N.J. Admin. Code § 17:1-2.18

Current through Register Vol. 56, No. 9, May 6, 2024

Section 17:1-2.18 - Service and salary credit: awards of back pay

(a) When a member appeals the suspension or termination of the member's employment and through an award or settlement becomes entitled to full pay for all or a portion of that employment for the period of such suspension or termination, the member shall receive service credit for the period covered by the award or settlement, a full normal pension, and, if applicable, contributory group life insurance, as long as the contributory group life insurance contribution is received from the member or is deducted from the value of the award. The member must receive full back pay, including normal salary increases before mitigation and the contributions will be computed on the base salaries that the employee would have earned for the reinstated suspended or terminated period. In the event that the amount of back payment, after mitigation, is insufficient to deduct the value of the normal pension contributions and, if applicable, the contributory group life insurance due, such contribution shall be paid by the member to the respective retirement system by certified check or money order.

(b) If a member waives an award of back pay, then the member cannot receive service or salary credit for the period of the award.

(c) If the award or settlement is structured in such a way as to provide the member with a substantial increase of creditable salary at or near the end of the member's service, or a substantial increase in retirement benefits, or provides service credit that entitles a member to file for retirement benefits to which they would not otherwise have qualified, the award or settlement shall be reviewed by the Division. If the Division determines that the pension benefit was part of the negotiations for the award or settlement, or if the award or settlement includes extra compensation as defined by the various retirement systems, the Division shall determine the compensation and/or service credit to be used to calculate the retirement allowance, and the member shall have the pension contributions for the salaries based on the award refunded without interest.

(d) It is the responsibility of the certifying officer to provide to the Division a letter attesting to the base salary or salaries to be used to compute pension contributions and to provide a copy of the resolution or legal document and all details pertaining to a mitigated award of back pay. Any resolution or legal document submitted to the Division must be fully executed by all parties to the agreement.

(e) When necessary, the Division shall request all supporting documentation regarding the award or settlement agreement from the employer. The Division has the ability to request proof of mitigation from the member.

(f) For those defined contribution retirement programs administered by the Division, the member is not entitled to the employer contributions for the period of the award unless the member receives an award equal to full back pay pursuant to 17:1-2.1 8.

(g) For those defined contribution retirement programs administered by the Division, the member is not entitled to investment gains or losses that the contribution would have been subject to had the member receiving the award of back pay been employed continuously during the period of the award.

N.J. Admin. Code § 17:1-2.18

Amended by 48 N.J.R. 1306(a), effective 6/20/2016