Gov. Signs Early Retirement Legis.

Last week, as part of making New Jersey live within its means, Governor McGreevey signed into law legislation that will provide early retirement incentives to certain state employees—incentives that will reduce the size of state government and save the State approximately $46 million for the FY 2003 fiscal year.

This legislation "works to fulfill the Administration’s goal to reduce the size of government,” said McGreevey. “The law provides a rational, responsible and cost-effective plan to accomplish that objective.

“In recent years, the State has not lived within its means and the size of state government grew at an unacceptable rate even as New Jersey was heading into a serious budget crisis. This measure will effectively reduce the size of state government by approximately 1,000 employees. The measure will also save the State upwards of $46 million as part of the solution to close a nearly $6 billion budget deficit for the next fiscal year.”

“I would like to thank the Senate and Assembly sponsors of this legislation for their efforts to see the Administration’s early retirement proposal to passage,” said McGreevey. “The cooperation and leadership exhibited today will be essential as we continue to grapple with the historic budget deficits of the current and next fiscal year.”

Approximately 11,000 state employees, including judicial and legislative workers, and 6,000 college and university employees will be eligible for early retirement incentives. The new law also allows independent authorities to offer early retirement incentives to their employees; it does not include local governments or school boards.

The incentives of the new law are as follows:
* State employees who are 50 or older and have at least 25 years of service under the Public Employees’ Retirement System (PERS) and the Teachers’ Pension and Annuity Fund (TPAF) an additional three years of service credit toward their pensions.

* Employees who are 50 or older and have at least 25 years of service under the Alternate Benefit Program, Federal Civil Service Retirement System or the Federal Employees Retirement System are eligible for a payment in the amount of 60 percent of their base annual salary, paid in two equal installments one and thirteen months after retirement.

* Employees who are 60 or older and have at least 20 years but less than 25 years of credited service are able to retire with lifetime state medical benefits. Current law requires employees to have 25 years of service. Authority employees will be eligible to receive $500 a month for two years.

* Employees who are 60 or older and who have 10 to 20 years of service are eligible to receive an extra $500 dollars a month in additional pension benefits for the first 24 months after retiring.

* Employees who are at least 55 years old with at least 25 years of service and who are eligible to retire under a special veterans retirement under PERS or TPAF will receive an additional pension amount of 3/55 of the compensation on which the special veterans allowance is based.

The early retirement incentives apply to eligible state employees who retire on or after February 1, 2002, but no later than July 1, 2002. Employees of State autonomous authorities must retire on or after July 1, 2002, but not later than September 1, 2002, if the authority’s fiscal year ends on or before June 30, 2002. If the authority’s fiscal year ends after June 30, 2002, eligible employees must retire no earlier than two months before the end of that fiscal year but not later than the first day of the calendar month after the close of that fiscal year.

Employees who are interested in the early retirement offer will be asked to notify their department head no later than June 14th and must submit an application with a retirement date of May 1, June 1 or July 1.

The Division of Pensions and Benefits has sent information, including applications and retirement estimates, to eligible employees over the past month. Interested employees can obtain more information by visiting www.state.nj.us.

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Author: Paul Aronsohn