N.J. Admin. Code § 17:1-4.1

Current through Register Vol. 56, No. 23, December 2, 2024

Section 17:1-4.1 - Purchases; cancellation, interest on outstanding purchases, or cash discount requested

(a) A member who authorizes a purchase of service credit may cancel that purchase at any time on a prospective basis only. No refunds will be made of any lump sum payments, partial payments or installment payments. The member will receive a pro rata credit for the service purchased to the date installment payments cease. Any subsequent requests to purchase the remaining service credit shall be based on the laws and rules in effect on the date that the subsequent request is received.

(b) No more than one request received from a member for the cash discount value of an outstanding arrearage or a purchase quotation for previous service will be honored in a calendar year.

(c) For a member who has authorized a purchase of service credit on or after September 8, 1998, and who is inactive, or becomes inactive, the following provisions shall apply:

1. A member who authorizes a purchase that requires installment payments but who has not had installment payments made toward that purchase for two years due to inactivity in the account, shall receive written notice from the Division that the remainder of the purchase will be canceled. The member shall receive a pro rata credit for the service purchased to the date that the installment payments ceased. Any subsequent requests to purchase the remaining service credit shall be based on the laws and rules in effect on the date that the subsequent request is received.

2. The member may request to pay, in full, the cash discount value of the outstanding arrearage for the purchase within 60 days of the Division notice. The cash discount value of the outstanding arrearage for the purchase will be calculated with interest from the date of the last installment payment.

3. A member who authorizes a purchase that requires installment payments but who has not had installment payments made toward that purchase for two years for reasons other than inactivity shall have the installment payments recertified. The recertified installment payments will be calculated with interest from the date of the last installment payment.

4. A member returning from an approved leave of absence after two years may request that the original purchase be resumed. Such purchase shall be recalculated to include additional regular interest accrued between two years after the date of the last installment payment and the date the purchase is resumed. A member returning from an approved leave of absence within two years shall have the original purchase resumed. Installment payments for the purchase shall recommence without the assessment of additional regular interest.

(d) For a member who has authorized a purchase of service credit by installment and has filed for a retirement allowance, any outstanding balance due must be paid in full at least 30 days prior to the member's retirement date. If a balance remains unpaid at the effective date of retirement, the purchased service credit will be pro-rated. If a member becomes ineligible for a retirement benefit due to the pro-rated service credit, the retirement application will be cancelled and the member will be required to refile a new retirement application for a future retirement date.

N.J. Admin. Code § 17:1-4.1

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

Amended by 50 N.J.R. 645(a), effective 1/16/2018