Introduction
Technically, members of the Legislative
Retirement System belong to a sub-category of the Public Employees'
Retirement System (PERS). Because the conditions that affect
employment — namely periodic elections, are unique to enrolled
members of the State Legislature, there are special provisions
for retirement that need to be outlined separately.
What follows is a listing of the
types of retirement available to members of the PERS Legislative Retirement
System (LRS), as well as the eligibility requirements and benefit calculations.
From among the following options, the member will receive the
highest benefits for which he or she qualifies.* Employer and employee
responsibilities are also outlined.
*Please note that under Chapter 92, P.L. 2007, effective July 1, 2007, newly elected legislators whose term begins on or after July 1, 2007 will be enrolled in the Deferred Compensation Retirement Program, or DCRP.
Legislators who are already enrolled in the LRS Part of the Public Employees' Retirement System, or PERS, prior to July 1, 2007 will remain PERS LRS members, and will continue to receive retirement benefits through their PERS LRS membership.
The Deferred Compensation Retirement Program
Under Chapter 92, P.L. 2007, the Defined Contribution Retirement Program, or DCRP, became operational on July 1, 2007.
DCRP membership is limited to:
- Newly elected and appointed officials, including legislators, whose elected term or appointment takes effect on or after July 1, 2007;
- New members of the PERS and TPAF who reach the annual maximum wage contribution base for Social Security, pursuant to the Federal Insurance Contributions Act ($106,800 in 2009), unless the member waives participation when first eligible.
- Retired elected officials who choose to participate in the program.
General DCRP Information
Under the DCRP, State and local government employers will contribute three percent of the employee’s base salary to the program. Group life insurance and the option for disability benefits coverage will be provided to participants. A Defined Contribution Retirement Program Board has been established to oversee the program.
Chapter 92, P.L. 2007 called for participants to contribute 5 percent of their salary to the DCRP, but a more recent law, Chapter 103, P.L. 2007, stipulates that participants contribute 5.5 percent.
Participants will be allowed to allocate their contributions and the contributions of their employer into investment alternatives as determined by the new program board. The DCRP will be administered for the Division of Pensions and
benefits by Prudential Financial.
More information about the Defined Contribution Retirement Program, or DCRP, will be provided as it becomes available.
Elected and Appointed Officials
Newly elected legislators whose term begins on or after July 1, 2007 (that is, the elected official assumes the
duties of his/her elected office on or after July 1, 2007) must be enrolled in the DCRP — instead of the PERS LRS.
Legislators who are already enrolled in the PERS LRS prior to July 1, 2007, will remain PERS LRS members.
Minimum DCRP eligibility criteria for an elected or appointed official (including legislators) are the same as they would be for a similar PERS position (this includes a minimum base salary of $1,500.00 for PERS LRS positions).
Furthermore, if the elected or appointed official will earn less than $5,000.00 annually, the official may choose to waive participation in the DCRP. However, if the elected or appointed official waives participation, the waiver is irrevocable and the official cannot enroll at a later date.
Retired Elected Officials
Retired elected officials may choose to participate in the Defined Contribution Retirement Program.
New Members of the PERS and TPAF Reaching the Annual Maximum Wage Contribution Base for Social Security
New members of the PERS and TPAF who reach the annual maximum wage contribution base for Social Security, pursuant to the Federal Insurance Contributions Act ($106,800 in 2009), will become a member of the DCRP, unless the member waives participation when first eligible.
The member may elect to participate at a later time, with such election effective on the January 1 following a participation request. For the amount of compensation over the maximum compensation, 5.5% will be deducted as a contribution for the purposes of the program.
When a TPAF or PERS member also becomes a participant in the Defined Contribution Program, the life insurance and disability benefit provisions of that program will be available for that participant.
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PERS LRS Retirement Benefits
| Special
Legislative Retirement |
| Eligibility |
Age 60 or older,
and
No other public service credit in PERS |
| Benefit
Calculation |
3% of Final
Average Salary (FAS) per year in the legislature.
Maximum Benefit: 2/3 X
FAS |
| Employee
Responsibility |
Complete Application
for Retirement Allowance
Provide proof
of age for member
Provide proof
of age for beneficiary * |
| Employer
Responsibility |
Complete Certification
of Service and Final Salary for member and submit
to Division of Pensions and Benefits. |
| FAS = Final
Average Salary. FAS is the greater amount of the
average of the last three years salary, or the average
of the three highest fiscal years of earnings.
* Providing proof of age
for a beneficiary is required if the member selects
Option 2, 3, 4, A, B, C, or D.
Since the Internal Revenue Service is a federal agency, a civil union partner or domestic partner as defined under New Jersey State law does not qualify as a spouse under these circumstances and would be subject to the age limitations described. |
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|
Deferred Legislative
Retirement |
| Eligibility |
Under age 60, and
Eight or more years of service as a legislator. |
| Benefit
Calculation |
3% of Final Average Salary
(FAS) per year in legislature.
Maximum Benefit: 2/3 X
FAS |
| Employee
Responsibility |
Complete Application
for Retirement Allowance
Provide proof
of age for member
Provide proof
of age for beneficiary * |
| Employer
Responsibility |
Complete Certification
of Service and Final Salary for member and submit
to Division of Pensions and Benefits. |
| FAS = Final
Average Salary. FAS is the greater amount of the
average of the last three years salary, or the average
of the three highest fiscal years of earnings.
* Providing proof of age
for a beneficiary is required if the member selects
Option 2, 3, 4, A, B, C, or D.
Since the Internal Revenue Service is a federal agency, a civil union partner or domestic partner as defined under New Jersey State law does not qualify as a spouse under these circumstances and would be subject to the age limitations described. |
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|
PERS Service Retirement |
| Eligibility |
PERS qualifications are
used:
Age 60 or older, no minimum
years of service credit.
Veteran status can be used to qualify for a PERS Veteran
Retirement |
| Benefit
Calculation |
Combined years of Service
(Legislative and PERS) ÷ 60 X FAS
Note: If there is concurrent
service, only 12 months of service credit can be earned
in any 12-month period.
|
| Employee
Responsibility |
Complete Application
for Retirement Allowance. State clearly it is
a PERS Service Retirement.
Provide proof
of age for member
Provide proof
of age for beneficiary * |
| Employer
Responsibility |
Complete Certification
of Service and Final Salary for member and submit
to the Division of Pensions and Benefits. |
| FAS = Final
Average Salary. FAS is the greater amount of the
average of the last three years salary, or the average
of the three highest fiscal years of earnings.
* Providing proof of age
for a beneficiary is required if the member selects
Option 2, 3, 4, A, B, C, or D.
Since the Internal Revenue Service is a federal agency, a civil union partner or domestic partner as defined under New Jersey State law does not qualify as a spouse under these circumstances and would be subject to the age limitations described. |
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|
"Combined"
Legislative and PERS Retirement |
| Eligibility |
Age 60, and
member applies all public service (PERS and Legislative)
credit.
Veteran status can be used to qualify for a PERS Veteran
Retirement calculation.
This qualifies for a PERS Service Retirement. |
| Benefit Calculation |
Special (or Deferred) Legislative
Retirement Allowance based on legislative service, plus
PERS retirement allowance based on non-legislative
public service. |
| Employee Responsibility |
Complete Application
for Retirement Allowance: State clearly is a "Combined
Retirement."
Provide proof
of age for member
Provide proof
of age for beneficiary * |
| Employer Responsibility |
Complete Certification
of Service and Final Salary for member and submit
to Division of Pensions and Benefits. |
| FAS = Final
Average Salary. FAS is the greater amount of the
average of the last three years salary, or the average
of the three highest fiscal years of earnings.
* Providing proof of age
for a beneficiary is required if the member selects
Option 2, 3, 4, A, B, C, or D. Since the Internal Revenue Service is a federal agency, a civil union partner or domestic partner as defined under New Jersey State law does not qualify as a spouse under these circumstances and would be subject to the age limitations described. |
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Important Additional Information
for those with BOTH Legislative and Non-legislative Service
If the member has both non-legislative
and legislative service and receives the Special Legislative Retirement
or the Deferred Legislative Retirement, all contributions for
non-legislative service will be refunded to the member.
If the member has both non-legislative
and legislative service and is eligible to begin receiving retirement
benefits, the member can retire from the non-legislative employment
and begin collecting retirement benefits while completing the
term in office. This only applies to members who qualify for both
non-legislative PERS retirement and legislative retirement as
of the effective retirement date.
Age Limits on Nonspouse Beneficiaries
For all options, you can name your spouse* as your beneficiary regardless of your spouse's age. For Options 1, 3, C, or D, you can name someone other than your spouse as beneficiary regardless of age.
For Options 2 and A (100% to beneficiary), if you are naming a beneficiary who is not your spouse, Internal Revenue Service regulations restrict the age of your beneficiary to no more than 10 years younger than you.
For Option B (75% to beneficiary) you can name a nonspouse who is no more than 19 years younger than you.
If you name a nonspouse beneficiary under Option 4, if the dollar amount of your beneficiary's pension is more than half of your allowance, restrictions on your beneficiary's age apply.
*Since the Internal Revenue Service is a federal agency, a civil union partner or domestic partner as defined under New Jersey State law does not qualify as a spouse under these circumstances and would be subject to the age limitations described.