New Jersey § 43:16a-15

§ 43:16a-15.

(1) The contributions required for the support of the retirement system shall be made

by members and their employers. (2) (a) The uniform percentage contribution rate for members shall be 8.5% of compensation. Members of the retirement system shall contribute 10% of compensation to the system

on and after the effective date of P.L.2011, c. 78 . (b) The board of trustees is authorized to make an adjustment to the uniform contribution

rate of the members set forth in this subsection as the board deems reasonable, necessary,

and appropriate with the approval of at least eight members of the board after consultation

with, and the recommendation of, the actuary. Any adjustment to a contribution rate shall be made at such time and in such manner

as the board shall determine upon certification by the actuary that such change will

not result in an increased employer contribution in the current year and that such

change will not impact the long term viability of the fund. (3) (Deleted by amendment, P.L.1989, c. 204 ). (4) Upon the basis of the tables recommended by the actuary which the board adopts

and regular interest, the actuary shall compute annually, beginning as of June 30,

1991, the amount of contribution which shall be the normal cost as computed under

the projected unit credit method attributable to service rendered under the retirement

system for the year beginning on July 1 immediately succeeding the date of the computation. This shall be known as the “normal contribution.” (5) (Deleted by amendment, P.L.1989, c. 204 ). (6) (Deleted by amendment, P.L.1994, c. 62 .) (7) Each employer shall cause to be deducted from the salary of each member the percentage

of earnable compensation prescribed in subsection (2) of this section. To facilitate the making of deductions, the retirement system may modify the amount

of deduction required of any member by an amount not to exceed 1/10 of 1% of the compensation

upon which the deduction is based. (8) The deductions provided for herein shall be made notwithstanding that the minimum

salary provided for by law for any member shall be reduced thereby. Every member shall be deemed to consent and agree to the deductions made and provided

for herein, and payment of salary or compensation less said deduction shall be a full

and complete discharge and acquittance of all claims and demands whatsoever for the

service rendered by such person during the period covered by such payment, except

as to the benefits provided under this act. The chief fiscal officer of each employer shall certify to the retirement system

in such manner as the board of trustees may prescribe, the amounts deducted; and when deducted shall be paid into said annuity

savings fund, and shall be credited to the individual account of the member from whose

salary said deduction was made. (9) With respect to employers other than the State, upon the basis of the tables recommended

by the actuary which the board adopts and regular interest, the actuary shall compute

the amount of the accrued liability as of June 30, 1991 under the projected unit credit

method, which is not already covered by the assets of the retirement system, valued

in accordance with the asset valuation method established in this section. Using the total amount of this unfunded accrued liability, the actuary shall compute

the initial amount of contribution which, if the contribution is paid annually in

level dollars for a specific period of time, will amortize this liability. The board of trustees shall determine, upon the advice of the actuary, the time period for full funding of this liability, which shall not

exceed 40 years on initial application of this section as amended by this act, P.L.1994, c. 62 . This shall be known as the “accrued liability contribution.” Any increase or decrease in the unfunded accrued liability as a result of actuarial

losses or gains for the 10 valuation years following valuation year 1991 shall serve

to increase or decrease, respectively, the unfunded accrued liability contribution. Thereafter, any increase or decrease in the unfunded accrued liability as a result

of actuarial losses or gains for subsequent valuation years shall serve to increase

or decrease, respectively, the amortization period for the unfunded accrued liability,

unless an increase in the amortization period will cause it to exceed 30 years. If an increase in the amortization period as a result of actuarial losses for a

valuation year would exceed 30 years, the accrued liability contribution shall be

computed for the valuation year in the same manner provided for the computation of

the initial accrued liability contribution under this section. Beginning with the July 1, 2018 actuarial valuation, the accrued liability contribution

shall be computed so that if the contribution is paid annually in level dollars, it

will amortize this unfunded accrued liability over a closed 30-year period. Beginning with the July 1, 2028 actuarial valuation, when the remaining amortization

period reaches 20 years, any increase or decrease in the unfunded accrued liability

as a result of actuarial losses or gains for subsequent valuation years shall serve

to increase or decrease, respectively, the amortization period for the unfunded accrued

liability, unless an increase in the amortization period will cause it to exceed 20

years. If an increase in the amortization period as a result of actuarial losses for a

valuation year would exceed 20 years, the accrued liability contribution shall be

computed for the valuation year in the same manner provided for the computation of

the initial accrued liability contribution under this section. With respect to the State, upon the basis of the tables recommended by the actuary

which the board adopts and regular interest, the actuary shall annually determine

if there is an amount of the accrued liability, computed under the projected unit

credit method, which is not already covered by the assets of the retirement system,

valued in accordance with the asset valuation method established in this section. This shall be known as the “unfunded accrued liability.” If there was no unfunded accrued liability for the valuation period immediately preceding

the current valuation period, the actuary, using the total amount of this unfunded

accrued liability, shall compute the initial amount of contribution which, if the

contribution is paid annually in level dollars for a specific period of time, will

amortize this liability. The board of trustees shall determine, upon the advice of the actuary, the time period for full funding of this liability, which shall not

exceed 30 years. This shall be known as the “accrued liability contribution.” Thereafter, any increase or decrease in the unfunded accrued liability as a result

of actuarial losses or gains for subsequent valuation years shall serve to increase

or decrease, respectively, the amortization period for the unfunded accrued liability,

unless an increase in the amortization period will cause it to exceed 30 years. If an increase in the amortization period as a result of actuarial losses for a

valuation year would exceed 30 years, the accrued liability contribution shall be

computed for the valuation year in the same manner provided for the computation of

the initial accrued liability contribution under this section. Beginning with the July 1, 2018 actuarial valuation, the accrued liability contribution

shall be computed so that if the contribution is paid annually in level dollars, it

will amortize this unfunded accrued liability over a closed 30-year period. Beginning with the July 1, 2028 actuarial valuation, when the remaining amortization

period reaches 20 years, any increase or decrease in the unfunded accrued liability

as a result of actuarial losses or gains for subsequent valuation years shall serve

to increase or decrease, respectively, the amortization period for the unfunded accrued

liability, unless an increase in the amortization period will cause it to exceed 20

years. If an increase in the amortization period as a result of actuarial losses for a

valuation year would exceed 20 years, the accrued liability contribution shall be

computed for the valuation year in the same manner provided for the computation of

the initial accrued liability contribution under this section. The State may pay all or any portion of its unfunded accrued liability under the retirement

system from any source of funds legally available for the purpose, including, without

limitation, the proceeds of bonds authorized by law for this purpose. The value of the assets, excluding the special asset value set forth in section 38

of P.L.2010, c. 1 ( C.43:3C-14 ), to be used in the computation of the contributions provided for under this section

for valuation periods shall be the value of the assets for the preceding valuation

period increased by the regular interest rate, plus the net cash flow for the valuation

period (the difference between the benefits and expenses paid by the system and the

contributions to the system) increased by one half of the regular interest rate, plus

20% of the difference between this expected value and the full market value of the

assets as of the end of the valuation period. This shall be known as the “valuation assets.” Notwithstanding the first sentence of this paragraph, the valuation assets for the

valuation period ending June 30, 1995 shall be the full market value of the assets

as of that date and, with respect to the valuation assets allocated to the State,

shall include the proceeds from the bonds issued pursuant to the “Pension Bond Financing

Act of 1997,” P.L.1997, c. 114 ( C.34:1B-7.45 et seq. ), paid to the system by the New Jersey Economic Development Authority to fund the

unfunded accrued liability of the system. Notwithstanding the first sentence of this paragraph, the percentage of the difference

between the expected value and the full market value of the assets to be added to

the expected value of the assets for the valuation period ending June 30, 1998 for

the State shall be 100% and for other employers shall be 57% plus such additional

percentage as is equivalent to $150,000,000. Notwithstanding the first sentence of this paragraph, the amount of the difference

between the expected value and the full market value of the assets to be added to

the expected value of the assets for the valuation period ending June 30, 1999 shall

include an additional amount of the market value of the assets sufficient to fund

(1) the unfunded accrued liability for the supplementary “special retirement” allowances

provided under subsection b. of section 16 of P.L.1964, c. 241 ( C.43:16A-11.1 ) and (2) the unfunded accrued liability for the full credit toward benefits under

the retirement system for service credited in the Public Employees' Retirement System

and transferred pursuant to section 1 of P.L.1993, c. 247 ( C.43:16A-3.8 ) and the reimbursement of the cost of any credit purchase pursuant to section 3 of P.L.1993, c. 247 ( C.43:16A-3.10 ) provided under section 1 of P.L.2001, c. 201 ( C.43:16A-3.14 ). “ Excess valuation assets ” means, with respect to the valuation assets allocated to the State, the valuation

assets allocated to the State for a valuation period less the actuarial accrued liability

of the State for the valuation period, and beginning with the valuation period ending

June 30, 1998, less the present value of the expected additional normal cost contributions

attributable to the amendatory provisions of P.L.1999, c. 428 ( C.43:16A-1 et al.) payable on behalf of the active members employed by the State as of the valuation

period over the expected working lives of the active members in accordance with the

tables of actuarial assumptions applicable to the valuation period, and less the present

value of the expected additional normal cost contributions attributable to the provisions

of P.L.2003, c. 108 as amending section 16 of P.L.1964, c. 241 ( C.43:16A-11.1 ) payable on behalf of the active members employed by the State as of the valuation

period over the expected working lives of the active members in accordance with the

tables of actuarial assumptions applicable to the valuation period, if the sum is

greater than zero. “ Excess valuation assets ” means, with respect to the valuation assets allocated to other employers, the valuation

assets allocated to the other employers for a valuation period less the actuarial

accrued liability of the other employers for the valuation period, excluding the unfunded

accrued liability for early retirement incentive benefits pursuant to P.L.1993, c. 99 for the other employers, and beginning with the valuation period ending June 30,

1998, less the present value of the expected additional normal cost contributions

attributable to the amendatory provisions of P.L.1999, c. 428 ( C.43:16A-1 et al.) payable on behalf of the active members employed by other employers as of the valuation

period over the expected working lives of the active members in accordance with the

tables of actuarial assumptions applicable to the valuation period, and less the present

value of the expected additional normal cost contributions attributable to the provisions

of P.L.2003, c. 108 as amending section 16 of P.L.1964, c. 241 ( C.43:16A-11.1 ) payable on behalf of the active members employed by other employers as of the valuation

period over the expected working lives of the active members in accordance with the

tables of actuarial assumptions applicable to the valuation period, if the sum is

greater than zero. If there are excess valuation assets allocated to the State or to the other employers

for the valuation period ending June 30, 1995, the normal contributions payable by

the State or by the other employers for the valuation periods ending June 30, 1995,

and June 30, 1996 which have not yet been paid to the retirement system shall be reduced

to the extent possible by the excess valuation assets allocated to the State or to

the other employers, respectively, provided that with respect to the excess valuation

assets allocated to the State, the General Fund balances that would have been paid

to the retirement system except for this provision shall first be allocated as State

aid to public schools to the extent that additional sums are required to comply with

the May 14, 1997 decision of the New Jersey Supreme Court in Abbott v. Burke. If there are excess valuation assets allocated to the other employers for the valuation

period ending June 30, 1998, the accrued liability contributions payable by the other

employers for the valuation period ending June 30, 1997 shall be reduced to the extent

possible by the excess valuation assets allocated to the other employers. If there are excess valuation assets allocated to the State or to the other employers

for a valuation period ending after June 30, 1998, the State Treasurer may reduce

the normal contribution payable by the State or by other employers for the next valuation

period as follows: (1) for valuation periods ending June 30, 1996 through June 30, 2000, to the extent

possible by up to 100% of the excess valuation assets allocated to the State or to

the other employers, respectively; (2) for the valuation period ending June 30, 2001, to the extent possible by up to

84% of the excess valuation assets allocated to the State or to the other employers,

respectively; (3) for the valuation period ending June 30, 2002, to the extent possible by up to

68% of the excess valuation assets allocated to the State or to the other employers,

respectively; and (4) for valuation periods ending June 30, 2003 through June 30, 2007, to the extent

possible by up to 50% of the excess valuation assets allocated to the State or to

the other employers, respectively. Notwithstanding the discretion provided to the State Treasurer in the previous paragraph

to reduce the amount of the normal contribution payable by employers other than the

State, the State Treasurer shall reduce the amount of the normal contribution payable

by employers other than the State by $150,000,000 in the aggregate for the valuation

period ending June 30, 1998, and then the State Treasurer may reduce further pursuant

to the provisions of the previous paragraph the normal contribution payable by such

employers for that valuation period. The normal and accrued liability contributions shall be certified annually by the

retirement system and shall be included in the budget of the employer and levied and

collected in the same manner as any other taxes are levied and collected for the payment

of the salaries of members. Notwithstanding the preceding sentence, the normal and accrued liability contributions

to be included in the budget of and paid by the employer other than the State shall

be as follows: for the payment due in the State fiscal year ending on June 30, 2004,

20% of the amount certified by the retirement system; for the payment due in the

State fiscal year ending on June 30, 2005, a percentage of the amount certified by

the retirement system as the State Treasurer shall determine but not more than 40%;

for the payment due in the State fiscal year ending on June 30, 2006, a percentage

of the amount certified by the retirement system as the State Treasurer shall determine

but not more than 60%; and for the payment due in the State fiscal year ending on

June 30, 2007, a percentage of the amount certified by the retirement system as the

State Treasurer shall determine but not more than 80%. The State Treasurer shall reduce the normal and accrued liability contributions payable

by employers other than the State to 50 percent of the amount certified annually by

the retirement system for payments due in the State fiscal year ending June 30, 2009. An employer that elects to pay the reduced normal and accrued liability contribution

shall adopt a resolution, separate and apart from other budget resolutions, stating

that the employer needs to pay the reduced contribution and providing an explanation

of that need which shall include (1) a description of its inability to meet the levy

cap without jeopardizing public safety, health, and welfare or without jeopardizing

the fiscal stability of the employer, or (2) a description of another condition that

offsets the long term fiscal impact of the payment of the reduced contribution. An employer also shall document those actions it has taken to reduce its operating

costs, or provide a description of relevant anticipated circumstances that could have

an impact on revenues or expenditures. This resolution shall be submitted to and approved by the Local Finance Board after

making a finding that these fiscal conditions are valid and affirming the findings

contained in the employer resolution. An employer that elects to pay 100 percent of the amount certified by the retirement

system for the State fiscal year ending June 30, 2009 shall be credited with such

payment and any such amounts shall not be included in the employer's unfunded liability. The actuaries for the retirement system shall determine the unfunded liability of

the retirement system, by employer, for the reduced normal and accrued liability contributions

provided under P.L.2009, c. 19 . This unfunded liability shall be paid by the employer in level annual payments over

a period of 15 years beginning with the payments due in the State fiscal year ending

June 30, 2012 and shall be adjusted by the rate of return on the actuarial value of

assets. The retirement system shall annually certify to each employer the contributions due

to the contingent reserve fund for the liability under P.L.2009, c. 19 . The contributions certified by the retirement system shall be paid by the employer

to the retirement system on or before the date prescribed by law for payment of employer

contributions for basic retirement benefits. If payment of the full amount of the contribution certified is not made within 30

days after the last date for payment of employer contributions for basic retirement

benefits, interest at the rate of 10% per year shall be assessed against the unpaid

balance on the first day after the thirtieth day. (10) The treasurer or corresponding officer of the employer shall pay to the board of trustees no later than April 1 of the State's fiscal year in which payment is due the amount

so certified as payable by the employer, and shall pay monthly to the board of trustees the amount of the deductions from the salary of the members in the employ of the

employer, and the board of trustees shall credit such amount to the appropriate fund or funds, of the retirement system. If payment of the required amount of the employer's obligation is not made within 30 days of the due dates established by this act, interest at the rate of 10% per annum shall commence to

run against the unpaid balance thereof on the first day after such 30th day. Nothing in P.L.2018, c. 55 shall relieve State or local government employers of any present or future obligations

of their normal cost or unfunded liabilities required to be paid into the retirement

system. If payment in full, representing the monthly transmittal and report of salary deductions,

is not made within 15 days of the due date established by the retirement system, interest

at the rate of 10% per annum shall commence to run against the total transmittal of

salary deductions for the period on the first day after such 15th day. (11) The expenses of administration of the retirement system shall be paid by the

State of New Jersey. Each employer shall reimburse the State for a proportionate share of the amount

paid by the State for administrative expense. This proportion shall be computed as the number of members under the jurisdiction

of such employer bears to the total number of members in the system. The pro rata share of the cost of administrative expense shall be included with

the certification by the retirement system of the employer's contribution to the system. (12) Notwithstanding anything to the contrary, the retirement system shall not be

liable for the payment of any pension or other benefits on account of the employees

or beneficiaries of any employer participating in the retirement system, for which

reserves have not been previously created from funds, contributed by such employer

or its employees for such benefits. (13) (Deleted by amendment, P.L.1992, c. 125 .) (14) Commencing with valuation year 1991, with payment to be made in Fiscal Year 1994,

the Legislature shall annually appropriate and the State Treasurer shall pay into

the pension accumulation fund of the retirement system an amount equal to 1.1% of

the compensation of the members of the system for the valuation year to fund the benefits

provided by section 16 of P.L.1964, c. 241 ( C.43:16A-11.1 ), as amended by P.L.1979, c. 109. (15) If the valuation assets are insufficient to fund the normal and accrued liability

costs attributable to the amendatory provisions of P.L.1999, c. 428 ( C.43:16A-1 et al.) as provided hereinabove, the normal and unfunded accrued liability contributions

required to fund these costs for the State and other employers shall be paid by the

State. (16) The savings realized as a result of the amendments to this section by P.L.2001, c. 44 in the payment of normal contributions computed by the actuary for the valuation

periods ending June 30, 1998 for employers other than the State shall be used solely

and exclusively by a county or municipality for the purpose of reducing the amount

that is required to be raised by the local property tax levy by the county for county

purposes or by the municipality for municipal purposes, as appropriate. The Director of the Division of Local Government Services in the Department of Community

Affairs shall certify for each year that each county or municipality has complied

with the requirements set forth herein. If the director finds that a county or municipality has not used the savings solely

and exclusively for the purpose of reducing the amount that is required to be raised

by the local property tax levy by the county for county purposes or by the municipality

for municipal purposes, as appropriate, the director shall direct the county or municipal

governing body, as appropriate, to make corrections to its budget.