Employers' Pensions and Benefits Administration Manual (EPBAM)
   

 

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How an Employer Joins the
State-administered Retirement Systems
and the Division of Pensions and
Benefits' Role as Administrator
of the State's Social Security Agreement


In order for a new public employer to participate in the public retirement systems administered by the Division of Pensions and Benefits, the employer must first be included in the State of New Jersey's agreement with the Social Security Administration.

The following are the required steps that new public employers must take to be included under the State of New Jersey—Social Security Administration Agreement, and ultimately to become a participating employer in one of our retirement systems.

  1. The new public entity must submit a resolution from the governing body or board to the Division, which states that the employer will guarantee the remittance of the employer's share for Social Security coverage and the pension contributions. A copy of the statute or ordinance that created or authorized the creation of the entity must accompany the resolution.

  2. The new public entity must provide a statement which includes:
    • The Employer Identification Number (EIN) from the IRS.
    • The effective date requested for Social Security coverage (usually the date of the employer's first hire).
    • The number of employees to be covered.
    • The name, address, phone number, fax number, e-mail address and title of the person who will be the Division's contact (usually the Certifying Officer).

  3. After the required information is received, the Division executes a formal modification to extend Social Security coverage under Section 218 of the State's Social Security coverage agreement.

  4. The Secretary of Health, Education and Welfare approves the modification. This process may take two or more months.

  5. Once the Division receives notice of the successful modification, a copy of the modification is sent to the contact person. Copies of the modification are also sent to the Enrollment Bureau, the State Health Benefits Bureau and the Employer Education Unit of the Client Services Bureau within the Division.

    Upon receipt of a copy of the modification, the Employer Education Unit contacts the employer to arrange training and assistance. Once enrollment or transfer forms are received by the Division, an employer location number is assigned for each retirement system in which the employer is enrolled. The Division uses the location number to create and identify the new employer in our data base systems. Most pension documents submitted to the Division by the employer will request this location number.

The Employer Education Unit will determine which materials should be included in the new employer information package forwarded to the new location. Materials sent may include member handbooks, enrollment and transfer applications, annual reports, newsletters, fact sheets, and other forms needed by employers to provide information to employees and to fulfill their duties in delivering the pension programs.

The package also will include information regarding our Employer Education Programs, and a cover letter providing the name and phone number of a contact person within the EEU should the employer have any questions or need more information.

The receipt of an enrollment application or transfer form, and the subsequent assignment of a location number, will create a master file for the new location in our data base system. This will then generate all enrollment certifications for payroll deductions and the quarterly Report of Contributions (ROC) form.

Because the Division does not have complete control of the process involved in granting approvals for accepting a new employer into the pension system, this procedure may take many months to complete. During that time the employer will have employees eligible for membership, but not able to be enrolled. This means that when the employer receives a certification to withhold pension contributions, the employee will have a pension contribution liability to take them back to their eligibility date. 

However, the Division does not promote withholding of pension contributions from employees before a certification is issued, and we cannot accept pension contributions withheld by the employer in an effort to avoid a hardship resulting from back deductions.

Social Security (FICA) Reimbursement for School Districts,
Boards of Education, and Charter Schools

Social Security Office Locator Link

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Last Updated: March 12, 2009