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Pensions and Benefits
CERTIFYING OFFICER LETTERS 2010

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

SUBJECT DATE
Report of Contributions, 4th Quarter 2010 (October 1st to December 31st) - Certifying Officers,Teachers’ Pension and Annuity Fund, Public Employees’ Retirement System, and Police and Firemen’s Retirement System December 2010
Report of Contributions, 4th Quarter 2010 (October 1st to December 31st) - Certifying Officers, Autonomous State College/University/State Employers December 2010
Retirement Workshops Available for PERS, TPAF, and PFRS Members in 2011 - Certifying Officers of the Public Employees’ Retirement System (PERS), Teachers' Pension and Annuity Fund (TPAF), and Police and Firemen’s Retirement System (PFRS) November 29, 2010
Report of Contributions, 3rd Quarter 2010 (July 1st to September 30th) - Certifying Officers, Teachers’ Pension and Annuity Fund, Public Employees’ Retirement System and Police and Firemen’s Retirement System September 15, 2010
Report of Contributions, 3rd Quarter 2010 (July 1st to September 30th) - Certifying Officers - Certifying Officers, Autonomous State College/ University/State Employers September 15, 2010
PERS Notice of Election — Certifying Officers of the Public Employees' Retirement System (PERS) September 2010
SHBP Open Enrollment 2010 — State Biweekly Employers — State Departmental Certifying Officers, State Departmental Human Resources Directors, State Biweekly Human Resources Representatives
September 10, 2010
SHBP Open Enrollment 2010 — State Monthly Employers — State Monthly Certifying Officers, State Monthly Human Resources Directors September 10, 2010
SEHBP Open Enrollment 2010 — Local Education Employers - School Employees’ Health Benefits Program Participating Local Education Employers September 10, 2010
SHBP Open Enrollment 2010—Local Government Employers - State Health Benefits Program Participating Local Government Employers September 10, 2010
Open Enrollment for the New Jersey State Employees Tax Savings Program (Tax$ave 2011) - State Department Certifying Officers, State Department Human Resource Directors, and State Biweekly Payroll Locations Benefits Administrators September 10, 2010
Open Enrollment for the New Jersey State Employees Tax Savings Program (Tax$ave 2011) - State University and College Certifying Officers, State University and College Benefits Administrators, State Monthly Certifying Officers, State Monthly Benefits Administrators September 10, 2010
Retroactive Salary Reporting Procedures - Certifying Officer – Teachers’ Pension and Annuity Fund, Public Employees’ Retirement System, and Police and Firemen’s Retirement System September 9, 2010
ABP Contribution Limits under Chapter 31, P.L. 2010 - Certifying Officers of the Alternate Benefit Program (ABP) August 16, 2010
Retirement Workshops Available for PFRS Members - Certifying Officers of the Police and Firemen’s Retirement System (PFRS) July 22, 2010
New Retirement Workshop Dates Available for PERS and TPAF Members — Certifying Officers of the Public Employees' Retirement System (PERS) and Teachers' Pension and Annuity Fund (TPAF) July 21, 2010
Minimum Annual Salary for Defined Contribution Retirement Program (DCRP) Enrollment under Chapter 1, P.L. 2010 - Certifying Officers of the Public Employees’ Retirement System (PERS), Teachers’ Pension and Annuity Fund (TPAF), and Defined Contribution Retirement Plan (DCRP) July 6, 2010
Report of Contributions, 2nd Quarter 2010 (April 1st to June 30th) - Certifying Officers – Teachers’ Pension and Annuity Fund, Public Employees’ Retirement System and Police and Firemen’s Retirement System July 2010
Report of Contributions, 2nd Quarter 2010 (April 1st to June 30th) - Certifying Officers, Autonomous State College / University/State Employers July 2010
Multiple SHBP/SEHBP Coverage Prohibited — Employers Participating in the State Health Benefits Program and School Employees’ Health Benefits Program June 2010
Extended Availability of Retirement Workshops for PERS and TPAF Members — Certifying Officers of the Public Employees’ Retirement System (PERS) and Teachers’ Pension and Annuity Fund (TPAF) May 11, 2010
Retirement Workshops Available for State and Local PERS Members — Certifying Officers of the Public Employees' Retirement System (PERS) May 4, 2010
Retirement Workshops Available for TPAF and PERS Members — Certifying Officers of the Teachers’ Pension and Annuity Fund (TPAF) April 28, 2010
Chapter 2, P.L. 2010 — Frequently Asked Questions — State Biweekly and State Monthly Certifying Officers; Local Government Certifying Officers of Employers Participating in the SHBP; Local Education Certifying Officers of Employers Participating in the SEHBP April 20, 2010
Chapter 3, P.L. 2010 — Disability Benefit Changes to the PERS and TPAF — Certifying Officers of the Public Employees' Retirement System (PERS) and Teachers’ Pension and Annuity Fund (TPAF) April 9, 2010
Chapter 2, P.L. 2010 — Changes to the SHBP and SEHBP — State Biweekly and State Monthly Certifying Officers; Local Government Certifying Officers of Employers Participating in the SHBP; Local Education Certifying Officers of Employers Participating in the SEHBP April 1, 2010
Chapter 1, P.L. 2010 — Pension Changes to the PERS, TPAF, and DCRP — Certifying Officers of the Public Employees' Retirement System (PERS), Teachers’ Pension and Annuity Fund (TPAF), and Defined Contributions Retirement Program (DCRP) April 1, 2010
Chapter 1, P.L. 2010 — Pension Changes to the PFRS — Certifying Officers of the Police and Firemen’s Retirement System (PFRS) April 1, 2010
Chapter 1, P.L. 2010 — Pension Changes to the SPRS — Certifying Officers of the State Police Retirement System (SPRS) April 1, 2010
Report of Contributions, 1st Quarter 2010 (January 1st to March 31st) – Certifying Officers, Teachers’ Pension and Annuity Fund, Public Employees’ Retirement System & Police and Firemen’s Retirement System March 2010
Report of Contributions, 1st Quarter 2010 (January 1st to March 31st) - Certifying Officers,Autonomous State College / University/State Employers March 2010
Extension of COBRA Subsidy for 2010 under the American Recovery and Reinvestment Act — State Biweekly and State Monthly Certifying Officers; Local Government Certifying Officers of Employers Participating in the SHBP; Local Education Certifying Officers of Employers Participating in the SEHBP February 1, 2010
Dependent Eligibility Verification Audit (DEVA) — State Health Benefits Program Participating Local Government Employers and School Employees’ Health Benefits Program Participating Local Education Employers January 25, 2010
Special Open Enrollment and Automatic Transfers State Department Certifying Officers, State Monthly Certifying Officer January 22, 2010
Reminder of Deadline for PFRS Training Requirements — Certifying Officers of the Police and Firemen’s Retirement System (PFRS) January 6, 2010
Election of Representative to the New Jersey State Investment Council — Certifying Officers 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) January 6, 2010

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 2010

TO:

Certifying Officers - Teachers’ Pension and Annuity Fund, Public Employees’ Retirement System, and Police and Firemen’s Retirement System

FROM:

Joseph Zisa, Manager 1, Fiscal Resources

SUBJECT:

Report of Contributions, 4th Quarter 2010 (October 1st to December 31st)

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 - For Employers Who Receive ‘Stop Deductions’ Certifications for Members

If you receive a ‘stop deduction’ certification for a member who is on the IROC, you must stop reporting deductions as of the date reflected on the certification. This certification was produced as a result of the employee’s concurrent service with another employer which, as a result of reforms contained in Chapter 1, P.L. 2010, makes employment with your jurisdiction no longer eligible for pension service.  Please adjust the member’s months of service and base salary, if applicable, and select “terminated” from the drop down box as the reason for the change.

IROC Reporting For Multiple Members

Chapter 1, P.L. 2010, requires that an employee enrolled after May 21, 2010, be eligible for PERS or TPAF Tier 4 membership based upon only one position and requires the retirement system to designate the position providing the higher or highest compensation for the member from among any concurrently held positions.  This position will be used as the basis for eligibility for membership, service credit, the compensation base for pension contributions, and for other pension calculations. 

For current PERS or TPAF Tier 1, Tier 2, or Tier 3 multiple members, all concurrent positions held without a break in service from May 21, 2010, will continue to qualify for service credit and the compensation base for pension contributions and calculation of benefits.  However, provisions of Chapter 1, P.L. 2010, require that any new concurrently held position begun after May 21, 2010, will not qualify for service credit or the compensation base for pension contributions and calculation of retirement for any PERS or TPAF multiple member.  Current multiple employer relationships will be terminated following any “break in service” not supported by an employer approved leave of absence (LOA).  For this purpose a “break in service” is being defined for employment with any municipality, county, board of education or authority as any one month period without service while not on an approved LOA.  The Division may require recertification of these employment relationships following a break in service with an approved leave of absence. As a result, you may be asked to provide additional information before being able to add a multiple member back to your report of contributions following an approved LOA.

Deadline for Filing the Report of Contributions

The Division has been updating member accounts as early as four weeks following the close of the calendar quarter.  But to do so we need the support of all our employers. Therefore, all reports are due by January 7, 2011.  Should your report not be received by the close of business on January 21, 2011, may not be used to update member accounts and interest penalties will begin to accrue.

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. 

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.

Closure of the Prosecutors Part of the PERS

Chapter 1, P.L. 2010, closes the Prosecutors Part of the PERS to new members.  Prosecutors taking office after May 21, 2010, will be enrolled as “regular” Tier 4 members of the PERS — except that a county prosecutor who is appointed by the Governor with the advice and consent of the Senate will be enrolled in the DCRP (or regular PERS if a Tier 1 member continuously since July 1, 2007).

Prosecutors who were enrolled in the Prosecutors Part of the PERS between its opening in 2001 and its closure on May 21, 2010, will be permitted to continue as members of the Prosecutors Part and receive Prosecutors Part benefits, provided that they continue in eligible Prosecutors Part service.

PERS & TPAF Tier 3 - 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 making no change to the annual base salary for participation in the TPAF and PERS from $7,700. This minimum annual base salary continues in effective through January 1, 2011. 

Employees who fall below the minimum annual base salary amount in any calendar year 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 (44K), for additional information.

PERS & TPAF Tiers 2 & 3 - 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 2010, 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 2010 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).  DCRP plan materials, enrollment forms, and other program information are available at www.state.nj.us/treasury/pensions/dcrp1.shtml

Note:  Until reporting procedures are developed for PERS and TPAF members’ who exceed the social security maximum of $106,800 for 2010, continue to report the pension and contributory insurance (if applicable) 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.

PFRS – Maximum Compensation

Chapter 1, P.L. 2010, provides that new members eligible to enroll in the Police and Firemen’s Retirement System on or after May 21, 2010 are subject to a maximum compensation limit for PFRS contributions and benefit.  The maximum compensation is based on the annual maximum wage for Social Security.

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

Reporting of Retroactive Salary Increases

As a result of the establishment of maximum compensation limits for certain members of the Public Employees’ Retirement System (PERS), the Teachers’ Pension and Annuity Fund (TPAF) and the Police and Firemen’s Retirement System (PFRS), 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.

Procedures for Reporting of Retroactive Salary

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, Chapter 89, P.L. 2008, and Chapter 1, P.L 2010, a new column has been added to the IROC to identify any members affected by these laws. The column heading is “TIER”. Chapter 103, P.L. 2007, members will be identified as Tier 2;  Chapter 89, P.L. 2008, members will be identified as Tier 3; and Chapter 1, P.L.2010, members will be identified as Tier 4.  

Tiers Defined for the TPAF and the PERS

  • Tier 1: Member who were enrolled prior to July 1, 2007
  • Tier 2: Members who were eligible to enroll on or after July 1, 2007 and prior to November 2, 2008 pursuant to the provisions of Chapter 103, P.L. 2007
  • Tier 3: Members who were eligible to enroll on or after November 2, 2008 pursuant to the provisions of Chapter 89, P.L. 2010.
  • Tier 4: Members who were eligible to enroll on or after May 21, 2010 pursuant to the provisions of Chapter 1, P.L. 2010.

Changing Banking Information For TEPS

On or after the date that the new checking account becomes effective, a Notice of Changes for TEPS should be faxed to (866) 568-2495 or mailed to:


New Jersey Department of Treasury
Division of Pensions and Benefits
PO Box 9581
Trenton NJ 08650-9581

Please call the TEPS Helpline (888) 835-3345 if you have any questions regarding the status of your change or if you have any questions regarding your password or the status of your transmittal payment.

Retirement Plan Limits for 2011

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 2010 to 2011 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 2011.
  • 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 2011. Please refer to Chapter 103, P.L. 2007 for details.

CO Letter in Printable Format Adobe PDF (59K)

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December 2010

TO:

Certifying Officers, Autonomous State College/University/State Employers

FROM:

Joseph Zisa, Manager 1, Fiscal Resources

SUBJECT:

Report of Contributions, 4th Quarter 2010 (October 1st to December 31st)

This memorandum has pertinent information concerning the reporting your employees’ pensionable service and salary and the completion of your quarterly Report of Contributions.  Please review this memorandum before submitting your quarterly pension report.

New - For Employers Who Receive ‘Stop Deductions’ Certifications for Members

If you receive a ‘stop deduction’ certification for a member who is on the IROC, you must stop reporting deductions as of the date reflected on the certification. This certification was produced as a result of the employee’s concurrent service with another employer which, as a result of reforms contained in Chapter 1, P.L. 2010, makes employment with your jurisdiction no longer eligible for pension service.  Please adjust the member’s months of service and base salary, if applicable.

Reporting For Multiple Members

Chapter 1, P.L. 2010, requires that an employee enrolled after May 21, 2010, be eligible for PERS or TPAF Tier 4 membership based upon only one position and requires the retirement system to designate the position providing the higher or highest compensation for the member from among any concurrently held positions.  This position will be used as the basis for eligibility for membership, service credit, the compensation base for pension contributions, and for other pension calculations. 

For current PERS or TPAF Tier 1, Tier 2, or Tier 3 multiple members, all concurrent positions held without a break in service from May 21, 2010, will continue to qualify for service credit and the compensation base for pension contributions and calculation of benefits.  However, provisions of Chapter 1, P.L. 2010, require that any new concurrently held position begun after May 21, 2010, will not qualify for service credit or the compensation base for pension contributions and calculation of retirement for any PERS or TPAF multiple member.  Current multiple employer relationships will be terminated following any “break in service” not supported by an employer approved leave of absence (LOA).  For this purpose a “break in service” is being defined for employment with any municipality, county, board of education or authority as any one month period without service while not on an approved LOA.  The Division may require recertification of these employment relationships following a break in service with an approved leave of absence.  As a result, you may be asked to provide additional information before being able to add a multiple member back to your report of contributions following an approved LOA.

The Division is aware that some adjunct faculty and part-time instructors are employed as multiple PERS members.  As a result of Chapter 1, P.L. 2010, adjunct faculty and part-time instructors with multiple member status will be unable to continue PERS membership if there is a break in service unless that individual is on an approved leave of absence.

PERS & TPAF Tier 3 - 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 making no change to the annual base salary for participation in the TPAF and PERS from $7,700. This minimum annual base salary continues in effective through January 1, 2011. 

Employees who fall below the minimum annual base salary amount in any calendar year 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 (44K), for additional information.

PERS & TPAF Tiers 2 & 3 - 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 2010, 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 2010 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).   DCRP plan materials, enrollment forms, and other program information are available at www.state.nj.us/treasury/pensions/dcrp1.shtml

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.

PFRS – Maximum Compensation

Chapter 1, P.L. 2010, provides that new members eligible to enroll in the Police and Firemen’s Retirement System on or after May 21, 2010 are subject to a maximum compensation limit for PFRS contributions and benefit.  The maximum compensation is based on the annual maximum wage for Social Security.

Tiers Defined for the TPAF and the PERS

  • Tier 1: Member who were enrolled prior to July 1, 2007
  • Tier 2: Members who were eligible to enroll on or after July 1, 2007 and prior to November 2, 2008 pursuant to the provisions of Chapter 103, P.L. 2007
  • Tier 3: Members who were eligible to enroll on or after November 2, 2008 pursuant to the provisions of Chapter 89, P.L. 2010.
  • Tier 4: Members who were eligible to enroll on or after May 21, 2010 pursuant to the provisions of Chapter 1, P.L. 2010.

Reporting and Payment Information

Your 4th Quarter 2010 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, 2011. Your December 2010 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, 2011.

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

Changing Banking Information For TEPS

On or after the date that the new checking account becomes effective, a Notice of Changes for TEPS should be faxed to (866) 568-2495 or mailed to:


New Jersey Department of Treasury
Division of Pensions and Benefits
PO Box 9581
Trenton NJ 08650-9581

Please call the TEPS Helpline (888) 835-3345 if you have any questions regarding the status of your change or if you have any questions regarding your password or the status of your transmittal payment.

Retirement Plan Limits for 2011

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 2010 to 2011 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 2011.
  • 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 2011. Please refer to Chapter. 103, P.L. 2007 for details.

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November 29, 2010

TO:

Certifying Officers of the Public Employees’ Retirement System (PERS), Teachers' Pension and Annuity Fund (TPAF), and Police and Firemen’s Retirement System (PFRS)

FROM:

New Jersey Division of Pensions and Benefits

SUBJECT:

Retirement Workshops Available for PERS, TPAF, and PFRS Members in 2011

The Division of Pensions and Benefits has scheduled Retirement Workshop dates in 2011 for members of the Public Employees’ Retirement System (PERS), Teachers’ Pension and Annuity Fund (TPAF), or Police and Firemen’s Retirement System (PFRS).

RETIREMENT WORKSHOPS

During the workshops, our representatives will take a step-by-step approach to explain topics that include retirement benefits, beneficiary options or survivor’s benefits, group life insurance, the taxability of your pension, and health benefits in retirement.

  • Workshops are available for PERS, TPAF, or PFRS members who will be retiring before the end of 2011.
  • All workshops are being held at the New Jersey Forensic Science Technology Center in Hamilton Township (Mercer County), New Jersey*.
  • Workshop times will be at either 9:00 a.m. or 1:00 p.m.  
  • PERS/TPAF workshops are currently scheduled for February 2, March 23, April 13, 20, or 26, and June 22.
  • PFRS workshops are currently scheduled for March 2 and May 25.
  • Seating is limited*. Members interested in attending must register online using the link on the Division’s Web site. Go to: www.state.nj.us/treasury/pensions and click the link for “Retirement Workshops”.

*Additional dates or locations may be added if they become available but cannot be guaranteed.

PREPARE IN ADVANCE USING MBOS

If attending, members must print an Estimate of Retirement Benefits using the Member Benefits Online System (MBOS) and bring it to the workshop (retirement estimates will not be provided at the workshop). To register for MBOS go to: www.state.nj.us/treasury/pensions/mbosregister.shtml and follow the registration instructions.  Estimates obtained from MBOS are the same estimates obtained when visiting the Division’s offices and use identical salary and service information.

If members are unable to use MBOS:

  • Human Resources Representative or Benefits Administrators at your employing entity may obtain retirement estimates for employees using the Employer Pensions and Benefits Information Connection (EPIC); or
  • Direct the members to the Division’s long-range Retirement Calculator which can be accessed from the Pensions and Benefits home page at: www.state.nj.us/treasury/pensions  Please note the long-range calculator uses service and salary information that is provided by the member and is not an “official” estimate of benefits.  Members should not rely exclusively on this calculation if applying for retirement.

APPLY FOR RETIREMENT USING MBOS

Due to the expected increase in retirement applications, members must use the online Retirement Application available in MBOS.  Submitting the application through MBOS reduces the chance of any delays in receipt of your application and provides for the fastest processing.  Please also note that paper retirement applications will not be available and will not be accepted at the workshops. 

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September 15, 2010

TO:

Certifying Officers - Teachers’ Pension and Annuity Fund, Public Employees’ Retirement System, and Police and Firemen’s Retirement System

FROM:

Joseph Zisa, Manager 1, Fiscal Resources

SUBJECT:

Report of Contributions, 3rd Quarter 2010 (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

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 7, 2010.  Should your report not be received by the close of business on October 22, 2010, 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.

Multiple Membership

For current PERS or TPAF Tier 1, Tier 2, or Tier 3 multiple members, all concurrent positions held without a break in service from May 21, 2010, will continue to qualify for service credit and the compensation base for pension contributions and calculation of benefits.  However, provisions of Chapter 1, P.L. 2010, require that any new concurrently held position begun after May 21, 2010, will not qualify for service credit or the compensation base for pension contributions and calculation of retirement for any PERS or TPAF multiple member.

Current multiple location relationships will be terminated following any “break in service” not supported by an employer approved leave of absence (LOA).  For this purpose a “break in service” is being defined for employment with any municipality, county, board of education or authority as any one month period without service while not on an approved LOA.  The Division may require recertification of these employment relationships following a break in service with an approved leave of absence.  As a result, you may be asked to provide additional information before being able to add a multiple member back to your report of contributions following an approved LOA.

CLOSURE OF THE PROSECUTORS PART OF THE PERS

Chapter 1, P.L. 2010, closes the Prosecutors Part of the PERS to new members.  Prosecutors taking office after May 21, 2010, will be enrolled as “regular” Tier 4 members of the PERS — except that a county prosecutor who is appointed by the Governor with the advice and consent of the Senate will be enrolled in the DCRP (or regular PERS if a Tier 1 member continuously since July 1, 2007).

Prosecutors who were enrolled in the Prosecutors Part of the PERS between its opening in 2001 and its closure on May 21, 2010, will be permitted to continue as members of the Prosecutors Part and receive Prosecutors Part benefits, provided that they continue in eligible Prosecutors Part service.

PERS & TPAF Tier 3 - 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 making no change to the annual base salary for participation in the TPAF and PERS from $7,700. This minimum annual base salary continues in effective through January 1, 2011. 

Employees who fall below the minimum annual base salary amount in any calendar year 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.

PERS & TPAF Tiers 2 & 3 - 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 2010, 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 2010 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).   DCRP plan materials, enrollment forms, and other program information are available at www.state.nj.us/treasury/pensions/dcrp1.shtml.

Note:  Until reporting procedures are developed for PERS and TPAF members’ who exceed the social security maximum of $106,800 for 2010, continue to report the pension and contributory insurance (if applicable) 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.

PFRS – Maximum Compensation

Chapter 1, P.L. 2010 provides that new members eligible to enroll in the Police and Firemen’s Retirement System on or after May 21, 2010 are subject to a maximum compensation limit for PFRS contributions and benefit.  The maximum compensation is based on the annual maximum wage for Social Security.

Note:  Until reporting procedures are developed for PFRS members’ who exceed the social security maximum of $106,800 for 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.

Reporting of Retroactive Salary Increases

As a result of the establishment of maximum compensation limits for certain members of the Public Employees’ Retirement System (PERS), the Teachers’ Pension and Annuity Fund (TPAF) and the Police and Firemen’s Retirement System (PFRS), 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.

Procedures for REPORTING OF RETROACTIVE SALARY

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, PL 2007, Chapter 89, PL 2008, and Chapter 1, P.L 2010 a new column has been added to the IROC to identify any members affected by these laws. The column heading is “TIER”.  Ch. 103, PL 2007, members will be identified as Tier 2;  Ch. 89, PL 2008, members will be identified as Tier 3; and Chapter 1, P.L.2010, members will be identified as Tier 4.  

Tiers Defined for the TPAF and the PERS.

  • Tier 1: Member who were enrolled prior to July 1, 2007
  • Tier 2: Members who were eligible to enroll on or after July 1, 2007 and prior to November 2, 2008 pursuant to the provisions of Chapter 103, P.L. 2007
  • Tier 3: Members who were eligible to enroll on or after November 2, 2008 pursuant to the provisions of Chapter 89, P.L. 2010.
  • Tier 4: Members who were eligible to enroll on or after May 21, 2010 pursuant to the provisions of Chapter 1, P.L. 2010.

Changing Banking Information For TEPS

On or after the date that the new checking account becomes effective, a Notice of Changes for TEPS should be faxed to (866) 568-2495 or mailed to:

New Jersey Department of Treasury
Division of Pensions and Benefits
PO Box 9581
Trenton NJ 08650-9581

Please call the TEPS Helpline (888) 835-3345 if you have any questions regarding the status of your change or if you have any questions regarding your password or the status of your transmittal payment.

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September 15, 2010

TO:

Certifying Officer Autonomous State College/University/State Employers

FROM:

Joseph Zisa, Manager 1, Fiscal Resources

SUBJECT:

Report of Contributions, 3rd Quarter 2010 (July 1st to September 30th)

This memorandum has pertinent information concerning the reporting your employees’ pensionable service and salary and the completion of your quarterly Report of Contributions.  Please review this memorandum before submitting your quarterly pension report.

Multiple Membership

For current PERS or TPAF Tier 1, Tier 2, or Tier 3 multiple members, all concurrent positions held without a break in service from May 21, 2010, will continue to qualify for service credit and the compensation base for pension contributions and calculation of benefits. However, provisions of Chapter 1, P.L. 2010, require that any new concurrently held position begun after May 21, 2010, will not qualify for service credit or the compensation base for pension contributions and calculation of retirement for any PERS or TPAF multiple member.

Current multiple location relationships will be terminated following any “break in service” not supported by an employer approved leave of absence (LOA).  For this purpose a “break in service” is being defined as any one reporting period (one month for employees reported on a monthly basis, one payroll period for employees reported by the biweekly payroll period) without service while not on an approved LOA. The Division may require recertification of these employment relationships following a break in service with an approved leave of absence. 

The Division is aware that some adjunct faculty and part-time instructors are employed as multiple PERS members.  As a result of Chapter 1, P.L. 2010, adjunct faculty with multiple member status will be unable to continue PERS membership if there is a break in service unless that adjunct is on an approved leave of absence.

PERS & TPAF Tier 3 - 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 making no change to the annual base salary for participation in the TPAF and PERS from $7,700. This minimum annual base salary continues in effective through January 1, 2011. 

Employees who fall below the minimum annual base salary amount in any calendar year 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.

PERS & TPAF Tiers 2 & 3 - 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.

For calendar year 2010, 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 2010 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).   DCRP plan materials, enrollment forms, and other program information are available at www.state.nj.us/treasury/pensions/dcrp1.shtml.

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.

PFRS – Maximum Compensation

Chapter 1, P.L. 2010 provides that new members eligible to enroll in the Police and Firemen’s Retirement System on or after May 21, 2010 are subject to a maximum compensation limit for PFRS contributions and benefit.  The maximum compensation is based on the annual maximum wage for Social Security.

Reporting And Payment Information

Your 2nd Qtr. 2010 tape ROC applicable to the Teachers’ Pension and Annuity Fund, Public Employees’ Retirement System, and Police and Firemen’s Retirement System is due by October 7, 2010. Your June 2010 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 October 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.

Changing Banking Information For TEPS

On or after the date that the new checking account becomes effective, a Notice of Changes for TEPS should be faxed to (866) 568-2495 or mailed to:

New Jersey Department of Treasury
Division of Pensions and Benefits
PO Box 9581
Trenton NJ 08650-9581

Please call the TEPS Helpline (888) 835-3345 if you have any questions regarding the status of your change or if you have any questions regarding your password or the status of your transmittal payment.

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September 2010

TO: Certifying Officers of the Public Employees' Retirement System (PERS)
FROM: Kathleen Coates, Board Secretary
Public Employees' Retirement System
SUBJECT: PERS Notice of Election

In an effort to support a decrease in administrative costs and the preservation of resources, this certifying officer letter and the attached notice for the 2011 Public Employees' Retirement System (PERS) elections are being transmitted to you electronically and will require your electronic response.

We are seeking your assistance in servicing an election for one “State” Representative position, one “County” Representative position, and two “Municipal” Representative positions to the PERS Board of Trustees.  A State, County and one Municipal representative will be elected for a three-year term as of July 1, 2011.  An additional Municipal representative will be elected for a two-year remaining term, effective July 1, 2011, to fill a position that is currently vacant and expires June 30, 2013.  Candidates for all positions must qualify by nomination.

We are requesting that you distribute the attached election notice electronically to each PERS member employed at your location, as the information will explain the pre-election procedures.  It is most important that each individual active PERS member receives this notice.  If you are the certifying officer for multiple locations, you will only receive one certifying officer letter and will be required to distribute the attached election notice to active PERS members at all locations.  Your attention to this distribution is required as regulated by N.J.A.C. 17:2-1.4.

We ask that you distribute this notice by the preferred method of distribution, which is electronically.  If you are not able to accommodate electronic distribution, please make copies of the notice and provide to all active PERS employees.  In addition, if you maintain a website for your employees, you may post the notice there and in any other appropriate public place at your location.

It is very important that you confirm distribution of this notice.  To confirm distribution of the notice to your active PERS employees, please send an e-mail to:

NJBOT.ELECT@treas.state.nj.us

Thank you for your prompt assistance in the timely response and distribution of this notice.

Attachment: Election Notice


DIVISION OF PENSIONS AND BENEFITS - NOTICE OF ELECTION
BOARD OF TRUSTEES OF THE PUBLIC EMPLOYEES' RETIREMENT SYSTEM (PERS)
One State Street Square - 50 West State Street - P.O. BOX 295 - Trenton, NJ 08625-0295

Nominations are now being received for one elected “State” position, one elected “County” position, and two elected “Municipal” positions to the Board of Trustees of the PERS whose terms will expire as of June 30, 2011.* The vacant Municipal position will expire as of June 30, 2013.**  The general responsibility for the operation of the PERS is vested in the Board of Trustees under the provisions of N.J.S.A. 43:15A-17.  The Board meets monthly at the Division of Pensions and Benefits in Trenton.

The statute provides that no employee shall suffer loss of salary or wages because of serving on the Board.  A member who wishes to be a candidate for one of the above positions must be an active member of the PERS and must be nominated by at least 500 active PERS members.  Only State employees may petition for State Representative, only County employees may petition for County Representative, and only Municipal employees may petition for Municipal Representative.  Instructions for the nominating process are available upon receipt of a written request to the Secretary of the PERS Board of Trustees.  Nominations must be registered on or before 4:00 p.m. Friday, January 14, 2011.  Election ballots will be mailed to employers on or about April 1, 2011 for prompt distribution to their employee members of the PERS.  All qualified candidates will be invited to attend the drawing by lot for position on the ballot, if necessary, and/or the selection of term for the Municipal election on February 16, 2011.

PRESENT MEMBERS - TERM:
 
State   Thomas Bruno  6-30-13 
County
*Suzanna Buriani-DeSantis    6-30-11
  *John Lowden   6-30-11        
  Peter Maurer 6-30-12 
Gubernatorial Appointments Edward Thomson, III
  Ronald Winthers
Municipal *Leon Flanagan  6-30-11 
  **Vacant 6-30-13
     
   
Ex Officio Member Susanne Culliton,
  State Treasurer’s Representative
           

The PERS Board of Trustees has the responsibility for the proper operation of the Retirement System.  The Board consists of six employee representatives, the State Treasurer, and two private citizens appointed by the Governor with the advice and consent of the Senate.  The Board meets once per month.  Within the limits of legislation, the PERS Board has a certain amount of discretion in the solution of problems confronting the Retirement System in cases where complications exist that legislation alone cannot properly address.

PERS BOARD RESPONSIBILITIES

  • Adopt rules and regulations to provide for the payment of benefits and collection of monies as required by the statute.
  • Establish rules and regulation within the limitations of statutes and opinions of the Courts and the Attorney General, designed to prevent injustices and inequities that may arise in the operation of the Retirement System.
  • Resolve individual questions on the merits of each case in terms of statutes, opinions of the Attorney General, advice of the Actuary and cases cited by counsel as deliberated by the Courts.
  • Review monthly and annual reports setting forth data such as assets and liabilities, income and disbursements and statistical summarization of membership as documented by the Actuary.

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September 10, 2010

TO: State Departmental Certifying Officers
State Departmental Human Resources Directors
State Biweekly Human Resources Representatives
FROM: New Jersey State Health Benefits Program
SUBJECT: SHBP Open Enrollment 2010 — State Biweekly Employers

The State Health Benefits Program (SHBP) Open Enrollment period for all State employees will begin on October 1, 2010 and end on October 29, 2010.  All changes to coverage made during this open enrollment will be effective on January 1, 2011 for State employees paid through the State Centralized Payroll Unit.

For changes made during this Open Enrollment, completed employer-certified Health Benefit Applications and/or Dental Plan 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 to be effective for the start of the new plan year is November 5, 2010.

Note: Be sure to see the information on page 6 of this letter regarding important changes in the distribution of Open Enrollment publications.

COVERAGE OF CHILDREN UNTIL AGE 26

Provisions of the federal Patient Protection and Affordable Care Act (PPACA) include the coverage of children until age 26.  Effective with the plan year beginning January 1, 2011, the SHBP will extend the coverage of children until December 31 of the year a child turns age 26 (or older if a disabled dependent child – see page 2)

Employers should note that the PPACA mandates that employers inform employees of the provisions of this new legislation.  In addition to an article in the Open Enrollment edition of the Health Capsule Adobe PDF (102K) newsletter, an informational flier is attached for distribution to your enrolled employees.

Under the PPACA a “child” is defined as a subscriber’s child until age 26, regardless of the child’s marital, student, or financial dependency status — even if the young adult no longer lives with his or her parents.  However, the extension of coverage is only available if the adult child is not eligible to enroll in other employer-based coverage (aside from coverage through the parent).

  • During the October Open Enrollment, parents may enroll/re-enroll children who meet the above criteria and who will be under age 26 as of December 31, 2010.  A photocopy of the child's birth certificate that includes the covered employee’s name must be submitted along with the application (additional supporting documentation is required for a stepchild, foster child, or a legal guardianship).
  • Covered children who turn age 23 during 2010 do not need to enroll during October to continue coverage in 2011. Coverage will be continued automatically.
  • Children ages 23 through 26 who are currently enrolled for extended SHBP coverage under the provisions of Chapter 375, P.L. 2005, will need to be enrolled during October for SHBP coverage as a child under age 26.

DOCUMENTATION REQUIREMENTS FOR OTHER DEPENDENTS

There are documentation requirements if a member is enrolling other dependents for coverage (spouse, partner, step/foster child, disabled child over age 26). Along with the employer-certified Health Benefit Applications and/or Dental Plan Application the following documents are required to verify the dependent’s relationship to the member and eligibility for coverage.

  • Employees who are enrolling a spouse 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 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/partner 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 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.

For a stepchild 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. 

For a grandchild, foster child, or legal guardianship provide a photocopy of a Final Court Order with the presiding judge’s signature and seal attesting to the legal guardianship by the covered employee.

Note: Additional documentation requirements for the continuation of coverage for children with disabilities over the age of 26 or for children until age 31 under Chapter 375, P.L. 2005, 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.

MINIMUM WORK HOURS FOR COVERAGE

A State employee hired after May 21, 2010, is required to work a minimum of 35 hours per week* to be considered “full-time” and eligible for coverage under the SHBP.

Similarly, after May 21, 2010, any newly appointed or elected officer is required to work a minimum of 35 hours per week* to be eligible for coverage under the SHBP.

* Or more if required by contract. 

An employee or appointed/elected officer of the State enrolled on or before May 21, 2010, is eligible for continued coverage under the SHBP based on the minimum work hour requirements in place prior to May 21, 2010, provided there is no break in the employee’s/officer’s service or reduction in work hours.

MULTIPLE SHBP/SEHBP COVERAGE IS PROHIBITED

Chapter 2, P.L. 2010, effective May 21, 2010, specifically prohibits two members who are each enrolled in SHBP/SEHBP plans from covering each other. Therefore, an eligible individual may only enroll in the SHBP/SEHBP as an employee or retiree, or be covered as a dependent.

In addition, eligible children may only be covered by one participating SHBP/SEHBP subscriber.

MEDICAID AND CHILDREN’S HEALTH INSURANCE PROGRAMS NOTICE

The federal Children's Health Insurance Program Reauthorization Act requires that employees receive annual notification of premium assistance for employer-sponsored health coverage available through Medicaid and Children’s Health Insurance Programs (CHIP).

A sample Medicaid/CHIP Notice is included with this mailing that employers may distribute to enrolled employees.  The Medicaid/CHIP Notice will also be incorporated in the Division’s annual mailing of HIPAA/COBRA information so the notices can be distributed in future years.

2011 SHBP RATES FOR EMPLOYERS

The State Health Benefits Commission has approved medical, dental, and prescription drug plan rates for the 2011 plan year.  These rates are based upon the recommendation of the Commission’s actuarial consultant, Aon Consulting.

Effective January 1, 2011, SHBP plan rates for the State Active Biweekly Group will see the following percentage of change.

MEDICAL PLAN RATE CHANGES FOR 2011

PLAN TYPE

RATE CHANGE

NJ DIRECT15

6.1%

Aetna HMO

9.4%

CIGNA HealthCare HMO

8.9%

Prescription Drug Plan

5%


DENTAL PLAN RATE CHANGES FOR 2011

PLAN TYPE

RATE CHANGE

Dental Expense Plan

2%

Dental Provider Organizations (DPO)
(Aetna, CIGNA, Community)

0%

BeneCare DPO

1%

Healthplex DPO

-5%

Horizon DPO

2%

MEDICAL PLANS, EMPLOYEE COSTS, AND COPAYMENTS

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

PRESCRIPTION DRUG PLANS AND COPAYMENTS

Medco Health Solutions, Inc., of Franklin Lakes, NJ, is the pharmacy benefits manager for the SHBP. 

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.

For more information, see the Employee Prescription Drug Plan Member Handbook.

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 29, 2010.  To waive coverage effective January 1st, employees should indicate “Open Enrollment” on the waiver form; otherwise, the waiver will be processed on a timely basis.

DENTAL PLANS AND EMPLOYEE COSTS

Dental coverage is offered to all eligible State employees through the Employee Dental Plans.  For plan year 2011, 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.

The employee cost for coverage under a dental plan is 50 percent of the actual dental plan premium. Therefore, the employee cost varies 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 and Fact Sheet #37, Employee Dental Plans Adobe PDF (44K)with a side-by-side comparison of dental plan benefits — are 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 2, 2010, 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$ave) Open Enrollment Period runs from October 1 until October 31, 2010 (concurrent with the SHBP Open Enrollment Period). Tax$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.

ONLINE DISTRIBUTION OF OPEN ENROLLMENT MATERIALS

Please Note: In compliance with State initiatives to provide paperless services, the Health Capsule newsletter and most other Open Enrollment informational materials will only be available in electronic format for this year’s Open Enrollment. 

Access to Open Enrollment publications are available through links at the Division of Pensions and Benefits Web site: www.state.nj.us/treasury/pensions/health-benefits.shtml  or as PDF attachments provided with the distribution of this letter.

Employers should inform employees to access the Open Enrollment information online or provide the PDF versions via e-mail attachment or your Departmental Intranet.

For cases where online or e-mail notification is not possible, a paper flier giving instructions on accessing the Open Enrollment publications is provided with this letter and can be copied and distributed as required.

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.

Employees should be informed to access the Health Capsule online or be provided the PDF version via e-mail attachment or your Departmental Intranet.

CHECK MESSAGES — Beginning September 17, 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*.

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

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.)

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 are being revised. Updates — where needed — will be online for the start of the 2011 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 or send an e-mail

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 (9K)
Medical and Dental Plan Rates Adobe PDF (9K)
Health Capsule Newsletter Adobe PDF (102K)
Open Enrollment Flier for Online Access to Publications Adobe PDF (35K)
Coverage of Children Until Age 26 Flier Adobe PDF (8K)
Medicaid/CHIP Notice Adobe PDF (16K)
Open Enrollment Check Messages Adobe PDF (9K)
Medical/Dental Plan Employee Contact Information Adobe PDF (30K)
Medical/Dental Plan Marketing Contacts Adobe PDF (12K)

CO Letter in Printable Format Adobe PDF (70K)

Return to Top


September 10, 2010

TO: State Monthly Certifying Officers
State Monthly Human Resources Representatives
FROM: New Jersey State Health Benefits Program
SUBJECT: SEHBP Open Enrollment 2010 — State Monthly Employers

The State Health Benefits Program (SHBP) Open Enrollment period for all State employees will begin on October 1, 2010 and end on October 29, 2010.  All changes to coverage made during this open enrollment will be effective on January 1, 2011 for State monthly employees.

For changes made during this Open Enrollment, completed employer-certified Health Benefit Applications and/or Dental Plan 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 to be effective for the start of the new plan year is November 5, 2010.

Note: Be sure to see the information on page 6 of this letter regarding important changes in the distribution of Open Enrollment publications.

COVERAGE OF CHILDREN UNTIL AGE 26

Provisions of the federal Patient Protection and Affordable Care Act (PPACA) include the coverage of children until age 26.  Effective with the plan year beginning January 1, 2011, the SHBP will extend the coverage of children until December 31 of the year a child turns age 26 (or older if a disabled dependent child).

Employers should note that the PPACA mandates that employers inform employees of the provisions of this new legislation.  In addition to an article in the Open Enrollment edition of the Health Capsule newsletter, an informational flier is attached for distribution to your enrolled employees.

Under the PPACA a “child” is defined as a subscriber’s child until age 26, regardless of the child’s marital, student, or financial dependency status — even if the young adult no longer lives with his or her parents.  However, the extension of coverage is only available if the adult child is not eligible to enroll in other employer-based coverage (aside from coverage through the parent).

  • During the October Open Enrollment, parents may enroll/re-enroll children who meet the above criteria and who will be under age 26 as of December 31, 2010.  A photocopy of the child's birth certificate that includes the covered employee’s name must be submitted along with the application (additional supporting documentation is required for a foster child, stepchild, or a legal guardianship).
  • Covered children who turn age 23 during 2010 do not need to enroll during October to continue coverage in 2011. Coverage will be continued automatically.
  • Children ages 23 through 26 who are currently enrolled for extended SHBP coverage under the provisions of Chapter 375, P.L. 2005, will need to be enrolled during October for SHBP coverage as a child under age 26.

DOCUMENTATION REQUIREMENTS FOR OTHER DEPENDENTS

There are documentation requirements if a member is enrolling other dependents for coverage (spouse, partner, step/foster child, disabled child over age 26). Along with the employer-certified Health Benefit Applications and/or Dental Plan Application the following documents are required to verify the dependent’s relationship to the member and eligibility for coverage.

  • Employees who are enrolling a spouse 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 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/partner 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 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.

For a stepchild 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. 

For a grandchild, foster child, or legal guardianship provide a photocopy of a Final Court Order with the presiding judge’s signature and seal attesting to the legal guardianship by the covered employee.

Note: Additional documentation requirements for the continuation of coverage for children with disabilities over the age of 26 or for children until age 31 under Chapter 375, P.L. 2005, 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.

MINIMUM WORK HOURS FOR COVERAGE

A State employee hired after May 21, 2010, is required to work a minimum of 35 hours per week* to be considered “full-time” and eligible for coverage under the SHBP.

Similarly, after May 21, 2010, any newly appointed or elected officer is required to work a minimum of 35 hours per week* to be eligible for coverage under the SHBP.

* Or more if required by contract. 

An employee or appointed/elected officer of the State enrolled on or before May 21, 2010, is eligible for continued coverage under the SHBP based on the minimum work hour requirements in place prior to May 21, 2010, provided there is no break in the employee’s/officer’s service or reduction in work hours.

MULTIPLE SHBP/SEHBP COVERAGE IS PROHIBITED

Chapter 2, P.L. 2010, effective May 21, 2010, specifically prohibits two members who are each enrolled in SHBP/SEHBP plans from covering each other. Therefore, an eligible individual may only enroll in the SHBP/SEHBP as an employee or retiree, or be covered as a dependent.

In addition, eligible children may only be covered by one participating SHBP/SEHBP subscriber.

MEDICAID AND CHILDREN’S HEALTH INSURANCE PROGRAMS NOTICE

The federal Children's Health Insurance Program Reauthorization Act requires that employees receive annual notification of premium assistance for employer-sponsored health coverage available through Medicaid and Children’s Health Insurance Programs (CHIP).

A sample Medicaid/CHIP Notice is included with this mailing that employers may distribute to enrolled employees.  The Medicaid/CHIP Notice will also be incorporated in the Division’s annual mailing of HIPAA/COBRA information so the notices can be distributed in future years.

2011 SHBP RATES FOR EMPLOYERS

The State Health Benefits Commission has approved medical, dental, and prescription drug plan rates for the 2011 plan year.  These rates are based upon the recommendation of the Commission’s actuarial consultant, Aon Consulting.

Effective January 1, 2011, SHBP plan rates for the State Active Monthly Group will see the following percentage of change.

MEDICAL PLAN RATE CHANGES FOR 2011

PLAN TYPE

RATE CHANGE

NJ DIRECT15

6.1%

Aetna HMO

9.4%

CIGNA HealthCare HMO

8.9%

Prescription Drug Plan

5%

DENTAL PLAN RATE CHANGES FOR 2011

PLAN TYPE

RATE CHANGE

Dental Expense Plan

2%

Dental Provider Organizations (DPO)
(Aetna, CIGNA, Community)

0%

BeneCare DPO

1%

Healthplex DPO

-5%

Horizon DPO

2%

MEDICAL PLANS, EMPLOYEE COSTS, AND COPAYMENTS

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

PRESCRIPTION DRUG PLANS AND COPAYMENTS

Medco Health Solutions, Inc., of Franklin Lakes, NJ, is the pharmacy benefits manager for the SHBP.

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.

For more information, see the Employee Prescription Drug Plan Member Handbook.

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 29, 2010.  To waive coverage effective January 1st, employees should indicate “Open Enrollment” on the waiver form; otherwise, the waiver will be processed on a timely basis. 

DENTAL PLANS AND EMPLOYEE COSTS

Dental coverage is offered to all eligible State employees through the Employee Dental Plans.  For plan year 2011, 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.

The employee cost for coverage under a dental plan is 50 percent of the actual dental plan premium. Therefore, the employee cost varies 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 and Fact Sheet #37, Employee Dental Plans — with a side-by-side comparison of dental plan benefits — are 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, 2010, 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$ave) Open Enrollment Period runs from October 1 until October 31, 2010 (concurrent with the SHBP Open Enrollment Period). Tax$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.

ONLINE DISTRIBUTION OF OPEN ENROLLMENT MATERIALS

Please Note: In compliance with State initiatives to provide paperless services, the Health Capsule newsletter and most other Open Enrollment informational materials will only be available in electronic format for this year’s Open Enrollment. 

Access to Open Enrollment publications are available through links at the Division of Pensions and Benefits Web site: www.state.nj.us/treasury/pensions/health-benefits.shtml  or as PDF attachments provided with the distribution of this letter.

Employers should inform employees to access the Open Enrollment information online or provide the PDF versions via e-mail attachment or your Departmental Intranet.

For cases where online or e-mail notification is not possible, a paper flier giving instructions on accessing the Open Enrollment publications is provided with this letter and can be copied and distributed as required.

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.

Employees should be informed to access the Health Capsule online or be provided the PDF version via e-mail attachment or your Departmental Intranet.

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*.

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

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.)

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 are being revised. Updates — where needed — will be online for the start of the 2011 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 or send an e-mail.

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 (10K)
Medical and Dental Plan Rates Adobe PDF (9K)
Health Capsule Newsletter Adobe PDF (102K)
Open Enrollment Flier for Online Access to Publications Adobe PDF (35K)
Coverage of Children Until Age 26 Flier Adobe PDF (8K)
Medicaid/CHIP Notice Adobe PDF (16K)
Medical/Dental Plan Employee Contact Information Adobe PDF (30K)
Medical/Dental Plan Marketing Contacts Adobe PDF (12K)

CO Letter in Printable Format Adobe PDF (72K)

Return to Top


September 10, 2010

TO: School Employees’ Health Benefits Program Participating Local
Education Employers
FROM: New Jersey School Employees’ Health Benefits Program
SUBJECT: SEHBP Open Enrollment 2010 — Local Education Employers

The School Employees’ Health Benefits Program (SEHBP) Open Enrollment Period for local education employees will begin on October 1, 2010 and end on October 29, 2010.  All changes to coverage made during this open enrollment will be effective on January 1, 2011.

For changes made during this Open Enrollment, completed employer-certified Health Benefit Applications and/or Dental Plan 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 to be effective for the start of the new plan year is November 5, 2010.

Note: Be sure to see the information on page 6 of this letter regarding important changes in the distribution of Open Enrollment publications.

COVERAGE OF CHILDREN UNTIL AGE 26

Provisions of the federal Patient Protection and Affordable Care Act (PPACA) include the coverage of children until age 26.  Effective with the plan year beginning January 1, 2011, the SEHBP will extend the coverage of children until December 31 of the year a child turns age 26 (or older if a disabled dependent child).

Employers should note that the PPACA mandates that employers inform employees of the provisions of this new legislation.  In addition to an article in the Open Enrollment edition of the Health Capsule newsletter, an informational flier is attached for distribution to your enrolled employees.

Under the PPACA a “child” is defined as a subscriber’s child until age 26, regardless of the child’s marital, student, or financial dependency status — even if the young adult no longer lives with his or her parents.  However, the extension of coverage is only available if the adult child is not eligible to enroll in other employer-based coverage (aside from coverage through the parent).

  • During the October Open Enrollment, parents may enroll/re-enroll children who meet the above criteria and who will be under age 26 as of December 31, 2010.  A photocopy of the child's birth certificate that includes the covered employee’s name must be submitted along with the application (additional supporting documentation is required for a stepchild, foster child, or a legal guardianship).
  • Covered children who turn age 23 during 2010 do not need to enroll during October to continue coverage in 2011. Coverage will be continued automatically.
  • Children ages 23 through 26 who are currently enrolled for extended SHBP coverage under the provisions of Chapter 375, P.L. 2005, will need to be enrolled during October for SHBP/ coverage as a child under age 26.

DOCUMENTATION REQUIREMENTS FOR OTHER DEPENDENTS

There are documentation requirements if a member is enrolling other dependents for coverage (spouse, partner, step/foster child, disabled child over age 26). Along with the employer-certified Health Benefit Applications and/or Dental Plan Application the following documents are required to verify the dependent’s relationship to the member and eligibility for coverage.

  • Employees who are enrolling a spouse 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 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/partner 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 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.

    For a stepchild 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.  

    For a grandchild, foster child, or legal guardianship provide a photocopy of a Final Court Order with the presiding judge’s signature and seal attesting to the legal guardianship by the covered employee.

    Note: Additional documentation requirements for the continuation of coverage for children with disabilities over the age of 26 or for children until age 31 under Chapter 375, P.L. 2005, can be found on the SEHBP 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.

MINIMUM WORK HOURS FOR COVERAGE

A local education employee hired after May 21, 2010, is required to work a minimum of 25 hours per week* to be considered “full-time” and eligible for coverage under the SEHBP.

* Or more if required by contract. 

An employees enrolled on or before May 21, 2010, is eligible for continued coverage under the SEHBP based on the minimum work hour requirements of the local education entity that were in place prior to May 21, 2010, provided there is no break in the employee’s service or reduction in work hours.

MULTIPLE SHBP/SEHBP COVERAGE IS PROHIBITED

Chapter 2, P.L. 2010, effective May 21, 2010, specifically prohibits two members who are each enrolled in SHBP/SEHBP plans from covering each other. Therefore, an eligible individual may only enroll in the SHBP/SEHBP as an employee or retiree, or be covered as a dependent.

In addition, eligible children may only be covered by one participating SHBP/SEHBP subscriber.

MEDICAID AND CHILDREN’S HEALTH INSURANCE PROGRAMS NOTICE

The federal Children's Health Insurance Program Reauthorization Act requires that employees receive annual notification of premium assistance for employer-sponsored health coverage available through Medicaid and Children’s Health Insurance Programs (CHIP).

A sample Medicaid/CHIP Notice is included with this mailing that employers may distribute to enrolled employees.  The Medicaid/CHIP Notice will also be incorporated in the Division’s annual mailing of HIPAA/COBRA information so the notices can be distributed in future years.

2011 SEHBP RATES FOR EMPLOYERS

The School Employees’ Health Benefits Commission has approved medical and prescription drug plan rates for the 2011 plan year. The State Health Benefits Commission has approved dental plan rates for the 2011 plan year. These rates are based upon the recommendation of the Commission’s actuarial consultant, Aon Consulting. 

Effective January 1, 2011, SEHBP plan rates for the Local Education Active Group will see the following percentage of change.

MEDICAL PLAN RATE CHANGES FOR 2011

PLAN TYPE

RATE CHANGE

NJ DIRECT10

8.5%

NJ DIRECT15

8.5%

Aetna HMO

12%

CIGNA HealthCare HMO

11.5%

Prescription Drug Plan

4%


DENTAL PLAN RATE CHANGES FOR 2011

PLAN TYPE

RATE CHANGE

Dental Expense Plan

2%

Dental Provider Organizations (DPO)
(Aetna, CIGNA, Community)

0%

BeneCare DPO

1%

Healthplex DPO

-5%

Horizon DPO

2%

MEDICAL 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 SEHBP Web site:www.state.nj.us/treasury/pensions/health-benefits.shtml

PRESCRIPTION DRUG PLANS AND COPAYMENTS

Medco Health Solutions, Inc., of Franklin Lakes, NJ, is the pharmacy benefits manager for the SEHBP.

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 education 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.

For more information, see the Employee Prescription Drug Plan Member Handbook.

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

WAIVING SEHBP COVERAGE

Local education employees are permitted to waive SEHBP medical and prescription coverage if they have other employer-provided or retiree coverage, or other coverage as a dependent. 

Employers are permitted to offer an incentive to employees who waive SEHBP coverage. Under Chapter 2, P.L. 2010, the incentive amount for waivers filed on or after May 21, 2010, is limited to 25 percent of the amount saved by the employer or $5,000, whichever is less.  In addition, because Chapter 2, P.L. 2010, prohibits multiple coverage under the SHBP/SEHBP (see page 3), waiver incentives are only payable if the other coverage is through a non-SHBP/SEHBP plan.

To waive coverage a SEHBP Waiver Form for Local Employees and a Health Benefit Application must be completed and submitted by October 29, 2010.  To waive coverage effective January 1st, employees should indicate “Open Enrollment” on the waiver form; otherwise, the waiver will be processed on a timely basis.

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.

The employee cost for coverage under a dental plan is 50 percent of the actual dental plan premium. Therefore, the employee cost varies 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 and Fact Sheet #37, Employee Dental Plans — with a side-by-side comparison of dental plan benefits — are 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, 2010, they will not be permitted to change dental plans during this Open Enrollment.

ONLINE DISTRIBUTION OF OPEN ENROLLMENT MATERIALS

Please note: In compliance with State initiatives to provide paperless services, the Health Capsule newsletter and most other Open Enrollment informational materials will only be available in electronic format for this year’s Open Enrollment. 

Access to Open Enrollment publications are available through links at the Division of Pensions and Benefits Web site: www.state.nj.us/treasury/pensions/health-benefits.shtml  or as PDF attachments provided with the distribution of this letter.

Employers should inform employees to access the Open Enrollment information online or provide the PDF versions via e-mail attachment or your Departmental Intranet.

For cases where online or e-mail notification is not possible, a paper flier giving instructions on accessing the Open Enrollment publications is provided with this letter and can be copied and distributed as required.

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 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.

Employees should be informed to access the Health Capsule online or be provided the PDF version via e-mail attachment or your Departmental Intranet.

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 are being revised. Updates — where needed — will be online for the start of the 2011 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.

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 (9K)
Medical Plan and Dental Plan Rates Adobe PDF (2K)
Health Capsule Newsletter Adobe PDF (98K)
Open Enrollment Flier for Online Access to Publications Adobe PDF (35K)
Coverage of Children Until Age 26 Flier Adobe PDF (8K)
Medicaid/CHIP Notice Adobe PDF (16K)
Medical/Dental Plan Employee Contact Information Adobe PDF (3K)
Medical/Dental Plan Marketing Contacts Adobe PDF (12K)

CO Letter in Printable Format Adobe PDF (374K)

Return to Top


September 10, 2010

TO: State Health Benefits Program Participating Local Government Employers
FROM: New Jersey State Health Benefits Program
SUBJECT: SHBP Open Enrollment 2010 — Local Government Employers

The State Health Benefits Program (SHBP) Open Enrollment Period for local government employees will begin on October 1, 2010 and end on October 29, 2010.  All changes to coverage made during this open enrollment will be effective on January 1, 2011.

For changes made during this Open Enrollment, completed employer-certified Health Benefit Applications and/or Dental Plan 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 to be effective for the start of the new plan year is November 5, 2010.

Note: Be sure to see the information on page 6 of this letter regarding important changes in the distribution of Open Enrollment publications.

COVERAGE OF CHILDREN UNTIL AGE 26

Provisions of the federal Patient Protection and Affordable Care Act (PPACA) include the coverage of children until age 26.  Effective with the plan year beginning January 1, 2011, the SHBP will extend the coverage of children until December 31 of the year a child turns age 26 (or older if a disabled dependent child).

Employers should note that the PPACA mandates that employers inform employees of the provisions of this new legislation.  In addition to an article in the Open Enrollment edition of the Health Capsule newsletter, an informational flier is attached for distribution to your enrolled employees.

Under the PPACA a “child” is defined as a subscriber’s child until age 26, regardless of the child’s marital, student, or financial dependency status — even if the young adult no longer lives with his or her parents.  However, the extension of coverage is only available if the adult child is not eligible to enroll in other employer-based coverage (aside from coverage through the parent).

  • During the October Open Enrollment, parents may enroll/re-enroll children who meet the above criteria and who will be under age 26 as of December 31, 2010.  A photocopy of the child's birth certificate that includes the covered employee’s name must be submitted along with the application (additional supporting documentation is required for a foster child, stepchild, or a legal guardianship).
  • Covered children who turn age 23 during 2010 do not need to enroll during October to continue coverage in 2011. Coverage will be continued automatically.
  • Children ages 23 through 26 who are currently enrolled for extended SHBP coverage under the provisions of Chapter 375, P.L. 2005, will need to be enrolled during October for SHBP coverage as a child under age 26.

DOCUMENTATION REQUIREMENTS FOR OTHER DEPENDENTS

There are documentation requirements if a member is enrolling other dependents for coverage (spouse, partner, step/foster child, disabled child over age 26). Along with the employer-certified Health Benefit Applications and/or Dental Plan Application the following documents are required to verify the dependent’s relationship to the member and eligibility for coverage.

  • Employees who are enrolling a spouse 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 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/partner 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 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.

For a stepchild 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.

For a grandchild, foster child, or legal guardianship provide a photocopy of a Final Court Order with the presiding judge’s signature and seal attesting to the legal guardianship by the covered employee.

Note: Additional documentation requirements for the continuation of coverage for children with disabilities over the age of 26 or for children until age 31 under Chapter 375, P.L. 2005, 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.

MINIMUM WORK HOURS FOR COVERAGE

A local government employee hired after May 21, 2010, is required to work a minimum of 25 hours per week* to be considered “full-time” and eligible for coverage under the SHBP.

Similarly, after May 21, 2010, any newly appointed or elected officer of alocal government entityis required to work a minimum of 35 hours per week* to be eligible for coverage under the SHBP.

* Or more if required by contract. 

An employee or appointed/elected officer, enrolled on or before May 21, 2010, is eligible for continued coverage under the SHBP based on the minimum work hour requirements of the local government entity that were in place prior to May 21, 2010, provided there is no break in the employee’s/officer’s service or reduction in work hours.

MULTIPLE SHBP/SEHBP COVERAGE IS PROHIBITED

Chapter 2, P.L. 2010, effective May 21, 2010, specifically prohibits two members who are each enrolled in SHBP/SEHBP plans from covering each other. Therefore, an eligible individual may only enroll in the SHBP/SEHBP as an employee or retiree, or be covered as a dependent.

In addition, eligible children may only be covered by one participating SHBP/SEHBP subscriber.

MEDICAID AND CHILDREN’S HEALTH INSURANCE PROGRAMS NOTICE

The federal Children's Health Insurance Program Reauthorization Act requires that employees receive annual notification of premium assistance for employer-sponsored health coverage available through Medicaid and Children’s Health Insurance Programs (CHIP).

A sample Medicaid/CHIP Notice is included with this mailing that employers may distribute to enrolled employees.  The Medicaid/CHIP Notice will also be incorporated in the Division’s annual mailing of HIPAA/COBRA information so the notices can be distributed in future years.

2011 SHBP RATES FOR EMPLOYERS

The State Health Benefits Commission has approved medical, dental, and prescription drug plan rates for the 2011 plan year.  These rates are based upon the recommendation of the Commission’s actuarial consultant, Aon Consulting. 

Effective January 1, 2011, SHBP plan rates for the Local Government Active Group will see the following percentage of change.

MEDICAL PLAN RATE CHANGES FOR 2011

PLAN TYPE

RATE CHANGE

NJ DIRECT10

12.2%

NJ DIRECT15

12.2%

Aetna HMO

12.7%

CIGNA HealthCare HMO

12.2%

Prescription Drug Plan

6.6%

DENTAL PLAN RATE CHANGES FOR 2011

PLAN TYPE

RATE CHANGE

Dental Expense Plan

2%

Dental Provider Organizations (DPO)
(Aetna, CIGNA, Community)

0%

BeneCare DPO

1%

Healthplex DPO

-5%

Horizon DPO

2%

MEDICAL 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

PRESCRIPTION DRUG PLANS AND COPAYMENTS

Medco Health Solutions, Inc., of Franklin Lakes, NJ, is the pharmacy benefits manager for the SHBP.

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.

For more information, see the Employee Prescription Drug Plan Member Handbook.

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

WAIVING SHBP COVERAGE

Local government employees are permitted to waive SHBP medical and prescription coverage if they have other employer-provided or retiree coverage, or other coverage as a dependent. 

Employers are permitted to offer an incentive to employees who waive SHBP coverage. Under Chapter 2, P.L. 2010, the incentive amount for waivers filed on or after May 21, 2010, is limited to 25 percent of the amount saved by the employer or $5,000, whichever is less.  In addition, because Chapter 2, P.L. 2010, prohibits multiple coverage under the SHBP/SEHBP (see page 3), waiver incentives are only payable if the other coverage is through a non-SHBP/SEHBP plan.

To waive coverage a SHBP Waiver Form for Local Employees and a Health Benefit Application must be completed and submitted by October 29, 2010.  To waive coverage effective January 1st, employees should indicate “Open Enrollment” on the waiver form; otherwise, the waiver will be processed on a timely basis.

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.

The employee cost for coverage under a dental plan is 50 percent of the actual dental plan premium. Therefore, the employee cost varies 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 and Fact Sheet #37, Employee Dental Plans — with a side-by-side comparison of dental plan benefits — are 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, 2010, they will not be permitted to change dental plans during this Open Enrollment.

ONLINE DISTRIBUTION OF OPEN ENROLLMENT MATERIALS

Please Note: In compliance with State initiatives to provide paperless services, the Health Capsule newsletter and most other Open Enrollment informational materials will only be available in electronic format for this year’s Open Enrollment. 

Access to Open Enrollment publications are available through links at the Division of Pensions and Benefits Web site: www.state.nj.us/treasury/pensions/health-benefits.shtml  or as PDF attachments provided with the distribution of this letter.

Employers should inform employees to access the Open Enrollment information online or provide the PDF versions via e-mail attachment or your Departmental Intranet.

For cases where online or e-mail notification is not possible, a paper flier giving instructions on accessing the Open Enrollment publications is provided with this letter and can be copied and distributed as required.

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.

Employees should be informed to access the Health Capsule online or be provided the PDF version via e-mail attachment or your Departmental Intranet.

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 are being revised. Updates — where needed — will be online for the start of the 2011 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 or send an e-mail.

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 (9K)
Medical and Dental Plan Rates Adobe PDF (23K)
Health Capsule Newsletter Adobe PDF (9K)
Open Enrollment Flier for Online Access to Publications Adobe PDF (35K)
Coverage of Children Until Age 26 Flier Adobe PDF (8K)
Medicaid/CHIP Notice Adobe PDF (16K)
Medical/Dental Plan Employee Contact Information Adobe PDF (3K)
Medical/Dental Plan Marketing Contacts Adobe PDF (12K)

CO Letter in Printable Format Adobe PDF (168K)

Return to Top


September 10, 2010

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 2011)

The annual open enrollment for the calendar year 2011 New Jersey State Employees Tax Savings Program (Tax$ave 2011) will be conducted from October 1 through October 31, 2010.  Full-time employees of the State who are eligible for participation in the New Jersey State Health Benefits Program (SHBP) may participate in Tax$ave. 

Note: Be sure to see the information on page 5 of this letter regarding important changes in the distribution of Open Enrollment publications.

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 2011 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, 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 2011 (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.  Fringe Benefits Management Company (FBMC) administers the Tax$ave Unreimbursed Medical and Dependent Care FSAs for the Division of Pensions and Benefits.

Unlike the Premium Option Plan or the health plans of the SHBP, prior participation in a Tax$ave FSA in 2010 does not carry over automatically into 2011. Employees must enroll each year to participate in an FSA for calendar year 2011. 

Listed below are some of the benefits of FSA participation.

  • $2,500 Medical FSA Maximum and $5,000 Dependent Care FSA Maximum.  For the Tax$ave 2011 plan year, the maximum annual allowance that can be set aside for an Unreimbursed Medical FSA is $2,500 and the maximum annual allowance that can be set aside for a Dependent Care FSA is $5,000. Employees may save federal income, Medicare and Social Security taxes on up to $7,500 of combined unreimbursed medical and dependent care expenses.  It makes sense to enroll and use a Tax$ave FSA plan when paying for doctor and prescription copayments, health plan deductibles, orthodontics, eyeglasses, Lasik surgery, uncovered dental fees, certain over-the-counter items (see page 3), or dependent care. 
  • Expanded Eligibility for Adult Children Until Age 26. The federal Patient Protection and Affordable Care Act (PPACA) changed the coverage eligibility of dependents to include adult children until age 26. Effective with the Plan Year beginning January 1, 2011, qualified out-of-pocket medical expenses incurred by eligible adult children can be reimbursed through the Unreimbursed Medical FSA.  Coverage applies until the end of the year in which a child turns age 26, regardless of the child’s marital or student status. However, until 2014, the coverage requirement applies only if the adult child is not eligible to enroll in other employer-based coverage (aside from coverage through the parent).
  • 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.
  • 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 certain eligible over-the-counter medical expenses (see below) 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 2011 Unreimbursed Medical FSA funds to reimburse eligible expense incurred prior to March 15, 2012 before using funds contributed in the 2012 plan year.

Changes to Over-the-Counter Reimbursement for Drugs and Medicines.

The federal Patient Protection and Affordable Care Act (PPACA) has changed FSA reimbursement eligibility of over-the-counter drugs and medicines. Effective January 1, 2011, over-the-counter drugs and medicines are no longer eligible for reimbursement without an order, directive, or script from an attending provider.  This includes over-the-counter items like: allergy drugs, pain relievers, cold and cough medicines, sleep aids, digestive aids, anti-gas medications, baby rash creams, and insect bite treatments.

If you wish to continue to be reimbursed for these types of over-the-counter items using your Unreimbursed Medical FSA, you must obtain a doctor’s order, directive, or prescription and submit it with a Claim Form to FBMC for reimbursement (items that require a doctor’s order may no longer be purchased using the myFBMC Card because the IIAS approval system cannot determine if there is a doctor’s note on file with FBMC). 

Over-the-counter items like eyeglasses, wrist splints, and bandages, as well as durable medical items such as crutches and canes will continue to be reimbursed without a doctor’s order.  For an updated list of expenses that are eligible under the FSA, please visit: www.myFBMC.com

Enrolling in a Flexible Spending Account

Employees have four ways of enrolling in the Tax$ave FSA accounts during the Open Enrollment: mail, fax, telephone, and Internet.  Fringe Benefits Management Company (FBMC) will inform employees currently participating in a Tax$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 FBMC by the employee.  All enrollment forms must be postmarked no later than October 31, 2010, to be accepted.  Those postmarked after October 31, 2010 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, 2010. 
  • Telephone: Employees may enroll in the Unreimbursed Medical and/or Dependent Care FSA plans for 2011 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, 2010.
  • 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, 2010.

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.

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.

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.  Information about New Jersey Domestic Partners can be found in Fact Sheet #71, Benefits Under the Domestic Partnership Act.  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 26 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 26 to 31, see Fact Sheet #74, Health Benefits Coverage of Children Until Age 31 Under Chapter 375.

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, 2010.

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$ave 2011 Open Enrollment Milestones Adobe PDF (7K) chart that lists the critical dates of the Tax$ave 2011 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.

Check Messages

Announcement of the open enrollment to employees paid through Centralized Payroll will be made with paycheck messages on the September 17 and October 1 payroll statements.

An additional ”reminder message” will be provided to employees through a paycheck message on October 29.  The text of the check message announcements and preview copies of the Tax$ave publications are enclosed with this letter.

NEW! Tax$ave Newletter and Flier Online Distribution for the Open Enrollment

In compliance with State initiatives to provide paperless services, the Tax$ave 2011 Newsletter, Premium Option Plan (POP) Flier, and FSA Plan pamphlet will only be available in electronic format for this year’s Open Enrollment. 

  • The Tax$ave 2011 Open Enrollment News announces the open enrollment, outlines the components of the program with emphasis on its tax saving advantages, and identifies the October 31, 2010 deadline for submission of all election materials;
  • The Premium Option Plan 2011 flier explains the advantages and disadvantages of participation; and
  • An FSA pamphlet describes the Unreimbursed Medical and Dependent Care Flexible Spending Accounts administered by Fringe Benefits Management Company (FBMC).

Access to these publications is available through links at the Division of Pensions and Benefits Web site: www.state.nj.us/treasury/pensions/taxsave.shtml or as PDF attachments provided with the distribution of this letter.

Employers should inform employees to access the Open Enrollment information online or provide the PDF versions via e-mail attachment or your Departmental Intranet.

For cases where online or e-mail notification is not possible, a paper flier giving instructions on accessing the Open Enrollment publications is provided with this letter and can be copied and distributed as required.

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 2011 form. 

  • A sample of the 2011 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 2011, 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, 2010.  Benefits administrators must then forward declination forms to Centralized Payroll by November 8, 2010. 

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$ave 2011, the open enrollment, or the Premium Option Plan, visit the Division of Pensions and Benefits’ Tax$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 an e-mail

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$ave 2011 Open Enrollment Milestones Adobe PDF (7K)
Open Enrollment Check Messages Adobe PDF (8K)
Tax$ave 2011 Open Enrollment News Adobe PDF (46K)
The Premium Option Plan 2011 Flier Adobe PDF (18K)
Tax$ave — FBMC Flexible Savings Accounts Pamphlet Adobe PDF (172K)
Open Enrollment Flier for Online Access to Publications Adobe PDF (18K)
Tax$ave — FBMC Flexible Savings Accounts Enrollment Form Adobe PDF (63K)
Declination of Premium Option Plan (POP) for Plan Year 2011 Adobe PDF (21K)

CO Letter in Printable Format Adobe PDF (802K)

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September 10, 2010

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 2011)


The annual open enrollment for the calendar year 2011 New Jersey State Employees Tax Savings Program (Tax$ave 2011) will be conducted from October 1 through October 31, 2010.  Full-time employees of the State, State authorities, State universities, and State colleges who are eligible for participation in the New Jersey State Health Benefits Program (SHBP) may participate in Tax$ave. 

Note: Be sure to see the information on page 5 of this letter regarding important changes in the distribution of Open Enrollment publications.

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 2011 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, 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 2011 (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.  Fringe Benefits Management Company (FBMC) administers the Tax$ave Unreimbursed Medical and Dependent Care FSAs for the Division of Pensions and Benefits.

Unlike the Premium Option Plan or the health plans of the SHBP, prior participation in a Tax$ave FSA in 2010 does not carry over automatically into 2011.  Employees must enroll each year to participate in an FSA for calendar year 2011. 

Listed below are some of the benefits of FSA participation.

  • $2,500 Medical FSA Maximum and $5,000 Dependent Care FSA Maximum.  For the Tax$ave 2011 plan year, the maximum annual allowance that can be set aside for an Unreimbursed Medical FSA is $2,500 and the maximum annual allowance that can be set aside for a Dependent Care FSA is $5,000.  Employees may save federal income, Medicare and Social Security taxes on up to $7,500 of combined unreimbursed medical and dependent care expenses.  It makes sense to enroll and use a Tax$ave FSA plan when paying for doctor and prescription copayments, health plan deductibles, orthodontics, eyeglasses, Lasik surgery, uncovered dental fees, certain over-the-counter items (see page 3), or dependent care. 
  • Expanded Eligibility for Adult Children Until Age 26. The federal Patient Protection and Affordable Care Act (PPACA) changed the coverage eligibility of dependents to include adult children until age 26. Effective with the Plan Year beginning January 1, 2011, qualified out-of-pocket medical expenses incurred by eligible adult children can be reimbursed through the Unreimbursed Medical FSA.  Coverage applies until the end of the year in which a child turns age 26, regardless of the child’s marital or student status. However, until 2014, the coverage requirement applies only if the adult child is not eligible to enroll in other employer-based coverage (aside from coverage through the parent).
  • 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.
  • 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 certain eligible over-the-counter medical expenses (see below) 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 2011 Unreimbursed Medical FSA funds to reimburse eligible expense incurred prior to March 15, 2012 before using funds contributed in the 2012 plan year..

Changes to Over-the-Counter Reimbursement for Drugs and Medicines.

The federal Patient Protection and Affordable Care Act (PPACA) has changed FSA reimbursement eligibility of over-the-counter drugs and medicines. Effective January 1, 2011, over-the-counter drugs and medicines are no longer eligible for reimbursement without an order, directive, or script from an attending provider.  This includes over-the-counter items like: allergy drugs, pain relievers, cold and cough medicines, sleep aids, digestive aids, anti-gas medications, baby rash creams, and insect bite treatments.

If you wish to continue to be reimbursed for these types of over-the-counter items using your Unreimbursed Medical FSA, you must obtain a doctor’s order, directive, or prescription and submit it with a Claim Form to FBMC for reimbursement (items that require a doctor’s order may no longer be purchased using the myFBMC Card because the IIAS approval system cannot determine if there is a doctor’s note on file with FBMC). 

Over-the-counter items like eyeglasses, wrist splints, and bandages, as well as durable medical items such as crutches and canes will continue to be reimbursed without a doctor’s order.  For an updated list of expenses that are eligible under the FSA, please visit: www.myFBMC.com

Enrolling in a Flexible Spending Account

Employees have four ways of enrolling in the Tax$ave FSA accounts during the Open Enrollment: mail, fax, telephone, and Internet.  Fringe Benefits Management Company (FBMC) will inform employees currently participating in a Tax$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 FBMC by the employee. All enrollment forms must be postmarked no later than October 31, 2010, to be accepted. Those postmarked after October 31, 2010 will be returned without action. Benefits offices should not be involved in processing or mailing FSAEnrollment 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, 2010. 
  • Telephone: Employees may enroll in the Unreimbursed Medical and/or Dependent Care FSA plans for 2011 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, 2010.
  • 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, 2010.

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.

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.

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.  Information about New Jersey Domestic Partners can be found in Fact Sheet #71, Benefits Under the Domestic Partnership Act.  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 26 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 26 to 31, see Fact Sheet #74, Health Benefits Coverage of Children Until Age 31 Under Chapter 375.

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, 2010.

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 2011 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.

NEW! Tax$ave Newletter and Flier Online Distribution for the Open Enrollment

In compliance with State initiatives to provide paperless services, the Tax$ave 2011 Newsletter, Premium Option Plan (POP) Flier, and FSA Plan pamphlet will only be available in electronic format for this year’s Open Enrollment. 

  • The Tax$ave 2011 Open Enrollment News announces the open enrollment, outlines the components of the program with emphasis on its tax saving advantages, and identifies the October 31, 2010 deadline for submission of all election materials;
  • The Premium Option Plan 2011 flier explains the advantages and disadvantages of participation; and
  • An FSA pamphlet describes the Unreimbursed Medical and Dependent Care Flexible Spending Accounts administered by Fringe Benefits Management Company (FBMC).

Access to these publications are available through links at the Division of Pensions and Benefits Web site: www.state.nj.us/treasury/pensions/taxsave.shtml or as PDF attachments provided with the distribution of this letter.

Employers should inform employees to access the Open Enrollment information online or provide the PDF versions via e-mail attachment or your Departmental Intranet.

For cases where online or e-mail notification is not possible, a paper flier giving instructions on accessing the Open Enrollment publications is provided with this letter and can be copied and distributed as required.

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 2011 form. 

  • A sample of the 2011 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 2011, 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, 2010.  Benefits administrators must then forward declination forms to the appropriate representative in their payroll department. 

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$ave 2011, the open enrollment, or the Premium Option Plan, visit the Division of Pensions and Benefits’ Tax$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 an e-mail.

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$ave 2011 Open Enrollment Milestones Adobe PDF (7K)
Open Enrollment Check Messages Adobe PDF (8K)
Tax$ave 2011 Open Enrollment News Adobe PDF (46K)
The Premium Option Plan 2011 Flier Adobe PDF (18K)
Tax$ave — FBMC Flexible Savings Accounts Pamphlet Adobe PDF (172K)
Open Enrollment Flier for Online Access to Publications Adobe PDF (18K)
Tax$ave — FBMC Flexible Savings Accounts Enrollment Form Adobe PDF (63K)
Declination of Premium Option Plan (POP) for Plan Year 2011 Adobe PDF (21K)

CO Letter in Printable Format Adobe PDF (796K)

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September 9, 2010

TO: Certifying Officer – Teachers’ Pension and Annuity Fund, Public Employees’ Retirement System, and Police and Firemen’s Retirement System
FROM: Joseph Zisa, Manager 1, Fiscal Resources
SUBJECT: Retroactive Salary Reporting Procedures

The Division of Pension and Benefits is streamlining the current procedures for the reporting of all retroactive salary increases for both retired and active members of all State-administered retirement systems. Effective immediately, the following procedures are to be followed.  Over time we expect these new procedures will increase the timeliness of updating members’ retirement account information.

Whenever a new contract, salary guide or resolution is adopted and retroactive salaries are paid to your employees, the current quarterly salary reported through IROC should reflect the new quarterly base salary for that quarter only. A copy of the contract, salary guide or resolution should be submitted to the Division of Pensions and Benefits with the dates effected by the retroactive salary increase.

As an example, if the retroactive salary is paid in November 2010, going back to January 2008, the new quarterly base salary should be reported on the 4th quarter 2010 IROC. When submitting the contract to the Division a cover letter should be submitted stating that a Retroactive Salary Reporting spreadsheet is needed for January 1, 2008, through September 30, 2010, with an appropriate contact name and telephone number for any inquiries by the Division.  Please include your pension employer location number and, if applicable, the affected bureau numbers.

The Division will no longer accept employer submissions of revised certifications of final salary with separate checks for retired members.  Moving forward, these retired members will be treated in the same way as active members and any reported retroactive salary should be submitted via the Retroactive Salary Reporting spreadsheet.  A revised certification(s) must be submitted along with the check covering the period of retroactivity with the completed excel spreadsheet.  If it is not received in this format any individual checks and revised certifications will not be accepted and returned to you for proper completion.

If you should need additional information regarding this letter, please call (609) 777-2115.

CO Letter in Printable Format Adobe PDF (52K)

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August 16 , 2010

TO: Certifying Officers of the Alternate Benefit Program (ABP)
FROM: Joseph Zisa, Manager 1, Fiscal Resources, Division of Pensions and Benefits
SUBJECT: ABP Contribution Limits under Chapter 31, P.L. 2010

Chapter 31, P.L 2010, signed into law by Governor Christie and effective July 1, 2010, limits employer contributions to the Alternate Benefit Program (ABP) for higher education employees whose salary exceeds statutory maximum salary of Executive Branch department heads.

Prior to this change, the employer contributed 8% of an ABP member’s base salary and the member contributed 5% toward the retirement savings plan.  Under the provisions of Chapter 31, the State will continue to contribute at a rate equal to 8% of the member's base salary except that the amount of the contribution may not exceed 8% of the maximum salary for State department officers as established by law.  Currently, N.J.S.A. 52:14-15.107 sets the maximum annual salary of department officers at $141,000 per calendar year.

The provisions of Chapter 31 apply as of July 1, 2010.  Please refer to the following questions and answers to help in implementing this change.

QUESTIONS AND ANSWERS
REGARDING CHAPTER 31, P.L. 2010

  1. Q: Will salaries be looked at on a calendar year or fiscal year basis?

    A. A calendar year basis, in the same way that limitations have been applied under IRC 401(a)(17) / 404(l) Annual Compensation limit.

  2. Q: Since calendar year salaries are being used, would salaries paid from January 1 through June 30 be included in determining when an employee reaches the $141,000 limit for state employer matching contributions?

    A: Yes, if an employee has reached the accumulated base salary limit under this law of $141,000 for calendar year 2010 prior to the July 1, 2010 — effective date of this measure — no additional employer contributions are to be made toward that employee’s ABP retirement annuity after June 30, 2010 and no recovery of employer contributions for the excess is required.  If the limit of $141,000 is reached on or after July 1, 2010, the employer is to cease making employer matching contributions under the ABP for compensation in excess of this limit.  If an employer is unable to institute this change to become effective for or on payrolls after July 1, 2010, the employer is responsible for correction of any excess contribution through the appropriate investment provider’s adjustment process.

  3. Q: For State Centralized Payroll and most State Colleges and Universities there was a regular payroll scheduled for July 9, 2010.  If an employee’s compensation received from January 1, 2010, exceeded the $141,000 limit prior to the first payroll following enactment of this legislation, will the cap need to be imposed on the July 9 payroll?

    A: Yes, The employer’s liability is established on the payroll date and becomes payable to the member’s retirement annuity on that payroll date. Since the law’s effective date is July 1, 2010, any payroll made after June 30, 2010, must not include employer matching contributions for any compensation in excess of the limit.

  4. Q: Is the employee’s 5% mandatory contribution not capped at $141,000 in salary but rather the higher limits allowed under IRC 401(a)(17) / IRC 404(l) Annual Compensation limit, which for 2009 and 2010 is $245,000, or the higher amounts permitted for grandfathered employees under Chapter 113, P.L. 1997?

    A: Yes, employee contributions will continue to be taken at the rate of 5% of base salary beyond the $141,000 limit up to the higher of the IRC 401(a)(17) / IRC 404(l) Annual Compensation limit, which for 2009 and 2010 is $245,000, or the higher amounts permitted for grandfathered employees under Chapter 113, P.L. 1997, whichever applies.

  5. Q: Is the employer not permitted to make employer 8% matching contributions for any ABP member even if the contribution is funded through sources other than the State (i.e., federal grants, private endowments)?

    A: Yes, all employer contributions are limited to $141,000 as a result of this legislation.

  6. Q: Will this have any effect on the calculation of benefits under the ABP’s group life insurance benefit or Long-Term Disability benefit?

    A: No, the definition of base salary has not been changed by this revision and, since these benefits are calculated using base salary, there will be no change in how these benefits are calculated.

  7. Q: Are College President's included in the cap?

    A: Yes. The provisions of Chapter 31, P.L. 2010, apply to all employees in positions covered by the ABP. The revisions to N.J.S.A. 18A:66-174 limit “…payment of the employer contributions to the alternate benefit program at a rate equal to 8% of the employee's base salary…” to “…8% of the maximum salary for department officers…”  The revised statute makes no differentiation as to how employer contributions will be calculated for employees serving in different capacities.  Therefore, this limit is imposed on all employees who are members of the ABP.

  8. Q: Does the wage cap impact the amount of Long Term Disability and Life Insurance?

    A: No. Chapter 31, P.L. 2010, did not change the administration of the group life insurance benefit or the long-term disability benefit available under the ABP.

  9. Q: If an employee changes employer during the calendar year, how does the new employer know the previous ABP compensation to ensure the annual limit is not exceeded?

    A: The Division is working toward a procedure that will allow for communication of year-to-date compensation from previous employment in these situations.  Additional information concerning this process will be provided as it becomes available.

  10. Q: Should the employer recoup any 8% employer contribution made for compensation over $141,000 paid prior to July 1, 2010, from the investment carrier and return it to the State?

    A: No. If an employee has reached the $141,000 accumulated base salary limit prior to the July 1, 2010 effective date of Chapter 31, P.L. 2010, no additional employer contributions are to be made toward that employee’s ABP retirement annuity after June 30, 2010 and no recovery of employer contributions for the excess is required. 

  11. Q: What happens if an employee exceeded the limit after July 1, 2010?

    A: If the limit of $141,000 is reached on or after July 1, 2010, the employer is to cease making employer matching contributions under the ABP for compensation in excess of this limit.  If an employer is unable to institute this change to affect payrolls after July 1, 2010, the employer is responsible for correction of any excess contribution through the appropriate investment provider’s adjustment process.

  12. Q: Can the employer submit contributions for an ABP member in excess of the limit imposed by Chapter 31, P.L. 2010, without seeking reimbursement from the State?

    A: No. Chapter 31, P.L. 2010, has changed the formula used calculate the employer contribution for ABP members effective July 1, 2010. Employer contributions above that limit are not authorized under the ABP.

  13. Q: If an employer wanted to contribute (with non-state funds) the dollar equivalent of the 8% match over $141,000 to a non-ABP retirement account, such as a non-State 403b plan, would that be an option permissible under the law?

    A: The Division is not aware of any prohibition that would prevent a college or university from establishing a program other than the ABP for employer contributions covering a specific group of employees. However, the employer should consider consulting with its legal advisor before implementing any such program.

ADDITIONAL INFORMATION

If you have additional questions regarding Chapter 31, or any of the information provided in this letter, contact the Division’s Office of Client Services at (609) 292-7524, or e-mail the Division.

CO Letter in Printable Format Adobe PDF (59K)

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July 22, 2010

TO: Certifying Officers of the Police and Firemen’s Retirement System (PFRS)
FROM: New Jersey Division of Pensions and Benefits
SUBJECT: Retirement Workshops Available for PFRS Members

In August of 2010, the Division of Pensions and Benefits will begin to hold Retirement Workshops for members of the Police and Firemen’s Retirement System (PFRS).

RETIREMENT WORKSHOPS

During the workshops, our representatives will take a step-by-step approach to explain topics that include retirement benefits, beneficiary options, group life insurance, the taxability of your pension, and health benefits in retirement.

  • Workshops are designed for PFRS members who are planning to retire before the end of 2011.
  • All workshops are being held at the New Jersey Forensic Science Technology Center in Hamilton Township (Mercer County), New Jersey*.
  • Workshop times will be at either 9:00 a.m. or 1:00 p.m.
  • Workshop dates are September 22, November 15, and December 3.
  • Seating is limited*. Members interested in attending must register online using the link on the Division’s Web site.

Go to: www.state.nj.us/treasury/pensions and click the link for “Retirement Workshops”.

*Additional dates or locations may be added if they become available but cannot be guaranteed.

PREPARE IN ADVANCE USING MBOS

If attending, members must print an Estimate of Retirement Benefits using the Member Benefits Online System (MBOS) and bring it to the workshop (retirement estimates will not be provided at the workshop). To register for MBOS go to: www.state.nj.us/treasury/pensions/mbosregister.shtml and follow the registration instructions. Estimates obtained from MBOS are the same estimates obtained when visiting the Division’s offices and use identical salary and service information.

If members are unable to use MBOS:

  • Human Resources Representative or Benefits Administrators at your employing entity may obtain retirement estimates for employees using the Employer Pensions and Benefits Information Connection (EPIC); or
  • Direct the members to the Division’s long-range Retirement Calculator which can be accessed from the Pensions and Benefits home page at: www.state.nj.us/treasury/pensions   Please note the long-range calculator uses service and salary information that is provided by the member and is not an “official” estimate of benefits. Members should not rely exclusively on this calculation if applying for retirement.

APPLY FOR RETIREMENT USING MBOS

Due to the expected increase in retirement applications, members must use the online Retirement Application available in MBOS. Submitting the application through MBOS reduces the chance of any delays in receipt of your application and provides for the fastest processing. Please also note that paper retirement applications will not be available and will not be accepted at the workshops.

CO Letter in Printable Format Adobe PDF (55K)

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July 21, 2010

TO: Certifying Officers of the Public Employees' Retirement System (PERS) and Teachers' Pension and Annuity Fund (TPAF)
FROM: New Jersey Division of Pensions and Benefits
SUBJECT: New Retirement Workshop Dates Available for PERS and TPAF Members

The Division of Pensions and Benefits has scheduled new Retirement Workshop dates for members of the Public Employees’ Retirement System (PERS) or the Teachers’ Pension and Annuity Fund (TPAF).

RETIREMENT WORKSHOPS

During the workshops, our representatives will take a step-by-step approach to explain topics that include retirement benefits, beneficiary options, group life insurance, the taxability of your pension, and health benefits in retirement.

  • Workshops are designed for PERS or TPAF members who are planning to retire before the end of 2011.

  • All workshops are being held at the New Jersey Forensic Science Technology Center in Hamilton Township (Mercer County), New Jersey.*

  • Workshop times will be at either 9:00 a.m. or 1:00 p.m. and are currently scheduled for

    • August 16, 23

    • September 9, 15, 24 and 29

    • October 4 and 21

    • November 3, 22 and 29

    • December 10 and 17

  • Seating is limited.* Members interested in attending must register online using the link on the Division’s Web site. Go to: www.state.nj.us/treasury/pensions and click the link for “Retirement Workshops”.

*Additional dates or locations may be added if they become available but cannot be guaranteed.

PREPARE IN ADVANCE USING MBOS

If attending, members must print an Estimate of Retirement Benefits using the Member Benefits Online System (MBOS) and bring it to the workshop (retirement estimates will not be provided at the workshop). To register for MBOS go to: www.state.nj.us/treasury/pensions/mbosregister.shtml and follow the registration instructions. Estimates obtained from MBOS are the same estimates obtained when visiting the Division’s offices and use identical salary and service information.

If members are unable to use MBOS:

  • Human Resources Representative or Benefits Administrators at your employing
    entity may obtain retirement estimates for employees using the Employer Pensions
    and Benefits Information Connection (EPIC); or
  • Direct the members to the Division’s long-range Retirement Calculator which can
    be accessed from the Pensions and Benefits home page at: www.state.nj.us/treasury/pensions Please note the long-range calculator uses service and salary information that is provided by the member and is not an “official” estimate of benefits. Members should not rely exclusively on this calculation if applying for retirement.

APPLY FOR RETIREMENT USING MBOS

Due to the expected increase in retirement applications, members must use the online Retirement Application available in MBOS. Submitting the application through MBOS reduces the chance of any delays in receipt of your application and provides for the fastest processing. Please also note that paper retirement applications will not be available and will not be accepted at the workshops.

CO Letter in Printable Format Adobe PDF (51K)

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July 6, 2010

TO: Certifying Officers of the Public Employees’ Retirement System (PERS), Teachers’ Pension and Annuity Fund (TPAF), and Defined Contribution Retirement Plan (DCRP)
FROM: Joseph Zisa, Manager 1, Fiscal Resources, Division of Pensions and Benefits
SUBJECT: Minimum Annual Salary for Defined Contribution Retirement Program (DCRP) Enrollment under Chapter 1, P.L. 2010

This letter is being distributed as a notice of reminder to Certifying Officers of changes to eligibility in the Defined Contribution Retirement Program (DCRP).

Chapter 1, P.L. 2010, increased the minimum annual salary required for eligibility in the DCRP. As of May 21, 2010, an employee must earn an annual salary of at least $5,000 to be eligible for, or continue participation in, the DCRP.

The increase in the DCRP minimum salary effects:

  • Employees ineligible for enrollment in Tier 4 of the PERS or TPAF because the hours of work are fewer than those required for membership (35 hours per week for State employees; 32 hours or more per week for Local Government or State/Local Education employees); and
  • Employees ineligible for enrollment in Tier 3 of the PERS or TPAF because the minimum annual salary is less than that required for PERS or TPAF enrollment ($7,700 in 2010, subject to adjustment in future years); and
  • Elected or appointed officials currently enrolled in the DCRP who earn less than $5,000 in annual salary.

Employees in the categories listed above must earn at least $5,000 to be enrolled in the DCRP.  Furthermore, any employees currently enrolled in the DCRP who earns less than $5,000 annually, may no longer participate in or contribute to the DCRP.   

Employers are to discontinue withholding the 5.5% contribution immediately upon receipt of this notification for any employees who have been participating in the DCRP and who are no longer eligible to contribute effective May 21, 2010. The enclosed DCRP Eligibility Status Change Verification Form (FL-0852) Adobe PDF (18K) should be completed for each employee for whom deductions have ceased due to ineligibility. Completed forms can be faxed to the Defined Contribution Plans Unit at (609) 341-3410.

Employees no longer eligible for participation in the DCRP also need to be made aware of their distribution options. Former DCRP members may:

  • Leave their funds in the DCRP;
  • Take a systematic withdrawal;
  • Take a full or partial lump-sum distribution;
  • Transfer the balance to a traditional IRA or another employer-sponsored retirement plan; or
  • Contact the DCRP to purchase an annuity.

Note: The taxable portion of any disbursement not rolled over to a traditional IRA or another eligible employer-sponsored retirement plan may be subject to federal income tax at the recipient’s federal tax rate. State and local taxes may also be due on funds not rolled over. Distribution recipients should consult with the Internal Revenue Service, state and local taxing authorities, or a professional tax advisor for further clarification.  

Disbursement from a “vested” DCRP account will also cause a member to be considered “retired” making that individual ineligible for future participation in the DCRP, Alternate Benefit Program (ABP), or enrollment into a State-administered Retirement System (PERS, TPAF, PFRS, etc.). DCRP members considering future employment in a position covered by any of these State-administered retirement systems should carefully consider this impact before requesting a distribution.

ADDITIONAL INFORMATION

Additional information about the DCRP can be obtained at the New Jersey Defined Contribution Program Web site: www.prudential.com/njdcrp  or by contacting the DCRP through Prudential's toll-free number: 1-866-653-2771.

Employers and employees can also find information about DCRP enrollment, contribution rates, and plan benefits in:

Fact Sheet #79, DCRP for PERS, TPAF, PFRS, and SPRS Members Adobe PDF (41K)

Fact Sheet #80, DCRP for Elected and Appointed Officials Adobe PDF (41K)

Fact Sheet #82, DCRP if Ineligible for PERS or TPAF Adobe PDF (43K)

The fact sheets and DCRP related forms are available on the Division of Pensions and Benefits Web site at: www.state.nj.us/treasury/pensions/dcrp1.shtml

For other questions regarding Chapter 1, P.L. 2010, or any of the information provided in this letter, contact the Division’s Office of Client Services at (609) 292-7524, or e-mail the Division.

Enclosure

DCRP Eligibility Status Change Verification Form Adobe PDF (18K)

CO Letter and Attachment in Printable Format Adobe PDF (69K)

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July 2010

TO:

Certifying Officer – Teachers’ Pension and Annuity Fund, Public Employees’ Retirement System & Police and Firemen’s Retirement System

FROM:

Joseph Zisa, Manager 1, Fiscal Resources

SUBJECT:

Report of Contributions, 2nd Quarter 2010 (April 1 to June 30)

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

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 July 7, 2010.  Should your report not be received by the close of business on July 22, 2010, 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.

MULTIPLE MEMBERSHIP

For current PERS or TPAF Tier 1, Tier 2, or Tier 3 multiple members, all presently held concurrent positions will continue to qualify for service credit and the compensation base for pension contributions and calculation of benefits, provided that the member continues to hold those positions without any break in service.  However, provisions of Chapter 1, P.L. 2010, requires that any new concurrently held position begun after May 21, 2010, will not qualify for service credit or the compensation base for pension contributions and calculation of retirement for any PERS or TPAF multiple member.

Current multiple location relationships will be terminated following any “break in service” not supported by an employer approved leave of absence (LOA).  For this purpose a “break in service” is being defined for employment with any municipality, county, board of education or authority as any one month period without service while not on an approved LOA.  The Division may require recertification of these employment relationships following a break in service with an approved leave of absence.  As a result, you may be asked to provide additional information before being able to add a multiple member back to your report of contributions following an approved LOA.

CLOSURE OF THE PROSECUTORS PART OF THE PERS

Chapter 1, P.L. 2010, closes the Prosecutors Part of the PERS to new members.  Prosecutors taking office after May 21, 2010, will be enrolled as “regular” Tier 4 members of the PERS — except that a county prosecutor who is appointed by the Governor with the advice and consent of the Senate will be enrolled in the DCRP (or regular PERS if a Tier 1 member continuously since July 1, 2007).

Prosecutors who were enrolled in the Prosecutors Part of the PERS between its opening in 2001 and its closure on May 21, 2010, will be permitted to continue as members of the Prosecutors Part and receive Prosecutors Part benefits, provided that they continue in eligible Prosecutors Part service.

PERS & TPAF Tier 3 - Increase in 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.

PERS & TPAF Tiers 2 & 3 - 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 2010, 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 2010 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 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.

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.

Procedures for REPORTING OF RETROACTIVE SALARY

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, 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 is “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, assisting you to properly prepare the IROC.

Changing Banking Information For TEPS

Notice of Changes for TEPS should be faxed to (866) 568-2495 or mailed to State of New Jersey, Department of Treasury, Division of Pensions and Benefits, P.O. Box 9581, Trenton NJ 08650-9581 on or after the date that the new checking account becomes effective.

CO Letter and Attachment in Printable Format Adobe PDF (53K)

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July 2010

TO: Certifying Officer Autonomous State College / University/State Employers
FROM: Joseph Zisa, Manager 1, Fiscal Resources
SUBJECT: Report of Contributions, 2nd Quarter 2010 (April 1 to June 30)

MULTIPLE MEMBERSHIP

For current PERS or TPAF Tier 1, Tier 2, or Tier 3 multiple members, all presently held concurrent positions will continue to qualify for service credit and the compensation base for pension contributions and calculation of benefits, provided that the member continues to hold those positions without any break in service. However, provisions of Chapter 1, P.L. 2010, requires that any new concurrently held position begun after May 21, 2010, will not qualify for service credit or the compensation base for pension contributions and calculation of retirement for any PERS or TPAF multiple member.

Current multiple location relationships will be terminated following any “break in service” not supported by an employer approved leave of absence (LOA).  For this purpose a “break in service” is being defined as any one reporting period (one month for employees reported on a monthly basis, one payroll period for employees reported by the biweekly payroll period) without service while not on an approved LOA. The Division may require recertification of these employment relationships following a break in service with an approved leave of absence. 

The Division is aware that some adjunct faculty and part-time instructors are employed as multiple PERS members.  As a result of Chapter 1, P.L. 2010, adjunct faculty with multiple member status will be unable to continue PERS membership if there is a break in service unless that adjunct is on an approved leave of absence.

Notice of PERS & TPAF Tier 3 - 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 Adobe PDF (43K) for additional information.

PERS & TPAF Tiers 2 & 3 - 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.

For calendar year 2010, 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 2010 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.

Reporting And Payment Information

Your 2nd Qtr. 2010 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 7, 2010. Your June 2010 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 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.

Changing Banking Information For TEPS

Notice of Changes for TEPS should be faxed to (866) 568-2495 or mailed to State of New Jersey, Department of Treasury, Division of Pensions and Benefits, P.O. Box 9581, Trenton NJ 08650-9581 on or after the date that the new checking account becomes effective.

CO Letter and Attachment in Printable Format Adobe PDF (50K)

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June 2010

TO: Employers Participating in the State Health Benefits Program and School Employees’ Health Benefits Program
FROM: Division of Pensions and Benefits, Health Benefits Bureau
SUBJECT: Multiple SHBP/SEHBP Coverage Prohibited

According to our records, you have employees enrolled with multiple coverage provided through the State Health Benefits Program (SHBP) and/or School Employees’ Health Benefits Program (SEHBP).  This letter explains actions that you and your employees must take in order to comply with new provisions of New Jersey State Law.

Chapter 2, P.L. 2010, effective May 21, 2010, prohibits multiple coverage under the SHBP or SEHBP. This means that an individual may only be covered by the SHBP/SEHBP as an employee, a retiree, or a dependent.

For example: A husband and wife both have SHBP and/or SEHBP coverage based on their employment and have children eligible for coverage. Under the prohibitions implemented in Chapter 2, either the husband or wife may choose Family coverage, making the spouse and children dependents and ineligible for any other SHBP/SEHBP coverage; or, one individual may choose Single coverage and the spouse may choose Parent and Child(ren) coverage. 

Similarly, an employee cannot simultaneously have coverage as an employee and as a retiree under the SHBP/SEHBP. A retiree with SHBP or SEHBP coverage due to prior employment, who returns to public employment with an employer that participates with the SHBP or SEHBP  must either waive retired SEHBP coverage or waive active employee coverage.

REQUIRED EMPLOYER ACTIONS

With this letter, you have received:

  • A report that lists your employees who we have identified with multiple SHBP and/or SEHBP coverage;

  • An employee letter – Employee Multiple Coverage Notice, explaining the multiple coverage restriction;

  • Health Benefits Applications — one for medical/prescription coverage and a separate application for dental coverage; and

  • A list of the supporting documentation required if the employee is adding dependents to his or her SHBP or SEHBP coverage.

It is important that you provide a copy of the Employee Multiple Coverage Notice, applications, and documentation requirements to all of the employees listed on the report.  Completed applications to change or waive coverage must be certified by the employer* prior to submitting them to the Health Benefits Bureau at the Division of Pensions and Benefits.

Once employer certified applications are received by the Health Benefits Bureau, employees who are terminating or waiving coverage should not use the ID card for the medical, prescription drug, or dental plans to be terminated. Coverage will be terminated once the application is processed by the Health Benefits Bureau but in no instance later than September 1, 2010.

Note: Employees who waive coverage and later lose their other coverage are eligible to immediately reinstate the waived coverage by completing and submitting the appropriate health benefit application — along with proof of loss of the other coverage — within 60 days of the loss of coverage.

IMMEDIATE EMPLOYEE ACTION IS REQUIRED

As indicated in the Employee Multiple Coverage Notice, to comply with the law and retain current and future eligibility for SHBP or SEHBP coverage, employees affected by the prohibitions of Chapter 2, must either waive their SHBP or SEHBP coverage as a subscriber (employee) OR terminate any other SHBP or SEHBP coverage as a retiree or dependent.

The Employee Multiple Coverage Notice details several options available to employees who have coverage as a subscriber (employee) and as a dependent (covered by a spouse/partner), or who have duplicate coverage as an employee and as a retiree.*

Additional guidance is provided concerning limitations on multiple coverage of dependent children under the SHBP and/or SEHBP.

*To change or waive retiree coverage, retirees should mail the Retired Change of Status Applicationem> directly to the Health Benefits Bureau at the Division of Pensions and Benefits.  The Application is available from the Division’s Web site at: www.state.nj.us/treasury/pensions/hb-forms.shtml

Enclosures

Multiple Coverage Employee Report
Employee Multiple Coverage Notice Adobe PDF (70K)
Health Benefits Application (medical/prescription) Adobe PDF (144K)
Employee Dental Plans Application Adobe PDF (70K)
Required Documentation for Enrolling Dependents Adobe PDF (33K)

CO Letter and All Attachments in Printable Format Adobe PDF (202K)

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May 11, 2010

TO: Certifying Officers of the Public Employees’ Retirement System (PERS) and Teachers’ Pension and Annuity Fund (TPAF)
FROM: New Jersey Division of Pensions and Benefits
SUBJECT: Extended Availability of Retirement Workshops for PERS and TPAF Members

The Division of Pensions and Benefits is extending the availability of its PERS and TPAF Retirement Workshops to members who plan to retire between JULY 1, 2010 and JANUARY 1, 2011. 

  • Workshops are being held at the New Jersey Forensic Science Technology Center in Hamilton Township (Mercer County), New Jersey.
  • Workshop times are at either 9:00 a.m. or 1:00 p.m. and are currently scheduled for May 19, 24, 28, and June 4, 7, 11, 15, 18, 21, 25, and 30.
  • Seating is limited*. Members interested in attending must register online using the link on the Division’s Web site. Go to: www.state.nj.us/treasury/pensions and click the link for “Retirement Workshops”.

*Additional dates may be added but cannot be guaranteed.

During the workshops, our representatives will take a step-by-step approach to explain topics that include retirement benefits, beneficiary options, group life insurance, the taxability of your pension, and health benefits in retirement.

PREPARE IN ADVANCE USING MBOS

If attending, members must print an Estimate of Retirement Benefits using the Member Benefits Online System (MBOS) and bring it to the workshop (retirement estimates will not be provided at the workshop). To register for MBOS go to: www.state.nj.us/treasury/pensions/mbosregister.shtml and follow the registration instructions.  Estimates obtained from MBOS are the same estimates obtained when visiting the Division’s offices and use identical salary and service information.

If members are unable to use MBOS:

  • Human Resources Representative or Benefits Administrators at your employing entity may obtain retirement estimates for employees using the Employer Pensions and Benefits Information Connection (EPIC); or
  • Direct the members to the Division’s long-range Retirement Calculator which can be accessed from the Pensions and Benefits home page at: www.state.nj.us/treasury/pensions  Please note the long-range calculator uses service and salary information that is provided by the member and is not an “official” estimate of benefits.  Members should not rely exclusively on this calculation if applying for retirement.

APPLY FOR RETIREMENT USING MBOS

Due to the recent increase in retirement applications, members must use the online Retirement Application available in MBOS.  Submitting the application through MBOS reduces the chance of any delays in receipt of your application and provides for the fastest processing.  Please also note that paper retirement applications will not be available and will not be accepted at the workshops. 

CO Letter in Printable Format Adobe PDF (58K)

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May 4, 2010

TO: Certifying Officers of the Public Employees' Retirement System (PERS)
FROM: New Jersey Division of Pensions and Benefits
SUBJECT: Retirement Workshops Available for State and Local PERS Members

Due to increased demand from members inquiring about retirement, the Division of Pensions and Benefits is offering a limited number of Retirement Workshops for members of the Public Employees’ Retirement System (PERS).

RETIREMENT WORKSHOPS

During the workshops, our representatives will take a step-by-step approach to explain topics that include retirement benefits, beneficiary options, group life insurance, the taxability of your pension, and health benefits in retirement.

  • Workshops are only available for PERS members who will be retiring as of JULY 1 or AUGUST 1, 2010.
  • All workshops are being held at the New Jersey Forensic Science Technology Center in Hamilton Township (Mercer County), New Jersey*.
  • Workshop times will be at either 9:00 a.m. or 1:00 p.m. and are currently scheduled for May 10, 19, 24, 28, and June 4, 7, 11, 15, 18, 21, 25, and 30.
  • Seating is limited*. Members interested in attending must register online using the link on the Division’s Web site. Go to: www.state.nj.us/treasury/pensions and click the link for “Retirement Workshops”.

*Additional dates or locations may be added if they become available but cannot be guaranteed.

PREPARE IN ADVANCE USING MBOS

If attending, members must print an Estimate of Retirement Benefits using the Member Benefits Online System (MBOS) and bring it to the workshop (retirement estimates will not be provided at the workshop). To register for MBOS go to: www.state.nj.us/treasury/pensions/mbosregister.shtml and follow the registration instructions. Estimates obtained from MBOS are the same estimates obtained when visiting the Division’s offices and use identical salary and service information.

If members are unable to use MBOS:

  • Human Resources Representative or Benefits Administrators at your employing entity may obtain retirement estimates for employees using the Employer Pensions and Benefits Information Connection (EPIC); or
  • Direct the members to the Division’s long-range Retirement Calculator which can be accessed from the Pensions and Benefits home page at: www.state.nj.us/treasury/pensions Please note the long-range calculator uses service and salary information that is provided by the member and is not an “official” estimate of benefits. Members should not rely exclusively on this calculation if applying for retirement.

APPLY FOR RETIREMENT USING MBOS

Due to the expected increase in retirement applications, members must use the online Retirement Application available in MBOS. Submitting the application through MBOS reduces the chance of any delays in receipt of your application and provides for the fastest processing. Please also note that paper retirement applications will not be available and will not be accepted at the workshops.

CO Letter in Printable Format Adobe PDF (60K)

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April 28, 2010

TO: Certifying Officers of the Teachers’ Pension and Annuity Fund (TPAF)
FROM: New Jersey Division of Pensions and Benefits
SUBJECT: Retirement Workshops Available for TPAF and PERS Members

Due to increased demand from members inquiring about retirement, the Division of Pensions and Benefits is offering a limited number of Retirement Workshops for members of the Teachers’ Pension and Annuity Fund (TPAF) or the Public Employees’ Retirement System (PERS).

RETIREMENT WORKSHOPS

During the workshops, our representatives will take a step-by-step approach to explain topics that include retirement benefits, beneficiary options, group life insurance, the taxability of your pension, and health benefits in retirement.

  • Workshops are only available for TPAF or PERS members who will be retiring as of JULY 1 or AUGUST 1, 2010.
  • All workshops are being held at the New Jersey Forensic Science Technology Center in Hamilton Township (Mercer County), New Jersey*.
  • Workshop times will be at either 9:00 a.m. or 1:00 p.m. and are currently scheduled for May 10, 19, 24, 28, and June 4, 7, 11, 15, 18, 21, 25, and 30.
  • Seating is limited*. Members interested in attending must register online using the link on the Division’s Web site. Go to: www.state.nj.us/treasury/pensions and click the link for “Retirement Workshops”.

*Additional dates or locations may be added if they become available but cannot be guaranteed.

PREPARE IN ADVANCE USING MBOS

If attending, members must print an Estimate of Retirement Benefits using the Member Benefits Online System (MBOS) and bring it to the workshop (retirement estimates will not be provided at the workshop). To register for MBOS go to: www.state.nj.us/treasury/pensions/mbosregister.shtml and follow the registration instructions. Estimates obtained from MBOS are the same estimates obtained when visiting the Division’s offices and use identical salary and service information.

If members are unable to use MBOS:

  • Human Resources Representative or Benefits Administrators at your employing entity may obtain retirement estimates for employees using the Employer Pensions and Benefits Information Connection (EPIC); or
  • Direct the members to the Division’s long-range Retirement Calculator which can be accessed from the Pensions and Benefits home page at: www.state.nj.us/treasury/pensions Please note the long-range calculator uses service and salary information that is provided by the member and is not an “official” estimate of benefits. Members should not rely exclusively on this calculation if applying for retirement.

APPLY FOR RETIREMENT USING MBOS

Due to the expected increase in retirement applications, members must use the online Retirement Application available in MBOS. Submitting the application through MBOS reduces the chance of any delays in receipt of your application and provides for the fastest processing. Please also note that paper retirement applications will not be available and will not be accepted at the workshops.

CO Letter in Printable Format Adobe PDF (60K)

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April 20, 2010

TO: State Biweekly and State Monthly Certifying Officers;
Local Government Certifying Officers of Employers Participating in the SHBP;
Local Education Certifying Officers of Employers Participating in the SEHBP
FROM: David J. Pointer, Chief, Health Benefits Bureau
SUBJECT: Frequently Asked Questions Regarding Chapter 2, P.L. 2010 and Changes to Public Employee Health Benefits

The recent passage of law Chapter 2, P.L. 2010, makes numerous changes to public employee health benefits — including those provided through the State Health Benefits Program (SHBP) and School Employees’ Health Benefits Program (SEHBP).  The changes affect shared costs, employee eligibility, multiple coverage, and waiver incentives.  Most of the changes are effective May 21, 2010 while others will not be effective until current labor contracts expire.

The Division of Pensions and Benefits is distributing the attached Frequently Asked Questions to assist employers in understanding and complying with the administrative responsibilities required under the law.

Please note that because the Division of Pensions and Benefits does not administer or interpret the provisions of health benefit programs that are not part of the SHBP or SEHBP, the attached Frequently Asked Questions generally pertain only to the SHBP and SEHBP.

ADDITIONAL INFORMATION

For a general overview of the provisions of Chapter 2, P.L. 2010, please refer to the Certifying Officer Letter of April 1, 2010, which is available on the Division of Pensions and Benefits Web site. A synopsis of Chapter 2, along with a link to the full text of the law is also available on the Web site. Go to: www.state.nj.us/treasury/pensions  From the home page, select “Information for Employers” and then use the “Letters, Laws, Boards & Other Resources” drop menu.

If you have general questions regarding Chapter 2, P.L. 2010, or any of the information provided in this letter, contact the Division’s Office of Client Services at (609) 292-7524, or e-mail the Division.

Enclosure

Chapter 2, P.L. 2010 — Frequently Asked Questions

CO Letter and FAQ pages in Printable Format Adobe PDF (62K)

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April 9, 2010

TO: Certifying Officers of the Public Employees' Retirement System (PERS) and Teachers' Pension and Annuity Fund (TPAF)
FROM: Florence J. Sheppard, Deputy Director, Benefit Operations
SUBJECT: Chapter 3, P.L. 2010 — Disability Benefit Changes to the Public Employees' Retirement System (PERS) and Teachers' Pension and Annuity Fund (TPAF)

Governor Christie recently signed into law Chapter 3, P.L. 2010. Among the provisions of this law are changes to the State-administered retirement systems. This letter addresses the changes to disability retirement benefits for members of the Public Employees’ Retirement System (PERS) and the Teachers’ Pension and Annuity Fund (TPAF).  Chapter 3, P.L. 2010 is effective May 21, 2010.

PERS AND TPAF DISABILITY BENEFITS

Chapter 3, P.L. 2010, eliminates Ordinary and Accidental Disability Retirement benefits for PERS or TPAF members enrolled after May 21, 2010 (Tier 4 membership*).  In its place, Chapter 3 establishes disability insurance coverage for PERS and TPAF Tier 4 members who become disabled due to an occupational or nonoccupational condition.

Disability Insurance Coverage

Disability insurance coverage will provide monthly income if a member becomes totally disabled from occupational or nonoccupational causes due to sickness or accidental bodily injury.

  • The member must be unable to perform any and every duty pertaining to his/her occupation;

  • The member need not be confined to home, but must be under a doctor’s regular care;

  • The disability benefit shall be in an amount equal to 60 percent of the member's base monthly salary, reduced by any periodic benefits to which the member may be entitled during the period of total disability;

  • Eighteen months after the onset of long-term disability eligibility, the member must be unable to engage in any gainful employment for which he or she is reasonably suited by education, training, or experience;

  • Total disability shall not be considered to exist if the member is gainfully employed;

  • While disabled, the member’s mandatory pension contributions are automatically credited to the member’s retirement account;

  • Disability insurance benefits terminate when the member is no longer considered totally disabled, attains age 70, or begins to receive retirement benefits.

Complete details regarding the disability insurance will be made available to employers and members as the Division of Pensions and Benefits moves toward the coverage implementation date on May 22, 2010.

Note: Ordinary and Accidental Disability Retirement benefits remain available to PERS and TPAF members enrolled on or before May 21, 2010, in Tiers 1, 2, or 3. See Fact Sheet #15, Disability Retirement Benefits (PERS & TPAF), for details.

OTHER PROVISIONS OF THE LAW

Please note that while Chapter 3, P.L. 2010, also changes public employee benefits regarding payment of unused sick leave, the carry-over of unused vacation leave, and sick leave for injury while in State service, these changes are not discussed in this letter because the programs are not administered by the Division of Pensions and Benefits.

ADDITIONAL INFORMATION

This letter is intended to provide employers with a general overview of the pension changes established by Chapter 3, P.L. 2010.  Additional administrative information will become available as the Division of Pensions and Benefits completes the procedural and programming changes needed to implement the provisions of this legislation.

When available, revised publications and forms will be posted to the Division of Pensions and Benefits Web site at: www.state.nj.us/treasury/pensions

If you have general questions regarding Chapter 3, P.L. 2010, or any of the information provided in this letter, contact the Division’s Office of Client Services at (609) 292-7524, or e-mail the Division.

*Membership Tier 4 of the PERS and TPAF is established for the administration of changes to eligibility and retirement under Chapter 1, P.L. 2010, and Chapter 3, P.L. 2010.  Information about Chapter 1, P.L. 2010, is available in the Certifying Officer Letter dated April 1, 2010.

CO Letter in Printable Format Adobe PDF (58K)

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April 1, 2010

TO: State Biweekly and State Monthly Certifying Officers;
Local Government Certifying Officers of Employers Participating in the SHBP;
Local Education Certifying Officers of Employers Participating in the SEHBP
FROM: David J. Pointer, Chief, Health Benefits Bureau
SUBJECT: Chapter 2, P.L. 2010 — Changes to the State Health Benefits Program (SHBP) and School Employees’ Health Benefits Program (SEHBP)

Governor Christie recently signed into law Chapter 2, P.L. 2010 that makes numerous changes to the State Health Benefits Program (SHBP) and School Employees’ Health Benefits Program (SEHBP). These changes affect employee eligibility, shared member costs, plan choices, waiver incentives, and multiple coverages.  Most of these changes are effective May 21, 2010 while others will not be effective until current labor contracts expire.

MULTIPLE COVERAGE

An eligible individual may only enroll in the SHBP/SEHBP as an employee, retiree, or dependent.  Multiple coverage under the SHBP and/or SEHBP is prohibited.

For example, a husband and wife both have coverage based on their employment and have children eligible for coverage.  One may choose family coverage, making the spouse and children ineligible for any other SHBP/SEHBP coverage; or, one may choose single coverage and the spouse may choose parent and child(ren) coverage.

The Division of Pensions and Benefits will send lists of employees who have multiple coverage to employers so that the employees can be notified to waive coverage for themselves or remove dependents with multiple coverage.

MINIMUM CONTRIBUTION FOR HEALTH COVERAGE

Upon the expiration of any labor agreement after May 21, 2010, employees enrolled in the SHBP/SEHBP will be required to contribute a minimum of 1.5 percent of annual base salary towards the cost of their medical and/or prescription drug coverage. The minimum contribution is in addition to any premium paid for dental, vision or other health benefit.

Employees who become members of a State or locally-administered retirement system after May 21, 2010 and are eligible for the benefits provided under N.J.S.A. 52:14-17.32f, 52:14-17.32f1, 52:14-17.32f2, or 52:14-17.38, will be required to contribute 1.5 percent of their monthly retirement allowance, including any cost-of-living adjustments, towards the cost of their medical and/or prescription drug coverage.  The contribution is in addition to any premium paid for dental, vision or other post-retirement health benefit.

MINIMUM WORK HOURS FOR COVERAGE

Effective May 21, 2010, any newly appointed or elected officer will be required to work a minimum of 35 hours per week to be considered “full-time” and eligible for coverage under the SHBP/SEHBP.

A State employee hired after May 21, 2010 will be required to work a minimum of 35 hours per week — or more if required by contract — to be eligible for coverage under the SHBP.

In order for an employee of a local employer hired after May 21, 2010 to be eligible for coverage under the SHBP/SEHBP, he or she will be required to work a minimum number of hours per week as determined by resolution of the governing body of the local employer but in no instance will the minimum hours be less than 25.

Any employee or officer of the local employer or the State who met the minimum work hour requirements prior to May 21, 2010 will be eligible for continued coverage under the SHBP/SEHBP provided there is no break in the employee’s service or reduction in work hours.

WAIVER OF COVERAGE INCENTIVE

Local employers are permitted to offer an incentive to employees eligible for coverage under the SHBP/SEHBP to waive coverage due to employment with the employer.  The incentive is currently permitted to be up to 50 percent of the amount saved by the employer due to the employee’s waiver of coverage.

Effective for waivers filed on or after May 21, 2010, the most an employer may offer an employee who waives coverage is 25 percent of the amount saved by the employer or $5,000, whichever is less.  The amount saved by the employer would be the premium due minus the contribution the employee would have made if the employee did not waive coverage.

PLAN CHOICE

The availability of plans offered to eligible employees may be limited by local employers through the binding collective bargaining process.  The local employer may, through its sole discretion, impose the provisions of a binding collective bargaining agreement on those employees who have no majority representation for collective bargaining purposes

For example, the SHBP/SEHBP currently offers NJ DIRECT10, NJ DIRECT15, Aetna HMO, and CIGNA HealthCare HMO to local employers. The local employer may, through the collective bargaining process, offer employees all, a combination of plans, or one plan. The plans offered may be different for each bargaining group.

CHANGES TO THE PROVISIONS OF THE SHBP/SEHBP

Any changes in the provisions of health care benefits through the SHBP/SEHBP that are included in labor agreements between the State and its employees entered into after May 21, 2010 will apply to local employers and their employees in the same manner and at the same time as to State employees

ADDITIONAL INFORMATION

This letter is intended to provide employers with a general overview of the changes put into place by Chapter 2, P.L. 2010.  Additional administrative information will become available as the Division of Pensions and Benefits completes the procedural and programming changes needed to implement the provisions of this legislation. 

When available, revised publications and forms will be posted to the Division of Pensions and Benefits Web site at: www.state.nj.us/treasury/pensions 

If you have general questions regarding Chapter 2, P.L. 2010, or any of the information provided in this letter, contact the Division’s Office of Client Services at (609) 292-7524, or e-mail the Division.

CO Letter in Printable Format Adobe PDF (55K)

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April 1, 2010

TO: Certifying Officers of the Public Employees' Retirement System (PERS), Teachers' Pension and Annuity Fund (TPAF), and Defined Contribution Retirement Program (DCRP)
FROM: Florence J. Sheppard, Deputy Director, Benefit Operations
SUBJECT: Chapter 1, P.L. 2010 — Changes to the Public Employees' Retirement System (PERS), Teachers' Pension and Annuity Fund (TPAF), and Defined Contribution Retirement Program (DCRP)

Governor Christie recently signed into law Chapter 1, P.L. 2010. This law implements several changes to the State-administered retirement systems.  This letter addresses the changes to the Public Employees’ Retirement System (PERS), Teachers’ Pension and Annuity Fund (TPAF), and the Defined Contribution Retirement Program (DCRP).  Chapter 1, P.L. 2010 is effective May 21, 2010.

PERS AND TPAF ELIGIBILITY AND ENROLLMENT

Chapter 1, P.L. 2010, shifts the basis for membership in PERS or TPAF from the amount of an employee’s compensation to the number of hours worked.  To be eligible for PERS or TPAF membership, the hours worked by an employee enrolled after May 21, 2010, must be fixed at:

  • 35 hours or more per week for State employees to be enrolled in the PERS;

  • 32 hours or more per week for Local Government employees to be enrolled in the PERS; or

  • 32 hours or more per week for State or Local Education employees to be enrolled in the TPAF.

The change in eligibility establishes a new PERS and TPAF membership tier — Tier 4*. To be enrolled, an employee must meet the minimum required work hours per week.

*Enrollment into Tier 3 of the PERS or TPAF based on annual salary will close to new members on May 21, 2010 (except in cases of transfer of Tier 3 membership or disability retirees who return to covered employment).  Please see the information about the transfer of Tier 1, Tier 2, or Tier 3 membership on page 3 of this letter.

When determining eligibility, hours during which an employee does not work due to participation in a voluntary or mandatory furlough program will not be deducted in determining if the hours of work are fixed at fewer than 35 or 32 per week, as appropriate.

Persons ineligible for the PERS or TPAF because the hours of work are fewer than those required for membership may be eligible for enrollment in the Defined Contribution Retirement Program (DCRP).  See the changes to DCRP eligibility on page 3 of this letter.

PERS AND TPAF RETIREMENT

Chapter 1, P.L. 2010, changes the formula and the definition of compensation to be used to calculate Service, Early, and Deferred Retirement for PERS and TPAF Tier 4 members enrolled after May 21, 2010. 

  • For Service, Early, and Deferred Retirement the formula for PERS and TPAF Tier 4 members uses the pre-2001 level of 1/60, or Years of Service/60 x Final Average Salary.

  • The definition of compensation, or “Final Average Salary,” for PERS and TPAF Tier 4 members will be based on the average annual compensation for the last five years of service, or any five fiscal years of membership that provide the largest possible benefit to the member or the member’s beneficiary.

This definition of compensation will also be used to calculate survivor pension benefits and death benefit payments, when available, to beneficiaries of PERS or TPAF Tier 4 members.

  • The PERS and TPAF Service Retirement age and benefit reductions applicable to PERS and TPAF Early Retirement remain the same as established under Chapter 89, P.L. 2008, and effective as of November 2, 2008.  See Fact Sheet #4, Applying for Retirement, for details.

  • The establishment of Tier 4 membership made no changes to the age or calculation methods for PERS or TPAF Veteran Retirements.

Note: Retirement eligibility and calculation methods for PERS and TPAF Tier 1, Tier 2, and Tier 3 members remain unchanged and stay the same if the member transfers (See information regarding transfers on page 3 of this letter). 

MULTIPLE MEMBERSHIP

Chapter 1, P.L. 2010, requires that an employee enrolled after May 21, 2010, be eligible for PERS or TPAF Tier 4 membership based upon only one position and requires the retirement system to designate the position providing the higher or highest compensation for the member from among any concurrently held positions.  This position will be used as the basis for eligibility for membership, service credit, the compensation base for pension contributions, and for other pension calculations.

If a Tier 4 member leaves a designated position or acquires a different position – or an additional position with higher compensation — the member will receive a new designation by the retirement system, if appropriate.

For current PERS or TPAF Tier 1, Tier 2, or Tier 3 multiple members, all presently held concurrent positions will continue to qualify for service credit and the compensation base for pension contributions and calculation of retirement, provided that the member continues to hold those positions without any break in service.  However, any new concurrently held position begun after May 21, 2010, will not qualify for service credit or the compensation base for pension contributions and calculation of retirement for any PERS or TPAF multiple member.

CLOSURE OF THE PROSECUTORS PART OF THE PERS

Chapter 1, P.L. 2010, closes the Prosecutors Part of the PERS to new members.  Prosecutors taking office after May 21, 2010, will be enrolled as “regular” Tier 4 members of the PERS — except that a county prosecutor who is appointed by the Governor with the advice and consent of the Senate will be enrolled in the DCRP (or regular PERS if a Tier 1 member continuously since July 1, 2007).

Prosecutors who were enrolled in the Prosecutors Part of the PERS between its opening in 2001 and its closure on May 21, 2010, will be permitted to continue as members of the Prosecutors Part and receive Prosecutors Part benefits, provided that they continue in eligible Prosecutors Part service.

DEFINED CONTRIBUTION RETIREMENT PROGRAM

Chapter 1, P.L. 2010, increases the minimum annual salary required for eligibility in the Defined Contribution Retirement Program (DCRP) to $5,000.

An employee who is ineligible for the PERS or TPAF because the hours of work are fewer than those required for membership (or a Tier 3 PERS or TPAF member whose annual salary falls below the minimum required for eligibility – $7,700 for 2010) is eligible for enrollment in the DCRP provided the annual salary is $5,000 or higher.

NON-FORFEITABLE RIGHTS

Chapter 1, P.L. 2010, eliminates the five-year “non-forfeitable right to receive benefits” for employees enrolled in any New Jersey State-administered retirement system after May 21, 2010.

This provision of Chapter 1 also applies to retirees of a State-administered retirement system who return to covered employment after May 21, 2010, with the same retirement system (except for disability retirees approved for return to active employment).

For Tier 1, Tier 2, or Tier 3 members the five-year “non-forfeitable right to receive benefits” is maintained if you transfer (see the information below regarding transfers).

TRANSFER OF TIER 1, TIER 2, AND TIER 3 MEMBERSHIPS
AND RETURN TO EMPLOYMENT FROM RETIREMENT

Chapter 1, P.L. 2010, provides that an employee enrolled as a Tier 1, Tier 2, or Tier 3 member of the PERS or TPAF who transfers employment within the PERS or TPAF, or from the PERS to the TPAF (or TPAF to PERS), will retain his or her original Tier 1, Tier 2, or Tier 3 status provided that there has not been a break in membership (two years or more without a pension contribution and/or the member has not withdrawn his or her PERS or TPAF account). 

If there has been a break in membership, the member has withdrawn his or her account, or the member is a PERS or TPAF retiree who is returning to PERS or TPAF covered employment (except for disability retirees approved for return to active employment), upon meeting the eligibility requirements, the member will be enrolled as a Tier 4 member of the PERS or TPAF and be regarded as a new enrollee; whereupon, the provisions of Chapter 1, P.L. 2010, will apply.

ADDITIONAL INFORMATION

This letter is intended to provide employers with a general overview of the changes put into place by Chapter 1, P.L. 2010.  Additional administrative information will become available as the Division of Pensions and Benefits completes the procedural and programming changes needed to implement the provisions of this legislation. 

When available, revised publications and forms will be posted to the Division of Pensions and Benefits Web site at: www.state.nj.us/treasury/pensions 

If you have general questions regarding Chapter 1, P.L. 2010, or any of the information provided in this letter, contact the Division’s Office of Client Services at (609) 292-7524, or e-mail the Division.

CO Letter in Printable Format Adobe PDF (62K)

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April 1, 2010

TO: Certifying Officers of the Police and Firemen's Retirement System (PFRS)
FROM: Florence J. Sheppard, Deputy Director, Benefit Operations
SUBJECT: Chapter 1, P.L. 2010 — Changes to the Police and Firemen's Retirement System (PFRS)

Governor Christie recently signed into law Chapter 1, P.L. 2010. This law implements several changes to the State-administered retirement systems.  This letter addresses the changes to the Police and Firemen’s Retirement System (PFRS).  Chapter 1, P.L. 2010 is effective May 21, 2010.

PFRS MAXIMUM SALARY LIMITS

Chapter 1, P.L. 2010, imposes a maximum compensation limit upon which pension contributions will be made for police officers or firefighters who become members of the PFRS after May 21, 2010.  The maximum amount will be the amount of base salary equivalent to the annual maximum wage contribution base for Social Security, pursuant to the federal Insurance Contributions Act.  For 2010, that amount is $106,800. 

Under this law, a new member for whom this annual maximum compensation will be reached in any year will become a participant of the Defined Contribution Retirement Program (DCRP) with regard to the remaining compensation, unless the member irrevocably elects to waive participation in the DCRP.

For the amount of compensation in excess of the maximum compensation, 5.5 percent will be deducted as a contribution for the purposes of the DCRP.  Employers will be responsible for the DCRP’s matching 3 percent contribution.  When a PFRS member also becomes a participant in the DCRP, the life insurance and disability benefit provisions of that program will be available for that participant.  Additional information about the DCRP is available in Fact Sheet #79, Defined Contribution Retirement Program, which is being revised to include PFRS members.

CHANGES TO PFRS FINAL COMPENSATION

Chapter 1, P.L. 2010, also changes the calculation of “Final Compensation” used for PFRS retirement.  A PFRS member who is enrolled after May 21, 2010, will have Final Compensation based on the average annual compensation for any three fiscal years of membership that provides the largest possible benefit to the member or the member’s beneficiary.

For PFRS members enrolled after May 21, 2010, this law also affects the calculation of PFRS survivor benefits, when such a benefit is available, and the amount of a death benefit to a beneficiary whenever current law provides for the use of Final Compensation or final salary, as those terms are redefined by this law, for the purpose of that calculation. In instances where current law provides that the calculation of benefits be based on the compensation or salary received in the last year of service or at the time of death, there is no change as a result of this law.

Note: Members of the PFRS enrolled on or before May 21, 2010, will continue to have “Final Compensation” based on the compensation in the final year of service.

NON-FORFEITABLE RIGHTS

Chapter 1, P.L. 2010, eliminates the five-year “non-forfeitable right to receive benefits” for employees enrolled in any New Jersey State-administered retirement system after May 21, 2010.

This provision of Chapter 1 also applies to retirees of a State-administered retirement system who return to covered employment after May 21, 2010, with the same retirement system (except for disability retirees approved for return to active employment).

For PFRS members enrolled on or before May 21, 2010, the five-year “non-forfeitable right to receive benefits” is maintained if you transfer (see the information below regarding transfers).

TRANSFER OF PFRS MEMBERSHIP AND
RETURN TO EMPLOYMENT FROM RETIREMENT

Chapter 1, P.L. 2010, provides that a PFRS member enrolled on or before May 21, 2010, who transfers employment within the PFRS, will retain his or her original membership status provided that there has not been a break in membership (two years or more without a pension contribution and/or the member has not withdrawn his or her PFRS account).

If there has been a break in membership, the member has withdrawn his or her account, or the member is a PFRS retiree who is returning to PFRS covered employment (except for disability retirees approved for return to active employment), upon meeting the eligibility requirements, the member will be regarded as a new enrollee; whereupon, the provisions of Chapter 1, P.L. 2010, will apply.

ELIMINATION OF EXCESS FUNDING PROVISIONS

Chapter 1, P.L. 2010, eliminates the provision in PFRS statutes that would permit a member of the PFRS to retire, at any age after 25 years of service credit, on a special retirement allowance of 70 percent of Final Compensation after the retirement system reaches a funded level of 104 percent. This provision applies to all PFRS members.

ADDITIONAL INFORMATION

This letter is intended to provide employers with a general overview of the changes put into place by Chapter 1, P.L. 2010.  Additional administrative information will become available as the Division of Pensions and Benefits completes the procedural and programming changes needed to implement the provisions of this legislation. 

When available, revised publications and forms will be posted to the Division of Pensions and Benefits Web site at: www.state.nj.us/treasury/pensions 

If you have general questions regarding Chapter 1, P.L. 2010, or any of the information provided in this letter, contact the Division’s Office of Client Services at (609) 292-7524, or e-mail the Division.

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April 1, 2010

TO: Certifying Officers of the State Police Retirement System (SPRS)
FROM: Florence J. Sheppard, Deputy Director, Benefit Operations
SUBJECT: Chapter 1, P.L. 2010 — Changes to the State Police Retirement System (SPRS)

Governor Christie recently signed into law Chapter 1, P.L. 2010.  This law implements several changes to the State-administered retirement systems.  This letter addresses the changes to the State Police Retirement System (SPRS).  Chapter 1, P.L. 2010 is effective May 21, 2010.

SPRS MAXIMUM SALARY LIMITS

Chapter 1, P.L. 2010, imposes a maximum compensation limit upon which pension contributions will be made for State Police officers who become members of the SPRS after May 21, 2010.  The maximum amount will be the amount of base salary equivalent to the annual maximum wage contribution base for Social Security, pursuant to the federal Insurance Contributions Act.  For 2010, that amount is $106,800. 

Under this law, a new member for whom this annual maximum compensation will be reached in any year will become a participant of the Defined Contribution Retirement Program (DCRP) with regard to the remaining compensation, unless the member irrevocably elects to waive participation in the DCRP.

For the amount of compensation in excess of the maximum compensation, 5.5 percent will be deducted as a contribution for the purposes of the DCRP.  The employer will be responsible for the DCRP’s matching 3 percent contribution.  When a SPRS member also becomes a participant in the DCRP, the life insurance and disability benefit provisions of that program will be available for that participant.  Additional information about the DCRP is available in Fact Sheet #79, Defined Contribution Retirement Program, which is being revised to include SPRS members.

CHANGES TO SPRS FINAL COMPENSATION

Chapter 1, P.L. 2010, also changes the calculation of “Final Compensation” used for SPRS retirement.  A SPRS member who is enrolled after May 21, 2010, will have Final Compensation based on the average annual compensation for any three fiscal years of membership (plus maintenance) that provides the largest possible benefit to the member or the member’s beneficiary.

For SPRS members enrolled after May 21, 2010, this law also affects the calculation of SPRS survivor benefits, when such a benefit is available, and the amount of a death benefit to a beneficiary whenever current law provides for the use of Final Compensation or final salary, as those terms are redefined by this law, for the purpose of that calculation. In instances where current law provides that the calculation of benefits be based on the compensation or salary received in the last year of service or at the time of death, there is no change as a result of this law.

Note: Members of the SPRS enrolled on or before May 21, 2010, will continue to have “Final Compensation” based on the compensation in the final year of service (plus maintenance).

NON-FORFEITABLE RIGHTS

Chapter 1, P.L. 2010, eliminates the five-year “non-forfeitable right to receive benefits” for employees enrolled in any New Jersey State-administered retirement system after May 21, 2010.

ADDITIONAL INFORMATION

This letter is intended to provide employers with a general overview of the changes put into place by Chapter 1, P.L. 2010.  Additional administrative information will become available as the Division of Pensions and Benefits completes the procedural and programming changes needed to implement the provisions of this legislation. 

When available, revised publications and forms will be posted to the Division of Pensions and Benefits Web site at: www.state.nj.us/treasury/pensions 

If you have general questions regarding Chapter 1, P.L. 2010, or any of the information provided in this letter, contact the Division’s Office of Client Services at (609) 292-7524, or e-mail the Division.

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March 2010

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 2010 (January 1 to March 31)

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

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 April 7, 2010.  Should your report not be received by the close of business on April 22, 2010, 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.

>> Reminder << PERS & TPAF Tier 3 - Increase in 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.

>> Reminder << PERS & TPAF Tiers 2 & 3 - 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 2010, 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 2010 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 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.

>> 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 Pensions 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, assisting you to properly prepare the IROC.

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.

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March 2010

TO: Certifying Officer – Autonomous State College / University/State Employers
FROM: John D. Megariotis, Deputy Director, Finance
SUBJECT: Report of Contributions, 1st Quarter 2010 (January 1 to March 31)

>> Reminder << Notice of PERS & TPAF Tier 3 - 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.

>> Reminder << PERS & TPAF Tiers 2 & 3 - 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.

For calendar year 2010, 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 2010 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.

Reporting And Payment Information

Your 1st Qtr. 2010 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 7, 2010.  Your March 2010 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 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.

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.

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February 1, 2010

TO: State Biweekly and State Monthly Certifying Officers;
Local Government Certifying Officers of Employers Participating in the SHBP;
Local Education Certifying Officers of Employers Participating in the SEHBP
FROM: The Division of Pensions and Benefits, Health Benefits Bureau
SUBJECT: Extension of COBRA Subsidy for 2010 under the American Recovery and Reinvestment Act

The American Recovery and Reinvestment Act of 2009 (ARRA) was amended on December 19, 2009, by the Department of Defense Appropriations Act of 2010. The amendment extends the eligibility and duration of the COBRA1 premium subsidy available to certain individuals with continuation of health benefits coverage. 

EXTENDED ELIGIBILITY AND COVERAGE

Under the Department of Defense Appropriations Act:

  • The eligibility period for the COBRA premium subsidy was extended for two months until February 28, 2010.
  • The maximum period for receiving the subsidy was increased by an additional six months — from 9 months to 15 months.

To qualify, an individual must now be involuntary terminated from employment anytime between September 1, 2008 and February 28, 20102. The amount of the subsidized premium remains unchanged — qualified individuals continue to pay 35 percent of the regular COBRA premium. However, qualified individuals may now receive the subsidized rate for a longer period of time.

EMPLOYER ACTIONS

New COBRA Enrollees — Since enactment of the ARRA in 2009, employers have been required to provide information regarding the COBRA subsidy to employees who experience a COBRA qualifying event.  The notification requirement includes all employees who are involuntarily terminated as well as employees who voluntarily terminate employment. Under the amendment, this notification requirement extends to employees who experience a COBRA event prior to February 28, 2010.  Samples of the revised COBRA Notice and Application — that include information about the premium subsidy — are attached with this letter.  The COBRA Notice, Application, and current COBRA subsidy rates are also available on the Division’s Web site at:

www.state.nj.us/treasury/pensions/health-benefits.shtml

Current COBRA Enrollees — The Division of Pensions and Benefits has contacted currently enrolled COBRA members regarding eligibility for the extended subsidy period. These members will receive an adjustment to their current COBRA bill and, in most cases, do not need to take any action. However, if you are contacted by a former employee who is already enrolled in COBRA and/or receiving the subsidized premium, please refer the employee to the Division of Pensions and Benefits, Health Benefits Bureau at (609) 292-7524.

ADDITIONAL INFORMATION

More information about the COBRA subsidy and employer duties and responsibilities are available from the federal Department of Labor at: www.dol.gov/ebsa/COBRA.html  and the Internal Revenue Service at: www.irs.gov/

General questions regarding COBRA coverage under the State Health Benefits Program (SHBP) or the School Employees’ Health Benefits Program (SEHBP) can be addressed to the Division of Pensions and Benefits, Office of Client Services by calling (609) 292-7524 or by sending an e-mail.


1Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA).

2Additional eligibility restrictions may apply. See the Certifying Officer Letter of March 11, 2009 for full details on eligibility for the COBRA ARRA premium subsidy.

Enclosure

COBRA Notice and Application Adobe PDF (78K)

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January 25, 2010

TO: State Health Benefits Program Participating Local Government Employers
School Employees’ Health Benefits Program Participating Local Education Employers
FROM: Frederick J. Beaver, Director
SUBJECT: Dependent Eligibility Verification Audit

The Division of Pensions and Benefits under the direction of the State Treasurer is conducting an audit to ensure that only eligible dependents are covered under the State Health Benefits Program (SHBP) and School Employees’ Health Benefits Program (SEHBP). This audit will require your employees who cover dependents to submit documents to verify that the person(s) who they have listed as eligible dependents meet the definitions for coverage under the Program.

The reason we are conducting this audit is that, by law, only those who meet the definition of eligible dependents are permitted to receive benefits under the Program. Each time a claim is made for services provided to an ineligible dependent, the cost is paid by the Program, which in turn increases your cost to provide coverage to your employees. Therefore, the audit serves the very important purpose of keeping health care coverage affordable and advantageous to participating employers and their employees.

Our health care consultant, Aon Consulting, will be performing the audit on our behalf. Aon recently completed the audit for State employees and over 5,300 dependents either self-identified or were deemed ineligible for coverage under the Program.

The chart below outlines the correspondence your employees can expect to receive from Aon and due dates for submission of documentation to Aon.

Type of Communication Date
Initial Audit Packet February 10
Aon Call Center Opens February 16
Documentation Due Date March 19
Interim Non-Respondent Letter March 29

Final Documentation Due Date April 23

As documentation is received and reviewed by Aon, letters of confirmation for those successfully completing the audit and interim disposition letters for those who have not submitted sufficient documentation, will be mailed throughout the audit cycle.

In some instances, the member address the Division has on file may not be up to date. If the initial audit packet is returned because a member has moved, you can expect to receive a request asking to supply the correct address of your employee. I ask that you respond to those requests timely to avoid your employees’ dependents from being terminated from coverage. 

Please check the Division’s Web site: www.state.nj.us/treasury/pensions regularly for any updates and more information concerning the audit.

Again, this audit is an important step in keeping the Program as strong as possible. I appreciate your cooperation.

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January 2010

TO: State Department Certifying Officers, State Monthly Certifying Officers
FROM: David J. Pointer, Chief, Bureau of Health Benefits
SUBJECT: Special Open Enrollment and Automatic Transfers

The State Health Benefits Program (SHBP) Special Open Enrollment for New Jersey Law Enforcement Supervisors Association (NJLESA) employees whose labor contracts were recently resolved will begin on February 22 and end on March 5, 2010. All changes to coverage made during this open enrollment will be effective on May 8, 2010 for those employees paid through the State’s Centralized Payroll Unit and May 1, 2010 for State monthly employers.

Completed employer-certified SHBP Applications should be forwarded to the Health  Benefits Bureau as soon as they are received from employees. Please do not hold applications or send them in one at a time. The last day that certified applications may arrive at the Health Benefits Bureau is March 12th.

Current subscribers will be automatically transferred to the new plan offerings as outlined below unless they submit a SHBP Application choosing another plan.

  1. Employees enrolled in NJ PLUS will be automatically transferred to NJ DIRECT15.

  2. Employees enrolled in Aetna HMO or CIGNA HMO will remain in the HMO in which they are currently enrolled.

  3. The Special Open Enrollment is for medical plan changes only.

Members will not be permitted to add dependents to coverage, change coverage levels, or make changes to dental or prescription drug plans. Members will be automatically transferred from their existing plans into the corresponding new plans as of May 1st or May 8th as indicated above. Please remember that members do not need to submit an application if they are satisfied with the automatic transfer outlined above. See “Additional Information” below for more details.

MEDICAL PLANS

The SHBP is offering two types of medical plans, a Preferred Provider Organization (PPO) and Health Maintenance Organizations (HMO).

The new PPO will offer two options known as NJ DIRECT10 and NJ DIRECT15. Only NJ DIRECT15 is available to active State employees.  

  1. NJ DIRECT15 is similar in design to the current NJ PLUS plan, providing in-network and out-of-network medical care. NJ DIRECT15 differs from NJ PLUS in that NJ DIRECT15 is available nationwide, members are not required to choose a primary care physician, and do not need a referral for in-network services. The copayment for most NJ DIRECT15 in-network services is $15. Most out-of-network services are reimbursed at 70% of the “reasonable and customary” allowance after annual deductibles are met.

If treatment for an illness or injury was provided during 2010 in NJ PLUS, the eligible charges that were applied toward the annual deductibles may be counted toward meeting the out-of-network deductible under NJ DIRECT for 2010. In addition, the annual and lifetime accumulations as well as the 2010 out-of-pocket balances from NJ PLUS will carry forward into NJ DIRECT.

  1. Two HMO plans, Aetna HMO and CIGNA HealthCare, are available to all employees. Both HMOs have expanded networks and provide services nationwide. When an employee enrolls in an HMO he or she selects a Primary Care Physician (PCP) from a group of participating providers contracted by the HMO. All services, except emergencies, are coordinated through the PCP. The copayment for most HMO in-network services is $15. There is no option in an HMO for out-of-network care (except for emergencies).

The Plan Comparison Summary describes the new medical plans in additional detail, and it is enclosed and is also available to employees on the Division’s Web site at: www.state.nj.us/treasury/pensions/shbp.htm.

ADDITIONAL INFORMATION

Each medical plan has a SHBP dedicated Web site available with plan information. See the Plan Comparison Summary for telephone and Web site information. There is also a link to the medical plan Web sites from the Division’s Web site.

A copy of the revised New Jersey State Health Benefit Program Application is enclosed for your use. Please remember that employees do not need to submit an application if they are satisfied with the automatic transfer above.

If you have any questions about the SHBP Special Open Enrollment or the information in this letter, please contact Kathy Laflin of my staff at (609) 292-9734.

Enclosures:

SHBP Application
Plan Comparison Summary

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January 6, 2010

TO: Certifying Officers of the Police and Firemen’s Retirement System (PFRS)
FROM: Wendy Jamison, Secretary, PFRS Board of Trustees
SUBJECT: Reminder of Deadline for PFRS Training Requirements

This letter is being sent to employers as a reminder that as of July 1, 2010, all PFRS members must meet the statutory definition of a “police officer” or “firefighter” including the successful completion of specific training requirements.* 

In 2008, the Board of Trustees for the Police and Firemen’s Retirement System (PFRS) adopted amendments to the New Jersey Administrative Code that addressed “training requirements” for police officers and firefighters and eligibility for the PFRS. (N.J.A.C. 17:4-2.4, — detailed in the Certifying Officer Letter of December 15, 2008.)

In brief, to be eligible for participation in PFRS:

  • All police officers enrolled in the PFRS must complete the appropriate basic training course for the title to which they were appointed.  For example, an investigator must complete the Basic Course for Investigators in order to meet the training requirements for PFRS membership; a State corrections officer must complete the Basic Course for State Corrections Officers; a County corrections officer must complete the Basic Course for County Corrections Officers; a police officer or a sheriff’s officer must complete the Basic Course for Police Officer to qualify for continued PFRS membership. If a PFRS member has previously completed the appropriate basic training course for the title to which the member was appointed, and the certification for that training is currently valid, then that training qualifies for purposes of PFRS membership. Typically, successful completion of basic training courses for police officers and corrections officers is certified through the Police Training Commission (PTC).

  • All firefighters enrolled in the PFRS must complete and receive Firefighter 1 certification through the New Jersey Department of Community Affairs, Division of Fire Safety. 

Note: In certain circumstances, police officer members may be granted credit for substantially equivalent portions of previous basic police training which was completed as a requirement of previous employment by a federal, state, or county law enforcement agency, if approved by the PTC and the PFRS Board of Trustees. Employers may submit proof of other police officer certification along with a written request for consideration to the PFRS Board and Trustee Administration, Division of Pensions and Benefits, PO Box 295, Trenton, NJ, 08625-0295. For firefighter members, no other training can be substituted for the Firefighter 1 certification.

N.J.A.C. 17:4-2.4, specifies that any PFRS police members or firefighting members who have not successfully completed the PTC or Firefighter 1 certification as of July 1, 2010 will face removal from PFRS membership.

Therefore, employers should verify with their police officer and firefighter employees that all required training is, or will be, completed prior to the July 1, 2010 deadline.

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.


*As prescribed for police positions in N.J.S.A. 43:16A-1 and 52:17B-66 et seq.; and for firefighter positions in N.J.S.A. 43:16A-1 and 52:17B-66 et seq.

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January 6, 2010

TO: Certifying Officers 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)
FROM: Kathleen Coates, PERS Board Secretary;
Wendy Jamison, PFRS and SPRS Board Secretary; and
Mary Ellen Rathbun, TPAF Board Secretary
SUBJECT: Election of Representative to the New Jersey State Investment Council

The Office of the Board Secretary is seeking applications from active or retired members of the PERS, TPAF, PFRS, and SPRS who are interested in serving as a member of the State Investment Council.  If elected by the Board, the individual would serve for a three-year term to begin Summer 2010.

A “Notice to Employees” is included with this letter which outlines the qualifications, duties, and application procedures for the position. Interested individuals must apply no later than April 1, 2010.

The Division of Pensions and Benefits and the Office of the Board Secretary request employer assistance in making employees aware of the State Investment Council position. Please post the attached “Notice to Employees” in an area of your workplace where it will be easily seen by your employees.  You may also distribute the notice directly to employees by printing it or as an attachment to employee e-mail.

ADDITIONAL INFORMATION

If you have additional questions regarding the information provided in this letter, contact the Division of Pensions and Benefits, Office of the Board Secretary at (609) 292-3383 or (609) 984-6890, or send an e-mail  (please include “investment council election” as the subject line of your e-mail).

Enclosure
Notice to Employees — State Investment Council Election Adobe PDF (13K)

CO Letter in Printable Format Adobe PDF (92K)

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