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Retirement Plans
Enrollment Regulations
Enrollment in a pension plan for eligible staff employees is mandated by the State of New Jersey. Pension plan designation (PERS, PFRS or ABP) is based on the job responsibilities and requirements of the position held by the employee.
Public Employee’s Retirement System (PERS)
PERS Retirement Plan Eligibility
- Full-time and part-time regularly appointed employees in approved job titles
- Temporary or per diem employees after twelve (12) months of continuous employment earning $7,500 per year or more
- Employees holding "F" or "J" visas are not eligible to participate
PERS Plan Highlights
- A defined benefit plan
- Retirement benefit is based on a formula
- Employee contributions
- Hired prior to July 1, 1996 – 5.5% of annual base salary before federal taxes with no compensation limit.
- Hired between July 1, 1996 and June 30, 2007 - 5.5% of annual base salary before federal taxes up to the annual Revenue Reconciliation Act limit ($245,000 in 2009).
- Hired July 1, 2007 or later - 5.5% of annual base salary before federal taxes up to the annual
Maximum Compensation Limit ($106,800 in 2009).*
- Ten (10) year vesting based on credited service (years of pension contributions)
- Members older than 60 may retire regardless of amount of service credit
- Loans permitted upon completion of three (3) years of service
- Disability Retirement Options are available for members.
* Provides eligible PERS members hired July 1, 2007 or later with a tax sheltered defined contribution retirement benefit, along with life insurance and disability coverage who earn salaries in excess of established "maximum compensation" limits for PERS contributions. Your campus Benefits Associate will advise you of your eligibility.
PERS Formula Used to Calculate Maximum Annual Pension
(Years + months of service)/55 x average of the highest 3 years' of annual base salary
Purchasing Service Credit
- It may be beneficial to purchase additional service credit for prior public service
- Examples of service that members may be eligible to purchase include: temporary service (prior to enrollment), leave of absence without pay, former membership service, out-of-state service, U.S. government service, or military service
- Application to Purchase Service Credit – available on the NJ Division of Pensions and Benefits website
For plan details refer to PERS Member Handbook
Alternate Benefits Plan (ABP)
ABP Retirement Plan Eligibility
- Positions requiring a Bachelor’s Degree or higher are eligible
- Regularly appointed staff and faculty scheduled to work .5 Full Time Equivalent (FTE)
- NOTE: Employees holding either "F" or "J" visas are not eligible to participate
ABP Plan Highlights
- A defined contribution plan
- Retirement benefits based on investment growth over time and type of payout option selected
- Members allocate contributions to State-authorized investment carriers
- Employees contribution = 5% of base salary before federal taxes (up to the annual compensation limit of $245,000 for 2009)
- Employer contributions = 8% of base salary (up to the annual compensation limit of $245,000 for 2009)
- Loans are permitted
- Vesting:
- Immediate if employee owns a retirement contract from previous employer in the field of higher education or is in active/vested member of a state-administered retirement system
- Twelve (12) month delayed vesting for newly eligible employees who do not meet the above criteria
- Members in delayed vesting status who terminate UMDNJ employment will receive their contributions only (not employer contributions)
State-authorized Investment Carriers
AIG-VALIC
AXA Equitable
The Hartford
ING Financial
Metlife
TIAA-CREF
Purchase of Service Credit Option is not available under this retirement plan.
For plan details refer to NJ Division of Pensions and Benefits website
Police and Firemen’s Retirement System (PFRS)
PFRS Eligibility
- Full-time permanent police officers under age 35 at date of hire
- Must satisfy medical requirement
- Employees who do not satisfy age and medical requirements for PFRS enroll in PERS
- Employees holding "F" or "J" visas are not eligible to participate
PFRS Plan Highlights
- A defined benefit plan
- Retirement benefit is based on a formula
- Benefit calculations are based on service credit and final compensation
- Employee contribution = 8.5% of base salary before federal taxes (up to the annual compensation limit of $245,000 for 2009)
- Employer contributions are also made (amount is determined annually by the State of New Jersey)
- Ten (10) year vesting based on credited service (years of pension contributions)
- Members older than 55 may retire regardless of amount of service credit
- Retirement is mandatory at age 65
- Loans are permitted upon completion of three (3) years of service
- Disability Retirement Options are available for members
Purchasing Service Credit
- It may be beneficial to purchase additional service credit for prior public service
- Examples of service that employees may be eligible to purchase include: temporary service (prior to enrollment), leave of absence without pay, former membership service, out-of-state service, U.S. government service, or military service
- Application to Purchase Service Credit – available on the NJ Division of Pensions and Benefits website
For plan details refer to PFRS Member Handbook
Life Insurance
Plan Highlights
- Underwritten by the Prudential Insurance Company
- Payable to named beneficiary
- New PERS and ABP members age 60 or older require proof of insurability prior to enrollment
- Ceases 31 days after termination of employment
Public Employees’ Retirement System (PERS)
Coverage amount:
- Non-contributory amount = 1-1/2 times the total annual base salary upon which your pension contributions were based during the year proceeding your death during active service (100% employer paid)
- Plus contributory amount = 1-1/2 times annual base salary (100% employee paid)
- Members hired July 1, 2007 or later will have their annual base salary capped at the annual Maximum Compensation Limit.
- Cost of contributory life insurance to employee = annual base salary x .0050
Member may cancel contributory portion after one (1) year
- Irrevocable decision, members who cancel cannot be reinstated
- Contact your Campus Benefits Office for more information:
Newark |
973-972-5314 |
Piscataway/New Brunswick |
732-235-9417 |
Stratford/Camden |
856-566-6168 |
Alternate Benefit Program (ABP)
- Coverage amount = 3-1/2 times annual base salary received prior to death (pro rated in the first year)
- No cost to employee
Police and Fireman’s Retirement System (PFRS)
- Coverage amount = 3-1/2 Final Compensation, total annual base salary upon which pension contributions were based during the year preceding death (pro rated in the first year)
- No cost to employee
Changing Group Life Insurance Beneficiary
Waiving Group Life Insurance Coverage Over $50,000
- Change anytime
- Members can elect to waive insurance coverage over $50,000
Additional information:
NJ Division of Pension and Benefits website
Loan Requests for PERS & PFRS
Revised January 1, 2009 - Change in Loan Interest Rate for Calendar Year 2009
The New Jersey State Division of Pensions and Benefits implemented significant changes to pension loan application procedures for members of the Public Employees’ Retirement System (PERS) and Police and Firemen's Retirement System (PFRS).
Calendar Year 2009, loan interest rate for applications received between January 1, 2009 and December 31, 2009 is 3.33%.
Calendar Year 2008 is 4.69% for applications received at the Division of Pensions and Benefits during this period.
- Reminder - Effective November 1, 2008, an eligible PERS or PFRS members who wishes to borrow against their pension account, must submit the loan request online using the Pension Loan Application accessible through a personal account with the Member Benefits Online System (MBOS).
The Loan Application will no longer be available as a printed form or through the Division’s Web site. Paper Loan Applications that are received by mail as of November 1, 2008, will be returned to members with instructions on submitting the loan request through MBOS. The Loan Fax number, which has been phased out of use since the introduction of loans through MBOS, will be completely disabled.
Interest Rate - Interest is charged on the declining balance of all loans at a commercially reasonable rate set annually by the New Jersey State Treasurer. For loan applications received in calendar year 2009, the interest rate is 3.33% on the declining balance of the loan. The rate for calendar year 2008 was 4.69%.
Administrative Fee - Chapter 92, P.L. 2007, established an administrative processing fee on all pension loans. For loan applications received in 2008, the administrative processing fee is $8.00. The administrative processing fee is not an added charge, but is taken from the requested amount of the loan to recover the actual costs of administering the pension loan program. The administrative processing fee is subject to change annually with any change announced in December and the new fee taking effect the first of January.
- Refer to the Division of Pensions and Benefits website for loan request information.
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