Alternate Benefit Program (ABP)
in the Alternate Benefits Program (ABP)
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.
Full-time faculty, officers, visiting professors and certain professional administrative
staff required to possess a college degree or its equivalent must participate in
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.
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;
- 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:
Agencies and Institutions of Higher Education
Covered by the ABP
Cape Community College
- Bergen Community
- Brookdale Community College
- Camden County College
College of Morris
- Cumberland County
- Essex County College
- Higher Education Student
Assistance Authority (HESAA)
County Community College
- Kean University
County Community College
- Montclair State University
Jersey City University
- New Jersey Institute
Jersey State Commission
on Higher Education
- Passaic County Community
- Ramapo College of New Jersey
Valley Community College
- Rowan University
The State University
of New Jersey
- Sussex County Community
- The College of New Jersey
Richard Stockton College of New Jersey
Edison State College
- Union County College
of Medicine and
Dentistry of New Jersey
County Community College
- William Paterson
University of New Jersey
Types of Contributions: "Mandatory" and "Voluntary"
are two types of contributions for ABP: "Mandatory" and "Voluntary"
Pension Contribution Rates
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.
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.
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.
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.
September 1, 1995, pension deductions became mandatory from the employee's eligible
enrollment date, and therefore subject to the rules of IRS 414(h).
Additional ContributionsElective 403(b)
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
of Pensions and Benefits currently approves the following providers to offer annuity
investment accounts for ABP members:
| || |
VOYA Financial Services
581 Main St., Fourth Floor
MassMutual Retirement Services (formerly The Hartford)/Gitterman & Associates Wealth Management, LLC
Gitterman & Associates Wealth Management, LLC (financial advisors)
70 Wood Avenue South, 3rd Floor
Iselin, NJ 08830
Information for the Alternate Benefit Program and Participants:
Information for the 403(b) ACTS Program and Participants:
AXA Financial (Equitable)
333 Thornall Street, 8th Floor
Edison, NJ 08837
Teachers Insurance and Annuity Association/
College Retirement Equities Fund (TIAA/CREF)
155 Village Blvd, Suite A
Princeton, NJ 08540
MetLife (formerly Travelers/CitiStreet)
581 Main Street, Sixth Floor
Woodbridge, NJ 07095
135 Route 202/206, Suite 13
Bedminster, NJ 07921
Prudential Reitrement Services
30 Scranton Office Park
Scranton, PA 18507
TDD line: 1-877-760-5166
When a Member Has Chosen
a Provider But Has Not Made an Investment Election
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:
|MetLife (formerly Travelers/CitiStreet)
||Gold track Select Annuity
|AXA Financial (Equitable)
||Guaranteed Interest Option|
||General (fixed account)|
|VOYA Financial Services|| VP Money Market|
||Stable Value Fund
Visits by the Investment Provider Representatives
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
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 members 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.
Year Participants (Delayed Vesting)
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 states
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.
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
Newly enrolled members 60 years of
age or older must undergo a medical examination to qualify.
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
Follow this link for a
copy of the form, Election to
Waive Non-Contributory Life Insurance in Excess of $50,000.
this link for a copy of the form, Election
to Reinstate Noncontributory Life Insurance in Excess of $50,000.
learn more about insurance coverage under the State-administered pension systems,
see the Group Life Insurance section of this
who are not eligible for membership in the system include:
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.
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.
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 hereAcrobat 4.0 or
Part III is completed
by the educational institution to certify the member's appointment, academic rank,
service and salary.
must complete an Alternate Benefits
Program Enrollment Application. (For the fill
in and print version of the Alternate
Benefits Program Enrollment Application, click hereAcrobat 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
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
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.
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.
additional information, including a list of the default providers, click here.
of Payroll Deductions
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.
the certification is received, the administrator will need to follow the remittance
guidelines for each investment carrier.
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.
ABP and State-administered Retirement Systems: Interfund
the booklet, Choosing between the PERS
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.
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 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.
from Other States' Retirement Systems
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.
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.
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.
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.
TO HOME PAGE