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EARLY RETIREMENT INCENTIVE (ERI)
FOR STATE EMPLOYEES

Governor James E. McGreevey has signed an Early Retirement Incentive (ERI) package into law (view the law) for certain fulltime employees of the State and State colleges and universities.* To participate in this retirement package, an eligible employee must meet the criteria shown below prior to July 1, 2002. The law also provides an optional ERI package for State authorities, boards, commissions, corporations, agencies, or instrumentalities.

State authorities page.

The Division of Pensions and Benefits is open for "walk in" business Monday - Friday from 7:30 AM to 4:00 PM. Counselors are available during these times for your convenience. Our telephone operating hours remain from 9:00 AM - 4:00 PM. To contact the Division of Pensions and Benefits regarding the ERI, please send us an e-mail at: pensions_eri@tre.state.nj.us

Common Early Retirement Incentive Questions and Answers

ERI Written Communications

Benefits Administrators and ERI Benefits Liaisons: click here to download the ERI Workshop Reservation Form (PDF, size 245K. Requires Acrobat Reader which is available free from Adobe).

*This State ERI is not available to local government entities such as counties, county colleges, authorities, and agencies, municipalities and municipal authorities and agencies, school boards, or any other local governmental agency or entity.

Category Eligibility Criteria Incentive
1

Age 50 or older with 25 or more years of credited service in the:

  • Public Employees' Retirement System (PERS),
  • Teachers' Pension and Annuity Fund (TPAF),
  • Alternate Benefit Program (ABP),
  • Federal Civil Service Retirement System (CSRS), or
  • Federal Employee Retirement System (FERS).

PERS/TPAF:
Service and Early* Retirements
: 3 additional years of service credit (an additional 5.45% of final average salary).

* Reduction of 1/4 of 1% for each month under age 55 applies.

Veteran Retirement:** 3/55 of final salary added to retirement allowance (an additional 5.45% of final salary).

ABP and Federal CSRS/FERS***:
60% of base annual salary paid in two equal installments one month and thirteen months after retirement.

2

Age 60 or older with between 20 and 25 years of credited service in the PERS, TPAF, ABP, Federal CSRS, or FERS

State-paid State Health Benefits Program (SHBP) post-retirement medical benefits subject to applicable premium sharing agreements.

3

Age 60 or older with between 10 and 20 years of credited service in the PERS, TPAF, ABP, Federal CSRS, or FERS.

$500 per month for 24 months after retirement, paid in a separate check from your retirement allowance.

**Special Veteran Retirement Eligibility Criteria for PERS and TPAF

  • Age 60 with 20 years of membership credit (only applicable to Category 2 of ERI)
  • Age 55 with 25 years of membership credit
  • Age 55 with 35 years of membership credit

*** Category 1 and 3 Payments to ABP Members

The category 1 and 3 payments will be made to the ABP Member's retirement annuity, as an employer contribution, up to the maximum contribution allowable under Section 415 of the Internal Revenue Code ($40,000 in 2002). Any payment amount in excess of that limit will be contributed by the employer to a 403(b) contract on the member's behalf up to the maximum allowed for before tax contributions under the Internal Revenue Code (an additional $40,000 in 2002). If any payment amounts exist in excess of these maximum limits, that amount will be paid to the member and will be deemed by the IRS to be wages subject to normal taxation. In the calendar year after retirement, employer contributions cannot be made to an individual's retirement account,so the employer will make payments directly into the 403(b) account on the member's behalf.

Category 1 and 3 payments to Federal CSRS and FERS members are deemed to be wages and are subject to all taxes.


Additional Information

The ERI package provides incentives to eligible employees who retire by July 1, 2002. Applications must be filed (received by the Division of Pensions and Benefits) prior to your retirement date, but NO LATER THAN July 1, 2002. Extensions of retirement dates of up to one year may be granted at the request of the employer, but applications must be received by the Division of Pensions and Benefits for a July 1, 2002 retirement date not later than July 1, 2002.

The Division provided State employers with lists of their eligible employees by ERI category. The Division mailed ERI information kits for each identified eligible employee to home addresses (State employees) or to employers (State colleges and universities). Employers have been able to schedule Division conducted ERI workshops at work locations for the end of April through early June.

Links to Additional ERI Information


Employees Eligible to Receive Early Retirement Incentive

To be eligible to receive a benefit under the State ERI, an employee must meet all of the following requirements:

  • Be working for one of the employers eligible to participate in this ERI; AND

  • Work fulltime (defined as being eligible for State Health Benefits Program coverage as an employee at the employer's expense); AND

  • Be a member of the Public Employees' Retirement System*, Teachers' Pension and Annuity Fund, Alternate Benefit Program, Federal Civil Service Retirement System, or Federal Employee Retirement System; AND

  • Meet the age and service criteria by the earlier of your effective retirement date or July 1, 2002; AND

  • File for retirement no later than July 1, 2002.

* Legislators, Workers' Compensation Judges, and Prosecutor Part members of the PERS are specifically excluded from participating in this ERI.


Employers Participating in the State Early Retirement Incentive

  • State Executive Departments
  • Judicial Branch
  • Legislative Branch
  • Rutgers, The State University
  • University of Medicine and Dentistry of New Jersey
  • New Jersey Institute of Technology
  • College of New Jersey
  • Thomas Edison State College
  • New Jersey City University
  • Kean University
  • Montclair State University
  • William Paterson University of New Jersey
  • Ramapo College
  • Rowan University of New Jersey
  • Richard Stockton College of New Jersey

Benefits Administrators and ERI Benefits Liaisons: click here to download the ERI Workshop Reservation Form (PDF, size 245K. Requires Acrobat Reader which is available free from Adobe).


Optional Early Retirement Incentive Package
for Authorities, Boards, Commissions, Corporations, and other
Agencies or Instrumentalities of the State of New Jersey

The Governorís ERI package makes participation in the ERI by authorities, boards, commissions, corporations, and other agencies or instrumentalities of the State (i.e., organizations in but not of a principal department of the State of New Jersey) optional. The governing body will have to determine whether it wants to make use of the retirement incentive program to help restructure its workforce. List of organizations.

The Division of Pensions and Benefits provided information to authorities, boards, commissions, corporations, and other agencies or instrumentalities of the State in May regarding the additional PERS liabilities that will be incurred.

The window during which retirements must occur is July 1 through September 1, 2002 unless the organization's current fiscal year ends after June 30, 2002. If the current fiscal year ends after June 30, 2002, the ERI window will be the last two months of the fiscal year. For example, if an authority uses the calendar year as it's fiscal year, the ERI window will extend from November 1, 2002 through January 1, 2003.

The eligibility criteria for PERS members of authorities, boards, commissions, corporations, and other agencies or instrumentalities of the State are the same as for State employees. However, the criteria must be met by September 1, 2002 or for organization's whose current fiscal year ends after June 30, 2002, by the first day of the organization's next fiscal year. The incentives are also identical for Category 1 and 3 PERS members. The Category 2 incentive may vary, based on the policies of the employer regarding retiree health benefits.

The eligibility criteria for employees covered under pension programs sponsored by the authorities, boards, commissions, corporations, and other agencies or instrumentalities of the State are also identical to those for the State ERI Program. However, the governing body will have the authority to provide a comparable incentive benefit to that provided State employees.

ERI Information


Organizations Excluded from the State Early Retirement Incentive

This ERI does not include local governmental entities such as counties, county colleges, authorities, and agencies, municipalities and municipal authorities and agencies, school boards, or any other local governmental agency or entity.


ERI Workshops for Employees of State Authorites, Boards, Commissions, Corporations, Agencies, or Instrumentalities

Onsite Workshops

Each Department has a benefits administrator appointed as the ERI Benefits Liaison who is the principal point of contact for ERI related questions. This ERI Benefits Liaison will be scheduling ERI workshops at your work location. These three-hour workshops, presented by a representative from the Division of Pensions and Benefits, will outline the ERI program, explain your pension and health benefits in retirement, and provide you with a retirement estimate. If you are ready to make the decision to retire, our representative will help you through the application process. Contact your ERI Benefits Liaison to schedule your attendance at a workshop near your job site.

Benefits Administrators and ERI Benefits Liaisons: click here to download the ERI Workshop Reservation Form (PDF, size 245K. Requires Acrobat Reader which is available free from Adobe).

Workshops in Trenton

If you are unable to attend a workshop scheduled by your employer, the Division of Pensions and Benefits is also scheduling ERI Workshops at its Trenton offices located at NJ Division of Pensions and Benefits
50 West State Street, Trenton NJ 08625-0295
.
Seating is limited. You must sign-up at least four working days before the seminar you wish to attend and provide your Social Security number so that a retirement estimate can be provided when you attend. To sign up for one of these workshops use the online ERI Registration Page or see the registration materials included in the ERI Information packet that was mailed to eligible members.

Directions to the Division of Pensions and Benefits


ERI Retirement Date Extension

The Governor's ERI package allows employers to request the extension of the retirement date for absolutely essential individuals for up to one year, assuming that the individual consents to the extension. The individual will still need to formally file an application for retirement with a July 1, 2002 retirement effective date. The approval authority for these extension requests is shown in the chart below. Only individuals who are mission critical, such as those providing direct health, custodial, and safety service, and senior managers, will be considered for an extension. The Cabinet Officer, or equivalent level official in other organizations, must sign any extension request. Requests should include detailed justification and why someone else cannot be reassigned to cover that assignment.

State Department extension requests should be submitted to the State Treasurer on the ERI Extension Request form. Judiciary, General Assembly, Senate, OLS, SCI, and State Colleges and Universities should submit a report of their approved extensions to the Division of Pensions and Benefits using a Report of Approved Delayed Retirements. This report should be transmitted with a letter that states the extensions were approved by the Appointing Authority. State Autonomous Authorities should also use this form to report their extensions to the Division of Pensions and Benefits.

Agency Approving Authority
State Departments The State Treasurer
Judiciary The Chief Justice
General Assembly The Assembly Speaker
Senate The Senate President
OLS Executive Director, OLS
State Colleges and Universities The College or University President
State Autonomous Authorities The Governing Body

If an extension is approved, the approving authority will notify both the requesting office and the Division of Pensions and Benefits and the retirement date will be adjusted. For PERS and TPAF employees, the additional service and salary earned during the extension will be considered in the final calculations of the retirement benefits.


Purchasing Service Credit to Qualify for the ERI

Certain members of the PERS and TPAF can make purchases of eligible service to qualify for participation in this ERI or to qualify for a different category of the ERI. The procedures are the same as a purchase for any other reason. However, you must act quickly since an application to retire must be submitted to the Division of Pensions and Benefits no later than to July 1, 2002 to qualify for the program.

If you have service eligible to purchase (see Fact Sheet #1 for information on what type service qualifies for purchase), you should complete and file an Application to Purchase Service Credit with the Division of Pensions and Benefits as soon as possible. Indicate on the purchase application "ERI Retirement Pending".

When you file your retirement application, be sure to answer "yes" to question 12 - have you applied for a purchase within the last six months? Before we can process your retirement application, the purchase process must be completed, and if you are eligible to purchase service, full payment for that purchase must be made. You will not be able to pay through payroll deductions since you are retiring. You can determine the cost of a purchase with the use of Fact Sheet #2, or you can call (609) 777-1777 and follow the prompts to request an estimate for a purchase.


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Copyright © State of New Jersey, 1996-2002
Division of Pensions and Benefits
PO Box 295
Trenton, NJ 08625-0295

Last Updated: July 9, 2002

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