Employers' Pensions and Benefits Administration Manual (EPBAM)
   

 

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History of Employee Contribution Rates for the
State-administered Pension Funds


 
 
   
  PERS Employee Contribution Rate  
    State PERS Employee Contribution Rate  
    Local PERS Employee Contribution Rate  
    Employee Contribution Rates—Other PERS Members  
      PERS Prosecutors Part  
      PERS Workers' Compensation Judges Part  
      PERS Legislators  
  JRS Employee Contribution Rate  
  PFRS Employee Contribution Rate  
  SPRS Employee Contribution Rate  
       

History of the TPAF Member Contribution Rate

The full or normal TPAF employee contribution rate is currently 5.5 percent of base salary, but this rate will increase to 6.5 percent in September/October 2011. Beginning in July of 2012, an additional increase to 7.5 percent will be phased in over a seven year period.

The contribution rate was at 5 percent of base salary through June 30, 2007. Under Chapter 92, P.L. 2007, and Chapter 103, P.L. 2007, the TPAF employee contribution rate increased to 5.5 percent, according to the timetable provided below.

The full rate of contribution is established by the legislature by enacting or amending pension law.

The State Treasurer has the right under the current law to make temporary reductions in rate—authorized in statute and based on the existence of surplus pension assets in the Teachers' Pension and Annuity Fund; however, statute also requires the return to the normal rate when such surplus pension assets no longer exist.

The Treasurer of the State of New Jersey had previously reduced the member contribution rate to 4.5% of base salary, from January 1, 1998 through the end of 2001. On January 1, 2002, TPAF members were subject to a further temporary discounted contribution rate of 3%, through December 31, 2003. {Employers should have actually deducted at the reduced rate of 4.5% through 2001 and 3% through 2003—Base salary multiplied by 4.50% (.045) for calendar years 2000 and 2001; for 2002-2003, base salary multiplied by 3.00% (.030)} .

Effective January 1, 2004, the Teachers' Pension and Annuity Fund member contribution rate returned to the 5 percent normal contribution rate. Employers began to deduct the 5% contribution amount on the first payday on or after the January 1, 2004 effective date of this change*, until the effective date of Chapter 92, P.L. 2007 and Chapter 103, P.L. 2007, when the rate was increased to 5.5 percent — see timetable.

There was one exception: *The Fiscal Year 2005 Budget Act called for a temporary reduction in the pension contributions of TPAF members at New Jersey State colleges and universities — from 5 percent to 3 percent — for the period of July 1, 2004 through December 31, 2004. Effective January 1, 2005 this temporary reduction also ended.

All voluntary pension deductions (loan repayments, purchases) are based upon the full pension rate, regardless of any temporary discounts granted for normal pension and back deductions.

Since deductions in the employee pension contribution rate are considered temporary reductions, the regular pension deduction certifications for new employees continue to reflect the full or normal rate, even when such reductions occur. Any changes in deduction rate must be certified by the Division of Pensions and Benefits.

Timetable for TPAF Employee Contribution Rate Change

The increase in the TPAF contribution rate to 5.5 percent under Chapter 92, P.L. 2007, and Chapter 103, P.L. 2007 was implemented in two phases: Phase One and Phase Two.

Those employee groups in Phase One included:

  • State employees, except those working for the Judicial branch;Employees of an independent State authority, board, commission, corporation, agency, or organization; Employees of a board or commission under the authority of the Commissioner of Education or of the State Board of Education; Employees of a State public institution of higher education, except employees of the University of Medicine and Dentistry of New Jersey (UMDNJ);
  • Teachers and other employees of a local school district, regional school district, county vocational school district, county special services school district, jointure commission, educational services commission, State-operated school district, charter school, or county college.

For employees included in the Phase One employee group, the increase in the member contribution rate from 5 percent to 5.5 percent was effective:

  • Pay Period #15, beginning July 7, 2007 for the July 27, 2007 check date, for State employees paid through the State Centralized Payroll Unit who were already enrolled in the PERS or TPAF prior to July 1, 2007.July 1, 2007 for all new employees of the Phase One employee groups.
  • July 1, 2007 for all other employees of the Phase One employee groups who were enrolled in the PERS or TPAF prior to July 1, 2007.

Those employee groups in Phase Two included:

  • Employees of the Judicial Branch of State government,Employees of the University of Medicine and Dentistry of New Jersey (UMDNJ); and
  • Employees of counties, municipalities, and other local employers not included in phase one.

For employees included in Phase Two employee group, the increase in the contribution rate from 5 percent to 5.5 percent was effective:

  • Pay Period #15 beginning July 5, 2008 for the July 25, 2008 check date, for State Judicial Branch employees paid through the State Centralized Payroll Unit who are already enrolled in the PERS or TPAF prior to July 1, 2008.July 1, 2008 for all new employees of the Phase Two employee groups;
  • July 1, 2008 for all other employees of the Phase Two employee groups who were already enrolled in the PERS or TPAF prior to July 1, 2008.

Temporary Reductions in TPAF Employee Contribution Rate The State Treasurer has the right under the current law to make temporary reductions in contribution rate. Between 1998 and 2004, temporary reductions in the TPAF employee contribution rate had been in effect.

On January 1, 2004, the Teachers' Pension and Annuity Fund member contribution rate returned to the 5 percent full (normal) contribution rate* until Chapter 92, P.L. 2007, and Chapter 103, P.L. 2007 increased the full (normal) contribution rate to 5.5 percent.*

The Fiscal Year 2005 Budget Act called for a temporary reduction in the pension contributions of TPAF members at New Jersey State colleges and universities — from 5 percent to 3 percent — for the period of July 1, 2004 through December 31, 2004, but effective January 1, 2005, this rate returned to the full 5 percent in effect until the increase to 5.5 percent called for by Chapter 92, P.L. 2007 and Chapter 103, P.L. 2007.

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History of PERS Member Contribution Rate

The full or normal PERS employee contribution rate is currently 5.5 percent of base salary.

The full or normal employee contribution rate for the PERS was 5 percent of base salary, through June 30, 2007. Under Chapter 92, P.L. 2007 and Chapter 103, P.L. 2007, the PERS employee contribution rate increased to 5.5 percent, according to the timetable available at this link. (PERS Prosecutors Part members, PERS Workers' Compensation Judges Part members, and PERS Legislators, see below).

The full rate of contribution is established by the legislature by enacting or amending pension law.

The State Treasurer has the right to make temporary reductions in rate within the parameters of the law. The Treasurer of the State of New Jersey had previously reduced the employee contribution rate to 4.5 percent of base salary, from January 1, 1998 through the end of 1999.

The provisions of Chapter 415, P.L. 1999, subsequently changed the employee contribution rate to 3 percent of base salary temporarily, effective January 1, 2000, for calendar years 2000 and 2001. Chapter 133, PL 2001 continued the 3 percent contribution rate through 2002 and it was extended through 2003, and then through June 30, 2004 for both State and local PERS members. {Employers should have actually deducted at the reduced rate of 4.5% through 2001 and 3% through June 30, 2004 — Base salary multiplied by 4.50% (.045) for calendar years 2000 and 2001; for January 1, 2002 through June 30, 2004, base salary multiplied by 3.00% (.030); see note regarding PERS local members below}.

Since reductions in the employee pension contribution rate are considered temporary reductions, the regular pension deduction certifications for new employees continue to reflect the normal rate in effect when such reductions occur, but the employer deducts at the reduced rate until advised by the Division of Pensions and Benefits to do otherwise.

Effective July 1, 2004, the PERS member contribution rate for PERS members who are State employees reverted to the full rate of 5 percent of base salary, until the effective date of Chapter 92, P.L. 2007 and Chapter 103, P.L. 2007, when the rate was increased (or will increase) to 5.5 percent — see timetable.

The member contribution rate for local PERS members, however, remained at the reduced 3% rate through December 31, 2004. Effective January 1, 2005 the member contribution rate for local employees in the Public Employees' Retirement System (PERS) also returned to the then full or normal rate of 5 percent.

With the enactment of Chapter 92, P.L. 2007 and Chapter 103, P.L. 2007, the full or normal PERS member contribution rate was increased to 5.5 percent.

From PERS Enrollments

2007 Increase in PERS Contribution Rate

The contribution rate was at 5 percent of base salary through June 30, 2007, but under Chapter 92, P.L. 2007 and Chapter 103, P.L. 2007, the PERS employee contribution rate increased to 5.5 percent, according to the timetable provided below.

The full rate of contribution is established by the legislature by enacting or amending pension law.

Member contribution rates for all other PERS member groups are listed below:

PERS Proscutors Part Members
8.5%**
PERS LEOs
5.5%
PERS Workers' Compensation Judges Part Members
5.5%*
Legislators
5.5%*

*Group is closed to new enrollments, effective July 1, 2007.
**Group is closed to new enrollments, effective May 21, 2010.

Timetable for PERS Employee Contribution Rate Change

The increase in the PERS employee contribution rate to 5.5 percent was implemented in two phases: Phase One and Phase Two.

Those employee groups in Phase One include:

  • State employees, except those working for the Judicial branch;
  • Employees of an independent State authority, board, commission, corporation, agency, or organization;
  • Employees of a board or commission under the authority of the Commissioner of Education or of the State Board of Education;
  • Employees of a State public institution of higher education, except employees of the University of Medicine and Dentistry of New Jersey (UMDNJ);
  • Teachers and other employees of a local school district, regional school district, county vocational school district, county special services school district, jointure commission, educational services commission, State-operated school district, charter school, or county college.

For employees included in the Phase One employee group, the increase in the member contribution rate from 5 percent to 5.5 percent was effective:

  • Pay Period #15, beginning July 7, 2007 for the July 27, 2007 check date, for State employees paid through the State Centralized Payroll Unit who were already enrolled in the PERS or TPAF prior to July 1, 2007.
  • July 1, 2007 for all new employees of the Phase One employee groups.
  • July 1, 2007 for all other employees of the Phase One employee groups who were enrolled in the PERS or TPAF prior to July 1, 2007.

Those employee groups in Phase Two include:

  • Employees of the Judicial Branch of State government,
  • Employees of the University of Medicine and Dentistry of New Jersey (UMDNJ); and
  • Employees of counties, municipalities, and other local employers not included in phase one.

For employees included in Phase Two employee group, the increase in the contribution rate from 5 percent to 5.5 percent was effective:

  • Pay Period #15 beginning July 5, 2008 for the July 25, 2008 check date, for State Judicial Branch employees paid through the State Centralized Payroll Unit who were already enrolled in the PERS or TPAF prior to July 1, 2008.
  • July 1, 2008 for all new employees of the Phase Two employee groups;
  • July 1, 2008 for all other employees of the Phase Two employee groups who were already enrolled in the PERS or TPAF prior to July 1, 2008.

Temporary Reductions in Member Contribution Rates

The State Treasurer has the right to make temporary reductions in rate within the parameters of the law. Between 1998 and 2004, temporary reductions in the PERS employee contribution rate had been in effect. For specific information about these temporary reductions, click here.

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Effective July 1, 2004, the PERS member contribution rate for PERS members who are State employees reverted to the full rate of 5 percent of base salary. At that time employers were to deduct the 5 percent member contribution rate on the first payday on or after the July 1, 2004 effective date, through June 30, 2007, when the contribution rate was raised to 5.5 percent.

Effective January 1, 2005, the member contribution rate for local employees in the PERS also returned to the normal rate of 5 percent, through June 30, 2007, when the contribution rate was raised to 5.5 percent.

 

Employee Contribution Rate for Other PERS Members

PERS Prosecutors Part

Chapter 366, P.L. 2001 established a special Prosecutors Part within the Public Employees' Retirement System, effective January 7, 2002. The PERS Board of Trustees set the PERS Prosecutors Part employee contribution rate at 7.5 percent for PERS Prosecutors Part members, but under Chapter 92, P.L. 2007, and Chapter 103, P.L. 2007 the member contribution rate was increased to 8.5 percent.

PERS Workers' Compensation Judges Part

Chapter 259, P.L. 2001, established special retirement benefits for members of the Public Employees' Retirement System (PERS) employed by the Division of Workers' Compensation of the Department of Labor as Workers' Compensation Judges, and set the employee contribution rate for PERS Workers' Compensation Judges Part (WCJ Part) members at 5%.

Under Chapter 92, P.L. 2007, the Workers' Compensation Judges Part of the PERS was closed to new membership, effective June 8, 2007. Members enrolled in the WCJ Part of the PERS prior to June 8, 2007 had a member contribution rate of 5 percent through July 1, 2007, when the member contribution rate for the WCJ Part of the PERS increased to 5.5 percent, effective with the payroll period for which the beginning date was closest to July 1, 2007.

Those with no existing PERS account who are appointed to a Workers' Compensation Judge position on or after June 8, 2007 will be enrolled in the Deferred Compensation Retirement Program, or DCRP, established under Chapter 92, P.L. 2007. The DCRP will be administered for the Division of Pensions and Benefits by Prudential. The member contribution rate for the DCRP was also increased to 5.5 percent under Chapter 103, P.L. 2007.

A member enrolled in the PERS prior to July 1, 2007 who is appointed as a Workers’ Compensation Judge on or after July 1, 2007, will remain a regular PERS member while serving as a Workers’ Compensation Judge, with a member contribution rate of 5.5 percent, as set forth under Chapter 103, P.L. 2007.

PERS Legislators

PERS Legislators have not had the temporary reductions in member contribution rate experienced by other PERS members, as outlined above. PERS Legislators have had an employee contribution rate of 5 percent through June 30, 2007.

Effective July 1, 2007, legislators remaining in the PERS will see an increase in their employee contribution rate to 5.5 percent.

The Legislative Retirement System, or LRS, a subcategory of the Public Employees' Retirement System (PERS), has been closed to new members effective July 1, 2007, under Chapter 92, P.L. 2007 and Chapter 103, P.L. 2007.

Those officials elected on or after July 1, 2007 will be enrolled in the Deferred Compensation Retirement Program, or DCRP, and will have a member contribution rate of 5.5 percent.

JRS Member Contribution Rate

The JRS rate of contribution is 3% of the member's total base salary before federal taxes are withheld. This contribution rate became effective for any eligible judge enrolled on or after January 1, 1996.

PFRS Member Contribution Rate

The rate of contribution for members of the PFRS is 8.5% of base salary.

Base salary for contribution purposes does not include overtime, bonuses, maintenance, or money a member receives as an adjustment before retirement.

SPRS Member Contribution Rate

The contribution rate for members of the State Police Retirement System is 7.5% of the base salary.

Base salary for contribution purposes does not include overtime, bonuses, maintenance, or money a member receives as an adjustment before retirement.

 

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Last Updated: September 23, 2008