ASSEMBLY, No. 4399

STATE OF NEW JERSEY

216th LEGISLATURE

 

INTRODUCED MAY 11, 2015

 

 

Sponsored by:

Assemblywoman  HOLLY SCHEPISI

District 39 (Bergen and Passaic)

 

 

 

 

SYNOPSIS

     Provides PERS or PFRS member who continues to be volunteer firefighter after retirement with employer from whom member retires has bona fide severance from employment for compliance with NJ regulations and Internal Revenue Code.

 

CURRENT VERSION OF TEXT

     As introduced.

  

An Act concerning retirement from employment covered by the Public Employees' Retirement System and the Police and Firemen's Retirement System, and supplementing P.L.1954, c.84 (C.43:15A-1 et seq.) and P.L.1944, c.255 (C.43:16A-1 et seq.).

 

     Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 

     1.    The retirement of a member of the Public Employees' Retirement System, established pursuant to P.L.1954, c.84 (C.43:15A-1 et seq.), who (1) on the date of retirement has attained the service retirement age applicable to that member and is a volunteer firefighter with the same employer from whose employment the member retires; and (2) remains a volunteer firefighter after the date of retirement, shall be a bona fide severance from employment, notwithstanding that the retired employee maintains the relationship of a volunteer firefighter with the same employer from whose employment the member retired.  This act shall be effective if the qualified status of the retirement system under federal law can be maintained upon its application, and such modifications to the system as may be available shall be made to allow for its application.

 

     2.    The retirement of a member of the Police and Firemen's Retirement System, established pursuant to P.L.1944, c.255 (C.43:16A-1 et seq.), who (1) on the date of retirement has attained the service retirement age applicable to that member and is a volunteer firefighter with the same employer from whose employment the member retires; and (2) remains a volunteer firefighter after the date of retirement, shall be a bona fide severance from employment, notwithstanding that the retired employee maintains the relationship of a volunteer firefighter with the same employer from whose employment the member retired.  This act shall be effective if the qualified status of the retirement system under federal law can be maintained upon its application, and such modifications to the system as may be available shall be made to allow for its application.

 

     3.    This act shall take effect immediately.

 

 

STATEMENT

 

     This bill provides that the retirement of a member of the Public Employees' Retirement System (PERS) or a member of the Police and Firemen's Retirement System (PFRS) who (1) on the date of retirement has attained the service retirement age applicable to that member and is a volunteer firefighter with the same employer from whose employment the member retires; and (2) remains a volunteer firefighter after retirement, will be a bona fide severance from employment, notwithstanding that the retired employee maintains the relationship of a volunteer firefighter with the same employer from whom the member retired.  Service retirement age for PERS members enrolled before November 1, 2008 is age 60.  It is age 62 for those enrolled on or after November 1, 2008 and age 65 for those enrolled on or after June 28, 2011.  Service retirement age for PFRS members is age 55.

     A regulation of the Division of Pensions and Benefits in the Department of the Treasury, in compliance with the federal Internal Revenue Code, provides, " 'Bona fide severance from employment' means a complete termination of the employee's employment relationship with the employer for a period of at least 180 days" (N.J.A.C. 17:1-17.14(a)2.).  The division's August 22, 2014 letter to local government certifying officers of the defined benefit pension systems, including PERS and PFRS, states, "If the employer and employee make an arrangement prior to the employee's retirement to return to the same employer in any capacity, including as a volunteer - at any future time, regardless whether the position is covered by the former retirement system - the employer/employee relationship is not completely severed and the retirement will be invalid."  This bill will allow persons with a pre-existing volunteer relationship as a firefighter with their employer to retire from service covered by PERS or PFRS and continue  to serve that employer as a volunteer.

     The bill also provides that it will be effective if the qualified status of PERS and PFRS under federal law can be maintained upon its application, and such modifications to the system as may be available will be made to allow for its application.