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Recently, Karen Pierog and Jim Christie published an article addressing state pension overhauls during these tough economic times. Specifically, the article examines how Illinois, California, and other states have instituted reforms to combat increasing and debilitating unfunded pension liabilities. 

According to the article, the National Association of State Retirement Administrators found a nearly $443 billion collective unfunded liability for the 125 state, local government, and teacher pension funds in its most recent survey. The situation is likely to worsen as the recession punches holes in budgets nationwide and causes big investment losses for defined-benefit pension plans that pay out a fixed income. As a result, it is suggested that the economic downturn may also lead to more reforms as politicians and taxpayers realize they can no longer afford plush pensions compared to defined-contribution 401(k) plans in the private sector which pay income based on variable investment returns. 

This year, laws were enacted in Georgia, Louisiana, Nevada, New Mexico, Rhode Island, and Texas that reduced benefits for new employees. On the local level, New York City has repeatedly trimmed pension benefits for new hires by creating pension tiers. Illinois and California are among the states evaluating various reform suggestions and/or establishing pension commissions in order to adequately address the problem. In all, it is clear state pension systems are facing a major overhaul in response to the poor economic climate.

This article is of particular importance because the status of the New Jersey public pension system is vital to every resident of this state and especially crucial to public safety employees. Consequently, all current or retired New Jersey public safety officers should read this article in order to fully understand the measures being taken across the country to rectify the problems that have become prevalent in defined-benefit pension plans. To read the full article, click on the following link.

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An association of retired cops has warned Hamilton Township to not tamper with their retirement package. The association alleges it would be illegal to change the terms of their benefits “in the middle of the stream.” The Mercer County Local 12 of the Retired Police and Firemen’s Association sent the warning to the Hamilton Township Business Administrator John Ricci this week in a letter.

Ricci confirmed he received the letter a letter from Trenton attorney Sid Lehman, saying the association “objected” to the Township’s plan to change retirees’ prescription drug co-pays to match the co-pay terms of active employees. “Sid sent a letter saying you can’t do that because they are retirees and they are entitled to the same benefit they had when they retired,” Ricci said. “He gave me the case law, and I agreed with him, and that was the end of that.”

Thomas Murphy,a retired Trenton cop and president of the 400-member Local 12, said there is nothing “adversarial” about the issue. “We want to sit down and see if we can come to an agreement at the table. We have precedent on our side, and we won’t hesitate to use it.”

“They’re not a union, they have no right negotiate,” Ricci said, “but they do have certain rights to continue receiving the same benefits they had when they retired, and that’s what this is about.” 

Both Ricci and Murphy expressed optimism that the issue would be resolved without any legal action.

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Following up on our previous entry, this article will help our readers understand the criteria that must be met in order for a public employee to qualify for an ordinary or accidental disability pension within one of the following State pension systems, the Public Employees Retirement System, the Teachers Pension and Annuity Fund, the State Police Retirement System, and the Judicial Retirement System. While these pension plans are similar in defined benefits and criteria for eligibility, each has their own specific nuances that are particular to the membership they serve. 

Accidental v. Ordinary Disability Benefits

Public Employees Retirement System and Teachers Pension and Annuity Fund

In accordance with the Public Employees Retirement System (“PERS”) and Teachers Pension and Annuity Fund (“TPAF”) handbooks, in order to qualify for an ordinary disability retirement, an employee must:

·         Have an active pension account;

·         Have 10 or more years of New Jersey service credit;

·         Be considered totally and permanently disabled; and

·         Submit medical reports certifying the disability.

In order to qualify for an accidental disability retirement, a member must:

·         Be an active member of PERS or TPAF on the date of the “traumatic event”;

·         Be considered totally and permanently disabled as a result of a “traumatic event” that happened during and as a direct result of carrying out the member’s regular or assigned job duties;

·         File an application for disability retirement within five (5) years of the date of the “traumatic event”; and

·         Be examined by physicians selected by the retirement system.

If an employee claiming membership to either one of these retirement funds qualified for accidental disability, his/her annual retirement allowance will be 72.7% of their salary at the time of the “traumatic event.”

Should the public employee be receiving periodic workers’ compensation benefits, the accidental disability retirement benefits will be reduced dollar for dollar by the periodic benefits paid after the retirement date. However, the retirement benefit is not reduced by any Social Security or private insurance benefits that may be payable.

The New Jersey Division of Pensions and Benefits reports accidental disability retirement benefits as exempt from federal income tax. The benefits are also

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Recently, it has come to our attention that many individuals aside from Public Safety Officers utilize this website as a reference guide for the various pension systems available to individuals employed by municipalities, counties, and the New Jersey state government. As such, this entry will focus upon a few of these pension systems and help our readers understand their background, membrship, and administration.

Overview of the Various Pension Systems

Public Employees Retirement System

The State of New Jersey established the Public Employees Retirement System (“PERS”) in 1955 after repeal of the laws that created the former State Employees Retirement System. Like the Police and Firemen’s Retirement System (“PFRS”), the New Jersey Division of Pensions and Benefits is assigned all administrative functions of the retirement system except for investment of the assets.

The PERS Board of Trustees has the responsibility for the proper operation of the retirement system. The Board consists of six (6) employee representatives, the State Treasurer, and two (2) individuals appointed by the Governor with advice and consent of the Senate. The Board meets monthly to conduct its business. 

Membership in the retirement system is generally required as a condition of employment for most employees of the State or any county, municipality, school district, or public agency. Generally, an employee is required to enroll in PERS if:

·         They are employed on a regular basis in a position covered by Social Security;

·         Their annual salary is $1,500.00 or more; and

·         They are not required to be a member of any other State or local government retirement system on the basis of the same position which gives them membership in PERS.

Teachers Pension and Annuity Fund

The Teachers Pension and Annuity Fund (“TPAF”) was established in 1919 and completely reorganized in 1955. The New Jersey Division of Pensions and Benefits is assigned all administrative function of the retirement system except for investment of the assets.

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In the case of In re Carry Permit of Andros, A-4077-06T4, the Appellate Division held that the State of New Jersey’s authority to revoke a retired police officer’s permit to carry a handgun is not preempted by federal law.

James Andros was an Atlantic City police officer from 1968 to 2003. Prior to his retirement in good standing, Andros applied for and obtained a permit to carry a handgun. This action concerns Andros’ appeal from a judgment granting the State’s application, under N.J.S.A. 2C:39-6L(6), to revoke his permit to carry a firearm.

Andros challenged denial of his motion to dismiss the State’s application because of federal preemption under 18 U.S.C.A. § 926C, enacted as part of the Law Enforcement Officers’ Safety Act of 2004, which amended 18 U.S.C.A. § 921, et. seq., relating to firearms. Andros contended: (1) that the revocation was preempted; and (2) the Law Division erred in finding that the State had presented “good cause” for the revocation.

The Law Division Judge denied Andros’ motion to dismiss on the grounds that the State was not preempted from revoking the license under N.J.S.A. 2C:39-6L(6). The Judge found that N.J.S.A. 2C:39-6L(6) did not bar a retired New Jersey law enforcement officer, or officers from other states who are qualified in those states, from carrying a concealed weapon as long as he meets New Jersey’s qualification standards. Consequently, the Judge concluded that N.J.S.A. 2C:39-6L remained valid.

On appeal, the Appellate Division, in affirming the revocation, held that the federal Law Enforcement Officers’ Safety Act of 2004, 18 U.S.C.A. §926C, does not pre-empt a state from revoking a retired police officer’s permit to carry a handgun under N.J.S.A. 2C:39-6L. In conceding Andros satisfied the requirements of federal act, the Court indicated a retired officer’s conduct permits the licensing state to revoke the permit, as evidenced by the requirements for qualification and testing every year in U.S.C.A. § 926C(c)(5). In other words, the federal act expressly permits states to set standards for training and qualification consistent with those of “active law enforcement officers.”  

The Court agreed with the Law Division Judge that the federal act merely preempts a state’s ability to preclude, or change the requirements for, carrying the firearm interstate, if the state permits licensing of the retired officer. As a result, New Jersey retains jurisdiction to hear the state’s contention that it can establish good cause justifying the revocation. With these principles in mind, the Court found no congressional intent to preclude the action taken by the State here and no basis for concluding that a state cannot revoke a handgun permit because Congress authorizes a carrier when licensed in one state to possess it in another. 

This case illustrates the State’s ability to limit a retired public safety officer’s ability to carry a firearm. Recently, this topic has become an important issue for retired officers throughout the State of New Jersey. This case is significant in that shows the State of New Jersey is not precluded under federal law from seeking and ultimately obtaining revocation of an officer’s permit to carry a firearm. The evolving case law regarding retired officers and their ability to carry a firearm should be followed closely so as to ensure the officers’ rights are protected.   

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