New Jersey § 43:3c-24

§ 43:3c-24.

a. Post-employment benefits other than pensions under the State Health Benefits Program,

P.L.1961, c. 49 ( C.52:14-17.25 et seq. ), for retired employees, and their dependents, of employers other than the State

that are participating in the State Health Benefits Program pursuant to section 3

of P.L.1964, c. 125 ( C.52:14-17.34 ), as non-State participating employers, shall be funded and paid by means of contributions

to a separate trust fund. For the purposes of this section, the term “ post-employment benefits other than pensions ” means post-employment benefits including, but not limited to, health, dental and

vision care, which give rise to a liability under Statement No. 43 of the Governmental

Accounting Standards Board, Reporting for Postemployment Benefit Plans Other Than

Pension Plans, and Statement No. 45 of the Governmental Accounting Standards Board,

Accounting and Financial Reporting by Employers for Postemployment Benefits Other

Than Pensions, together, GASB 43/45, as amended from time to time, or any successor

publication. For purposes of this section, and notwithstanding anything to the contrary, the

term “non-State participating employers” is limited only to entities that are a political

subdivision of the State, as defined in federal Treas. Reg. s. 1.103-1(b), or entities the income of which is excluded from gross income

under section 115 of the Internal Revenue Code of 1986 ( 26 U.S.C. s.115 ), as amended. For purposes of this section, the term “dependent” or “dependents” means a dependent

as defined under section 152 of the Internal Revenue Code of 1986 ( 26 U.S.C. s.152 ), as amended, without regard to subsection (b)(1), (b)(2), or (d)(1)(B) thereof,

of a retired employee. b. There is hereby established the State of New Jersey Other Post-Employment Benefits

(OPEB) Fund, which is intended to qualify as an instrumentality of the State or a

political subdivision of the State under section 115 of the Internal Revenue Code of 1986 ( 26 U.S.C. s.115 ), as amended. The assets of the OPEB Fund shall be used only to fund and pay post-employment benefits

other than pensions, and the reasonable cost of administering such benefits, with

respect to eligible retired employees, and their dependents, of non-State participating

employers, and deposits and contributions to the OPEB Fund shall be irrevocable except

as specifically provided in subsection i. of this section. The OPEB Fund shall be a trust, trust account or custodial account, the assets of

which shall be deemed an arrangement equivalent to a trust for all legal purposes,

and shall be established by means of appropriate documentation so as to be exempt

from taxation under the provisions of applicable federal and State tax law, which

shall contain such terms and conditions as are required to comply with all State and

federal law including but not limited to the following: (1) The OPEB Fund shall provide no guaranty that payments or reimbursements to employees,

former employees, retirees, spouses or beneficiaries will be tax-free. (2) In the event that the OPEB Fund has obtained a ruling from the Internal Revenue

Service concerning only the federal tax treatment of the OPEB Fund's income, that

ruling may not be cited or relied upon by any non-State participating employer as

precedent concerning any matter relating to the non-State participating employer's

health plans, including post-retirement health plans. In particular, that ruling shall have no effect on whether contributions to the

non-State participating employer's health plans or payments from the non-State participating

employer's health plans, including reimbursements of medical expenses, are excludable

from the gross income of employees, former employees or retirees, under the Internal

Revenue Code of 1986, as amended. (3) The federal income tax consequences to employees, former employees and retirees

shall depend on the terms and operation of the non-State participating employer's

health plans. c. The assets of the OPEB Fund shall be segregated from all other funds of the State

and the non-State participating employers, including without limitation the fund described

in section 48 of P.L.2007, c. 103 ( C.52:14-17.32a1 ), and shall be invested and administered solely in the interest of retired employees,

and their dependents, of non-State participating employers entitled to post-employment

benefits other than pensions provided by the State Health Benefits Program. However, the OPEB Fund may be invested in a group trust established pursuant to section 401(a)(24) of the Internal Revenue Code of 1986 ( 26 U.S.C. s.401(a)(24) ), as amended. Neither the State, the State Legislature, the State Health Benefits Commission,

the Treasurer of the State of New Jersey, the Division of Pensions and Benefits in

the Department of the Treasury, nor any public officer, employee or agency, nor service

provider to the OPEB Fund, shall use or authorize the use of assets contributed to

the OPEB Fund, or the investment earnings thereon, for any purpose other than the

provision of post-employment benefits other than pensions in accordance with the terms

of the State Health Benefits Program applicable to retired employees, and their dependents,

of non-State participating employers, and the defraying of the reasonable costs of

administering the OPEB Fund and the benefits provided by means of the OPEB Fund. The assets constituting the OPEB Fund shall under no circumstances be subject to

assignment or alienation in favor of the creditors of the State or any non-State participating

employer, or of the individuals or entities that administer the State Health Benefits

Program or the OPEB Fund. Private parties' interests shall neither materially participate in the OPEB Fund

nor benefit more than incidentally from the operation or earnings of the OPEB Fund. d. The Director of the Division of Pensions and Benefits shall serve as the administrator

of the OPEB Fund. The Director of the Division of Investment as trustee shall have the authority to

adopt a trust agreement, to receive and hold all moneys in the OPEB Fund, and to disburse

the same in accordance with instructions from the fund administrator. The Director of the Division of Investment shall have the authority to invest and

reinvest the moneys in the OPEB Fund and to acquire for or on behalf of the OPEB Fund

such investments in accordance with the standards governing the investment of other

funds managed by the Director of the Division of Investment under the rules and regulations

of the State Investment Council. The State, the Division of Pensions and Benefits, the State Treasurer, the Division

of Investment, and the State Investment Council, and their respective officers and

employees, shall not be liable for any loss incurred by the OPEB Fund. e. The fund administrator or the trustee may select and contract with custodians,

record keepers, actuaries and other consultants, and other service providers with

respect to the administration of the OPEB Fund, and may delegate to such persons or

entities, or to any person within the Department of the Treasury, any of their duties

and responsibilities. The Director of the Division of Investment may select and contract with investment

managers, investment advisors and other service providers with respect to the investment

of the OPEB Fund, and may delegate to such persons or entities, or to any person within

the Division of Investment, any of its duties and responsibilities. f. The fund administrator shall, with the assistance of a qualified actuary, determine

a funding policy for the OPEB Fund and may promulgate rules and procedures with respect

to the administration and funding of the OPEB Fund. The fund administrator, with the assistance of a qualified actuary, shall annually

measure and determine an amount for the annual “other post-employment benefits” cost

of providing benefits for the retirees and their dependents of each non-State participating

employer in the State Health Benefits Program based on the “annual required cost”

(ARC) for providing such benefits determined in accordance with applicable standards

under GASB 43/45. The fund administrator shall report the OPEB cost for each non-State participating

employer to such employer on an annual basis. g. The fund administrator, with the assistance of a qualified actuary, shall annually

determine, and the fund administrator shall approve, the aggregate contribution to

the OPEB Fund to fund post-employment benefits other than pensions under the terms

of the State Health Benefits Program, which shall be the amount necessary to pay the

anticipated premiums or periodic charges for the benefits for the following annual

valuation period, with respect to all non-State employers participating in the OPEB

Fund. The fund administrator shall determine and approve the rate or rates to be charged

to non-State participating employers as contributions by such employers to the OPEB

Fund, based on such allocable amounts of the above-described aggregate contribution

and such other factors as the fund administrator shall determine with respect to the

setting of such rates. h. Deposits to the OPEB Fund shall be made by each non-State participating employer

in the amounts specified by the fund administrator. Deposits to the OPEB Fund by each non-State participating employer shall be segregated

in a separate account for recordkeeping purposes from the deposits from all other

non-State participating employers in the OPEB Fund. Such deposits may be commingled for purposes of investment, but the fund administrator

shall provide record keeping to establish the deposits allocable to each non-State

participating employer and shall periodically report the value of the separate accounts

to the applicable non-State participating employers. Investment earnings attributable to the OPEB Fund shall be determined on an aggregate

basis for all non-State participating employers. A non-State participating employer shall not make a deposit to the OPEB Fund if

the total amount invested with respect to that employer would exceed such employer's

actuarially determined liability for post-employment benefits other than pensions

due to its employees, as determined under the applicable standards of GASB 43/45. i. In the event that, following the satisfaction in full of all liabilities for post-employment

benefits other than pensions to retired employees, and their dependents, of non-State

participating employers, there remain undistributed assets of the OPEB Fund, such

assets shall be distributed in the manner determined by the fund administrator, provided

that in no event shall such assets be distributed to, or used for the purpose of paying

benefits for, the active or retired employees of an entity that is not a State, a

political subdivision of the State or an entity the income of which is excluded from

gross income under section 115 of the Internal Revenue Code of 1986 ( 26 U.S.C. s.115 ), as amended.