Recently, there has been much concern over new Department of Treasury regulations promulgated by the Internal Revenue Service (“IRS”) and their effect upon State legislated pension systems for public employees. This entry summarizes the new regulations and their potential impact on the members of the Police and Firemen’s Retirement System (“PFRS”). After conducting research and for the reasons set forth in detail below, it our belief the new Treasury Regulations will not alter the ability of a PFRS member to retire under any existing PFRS law, including the special retirement provision allowing retirement prior to attaining the age of 50. 

 

By way of background, the New Jersey State PBA reported that the IRS adopted regulations that would prohibit any public safety officer in a state legislated pension system from retiring before the age of 50. As most public safety officers are aware, there is currently no minimum retirement age for a member of PFRS to qualify for a pension. In fact, all that is needed to qualify for a PFRS pension is twenty-five (25) years of service and retirement credits paid into the system. Specifically, N.J.S.A. 43:16A-11.1, entitled “Special Retirement; resignation with 25 years of creditable service; allowance; death benefit”, provides in pertinent part:

 

Should a member resign after having established 25 years of creditable service, he may elect “special retirement,” provided, that such election is communicated by such member to the retirement system by filing a written application, duly attested, stating at what time subsequent

to the execution and filing thereof he desires to be retired…

 

[N.J.S.A. 43:16A-11.1(a).]   

   

Treasury Regulation §1.401(a)-1 was recently modified. The modifications require qualified pension plans to revise the definition of normal retirement age to an age that is not earlier than the earliest age that is reasonably representative of the typical retirement age for the industry in which the covered workforce is employed. In addition, the regulations provide that a normal retirement age of at least 62 is deemed to be not earlier than the typical retirement age for the industry in which the covered workforce is employed. Thus, a plan satisfies this provision if its normal retirement age is age 62, or if its normal retirement age is the later than age 62 or another specified date, such as the later of age 62 or the fifth anniversary of plan participation. This is known as the “safe harbor” provision. Continue Reading New IRS Regulations and Impact on PFRS Retirement System

Most recently New Jersey GovernorJon S. Corzine signed the Public Employee Pension and Benefits Reform Act of 2008. While this bill does not affect the members of the Police and Firemen’s retirement System (PFRS), it does affect members of the Public Employees Retirement System (PERS) and the Teachers Pension and Annuity Fund (TPAF). Certain …

 On its website, www.njspba.com, The New Jersey State PBA has reported that the Internal Revenue Service (IRS) has adopted regulations that would prohibit any public safety officer in a state legislated pension system from retiring before the age of 50. The regulation in its current form is slated to go into effect on January …

 In the Matter of Martinez, A-0090-07T2, the Appellate Division held a civil service appointing authority violates the Rule of Three, N.J.S.A. 11A:4-8, in guaranteeing a promotional candidate that he or she will receive the appointment if he or she attains the highest score on the examination. 

 

After taking the civil service examination …

On October 1, 2008, Governor Jon Corzine signed into law five bills aimed at fixing New Jersey’s Workers’ Compensation System. Significantly, the bills should reduce the long delays in making injured workers whole. The legislation, the State’s first workers’ compensation overhaul in thirty years, was the product of public hearings that followed a series …

On September 23, 2008, the New Jersey Supreme Court entertained oral argument in the case of State v. DeAngelo, A-73-07, wherein the issues of labor protesting and free speech collide. The case involves a union official who was fined for displaying a 10-foot tall, inflatable rat at a Lawrence Township labor rally, thereby …

Many public safety officers in the state of New Jersey understand that the terms and conditions of their employment to include the wages they are paid and the benefits they receive are derived from a collective bargaining agreement reached between the public employer and their collective bargaining unit.  However many public safety officers are not aware of the…

In the case of Spinks et al. v. The Township of Clinton et al., 52-2-1684, The Township of Clinton sought to bar the release of an internal affairs investigation of the police department that was submitted to the trial court as part and parcel to a summary judgment proceeding.  The Township argued that the disclosure of these types of…

In the case of Grasso v. Fraternal Order of Police, Glassboro Lodge No. 108, 33-2-1617, the Superior Court of New Jersey, Appellate Division, held that under the New Jersey Employer-Employee Relations Act, N.J.S.A. 34:13A-1 et.seq, the Defendants owed no duty to the Plaintiff to represent him in a dispute with the Borough of Glassboro…