N.J. Admin. Code § 17:3-5.5

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

Section 17:3-5.5 - Optional purchases of eligible service

(a) A shared-cost purchase is one in which the member pays only the employee's share and not the employer's share of the purchase. A member may purchase all or a portion of such eligible service. A shared-cost purchase shall be calculated on the basis of the actuarial purchase factor established for the member's age at the time of the purchase request times the higher of either the member's current annual base salary or highest fiscal year base salary. The following types of purchases are shared-cost purchases:

1. Former membership credit in a New Jersey State-administered retirement system;

2. Former service with any employer which was not certified for membership but which would have qualified on an optional or a compulsory basis at the time the service was rendered;

3. Continuous temporary service without interruption or substitute service as a teacher immediately preceding enrollment is eligible for purchase provided the following conditions are met:

i. Continuous temporary service without interruption must be employment without a break in service. For an employer that reports on a monthly basis, a break in service is defined as no salary earned by an employee during a month. For an employer that reports on a biweekly basis, a break in service is defined as no salary earned by an employee during a biweekly pay period.

ii. Substitute service is eligible for purchase provided the employment immediately precedes enrollment in TPAF. Immediately preceding enrollment is defined as employment rendered the month or biweekly pay period, prior to the date of enrollment. The period(s) of substitute service that a member can request to purchase must meet the following criteria:

(1) A year of substitute service wherein a 10-month employee worked an average of 10 days per month and an aggregate of 100 days during a regular work year. A 12-month employee is required to have worked an average of 10 days per month and an aggregate of 120 days per year.

(2) Substitute service for a period of less than one year immediately preceding enrollment is eligible for purchase provided the member worked a minimum average of 10 days per month for each month of substitute service.

(3) When more than one year of substitute service is requested for purchase, each year of substitute service rendered prior to enrollment is reviewed and each year is required to meet the criteria set forth under the provisions of (a)3ii(1) above;

4. Leaves of absence without pay:

i. The period of the leave for personal reasons which does not exceed 93 days. Childcare is considered leave for personal reasons;

ii. The period of the leave up to two years for personal illness. The Division may require proof that the illness existed for the length of the leave;

iii. Maternity leave may consist of a personal illness component and a personal reasons component, for childcare. Members who apply to purchase any period of a maternity leave as personal illness, must provide certification from their physician, verifying that the member was disabled during the requested purchase period, due to pregnancy or childbirth. Absent physician certification, three months is the maximum allowable period of purchase for maternity leave for personal reasons; and

iv. A leave of absence shall be deemed to have ended upon resignation, termination, or return to covered payroll;

5. Eligible out-of-State public employment, or employment in schools within and outside the United States operated by a department of the United States Government for the instruction of the children of United States Government employees, up to a total purchase of 10 years. Pursuant to 18A:66-39(b) this service cannot be used to qualify for an ordinary disability retirement;

6. Service established under a local municipal or county retirement system within the State of New Jersey; and

7. Non-concurrent PERS service if a dual member of TPAF and PERS pursuant to P.L. 2001, c. 6 (18A:66-15.1) . All or a portion of non-concurrent service in the PERS from an expired or withdrawn account may be purchased.

(b) The types of purchases indicated in (b)1, 2, and 3 below are considered to be full-cost purchases. A member may purchase all, or a portion of, such eligible service. The lump sum purchase cost shall be calculated on the basis of the actuarial purchase factor established for the member's nearest age at the time of the purchase request times the higher of either the member's current annual base salary or highest fiscal year base salary. The computed lump sum purchase cost will then be doubled to establish the full cost to the member. This cost is calculated in this manner as 18A:66-13 provides that the employer shall not be liable for any costs of purchasing this service; therefore, the member must pay both the employee and employer share.

1. Active duty military service prior to enrollment: Active military service that is eligible for purchase means honorable full-time duty in the active military service of the United States, which is the same as the Federal definition found at 10 U.S.C. § 101. Such term includes full-time training duty, and attendance, while in the active military service, at a school designated as a service school by law or by the Secretary of the military department concerned. It does not include periods of service of less than 30 days, weekend drills, or annual summer training of a national guard or reserve unit, nor does it include periods when the member was on-call. It also does not include time spent in the Reserved Officers Training Corps or as a cadet or midshipman at one of the service academies. Military service before enrollment cannot be used to qualify for an ordinary disability retirement; and

2. Employment with the Federal government, provided the member is not receiving or eligible to receive a retirement benefit from the Federal retirement system for the same period of time, pursuant to 18A:66-13.

i. Pursuant to 18A:66-39.b, only New Jersey service may be used to qualify for an ordinary disability retirement. No other government service may be used for this purpose.

ii. For purchase applications received November 2, 2008 or later, U.S. government purchases, military purchases, and out-of-State purchases cannot be used to qualify for post-retirement medical benefits.

3. Service established under a local municipal or county retirement system within the State of New Jersey.

(c) A member shall be eligible to purchase an aggregate of up to 10 years of out-of-State public employment, military service and Federal employment provided that the member is neither receiving nor will be entitled to receive a future retirement allowance for such service from any other public retirement system and provides proof to the Division that the member is not eligible to receive a current or future retirement benefit from that service. A qualified veteran shall be eligible to purchase an additional five years of military service rendered during periods of war for an aggregate of 15 years of such service.

(d) Rules concerning the purchase and/or conversion of Class A credit include the following:

1. The cost of Class B service credit is based on the actuarial factors and such factors provide a retirement benefit which is 1/6 greater than service credited as Class A. If Class A credit is purchased, the cost will be 6/7 of the amount computed for a Class B purchase. The computation is based on the member's present salary or highest fiscal year base salary multiplied by the actuarial purchase factor for the member's age at the time of purchase with regular interest.

2. If a Class A member converts to Class B, the member will contribute an additional 1/6 of the total contributions that would have been payable based on the member's full Class A contribution rate with regular interest.

N.J. Admin. Code § 17:3-5.5

Amended by 47 N.J.R. 2876(a), effective 11/16/2015