Employers' Pensions and Benefits Administration Manual (EPBAM)
   

 

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Enrolling in the
Alternate Benefit Program (ABP)



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Required Employer Training, Enrollment Procedures  
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Eligibility

 
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Covered Locations

 
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"Mandatory" and "Voluntary" Contributions

 
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Current Approved Investment Providers (as of April 1, 2004)  
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Previous Approved Investment Providers (Old Contract)

 
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Default Carriers 
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Vesting

 
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First Year Participants (Delayed Vesting)

 
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Life Insurance Coverage

 
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Ineligibility

 
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Required Forms 
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Application Process

 
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Certification of Payroll Deductions 
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Processing Employee Contributions 
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Intrafund Transfers 
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ABP and State Systems (Interfund Transfers) 
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Pensions from Retirement Systems of Other States 

Enrolling in the Alternate Benefits Program (ABP)

Employer Training

All employers, including Certifying Officers and their immediate supervisors, are expected to complete board approved training on proper Enrollment procedures. This training will be made available over the State Web site. Additional information about this required training is available in the Certifying Officer Letter of May 26, 2011, Enrollment Certification and Training Requirements under Chapter 52, P.L. 2011.

Eligibility

Full-time faculty, officers, visiting professors and certain professional administrative staff required to possess a college degree or its equivalent must participate in the ABP.

Adjunct faculty members and part-time instructors whose employment agreements begin after October 31, 2008 are also required to participate in the ABP; they are no longer eligible to participate in the PERS, see below.

However, in cases where a member of the Public Employees' Retirement System, or PERS, is subsequently hired to fill an ABP-covered position, the employee may have the choice of enrolling in the ABP or remaining in the PERS. Click here for additional information.

Adjunct faculty members and part-time instructors who were employed under an agreement that took effect prior to November 1, 2008 and were enrolled in the Public Employees' Retirement System, or PERS, may also have a choice to either remain in PERS or enroll in the ABP when entering into a new employment agreement after October 31, 2008, see below.

Any eligible person who has been enrolled in the Alternate Benefit Program for at least one year may continue to be enrolled in the program, notwithstanding promotion or transfer to a full-time position within the institution not otherwise eligible for the program.

"Full-time" for the ABP is defined to include anyone receiving 50% or more of base salary of a 100% (full-time) position and may include an employee on sabbatical or paid leave of absence.

ABP Eligibility Requirements for Adjunct Faculty Members (Chapter 89, P.L. 2008)

Any new adjunct faculty member or part-time instructor whose employment agreement began after October 31, 2008 is required to participate in the ABP, under Chapter 89, P.L. 2008, not the Public Employees' Retirement System, or PERS.

ABP enrollment of adjunct faculty members and part-time instructors is to take place within 30 days of commencing employment in the ABP-eligible position, not after completion of 12 months of service, as was the case for enrollment of adjunct faculty members into the PERS prior to this change in law.

Adjunct faculty members and part-time instructors who were employed under an agreement that took effect prior to November 1, 2008 are eligible to participate in the ABP once they sign and begin service under a new employment agreement. An adjunct faculty member or part-time instructor already enrolled in the Public Employees' Retirement System (PERS), who enters into a new employment agreement after October 31, 2008, must complete the form, Election of Retirement Coverage - Transfer from PERS/TPAF , within 30 days of commencing employment in an ABP-eligible position, in order to choose to either:

  • Irrevocably waive their benefits under the ABP for the new employment agreement and continue their participation in the PERS;

    OR

  • Irrevocably waive their benefits under the PERS and transfer their accumulated pension service, contributions, and any available employer contributions under the PERS to the ABP.

Transfers of employee TPAF or PERS contributions occur upon election to waive TPAF or PERS coverage.  Transfers of employer contributions occur after the member has accrued ten years of non-concurrent service credit under the TPAF, PERS and ABP.

Individuals with existing TPAF or PERS membership at the time of ABP enrollment, who do not make an election to waive benefits under one of the two retirement systems, will lose the right to have all retirement credit consolidated under one retirement account and may lose benefits that have not vested.

When an individual is hired as an adjunct faculty member or part-time instructor but is already enrolled in the PERS and continues to serve in other PERS-covered employment, the individual may choose to be covered by PERS or be enrolled in the ABP for the ABP-eligible position.

Members choosing to enroll in the ABP will have dual membership, see below.

Members choosing to be covered by the PERS will have multiple membership in the PERS.

For additional information, please consult:

Covered Locations

State Agencies and Institutions of Higher Education
Covered by the ABP

  • Atlantic Cape Community College
  • Bergen Community College
  • Brookdale Community College
  • Burlington County College
  • Camden County College
  • County College of Morris
  • Cumberland County College
  • Essex County College
  • Gloucester County College
  • Higher Education Student
    Assistance Authority (HESAA)
  • Hudson County Community College
  • Kean University
  • Mercer County Community College
  • Middlesex County College
  • Montclair State University
  • New Jersey City University
  • New Jersey Institute of Technology
  • New Jersey State Commission
    on Higher Education
  • Ocean County College
  • Passaic County Community College
  • Ramapo College of New Jersey
  • Raritan Valley Community College
  • Rowan University
  • Rutgers, The State University
    of New Jersey
  • Salem Community College
  • Sussex County Community College
  • The College of New Jersey
  • The Richard Stockton College of New Jersey
  • Thomas Edison State College
  • Union County College
  • University of Medicine and
    Dentistry of New Jersey
  • Warren County Community College
  • William Paterson University of New Jersey

Two Types of Contributions: "Mandatory" and "Voluntary"

There are two types of contributions for ABP: "Mandatory" and "Voluntary"

Mandatory Pension Contribution Rates

The employee's mandatory rate of contribution is established at a flat rate of 5% of base or contractual salary. The employer's rate is currently 8% of a member's base salary.

For full-time members earning 100% of their base or contractual salary, both the mandatory 5% member pension contributions and the 8% employer contributions will be calculated on the base or contractual salary. This is also true for ABP members who are under contract to work "half time" or "three-fourths time", etc. They are considered "full-time" for ABP enrollment purposes, and they are earning 100% of their base contractual salary when they are working the "half time" or "three-fourths time", etc., hours set by contract.

In the case where full-time members earn less than 100% of their base contractual salary, (but not less than 50%), the 5% mandatory member pension contributions will be calculated on the full base contractual salary, and the 8% employer contributions will be paid on this salary. For these individuals, the full base contractual salary should be included in the "Total Normal Base Salaries" section of the monthly Employer Contribution Report.

For full-time employees earning less than 50% of their full base contractual salary, no deductions should be taken and no employee contributions made. The member's ABP status would be the same as that of a member on a leave of absence without pay.

For full-time ABP employees working more hours than contracted for (including those under contract to work "half time", "three-fourths time" etc.), the employee's additional earnings are regarded as extra compensation and are not subject to pension contributions.

Effective September 1, 1995, pension deductions became mandatory from the employee's eligible enrollment date, and therefore subject to the rules of IRS 414(h).

Voluntary Additional Contributions—Elective 403(b)

Under the voluntary 403(b) portion of the program, members may make additional contributions on a tax-deferred basis. Members are required to complete a Salary Reduction Agreement form with their employer in order to participate. While federal income tax will be deferred on the contributions, State income tax and Social Security taxes will not be deferred. 

To determine the total percentage of salary a member may defer, the employee's carrier of choice must perform a tax deferral calculation. Voluntary, additional 403 (b), contributions will be calculated on the actual base salary paid less the mandatory pension contributions, if the employee earns 50% or more of his/her full base salary. If the employee earns less than 50% of his/her full base salary, no payroll deductions should be taken for the elective 403(b) voluntary additional contributions.

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Approved Investment Providers

The Division of Pensions and Benefits currently approves the following providers to offer annuity investment accounts for ABP members:

 

ING Life Insurance and Annuity Co.
581 Main St., Fourth Floor
Woodbridge, NJ 07095
877-873-0321
www.ingretirementplans.com

 

The Hartford/Gitterman & Associates Wealth Management, LLC
70 Wood Avenue South, 3rd Floor
Iselin, NJ 08830
(848) 248-4877
Information for the Alternate Benefit Program and Participants:
http://www.retire.hartfordlife.com/newjersey401a/index.html
Information for the 403(b) ACTS Program and Participants:
http://www.retire.hartfordlife.com/newjersey403b/index.html

Campus Contacts

 

AXA Financial (Equitable)
333 Thornall Street, 8th Floor
Edison, NJ 08837
866-752-0072
www.equitable.com/nj

 

Teachers Insurance and Annuity Association/
College Retirement Equities Fund (TIAA/CREF)

155 Village Blvd, Suite A
Princeton, NJ 08540
1-800-842-8412
www.tiaa-cref.org/njabp

 

MetLife (formerly Travelers/CitiStreet)
581 Main Street, Sixth Floor
Woodbridge, NJ 07095
1-800-545-0108
(732) 602-0500
www.njabp.metlife.com

 

VALIC
135 Route 202/206, Suite 13
Bedminster, NJ 07921

(908) 470-4110

www.aigretirement.com/njabp

When a Member Has Chosen a Provider But Has Not Made an Investment Election

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

Provider
Investment Option
VALIC Money Market II
MetLife (formerly Travelers/CitiStreet) MetLife Money Market
AXA Financial (Equitable) Alliance Money Market
The HartfordHartford Money Market
INGING VP Money Market
TIAA/CREFCREF Money Market

Worksite Visits by the Investment Provider Representatives

Employers are reminded that each carrier must be given equal access to worksites and staff. The carriers are always responsible to make prior arrangements with each human resource office before appearing on campus.

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Vesting

If an ABP member has an existing retirement account containing employee and employer contributions based on employment in higher education anywhere in the United States, or is an active or vested member of any State of New Jersey-administered retirement system and transfers that membership into the ABP, the member is immediately vested. Vested members of the ABP are eligible to apply for loans from their carrier. Such loans are made from the member’s account balances. Members should contact their authorized carrier for details and repayment procedures.

Examples: (1) A new ABP member has an existing 401(k) account based on employment at an institution of higher education in another state. That ABP member is considered immediately vested. (2) A new ABP member has an account in the TPAF based on employment at a high school in New Jersey. The ABP member withdraws from the TPAF and transfers the service credit and contributions from the TPAF membership into the new ABP account. That ABP member is considered immediately vested.

First Year Participants (Delayed Vesting)

If an employee does not own an existing higher education retirement account or has not transferred from another State of New Jersey administered retirement system, employee (5%) and employer (8%) contributions required during the initial year of participation are held in a "delayed vesting" status. If an employee does not continue eligible employment in the second year, the employee may apply for a refund of employee contributions only from the carrier. The employer contributions revert back to the employer. While in the delayed vesting period, transfers between carriers and loans are not permitted.

Examples: (1) A new ABP member has an existing membership in another state’s defined benefit plan. The ABP member is considered to be in a delayed vested status. (2) A new ABP member has an expired PERS account, i.e., the individual is not vested in the PERS and has not made contributions in over two years. The ABP member is considered to be in a delayed vested status. (3) A new ABP member has an account in the PERS based on continuing employment with another employer. That account is not rolled into the new ABP account. The ABP member is considered to be in a delayed vested status.”

Life Insurance Coverage

All ABP members are covered by employer-paid life insurance, payable to designated beneficiaries, in the amount of three and one-half times the annual base salary. This coverage is available without a medical examination to newly enrolled members under age 60.

Newly enrolled members 60 years of age or older must undergo a medical examination to qualify.

The Internal Revenue Service classifies all employer paid, group life insurance coverage over $50,000 as a fringe benefit subject to taxation. The amount of the life insurance coverage is not taxable, but the premium required to pay for the life insurance coverage is taxable. Members may elect to waive insurance coverage over $50,000 at any time; for further information on this topic, please see Fact Sheet #22.

Follow this link for a copy of the form, Election to Waive Non-Contributory Life Insurance in Excess of $50,000.

Follow this link for a copy of the form, Election to Reinstate Noncontributory Life Insurance in Excess of $50,000.

To learn more about insurance coverage under the State-administered pension systems, see the Group Life Insurance section of this manual.

Ineligibility

Individuals who are not eligible for membership in the system include:

  • Employees in a career service title as defined by the State Department of Personnel.

  • Faculty members who are temporarily in the United States under an F or J visa.

  • Any employee receiving a retirement benefit from any pension system of the State of New Jersey, including an individual collecting an annuity or cash distribution from the ABP.

  • An employee who is appointed in a temporary capacity, with the exception of visiting professors, for one semester or for a lesser period.

Required Form

All new employees must complete the Alternate Benefits Program Enrollment Application, Parts I and II. (For the fill in and print version of the Alternate Benefits Program Enrollment Application, click here—Acrobat 4.0 or higher needed.)

Part III is completed by the educational institution to certify the member's appointment, academic rank, service and salary.

Application Process

Eligible employees must complete an Alternate Benefits Program Enrollment Application. (For the fill in and print version of the Alternate Benefits Program Enrollment Application, click here—Acrobat 4.0 or higher needed.) Upon completion of the "Certification of Employing Agency" section by the employer, the application should be filed with the Division of Pensions and Benefits. It is suggested that each new participant complete a Provider Election and Allocation form, and the application forms for each investment provider selected, at the same time. A copy of the completed application form for each investment provider should be forwarded to the appropriate provider, and the employer should also retain a copy.

Alternate Benefit Program members who do not designate an investment provider for program contributions will be enrolled by the institution with the investment provider designated as the default provider at the time of enrollment.

The Default Provider

The default provider is authorized to accept employer and employee mandatory contributions and will invest the funds in a money market fund. Contributions will continue to be sent to the default provider until the ABP member designates and completes an application with an investment provider and notifies the institution of the action. If the member is subject to delayed vesting, and is enrolled with the default provider, the member is allowed to choose an alternate provider during the first year and transfer the contributions deposited.

In the event an eligible employee fails to complete a Provider Election and Allocation form, the employer shall complete the paperwork necessary to enroll the individual with the investment provider selected as the default provider for the current plan year.

For additional information, including a list of the default providers, click here.

Certification of Payroll Deductions

The Division of Pensions and Benefits certifies all new enrollments and transfers to the respective employer. Certifications establish that the employee is eligible to enroll in the ABP. It also indicates the membership number, group life insurance status, date of enrollment, and whether the employee is in delayed vesting status or an active participant at the time of enrollment.

Processing Employee Contributions

Once the certification is received, the administrator will need to follow the remittance guidelines for each investment carrier.  

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Intrafund Transfers

When an ABP member transfers from one State of New Jersey public institution of higher education to another, an ABP Application for Transfer form is required to continue membership. 

Part I is completed by the member and Part II is completed by the employer. The member should also complete a new Carrier Election and Allocation form for the college's records. 

If the member had a Salary Reduction Agreement with their former employer and wishes to continue the reduction, a new agreement with the new employer is required.

The ABP and State-administered Retirement Systems: Interfund Transfers   

See the booklet, Choosing between the PERS and ABP

Continuance in a New Jersey State-administered defined benefit retirement system (such as the Public Employees' Retirement System and Teachers' Pension and Annuity Program), with its different benefit and contribution schedules, is permitted as long as the employee waives the right to the benefits provided by the ABP.

Transfers from the PERS

When an employer hires a member of the Public Employees' Retirement System, or PERS, to fill an ABP-eligible position, the employer's responsibility to enroll the new hire in the ABP depends on whether or not the employee chooses to participate in the ABP.

An employee with current PERS membership who is hired for an ABP-eligible position may choose to remain in the PERS or transfer into the ABP (an Interfund Transfer). If the employee's PERS membership will be continuing through other employment, please see below.

The PERS member must select, within 30 days of the date of hire, to participate in either the ABP or the PERS. 

The booklet, Choosing between the PERS and ABP, may help such members in deciding whether to remain in the PERS or enroll in the ABP. PERS members thinking of participating in the ABP may also use the Request for PERS and ABP Retirement Income Illustrations to compare retirement benefits under the PERS with retirement income available under any of the approved ABP investment carriers.

A PERS member wishing to transfer to the ABP makes this selection by completing and filing:

This is an irrevocable decision while employment continues with the same employer. 

If the individual does not file an election form during the initial 30-day period, the employee must enroll in the ABP and will lose the right to have all retirement credit consolidated under one retirement account and may lose those benefits that have not vested.

Dual Membership (PERS and ABP)

A PERS employee who is hired for an ABP-eligible position at another location, but at the same time continues to serve in other PERS-covered employment, may also choose to be covered by PERS or be enrolled in the ABP for the ABP-eligible position.

If the employee elects to be enrolled in the ABP for the ABP-eligible position, he/she will have dual membership in the PERS and the ABP.

However, if the employee elects PERS coverage for the ABP-eligible position, he/she will have multiple membership in the PERS rather than dual membership in the PERS and ABP.

Concurrent ABP- and PERS-covered Employment with the Same Employer

N.J.S.A. 18A:66-170 prohibits full-time ABP employees from also enrolling in the PERS on the basis of any PERS-covered employment at the same employing location. Concurrent ABP- and PERS-covered employment with the same employer, however, is permitted.

If one of your full-time ABP employees is also working in a PERS-covered position at your location, you may not enroll them in the PERS or deduct PERS pension contributions from their PERS salary.

Although ABP members may retain their employment and salary from such PERS-covered positions, they will receive no PERS service credit. The salary earned for the PERS position would be considered extra compensation for ABP purposes, and extra compensation is not subject to pension deductions.

Transferring from Other New Jersey State-administered Defined Benefit Programs

If the employee was a member of the TPAF, the employee must transfer to the PERS or the ABP. To transfer to the ABP, the Enrollment/Transfer Application (for transfers from PERS or TPAF)— Acrobat 4.0 or higher needed), must be submitted;

When a member establishes 10 years of service or attains age 60, the employee may be eligible for some portion of the employer's Contingent Reserve Fund. 

If the employee elected to enroll in the ABP, employee contributions transfer concurrently with enrollment in the ABP. 

Chapter 342, PL 1981, permits members of the Police and Firemen's Retirement System (PFRS) to transfer their equity to the ABP program.

Pensions from Other States' Retirement Systems

Chapter 276, PL 1991, permits individuals receiving public pensions from non-New Jersey State-administered retirement systems to participate as members of a retirement system administered by the State of New Jersey.

All newly hired employees who meet the eligibility requirements for participation in the ABP are required to enroll without regard to whether they are currently receiving a pension benefit from another state. The date of enrollment will be based on the date of appointment. The service credit for the period from the date of enrollment to the date deductions begin may be purchased through a lump-sum payment within the first year of participation.

All eligible employees hired prior to September 10, 1991 currently receiving pension benefits from other states have the option of enrolling as members of the ABP. The option to enroll will be in effect for as long as they are employed with their current employer. If the employee elects to enroll in the ABP, the date of enrollment will be the first day of the month following the date the enrollment application is received by the Division of Pensions and Benefits. The period from the date of enrollment to the initial date of payroll deductions may be purchased by means of a lump sum payment within the first year of participation. Employment rendered prior to the date of enrollment cannot be purchased.

Employees who did not enroll in the ABP and subsequently accepted another ABP eligible position with any other State college, county college, the Commission of Higher Education, or the Office of Student Assistance, are considered newly hired employees, and are required to enroll as of the date of permanent appointment in the new position.

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Last Updated: May 3, 2013