General Information That Applies to All Funds
Effective June 19, 2011, 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.
Online Enrollment Application
With certain exceptions, all new enrollment applications are to be processed online through EPIC. (See links to the specific Enrollment section above for the for the fund you are enrolling a member in for more information.)
Paper enrollment applications will be accepted only for certain exceptions or as directed by the Enrollment Section.
employer has the statutory responsibility for enrolling employees on a timely
It is the employer's responsibility to complete online enrollment applications for members through EPIC, in a timely manner. For help with the online EPIC Enrollment applications, please click here.
However, in the case where a paper application must be submitted, according
to N.J.S.A. 43:15A-7, if an employee refuses to complete the employee section of the enrollment
application, the employer should complete the employee section and indicate, "Employee
refused to sign" at the top. Once the application is received, the employee is considered to
be a "forced" enrollment.
the member is required to prove insurability, the member's
estate will be designated as his/her beneficiary until such time that an online MBOS "Designation of Beneficiary" or printed Designation
of Beneficiary form is completed and received by the Division of Pensions
employer has a statutory responsibility to enroll and transfer employees
on a timely basis. (NJSA 43:15A-7).
more than one year has elapsed from the time that contributions would have been
required from such persons, one-half of the employees' cost will be required of
the employer plus any additional employer costs, as appropriate.
PERS, see New Jersey Statutes Annotated (NJSA) 43:15A-7.1; for TPAF, see N.J.S.A.
18A:66-6.1; for PFRS, see N.J.S.A. 43:16A-15.1.
order to ensure the timely enrollment of eligible employees, employers are encouraged
to maintain adequate systems and procedures for the periodic review of employees
who are working but not enrolled. Employers
are further encouraged to ascertain if an individual already has an existing active membership
which would require immediate enrollment at the time of hire, if all other eligibility
criteria are met.
you engage to work at your location may claim to be "self-employed,"
"consultants," or "independent contractors," who would be
ineligible for enrollment in any of the State-administered retirement systems.
The distinction, however, between an employee and an independent contractor is
sometimes hard to make, and many persons are incorrectly classified.
a rule, the Division of Pensions and Benefits accepts the tests and standards
used by the Internal Revenue Service to determine the employer-employee relationship.
Since penalties levied by the IRS can be severe, both the worker and the employer
should give careful consideration before classifying a worker as an independent
contractor. In addition to IRS penalties and any penalties imposed by the NJ Department
of Labor in the event that an employee has been incorrectly classified as an independent
contractor, there are penalties relating to the pension system as well.
- The employer will be assessed delinquent enrollment
charges for failing to enroll an employee in the retirement system in a timely
manner. The employee will be required
to refund all retirement benefits received after the date enrollment should have
- The employee must also pay
any retroactive pension contributions due on the new pension account.
The Division uses the IRS test to determine whether an individual is an independent contractor. All of the factors listed below must be evaluated to render a determination.
A) Behavioral Control – Included in this test are instructions and training.
(1) Instructions – if the individual receives extensive instructions on how work is to be done, this suggests that an employer-employee relationship exists. Ask how, when, or where the person is asked to do the work; what and who owns the tools or equipment used; what assistants are hired to help with the work and where and by whom supplies and services are purchased. If one receives less extensive instructions about what should be done, but not how it should be
done, the person may be an independent contractor. Each of these factors
will vary dependent upon the actual position.
(2) Training – If the business provides training about required procedures and
methods, this indicates that the business wants the work done in a certain
way, and that suggests that the individual may be an employee.
B) Financial Control – Included in this test are facts which would reveal whether there is a right to direct or control the business part of the work.
(1) If the individual has made a significant investment in a position, this may
qualify as an independent contractor.
(2) If the individual is not reimbursed for some or all business expenses, then he
or she may qualify as an independent contractor, especially if unreimbursed
business expenses are high.
(3) If the individual can realize a profit or incur a loss, this suggests that the
person is in business for themselves and may be an independent contractor.
C) Relationship to Parties – These are facts that illustrate how the business and the worker perceive their relationship. For example:
(1) Does the person receive benefits such as paid leave or insurance? This may
indicate employee status.
(2) Written contracts – A written contract may show what both the individual and the employer intend.
Not one of these factors is controlling and the response to all factors must be weighed together, under the common law definition of "employment."
However, one of the most important factors for consideration is whether the employer has the right to instruct and control the employee with respect to the details of the work that is performed by the employee.
Since the Division of Pensions and Benefits uses the established IRS Employee Test (commonly known as Revenue Ruling 87-41) as the basis for determining employee or independent contractor status, local employers have a standard assessment tool and the opportunity for formal guidance. There are several IRS documents that discuss how to evaluate the individual circumstance. These are:
• IRS Publication 1779, a two-page brochure that summarizes the IRS Employee Test. It is available from the IRS at: www.irs.gov/pub/irs-pdf/p1779.pdf
• IRS Publication 15a, about employees and the employer-employee
relationship which includes examples of employees and contractors. It also
discusses employee tax liability issues. It is available from the IRS at:
• IRS Publication 963, the “Federal-State Reference Guide”, a comprehensive
reference source for Social Security and Medicare coverage and Federal
Insurance Contributions Act (FICA) tax withholding issues. Chapter 4 of this
document provides details on determining worker status. It is available from
the IRS at: www.irs.gov/pub/irs-pdf/p963.pdf
As part of its services to employers, the IRS will also look at individual circumstances and provide a determination for the purposes of federal employment taxes and income tax withholding. Because these two issues are at the heart of the IRS assessment, local employers can contact the IRS to obtain a definitive answer if local analysis is inconclusive.
IRS Form SS-8 can be used to request a determination. The form is
available online at: www.irs.gov/pub/irs-pdf/fss8.pdf
The IRS test factors listed above replace the 20 factor test set previously used by the IRS to determine independent contractor or employee status. The 20 factors included: degree of control; right to discharge; right to delegate work; right to hire and fire assistants; payment by the hour; furnishing of training; skill; duration of relationship; control over hours of work; independent trade; furnishing tools; place of work; profit and loss; intent of the parties; principal in business; sequence of work; reports required; same work as others classified as employees; integration; and industry custom.
additional clarification on this issue, contact the NJ Department of Labor, Division
of Employer Accounts, at (609) 292-2321; or
All members of the State-administered
retirement systems must provide proof of age prior to retirement. It is recommended
that this be submitted along with the completed Enrollment Application.
Acceptable proof of age documents include a copy of any of the following:
or immigration papers
- Baptismal certificate
- Other records,
including military records, census records, school or business records, age recorded
on marriage licenses and insurance, or children's birth records.
of Insurability (PERS and TPAF)
PERS or TPAF employee who is age 60 or older at the time the Division of Pensions and Benefits receives his or her enrollment application will
be required to prove insurability in order to obtain group life insurance coverage (see below for more information).
In addition, if a member's date of birth is not given on the Enrollment Application,
he or she will be required to prove insurability through a medical examination.Optional
enrollees must prove insurability if the Enrollment Application is received
more than one year after their date of compulsory enrollment.
retirees who return to active employment, and those who converted their group
life insurance to private coverage upon termination of employment, must also prove
insurability. The Division of Pensions and Benefits will notify the member in
writing regarding this process.
Group Life Insurance for Members Age 60 or Older (PERS and TPAF)
Employees who are age 60 or older at the time of enrollment are ineligible for both Noncontributory and Contributory Group Life Insurance coverage until they prove insurability by taking and passing a physical examination.The date of birth information on the Enrollment Application, submitted by the employer, is used to determine whether or not an enrolling member must prove insurability for group life insurance coverage due to age. When a member is found to be age 60 or older at enrollment, the following procedure is set in motion:
- The Division of Pensions and Benefits notifies the member in writing of his or her ineligibility for group life insurance coverage until insurability is proven through a physical examination.*
- The Division informs Prudential Life Insurance Company of America, Inc., (the present group life insurance underwriter), about the enrolling member's ineligibility for group life insurance coverage due to age.
- Prudential then provides the new member with information about completing the process of obtaining a physical examination to prove insurability. Prudential authorizes a third party to administer the physical examination.
*The member has 12 months from the date of the Division's written notification to take and pass the required physical examination. Failure to pass the physical examination within the prescribed time frame will render the member ineligible for group life insurance coverage.
Prudential notifies the Division when the member becomes eligible for group life insurance coverage as a result of proving insurability through a physical exam. At that time, the Division provides certification to both the member and employer. The certification indicates the date on which salary deductions for group life insurance coverage will begin.
Members who fail to prove insurability have 45 days to submit an appeal of the decision to Prudential.
of Employer-paid Group Life Insurance Premiums
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 Non-contributory Group Life Insurance
coverage over $50,000 at any time.
For further information on this topic, contact
the Division of Pensions and Benefits, or see
Fact Sheet #22, provided in this manual.
NOTE: TPAF members are not required to
pay Contributory Group Life Insurance premiums after attaining age 70.
When the Division of Pensions and
Benefits receives an application requiring payroll deductions
(enrollment, loan, purchase), the Division will send a Certification
of Payroll Deductions to the employer, specifying the
amount of the deductions and when the deductions should begin.
For Newly Enrolled or Transferred
Two copies of the Certification
of Payroll Deductions are mailed to the employer: one is for
the member and one is for the employer's records. Employers are not authorized
to take pension contributions, Contributory Group Life Insurance, back deductions,
arrears, or loan payments in anticipation of receiving a Certification of Payroll
Deductions from the Division of Pensions and Benefits.
Back deductions are mandatory pension
contributions subject to IRC Section 414(h). They are the pension
obligations owed from the date of enrollment or transfer to the
date deductions are certified to begin.Back deductions are calculated on
the member's current annual salary, regardless of when the
member is enrolled. If back deductions are owed for a time
period exceeding 12 months, 8.25% interest is added.
Lump Sum Back Deduction Payments
Made by Members
Members have the option of paying
a back deduction obligation through a lump sum payment, rather
than having this obligation deducted from their monthly or biweekly
paycheck.To make a lump sum payment, the member
remits the full amount of back deductions owed to their employer.
The Division of Pensions and Benefits will not accept member checks
for lump sum back deductions, due to applicable IRS rules.
of Payroll Deductions issued at the time of enrollment indicates the member's payroll deduction schedule for member pension
contributions, as well as for any back deductions owed. It also
provides the cash discount value for the back deduction balance—the
lump sum amount, with any interest, payable by the member for
total back deductions owed. (Back deductions owed
for a time period exceeding 12 months may accrue interest, as
The member must pay the cash discount
value to his or her employer prior to the date on which
payroll deductions are scheduled to begin, in order for the cash
discount value quoted on the Certification of Payroll Deductions to be in effect.
more information about how to report member lump-sum back deduction
payments on the Quarterly Report of Contributions, please
Written Requests for the Cash
Discount Value of an Arrears Obligation
When a member wishes to pay a back
deduction obligation after payroll deductions have begun, the
member must make a request, in writing, for an "arrears payoff
quotation" letter for the cash discount value of the remaining
back deductions owed. The amount quoted will include any interest
This written request should be made
to the Adjustment Section, Division of Pensions and Benefits,
PO Box 295, Trenton, NJ, 08625-0295.
According to New Jersey Administrative
Code [N.J.A.C. 17:1-4.1(b)], members may make only one request for the cash discount value of outstanding arrears, such as back
a purchase quotation for previous service) in a calendar year.For
more information about how to report member lump-sum back deduction
payments on the Quarterly Report of Contributions, please
As stated above, all new enrollment applications are to be processed online through EPIC, although certain exceptions apply. The member's
biographical information (i.e.: name, address, date of birth, Social Security
number, etc.) is required from the member on every enrollment application, regardless of
the retirement system the employee is joining. Additional member information is also required, according to pension system.
At the time of enrollment, the employee's estate will automatically be designated as beneficiary for any death benefits payable. If an employee wishes to change that designation, he or she may either register with the Member Benefits Online System (MBOS), which will allow the member to use the online "Designation of Beneficiary" application to designate beneficiaries or subsequently update their beneficiary information online.
Employers should submit the enrollment application,
completed in its entirety, as soon as possible; delayed
and forced enrollments can be costly to the employer.
a member does not subsequently complete the online MBOS "Designation of Beneficiary" or the Designation of Beneficiary form after enrollment, the enrollment will be processed with the member's
estate listed as both group life insurance and pension beneficiaries.
cases, an insurance packet and policy rider confirming the estate as beneficiary
will be mailed to the member.
to change the beneficiary information in effect once enrollment has occurred, the member must submit a separate online MBOS "Designation of Beneficiary".
also requires the employer to certify the member's date of hire, salary, and location.
This information must be verified with the Certifying Officer's signature.
For New Employees
in a Regular Appointment (Civil Service) or Regularly Budgeted Position (non-Civil
Employers Who Report
Pensions on a Monthly Basis
who report on a monthly basis, the compulsory enrollment date shall be fixed as
the first of the month for an employee whose regular Civil Service appointment
or date of hire into a non-Civil Service position falls between the first through
the 16th of the month.
enrollment date shall be fixed as the first of the following month for an employee
whose appointment date falls between the 17th and the end of the month. (See N.J.A.C.
17:2-2.4(a)1 and (c)2)
Report Pensions on a Biweekly Basis
employers who report on a biweekly basis, the compulsory enrollment date shall
be fixed as the first day of the pay period for an employee whose appointment
date falls on the first through seventh day of the biweekly pay period.
compulsory enrollment date shall be fixed as the first day of the following biweekly
pay period for an employee whose appointment date falls on any subsequent date
within that pay period. (See N.J.A.C. 17:2-2.4(a)2 and (c)3)
An employee who
is an optional enrollee shall be enrolled as of the first of the month if the
employer reports on a monthly basis, or the first day of the next biweekly pay
period if the employer reports on a biweekly basis following the receipt of the
enrollment application. (See N.J.A.C. 17:2-2(b))
of Beneficiary Designation
The online MBOS "Designation of Beneficiary" application or Designation of Beneficiary form should be completed again any time there
is a change in family status affecting the designation on file. The employer should
advise the member of the possible need to make beneficiary designation changes
when they learn of changes in an employee's family status (e.g., marriage, civil union partnership, divorce,
death of a spouse, eligible same-sex domestic partner or civil union partner, birth of a child, etc.)
Members wishing to sign up for MBOS at the time of enrollment should be directed to the "MBOS Registration Information" page, at: http://www.state.nj.us/treasury/pensions/mbosregister.shtml
Link to instructions for the MBOS online "Designation of Beneficiary" application
and Dual Memberships
Memberships (PERS and TPAF only) Prior to May 21, 2010
A PERS multiple member is someone who is employed by more than one PERS participating employer and enrolled in the PERS through more than one employer— that is, more than one employer reports to the PERS for that employee concurrently.
In the past, an employee already holding PERS
membership through one PERS-covered position, could become a "multiple member" when taking (an)
additional PERS-covered postion(s). That employee had to enroll in the PERS
for the new position(s) immediately, as of the date of hire, regardless of the member's employment status, as long as salary and Social Security eligibility requirements for the PERS
However, Chapter 1, P.L. 2010, now requires that an employee enrolled after May 21, 2010, be eligible for PERS or TPAF membership based upon only one position. It also 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.
Under the provisions of Chapter 1, P.L. 2010, multiple membership is only available to Tier 1, Tier 2, and Tier 3 members; only for PERS eligible positions when enrolled on or before May 21, 2010; and provided that there has not been a “break in service” in any concurrently held PERS eligible position.
Thus, for all tiers, any new, concurrently held PERS eligible 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 member.
employee who is enrolled and active in a covered position under one State administered
pension system and accepts an additional position covered under a different State
administered pension system, must be enrolled in the second system.
The "dual" member's contributions and benefits are established on the basis of statutes pertaining
to each system independently and are not related in any way to each other.If
an employee is an enrolled member of a State-administered retirement system and
has applied for Deferred Retirement, has terminated employment from the first
employer and accepts employment in a position covered under a second retirement
system, the member may have the option to make an interfund
To qualify for an interfund transfer, the member can have no more
than two years concurrent service credit while covered under both funds.
An Enrollment Application is required for membership in the second pension system, and the employee will
be a member of both funds.
one of these links to go to the Enrollment Application for the appropriate
fund: TPAF, PERS,
and Intrafund Transfers
are of two types: Interfund and Intrafund.
employees who change jobs and accept positions that require enrollment in another
retirement system. This applies even if the employer remains the same.
permit any member of a State-administered retirement system the option to transfer
membership to another State-administered retirement system if there is a change
in employment or title that would make the member ineligible to continue contributing
to their original retirement system.
example, if a teacher's aide (PERS) accepts a position in a neighboring school
district as a regularly appointed classroom teacher (TPAF), and ceases to work
as an aide, this member would be eligible to transfer membership from the PERS
to the TPAF.
- Prior to the passage of
Chapter 6, P.L. 2001, a member who had any concurrent service in two retirement
systems could not transfer service credit from one pension fund to another.
Effective January 16, 2001, however, those PERS or TPAF members with two
years or less of concurrent service were permitted, under certain conditions,
to transfer all service credit from one fund to another, less any concurrent service
- With the passage of Chapter
341, P.L. 2001, effective January 5, 2002, those PERS or TPAF members with
three years or less of concurrent service are now permitted, under certain conditions,
to transfer all service credit from one fund to another, less any concurrent service
Interfund transfers are
limited to pension systems administered by the State of New Jersey.
Members who are actively contributing simultaneously
to two separate State administered retirement systems are not eligible for an
interfund transfer because service is being accrued concurrently in both funds:
They would be considered "dual" members for pension
PERS and TPAF Only
interfund transfer may be processed if a period of three years of service
or less is concurrent and the member is no longer actively contributing to the
second account. In such a case, only the non-concurrent servicethat is,
service not credited under both accounts, may be transferred. Interfund
transfers can be done at any time prior to an account expiring or being withdrawn.
Vested accounts are also eligible to be transferred
provided they do not have more than three years of concurrent service.
- An Enrollment
Application (TPAF, PERS,
for the system to which the employee is transferring, and
Interfund Transfer Form, which must be completed by the employee (Part
1) and the former employer (Part 2). Generally, the Application
for Interfund Transfer Form must be first filled out by the member, then
sent to the former employer who is required to return it to the member. The Interfund
Transfer Form should then be submitted along with the completed Enrollment
Application to the Division of Pensions and Benefits.
when the employer remains the same but the member is transferring to a
different retirement system due to a title change, the employer should stop remitting
contributions under the former system once the employee becomes eligible for membership
in the second system, and wait for a Certification of Payroll Deductions for the
new retirement system.
Interfund transfers are optional. The Division often receives a new Enrollment
Application but does not receive an Application for Interfund Transfer
form. If the Interfund Transfer form is not received within a reasonable
time frame, the Division establishes the new enrollment without the interfund
transfer and the member becomes a "dual member".
An interfund transfer can occur at a later date so long as an Application for
Interfund Transfer has been received prior to the expiration or withdrawal
of an account.
Transfers ("Reports of Transfer")
employees who change employer and remain in positions covered by the same retirement
All active members
of a State-administered retirement system who change employers, but continue employment
in positions covered by the same pension fund, are immediately eligible to continue
membership regardless of temporary or permanent status in the new position, so
long as salary and Social Security requirements are met.The
employee's membership should be in good standing and the account cannot be withdrawn
or expired. If the account has been withdrawn or has expired, a new enrollment
application must be completed.The Division
of Pensions and Benefits will process the Report of Transfer and will send
a Certification of Payroll Deductions to the new employer indicating the
date pension deductions must begin for the transferring employee.
new employer must wait for a Certification of Payroll Deductions from
the Division of Pensions and Benefits before commencing pension deductions. Back
deductions will be certified for the member to make up for any delay in normal
A Report of Transfer
form must be completed by the new employer.Report
of Transfer form available for download and printingReport
of Transfer forms instructions are available here: PERS,
Status (Applies only
to the PERS and the TPAF)
The definition for those who qualify for Veteran status used here is based upon
NJ Statutes for NJ State pension purposes only.
veteran is a person who holds an honorable discharge from the military services
of the United States who served the required amount of active duty service during
the following periods (It is important that those who qualify for Veteran status
for pension purposes establish Veteran status well in advance of retirement with
the NJ Department of Military and Veteran's Affairssee
below to find out how to do so).:
status for World War II, the Korean Conflict or the Vietnam Conflict can be granted
as long as the member had at least 90 days of continuous active military service,
of which at least one day falls within the dates listed above.
Any honorably discharged member of the American Merchant Marine who served at
least 90 days during World War II also qualifies for veteran status.
Recent Conflicts To
qualify for veteran status for the Lebanon Crisis, Lebanon Conflict, the Grenada
Conflict, the Panama Peacekeeping Mission, Operation Desert Shield/Storm, Operation
Restore Hope in Somalia, Operations Joint Endeavor/Joint Guard in the Republic
of Bosnia and Herzegovina, or Operation Enduring Freedom (including but not limited
to service in Afghanistan), or Operation Iraqi Freedom in Iraq, the member must
have served at least 14 days in the country or region, or on ships patrolling
in the territorial waters of these nations.
If the members military service began after the starting date of conflict, only one of the 14 days in the areas
of hostilities must have fallen within the service dates specified. If the member's
service started prior to the beginning of the period of hostilities, then
the member must have served at least 14 days within the dates specified.The
90- or 14-day requirement for service is waived if the veteran was discharged
because of a service-incurred disability. Absent Without Leave (AWOL) periods
must be deducted from active service and if this reduces the active service to
less than the 90- or 14-day service requirement, veteran status will be denied.
Service with the Women's Army Auxiliary Corps (WAAC) and Women's Army Corps (WAC)
qualifies for veteran status.
status cannot be granted if an individual received a dishonorable discharge, a
discharge from the draft, disenrollment from the Coast Guard Reserve, or a discharge
from the reserve with no evidence of active service in time of war.Active
Duty Training, Reserve, or National Guard Service do not qualify as active duty
service.Additional information is available
for download on Fact Sheet 17,
Veteran Status (PERS and TPAF).
Effective March 1, 2001,
the final arbiter of Veteran Status is the Adjutant General of the NJ Department
of Military and Veteran's Affairs who will inform the Division of Pensions and
Benefits of the determination of Veteran Status (Chapter 127, PL 2000).
you qualify for Veteran status for pension purposes, it is important that you
establish Veteran status well in advance of your retirement.A
copy of the member's military discharge document, Form DD-214, must be
The New Jersey
Department of Military and Veterans' Affairs
Trenton, NJ 08625-0340
It will be reviewed to determine eligibility for veteran's
status for pension purposes. Be sure the member includes a note or letter indicating
that the DD-214 is being submitted for the purpose of obtaining veteran status
in the retirement system in which he or she in a member. The member should also
include his or her Social Security number for identification purposes.To
obtain a copy of his or her Form DD-214 (discharge papers), a member should write
Military PErsonnel Records
9700 Page Boulevard
St. Louis MO 63132-5100
Or, a member may visit:
obtain copies of discharge papers for the Merchant Marines, the member should
400 7th Street S.W., Room 7302
Washington, DC 20590
information about the purchase of service credit military service, please refer
to Fact Sheet #1, Purchasing
Service Credit, or see the "Purchase
of Service Credit" section of this manual.For
information about the qualifications and retirement benefits for a PERS or TPAF
member with veteran status, please see the "Retirement
from the PERS or TPAF" section of this manual, or refer to Fact Sheet
#4, Types of Retirement (PERS