may not return to any State or Local government level public employment unless the retiree has at least a 30-day break in service after his or her retirement date or the date the retirement is approved by the respective Board of Trustees, whichever is the later. If you should employ a retiree prior to the end of this 30-day period, you must advise the retiree that his or her retirement may be considered invalid and notify the Division immediately of the re-employment.  If after review by the Division it is determined the retirement is invalid, the retiree’s retirement system account will be reactivated and the retiree notified. Employers should ask the retiree to see the retiree’s Board Approval Letter, which is sent to all new retirees, to determine the individual’s board approval date.
If a retiree is re-employed subsequent to the 30-day break in service in a public position covered by the same retirement system from which he or she retired, the retiree will be subject to earnings limits.  If the annual salary from public employment (or any combination of public employers) exceeds the limit, the retiree will be required to suspend his or her pension and re-enroll in the retirement system.  If you should employ a retiree and his or her salary exceeds the annual limit, you must advise the retiree that his or her retirement may need to be suspended and notify the Division immediately for a review.

We request that employers notify the Division in writing when there is a question concerning a re-employed retiree and his or her eligibility for continued retirement benefits.  Documentation provided by the employer should include the retiree’s name, employment title (both current and former, if known), current job description and place of employment (both current and former, if known).  This information should be mailed to:

NJ Division of Pensions and Benefits
Attn: Enrollment Bureau
PO Box 295
Trenton, NJ 08625-0295

For additional information, please refer to Fact Sheet #21, Employment After Retirement (PERS), Fact Sheet #28, Employment After Retirement (TPAF) and Fact Sheet #29, Employment After Retirement (PFRS).

PERS and TPAF Maximum Compensation

Chapter 103, P.L. of 2007, provides that new members of PERS and TPAF, those individuals enrolled as Tier 2 or Tier 3 members, are subject to a maximum compensation limit for PERS or TPAF pension contributions and benefits. The maximum compensation is based on the annual maximum wage for Social Security.

Note: The PERS and TPAF maximum compensation limit does not apply to employees who were already members of the PERS or TPAF prior to July 1, 2007, otherwise known as Tier 1 members.

For calendar year 2009, the annual maximum wage for Social Security is $106,800 and is subject to change at the start of each calendar year. Therefore, a new employee enrolled in the PERS or TPAF on or after July 1, 2007, who earns in excess of $106,800 before the end of 2009 will have his or her TPAF or PERS base salary capped – limiting the amount used to calculate benefits and contributions to TPAF or PERS for pension or contributory insurance. These individuals with earnings over the Social Security maximum wage base are also eligible for benefits under the Defined Contribution Retirement Program (DCRP).

For calendar year 2010, the annual maximum wage for Social Security will continue at $106,800 and the maximum compensation under TPAF and PERS for Tier 2 and Tier 3 members will remain unchanged as well.

Note:  Until reporting procedures are developed for PERS and TPAF members’ who exceed the social security maximum of $106,800 for 2009 and 2010, continue to report the pension and contributory insurance for the excess salary as you did in the past. The Division will forward the pension contributions to the DCRP carrier. Excess contributory insurance payments will be refunded to the employee.

Pension benefits may be available to these individuals for base salary paid in excess of the annual compensation limit under the newly created DCRP. DCRP plan materials, enrollment forms, and other program information are being developed and will be provided under a separate mailing.

Deadline for Filing the Report of Contributions

Due to the overwhelming popularity of the IROC program and the time saved in preparing the report of contributions, the Division is updating member accounts as early as four weeks following the close of the calendar quarter.  All reports are due by January 7, 2010.  Should your report not be received by the close of business on January 22, 2010, interest penalties will be assessed and reports received after this date may not be used to update member accounts.

Delays in receiving reports affect the timeliness of the Division providing services to ALL pension plan members, not just your employees and retirees.  Unfortunately, we continue to experience delays associated with employer late reporting.  This policy, of strict adherence to the established reporting deadline, will alleviate that problem.

When you receive your quarterly ROC, 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. If other arrangements need to be made to assist you in the completion of your ROC, the sooner you communicate that fact to the Division the better for everyone involved.

TEPS - Transmittal Electronic Payment System 

Please note that the only payments that should be submitted through TEPS are for monthly transmittal and annual appropriation payments. Employee shortages are not to be submitted through TEPS, and payment should be made to the address on the shortage statement only.

The fax number and address that you use to submit the Employer Authorization Forms to the Division of Pensions and Benefits is 1-866-568-2495 or it may be mailed to State of New Jersey, Department of Treasury, Division of Pensions and Benefits, P.O. Box 9581, Trenton, NJ 08650‑9581.

Retirement Plan Limits for 2010

The IRS has announced the cost-of-living adjustments (COLAs) for retirement plans. Many of the limits applicable to pension, and other retirement plans, are unchanged from 2009 to 2010 but are noted here for your reference.

  • Annual compensation limit. The maximum amount of annual compensation that can be taken into account for the purpose of determining benefits and contributions under Code Sec. 401(a)(17) is unchanged and remains at $245,000. Retirement plans administered by the Division of Pensions and Benefits affected by this change include the Teachers' Pension and Annuity Fund (TPAF), the Public Employees' Retirement System (PERS), the Police and Firemen's Retirement System (PFRS), the Supplemental Annuity Collective Trust (SACT), the Alternate Benefit Program (ABP), the Additional Contributions Tax-Sheltered (ACTS) program, the Deferred Compensation Retirement Program (DCRP) and the New Jersey State Employees Deferred Compensation Plan.
  • Chapter 113, P.L. 1997.  N.J.S.A. 43:3C-9.3 & 43:3C-9.4 permits higher annual compensation limits for members of TPAF, PERS, PFRS and ABP enrolled prior to July 1, 1996, if, prior to July 1, 1997, the employer certified to the Division Director that the employer will pay the additional cost for not applying the lower Code Sec. 401(a)(17) Annual Compensation Limit to these members.  If you are such an employer, you may report pensionable salary in excess of the Code Sec. 401(a)(17) limits mentioned earlier for those employees in the affected class up to the higher limit permitted for members of TPAF, PERS, PFRS and ABP enrolled prior to July 1, 1996, under the provisions of Chapter 113, P.L. 1997, is unchanged and remains at $360,000 for 2010.
  • Defined contribution plans. The limitation on the annual additions to a participant's defined contribution account under Code Sec. 415(c)(1)(A) is unchanged and remains at the lesser of $49,000 or 100% of the participant's compensation.  Annual additions are the sum for any year of all employer and employee contributions to the defined contribution plan.  For purposes of applying the limitations all defined contribution plans of an employer are to be treated as one defined contribution plan.  Defined contribution plans include an employee annuity plan described in and an annuity contract described in section 403(b).  Defined contribution plans administered by the Division of Pensions and Benefits affected by this change include the SACT, DCRP, ABP and ACTS programs and the New Jersey State Employees Deferred Compensation Plan.
  • Elective deferrals. The limitation under Code Sec. 402(g)(1) on the exclusion for elective deferrals described in Code Sec. 402(g)(3) is unchanged and remains at the lesser of $16,500 or 100% of the participant's compensation.  Defined contribution plans administered by the Division of Pensions and Benefits affected by this change include the SACT, DCRP, ABP and ACTS programs.
  • Deferred compensation plans. The limit on deferrals under Code Sec. 457(e)(15) concerning deferred compensation plans of state and local governments and tax-exempt organizations is unchanged and remains at the lesser of $16,500 or 100% of the participant's compensation. The deferred compensation plan administered by the Division of Pensions and Benefits affected by this change is the New Jersey State Employees Deferred Compensation Plan and is available to Employees of the State and other State chartered commissions, authorities and boards. Other governmental employers in the State my offer similar, self-administered programs.
  • Catch-up contributions. The dollar limit under Code Sec. 414(v)(2)(B)(i) for catch-up contributions to an applicable employer plan other than a plan described in Code Sec. 401(k)(11) or Code Sec. 408(p) for individuals aged 50 or over is unchanged and remains at $5,500.  Defined contribution plans administered by the Division of Pensions and Benefits affected by this change include the SACT, ABP and ACTS programs.

Lower compensation limits are in place for TPAF and PERS Tier 2 and Tier 3 members enrolled on or after July 1, 2007.  These members’ annual base salary is limited and may not exceed the amount of the Social Security Taxable Wage Base. The Social Security Taxable Wage Base and the compensation limit for TPAF and PERS Tier 2 and Tier 3 members is unchanged and remains at $106,800 for 2010. Please refer to Ch. 103, P.L. 2007 for details.

CO Letter in Printable Format Adobe PDF (68K)


December 2009

TO: Certifying Officer
Autonomous State College / University/State Employers
FROM: John D. Megariotis
Deputy Director, Finance
SUBJECT: Report of Contributions, 4th Qtr. 2009 (October 1, 2009 to December 31, 2009)

>> New << New Due Dates for Tape ROC and Transmittal Payments

The regulation that establishes the due dates for the remittance of the monthly transmittal payments and the submission of the Tape Reports of Contributions was amended January 9, 2009.  The regulation now states that the monthly transmittal payments are to be transmitted through the electronic funds transfer system by the seventh day of the month following the close of the preceding month for which contributions are required.  Also the Reports of Contributions are due in the Division by the seventh day of the month following the close of the preceding quarter.

The new due dates took effect beginning with the 4th Quarter 2009 monthly transmittal payments and Tape Report of Contribution.  The due date for the October 2009 monthly transmittal payment was November 7, 2009, the due date for the November transmittal payment was December 7, 2009, and the due date for the December 2009 monthly transmittal payment and the 4th quarter 2009 Tape Report of Contributions is January 7, 2010.

>> New << Notice of Increase In The Minimum Annual Base Salary

As a result of Ch 89, PL 2008, the Director of the Division of Pensions and Benefits shall adjust each year the minimum annual base salary for participation in the Teachers’ Pension and Annuity Fund (TPAF) and the Public Employees Retirement System (PERS) for those members in Tier 3 service (Tier 3 service covers those individuals eligible to enroll in TPAF or PERS on or after November 2, 2008). The adjustment is made annually in accordance with changes in the Consumer Price Index, pursuant to N.J.A.C. 17:3-2.1(g) for TPAF membership and N.J.A.C. 17:2-2.1(c) for PERS membership.

Please take note that, pursuant to these provisions, the Division of Pensions and Benefits is raising the annual base salary for participation in the TPAF and PERS from $7,500 to $7,700. This increase in the minimum annual base salary is effective January 1, 2010. 

Employees who fall below the minimum annual base salary amount in calendar year 2010 may be eligible to participate in the Defined Contribution Retirement Program.  Please review Fact Sheet #82 - Defined Contribution Retirement Program (DCRP) If Ineligible for PERS or TPAF for additional information.

The minimum annual base salary amount for TPAF members under Tier 1 & Tier 2 will remain at $500 for 2010.  The minimum annual base salary amount for PERS members under Tier 1 & Tier 2 will remain at $1,500.

PERS and TPAF Maximum Compensation

Chapter 103, PL of 2007, provides that new employees are subject to a maximum compensation limit for PERS or TPAF pension contributions. The maximum compensation is based on the annual maximum wage for Social Security.

Note: The PERS and TPAF maximum compensation limit does not apply to employees who were already members of the PERS or TPAF prior to July 1, 2007, otherwise known as Tier 1 members.

For calendar year 2009, the annual maximum wage for Social Security is $106,800 and is subject to change at the start of each calendar year. Therefore, a new employee enrolled in the PERS or TPAF on or after July 1, 2007, who earns in excess of $106,800 before the end of 2009 will have his or her TPAF or PERS base salary capped – limiting the amount used to calculate benefits and contributions to TPAF or PERS for pension or contributory insurance.

For calendar year 2010, the annual maximum wage for Social Security will continue at $106,800 and the maximum compensation under TPAF and PERS for Tier 2 and Tier 3 members will remain unchanged as well.

Pension benefits may be available to these individuals for base salary paid in excess of the annual compensation limit under the newly created Defined Contribution Retirement Program (DCRP). DCRP plan materials, enrollment forms, and other program information are being developed and will be provided under a separate mailing.

Notice To Delinquent Report Of Contribution Filers

In the past I have written explaining the importance of all employers providing to the Division of Pensions and Benefits their quarterly Report of Contributions (ROC) in a timely fashion.  As stated in the past, delays in receiving these reports affect the timeliness of the Division providing services to ALL pension plan members, not just your employees and retirees. Unfortunately, we continue to experience delays associated to employer late reporting.  I must again ask for your help in avoiding these delays at all costs and remind you that the Division will utilize everything at its disposal in order to solicit timely reporting by the employers we work with to provide benefit services to the State’s public employees.

Reporting And Payment Information

Your 4th quarter 2009 tape ROC applicable to the Teachers’ Pension and Annuity Fund, Public Employees’ Retirement System, and Police and Firemen’s Retirement System is due by January 7, 2010.  Your December 2009 remittance, which represents the deductions due for the balance of the quarter, should be made through the Transmittal Electronic Payments System (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.  Your TEPS remittance is also due by January 7, 2010.

The Control and Certification form must also accompany your quarterly ROC data file.  This is essential as it attests to the accuracy and validity of the submitted documentation.

If your quarterly ROC 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 ROC for the following quarter.  A ROC data file will be considered received when it is submitted in an acceptable format, passes all data processing edits, and can be used to update members’ accounts.  Interest will be assessed, as prescribed by statute and administrative code, when monthly transmittal remittances and the quarterly ROC are not received within fifteen days of the due dates.

Should you have any questions or need assistance in completing the Report, please refer to http://www.state.nj.us/treasury/pensions/epbam/finance/roc.htm.

SACT Tax-Sheltered Annuity – Remittance Of 403(b) Contributions

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.

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).

Please note that the full quarterly SUPPLEMENTAL ANNUITY contribution must be submitted prior to the processing of your ROC. If the full contribution is not submitted, it may be necessary to refund any supplemental annuity contributions sent in for the quarter. This could adversely affect your employees’ retirement savings.

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 verified to ensure that the Division has the correct banking information.  This normally takes 12 to 15 days.

Retirement Plan Limits for 2010

The IRS has announced the cost-of-living adjustments (COLAs) for retirement plans. Many of the limits applicable to pension, and other retirement plans, are unchanged from 2009 to 2010 but are noted here for your reference.

  • Annual compensation limit. The maximum amount of annual compensation that can be taken into account for the purpose of determining benefits and contributions under Code Sec. 401(a)(17) is unchanged and remains at $245,000. Retirement plans administered by the Division of Pensions and Benefits affected by this change include the Teachers' Pension and Annuity Fund (TPAF), the Public Employees' Retirement System (PERS), the Police and Firemen's Retirement System (PFRS), the Supplemental Annuity Collective Trust (SACT), the Alternate Benefit Program (ABP), the Additional Contributions Tax-Sheltered (ACTS) Program, the Deferred Compensation Retirement Program (DCRP) and the New Jersey State Employees Deferred Compensation Plan.
  • Chapter 113, P.L. 1997.  N.J.S.A. 43:3C-9.3 & 43:3C-9.4 permits higher annual compensation limits for members of TPAF, PERS, PFRS and ABP enrolled prior to July 1, 1996, if, prior to July 1, 1997, the employer certified to the Division Director that the employer will pay the additional cost for not applying the lower Code Sec. 401(a)(17) Annual Compensation Limit to these members.  If you are such an employer, you may report pensionable salary in excess of the Code Sec. 401(a)(17) limits mentioned earlier for those employees in the affected class up to the higher limit permitted for members of TPAF, PERS, PFRS and ABP enrolled prior to July 1, 1996, under the provisions of Chapter 113, P.L. 1997, is unchanged and remains at $360,000 for 2010.
  • Defined contribution plans. The limitation on the annual additions to a participant's defined contribution account under Code Sec. 415(c)(1)(A) is unchanged and remains at the lesser of $49,000 or 100% of the participant's compensation.  Annual additions are the sum for any year of all employer and employee contributions to the defined contribution plan.  For purposes of applying the limitations all defined contribution plans of an employer are to be treated as one defined contribution plan.  Defined contribution plans include an employee annuity plan described in and an annuity contract described in section 403(b).  Defined contribution plans administered by the Division of Pensions and Benefits affected by this change include the SACT, DCRP, ABP and ACTS programs and the New Jersey State Employees Deferred Compensation Plan.
  • Elective deferrals. The limitation under Code Sec. 402(g)(1) on the exclusion for elective deferrals described in Code Sec. 402(g)(3) is unchanged and remains at the lesser of $16,500 or 100% of the participant's compensation.  Defined contribution plans administered by the Division of Pensions and Benefits affected by this change include the SACT, DCRP, ABP and ACTS programs.
  • Deferred compensation plans. The limit on deferrals under Code Sec. 457(e)(15) concerning deferred compensation plans of state and local governments and tax-exempt organizations is unchanged and remains at the lesser of $16,500 or 100% of the participant's compensation. The deferred compensation plan administered by the Division of Pensions and Benefits affected by this change is the New Jersey State Employees Deferred Compensation Plan and is available to Employees of the State and other State chartered commissions, authorities and boards. Other governmental employers in the State may offer similar, self-administered programs.
  • Catch-up contributions. The dollar limit under Code Sec. 414(v)(2)(B)(i) for catch-up contributions to an applicable employer plan other than a plan described in Code Sec. 401(k)(11) or Code Sec. 408(p) for individuals aged 50 or over is unchanged and remains at $5,500.  Defined contribution plans administered by the Division of Pensions and Benefits affected by this change include the SACT, ABP and ACTS programs.

Lower compensation limits are in place for TPAF and PERS Tier 2 and Tier 3 members enrolled on or after July 1, 2007.  These members’ annual base salary is limited and may not exceed the amount of the Social Security Taxable Wage Base. The Social Security Taxable Wage Base and the compensation limit for TPAF and PERS Tier 2 and Tier 3 members is unchanged and remains at $106,800 for 2010. Please refer to Ch. 103, P.L. 2007 for details.

CO Letter in Printable Format Adobe PDF (63K)


December 15, 2009

TO: Certifying Officers of the Public Employees’ Retirement System (PERS), Teachers’ Pension and Annuity Fund (TPAF), and Defined Contribution Retirement Program (DCRP)
FROM: John D. Megariotis
Deputy Director, Finance
SUBJECT: Increase in the Minimum Salary Required for PERS or TPAF Enrollment

This letter is being provided as notice to employers that, effective January 1, 2010, the minimum annual base salary required for enrollment for “Tier 3 membership” in the Public Employees’ Retirement System (PERS) or the Teachers’ Pension and Annuity Fund (TPAF) will increase from $7,500 to $7,700.

Enrollment criteria for Tier 1 and Tier 2 of the PERS or TPAF remain unchanged for 2010.  However, Chapter 89, P.L. 2008, established a minimum annual salary for Tier 3 enrollment that is subject to annual adjustment.

Employers must note the increase in the annual base salary for Tier 3 membership as it effects:

  • Employees being newly enrolled into Tier 3 membership of the PERS or TPAF;
  • Current Tier 3 members who transfer to a new PERS or TPAF employer or who accept additional PERS or TPAF covered employment as “multiple members”; and
  • Current Tier 3 members who are continuing employment who earn salary at or near the annual minimum.

Employees who otherwise qualify for PERS or TPAF Tier 3 membership, but do not meet the $7,700 minimum salary requirement, are eligible for enrollment in the Defined Contribution Retirement Program (DCRP) provided that the base salary is at least $1,500 annually, see Fact Sheet #82, DCRP if Ineligible for the PERS or TPAF, for details.

Included with this letter is an updated chart that outlines the minimum base salary for Tiers 1, 2, and 3 of the PERS and TPAF.

The chart also includes the maximum salary limits for both “IRS annual compensation” ($245,000) and the “Social Security maximum wage” ($106,800). Both of these maximum salary limits remain unchanged for calendar year 2010.  Note: The “Social Security maximum wage” is applied to PERS/TPAF Tier 2 and Tier 3 member salaries to determine eligibility for enrollment in the Defined Contribution Retirement Program (DCRP), see Fact Sheet #79, DCRP for PERS and TPAF Members, for details. 

Employers should also note that the minimum salary requirements for re-enrollment of retirees who return to PERS or TPAF covered employment differ from the salary limits described above and may be determined by both the retired member’s original membership tier and the member’s type of retirement. See Fact Sheet #21, Employment after Retirement (PERS); Fact Sheet #28, Employment after Retirement (TPAF); and Fact Sheet #58, Employer's Guide to Hiring Retired Government Employees, for more information.

ADDITIONAL INFORMATION

Information about the establishment of the PERS and TPAF membership tiers, the DCRP, and other recent changes to pensions and benefits are provided in the Division’s Certifying Officer Letters:

  • The letter Chapter 92, P.L. 2007 and Chapter 103, P.L. 2007 Pension Changes PERS, TPAF, and DCRP, of August 2007, details the establishment of PERS and TPAF Tier 2 membership, maximum wage limits, and the creation of the DCRP.
  • The letter Chapter 89, P.L. 2008, Public Employee Benefits Reform Act of 2008, of December 5, 2008, details the establishment of PERS and TPAF Tier 3 membership, and DCRP eligibility for employees earning less than the PERS or TPAF minimum annual salary.

Employers and employees should also refer to the fact sheets referenced in this letter and the recently revised PERS or TPAF Member Handbooks.

The fact sheets, handbooks, and archived Certifying Officer Letters are available for viewing, or can be printed, from the Division of Pensions and Benefits Web site at: www.state.nj.us/treasury/pensions

If you have additional questions about the information provided in this letter, contact the Division’s Office of Client Services at (609) 292-7524, or e-mail the Division at: pensions.nj@treas.state.nj.us

Enclosure Adobe PDF (30K)


For a Tier 3 member paid on a part-time hourly, on-call or per diem basis and who does not have an annual contractual base salary, pension and contributory insurance deductions are calculated using actual creditable salary earned. In this case the monthly minimum salary to receive service and salary credit for 2010 will be $642 or $770 for 12-month and 10-month members respectively. If a member’s actual creditable salary should drop below one-twelfth (for 12-month employees; one-tenth for 10-month employees) of the minimum threshold salary required for enrollment into the retirement system, pension contributions should not be deducted from that member‘s creditable salary, and pension credit cannot be earned, for that month.

CO Letter in Printable Format Adobe PDF (89K)


November 24, 2009

TO: State Health Benefits Program and School Employees’ Health Benefits Program Participating Employers
FROM: Health Benefit Bureau, Division of Pensions and Benefits
SUBJECT: Announcement of Medco as Administrator of Prescription Drug Benefits for the SHBP and SEHBP

Beginning January 1, 2010,* all pharmacy benefits provided under the State Health Benefits Program (SHBP) and School Employees’ Health Benefits Program (SEHBP) will be administered by Medco, Health Solutions, Inc. of Franklin Lakes, New Jersey.

The change in administration includes prescription drug benefits through the Employee Prescription Drug Plan as well as prescription drug benefits coordinated with a SHBP or SEHBP medical plan (NJ DIRECT, Aetna HMO, or CIGNA HealthCare HMO) when the employer does not provide a separate prescription drug benefit.**

ANNOUNCEMENT TO EMPLOYEES

The Division of Pensions and Benefits asks employer assistance in announcing the change by distributing the attached letter Adobe PDF (37K) to their employees.  The letter introduces Medco, describes some of Medco’s basic services, and outlines coming steps in the transition of prescription drug benefits from CVS/Caremark and the HMO plans to Medco. The letter is provided in PDF format that can be printed or e-mailed. The letter is also available as a link on our Web site at: www.state.nj.us/treasury/pensions/shbp.htm

Employees will receive more information about Medco during the implementation process, including a “welcome letter” and Medco ID Cards to be mailed directly to employee home addresses in December. Meanwhile, members and participating employers should note that while services such as Mail Order prescription drugs and member services for claims and questions will now be directed to Medco, the overall design of the prescription drug benefit and active group copayment and reimbursement amounts under the SHBP and SEHBP are not changing.

We appreciate your cooperation in contributing to the SHBP/SEHBP’s efforts to provide quality health care benefits to your employees.

* January 2, 2010 for members paid through the State's Centralized Payroll Unit.

** If the SHBP or SEHBP participating employer provides a separate third-party prescription drug benefit, the changes described in this letter do not apply.

Enclosure
Medco Announcement Letter for Distribution to Employees Adobe PDF (37K)

CO Letter in Printable Format Adobe PDF (69K)


September 28, 2009

TO: Certifying Officers
FROM: Virginia Martucci, Chief of Operations,
Division of Pensions and Benefits
SUBJECT: Terms and Conditions of Retirement

The Division of Pensions and Benefits is implementing significant changes to retirement application procedures for members of the Public Employees’ Retirement System (PERS), Teachers’ Pension and Annuity Fund (TPAF), Police and Firemen’s Retirement System (PFRS), and State Police Retirement System (SPRS).  This memorandum consists of two sections:  Section I addresses the new Terms and Conditions of Retirement members must read and agree to when applying for retirement; Section II explains their origins.

SECTION I – TERMS AND CONDITIONS OF RETIREMENT

  • I understand that I must meet all of the eligibility requirements for retirement and cannot submit an application more than one yearbefore my retirement date.  (If eligible and applying for a Deferred Retirement, members may file more than one year in advance after you have terminated employment.)
  • I understand that my employer will be notified that I have filed an application for retirement.
  • I understand that if I cancel or change my retirement date and submit a new application with a later retirement date, it is my responsibility to notify my employer to ensure that any active health benefits are not canceled and that my employment remains uninterrupted.
  • I understand that changing or canceling my retirement date does not guarantee continued employment with my employer.
  • I understand that the beneficiary designation I am indicating on this retirement application supersedes all prior designations, even if my retirement is not yet effective or if I cancel my retirement. The Division of Pensions and Benefits will honor this as my most recent beneficiary designation on file, unless another beneficiary designation is made after the retirement application.

    (For PERS and TPAF members)
  • I understand that if I die prior to the retirement date indicated on my retirement application, any retirement benefits that may be payable to a beneficiary cannot be paid until the retirement date selected.

NEW PROVISIONS FOR EMPLOYEES APPLYING FOR RETIREMENT

The Terms and Conditions of Retirement are compulsory. All members who apply for retirement must acknowledge and agree to the Terms and Conditions as part of the retirement application.

  • Programming has been undertaken to include the Terms and Conditions as part of the online Retirement Application in the Member Benefits Online System (MBOS).  When added, a member will not be allowed to proceed with the MBOS Retirement Application unless he or she agrees to the Terms and Conditions.
  • Newly revised and printable Application for Retirement Allowance forms now include an “Acknowledgement of Terms and Conditions of Retirement” that the member must sign. The new applications are available for printing from the Division’s Web site, or by contacting the Division’s Office of Client Services at (609) 292-7524, or by e-mail to: pensions.nj@treas.state.nj.us

We ask employers to assist in notifying their employees of these changes, and making the new Application for Retirement Allowance forms available to employees who intend to retire within the next 12 months. 

Employers and employees should also note the following:

  • Members should be encouraged to apply for retirement using the online Retirement Applications in the Member Benefits Online System (MBOS) or the printable Application for Retirement Allowance forms that include the “Acknowledgement of Terms and Conditions of Retirement.”
  • The Division will also continue to accept Application for Retirement Allowance forms that were created prior to the inclusion of the Terms and Conditions until December 31, 2009, however, those applications will be placed in a pending status while the member is contacted by the Division with instructions to return a signed “Acknowledgement of Terms and Conditions of Retirement.”
  • After January 1, 2010, retirement application forms that do not include the printed “Acknowledgement of Terms and Conditions of Retirement” will not be accepted by the Division.  Members will be contacted by the Division with instructions to re-apply using the new version of the application that includes the “Acknowledgement of Terms and Conditions of Retirement.”
  • Similarly, retirement applications that are received where the “Acknowledgement of Terms and Conditions of Retirement” is not signed will not be accepted. The member will be contacted by the Division with instructions that a new application must be filed with the “Acknowledgement of Terms and Conditions of Retirement” signed.

SECTION II – ORIGINS OF THE TERMS AND CONDITIONS

The Terms and Conditions of Retirement were adopted to address issues that arise during the retirement process. These issues affect the Division, participating employers, and retiring members to varying degrees and are briefly outlined in the following sections.

One Year Limit for Application

For retirements other than Deferred Retirement* the Division will no longer accept an application more than one year prior to the retirement date.  While the Division encourages long-term retirement planning, the act of applying for and beginning retirement should be a timely and efficient process.

*Members with at least 10 years of service credit who terminate employment before attaining the service retirement age, will be permitted to apply for a Deferred Retirement more that 12 months prior to the retirement date.

The one year application limit eliminates lengthy periods of time between the submission of a retirement application and the retirement date; establishing a time frame between application, salary reporting, and benefit processing that is more efficient and manageable for the employer, the member, and the Division. 

Employer Notification

The Terms and Conditions inform and remind the member that the employer is an important participant in the retirement process.  Employer participation not only includes the required submission of the Certification of Service and Final Salary, but also extends to assistance with the transition of health benefit coverage to a retiree group plan or COBRA benefits; finalizing any vacation, sick, or other accrued leave time due to the employee; and coordinating with the employer’s training of replacement staff or the transfer of job duties.

The Terms and Conditions make the member aware of the importance of contacting his or her employer if there is a change to the retirement date or the retirement is canceled.  The sooner an employee coordinates any needed change to a retirement date with the employer, the less is the likelihood of employee payroll problems or a potential lapse in the employee’s active group health benefit coverage. Under no circumstances can the Division of Pensions and Benefits guarantee continued employment if a member changes a retirement date or cancels a retirement application.  Where there is a change to a retirement date or a retirement application is canceled, it is the member’s responsibility to arrange any continuation or reinstatement of employment with the employer. Continued employment may be at the discretion of the employer provided that it is within the limits of existing contracts, labor agreements, and the rules and regulations governing public employment.

Beneficiary Designation

The Terms and Conditions remind the employee that once the retirement application has been filed, the beneficiary or beneficiaries that he or she selects supersede any prior beneficiary designation on record.

In addition, the beneficiaries listed on the retirement application will remain in effect even if the retirement date is changed or the retirement is canceled* — unless or until a new Designation of Beneficiary is submitted to, and accepted by, the Division of Pensions and Benefits.

*Certain exceptions apply in cases of divorce or the dissolution of a civil union or domestic partnership. For more information in these cases see Fact Sheet #42, Divorce, Dissolution of a Civil Union, and Retirement Benefits Adobe PDF (33K).

Death Prior to Retirement

If a PERS or TPAF member dies after the date a retirement application is received by the Division of Pensions and Benefits, but prior to the retirement becoming “due and payable” the surviving beneficiary may elect to receive either the active death benefit or the retired survivor’s pension option — provided that the member indicated a survivor option on the retirement application.

Note: A retirement is usually “due and payable” 30 days after the retirement date or 30 days after Board of Trustee approval, whichever is later.

The Terms and Conditions remind the member that any retirement benefits payable to a beneficiary in this situation cannot be paid until the retirement date indicated on the retirement application.

Note: This provision only applies to PERS and TPAF members. PFRS, SPRS, and JRS members have an automatic survivor benefit payable to a surviving spouse or eligible partner upon the death of the employee or retiree.

ADDITIONAL INFORMATION

If you have questions regarding any of the other information provided in this letter, contact the Division’s Office of Client Services at (609) 292-7524, or e-mail the Division at: pensions.nj@treas.state.nj.us

Note: Certifying Officers and Employer Representatives should press “2” when prompted to access the telephone queue, and then press “1” to be transferred to the “Employer Help” line for the fastest access to counselors experienced with employer related issues.

Enclosure

Terms and Conditions of Retirement Adobe PDF (20K)

CO Letter in Printable Format Adobe PDF (69K)


September 20, 2009

TO: Certifying Officer – Teachers’ Pension and Annuity Fund, Public Employees’ Retirement System & Police and Firemen’s Retirement System
FROM: John D. Megariotis
Deputy Director, Finance
SUBJECT: Report of Contributions, 3rd Quarter 2009 (July 1st to September 30th)

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

Should you have any questions or need assistance in completing the Report, please refer to www.state.nj.us/treasury/pensions/epbam/finance/roc.htm

>> New << New Due Dates for IROC and Transmittal Payments

The regulation that establishes the due dates for the remittance of the monthly transmittal payments and the submission of the Reports of Contributions was amended January 9, 2009. The regulation now states that the monthly transmittal payments are to be transmitted through the electronic funds transfer system by seventh day of the month following the close of the preceding month for which contributions are required. Also, the Reports of Contributions are due in the Division by the seventh day of the month following the close of the preceding quarter.

The new due dates will take effect beginning with the 4th Quarter 2009 monthly transmittal payments and Report of Contribution. The due date for the October 2009 monthly transmittal payment is November 7, 2009, the due date for the November transmittal payment is December 7, 2009 and the due date for the December 2009 monthly transmittal payment and the 4th quarter 2009 Report of Contributions is January 7, 2010.

If your monthly transmittal payments or your Report of Contributions are not received by the Division within 15 days of their respective due dates interest penalties will begin to accrue and Reports of Contributions may not be used to update members’ accounts.

>> New << Notice of Increase in the Minimum Annual Base Salary

As a result of Chapter 89, P.L. 2008, the Director of the Division of Pensions and Benefits shall adjust each year the minimum annual base salary for participation in the Teachers’ Pension and Annuity Fund (TPAF) and the Public Employees Retirement System (PERS) for those members in Tier 3 service (Tier 3 service covers those individuals eligible to enroll in TPAF or PERS on or after November 2, 2008). The adjustment is made annually in accordance with changes in the Consumer Price Index, pursuant to N.J.A.C. 17:3-2.1(g) for TPAF membership and N.J.A.C. 17:2-2.1(c) for PERS membership.

Please take note that, pursuant to these provisions, the Division of Pensions and Benefits is raising the annual base salary for participation in the TPAF and PERS from $7,500 to $7,700. This increase in the minimum annual base salary is effective January 1, 2010. 

Employees who fall below the minimum annual base salary amount in calendar year 2010 may be eligible to participate in the Defined Contribution Retirement Program. Please review Fact Sheet #82, Defined Contribution Retirement Program (DCRP) If Ineligible for PERS or TPAF, Adobe PDF (38K) for additional information.

>> Reminder << Reporting of Retroactive Salary Increases

As a result of the implementation of Chapter 103, P.L. 2007, and the establishment of maximum compensation limits for certain members of the Public Employees’ Retirement System (PERS) and the Teachers’ Pension and Annuity Fund (TPAF), the Division of Pension and Benefits has determined that retroactive salary increases can no longer be reported through the Internet-based Report of Contributions (IROC) if they affect reporting periods prior to the current reporting quarter.

UPDATE- REPORTING OF RETROACTIVE SALARY PROCEDURES

The current procedures in place to allow employers to report retroactive salary increases are as follows:

Once the new contract is received by the Division of Pension and Benefits and reviewed, a spreadsheet will be sent to the employer. This spreadsheet will contain all data submitted for each member for the period of the retroactive salary adjustment. The employer must then supply the new base salary for each quarter affected for members receiving a retroactive salary adjustment. The total additional pension and contributory insurance contribution due will appear at the top of the spreadsheet page.  Please submit a check for the necessary contributions, payable to the retirement system, and return the spreadsheet via e-mail to the sending party at the Division of Pensions and Benefits.

Addition to IROC

Due to the implementation of Chapter 103, P.L. 2007, and Chapter 89, P.L. 2008, a new column has been added to the IROC to identify any members affected by these laws. The column heading will be “TIER”, Chapter 103, P.L. 2007, members will be identified as Tier 2 and Chapter 89, P.L. 2008, members will be identified as Tier 3. A letter from the Division dated December 5, 2008, defined what each Tier means, assisting you to properly prepare the IROC.

Treatment of Retirees Returning to Employment

The Division is becoming increasingly aware of public employees returning to employment under circumstances that would make these individuals ineligible for continuing the receipt of their retirement benefit. We want to take this opportunity to review the employer’s responsibilities when making offers of employment to retirees from any of the State’s retirement systems.

Retirees may not return to any State or Local government level public employment unless the retiree has at least a 30-day break in service after his or her retirement date or the date the retirement is approved by the respective Board of Trustees, whichever is the later. If you should employ a retiree prior to the end of this 30-day period, you must advise the retiree that his or her retirement may be considered invalid and notify the Division immediately of the re-employment.  If after review by the Division it is determined the retirement is invalid, the retiree’s retirement system account will be reactivated and the retiree notified. Employers should ask the retiree to see the retiree’s Board Approval Letter, which is sent to all new retirees, to determine the individual’s board approval date.

If a retiree is re-employed subsequent to the 30-day break in service in a public position covered by the same retirement system from which he or she retired, the retiree will be subject to earnings limits.  If the annual salary from public employment (or any combination of public employers) exceeds the limit, the retiree will be required to suspend his or her pension and re-enroll in the retirement system.  If you should employ a retiree and his or her salary exceeds the annual limit, you must advise the retiree that his or her retirement may need to be suspended and notify the Division immediately for a review.

We request that employers notify the Division in writing when there is a question concerning a re-employed retiree and his or her eligibility for continued retirement benefits.  Documentation provided by the employer should include the retiree’s name, employment title (both current and former, if known), current job description and place of employment (both current and former, if known).  This information should be mailed to:

NJ Division of Pensions and Benefits
Attn: Enrollment Bureau
PO Box 295
Trenton, NJ 08625-0295

For additional information, please refer to Fact Sheet #21, Employment After Retirement (PERS) Adobe PDF (40K), Fact Sheet #28, Employment After Retirement (TPAF) Adobe PDF (39K),and Fact Sheet #29, Employment After Retirement (PFRS) Adobe PDF (33K).

PERS and TPAF Maximum Compensation

Chapter 103, P.L. of 2007, provides that new members of PERS and TPAF are subject to a maximum compensation limit for PERS or TPAF pension contributions and benefits. The maximum compensation is based on the annual maximum wage for Social Security.

Note: The PERS and TPAF maximum compensation limit does not apply to employees who were already members of the PERS or TPAF prior to July 1, 2007.

For calendar year 2009, the annual maximum wage for Social Security is $106,800 and is subject to change at the start of each calendar year. Therefore, a new employee enrolled in the PERS or TPAF on or after July 1, 2007, who earns in excess of $106,800 before the end of 2009 will have his or her TPAF or PERS base salary capped – limiting the amount used to calculate benefits and contributions to TPAF or PERS for pension or contributory insurance. These individuals with earnings over the Social Security maximum wage base are also eligible for benefits under the Defined Contribution Retirement Program (DCRP).

Note:  Until reporting procedures are developed for PERS and TPAF members’ who exceed the social security maximum of $106,800 for 2009, continue to report the pension and contributory insurance for the excess salary as you did in the past. The Division will forward the pension contributions to the DCRP carrier. Excess contributory insurance payments will be refunded to the employee.

Pension benefits may be available to these individuals for base salary paid in excess of the annual compensation limit under the newly created DCRP. DCRP plan materials, enrollment forms, and other program information are being developed and will be provided under a separate mailing.

Deadline for Filing the Report of Contributions

Due to the overwhelming popularity of the IROC program and the time saved in preparing the report of contributions, the Division is updating member accounts as early as four weeks following the close of the calendar quarter.  All reports are due by October 10, 2009.  Should your report not be received by the close of business on October 25, 2009, interest penalties will begin to accrue and reports received after this date may not be used to update member accounts.

Delays in receiving reports affect the timeliness of the Division providing services to ALL pension plan members, not just your employees and retirees.  Unfortunately, we continue to experience delays associated with employer late reporting.  This policy, of strict adherence to the established reporting deadline, will alleviate that problem.

When you receive your quarterly ROC, 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. If other arrangements need to be made to assist you in the completion of your ROC, the sooner you communicate that fact to the Division the better for everyone involved.

TEPS - Transmittal Electronic Payment System 

Please note that the only payments that should be submitted through TEPS are for monthly transmittal and annual appropriation payments. Employee shortages are not to be submitted through TEPS, and payment should be made to the address on the shortage statement only.

The fax number and address that you use to submit the Employer Authorization Forms to the Division of Pensions and Benefits is 1-866-568-2495 or it may be mailed to State of New Jersey, Department of Treasury, Division of Pensions and Benefits, P.O. Box 9581, Trenton, NJ 08650‑9581.

CO Letter in Printable Format Adobe PDF (58K)


September 10, 2009

TO: State Departmental Certifying Officers
State Human Resources Directors
State Biweekly Human Resources Representatives
FROM: New Jersey State Health Benefits Program
SUBJECT: SHBP Open Enrollment 2009 — State Biweekly Employers

The State Health Benefits Program (SHBP) Open Enrollment period for all State employees will begin on October 1, 2009 and end on October 30, 2009.  All changes to coverage made during this open enrollment will be effective on January 2, 2010 for State employees paid through the State Centralized Payroll Unit.

For changes made during this Open Enrollment, completed employer-certified Health Benefit Applicationsand/or Dental Plan Applications Adobe PDF (72K) should be forwarded to the Health Benefits Bureau as soon as they are received from employees. The last day that certified applications may arrive at the Health Benefits Bureau to be effective for the start of the new plan year is November 6, 2009.

DOCUMENTATION REQUIREMENTS FOR DEPENDENTS

There are new documentation requirements if a member is enrolling a dependent for coverage (spouse, partner, child). Along with the employer-certified Health Benefit Applicationsand/or Dental Plan Applications Adobe PDF (72K) the following documents are required to verify the dependent’s relationship to the member and eligibility for coverage.

  • Employees who are enrolling a spouse as a dependent in the SHBP for the first time are required to provide a photocopy of the marriage certificate and a copy of the top half of the front page of the employee’s most recently filed federal tax return (Form 1040*) that lists the spouse. 
  • An employee enrolling a civil union partner as a dependent is required to provide a photocopy of the NJ Civil Union Certificate — or a valid certification from another State of foreign jurisdiction that recognizes same-sex civil unions (for an eligible domestic partner provide a photocopy of the NJ Certificate of Domestic Partnership that is dated prior to February 19, 2007, or a valid certification from another State of foreign jurisdiction that recognizes same-sex domestic partnerships) and a photocopy of the top half of the front page of the employee’s most recently filed NJ income tax return* that also lists the partner.

*If the Form 1040 does not list the spouse or partner, the employee should provide a photocopy of a recent (within 90 days of application) bank statement or utility bill that includes both name of the employee and spouse and is received at the same address. Employees may black out all financial information and all but the last 4 digits of any Social Security numbers.

  • Employees who are enrolling a child as a dependent in the SHBP for the first time are required to provide a photocopy of the child’s birth certificate showing the employee’s name as a parent. If the employee’s name is not on the birth certificate, the birth certificate and a copy of the top half of the front page of the employee’s most recently filed federal tax return (Form 1040*) that lists the child may be submitted.

For a step child provide a photocopy of the child’s birth certificate showing the spouse/partner’s name as a parent; and a photocopy of marriage/partnership certificate showing the names of the employee and spouse/partner and a copy of the top half of the front page of the employee’s most recently filed federal tax return (Form 1040*) that lists the child. 

For a legal guardianship, adoption, grandchild, or foster child, provide a photocopy of Affidavits of Dependency, a Final Court Order with the presiding judge’s signature and seal, or an Adoption Final Decree with the presiding judge’s signature and seal, and a copy of the top half of the front page of the employee’s most recently filed federal tax return (Form 1040*) that lists the child.

*Employees may black out all financial information shown on the Form 1040 and all but the last 4 digits of any Social Security numbers.

Note: Additional documentation requirement for the continuation of coverage for children over the age of 23 or for children with disabilities can be found on the SHBP Web site at: www.state.nj.us/treasury/pensions/health-benefits.shtml

To ensure that the documentation submitted is properly matched to the employee’s record, the Health Benefits Bureau requests that employers provide the employee’s Social Security number and last name on the copy of the required documentation.

2010 SHBP RATES FOR EMPLOYERS

The State Health Benefits Commission has approved health, dental, and prescription drug plan rates for the 2010 plan year.  These rates are based upon the recommendation of the Commission’s actuarial consultant, Aon Consulting.

Effective January 2, 2010, SHBP plan rates for the State Active Biweekly Group will see the following percentage of change.

PLAN TYPE
RATE INCREASE
NJ DIRECT15 13%
Aetna HMO 9%
CIGNA HealthCare HMO 9%
NJ PLUS* 12%
Prescription Drug Plan 7%
Dental Expense Plan 2%
Dental Provider Organizations (DPO)
(BeneCare, Community, CIGNA, Horizon)
0%
Aetna DPO -2%
Healthplex DPO -4%
* NJ PLUS is only available to certain State employees covered by labor contracts that have not yet been ratified.


MEDICAL AND PRESCRIPTION DRUG PLANS AND EMPLOYEE COSTS

Since July 2007, most State employees contribute 1.5 percent of annual base salary for SHBP medical plan and/or prescription drug plan coverage regardless of the medical plan, level of coverage selected, salary level, or date of hire.

The SHBP currently offers these State employees a choice of one of three medical plans.

  • NJ DIRECT15 — a Preferred Provider Organization administered by Horizon Blue Cross Blue Shield of New Jersey that offers a selection of both in-network coverage with a $15 office visit copayment and out-of-network coverage subject to deductibles and coinsurance; or
  • Aetna HMO or CIGNA HealthCare HMO — standard Health Maintenance Organization (HMO) plans that offer in-network coverage through a primary care physician for a $15 office visit copayment.
  • For each of the medical plans, the copayment for a visit to an emergency room is $50. The emergency room copayment is waived if the member is admitted to the hospital.

A side-by-side comparison of medical plan benefits is available in the Plan Comparison Summary for State Employees, available for viewing or printing at the SHBP Web site: www.state.nj.us/treasury/pensions/health-benefits.shtml

Note: Certain State employees covered by labor contracts that are not yet ratified remain in NJ PLUS (along with the option of Aetna HMO or CIGNA HealthCare HMO) until new contracts are settled. Earlier premium sharing agreements remain in place for these employee groups which include State Police (law enforcement officers). Rate information for these employees is included with this letter Adobe PDF (9K) and will be posted to the SHBP Web site.

Prescription drug coverage is offered to most eligible State employees through the Employee Prescription Drug Plan.  The plan has a three tier copayment design.

  • Copayments for a 30 day supply when purchased at a retail pharmacy are $3 for generic drugs, $10 for brand name prescription drugs without generic equivalents, and $25 for brand name drugs where a generic equivalent is available
  • Mail order prescription drug copayments for up to a 90-day supply are $5 for generic drugs, $15 for brand name drugs without generic equivalents, and $40 for brand name drugs where a generic equivalent is available.

Medco Health Solutions, Inc., of Franklin Lakes, NJ, has been awarded the contract for pharmacy benefits management for the SHBP to be effective with the 2010 plan year.  As the SHBP goes through the implementation process, employees will receive more information and it will also be posted to the SHBP Web site as it becomes available.

Waiving SHBP Coverage

State employees are permitted to waive SHBP medical and prescription coverage to avoid the 1.5 percent health contribution from salary — provided the employee has other health care coverage. To waive coverage a SHBP State Waiver form and a Health Benefit Application must be completed and submitted by October 30, 2009.  Employees should also indicate “Open Enrollment” on the waiver form; otherwise, the waiver will be processed on a timely basis.

DENTAL PLANS AND REVISED EMPLOYEE COSTS

Dental coverage is offered to all eligible State employees through the Employee Dental Plans.  For plan year 2010, seven different dental plans are offered based on one of two different plan designs — Dental Plan Organizations (DPO) and a Dental Expense Plan.

  • Six DPOs are available: Aetna DMO; BeneCare; CIGNA DHMO; Community Dental Associates; Healthplex; and Horizon Dental Choice.  DPOs contract with a network of providers for dental services. When you use a DPO dentist, diagnostic and preventive services are covered in full. Most other eligible expenses require a small copayment. You must use providers participating with the DPO you select to receive coverage. Be sure you confirm that the dentist or dental facility you select is taking new patients and participates with the SHBP Employee Dental Plans, since DPOs also service other organizations.
  • The Dental Expense Plan is an indemnity type plan administered by Aetna that allows members to obtain services from any dentist. After satisfying an annual deductible (no deductible for preventive services), members are reimbursed a percentage of the reasonable and customary charges for most services.

Effective with the 2010 plan year, the employee cost for coverage under a dental plan will be 50 percent of the actual dental plan premium. (In the past, employees paid 50 percent of the average of all DPO premiums.) Therefore, the employee cost will vary depending on which dental plan an employee chooses; however, the rate for coverage under a DPO remains considerably less expensive than the Dental Expense Plan. Rate charts for dental coverage can be found on our Web site: www.state.nj.us/treasury/pensions/health-benefits.shtml

A side-by-side comparison of dental plan benefits is available in Fact Sheet #37, Employee Dental Plans, which is available on our Web site: www.state.nj.us/treasury/pensions/health-benefits.shtml

Employees must remain enrolled in a dental plan for a minimum of 12 months before they will be allowed to change plans.  This means that if an employee was not enrolled in a dental plan as of January 3, 2009, they will not be permitted to change dental plans during this Open Enrollment.

TAX$AVE AND THE SHBP

The State Employees’ Tax Savings Program (Tax$ave) Open Enrollment Period runs from October 1 until October 31, 2009 (concurrent with the SHBP Open Enrollment Period). Tax$ave is a benefit program available to full-time State employees who are eligible for the SHBP.  Tax$ave can save your employees tax money by paying health and dental benefit premiums and eligible unreimbursed medical and/or dependent care expenses from before-tax dollars.

Separate Tax$ave Open Enrollment materials were distributed to employers and contain more information about these valuable benefits.  Please also note the items detailed below that relate to both Tax$ave and SHBP medical and dental plan enrollment.

  • Limitations on Plan Changes if Enrolled in POP — Internal Revenue Service (IRS) rules require that for an employee covered by the Premium Option Plan, payroll deductions for health and dental plan benefits remain the same for the entire plan year.  Therefore, no coverage level changes can be made which result in a change in the amount of an employee’s health and/or dental plan deduction unless a Qualifying Event has occurred.
  • Tax$ave, Civil Unions, and Domestic Partners — SHBP members need to be aware of the possible federal tax implications of adding a civil union partner or domestic partner to SHBP benefits. Since the federal tax code does not view civil union or domestic partners in the same manner as spouses, an employer may have to treat the civil union or domestic partner SHBP benefit as taxable to the employee and withhold federal income, Social Security, and Medicare taxes on its value. Similarly, since the partner's coverage is a federally taxable benefit, an employee who participates in the Tax$ave Premium Option Plan cannot make pre-tax payments for the cost of a civil union or domestic partner's coverage. Pre-tax dollars may still be used to pay for the employee's portion of the cost of his or her own and dependent children's coverage. If an employee wants to claim a federal tax dependency exemption for a civil union or domestic partner, he or she should contact the Internal Revenue Service or see IRS Tax Topic 354 — Dependents for more details.

OPEN ENROLLMENT INFORMATIONAL MATERIALS

Please note that the SHBP is not conducting health fairs during this open enrollment period.

MILESTONES — Enclosed is a milestone chart that lists the critical dates of the open enrollment period and outlines the efforts being made to educate employees. Please use this chart as a checklist to guide your activities during open enrollment.

RATE CHARTS — Enclosed you will find employer rates for medical, prescription drug, and dental plans. 

Because most State employees pay a contribution of 1.5 percent of salary rather than a set premium, employee rate charts for medical plans and the Employee Prescription Drug Plan are no longer provided.

Dental premium rate charts for employees are posted to the SHBP Web site: www.state.nj.us/treasury/pensions/health-benefits.shtml 

HEALTH CAPSULE — The Health Capsule newsletter announces the SHBP Open Enrollment to employees, lists important changes, and provides other information that may affect employee benefit selection.  A sample is enclosed for your review.

The Health Capsule newsletter will be provided to employers through the State’s Centralized Payroll Unit for distribution to employees with paychecks on September 18. 

CHECK MESSAGES — Beginning September 4, and through the end of the Open Enrollment, paycheck messages will be provided to employees paid through the State Centralized Payroll Unit.  A copy of the message text is enclosed.

HEALTH PLAN CONTACTS — A list of medical and dental plans, telephone contact information, Web site addresses, and service areas is enclosed. Please copy and provide this information to your employees for obtaining detailed plan information, inquiries about claims, or to find participating medical or dental providers*.

A separate list of employer marketing contacts for the medical and dental plans is also enclosed. Use these contacts to obtain plan specific literature. (These telephone numbers are not for member services. Please do not give these telephone numbers to your employees.)

* Note: The online Unified Provider Directory (UPD) is no longer available.

HEALTH AND DENTAL PLAN APPLICATIONS — The medical plans (including prescription drug coverage) and the Employee Dental Plans use two different applications.  The health and dental applications are available for printing from the SHBP Web site at: www.state.nj.us/treasury/pensions/health-benefits.shtml

SUMMARY PROGRAM DESCRIPTION (SPD) BOOKLET, PLAN HANDBOOKS, AND HEALTH PLAN COMPARISON SUMMARY CHARTS — The Summary Program Description, Member Handbooks for the individual plans, and SHBP Plan Comparison Summary charts have recently been revised. Additional updates — where needed — will be online for the start of the 2010 plan year.

These publications are available as online, printer friendly documents on the SHBP Web site at: www.state.nj.us/treasury/pensions/health-benefits.shtml  Please encourage your employees to access these materials online.  Bulk supplies of print copies are no longer available.

ADDITIONAL INFORMATION

If you have any questions about the SHBP Open Enrollment Period or the information in this letter, please contact our Office of Client Services at (609) 292-7524 to speak with an Employer Group representative. 

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

Enclosures:
SHBP Open Enrollment Milestone Chart Adobe PDF (9 kb)
Medical and Dental Plan Rates Adobe PDF (9 kb)
Health Capsule Newsletter Adobe PDF (102 kb)
Open Enrollment Check Messages Adobe PDF (9 kb)
Medical/Dental Plan Employee Contact Information Adobe PDF (30 kb)
Medical/Dental Plan Marketing Contacts Adobe PDF (12 kb)

CO Letter in Printable Format Adobe PDF (70 kb)


September 10, 2009

TO: State Monthly Certifying Officers
State Monthly Human Resources Representatives
FROM: New Jersey State Health Benefits Program
SUBJECT: SHBP Open Enrollment 2009 — State Monthly Employers

The State Health Benefits Program (SHBP) Open Enrollment period for all State employees will begin on October 1, 2009 and end on October 30, 2009.  All changes to coverage made during this open enrollment will be effective on January 1, 2010 for State monthly employees.

For changes made during this Open Enrollment, completed employer-certified Health Benefit Applications and/or Dental Plan Applications Adobe PDF (72K) should be forwarded to the Health Benefits Bureau as soon as they are received from employees. The last day that certified applications may arrive at the Health Benefits Bureau to be effective for the start of the new plan year is November 6, 2009.

DOCUMENTATION REQUIREMENTS FOR DEPENDENTS

There are new documentation requirements if a member is enrolling a dependent for coverage (spouse, partner, child). Along with the employer-certified Health Benefit Applications and/or Dental Plan Application Adobe PDF (72K) the following documents are required to verify the dependent’s relationship to the member and eligibility for coverage.

  • Employees who are enrolling a spouse as a dependent in the SHBP for the first time are required to provide a photocopy of the marriage certificate and a copy of the top half of the front page of the employee’s most recently filed federal tax return (Form 1040*) that lists the spouse. 
  • An employee enrolling a civil union partner as a dependent is required to provide a photocopy of the NJ Civil Union Certificate — or a valid certification from another State of foreign jurisdiction that recognizes same-sex civil unions (for an eligible domestic partner provide a photocopy of the NJ Certificate of Domestic Partnership that is dated prior to February 19, 2007, or a valid certification from another State of foreign jurisdiction that recognizes same-sex domestic partnerships) and a photocopy of the top half of the front page of the employee’s most recently filed NJ income tax return* that also lists the partner.

*If the Form 1040 does not list the spouse or partner, the employee should provide a photocopy of a recent (within 90 days of application) bank statement or utility bill that includes both name of the employee and spouse and is received at the same address. Employees may black out all financial information and all but the last 4 digits of any Social Security numbers.

  • Employees who are enrolling a child as a dependent in the SHBP for the first time are required to provide a photocopy of the child’s birth certificate showing the employee’s name as a parent. If the employee’s name is not on the birth certificate, the birth certificate and a copy of the top half of the front page of the employee’s most recently filed federal tax return (Form 1040*) that lists the child may be submitted.

For a step child provide a photocopy of the child’s birth certificate showing the spouse/partner’s name as a parent; and a photocopy of marriage/partnership certificate showing the names of the employee and spouse/partner and a copy of the top half of the front page of the employee’s most recently filed federal tax return (Form 1040*) that lists the child. 

For a legal guardianship, adoption, grandchild, or foster child, provide a photocopy of Affidavits of Dependency, a Final Court Order with the presiding judge’s signature and seal, or an Adoption Final Decree with the presiding judge’s signature and seal, and a copy of the top half of the front page of the employee’s most recently filed federal tax return (Form 1040*) that lists the child.

*Employees may black out all financial information shown on the Form 1040 and all but the last 4 digits of any Social Security numbers.

Note: Additional documentation requirement for the continuation of coverage for children over the age of 23 or for children with disabilities can be found on the SHBP Web site at: www.state.nj.us/treasury/pensions/health-benefits.shtml

To ensure that the documentation submitted is properly matched to the employee’s record, the Health Benefits Bureau requests that employers provide the employee’s Social Security number and last name on the copy of the required documentation.

2010 SHBP RATES FOR EMPLOYERS

The State Health Benefits Commission has approved health, dental, and prescription drug plan rates for the 2010 plan year.  These rates are based upon the recommendation of the Commission’s actuarial consultant, Aon Consulting.

Effective January 1, 2010, SHBP plan rates for the State Active Monthly Group will see the following percentage of change.

PLAN TYPE
RATE INCREASE
NJ DIRECT15 13%
Aetna HMO 9%
CIGNA HealthCare HMO 9%
NJ PLUS* 12%
Prescription Drug Plan 7%
Dental Expense Plan 2%
Dental Provider Organizations (DPO)
(BeneCare, Community, CIGNA, Horizon)
0%
Aetna DPO -2%
Healthplex DPO -4%
* NJ PLUS is only available to certain State employees covered by labor contracts that have not yet been ratified

MEDICAL AND PRESCRIPTION DRUG PLANS AND EMPLOYEE COSTS

Since July 2007, most State employees contribute 1.5 percent of annual base salary for SHBP medical plan and/or prescription drug plan coverage regardless of the medical plan, level of coverage selected, salary level, or date of hire.

The SHBP currently offers these State employees a choice of one of three medical plans.

  • NJ DIRECT15 — a Preferred Provider Organization administered by Horizon Blue Cross Blue Shield of New Jersey that offers a selection of both in-network coverage with a $15 office visit copayment and out-of-network coverage subject to deductibles and coinsurance; or
  • Aetna HMO or CIGNA HealthCare HMO — standard Health Maintenance Organization (HMO) plans that offer in-network coverage through a primary care physician for a $15 office visit copayment.
  • For each of the medical plans, the copayment for a visit to an emergency room is $50. The emergency room copayment is waived if the member is admitted to the hospital.

A side-by-side comparison of medical plan benefits is available in the Plan Comparison Summary for State Employees, available for viewing or printing at the SHBP Web site: www.state.nj.us/treasury/pensions/health-benefits.shtml

Note: Certain State employees covered by labor contracts that are not yet ratified remain in NJ PLUS (along with the option of Aetna HMO or CIGNA HealthCare HMO) until new contracts are settled. Earlier premium sharing agreements remain in place for these employee groups which include certain law enforcement groups. Rate information for these employees is included with this letter Adobe PDF (9 kb) and will be posted to the SHBP Web site.

Prescription drug coverage is offered to most eligible State employees through the Employee Prescription Drug Plan.  The plan has a three tier copayment design.

  • Copayments for a 30 day supply when purchased at a retail pharmacy are $3 for generic drugs, $10 for brand name prescription drugs without generic equivalents, and $25 for brand name drugs where a generic equivalent is available
  • Mail order prescription drug copayments for up to a 90-day supply are $5 for generic drugs, $15 for brand name drugs without generic equivalents, and $40 for brand name drugs where a generic equivalent is available.

Medco Health Solutions, Inc., of Franklin Lakes, NJ, has been awarded the contract for pharmacy benefits management for the SHBP to be effective with the 2010 plan year.  As the SHBP goes through the implementation process, employees will receive more information and it will also be posted to the SHBP Web site as it becomes available.

Waiving SHBP Coverage

State employees are permitted to waive SHBP medical and prescription coverage to avoid the 1.5 percent health contribution from salary — provided the employee has other health care coverage. To waive coverage a SHBP State Waiver form and a Health Benefit Application must be completed and submitted by October 30, 2009.  Employees should also indicate “Open Enrollment” on the waiver form; otherwise, the waiver will be processed on a timely basis.

DENTAL PLANS AND REVISED EMPLOYEE COSTS

Dental coverage is offered to all eligible State employees through the Employee Dental Plans.  For plan year 2010, seven different dental plans are offered based on one of two different plan designs — Dental Plan Organizations (DPO) and a Dental Expense Plan.

  • Six DPOs are available: Aetna DMO; BeneCare; CIGNA DHMO; Community Dental Associates; Healthplex; and Horizon Dental Choice.  DPOs contract with a network of providers for dental services. When you use a DPO dentist, diagnostic and preventive services are covered in full. Most other eligible expenses require a small copayment. You must use providers participating with the DPO you select to receive coverage. Be sure you confirm that the dentist or dental facility you select is taking new patients and participates with the SHBP Employee Dental Plans, since DPOs also service other organizations.
  • The Dental Expense Plan is an indemnity type plan administered by Aetna that allows members to obtain services from any dentist. After satisfying an annual deductible (no deductible for preventive services), members are reimbursed a percentage of the reasonable and customary charges for most services.

Effective with the 2010 plan year, the employee cost for coverage under a dental plan will be 50 percent of the actual dental plan premium. (In the past, employees paid 50 percent of the average of all DPO premiums.) Therefore, the employee cost will vary depending on which dental plan an employee chooses; however, the rate for coverage under a DPO remains considerably less expensive than the Dental Expense Plan. Rate charts for dental coverage can be found on our Web site: www.state.nj.us/treasury/pensions/health-benefits.shtml

A side-by-side comparison of dental plan benefits is available in Fact Sheet #37, Employee Dental Plans, which is available on our Web site: www.state.nj.us/treasury/pensions/health-benefits.shtml

Employees must remain enrolled in a dental plan for a minimum of 12 months before they will be allowed to change plans.  This means that if an employee was not enrolled in a dental plan as of January 1, 2009, they will not be permitted to change dental plans during this Open Enrollment.

TAX$AVE AND THE SHBP

The State Employees’ Tax Savings Program (Tax$ave) Open Enrollment Period runs from October 1 until October 31, 2009 (concurrent with the SHBP Open Enrollment Period). Tax$ave is a benefit program available to full-time State employees who are eligible for the SHBP.  Tax$ave can save your employees tax money by paying health and dental benefit premiums and eligible unreimbursed medical and/or dependent care expenses from before-tax dollars.

Separate Tax$ave Open Enrollment materials were distributed to employers and contain more information about these valuable benefits.  Please also note the items detailed below that relate to both Tax$ave and SHBP medical and dental plan enrollment.

  • Limitations on Plan Changes if Enrolled in POP — Internal Revenue Service (IRS) rules require that for an employee covered by the Premium Option Plan, payroll deductions for health and dental plan benefits remain the same for the entire plan year.  Therefore, no coverage level changes can be made which result in a change in the amount of an employee’s health and/or dental plan deduction unless a Qualifying Event has occurred.
  • Tax$ave, Civil Unions, and Domestic Partners — SHBP members need to be aware of the possible federal tax implications of adding a civil union partner or domestic partner to SHBP benefits. Since the federal tax code does not view civil union or domestic partners in the same manner as spouses, an employer may have to treat the civil union or domestic partner SHBP benefit as taxable to the employee and withhold federal income, Social Security, and Medicare taxes on its value. Similarly, since the partner's coverage is a federally taxable benefit, an employee who participates in the Tax$ave Premium Option Plan cannot make pre-tax payments for the cost of a civil union or domestic partner's coverage. Pre-tax dollars may still be used to pay for the employee's portion of the cost of his or her own and dependent children's coverage. If an employee wants to claim a federal tax dependency exemption for a civil union or domestic partner, he or she should contact the Internal Revenue Service or see IRS Tax Topic 354 — Dependents for more details.

OPEN ENROLLMENT INFORMATIONAL MATERIALS

Please note that the SHBP is not conducting health fairs during this open enrollment period.

MILESTONES — Enclosed is a milestone chart that lists the critical dates of the open enrollment period and outlines the efforts being made to educate employees. Please use this chart as a checklist to guide your activities during open enrollment.

RATE CHARTS — Enclosed you will find employer rates for medical, prescription drug, and dental plans. 

Because most State employees pay a contribution of 1.5 percent of salary rather than a set premium, employee rate charts for medical plans and the Employee Prescription Drug Plan are no longer provided.

Dental premium rate charts for employees are posted to the SHBP Web site: www.state.nj.us/treasury/pensions/health-benefits.shtml 

HEALTH CAPSULE — The Health Capsule newsletter announces the SHBP Open Enrollment to employees, lists important changes, and provides other information that may affect employee benefit selection.  A sample is enclosed for your review.

The Health Capsule newsletter will be shipped directly to State Monthly employers in mid-September. Please distribute the newsletter to employees prior to the start of the Open Enrollment.

HEALTH PLAN CONTACTS — A list of medical and dental plans, telephone contact information, Web site addresses, and service areas is enclosed. Please copy and provide this information to your employees for obtaining detailed plan information, inquiries about claims, or to find participating medical or dental providers*.

A separate list of employer marketing contacts for the medical and dental plans is also enclosed. Use these contacts to obtain plan specific literature. (These telephone numbers are not for member services. Please do not give these telephone numbers to your employees.)

*Note: The online Unified Provider Directory (UPD) is no longer available.

HEALTH AND DENTAL PLAN APPLICATIONS — The medical plans (including prescription drug coverage) and the Employee Dental Plans use two different applications.  The health and dental applications are available for printing from the SHBP Web site at: www.state.nj.us/treasury/pensions/health-benefits.shtml

SUMMARY PROGRAM DESCRIPTION (SPD) BOOKLET, PLAN HANDBOOKS, AND HEALTH PLAN COMPARISON SUMMARY CHARTS — The Summary Program Description, Member Handbooks for the individual plans, and SHBP Plan Comparison Summary charts have recently been revised. Additional updates — where needed — will be online for the start of the 2010 plan year.

These publications are available as online, printer friendly documents on the SHBP Web site at: www.state.nj.us/treasury/pensions/health-benefits.shtml   Please encourage your employees to access these materials online.  Bulk supplies of print copies are no longer available.

ADDITIONAL INFORMATION

If you have any questions about the SHBP Open Enrollment Period or the information in this letter, please contact our Office of Client Services at (609) 292-7524 to speak with an Employer Group representative. 

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

Enclosures:
SHBP Open Enrollment Milestone Chart Adobe PDF (10 kb)
Medical and Dental Plan Rates Adobe PDF (9 kb)
Health Capsule Newsletter Adobe PDF (102 kb)
Medical/Dental Plan Employee Contact Information Adobe PDF (30 kb)
Medical/Dental Plan Marketing Contacts Adobe PDF (12 kb)

CO Letter in Printable Format Adobe PDF (72 kb)


September 10, 2009

TO: State Health Benefits Program Participating Local Government Employers
FROM: New Jersey State Health Benefits Program
SUBJECT: SHBP Open Enrollment 2009 — Local Government Employers

The State Health Benefits Program (SHBP) Open Enrollment Period for local government employees will begin on October 1, 2009 and end on October 30, 2009.  All changes to coverage made during this open enrollment will be effective on January 1, 2010.

For changes made during this Open Enrollment, completed employer-certified Health Benefit Applications and/or Dental Plan Applications Adobe PDF (72K) should be forwarded to the Health Benefits Bureau as soon as they are received from employees. The last day that certified applications may arrive at the Health Benefits Bureau to be effective for the start of the new plan year is November 6, 2009.

DOCUMENTATION REQUIREMENTS FOR DEPENDENTS

There are new documentation requirements if a member is enrolling a dependent for coverage (spouse, partner, child). Along with the employer-certified Health Benefit Application and/or Dental Plan Application Adobe PDF (72K) the following documents are required to verify the dependent’s relationship to the member and eligibility for coverage.

  • Employees who are enrolling a spouse as a dependent in the SHBP for the first time are required to provide a photocopy of the marriage certificate and a copy of the top half of the front page of the employee’s most recently filed federal tax return (Form 1040*) that lists the spouse. 
  • An employee enrolling a civil union partner as a dependent is required to provide a photocopy of the NJ Civil Union Certificate — or a valid certification from another State of foreign jurisdiction that recognizes same-sex civil unions (for an eligible domestic partner provide a photocopy of the NJ Certificate of Domestic Partnership that is dated prior to February 19, 2007, or a valid certification from another State of foreign jurisdiction that recognizes same-sex domestic partnerships) and a photocopy of the top half of the front page of the employee’s most recently filed NJ income tax return* that also lists the partner.

*If the Form 1040 does not list the spouse or partner, the employee should provide a photocopy of a recent (within 90 days of application) bank statement or utility bill that includes both name of the employee and spouse and is received at the same address. Employees may black out all financial information and all but the last 4 digits of any Social Security numbers.

  • Employees who are enrolling a child as a dependent in the SHBP for the first time are required to provide a photocopy of the child’s birth certificate showing the employee’s name as a parent. If the employee’s name is not on the birth certificate, the birth certificate and a copy of the top half of the front page of the employee’s most recently filed federal tax return (Form 1040*) that lists the child may be submitted.

For a step child provide a photocopy of the child’s birth certificate showing the spouse/partner’s name as a parent; and a photocopy of marriage/partnership certificate showing the names of the employee and spouse/partner and a copy of the top half of the front page of the employee’s most recently filed federal tax return (Form 1040*) that lists the child. 

For a legal guardianship, adoption, grandchild, or foster child, provide a photocopy of Affidavits of Dependency, a Final Court Order with the presiding judge’s signature and seal, or an Adoption Final Decree with the presiding judge’s signature and seal, and a copy of the top half of the front page of the employee’s most recently filed federal tax return (Form 1040*) that lists the child.

*Employees may black out all financial information shown on the Form 1040 and all but the last 4 digits of any Social Security numbers.

Note: Additional documentation requirement for the continuation of coverage for children over the age of 23 or for children with disabilities can be found on the SHBP Web site at: www.state.nj.us/treasury/pensions/health-benefits.shtml

To ensure that the documentation submitted is properly matched to the employee’s record, the Health Benefits Bureau requests that employers provide the employee’s Social Security number and last name on the copy of the required documentation.

Please note that in the Summer of 2010 the SHBP’s health consultant, Aon Consulting, will be conducting a full legal documentation audit of all current local government subscribers who cover dependents. Subscribers will be required to provide legal documentation verifying a dependent’s relationship to the subscriber. This open enrollment period may be a good opportunity to remind employees to review the individuals covered under their medical plan and make any necessary updates.

2010 SHBP RATES FOR EMPLOYERS

The State Health Benefits Commission has approved health, dental, and prescription drug plan rates for the 2010 plan year.  These rates are based upon the recommendation of the Commission’s actuarial consultant, Aon Consulting.  

Effective January 1, 2010, SHBP plan rates for the Local Government Active Group will see the following percentage of change.

MEDICAL AND PRESCRIPTION PLANS

PLAN TYPE
RATE INCREASE

NJ DIRECT10 20%
NJ DIRECT15 20%
Aetna HMO 20%
CIGNA HealthCare HMO 20%
Prescription Drug Plan 5%

DENTAL PLANS

PLAN TYPE
RATE INCREASE

Dental Expense Plan 2%
Dental Provider Organizations (DPO)
(BeneCare, Community, CIGNA, Horizon)
0%
Aetna DPO -2%
Healthplex DPO -4%

MEDICAL AND PRESCRIPTION DRUG PLANS AND COPAYMENTS

The SHBP currently offers local government employees a choice of one of four medical plans.

  • NJ DIRECT10 — a Preferred Provider Organization administered by Horizon Blue Cross Blue Shield of New Jersey that offers a selection of both in-network coverage with a $10 office visit copayment and out-of-network coverage subject to deductibles and coinsurance; or
  • NJ DIRECT15 — a Preferred Provider Organizations administered by Horizon Blue Cross Blue Shield of New Jersey that offers a selection of both in-network coverage with a $15 office visit copayment and out-of-network coverage subject to deductibles and coinsurance; or
  • Aetna HMO or CIGNA HealthCare HMO — standard Health Maintenance Organization (HMO) plans offering in-network coverage through a primary care physician for a $10 office visit copayment.

A side-by-side comparison of medical plan benefits is available in the Plan Comparison Summary for Local Government Employees, available for viewing or printing at the SHBP Web site: www.state.nj.us/treasury/pensions/health-benefits.shtml

Medco Health Solutions, Inc., of Franklin Lakes, New Jersey, has been awarded the contract for pharmacy benefits management for the SHBP to be effective with the 2010 plan year.  As the SHBP goes through the implementation process, employees will receive more information and it will also be posted to the SHBP Web site as it becomes available.

The SHBP offers two types of prescription drug plans to participating employers: The Employee Prescription Drug Plan and a prescription drug plan based on medical plan enrollment.

The Employee Prescription Drug Plan is offered to local government employers as a freestanding prescription drug plan.  If your employing entity has chosen to participate:

  • Copayments for a 30 day supply when purchased at a retail pharmacy are $3 for generic drugs, $10 for brand name prescription drugs. 
  • Mail order prescription drug copayments for up to a 90-day supply are $5 for generic drugs, $15 for brand name drugs.

Prescription Drug Plan based on medical plan enrollment

  • Subscribers in NJ DIRECT10 or NJ DIRECT15 are provided reimbursement of prescription drug costs at 90% for prescriptions filled by an in-network pharmacy or 80% (NJ DIRECT10) or 70% (NJ DIRECT15) for prescriptions filled by an out-of-network pharmacy.
  • Subscribers in Aetna HMO or CIGNA HealthCare HMO are provided a three tier copayment benefit. Copayments for a 30 day supply when purchased at a retail pharmacy are $5 for generic drugs, $10 for preferred brand name drugs, and $20 for all other brand name drugs. Mail order copayments for up to a 90-day supply are $5 for generic drugs, $15 for preferred brand name drugs, and $25 for all other brand name drugs.

Employer rate charts for medical plans — with either separate or medical plan based prescription drug coverage — as well as Employee Prescription Drug Plan rates are included in this mailing. Rate information is also available on the SHBP Web site:
www.state.nj.us/treasury/pensions/health-benefits.shtml

EMPLOYEE DENTAL PLANS

The Employee Dental Plans are offered to local government employers as a freestanding dental plan.  If your employing entity has chosen to participate there are  seven different dental plans offered based on one of two different plan designs — Dental Plan Organizations (DPO) and a Dental Expense Plan.

  • Six DPOs are available: Aetna DMO; BeneCare; CIGNA DHMO; Community Dental Associates; Healthplex; and Horizon Dental Choice.  DPOs contract with a network of providers for dental services. When you use a DPO dentist, diagnostic and preventive services are covered in full. Most other eligible expenses require a small copayment. You must use providers participating with the DPO you select to receive coverage. Be sure you confirm that the dentist or dental facility you select is taking new patients and participates with the SHBP Employee Dental Plans, since DPOs also service other organizations.
  • The Dental Expense Plan is an indemnity type plan administered by Aetna that allows members to obtain services from any dentist. After satisfying an annual deductible (no deductible for preventive services), members are reimbursed a percentage of the reasonable and customary charges for most services.

Effective with the 2010 plan year, the maximum employee cost for coverage under a dental plan will be 50 percent of the actual dental plan premium. (In the past, the maximum an employee paid was 50 percent of the average of all DPO premiums.) Therefore, the employee cost will vary depending on which dental plan an employee chooses; however, the rate for coverage under a DPO remains considerably less expensive than the Dental Expense Plan. Rate charts for dental coverage can be found on our Web site: www.state.nj.us/treasury/pensions/health-benefits.shtml

A side-by-side comparison of dental plan benefits is available in Fact Sheet #37, Employee Dental Plans, which is available on our Web site: www.state.nj.us/treasury/pensions/health-benefits.shtml

Employees must remain enrolled in a dental plan for a minimum of 12 months before they will be allowed to change plans.  This means that if an employee was not enrolled in a dental plan as of January 1, 2009, they will not be permitted to change dental plans during this Open Enrollment.

OPEN ENROLLMENT INFORMATIONAL MATERIALS

Please note that the SHBP is not conducting health fairs during this open enrollment period.

MILESTONES — Enclosed is a milestone chart that lists the critical dates of the open enrollment period and outlines the efforts being made to educate employees. Please use this chart as a checklist to guide your activities during open enrollment.

RATE CHARTS — Enclosed you will find employer rates for medical, prescription drug, and dental plans. Rate information is also posted to the SHBP Web site: www.state.nj.us/treasury/pensions/health-benefits.shtml 

HEALTH CAPSULE — The Health Capsule newsletter announces the SHBP Open Enrollment to employees, lists important changes, and provides other information that may affect employee benefit selection.  A sample is enclosed for your review.

The Health Capsule newsletter will be shipped directly to local government employers in mid-September. Please distribute the newsletter to employees prior to the start of the Open Enrollment.

HEALTH PLAN CONTACTS — A list of medical and dental plans, telephone contact information, Web site addresses, and service areas is enclosed. Please copy and provide this information to your employees for obtaining detailed plan information, inquiries about claims, or to find participating medical or dental providers*.

A separate list of employer marketing contacts for the medical and dental plans is also enclosed. Use these contacts to obtain plan specific literature. (These telephone numbers are not for member services. Please do not give these telephone numbers to your employees.)

* Note: The online Unified Provider Directory (UPD) is no longer available.

HEALTH AND DENTAL PLAN APPLICATIONS — The medical plans (including prescription drug coverage) and the Employee Dental Plans use two different applications.  The health and dental applications are available for printing from the SHBP Web site at:www.state.nj.us/treasury/pensions/health-benefits.shtml 

SUMMARY PROGRAM DESCRIPTION (SPD) BOOKLET, PLAN HANDBOOKS, AND HEALTH PLAN COMPARISON SUMMARY CHARTS — The Summary Program Description, Member Handbooks for the individual plans, and SHBP Plan Comparison Summary charts have recently been revised. Additional updates — where needed — will be online for the start of the 2010 plan year.

These publications are available as online, printer friendly documents on the SHBP Web site at: www.state.nj.us/treasury/pensions/health-benefits.shtml   Please encourage your employees to access these materials online.  Bulk supplies of print copies are no longer available.

ADDITIONAL INFORMATION

If you have any questions about the SHBP Open Enrollment Period or the information in this letter, please contact our Office of Client Services at (609) 292-7524 to speak with an Employer Group representative. 

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

Enclosures:
SHBP Open Enrollment Milestone Chart Adobe PDF (9 kb)
Medical and Dental Plan Rates Adobe PDF (23 kb)
Health Capsule Newsletter Adobe PDF (98 kb)
Medical/Dental Plan Employee Contact Information Adobe PDF (30 kb)
Medical/Dental Plan Marketing Contacts Adobe PDF (12 kb)

CO Letter in Printable Format Adobe PDF (68 kb)


September 10, 2009

TO: School Employees’ Health Benefits Program Participating Local
Education Employers
FROM: New Jersey School Employees’ Health Benefits Program
SUBJECT: SEHBP Open Enrollment 2009 — Local Education Employers

The School Employees’ Health Benefits Program (SEHBP) Open Enrollment Period for local education employees will begin on October 1, 2009 and end on October 30, 2009.  All changes to coverage made during this open enrollment will be effective on January 1, 2010.

For changes made during this Open Enrollment, completed employer-certified Health Benefit Applications and/or Dental Plan Applications Adobe PDF (72K) should be forwarded to the Health Benefits Bureau as soon as they are received from employees. The last day that certified applications may arrive at the Health Benefits Bureau to be effective for the start of the new plan year is November 6, 2009.

DOCUMENTATION REQUIREMENTS FOR DEPENDENTS

There are new documentation requirements if a member is enrolling a dependent for coverage (spouse, partner, child). Along with the employer-certified Health Benefit Application and/or Dental Plan Application Adobe PDF (72K) the following documents are required to verify the dependent’s relationship to the member and eligibility for coverage.

  • Employees who are enrolling a spouse as a dependent in the SEHBP for the first time are required to provide a photocopy of the marriage certificate and a copy of the top half of the front page of the employee’s most recently filed federal tax return (Form 1040*) that lists the spouse. 
  • An employee enrolling a civil union partner as a dependent is required to provide a photocopy of the NJ Civil Union Certificate — or a valid certification from another State of foreign jurisdiction that recognizes same-sex civil unions (for an eligible domestic partner provide a photocopy of the NJ Certificate of Domestic Partnership that is dated prior to February 19, 2007, or a valid certification from another State of foreign jurisdiction that recognizes same-sex domestic partnerships) and a photocopy of the top half of the front page of the employee’s most recently filed NJ income tax return* that also lists the partner.

*If the Form 1040 does not list the spouse or partner, the employee should provide a photocopy of a recent (within 90 days of application) bank statement or utility bill that includes both name of the employee and spouse and is received at the same address. Employees may black out all financial information and all but the last 4 digits of any Social Security numbers.

  • Employees who are enrolling a child as a dependent in the SEHBP for the first time are required to provide a photocopy of the child’s birth certificate showing the employee’s name as a parent. If the employee’s name is not on the birth certificate, the birth certificate and a copy of the top half of the front page of the employee’s most recently filed federal tax return (Form 1040*) that lists the child may be submitted.

For a step child provide a photocopy of the child’s birth certificate showing the spouse/partner’s name as a parent; and a photocopy of marriage/partnership certificate showing the names of the employee and spouse/partner and a copy of the top half of the front page of the employee’s most recently filed federal tax return (Form 1040*) that lists the child. 

For a legal guardianship, adoption, grandchild, or foster child, provide a photocopy of Affidavits of Dependency, a Final Court Order with the presiding judge’s signature and seal, or an Adoption Final Decree with the presiding judge’s signature and seal, and a copy of the top half of the front page of the employee’s most recently filed federal tax return (Form 1040*) that lists the child.

*Employees may black out all financial information shown on the Form 1040 and all but the last 4 digits of any Social Security numbers.

Note: Additional documentation requirement for the continuation of coverage for children over the age of 23 or for children with disabilities can be found on the SHBP Web site at: www.state.nj.us/treasury/pensions/health-benefits.shtml

To ensure that the documentation submitted is properly matched to the employee’s record, the Health Benefits Bureau requests that employers provide the employee’s Social Security number and last name on the copy of the required documentation.

Please note that starting in January the SEHBP’s health consultant, Aon Consulting, will be conducting a full legal documentation audit of all current local education subscribers who cover dependents. Subscribers will be required to provide legal documentation verifying a dependent’s relationship to the subscriber. This open enrollment period may be a good opportunity to remind employees to review the individuals covered under their medical plan and make any necessary updates.

2010 SEHBP RATES FOR EMPLOYERS

The School Employees’ Health Benefits Commission has approved health and prescription drug plan rates for the 2010 plan year. The State Health Benefits Commission has approved dental rates for the 2010 plan year. These rates are based upon the recommendation of the Commissions’ actuarial consultant, Aon Consulting.

Effective January 1, 2010, SEHBP plan rates for the Local Education Active Group will see the following percentage of change.

MEDICAL AND PRESCRIPTION PLANS

PLAN TYPE
RATE INCREASE
NJ DIRECT10 25%
NJ DIRECT15 25%
Aetna HMO 24%
CIGNA HealthCare HMO 24%
Prescription Drug Plan 7%

DENTAL PLANS

PLAN TYPE
RATE INCREASE
Dental Expense Plan 2%
Dental Provider Organizations (DPO)
(BeneCare, Community, CIGNA, Horizon)
0%
Aetna DPO -2%
Healthplex DPO -4%

MEDICAL AND PRESCRIPTION DRUG PLANS AND COPAYMENTS

The SEHBP currently offers local education employees a choice of one of four medical plans.

  • NJ DIRECT10 — a Preferred Provider Organization administered by Horizon Blue Cross Blue Shield of New Jersey that offers a selection of both in-network coverage with a $10 office visit copayment and out-of-network coverage subject to deductibles and coinsurance; or
  • NJ DIRECT15 — a Preferred Provider Organizations administered by Horizon Blue Cross Blue Shield of New Jersey that offers a selection of both in-network coverage with a $15 office visit copayment and out-of-network coverage subject to deductibles and coinsurance; or
  • Aetna HMO or CIGNA HealthCare HMO — standard Health Maintenance Organization (HMO) plans offering in-network coverage through a primary care physician for a $10 office visit copayment.

A side-by-side comparison of medical plan benefits is available in the Plan Comparison Summary for Local Education Employees, available for viewing or printing at the Health Benefits Web site: www.state.nj.us/treasury/pensions/health-benefits.shtml

Medco Health Solutions, Inc., of Franklin Lakes, New Jersey, has been awarded the contract for pharmacy benefits management for the SEHBP to be effective with the 2010 plan year.  As the SEHBP goes through the implementation process, employees will receive more information and it will also be posted to the SEHBP Web site as it becomes available.

The SEHBP offers two types of prescription drug plans to participating employers: The Employee Prescription Drug Plan and a prescription drug plan based on medical plan enrollment.

The Employee Prescription Drug Plan is offered to local government employers as a freestanding prescription drug plan.  If your employing entity has chosen to participate:

  • Copayments for a 30 day supply when purchased at a retail pharmacy are $3 for generic drugs, $10 for brand name prescription drugs. 
  • Mail order prescription drug copayments for up to a 90-day supply are $5 for generic drugs, $15 for brand name drugs.

Prescription Drug Plan based on medical plan enrollment

  • Subscribers in NJ DIRECT10 or NJ DIRECT15 are provided reimbursement of prescription drug costs at 90% for prescriptions filled by an in-network pharmacy or 80% (NJ DIRECT10) or 70% (NJ DIRECT15) for prescriptions filled by an out-of-network pharmacy.
  • Subscribers in Aetna HMO or CIGNA HealthCare HMO are provided a three tier copayment benefit. Copayments for a 30 day supply when purchased at a retail pharmacy are $5 for generic drugs, $10 for preferred brand name drugs, and $20 for all other brand name drugs. Mail order copayments for up to a 90-day supply are $5 for generic drugs, $15 for preferred brand name drugs, and $25 for all other brand name drugs.

Employer rate charts for medical plans — with either separate or medical plan based prescription drug coverage — as well as Employee Prescription Drug Plan rates are included in this mailing. Rate information is also available on the SEHBP Web site:
www.state.nj.us/treasury/pensions/health-benefits.shtml

EMPLOYEE DENTAL PLANS

The Employee Dental Plans are offered to local education employers as a freestanding dental plan.  If your employing entity has chosen to participate there are seven different dental plans offered based on one of two different plan designs — Dental Plan Organizations (DPO) and a Dental Expense Plan.

  • Six DPOs are available: Aetna DMO; BeneCare; CIGNA DHMO; Community Dental Associates; Healthplex; and Horizon Dental Choice.  DPOs contract with a network of providers for dental services. When you use a DPO dentist, diagnostic and preventive services are covered in full. Most other eligible expenses require a small copayment. You must use providers participating with the DPO you select to receive coverage. Be sure you confirm that the dentist or dental facility you select is taking new patients and participates with the SHBP Employee Dental Plans, since DPOs also service other organizations.
  • The Dental Expense Plan is an indemnity type plan administered by Aetna that allows members to obtain services from any dentist. After satisfying an annual deductible (no deductible for preventive services), members are reimbursed a percentage of the reasonable and customary charges for most services.

Effective with the 2010 plan year, the maximum employee cost for coverage under a dental plan will be 50 percent of the actual dental plan premium. (In the past, the maximum and employee paid was 50 percent of the average of all DPO premiums.) Therefore, the employee cost will vary depending on which dental plan an employee chooses; however, the rate for coverage under a DPO remains considerably less expensive than the Dental Expense Plan. Rate charts for dental coverage can be found on our Web site: www.state.nj.us/treasury/pensions/health-benefits.shtml

A side-by-side comparison of dental plan benefits is available in Fact Sheet #37, Employee Dental Plans, which is available on our Web site: www.state.nj.us/treasury/pensions/health-benefits.shtml

Employees must remain enrolled in a dental plan for a minimum of 12 months before they will be allowed to change plans.  This means that if an employee was not enrolled in a dental plan as of January 1, 2009, they will not be permitted to change dental plans during this Open Enrollment.

OPEN ENROLLMENT INFORMATIONAL MATERIALS

Please note that the SEHBP is not conducting health fairs during this open enrollment period.

MILESTONES — Enclosed is a milestone chart that lists the critical dates of the open enrollment period and outlines the efforts being made to educate employees. Please use this chart as a checklist to guide your activities during open enrollment.

RATE CHARTS — Enclosed you will find employer rates for medical, prescription drug, and dental plans. Rate information is also posted to the Web site at:
www.state.nj.us/treasury/pensions/health-benefits.shtml 

HEALTH CAPSULE — The Health Capsule newsletter announces the SEHBP Open Enrollment to employees, lists important changes, and provides other information that may affect employee benefit selection.  A sample is enclosed for your review.

The Health Capsule newsletter will be shipped directly to local education employers in mid-September. Please distribute the newsletter to employees prior to the start of the Open Enrollment.

HEALTH PLAN CONTACTS — A list of medical and dental plans, telephone contact information, Web site addresses, and service areas is enclosed. Please copy and provide this information to your employees for obtaining detailed plan information, inquiries about claims, or to find participating medical or dental providers*.

A separate list of employer marketing contacts for the medical and dental plans is also enclosed. Use these contacts to obtain plan specific literature. (These telephone numbers are not for member services. Please do not give these telephone numbers to your employees.)

* Note: The online Unified Provider Directory (UPD) is no longer available.

HEALTH AND DENTAL PLAN APPLICATIONS — The medical plans (including prescription drug coverage) and the Employee Dental Plans use two different applications.  The health and dental applications are available for printing from the Web site at:
www.state.nj.us/treasury/pensions/health-benefits.shtml

SUMMARY PROGRAM DESCRIPTION (SPD) BOOKLET, PLAN HANDBOOKS, AND HEALTH PLAN COMPARISON SUMMARY CHARTS — The Summary Program Description, Member Handbooks for the individual plans, and SEHBP Plan Comparison Summary charts have recently been revised. Additional updates — where needed — will be online for the start of the 2010 plan year.

These publications are available as online, printer friendly documents on the SEHBP Web site at: www.state.nj.us/treasury/pensions/health-benefits.shtml   Please encourage your employees to access these materials online.  Bulk supplies of print copies are no longer available.

ADDITIONAL INFORMATION

If you have any questions about the SEHBP Open Enrollment Period or the information in this letter, please contact our Office of Client Services at (609) 292-7524 to speak with an Employer Group representative or send an e-mail to: pensions.nj@treas.state.nj.us

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

Enclosures:
SEHBP Open Enrollment Milestone Chart Adobe PDF (9 kb)
Medical Plan and Dental Plan Rates Adobe PDF (25 kb)
Health Capsule Newsletter Adobe PDF (98 kb)
Medical/Dental Plan Employee Contact Information Adobe PDF (30 kb)
Medical/Dental Plan Marketing Contacts Adobe PDF (12 kb)

CO Letter in Printable Format Adobe PDF (68 kb)


August 2009

TO: Local Government and Local Education Certifying Officers
State Biweekly and State Monthly Certifying Officers
FROM: The New Jersey Division of Pensions and Benefits
SUBJECT: NEW HEALTH BENEFIT APPLICATION ON EPIC

The Division of Pensions and Benefits is pleased to announce a new online application that will soon be accessible through the Employer Pension and Benefit Information Connection (EPIC). Providing this information to employers online will allow for greater security of employee information, allow easier access to the information to employers, reduce paper and mailing costs for the Division and save employer reproduction and storage costs.

SHBP/SEHBP LIST OF COVERED EMPLOYEES

Effective with the October 2009 coverage report (issued in September), the new, online, HB List of Covered Employees application will be available to employers who provide coverage in the State Health Benefits Program (SHBP) – for State and Local Government Employers - or the School Employees’ Health Benefits Program (SEHBP) – for Local Educational Employers. This includes employers who do not participate in the SHBP/SEHBP but who pay for coverage of certain retirees under an Early Retirement Incentive.

The Alpha List, Activity Report, and the Local or State Monthly Bill will all now be available to employers through EPIC. The online applications mirror the paper versions of the documents that you now receive through the mail. All of the information you currently receive will be available online. You will be able to review, print or download (and save) the reports from EPIC. The system maintains historical data for 11 months in addition to the current month.

This application will be on EPIC by mid-September 2009 for the October 2009 billing period.  Employers will be able to compare the paper bill to the online system for that billing period.  Employers will no longer receive a paper Alpha List or Activity Report after the September mailing. The Local or State Monthly Bill will continue to be sent through the mail.

Please make sure that your employees who require access to these reports have the appropriate EPIC access prior to the September release date. Information and links for assigning EPIC applications is provided below.  As always, keep the EPIC security access of your employees up-to-date.  Be sure to terminate access for those employees who leave your employment or whose duties change and who no longer require EPIC access.

Information about using EPIC applications is available in the EPIC User’s Guide at: www.state.nj.us/treasury/pensions/epickit.htm  A link to the EPIC User’s Guide is also found on the EPIC home page.

ASSIGNING ACCESS TO NEW EPIC APPLICATIONS

Your designated EPIC Security Officer must assign access to new EPIC applications to users registered through your employing location. (Note: the Certifying Officer can assign the applications to the Security Officer.)  For information about how to assign access to new applications, see the EPIC Security Help Page at: www.state.nj.us/treasury/pensions/epic-security.htm   A link to the EPIC Security Help Page is also found in the EPIC User’s Guide.

If you experience problems logging onto or using EPIC, you may e-mail the EPIC Help Desk at: https://www.state.nj.us/treas/pensions/epicmail.shtml or call the EPIC Help Desk at (609) 777-0534.

CO Letter in Printable Format Adobe PDF (49K)


August 18, 2009

TO: State Department Certifying Officers
State Department Human Resource Directors
State Biweekly Payroll Locations Benefits Administrators
FROM: John D. Megariotis
Deputy Director, Finance
SUBJECT: Open Enrollment For The New Jersey State Employees Tax Savings Program (Tax$ave 2010)

The annual open enrollment for the calendar year 2010 New Jersey State Employees Tax Savings Program (Tax$ave 2010) will be conducted from October 1 through October 31, 2009. Full-time employees of the State who are eligible for participation in the New Jersey State Health Benefits Program (SHBP) may participate in Tax$ave.

ABOUT TAX$AVE

Tax$ave consists of three components:

1.The Premium Option Plan (POP);

2.The Unreimbursed Medical Flexible Spending Account; and

3.The Dependent Care Flexible Spending Account.

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.

Note: Information on the State Health Benefits Program’s Open Enrollment for medical, prescription drug, and dental plans for the 2010 plan year will follow in a separate letter.

Tax savings on commuter mass transit and parking expenses are available at any time as a separate benefit to State employees under the Commuter Tax$ave Program and are not tied to this open enrollment period. See Fact Sheet #67, Commuter Tax$ave Program Adobe PDF (41kb), for details.

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 2010 (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 and/or Dependent Care Flexible Spending Accounts (FSA) allow employees to set aside money to pay for out-of-pocket medical, dental, and dependent care expenses while saving on taxes because the money contributed to the account is free from federal income, Social Security, and Medicare taxes and remains tax-free when an employee receives it.

Unlike the Premium Option Plan or the health plans of the SHBP, prior participation in a Tax$ave FSA in 2009 does not carry over automatically into 2010. Employees must enroll each year to participate in an FSA for calendar year 2010.

Enrolling in a Flexible Spending Account

Employees have four ways of enrolling in the Tax$ave FSA accounts during the Open Enrollment: mail, fax, telephone, and Internet. Fringe Benefits Management Company (FBMC) administers the Tax$ave Unreimbursed Medical and Dependent Care FSAs and will inform employees currently participating in a Tax$ave FSA plan of this enrollment opportunity through a direct mailing in September. The Tax$ave publications will provide the following enrollment instructions to employees:

  • Mail: FSA Enrollment Forms must be mailed directly to Fringe Benefits Management Company (FBMC) by the employee. All enrollment forms must be postmarked no later than October 31, 2009, to be accepted. Those postmarked after October 31, 2009 will be returned without action. Benefits offices should not be involved in processing or mailing FSA Enrollment Forms.

  • Fax: FSA Enrollment Forms may be faxed directly to FBMC by the employee at 1-850-514-5806. The deadline for accepting faxed enrollment forms is midnight, October 31, 2009.

  • Telephone: Employees may enroll in the Unreimbursed Medical and/or Dependent Care FSA plans for 2010 over the phone by calling FBMC’s automated Interactive Voice Response system at 1-866-440-7150 1-800-865-FBMC (3262).
    This is a great opportunity to quickly and easily go through the enrollment process. The deadline for enrollment by telephone is midnight, October 31, 2009.

  • Internet: Employees have the ability to enroll in the Unreimbursed Medical and/or Dependent Care FSA plans over the Internet. Go to the FBMC Web page: www.myFBMC.com   The deadline for enrollment over the Internet is midnight, October 31, 2009.

Special Rules for Enrolling Newly Hired Employees — New employees can enroll in Tax$ave FSA plans when hired but must complete an FSA Enrollment Form within 30 days of the date of hire to participate in either the Unreimbursed Medical FSA or the Dependent Care FSA.

  • There is a 60 day waiting period for Unreimbursed Medical FSA eligibility.

  • There is a 30 day waiting period for Dependent Care FSA eligibility.

The effective date will be the first day of the month following eligibility. If the employee misses the 30 day enrollment window, they must wait to enroll during the Tax$ave Open Enrollment.

Listed below are some additional benefits of FSA participation.

  • $2,500 Medical FSA Maximum. The maximum annual allowance that can be set aside for a Tax$ave Unreimbursed Medical FSA is $2,500 for the 2010 plan year. Employees may save federal income, Medicare and Social Security taxes on up to $2,500 of unreimbursed medical expenses and up to $5,000 on dependent care expenses. It makes sense to enroll and use a Tax$ave FSA plan when paying for doctor and prescription copayments, health plan deductibles, orthodontics, eyeglasses, Lasik surgery, uncovered dental fees, or certain over-the-counter medications.

  • Many over-the-counter drugs are eligible for reimbursement in the Unreimbursed Medical FSA. Internal Revenue Service rules permit over-the-counter products/medications deemed for "medical care" to be considered reimbursable. "Medical care" includes amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease. While purchases of medicines and drugs for medical care are eligible for reimbursement, expenditures that are merely beneficial to the general health of an individual, such as vitamins and other supplements, are not eligible. For more information about expenses that are eligible under Unreimbursed Medical and Dependent Care FSAs, please visit the FBMC Web site: www.myFBMC.com

  • Unreimbursed Medical FSAs feature the myFBMC CardSM Visa® Card that draws on the value of the employee’s annual Medical FSA election amount. The myFBMC Card is included free with the sign up for an FBMC Unreimbursed Medical FSA during Tax$ave Open Enrollment. Employees can use the myFBMC Card for qualifying expenses, such as covered prescription copayments, health plan deductibles, orthodontics, doctor and emergency room copayments, eyeglasses, Lasik surgery, and uncovered dentist or other provider fees. The myFBMC Card can also be used for eligible over-the-counter medical expenses at grocery stores, drugstores, and discount stores that are IIAS (Inventory Information Approval Systems) certified merchants. A list of IIAS certified merchants is available at: www.myFBMC.com.

  • Look Back Feature. The myFBMC Card also contains a “look back” feature during the 2 ½ month grace period extension that will access any unused 2010 Unreimbursed Medical FSA funds before using funds contributed in the 2011 plan year. For plan year 2010, the grace period extension will run from January 1, 2011 to March 15, 2011 (more about the grace period below).

  • Grace Period Extension for Eligible Expenses and Extended Claim Filing Period. Employees enrolled in the Unreimbursed Medical or Dependent Care FSAs have until March 15 of the following year to incur eligible expenses for the current plan year. In addition to claiming eligible expenses through March 15 of the following year, the period that employees enrolled in the UMSA or DCSA have for submitting claims for reimbursement has been extended to April 30 of the following year. While this does not eliminate the use-it-or-lose-it rule completely, employees now have a longer period to obtain reimbursement for eligible expenses and avoid forfeiting unused funds. Under the Unreimbursed Medical and Dependent Care Flexible Spending Accounts, any contributions that remain unclaimed after the April 30 deadlines are forfeited.

For more information about the FSA plans see the Division of Pensions and Benefits’ Tax$ave Web page at: www.state.nj.us/treasury/pensions/taxsave.shtml or contact FBMC Customer Service at 1-800-342-8017.

TAX$AVE AND CIVIL UNION PARTNERS OR DOMESTIC PARTNERS

State employees are able to add a civil union partner or same-sex domestic partner to their SHBP medical and dental insurance coverage. However, before any payroll contributions or premiums that the employee pays for a partner can be made on a pre-tax basis under the Tax$ave Premium Option Plan, the civil union partner or domestic partner must be able to qualify as a “tax dependent” of the employee for federal tax filing purposes under Internal Revenue Code Section 152.

Similarly, the civil union partner or domestic partner must qualify as the employee’s tax dependent before an out-of-pocket medical expense incurred by the partner can be reimbursed under the Unreimbursed Medical Flexible Spending Account. See IRS Tax Topic 354 - Dependents for additional information on the requirements for establishing dependent status for federal tax purposes.

If the civil union partner or domestic partner is not a “qualified tax dependent” of the employee, any premium deductions made for the partner’s coverage must be made on an after-tax basis and funds in the Unreimbursed Medical Spending Account cannot be used to cover the partner’s medical expenses.

Additional information about the New Jersey Civil Unions can be found in Fact Sheet #75, Civil Unions Adobe PDF (51 kb) .

Information about New Jersey Domestic Partners can be found in Fact Sheet #71, Benefits Under the Domestic Partnership Act Adobe PDF (56 kb) .

Both fact sheets are available on the Division of Pensions and Benefits Web site: www.state.nj.us/treasury/pensions

TAX$AVE AND CHILDREN AGE 23 TO 31

Chapter 375, P.L. 2005, permits continued SHBP medical plan coverage for certain children until their 31st birthday. However, contributions or premiums that an employee pays for coverage of an over age child cannot be made on a pre-tax basis under the Tax$ave Premium Option Plan, nor can an out-of-pocket medical expense incurred by the over age child be reimbursed under the Unreimbursed Medical Flexible Spending Account, unless the child qualifies as a “tax dependent” of the employee for federal tax filing purposes under Internal Revenue Code Section 152. See IRS Tax Topic 354 - Dependents for additional information on the requirements for establishing dependent status for federal tax purposes.

For more information about continued coverage for children age 23 to 31, see Fact Sheet #74, Health Benefits Coverage of Children Until Age 31 Under Chapter 375 Adobe PDF (31 kb).

EMPLOYEE SEMINARS

Upon request, Fringe Benefits Management Company (FBMC) will provide educational employee seminars about the Tax$ave Flexible Spending Accounts. A notice about the seminars and the Tax$ave Seminar Request Form was forwarded to employers in a separate mailing on July 15, 2009.

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 2010 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.

Announcement of the open enrollment to employees paid through Centralized Payroll will be made in a September 4 paycheck message that will be accompanied by two payroll inserts.

  • The Premium Option Plan 2010 pamphlet that explains the advantages and disadvantages of participation; and

  • The Tax$ave 2010 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, 2009 deadline for submission of all election materials.

The September 18 payroll will be accompanied by an additional payroll insert.

  • An FSA pamphlet that describes the Unreimbursed Medical and Dependent Care Flexible Spending Accounts administered by Fringe Benefits Management Company (FBMC).

Additional ”reminder messages” will be provided to employees through paycheck messages on October 2 and October 30. The text of these check message announcements and preview copies of the Tax$ave publications are enclosed with this letter.

The other open enrollment materials that are available to you are the FSA Reference Guides and the Declination of Premium Option Plan (POP) for Plan Year 2010 form.

  • A sample of the 2010 FSA Reference Guide will be sent directly to benefits administrators by FBMC, along with information on how to request additional guides. Please provide the FSA Reference Guides to those employees who request them.

  • This letter includes the Declination of Premium Option Plan (POP) form. This can be copied for use by those few employees who do not wish to participate in the POP and, therefore, pay more in tax. Please 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 2010, they must complete the 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, 2009. Benefits administrators must then forward declination forms to Centralized Payroll by November 6, 2009.

The Tax$ave program for the 2010 plan year promises to make Tax$ave participation even more rewarding to your employees than it has been in the past. As we do every year, the Division of Pensions and Benefits appreciates your cooperation in the Open Enrollment. 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 general questions about Tax$ave 2010, the open enrollment, or the Premium Option Plan, visit the Division of Pensions and Benefits’ Tax$ave Internet site at: www.state.nj.us/treasury/pensions/taxsave.shtml call the Division’s Office of Client Services at (609) 292-7524, or send e-mail to: pensions.nj@treas.state.nj.us

For more information about the Unreimbursed Medical or Dependent Care Flexible Spending Accounts, contact FBMC at: www.myFBMC.com or call FBMC Customer Service at 1-800-342-8017.

Enclosures:

Tax$ave 2010 Open Enrollment Milestones Adobe PDF (7k)
Open Enrollment Check Messages Adobe PDF (8k)
Tax$ave 2010 Open Enrollment News Adobe PDF (46k)
The Premium Option Plan 2010 Pamphlet Adobe PDF (18k)
Tax$ave — FBMC Flexible Savings Accounts Pamphlet Adobe PDF (172k)
Tax$ave — FBMC Flexible Savings Accounts Enrollment Form Adobe PDF (63k)
Declination of Premium Option Plan (POP) for Plan Year 2010 Adobe PDF (21k)

CO Letter in Printable Format Adobe PDF (1.25mb)


August 18, 2009

TO: State University and College Certifying Officers
State University and College Benefits Administrators
State Monthly Certifying Officers
State Monthly Benefits Administrators
FROM: John D. Megariotis
Deputy Director, Finance
SUBJECT: Open Enrollment For The New Jersey State Employees Tax Savings Program (Tax$ave 2010)

The annual open enrollment for the calendar year 2010 New Jersey State Employees Tax Savings Program (Tax$ave 2010) will be conducted from October 1 through October 31, 2009. Full-time employees of the State, State authorities, State universities, and State colleges who are eligible for participation in the New Jersey State Health Benefits Program (SHBP) may participate in Tax$ave.

ABOUT TAX$AVE

Tax$ave consists of three components:

1.The Premium Option Plan (POP);

2.The Unreimbursed Medical Flexible Spending Account; and

3.The Dependent Care Flexible Spending Account.

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.

Note: Information on the State Health Benefits Program’s Open Enrollment for medical, prescription drug, and dental plans for the 2010 plan year will follow in a separate letter.

Tax savings on commuter mass transit and parking expenses are available at any time as a separate benefit to State employees under the Commuter Tax$ave Program and are not tied to this open enrollment period. See Fact Sheet #67, Commuter Tax$ave Program Adobe PDF (41K), for details.

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 2010 (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 and/or Dependent Care Flexible Spending Accounts (FSA) allow employees to set aside money to pay for out-of-pocket medical, dental, and dependent care expenses while saving on taxes because the money contributed to the account is free from federal income, Social Security, and Medicare taxes and remains tax-free when an employee receives it.

Unlike the Premium Option Plan or the health plans of the SHBP, prior participation in a Tax$ave FSA in 2009 does not carry over automatically into 2010. Employees must enroll each year to participate in an FSA for calendar year 2010.

Enrolling in a Flexible Spending Account

Employees have four ways of enrolling in the Tax$ave FSA accounts during the Open Enrollment: mail, fax, telephone, and Internet. Fringe Benefits Management Company (FBMC) administers the Tax$ave Unreimbursed Medical and Dependent Care FSAs and will inform employees currently participating in a Tax$ave FSA plan of this enrollment opportunity through a direct mailing in September. The Tax$ave publications will provide the following enrollment instructions to employees:

  • Mail: FSA Enrollment Forms must be mailed directly to Fringe Benefits Management Company (FBMC) by the employee. All enrollment forms must be postmarked no later than October 31, 2009, to be accepted. Those postmarked after October 31, 2009 will be returned without action. Benefits offices should not be involved in processing or mailing FSA Enrollment Forms.

  • Fax: FSA Enrollment Forms may be faxed directly to FBMC by the employee at 1-850-514-5806. The deadline for accepting faxed enrollment forms is midnight, October 31, 2009.

  • Telephone: Employees may enroll in the Unreimbursed Medical and/or Dependent Care FSA plans for 2010 over the phone by calling FBMC’s automated Interactive Voice Response system at 1-866-440-7150 1-800-865-FBMC (3262). This is a great opportunity to quickly and easily go through the enrollment process. The deadline for enrollment by telephone is midnight, October 31, 2009.

  • Internet: Employees have the ability to enroll in the Unreimbursed Medical and/or Dependent Care FSA plans over the Internet. Go to the FBMC Web page: www.myFBMC.com The deadline for enrollment over the Internet is midnight, October 31, 2009.

Special Rules for Enrolling Newly Hired Employees — New employees can enroll in Tax$ave FSA plans when hired but must complete an FSA Enrollment Form within 30 days of the date of hire to participate in either the Unreimbursed Medical FSA or the Dependent Care FSA.

  • There is a 60 day waiting period for Unreimbursed Medical FSA eligibility.

  • There is a 30 day waiting period for Dependent Care FSA eligibility.

The effective date will be the first day of the month following eligibility. If the employee misses the 30 day enrollment window, they must wait to enroll during the Tax$ave Open Enrollment.

Listed below are some additional benefits of FSA participation.

  • $2,500 Medical FSA Maximum. The maximum annual allowance that can be set aside for a Tax$ave Unreimbursed Medical FSA is $2,500 for the 2010 plan year. Employees may save federal income, Medicare and Social Security taxes on up to $2,500 of unreimbursed medical expenses and up to $5,000 on dependent care expenses. It makes sense to enroll and use a Tax$ave FSA plan when paying for doctor and prescription copayments, health plan deductibles, orthodontics, eyeglasses, Lasik surgery, uncovered dental fees, or certain over-the-counter medications.

  • Many over-the-counter drugs are eligible for reimbursement in the Unreimbursed Medical FSA. Internal Revenue Service rules permit over-the-counter products/medications deemed for "medical care" to be considered reimbursable. "Medical care" includes amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease. While purchases of medicines and drugs for medical care are eligible for reimbursement, expenditures that are merely beneficial to the general health of an individual, such as vitamins and other supplements, are not eligible. For more information about expenses that are eligible under Unreimbursed Medical and Dependent Care FSAs, please visit the FBMC Web site: www.myFBMC.com

  • Unreimbursed Medical FSAs feature the myFBMC CardSM Visa® Card that draws on the value of the employee’s annual Medical FSA election amount. The myFBMC Card is included free with the sign up for an FBMC Unreimbursed Medical FSA during Tax$ave Open Enrollment. Employees can use the myFBMC Card for qualifying expenses, such as covered prescription copayments, health plan deductibles, orthodontics, doctor and emergency room copayments, eyeglasses, Lasik surgery, and uncovered dentist or other provider fees. The myFBMC Card can also be used for eligible over-the-counter medical expenses at grocery stores, drugstores, and discount stores that are IIAS (Inventory Information Approval Systems) certified merchants. A list of IIAS certified merchants is available at: www.myFBMC.com.

  • Look Back Feature. The myFBMC Card also contains a “look back” feature during the 2 ½ month grace period extension that will access any unused 2010 Unreimbursed Medical FSA funds before using funds contributed in the 2011 plan year. For plan year 2010, the grace period extension will run from January 1, 2011 to March 15, 2011 (more about the grace period below).

  • Grace Period Extension for Eligible Expenses and Extended Claim Filing Period. Employees enrolled in the Unreimbursed Medical or Dependent Care FSAs have until March 15 of the following year to incur eligible expenses for the current plan year. In addition to claiming eligible expenses through March 15 of the following year, the period that employees enrolled in the UMSA or DCSA have for submitting claims for reimbursement has been extended to April 30 of the following year. While this does not eliminate the use-it-or-lose-it rule completely, employees now have a longer period to obtain reimbursement for eligible expenses and avoid forfeiting unused funds. Under the Unreimbursed Medical and Dependent Care Flexible Spending Accounts, any contributions that remain unclaimed after the April 30 deadlines are forfeited.

For more information about the FSA plans see the Division of Pensions and Benefits’ Tax$ave Web page at: www.state.nj.us/treasury/pensions/taxsave.shtml or contact FBMC Customer Service at 1-800-342-8017.

TAX$AVE AND CIVIL UNION PARTNERS OR DOMESTIC PARTNERS

State employees are able to add a civil union partner or same-sex domestic partner to their SHBP medical and dental insurance coverage. However, before any payroll contributions or premiums that the employee pays for a partner can be made on a pre-tax basis under the Tax$ave Premium Option Plan, the civil union partner or domestic partner must be able to qualify as a “tax dependent” of the employee for federal tax filing purposes under Internal Revenue Code Section 152.

Similarly, the civil union partner or domestic partner must qualify as the employee’s tax dependent before an out-of-pocket medical expense incurred by the partner can be reimbursed under the Unreimbursed Medical Flexible Spending Account. See IRS Tax Topic 354 - Dependents for additional information on the requirements for establishing dependent status for federal tax purposes.

If the civil union partner or domestic partner is not a “qualified tax dependent” of the employee, any premium deductions made for the partner’s coverage must be made on an after-tax basis and funds in the Unreimbursed Medical Spending Account cannot be used to cover the partner’s medical expenses.

Additional information about the New Jersey Civil Unions can be found in Fact Sheet #75, Civil Unions Adobe PDF (58K) .

Information about New Jersey Domestic Partners can be found in Fact Sheet #71, Benefits Under the Domestic Partnership Act Adobe PDF (56K) .

Both fact sheets are available on the Division of Pensions and Benefits Web site: www.state.nj.us/treasury/pensions

TAX$AVE AND CHILDREN AGE 23 TO 31

Chapter 375, P.L. 2005, permits continued SHBP medical plan coverage for certain children until their 31st birthday. However, contributions or premiums that an employee pays for coverage of an over age child cannot be made on a pre-tax basis under the Tax$ave Premium Option Plan, nor can an out-of-pocket medical expense incurred by the over age child be reimbursed under the Unreimbursed Medical Flexible Spending Account, unless the child qualifies as a “tax dependent” of the employee for federal tax filing purposes under Internal Revenue Code Section 152. See IRS Tax Topic 354 - Dependents for additional information on the requirements for establishing dependent status for federal tax purposes.

For more information about continued coverage for children age 23 to 31, see Fact Sheet #74, Health Benefits Coverage of Children Until Age 31 Under Chapter 375 Adobe PDF (31K) .

EMPLOYEE SEMINARS

Upon request, Fringe Benefits Management Company (FBMC) will provide educational employee seminars about the Tax$ave Flexible Spending Accounts. A notice about the seminars and the Tax$ave Seminar Request Form was forwarded to employers in a separate mailing on August 1, 2009.

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 2010 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 Open Enrollment materials for distribution to your eligible employees. These items include:

  • The Tax$ave 2010 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, 2009 deadline for submission of all election materials;

  • The Premium Option Plan 2010 pamphlet that explains the advantages and disadvantages of participation; and

  • An FSA pamphlet that describes the Unreimbursed Medical and Dependent Care Flexible Spending Accounts administered by Fringe Benefits Management Company (FBMC).

These publications will be shipped to employers in September. You should distribute the publications to employees before the Open Enrollment start date on October 1, 2009. 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 with additional fliers, paycheck messages, or by e-mail to ensure they don’t allow this opportunity to slip by without action.

Other open enrollment materials that are available to you are the FSA Reference Guides and the Declination of Premium Option Plan (POP) for Plan Year 2010 form.

  • A sample of the 2010 FSA Reference Guide will be sent directly to benefits administrators by FBMC, along with information on how to request additional guides. Please provide the FSA Reference Guides to those employees who request them.

  • This letter includes the Declination of Premium Option Plan (POP) form. This can be copied for use by those few employees who do not wish to participate in the POP and, therefore, pay more in tax. Please 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 2010, they must complete the 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, 2009. Benefits administrators must then forward declination forms to the appropriate representative in their payroll department.

The Tax$ave program for the 2010 plan year promises to make Tax$ave participation even more rewarding to your employees than it has been in the past. As we do every year, the Division of Pensions and Benefits appreciates your cooperation in the Open Enrollment. 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 general questions about Tax$ave 2010, the open enrollment, or the Premium Option Plan, visit the Division of Pensions and Benefits’ Tax$ave Internet site at: www.state.nj.us/treasury/pensions/taxsave.shtml call the Division’s Office of Client Services at (609) 292-7524, or send e-mail to: pensions.nj@treas.state.nj.us

For more information about the Unreimbursed Medical or Dependent Care Flexible Spending Accounts, contact FBMC at: www.myFBMC.comor call FBMC Customer Service at 1-800-342-8017.

Enclosures:

Tax$ave 2010 Open Enrollment Milestones Adobe PDF (7K)
Tax$ave 2010 Open Enrollment News Adobe PDF (46K)
The Premium Option Plan 2010 Pamphlet Adobe PDF (18K)
Tax$ave — FBMC Flexible Savings Accounts Pamphlet Adobe PDF (172K)
Tax$ave — FBMC Flexible Savings Accounts Enrollment Form Adobe PDF (63K)
Declination of Premium Option Plan (POP) for Plan Year 2010 Adobe PDF (21K)

CO Letter in Printable Format Adobe PDF (1.25MB)


August 7, 2009

TO: State Departmental Certifying Officers
State Monthly Certifying Officers
FROM: David J. Pointer
Manager, Policy, Planning and Operations
SUBJECT: Dependent Eligibility Verification Audit

As you are aware, the Division of Pensions and Benefits in conjunction with Aon Consulting has been conducting a dependent eligibility verification audit (DEVA) over the last several months. Over 100,000 members were contacted and over 3,700 dependents have self-identified themselves as ineligible for coverage under the State Health Benefits Program (SHBP).

The deadline for employees to respond to the audit is August 21, 2009. The covered dependents of members who do not respond by the deadline will be terminated from coverage effective October 1, 2009 (September 26, 2009 for employees paid through the State’s Centralized Payroll Unit).

There are still a significant number of members who have not responded to multiple requests to submit the necessary documentation to prove the eligibility of their dependents. We are asking you to encourage your employees to submit the necessary documentation to Aon to avoid the termination of their dependents’ coverage under the SHBP.

There are also a number of members who do not have current address information on file and therefore have had their DEVA paperwork returned to Aon as undeliverable. Please note that every employee who covers a dependent should have received a packet regarding the DEVA.

If an employee needs a replacement packet or an initial packet, they can call the SHBP Dependent Eligibility Verification Service Center at 1-866-641-5651, and enter employer code 8642 when prompted. Hours of operation are Monday through Friday, 8 am until 6 pm, except State holidays.

We appreciate your cooperation in contributing to the SHBP’s efforts to continue to provide quality healthcare at a reasonable cost.

CO Letter in Printable Format Adobe PDF (37K)


June 30, 2009

TO: Certifying Officer - Teachers’ Pension and Annuity Fund, Public Employees’ Retirement System & Police and Firemen’s Retirement System
FROM: John D. Megariotis
Deputy Director, Finance
SUBJECT: Report of Contributions, 2nd Quarter 2009 (April 1st to June 30, 2009)

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

Should you have any questions or need assistance in completing the Report, please refer to www.state.nj.us/treasury/pensions/epbam/finance/roc.htm.

>> Reminder << Reporting of Retroactive Salary Increases

As a result of the implementation of Chapter 103, P.L. 2007, and the establishment of maximum compensation limits for certain members of the Public Employees’ Retirement System (PERS) and the Teachers’ Pension and Annuity Fund (TPAF), the Division of Pension and Benefits has determined that retroactive salary increases can no longer be reported through the Internet-based Report of Contributions (IROC) if they affect reporting periods prior to the current reporting quarter.

UPDATE- REPORTING OF RETROACTIVE SALARY PROCEDURES

The current procedures in place to allow employers to report retroactive salary increases are as follows: Once the new contract is received by the Division of Pension and Benefits and reviewed, a spreadsheet will be sent to the employer. This spreadsheet will contain all data submitted for each member for the period of the retroactive salary adjustment. The employer must then supply the new base salary for each quarter affected for members receiving a retroactive salary adjustment. The total additional pension and contributory insurance contribution due will appear at the top of the spreadsheet page.  Please submit a check for the necessary contributions, payable to the retirement system, and return the spreadsheet via e-mail to the sending party at the Division of Pensions and Benefits.

Addition to IROC

Due to the implementation of Chapter 103, P.L. 2007, and Chapter 89, P.L. 2008, a new column has been added to the IROC to identify any members affected by these laws. The column heading will be “TIER”, Chapter 103, P.L. 2007, members will be identified as Tier 2 and Chapter 89, P.L. 2008, members will be identified as Tier 3. A letter from the Division dated December 5, 2008 defined what each TIER means, assisting you to properly prepare the IROC.

Treatment of Retirees Returning to Employment

The Division is becoming increasingly aware of public employees returning to employment under circumstances that would make these individuals ineligible for continuing the receipt of their retirement benefit.  We want to take this opportunity to review the employer’s responsibilities when making offers of employment to retirees from any of the State’s retirement systems.

Retirees may not return to any State or Local government level public employment unless the retiree has at least a 30-day break in service after his or her retirement date or the date the retirement is approved by the respective Board of Trustees, whichever is the later. If you should employ a retiree prior to the end of this 30-day period, you must advise the retiree that his or her retirement may be considered invalid and notify the Division immediately of the re-employment.  If after review by the Division it is determined the retirement is invalid, the retiree’s retirement system account will be reactivated and the retiree notified.  Employers should ask the retiree to see the retiree’s Board Approval Letter, which is sent to all new retirees, to determine the individual’s board approval date.

If a retiree is re-employed subsequent to the 30-day break in service in a public position covered by the same retirement system from which he or she retired, the retiree will be subject to earnings limits.  If the annual salary from public employment (or any combination of public employers) exceeds the limit, the retiree will be required to suspend his or her pension and re-enroll in the retirement system.  If you should employ a retiree and his or her salary exceeds the annual limit, you must advise the retiree that his or her retirement may need to be suspended and notify the Division immediately for a review.

We request that employers notify the Division in writing when there is a question concerning a re-employed retiree and his or her eligibility for continued retirement benefits.  Documentation provided by the employer should include the retiree’s name, employment title (both current and former, if known), current job description and place of employment (both current and former, if known).  This information should be mailed to:

NJ Division of Pensions and Benefits
Attn: Enrollment Bureau
PO Box 295
Trenton, NJ 08625-0295

For additional information, please refer to Fact Sheet #21, Employment After Retirement (PERS) Adobe PDF (40K), Fact Sheet #28, Employment After Retirement (TPAF) Adobe PDF (39K), and Fact Sheet #29, Employment After Retirement (PFRS) Adobe PDF (33K).

PERS and TPAF Maximum Compensation

Chapter 103, P.L. of 2007, provides that new members of PERS and TPAF are subject to a maximum compensation limit for PERS or TPAF pension contributions and benefits. The maximum compensation is based on the annual maximum wage for Social Security.

Note: The PERS and TPAF maximum compensation limit does not apply to employees who were already members of the PERS or TPAF prior to July 1, 2007.

For calendar year 2009, the annual maximum wage for Social Security is $106,800 and is subject to change at the start of each calendar year. Therefore, a new employee enrolled in the PERS or TPAF on or after July 1, 2007 who earns in excess of $106,800 before the end of 2009 will have his or her TPAF or PERS base salary capped – limiting the amount used to calculate benefits and contributions to TPAF or PERS for pension or contributory insurance.  These individuals with earnings over the Social Security maximum wage base are also eligible for benefits under the Defined Contribution Retirement Program (DCRP).

Note:  Until reporting procedures are developed for PERS and TPAF members’ who exceed the social security maximum of $106,800 for 2009, continue to report the pension and contributory insurance for the excess salary as you did in the past. The Division will forward the pension contributions to the DCRP carrier.  Excess contributory insurance payments will be refunded to the employee.

Pension benefits may be available to these individuals for base salary paid in excess of the annual compensation limit under the newly created DCRP.  DCRP plan materials, enrollment forms, and other program information are being developed and will be provided under a separate mailing.

Deadline for Filing the Report of Contributions

Due to the overwhelming popularity of the I-ROC program and the time saved in preparing the report of contributions, the Division is updating member accounts as early as four weeks following the close of the calendar quarter.  All reports are due by July 10, 2009.  Should your report not be received by the close of business on July 25, 2009, interest penalties will begin to accrue and reports received after this date may not be used to update member accounts.

Delays in receiving reports affect the timeliness of the Division providing services to ALL pension plan members, not just your employees and retirees.  Unfortunately, we continue to experience delays associated with employer late reporting.  This policy, of strict adherence to the established reporting deadline, will alleviate that problem.

When you receive your quarterly ROC, 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.  If other arrangements need to be made to assist you in the completion of your ROC, the sooner you communicate that fact to the Division the better for everyone involved.

TEPS - Transmittal Electronic Payment SystemPlease note that the only payments that should be submitted through TEPS are for monthly transmittal and annual appropriation payments.  Employee shortages are not to be submitted through TEPS, and payment should be made to the address on the shortage statement only.

The fax number and address that you use to submit the Employer Authorization Forms to the Division of Pensions and Benefits is (866) 568-2495 or it may be mailed to State of New Jersey, Department of Treasury, Division of Pensions and Benefits, P.O. Box 9581, Trenton, NJ 08650‑9581.

CO Letter in Printable Format Adobe PDF (21K)


June 30, 2009

TO: Certifying Officer
Autonomous State College/University/State Employers
FROM: John D. Megariotis
Deputy Director, Finance
SUBJECT: Report of Contributions, 2nd Quarter 2009 (April 1st to June 30, 2009)

REMINDER - PERS and TPAF Maximum Compensation

Chapter 103, P.L. of 2007, provides that new employees are subject to a maximum compensation limit for PERS or TPAF pension contributions. The maximum compensation is based on the annual maximum wage for Social Security.

Note: The PERS and TPAF maximum compensation limit does not apply to employees who were already members of the PERS or TPAF prior to July 1, 2007.

For calendar year 2009, the annual maximum wage for Social Security is $106,800 and is subject to change at the start of each calendar year. Therefore, a new employee enrolled in the PERS or TPAF on or after July 1, 2007 who earns in excess of $106,800 before the end of 2009 will have his or her TPAF or PERS base salary capped – limiting the amount used to calculate benefits and contributions to TPAF or PERS for pension or contributory insurance.

Pension benefits may be available to these individuals for base salary paid in excess of the annual compensation limit under the newly created Defined Contribution Retirement Program (DCRP). DCRP plan materials, enrollment forms, and other program information are being developed and will be provided under a separate mailing.

Notice To Delinquent Report Of Contribution Filers

In the past I have written explaining the importance of all employers providing to the Division of Pensions and Benefits their quarterly Report of Contributions (ROC) in a timely fashion.  As stated in the past, delays in receiving these reports affect the timeliness of the Division providing services to ALL pension plan members, not just your employees and retirees. Unfortunately, we continue to experience delays associated to employer late reporting.  I must again ask for your help in avoiding these delays at all costs and remind you that the Division will utilize everything at its disposal in order to solicit timely reporting by the employers we work with to provide benefit services to the State’s public employees.

Reporting And Payment Information

Your 2nd quarter 2009 tape ROC applicable to the Teachers’ Pension and Annuity Fund, Public Employees’ Retirement System, and Police and Firemen’s Retirement System is due by July 10, 2009. Your June 2009, remittance, which represents the deductions due for the balance of the quarter, should be made through the Transmittal Electronic Payments System (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. Your TEPS remittance is also due by July 10, 2009.

The Control and Certification form must also accompany your quarterly ROC data file.  This is essential as it attests to the accuracy and validity of the submitted documentation.

If your quarterly ROC 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 ROC for the following quarter.  A ROC data file will be considered received when it is submitted in an acceptable format, passes all data processing edits, and can be used to update members’ accounts.  Interest will be assessed, as prescribed by statute and administrative code, when monthly transmittal remittances and the quarterly ROC are not received within fifteen days of the due dates.

Should you have any questions or need assistance in completing the Report, please refer to www.state.nj.us/treasury/pensions/epbam/finance/roc.htm.

SACT Tax-Sheltered Annuity – Remittance Of 403(b) Contributions

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.

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).

Please note that the full quarterly SUPPLEMENTAL ANNUITY contribution must be submitted prior to the processing of your ROC. If the full contribution is not submitted, it may be necessary to refund any supplemental annuity contributions sent in for the quarter. This could adversely affect your employees’ retirement savings.

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 verified to ensure that the Division has the correct banking information.  This normally takes 12 to 15 days.

CO Letter in Printable Format Adobe PDF (18K)


April 9, 2009

TO: State and Local Employers Participating in the SHBP and SEHBP
FROM: The Division of Pensions and Benefits, Health Benefits Bureau
SUBJECT: COBRA and the American Recovery and Reinvestment Act of 2009 — Employee Notification

As you are aware, employers are required to provide a specific COBRA Notice to an employee and/or dependents who lose health coverage within 14 days of notification of a COBRA qualifying event. As indicated in our letter of March 11, 2009, ARRA has modified the contents of that notification. Employers are required to notify ALL employees (both those who voluntarily terminate employment and those involuntarily terminated) of the provisions of the ARRA. Employees who have a COBRA qualifying event from the date of our letter, March 11 through December 31, 2009, must be notified of the availability of the COBRA premium subsidy. Enclosed for your use are:

  • A revised Health Benefits COBRA Application;

  • Summary of the COBRA Premium Reduction Provisions under the ARRA;

  • Assistance Eligibility Request form; and

  • Assistance Eligibility Waiver form.

The above documents as well as Fact Sheet #30, Continuation of Health Benefits Insurance Under COBRA, Adobe PDF (39K) must be included in notifications to all employees and their covered dependents who have a COBRA qualifying event between March 11, 2009 and December 31, 2009. Fact Sheet #30 is currently being revised and will be available shortly. Please check the Division’s Web site on a regular basis for the revised fact sheet. Until the fact sheet is updated, you may include the current fact sheet in the notification packet. Revised rate charts showing the reduced COBRA rates which include the 65% subsidy will also be available on the Division’s Web site.

DIVISION OF PENSIONS AND BENEFITS ACTIONS

In our March 11th letter, we indicated that only employees who were involuntarily terminated needed to be notified of the COBRA premium reduction. Additional advice from the Department of Labor as well as the Internal Revenue Service has indicated that ALL employees who had a qualifying event since September 1, 2008, must be notified of the provisions of ARRA.

The Division of Pensions and Benefits will notify all employees who had a COBRA qualifying event on or after September 1, 2008 through March 11, 2009. Those notices are expected to go out no later than April 18, 2009. Members, who are currently enrolled in COBRA, will receive the Summary of the COBRA Premium Reduction Provisions under the ARRA, Assistance Eligibility Request form and the Assistance Eligibility Waiver form. Members who did not enroll in COBRA or enrolled and terminated COBRA coverage will receive those forms as well as the revised Health Benefits COBRA Application.

Assistance Eligible Individuals (AEI) who had a qualifying event on or after September 1, 2008 but who did not enroll in COBRA or enrolled but later terminated coverage have 60 days from the date of the Division’s notification to enroll in COBRA and take advantage of the premium reduction. The effective date of COBRA coverage will be March 1, 2009. These AEIs will be instructed to contact their former employers in order to have their COBRA applications certified by the employer.

Once the Division’s billing system has been modified, AEI’s COBRA bills will be reduced retroactive to March 1, 2009. Employers will not be expected to pay the difference in the reduced COBRA premiums. The Division will pay the full premium and request reimbursement of the COBRA premium subsidy from the federal government.

ADDITIONAL INFORMATION

The federal Department of Labor is continually updating information concerning the ARRA. Please review their Web site regularly at: www.dol.gov/ebsa/COBRA.html.

The Internal Revenue Service has also updated their question and answer page for employers on its Web site at: www.irs.gov/newsroom.

The Division of Pensions and Benefits will also be updating its Web site with the revised fact sheet and rate chart but also a FAQ. Please check it regularly.

General questions regarding COBRA coverage under the SHBP/SEHBP can be addressed to the Division of Pensions and Benefits, Office of Client Services by calling (609) 292-7524 or by sending e-mail to: pensions.nj@treas.state.nj.us.

Enclosures

Health Benefits COBRA Application Adobe PDF (63K)
Summary of the COBRA Premium Reduction Provisions under the ARRA Adobe PDF (21K)
COBRA-ARRA Questions and Answers
Assistance Eligibility Request Form Adobe PDF (45K)
Assistance Eligibility Waiver Form Adobe PDF (28K)

CO Letter in Printable Format Adobe PDF (64K)


March 20, 2009

TO: Certifying Officer - Teachers’ Pension and Annuity Fund, Public Employees’ Retirement System & Police and Firemen’s Retirement System
FROM: John D. Megariotis
Deputy Director, Finance
SUBJECT: Report of Contributions, 1st Quarter 2009 (January 1st to March 31, 2008)

This memorandum has pertinent information concerning the completion of your Report of Contributions (ROC). Please read this memorandum before you make any changes to the ROC. Should you have any questions or need assistance in completing the Report, please refer to http://www.state.nj.us/treasury/pensions/epbam/finance/roc.htm

>>Reminder << Reporting of Retroactive Salary Increases

As a result of the implementation of Chapter 103, P.L. 2007, and the establishment of maximum compensation limits for certain members of the Public Employees’ Retirement System (PERS) and the Teachers’ Pension and Annuity Fund (TPAF), the Division of Pension and Benefits has determined that retroactive salary increases can no longer be reported through the Internet-based Report of Contributions (IROC) if they affect reporting periods prior to the current reporting quarter. This reporting change will be effective with the first calendar quarter report for the period covering January 1, through March 31, 2009.

Addition to IROC

Due to the implementation of Chapter 103, P.L. 2007, and Chapter 89, P.L. 2008, a new column has been added to the IROC to identify any members affected by these laws. The column heading will be “TIER”, Chapter 103, P.L. 2007, members will be identified as Tier 2 and Chapter 89, P.L. 2008, members will be identified as Tier 3. A letter from the Division dated December 5, 2008 defined what each TIER means, assisting you to properly prepare the IROC.

Treatment of Retirees Returning to Employment

The Division is becoming increasingly aware of public employees returning to employment under circumstances that would make these individuals ineligible for continuing the receipt of their retirement benefit. We want to take this opportunity to review the employer’s responsibilities when making offers of employment to retirees from any of the State’s retirement systems.

Retirees may not return to any State or Local government level public employment unless the retiree has at least a 30-day break in service after his or her retirement date or the date the retirement is approved by the respective Board of Trustees, whichever is the later. If you should employ a retiree prior to the end of this 30-day period, you must advise the retiree that his or her retirement may be considered invalid and notify the Division immediately of the re-employment. If after review by the Division it is determined the retirement is invalid, the retiree’s retirement system account will be reactivated and the retiree notified. Employers should ask the retiree to see the retiree’s Board Approval Letter, which is sent to all new retirees, to determine the individual’s board approval date. If a retiree is re-employed subsequent to the 30-day break in service in a public position covered by the same retirement system from which he or she retired, the retiree will be subject to earnings limits.

If the annual salary from public employment (or any combination of public employers) exceeds the limit, the retiree will be required to suspend his or her pension and re-enroll in the retirement system. If you should employ a retiree and his or her salary exceeds the annual limit, you must advise the retiree that his or her retirement may need to be suspended and notify the Division immediately for a review.

We request that employers notify the Division in writing when there is a question concerning a re-employed retiree and his or her eligibility for continued retirement benefits. Documentation provided by the employer should include the retiree’s name, employment title (both current and former, if known), current job description and place of employment (both current and former, if known). This information should be mailed to:

NJ Division of Pensions and Benefits
Attn: Enrollment Bureau
PO Box 295
Trenton, NJ 08625-0295

For additional information, please refer to Fact Sheet #21, Employment After Retirement (PERS) Adobe PDF (40K), Fact Sheet #28, Employment After Retirement (TPAF) Adobe PDF (39K), and Fact Sheet #29, Employment After Retirement (PFRS) Adobe PDF (33K).

PERS and TPAF Maximum Compensation

Chapter 103, P.L. of 2007, provides that new members of PERS and TPAF are subject to a maximum compensation limit for PERS or TPAF pension contributions and benefits. The maximum compensation is based on the annual maximum wage for Social Security.

Note: The PERS and TPAF maximum compensation limit does not apply to employees who were already members of the PERS or TPAF prior to July 1, 2007.

For calendar year 2009, the annual maximum wage for Social Security is $106,800 and is subject to change at the start of each calendar year. Therefore, a new employee enrolled in the PERS or TPAF on or after July 1, 2007 who earns in excess of $106,800 before the end of 2009 will have his or her TPAF or PERS base salary capped – limiting the amount used to calculate benefits and contributions to TPAF or PERS for pension or contributory insurance. These individuals with earnings over the Social Security maximum wage base are also eligible for benefits under the Defined Contribution Retirement Program (DCRP).

Note:  Until reporting procedures are developed for PERS and TPAF members’ who exceed the social security maximum of $106,800 for 2009, continue to report the pension and contributory insurance for the excess salary as you did in the past. The Division will forward the pension contributions to the DCRP carrier. Excess contributory insurance payments will be refunded to the employee.

Pension benefits may be available to these individuals for base salary paid in excess of the annual compensation limit under the newly created DCRP. DCRP plan materials, enrollment forms, and other program information are being developed and will be provided under a separate mailing.

Deadline for Filing the Report of Contributions

Due to the overwhelming popularity of the I-ROC program and the time saved in preparing the report of contributions, the Division is updating member accounts as early as four weeks following the close of the calendar quarter. All reports are due by April 10, 2009. Should your report not be received by the close of business on April 24, 2009, interest penalties will begin to accrue and reports received after this date may not be used to update member accounts.

Delays in receiving reports affect the timeliness of the Division providing services to ALL pension plan members, not just your employees and retirees. Unfortunately, we continue to experience delays associated with employer late reporting.  This policy, of strict adherence to the established reporting deadline, will alleviate that problem.

When you receive your quarterly ROC, 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. If other arrangements need to be made to assist you in the completion of your ROC, the sooner you communicate that fact to the Division the better for everyone involved.

TEPS - Transmittal Electronic Payment System  

Please note that the only payments that should be submitted through TEPS are for monthly transmittal and annual appropriation payments. Employee shortages are not to be submitted through TEPS, and payment should be made to the address on the shortage statement only.

The fax number and address that you use to submit the Employer Authorization Forms to the Division of Pensions and Benefits is (866) 568-2495, or it may be mailed to State of New Jersey, Department of Treasury, Division of Pensions and Benefits, P.O. Box 9581, Trenton, NJ 08650‑9581.

CO Letter in Printable Format Adobe PDF (71K)


March 20, 2009

TO: Certifying Officer
Autonomous State College/University/State Employers
FROM: John D. Megariotis
Deputy Director, Finance
SUBJECT: Report of Contributions, 1st Quarter 2009 (January 1st to March 31st)

NEW LEGISLATION ALERT - PERS and TPAF Maximum Compensation

Chapter 103, P.L. of 2007, provides that new employees are subject to a maximum compensation limit for PERS or TPAF pension contributions. The maximum compensation is based on the annual maximum wage for Social Security.

Note: The PERS and TPAF maximum compensation limit does not apply to employees who were already members of the PERS or TPAF prior to July 1, 2007.

For calendar year 2009, the annual maximum wage for Social Security is $106,800 and is subject to change at the start of each calendar year. Therefore, a new employee enrolled in the PERS or TPAF on or after July 1, 2007 who earns in excess of $106,800 before the end of 2009 will have his or her TPAF or PERS base salary capped – limiting the amount used to calculate benefits and contributions to TPAF or PERS for pension or contributory insurance.Pension benefits may be available to these individuals for base salary paid in excess of the annual compensation limit under the newly created Defined Contribution Retirement Program (DCRP). DCRP plan materials, enrollment forms, and other program information are being developed and will be provided under a separate mailing.

Notice To Delinquent Report Of Contribution Filers

In the past I have written explaining the importance of all employers providing to the Division of Pensions and Benefits their quarterly Report of Contributions (ROC) in a timely fashion. As stated in the past, delays in receiving these reports affect the timeliness of the Division providing services to ALL pension plan members, not just your employees and retirees. Unfortunately, we continue to experience delays associated to employer late reporting. I must again ask for your help in avoiding these delays at all costs and remind you that the Division will utilize everything at its disposal in order to solicit timely reporting by the employers we work with to provide benefit services to the State’s public employees.

Reporting And Payment Information

Your 1st quarter 2009 tape ROC applicable to the Teachers’ Pension and Annuity Fund, Public Employees’ Retirement System, and Police and Firemen’s Retirement System is due by April 10, 2009. 

Your March, 2009, remittance, which represents the deductions due for the balance of the quarter, should be made through the Transmittal Electronic Payments System (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. Your TEPS remittance is also due by April 10, 2009.

The Control and Certification form must also accompany your quarterly ROC data file. This is essential as it attests to the accuracy and validity of the submitted documentation.If your quarterly ROC 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 ROC for the following quarter. A ROC data file will be considered received when it is submitted in an acceptable format, passes all data processing edits, and can be used to update members’ accounts. Interest will be assessed, as prescribed by statute and administrative code, when monthly transmittal remittances and the quarterly ROC are not received within fifteen days of the due dates. Should you have any questions or need assistance in completing the Report, please refer to http://www.state.nj.us/treasury/pensions/epbam/finance/roc.htm.

SACT Tax-Sheltered Annuity – Remittance Of 403(b) Contributions

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.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).

Please note that the full quarterly SUPPLEMENTAL ANNUITY contribution must be submitted prior to the processing of your ROC. If the full contribution is not submitted, it may be necessary to refund any supplemental annuity contributions sent in for the quarter. This could adversely affect your employees’ retirement savings.

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 verified to ensure that the Division has the correct banking information.  This normally takes 12 to 15 days.

CO Letter in Printable Format Adobe PDF (68K)


March 11, 2009

TO: State Biweekly Certifying Officers
State Monthly Certifying Officers
FROM: The Division of Pensions and Benefits, Health Benefits Bureau
SUBJECT: COBRA and the American Recovery and Reinvestment Act of 2009 — Request for Information

The federal American Recovery and Reinvestment Act (ARRA) of 2009 — also known as the Stimulus Bill — was approved by Congress and subsequently signed into law by President Obama on February 17, 2009. Among the provisions in the law affecting the State Health Benefits Program (SHBP) is an expansion of the federal Consolidated Omnibus Budget Reconciliation Act (COBRA) which creates a nine-month, federal subsidy of COBRA premiums and a “second chance” for COBRA enrollment for certain terminated employees. Many of the details for administering the COBRA subsidy and enrollment are still being finalized; however, the short enactment schedule of the law requires certain immediate actions by employers and the SHBP. This letter outlines the immediate actions required of State employers by the SHBP in order to determine the eligibility of employees for the benefits (described on page 2).

EMPLOYER ACTION REQUIRED

As a result of this legislation, the SHBP and its participating employers and plan administrators, face new COBRA notification responsibilities. All employees who were involuntarily terminated from employment on or after September 1, 2008 must be notified of the COBRA premium subsidy and/or the “second chance” opportunity for COBRA enrollment. Notification must occur within 60 days of the law’s enactment, or no later than April 18, 2009.

Therefore, employers must IMMEDIATELY identify all employees who were involuntarily terminated between September 1, 2008 and the present date and report that information to the Health Benefits Bureau of the Division of Pensions and Benefits. The enclosed health benefits COBRA Subsidy Roster is provided for reporting purposes. Completed, certified rosters are to be returned to the Health Benefits Bureau no later than March 31, 2009

Once the rosters are received, the SHBP will notify former employees of their eligibility for the subsidy and “second chance” opportunity for COBRA enrollment.

  • Upon identifying involuntarily terminated employees and verifying their eligibility, the Division will adjust COBRA billing for current, eligible enrollees to the 35% premium amount.

  • Employers are required to notify all employees (both those who voluntarily terminate employment and those involuntarily terminated) who have a COBRA qualifying event, from the date of the law’s enactment until December 31, 2009, of the availability of the COBRA premium subsidy when involuntarily terminated.  A revised COBRA Notice and detailed notification instructions are currently being prepared by the Division and will be made available to employers and will also be on the Division’s Web site when available.

ELIGIBILITY AND BENEFITS

The following is a brief description of the eligibility criteria and COBRA benefits provided under the ARRA. Additional information and administrative details will be provided to employers and eligible individuals as it becomes available.

  • To be eligible for the COBRA premium subsidy or “second chance” COBRA enrollment, an individual must have been involuntarily terminated from employment on or after September 1, 2008 (and prior to December 31, 2009).  Qualifying dependents of these terminated employees may also be eligible for a COBRA premium subsidy.

  • Eligible individuals currently enrolled in COBRA (covered involuntarily terminated State employees and qualifying dependents), will receive a COBRA premium subsidy for up to nine months beginning March 1, 2009. Eligible individuals will be responsible for paying only 35% of the regular COBRA premium.

  • Eligible individuals who did not elect COBRA coverage — or who elected COBRA coverage but subsequently dropped it for reasons other than eligibility for other coverage or reaching the end of the COBRA eligibility period — will be offered a “second chance” for COBRA enrollment along with the 35% premium subsidy.

  • The provisions of the ARRA do not extend the period of COBRA coverage to which the employee is entitled. In most cases 18-months is the period of COBRA eligibility following termination of employment.

  • Individuals with incomes over certain salary limits1; who become eligible for another group health plan or Medicare; who voluntarily terminated employment, or who were involuntarily terminated for reasons of gross misconduct are not eligible for the subsidy or “second chance” COBRA enrollment. If enrolled in COBRA, these individuals continue to pay the full COBRA premium.

ADDITIONAL INFORMATION

Additional details concerning the ARRA, the COBRA subsidy, and employers’ administrative duties and responsibilities will be provided as the information becomes available to the Division of Pensions and Benefits. Meanwhile, the federal Department of Labor has issued a preliminary fact sheet, informational posters, and fliers. These are available at: www.dol.gov/ebsa/COBRA.html

The Internal Revenue Service has also issued a press release and posted a question and answer page for employers on its Web site at: www.irs.gov/newsroom/

General questions regarding COBRA coverage under the SHBP can be addressed to the Division of Pensions and Benefits, Office of Client Services by calling (609) 292-7524 or by sending e-mail to: pensions.nj@treas.state.nj.us

Enclosure
COBRA Subsidy Roster


1Individuals with annual income exceeding $145,000 per year, and couples with income exceeding $290,000 per year, are not eligible for the subsidy and will pay the full COBRA premium.  The subsidy is also phased out starting at $125,000 for individuals and $250,000 for couples. Individuals who receive subsidies during a year in which they exceed these income limits will be required to repay the subsidy. Subsidy repayments are captured on the individual’s federal income tax return. Individuals may also make a permanent election to waive the subsidy.  It is not the employer’s responsibility to verify the income of former employees.

CO Letter in Printable Format Adobe PDF (730K)


March 11, 2009

TO: Certifying Officers of Local Government Employers in the SHBP
Certifying Officers of Local Education Employers in the SEHBP
FROM: The Division of Pensions and Benefits, Health Benefits Bureau
SUBJECT: COBRA and the American Recovery and Reinvestment Act of 2009 — Request for Information

The federal American Recovery and Reinvestment Act (ARRA) of 2009 — also known as the Stimulus Bill — was approved by Congress and subsequently signed into law by President Obama on February 17, 2009. Among the provisions in the law affecting the State Health Benefits Program (SHBP) and School Employees’ Health Benefits Program (SEHBP) is an expansion of the federal Consolidated Omnibus Budget Reconciliation Act (COBRA) which creates a nine-month, federal subsidy of COBRA premiums and a “second chance” for COBRA enrollment for certain terminated employees.

Many of the details for administering the COBRA subsidy and enrollment are still being finalized; however, the short enactment schedule of the law requires certain immediate actions by employers and the Division of Pensions and Benefits. This letter outlines the immediate actions required of employers by the Division in order to determine the eligibility of employees for the benefits (see page 2).

EMPLOYER ACTION REQUIRED

As a result of this legislation, the SHBP, SEHBP, and its participating employers and plan administrators, face new COBRA notification responsibilities. All employees who were involuntarily terminated from employment on or after September 1, 2008 must be notified of the COBRA premium subsidy and/or the “second chance” opportunity for COBRA enrollment. Notification must occur within 60 days of the law’s enactment, or no later than April 18, 2009.

Therefore, employers must IMMEDIATELY identify all employees who were involuntarily terminated between September 1, 2008 and the present date and report that information to the Health Benefits Bureau of the Division of Pensions and Benefits. The enclosed health benefits COBRA Subsidy Roster is provided for reporting purposes. Completed, certified rosters are to be returned to the Health Benefits Bureau no later than March 31, 2009

Once the rosters are received, the Health Benefits Bureau will notify former employees of their eligibility for the subsidy and “second chance” opportunity for COBRA enrollment.

  • Upon identifying involuntarily terminated employees and verifying their eligibility, the Division will adjust COBRA billing for current, eligible enrollees to the 35% premium amount.

  • Employers are required to notify all employees (both those who voluntarily terminate employment and those involuntarily terminated) who have a COBRA qualifying event, from the date of the law’s enactment untilDecember 31, 2009, of the availability of the COBRA premium subsidy when involuntarily terminated.  A revised COBRA Notice and detailed notification instructions are currently being prepared by the Division and will be made available to employers and will also be on the Division’s Web site when available.

ELIGIBILITY AND BENEFITS

The following is a brief description of the eligibility criteria and COBRA benefits provided under the ARRA.  Additional information and administrative details will be provided to employers and eligible individuals as it becomes available.

  • To be eligible for the COBRA premium subsidy or “second chance” COBRA enrollment, an individual must have been involuntarily terminated from employment on or after September 1, 2008 (and prior to December 31, 2009).  Qualifying dependents of these terminated employees may also be eligible for a COBRA premium subsidy.

  • Eligible individuals currently enrolled in COBRA (covered involuntarily terminated employees and qualifying dependents), will receive a COBRA premium subsidy for up to nine months beginning March 1, 2009. Eligible individuals will be responsible for paying only 35% of the regular COBRA premium.

  • Eligible individuals who did not elect COBRA coverage — or who elected COBRA coverage but subsequently dropped it for reasons other than eligibility for other coverage or reaching the end of the COBRA eligibility period — will be offered a “second chance” for COBRA enrollment along with the 35% premium subsidy.

  • The provisions of the ARRA do not extend the period of COBRA coverage to which the employee is entitled. In most cases 18-months is the period of COBRA eligibility following termination of employment.

  • Individuals with incomes over certain salary limits1; who become eligible for another group health plan or Medicare; who voluntarily terminated employment, or who were involuntarily terminated for reasons of gross misconduct are not eligible for the subsidy or “second chance” COBRA enrollment. If enrolled in COBRA, these individuals continue to pay the full COBRA premium.

ADDITIONAL INFORMATION

Additional details concerning the ARRA, the COBRA subsidy, and employers’ administrative duties and responsibilities will be provided as the information becomes available to the Division of Pensions and Benefits. Meanwhile, the federal Department of Labor has issued a preliminary fact sheet, informational posters, and fliers. These are available at: www.dol.gov/ebsa/COBRA.html

The Internal Revenue Service has also issued a press release and posted a question and answer page for employers on its Web site at: www.irs.gov/newsroom/

General questions regarding COBRA coverage under the SHBP can be addressed to the Division of Pensions and Benefits, Office of Client Services by calling (609) 292-7524 or by sending e-mail to: pensions.nj@treas.state.nj.us

Enclosure
COBRA Subsidy Roster


1Individuals with annual income exceeding $145,000 per year, and couples with income exceeding $290,000 per year, are not eligible for the subsidy and will pay the full COBRA premium.  The subsidy is also phased out starting at $125,000 for individuals and $250,000 for couples. Individuals who receive subsidies during a year in which they exceed these income limits will be required to repay the subsidy. Subsidy repayments are captured on the individual’s federal income tax return. Individuals may also make a permanent election to waive the subsidy.  It is not the employer’s responsibility to verify the income of former employees.

CO Letter in Printable Format Adobe PDF (73K)


March 4, 2009

TO: Certifying Officers, State and County Colleges and Universities
FROM: Joseph Zisa, Manager 1, Fiscal Resources
Division of Pensions and Benefits
SUBJECT: Pension Eligibility — Adjunct Faculty and Part-Time Instructors — Supplemental Questions and Answers — 2nd Set

As part of the Division’s continuing response to implementation of pension reform legislation signed into law by Governor Corzine on September 29, 2008, this document will serve as a supplement to information contained in the October 28, 2008, letter to Certifying Officers and the follow-up questions and answers sent to Certifying Officers on December 1, 2008, concerning the pension eligibility of adjunct faculty and part-time instructors. The information is presented in the form of questions and answers and addresses more of the questions the Division has been presented with following the signing of this legislation and the guidance issued to date.

QUESTIONS AND ANSWERS

1. Question. Is there a one year waiting period for part-time instructors to enroll into the Alternate Benefit Program (ABP)?

Answer.
There is generally a one year waiting period for vesting under the ABP.  However, if the reference here is to the one year waiting period for temporary employees to be enrolled into PERS, no, there is no such requirement under the ABP

2. Question.
As far as vesting goes, if an adjunct faculty member is enrolled in ABP and skips semesters, will he/she have to work a continuous year to be vested?

Answer.
N.J.S.A. 18A:66-189, “Contributions under alternate benefit program” states that employer contributions are vested to the employee “after the employee commences the second year of employment”.  And, N.J.A.C. 17:7-3.2, “Delayed vested contribution” states in part:“…The first year of employment is considered to be the commencement of the 13th month of employment after the participant has received credit in the Alternate Benefit Program for 12 months of service.”

There is no requirement that the service be continuous. So vesting will occur after the completion of 12 months of service.

3. Question.
How are part-time coaches treated for retirement plan enrollment?  Employers have normally enrolled part-time coaches into the Public Employees' Retirement System (PERS) after one year of service.  Do employers continue to this practice or are part-time coaches now ABP eligible with no waiting period?

Answer.
Unless the position “part-time coach” meets the definition of “adjunct faculty” or “Part-Time Instructor”, nothing has changed.  Employers must continue to follow the PERS eligibility rules for these other positions.

4. Question.
If a PERS member is provided an Election of Retirement Coverage form upon accepting an ABP eligible position and he or she does not respond, would the employer keep that employee in PERS?

Answer.
If a PERS member accepts an ABP eligible position, including Adjunct Faculty or Part-Time Instructor positions, and does not complete an Election of Retirement Coverage form within 30 days of beginning employment in that position the employer must enroll the employee into ABP.

However, the Division will honor, on a case-by-case basis, an election made by an individual after 30 days, but before 90 days, following the individual beginning employment in that ABP eligible position until such time as N.J.A.C. 17:7-2.1(e) is amended.

5. Question.
If an employer hires and terminates adjunct faculty on a semester-by-semester basis, does the employer have to offer the returning adjunct faculty member already enrolled in the PERS the opportunity to continue membership in the PERS instead of enrollment into the ABP each semester or just the next time adjunct faculty member is rehired?

Answer.
If a PERS member has not yet executed an Election of Retirement Coverage form, the individual has the right to make that election upon acceptance of any future ABP eligible employment.

6. Question.
Footnote #2 of the Division’s October 28, 2008, Certifying Officer letter states that current adjunct faculty who do not complete the Election of Retirement Coverage form will lose the right to have all retirement credit consolidated under one of the two retirement systems, ABP or PERS.  In that circumstance, the employer will enroll the adjunct faculty in the ABP.  If the employee is not vested in PERS, will he or she be required to withdraw his or her contributions and close the PERS account if the individual does not take a PERS eligible position within 2 years?

Answer.
Yes, if the PERS account is not vested, and the individual does not contribute to that account for 24 consecutive months, the PERS account will become inactive and the only option available to the individual is to withdraw those funds.  The individual may roll those funds over to another retirement plan, such as an IRA, or take a direct, taxable payment of the funds.

7. Question.
If the person accepting an ABP eligible position is vested in PERS, is the “penalty” for not completing the Election of Retirement Coverage form that the service time in each system will not be combined for purposes of eligibility for employer-paid retiree health benefits after 25 years of service?

Answer.
Part-time employees and faculty are not eligible for employer-paid health coverage at retirement. If the member is covered under the State Health Benefits Program (SHBP) or School Employees’ Health Benefits Program (SEHBP) at the time of retirement, they are permitted to continue that coverage in retirement as long as they pay for the coverage.

8. Question.
Footnote #2 of the Division’s October 28, 2008, Certifying Officer letter states that the employee who does not complete the Election of Retirement Coverage form may lose those benefits which have not been vested under PERS. How would the employee calculate the value of the PERS benefits that could be lost to determine if this is significant?

Answer.
It is not possible to calculate the value of a benefit that does not yet exist. Until a member of PERS is vested, there is no guarantee of future benefit. Alternatively, each year the Division provides to PERS members a statement of benefits which projects what an individual’s benefit might be if he or she were to continue in employment until reaching retirement age. One may consider using that information to determine “the value of the PERS benefits that could be lost” as this has been stated in the question.

9. Question.
Since PERS is not a defined contribution plan, what is the calculation to determine the amount of funds which would transfer to the ABP account to reflect the contributions made by the employer after 10 years of combined PERS/ABP service?

Answer.
The Division will provide a calculation upon request. Please see N.J.S.A. 18A:66-173 for a discussion of the process for calculating this amount.

10. Question.
When will an ABP enrolled adjunct faculty member be eligible to pay for health benefits coverage?

Answer.
These employees may pay for this benefit now. Part-time employees of the state colleges and universities are eligible to enroll in the SHBP.  In addition, part-time faculty at county colleges that participate in the SEHBP are eligible to enroll in the SEHBP. A part-time employee’s only coverage option is NJ DIRECT15 and the Employee Prescription Drug Plan.

11. Question.
When will a PERS enrolled adjunct faculty member be eligible to pay for health benefits coverage?

Answer.
These employees may pay for this benefit now. See Q&A # 10 above.

12. Question.
If a PERS enrolled adjunct faculty member transfers to ABP, is the length of service combined between PERS and ABP to determine eligibility for employer-paid retiree health benefits after 25 years of service?

Answer.
Part-time employees and faculty are not eligible for employer-paid health coverage at retirement. If the member is covered under the SHBP/SEHBP at the time of retirement, they are permitted to continue that coverage in retirement as long as they pay for the coverage.

13. Question.
The employer contribution to the ABP is paid by the state for academic positions.  Is this going to be the case for adjuncts?  If not, on what basis could this change occur?

Answer. See Certifying Officer Letter dated December 1, 2008; Q&A # 9 – there has been no change in this response.

14. Question.
  If a person is enrolled in ABP under multiple positions with different employers, may he or she choose different investment carriers at each employer?

Answer.  There are no restrictions under the ABP to restrict an individual to making contributions to one investment provider at any one employer.  Therefore, there is nothing to prevent the individual from choosing to invest with more than one provider at different employers.

15. Question.
  Will employers be required to complete Leave/Termination Reports for each adjunct faculty member, each semester, if the employee does not return in the next semester?

Answer.
  Yes, without this notification the Division is not aware of the current employment status of the individual.  As an alternative to filing the form, an employer may update an employee’s status via –the Employer Pensions and Benefits Information Connection (EPIC).

16. Question.  If an ABP member, including adjunct faculty and part-time instructors, terminates employment and begins to withdraw funds from the ABP account, may he or she stop receiving retirement benefits under the ABP account and re-enroll in ABP if he or she obtains a full-time position?

Answer.  No. N.J.S.A. 18A:66-175, “Election to receive cash distribution or annuity option; termination of participation”, states:“Membership or participation in the alternate benefit program shall terminate and the individual shall be considered retired once he has elected to receive a cash distribution upon separation from service or an annuity option from the designated insurer or insurers or a designated mutual fund company or companies, as appropriate.”Further, N.J.S.A. 18A:66-170, “Persons eligible for participation in program; ineligibility for membership in other pension funds; waiver of rights to continue membership in other fund”, states in part:“Any person receiving a benefit by reason of his retirement from any retirement or pension system of the State of New Jersey or any political subdivision thereof shall be ineligible to participate in the alternate benefit program. ….The alternate benefit programs established pursuant to this act are deemed to be pension funds or retirement systems for purposes of P.L.1968, c. 23 (C. 43:3C-1 et seq.).”

Therefore, such an individual, upon withdrawing funds from the ABP, would be considered retired from a “retirement or pension system of the State of New Jersey…” and prohibited from future enrollment and participation in the ABP.

17. Question.
  ABP default investment carriers change annually.  If an adjunct faculty member is “force-enrolled” in ABP in one semester and returns when there is a new default carrier, would the pension contributions go to the new default carrier or to the same carrier in which the adjunct was originally enrolled?

Answer.  As with any default enrollment in the past, the default investment provider utilized upon an individual’s enrollment into ABP would continue until such time as the individual elects to change that provider or, if the provider is no longer authorized to accept contributions under the plan, a replacement default provider is named.

ADDITIONAL INFORMATION

If you have additional questions regarding the ABP or any of the information in this letter, contact the Defined Contribution Plans Unit at (609) 292-3605 or e-mail the Unit at: typabp1@treas.state.nj.us.

CO Letter in Printable Format Adobe PDF (58K)


February 24, 2009

TO: Certifying Officers - Teachers’ Pension and Annuity Fund,
Public Employees’ Retirement System, and
Police and Firemen’s Retirement System
FROM: John D. Megariotis
Deputy Director, Finance
SUBJECT: Future Reporting of Retroactive Salary Increases

As a result of the implementation of Chapter 103, P.L. 2007, and the establishment of maximum compensation limits for certain members of the Public Employees’ Retirement System (PERS) and the Teachers’ Pension and Annuity Fund (TPAF), the Division of Pension and Benefits has determined that retroactive salary increases can no longer be reported through the Internet-based Report of Contributions (IROC) if they affect reporting periods prior to the current reporting quarter. This reporting change will be effective with the first calendar quarter report for the period covering January 1, through March 31, 2009.

Although only the PERS and TPAF were affected by Chapter 103, P.L. 2007, the reports for the Police and Firemen’s Retirement System (PFRS) through the IROC may not include retroactive salary increases. The Division believes that the benefits provided as a result of segregating the reporting of retroactive salary payment data from normal, quarterly salary data will benefit all retirement programs.

At the current time the Division is developing a new mechanism for the future reporting of retroactive salary increases. For employers who are affected by this reporting change and are making retroactive salary payments to their employees in the 1st quarter of 2009 for periods prior to January 1, 2009, please do not submit these pension and contributory insurance deductions through TEPS or attempt to report this data on the IROC. This includes employers utilizing the Report of Salary Change.  

Also, the Division is requesting, that upon the ratification of a new salary agreement, a copy of that agreement be forwarded to the Division prior to submission of any retroactive salary data or related contributions. Upon review of the new agreement, you will be contacted regarding when and how to submit your retroactive salary data.

If you have any questions concerning this matter, please contact the Division at (609) 777-2115. If you are forwarding a new salary agreement to the Division, please address it to:

NJ Division of Pensions and Benefits
Attn: Audit Section – Retro Salary Reporting
PO Box 295
Trenton NJ 08625-0295

Alternatively, questions or digital renderings (PDF file format preferred) of salary agreements may be directed to the Division at pensions.nj@treas.state.nj.us with “Retro Salary” in the subject line.

CO Letter in Printable Format Adobe PDF (57K)


February 4, 2009

TO: State Departmental Certifying Officers
State Departmental Human Resources Directors
State Biweekly Human Resources Representatives
FROM: David J. Pointer, CEBS
Chief, Bureau of Health Benefits
SUBJECT: DEPENDENT ELIGIBILITY VERIFICATION AUDIT

As notified in the certifying officer letter dated December 5, 2008, the SHBP has retained Aon Consulting to perform a Dependent Eligibility Verification Audit (DEVA). Each employee/retiree who covers a dependent under their health plan will receive a letter from Aon with specific instructions. They will have until a specified date to furnish Aon with the required legal documentation confirming that their dependents are eligible for coverage under the programs.

The DEVA will be conducted in phases with State employees and retirees being audited beginning in January 2009. This phase is split into stages according to which health plan each employee is enrolled in and their coverage level. As a result, employees will not receive a packet at the same time. However, every employee covering dependents will receive a packet over the next two months. The last stage of letters will be mailed in March 2009.

Please urge your employees to refrain from contacting the SHBP Dependent Eligibility Verification Service Center until they receive a packet from Aon. You may also direct employees to our Web site where there is a link for the Dependent Eligibility Audit and Frequently Asked Questions

CO Letter in Printable Format Adobe PDF (46K)


February 4, 2009

TO: State Monthly Certifying Officers
State Monthly Human Resources Representatives
FROM: David J. Pointer, CEBS
Chief, Bureau of Health Benefits
SUBJECT: DEPENDENT ELIGIBILITY VERIFICATION AUDIT

As notified in the certifying officer letter dated December 5, 2008, the SHBP has retained Aon Consulting to perform a Dependent Eligibility Verification Audit (DEVA). Each employee/retiree who covers a dependent under their health plan will receive a letter from Aon with specific instructions. They will have until a specified date to furnish Aon with the required legal documentation confirming that their dependents are eligible for coverage under the programs.

The DEVA will be conducted in phases with State employees and retirees being audited beginning in January 2009.  This phase is split into stages according to which health plan each employee is enrolled in and their coverage level. As a result, employees will not receive a packet at the same time.  However, every employee covering dependents will receive a packet over the next two months.  The last stage of letters will be mailed in March 2009.

Please urge your employees to refrain from contacting the SHBP Dependent Eligibility Verification Service Center until they receive a packet from Aon.  You may also direct employees to our Web site where there is a link for the Dependent Eligibility Audit and Frequently Asked Questions

CO Letter in Printable Format Adobe PDF (46K)


January 29, 2009

TO: State Departmental Certifying Officers
State Departmental Human Resources Directors
State Biweekly Human Resources Representatives
FROM: New Jersey State Health Benefits Program
SUBJECT: SHBP Special Open Enrollment — State Biweekly Employers

The State Health Benefits Commission, at its December 11, 2008 meeting, voted to approve the coordination of benefits (COB) between NJ DIRECT10 and NJ DIRECT15. Previous to this decision, there was no COB between the two plans. The Commission approved a Special Open Enrollment to allow members who are affected by this change in benefits to change medical plans. The Special Open Enrollment period will begin on February 1, 2009 and end on February 28, 2009. All plan changes made during this open enrollment will be effective on May 9, 2009 for State biweekly employees paid through the State Centralized Payroll Unit.

Please Note: This Special Open Enrollment is only for employees who have Family or Member and Spouse/Partner coverage. Members will not be permitted to add dependents or make any changes to dental or prescription drug coverage.

For changes made during this Special Open Enrollment, completed employer-certified Health Benefits Applications should be forwarded to the Health Benefits Bureau as soon as they are received from employees. The last day that certified applications may arrive at the Health Benefits Bureau is March 6, 2009.

MEDICAL PLANS

The SHBP currently offers State employees a choice of one of three medical plans.

  • NJ DIRECT15 — a Preferred Provider Organization administered by Horizon Blue Cross Blue Shield of New Jersey that offers a selection of both in-network coverage with a $15 copayment and out-of-network coverage subject to deductibles and coinsurance; or

  • Aetna HMO or CIGNA HealthCare HMO — standard Health Maintenance Organization (HMO) plans that offer in-network coverage through a primary care physician for a $15 copayment.

  • For each of the medical plans, the copayment for a visit to an emergency room is $50. The emergency room copayment is waived if the member is admitted to the hospital.

A side-by-side comparison of medical plan benefits is available in the Plan Comparison Summary for State Employees, available for viewing or printing at the SHBP Web site: www.state.nj.us/treasury/pensions/health-benefits.shtml

Note: Certain employees covered by labor contracts that are not yet ratified remain in the Traditional Plan, NJ PLUS, Aetna HMO or CIGNA HealthCare HMO until new contracts are settled. The Special Open Enrollment does not affect these employees. Once their contracts are ratified, they will be given the opportunity to make plan changes at that time.

HEALTH BENEFITS APPLICATIONS — The Health Benefits Application is available for printing from the SHBP Web site at: www.state.nj.us/treasury/pensions/health-benefits.shtml

PLAN HANDBOOKS, AND HEALTH PLAN COMPARISON SUMMARY CHARTS — SHBP plan Member Handbooks (NJ DIRECT, Aetna HMO, CIGNA HealthCare HMO), and SHBP Plan Comparison Summary charts are available as online publications on the SHBP Web site at: www.state.nj.us/treasury/pensions/health-benefits.shtml   

Please encourage your employees to access these materials online.  Bulk supplies of printed copies are no longer available.

CO Letter in Printable Format Adobe PDF (54K)


January 29, 2009

TO: State Monthly Certifying Officers
State Monthly Human Resources Representatives
FROM: New Jersey State Health Benefits Program
SUBJECT: SHBP Special Open Enrollment — State Monthly Employers

The State Health Benefits Commission, at its December 11, 2008 meeting, voted to approve the coordination of benefits (COB) between NJ DIRECT10 and NJ DIRECT15. Previous to this decision, there was no COB between the two plans. The Commission approved a Special Open Enrollment to allow members who are affected by this change in benefits to change medical plans. The Special Open Enrollment period will begin on February 1, 2009 and end on February 28, 2009. All plan changes made during this open enrollment will be effective on May 1, 2009 for State monthly employees.

Please Note: This Special Open Enrollment is only for employees who have Family or Member and Spouse/Partner coverage. Members will not be permitted to add dependents or make any changes to dental or prescription drug coverage.

For changes made during this Special Open Enrollment, completed employer-certified Health Benefits Applications should be forwarded to the Health Benefits Bureau as soon as they are received from employees. The last day that certified applications may arrive at the Health Benefits Bureau is March 6, 2009.

MEDICAL PLANS

The SHBP currently offers State employees a choice of one of three medical plans.

  • NJ DIRECT15 — a Preferred Provider Organization administered by Horizon Blue Cross Blue Shield of New Jersey that offers a selection of both in-network coverage with a $15 copayment and out-of-network coverage subject to deductibles and coinsurance; or

  • Aetna HMO or CIGNA HealthCare HMO — standard Health Maintenance Organization (HMO) plans that offer in-network coverage through a primary care physician for a $15 copayment.

  • For each of the medical plans, the copayment for a visit to an emergency room is $50. The emergency room copayment is waived if the member is admitted to the hospital.

A side-by-side comparison of medical plan benefits is available in the Plan Comparison Summary for State Employees, available for viewing or printing at the SHBP Web site: www.state.nj.us/treasury/pensions/health-benefits.shtml

Note: Certain employees covered by labor contracts that are not yet ratified remain in the Traditional Plan, NJ PLUS, Aetna HMO or CIGNA HealthCare HMO until new contracts are settled. The Special Open Enrollment does not affect these employees. Once their contracts are ratified, they will be given the opportunity to make plan changes at that time.

HEALTH BENEFITS APPLICATIONS — The Health Benefits Application is available for printing from the SHBP Web site at: www.state.nj.us/treasury/pensions/health-benefits.shtml

PLAN HANDBOOKS, AND HEALTH PLAN COMPARISON SUMMARY CHARTS — SHBP plan Member Handbooks (NJ DIRECT, Aetna HMO, CIGNA HealthCare HMO), and SHBP Plan Comparison Summary charts are available as online publications on the SHBP Web site at: www.state.nj.us/treasury/pensions/health-benefits.shtml   

Please encourage your employees to access these materials online.  Bulk supplies of printed copies are no longer available.

CO Letter in Printable Format Adobe PDF (54K)


January 29, 2009

TO: State Health Benefits Program Participating Local Government Employers
FROM: New Jersey State Health Benefits Program
SUBJECT: SHBP Special Open Enrollment — Local Government Employers

The State Health Benefits Commission, at its December 11, 2008 meeting, voted to approve the coordination of benefits (COB) between NJ DIRECT10 and NJ DIRECT15. Previous to this decision, there was no COB between the two plans. The Commission also approved a change to NJ DIRECT10 that allows the copayments a member makes to in-network providers to count toward the in-network out-of-pocket maximum. Previously only coinsurance counted toward the in-network out-of-pocket maximum.The Commission approved a Special Open Enrollment to allow members to change medical plans. The Special Open Enrollment period will begin on February 1, 2009 and end on February 28, 2009. All plan changes made during this open enrollment will be effective on May 1, 2009.

Please Note: This Special Open Enrollment will only allow members to change medical plans. Members will not be permitted to add dependents or make any changes to dental or prescription drug coverage.

For changes made during this Special Open Enrollment, completed employer-certified Health Benefits Applications should be forwarded to the Health Benefits Bureau as soon as they are received from employees. The last day that certified applications may arrive at the Health Benefits Bureau is March 6, 2009.

MEDICAL PLANS

The SHBP currently offers Local Government employees a choice of one of four medical plans.

  • NJ DIRECT10 — a Preferred Provider Organization administered by Horizon Blue Cross Blue Shield of New Jersey that offers a selection of both in-network coverage with a $10 copayment and out-of-network coverage subject to deductibles and coinsurance; or
  • NJ DIRECT15 — a Preferred Provider Organization administered by Horizon Blue Cross Blue Shield of New Jersey that offers a selection of both in-network coverage with a $15 copayment and out-of-network coverage subject to deductibles and coinsurance; or
  • Aetna HMO or CIGNA HealthCare HMO — standard Health Maintenance Organization (HMO) plans that offer in-network coverage through a primary care physician for a $10 copayment.

A side-by-side comparison of medical plan benefits is available in the Plan Comparison Summary for Local Government Employees, available for viewing or printing at the SHBP Web site: www.state.nj.us/treasury/pensions/health-benefits.shtml

HEALTH BENEFITS APPLICATIONS — The Health Benefits Application is available for printing from the SHBP Web site at: www.state.nj.us/treasury/pensions/health-benefits.shtml 

PLAN HANDBOOKS, AND HEALTH PLAN COMPARISON SUMMARY CHARTS — Plan Member Handbooks (NJ DIRECT, Aetna HMO, CIGNA HealthCare HMO), and the SEHBP Plan Comparison Summary chart are available as online publications on the SEHBP Web site at: www.state.nj.us/treasury/pensions/health-benefits.shtml   

Please encourage your employees to access these materials online.  Bulk supplies of printed copies are no longer available.

CO Letter in Printable Format Adobe PDF (53K)


January 29, 2009

TO: School Employees’ Health Benefits Program Participating Local Education Employers
FROM: New Jersey School Employees’ Health Benefits Program
SUBJECT: SEHBP Special Open Enrollment — Local Education Employers

The State Health Benefits Commission, at its December 11, 2008 meeting, voted to approve the following changes to benefits under the School Employees’ Health Benefits Program:

  • Allows for the coordination of benefits (COB) between NJ DIRECT10 and NJ DIRECT15. Previous to this decision, there was no COB between the two plans.

  • A change to NJ DIRECT10 that allows the copayments a member makes to in-network providers to count toward the in-network out-of-pocket maximum. Previously the copayments were applied toward the in-network out-of-pocket maximum, however the member was required to continue to pay the copayment after the maximum was reached. Now the member will be reimbursed at the end of the year for any copayments paid above the in-network out-of-pocket maximums.

  • A transition program for members enrolled in NJ DIRECT10 that limits the annual out-of-network out-of-pocket eligible expenses a member pays to Horizon contracted providers who are not in the NJ DIRECT network to $400 after a $100 deductible per individual. Once the transition program ends on December 31, 2009, the annual out-of-network out-of-pocket maximum for these providers will revert to $2,000 after a $100 deductible per individual.

The Commission approved a Special Open Enrollment to allow members to change medical plans. The Special Open Enrollment period will begin on February 1, 2009 and end on February 28, 2009. All plan changes made during this open enrollment will be effective on May 1, 2009.

Please Note: This Special Open Enrollment will only allow members to change medical plans. Members will not be permitted to add dependents or make any changes to dental or prescription drug coverage.

For changes made during this Special Open Enrollment, completed employer-certified Health Benefits Applications should be forwarded to the Health Benefits Bureau as soon as they are received from employees. The last day that certified applications may arrive at the Health Benefits Bureau is March 6, 2009.

MEDICAL PLANS

The SEHBP currently offers Local Education employees a choice of one of four medical plans.

  • NJ DIRECT10 — a Preferred Provider Organization administered by Horizon Blue Cross Blue Shield of New Jersey that offers a selection of both in-network coverage with a $10 copayment and out-of-network coverage subject to deductibles and coinsurance; or

  • NJ DIRECT15 — a Preferred Provider Organization administered by Horizon Blue Cross Blue Shield of New Jersey that offers a selection of both in-network coverage with a $15 copayment and out-of-network coverage subject to deductibles and coinsurance; or

  • Aetna HMO or CIGNA HealthCare HMO — standard Health Maintenance Organization (HMO) plans that offer in-network coverage through a primary care physician for a $10 copayment.

A side-by-side comparison of medical plan benefits is available in the Plan Comparison Summary for Local Education Employees, available for viewing or printing at the SEHBP Web site: www.state.nj.us/treasury/pensions/health-benefits.shtml

HEALTH BENEFITS APPLICATIONS — The Health Benefits Application is available for printing from the SHBP Web site at: www.state.nj.us/treasury/pensions/health-benefits.shtml

PLAN HANDBOOKS, AND HEALTH PLAN COMPARISON SUMMARY CHARTS — Plan Member Handbooks (NJ DIRECT, Aetna HMO, CIGNA HealthCare HMO), and the SEHBP Plan Comparison Summary chart are available as online publications on the SEHBP Web site at: www.state.nj.us/treasury/pensions/health-benefits.shtml 

Please encourage your employees to access these materials online.  Bulk supplies of printed copies are no longer available.

CO Letter in Printable Format Adobe PDF (54K)


January 12, 2009

TO: Certifying Officers, State and County Colleges and Universities
FROM: John D. Megariotis
Deputy Director, Finance
Division of Pensions and Benefits
SUBJECT: IRS Compliance for New Jersey ABP and ACTS 403(b) Programs

Effective January 1, 2009, the Internal Revenue Service implemented regulations that impose additional recordkeeping requirements and fiduciary responsibilities on educational and non-profit employers that provide 403(b) tax-deferred compensation plans to their employees. These regulations increase the similarities between 403(b) plans and other employer-sponsored deferred compensation plans, such as 457(b) plans and 401(k) plans. Under the proposed regulations, school employers will be required to maintain a legally binding "plan document," more closely monitor employee contributions and investment providers, and approve certain loans, transfers and distributions from their employees' 403(b) accounts.Among other things, these new regulations require employers to:

  • Keep records of each individual employee's account transactions including contributions, investment returns, distributions, sales or distribution expense charges, loans, hardship withdrawals, transfers, and tax withholdings;

  • Oversee catch-up contributions to make sure they do not exceed the dollar limits imposed under the Internal Revenue Code;

  • Monitor payroll deferrals elected by participating employees to ensure contributions do not exceed the maximum limits and ensure deferred contributions go only to specific funding arrangements.

The service providers for the Alternate Benefit Program (ABP) and Additional Contributions Tax Sheltered Program (ACTS) are currently providing many of the required recordkeeping services. However, as a result of these new regulations, the Division of Pensions and Benefits has determined that some of the requirements imposed by the IRS should be handled by each individual campus. 

Therefore, beginning January 1, 2009, you will be required to monitor employee contributions, deferral limits and catch-up contributions, authorize hardship withdrawals and loans.  The Division does not currently maintain provider information for each employee; therefore we are not able to properly administer these required IRS changes.  For example, if an employee maintains multiple providers, it will be to the responsibility of the employer to ensure loans are properly documented so the employee does not exceed allowed limits.  This would also apply to the maintenance of annual salary deferral amounts as well.

If you have any questions concerning this matter you may reach us at the Division of Pensions and Benefits, Defined Benefit & Contribution Plans Reporting Bureau, 50 West State Street, PO Box 295, Trenton, New Jersey, 08625-0295.  Our telephone number is (609) 777-0887.  Or you may e-mail the Unit at: typabp1@treas.state.nj.us.

CO Letter in Printable Format Adobe PDF (56K)


 
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