The DCRP is presently administered for the NJDPB by Empower. It is open to:
Newly elected and appointed officials. For details see the Defined Contribution Retirement Program (DCRP) for Elected and Appointed Officials Fact Sheet
Model Resolution/Ordinance – for Determining Positions Eligible for the DCRP
Empower (formerly Prudential) makes DCRP information, including information about distribution options, available on its New Jersey Defined Contribution Program website.
PERS, TPAF, PFRS, and SPRS members eligible for the DCRP because they have exceeded the maximum compensation limits may elect to waive participation in the DCRP by submitting the New Jersey DCRP Waiver of Retirement Program Participation for Employees Enrolled in the PERS, TPAF, PFRS, or SPRS within 30 days of the date the member becomes eligible for DCRP participation.
In cases where a DCRP member's status changes through loss of eligibility, termination of employment, leave of absence, or a return from a leave of absence, his or her employer must submit a DCRP Eligibility Status Change Verification Form
*Base salary means the annual compensation of a member (plus the value of maintenance, if applicable) in accordance with contracts, ordinances, resolutions or other established salary policies of the member's employer for all employees in the same position, or all employees covered by the same collective bargaining agreement, paid in regular, periodic installments in accordance with the payroll cycle of the employer. Overtime, bonuses, and lump-sum payments for longevity, holiday pay, vacation, compensatory time, or accumulated sick leave are not included as base salary.
Every employer reports employee contributions for all base salary paid to enrolled participants. The employee contributions are treated as contributions pursuant to IRC § 414(h)(2).The employer pays the three percent contributions directly to the Prudential. Such contributions, although designated as employee contributions, are paid by the employer. Employee contributions are treated for all purposes of the DCRP and State law in the same manner as employer contributions.
The DCRP member contribution rate is set at 5.5 percent. The employer deducts member contributions from the applicable salary (base salary for elected and appointed officials, or the amount of salary over the maximum allowable compensation for eligible PERS and TPAF members who do not waive enrollment in the DCRP). These contributions, along with the employer contributions, are put into the DCRP participant's tax-deferred investment account with Prudential.
Employers must submit contributions using Empower's Online Retirement Center for Plan Sponsors
Members with established PERS or TPAF accounts on or before June 30, 2007, who transfer into the PERS or TPAF on or after July 1, 2007, or members with established PFRS or SPRS accounts on or before May 21, 2010, who transfer into the PFRS or SPRS after May 21, 2010, will not be subject to the maximum compensation limits or DCRP enrollment if any of the conditions listed below apply:
If a member transfers into the PERS or the TPAF on or after July 1, 2007, from another pension system (PFRS, SPRS, or JRS), or the member transfers into the PFRS or the SPRS from another pension system after May 21, 2010; or the transfer occurs after a break in service that falls beyond the 24-month or 10-year exceptions described above, the member will be subject to the maximum compensation rules and DCRP enrollment.
Please Note: The maximum compensation limit does not apply to employees who were already members of the PERS or the TPAF prior to July 1, 2007, or employees who were already members of the PFRS or the SPRS on or before May 21, 2010; these members are also not eligible for enrollment in the DCRP.
IRC Sec. 401(a)(17) limits the amount of annual contributions that may be used to determine retirement plan benefits.
Thus, for PERS and TPAF members enrolled in the DCRP on or after July 1, 2007, or PFRS or SPRS members enrolled in the DCRP after May 21, 2010, the employee's eligible DCRP compensation is the amount of salary that exceeds the annual maximum wage for pension contributions, up to the IRC 401(a)(17) limit.
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