History of the TPAF
Member Contribution Rate
The full or normal
employee contribution rate for the TPAF is 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 (or will increase) to 5.5 percent, according to the timetable available at this link.
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 (or will increase) 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.
History
of PERS Member Contribution Rate
The full or normal
employee contribution rate for the TPAF is 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 (or will increase) 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 NJ 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.
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% for PERS Prosecutors Part members.
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 will have a member contribution rate of 5 percent through July 1, 2007, when the member contribution rate for the WCJ Part of the PERS increases to 5.5 percent, effective with the payroll period for which the beginning date is 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 also increases 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 an employee contribution rate of 5% through July 1, 2007. PERS Legislators have
not had the temporary reductions in member contribution rate experienced
by other PERS members, as outlined above.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.