State Police Pensions & Benefits Retirement System (SPRS) Member Guidebook SP-0194-0721 State Police Retirement System

TABLE OF CONTENTS Reduction or Suspension of Your Benefits. . . . . 27 SPRS General Information...... 3 Employment After Retirement ...... 27 Foreword ...... 4 Active and Retired Death Benefits...... 28 The Retirement System...... 4 Overview ...... 29 Contacting the New Jersey Division Choosing a Beneficiary ...... 30 of Pensions & Benefits (NJDPB)...... 4 Payment of Group Life Insurance...... 31 Plan Information...... 5 Group Life Insurance and Enrollments...... 6 Leave of Absence ...... 31 Overview ...... 7 Taxation of Group Life Insurance Benefits...... 31 Transfers ...... 8 Waiving Noncontributory Group Service Credit ...... 8 Life Insurance over $50,000...... 32 Vesting...... 9 Conversion of Group Life Insurance...... 32 Purchasing Service Credit...... 10 Withdrawal...... 33 Overview ...... 11 Overview ...... 34 Types of Service Eligible for Purchase...... 11 Withdrawing Contributions...... 35 Cost and Procedures for Workers’ Compensation...... 35 Purchasing Service Credit...... 12 Appeals...... 36 Applying to Purchase Service Credit...... 13 Overview ...... 37 Loans...... 14 Overview ...... 15 Applying for a Loan ...... 15 Internal Revenue Service (IRS) Requirements...... 16 Supplementing your Pension...... 18 Overview ...... 19 Retirements...... 20 Overview ...... 21 Types of Retirement...... 21 The Retirement Process ...... 24

SPRS Member Guidebook July 2021 Page 2 SPRS General Information State Police Retirement System

FOREWORD THE RETIREMENT SYSTEM If you need assistance registering for MBOS, call The New Jersey State Police Retirement System The State Police Retirement System (SPRS) was es- the MBOS Help Line at (609) 292-7524 or send (SPRS) Member Guidebook provides a summary de- tablished in 1965 as the successor to the State Police an email with the subject line “MBOS Email” to: scription of the benefits of the plan and outlines the Retirement and Benevolent Fund . The NJDPB is as- [email protected] rules and regulations governing the plan . The SPRS signed all administrative functions of the retirement Telephone Numbers Member Guidebook should provide you with all the in- system except for investment . • For computerized information about your individ- formation you need about your SPRS benefits . How- The SPRS Board of Trustees has the responsibility ual pension account 24 hours a day, seven days ever, if there is a conflict with statutes governing the for the proper operation of the retirement system . The a week, call our Automated Information System at plan or regulations implementing the statutes, the Board consists of: statutes and regulations will take precedence . Com- (609) 292-7524 . With Interactive Voice Response plete terms governing any employee benefit program • Two active or retired members appointed by the and added services, all you need is your Social are set forth in the New Jersey Statutes Annotated . Superintendent of the State Police; Security number and membership number to hear Regulations, new or amended, are published in the • The State Treasurer; and personalized benefits information on purchases, New Jersey Register by the State Office of Adminis- retirement benefits, and withdrawal . • Two trustees appointed by the Governor . trative Law supplementing the New Jersey Admin- • To speak with a representative about your SPRS istrative Code . This guidebook, containing current CONTACTING THE NEW JERSEY account or SHBP account, call (609) 292-7524 updates, is available for viewing on our website at: DIVISION OF PENSIONS & weekdays (except State holidays) . The most cur- www.nj.gov/treasury/pensions While at the NJDPB BENEFITS (NJDPB) rent hours of operation can be found on our web- website, be sure to check for SPRS-related forms, fact site . If you require the services of a relay operator, sheets, and news affecting the SPRS . Member Benefits Online System please dial 711 and provide the operator with the The purpose of this guidebook is to provide you with The Member Benefits Online System (MBOS) allows following phone number, (609) 292-6683 . You will information about the retirement system to assist you registered SPRS members access to their pension and then be connected to a Client Services phone rep- in making decisions concerning you and your family’s State Health Benefits Program (SHBP) account infor- resentative for assistance . future . If you have questions concerning your retire- mation online . Resources available through MBOS in- • To speak with a plan representative about the New ment system benefits, please see the “Contacting the clude: member account information; beneficiary desig- Jersey State Employees Deferred Compensation State of New Jersey Division of Pensions & Benefits nation; online pension loan; purchase of service credit; Plan (NJSEDCP), call Prudential at 1-866-NJSEDCP (NJDPB)” section . retirement applications; withdrawal application; and the (1-866-657-3327) weekdays between 8:00 a m. . Since this is your guidebook, we would appreciate any Supplemental Annuity Collective Trust (SACT) informa- and 9:00 p m. . (except State holidays) . A plan rep- comments or suggestions for improvement that you tion (if applicable) . resentative will answer your questions about the might have . Please send them to the address listed Retirees may also use MBOS to: view retirement ac- NJSEDCP and provide enrollment and distribution below: count information; update an address; change direct forms . deposit information; change a beneficiary designation; New Jersey Division of Pensions & Benefits • To speak with a plan representative about the or update federal and/or New Jersey State income tax ATTN: Office of Communications SACT, call (609) 292-7524 weekdays (except State withholding . P.O. Box 295 holidays) . The most current hours of operation can Trenton, NJ 08625-0295 Before you can begin using MBOS, you must be reg- be found on our website . SACT representatives will istered with MBOS and the MyNewJersey website . answer your questions and provide enrollment and Registration information can be found on the NJDPB distribution forms . website .

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Internet, Email, and Mailing Address may be found in Title 17, Chapter 5 of the New Jersey Administrative Code . General information and most publications of the Benefits and provisions of the SPRS are sub- NJDPB can be found on our website . You can email Funding ject to changes by the legislature, courts, and the NJDPB at: [email protected] other officials . While this guidebook outlines The funds used to pay benefits come from three sourc- Our postal address is: the benefit and contribution schedules of the es: employer contributions, employee contributions, State Police Retirement System, it is not a fi- New Jersey Division of Pensions & Benefits and investment income from those contributions . All nal statement . Complete terms governing any P.O. Box 295 contributions not required for current operations are in- employee benefit program are set forth in the Trenton, NJ 08625-0295 vested by the State Division of Investment . New Jersey Statutes Annotated . Regulations, On all correspondence, be sure to include your mem- new or amended, are published in the New Plan Year bership number or the last four digits of your Social Se- Jersey Register by the State Office of Admin- curity number . For record-keeping purposes, the plan year is July 1 istrative Law supplementing the New Jersey through June 30 . Administrative Code . Counseling Services Service of Legal Process The NJDPB offers individual counseling services to members of the retirement systems and other benefit Legal process must be served on the Attorney General programs . Counselors are available by appointment of New Jersey pursuant to New Jersey Court Rules, R . Monday through Friday from 8:00 a m. . to 4:00 p m. ,. 4:4-4(7) . with the last interviews taken at 3:30 p m. . Appoint- Employment Rights Not Implied ments can be made and directions can be found on our website . Membership in the SPRS does not give you the right to be retained in the employ of the New Jersey State Po- PLAN INFORMATION lice, nor does it give you a right of claim to any benefit you have not accrued under terms of the system . Name of Plan The State Police Retirement System (SPRS) of New Jersey .

Administration The SPRS is a defined benefit plan administered by the New Jersey Division of Pensions & Benefits (NJDPB) .

Provisions of Law The SPRS was established by New Jersey Statutes and can be found in the New Jersey Statutes Annotat- ed, Title 53, Chapter 5A . Changes in the law can only be made by an act of the State Legislature . Rules gov- erning the operation and administration of the system

Page 5 July 2021 SPRS Member Guidebook Enrollments State Police Retirement System

OVERVIEW Proof of Age email . Members can verify beneficiary designations on All members of the SPRS must provide documentation MBOS . Otherwise, the NJDPB will only accept a written Eligibility Criteria that proves their age . If possible, you should provide request for verification from the member . All individuals who become full-time troopers or com- your proof of age to the NJDPB when you enroll; how- Public Information and Restrictions missioned or noncommissioned officers of the Division ever, it does not delay the processing of your enrollment of State Police must enroll in the SPRS . application if you do not . Proof of age will be required to Most of the information maintained by the retirement be eligible to retire . system, including member salary and/or pension ben- SPRS Membership Tiers efit information, is considered a public record under Acceptable evidence of your age includes a photocopy SPRS members are categorized by specific member- N J. S. A. . 47:1A-1 et seq ,. the Open Public Records Act of: ship tiers based on enrollment date . Membership tiers (OPRA) . However, certain personal information, such affect a member’s enrollment and retirement eligibility . • Birth certificate — with visible seal; as a member’s address, telephone number, Social Se- These membership tiers, pursuant to N .J .S .A . 53:5A-3, • Passport or a U S. . Passport Card; curity number, pension membership numbers, benefi- are defined as follows: ciary information while the member is living, and medi- • A current digital New Jersey driver’s license or cal information is restricted from public access . • Membership Tier 1 — Members enrolled on or identification card (for non-drivers) issued by the before May 21, 2010 . N .J . Motor Vehicle Commission; Further restrictions to personal health information ex- ist under the privacy provisions of the federal Health • Membership Tier 2 — Members enrolled after • A current digital Pennsylvania or New York driver’s Insurance Portability and Accountability Act (HIPAA) . May 21, 2010 . license; or Members may be required to provide specific written Unless otherwise indicated by membership tier, the • Naturalization or immigration papers . authorization for the release of medical information to benefits listed in this guidebook are the same for all a third party who is not a doctor, hospital, or business Unacceptable documentation includes expired doc- SPRS members . partner of the NJDPB or the health benefit programs . umentation, out-of-state driver’s licenses except P A. . Information about HIPAA is available on the NJDPB and N Y. ,. hospital birth certificates, marriage certifi- Enrollment/Certification of Payroll Deductions website . cates, census records, baptismal records, affidavits Your employer must complete an Enrollment Applica- from older family members, or military records indicat- The NJDPB has implemented additional protection for tion to enroll you in the retirement system . ing your age . members in accordance with the New Jersey Identity Note: If you are currently active in another New Jer- Theft Prevention Act, N J. S. A. . 56:11-28 et seq . Secu- sey State-administered retirement system and wish Designating a Beneficiary rity Freeze procedures are available to restrict access to transfer your service credit to the SPRS, see the When the Enrollment Application is submitted, the new to the accounts of members who are, or have a serious “Transfers” and “Service Credit” sections . member should also submit a Designation of Benefi- risk of becoming, victims of identity theft . Additional When enrollment processing is complete, you and your ciary through MBOS . Your SPRS membership number information is available in the Identity Theft and Your employer will receive a Certification of Payroll Deduc- is required and is included in the confirmation of your Benefits Fact Sheet . tions showing the date deductions will begin, your rate online enrollment . Member Contribution Rate of contribution, and any back deductions due . Note: The new member’s estate is the beneficiary on The SPRS member contribution rate is nine percent You may wish to keep the Certification of Payroll De- record until the NJDPB receives a properly completed of base salary . The SPRS contribution rate also de- ductions on file with your other important papers as a designation . termines the minimum repayment amount for pension record of your enrollment in the retirement system . For your protection, beneficiary designations cannot loans or for the cost of a purchase of service credit if it be accepted or confirmed over the telephone or by is certified after the date of the rate change .

Page 7 July 2021 SPRS Member Guidebook State Police Retirement System

Pensionable Salary — Your contribution rate is ap- from another tax-deferred plan . See the “Rollover for • You meet the eligibility requirements of the new re- plied to your base salary to determine your pension Purchase Payment” section . tirement system; and deductions . Base salary means the annual compensa- • You apply for the Interfund Transfer within 30 days TRANSFERS tion of the member in accordance with the established of the date you meet the eligibility requirements of salary policies of the New Jersey State Police . Interfund Transfer the new retirement system . Base salary for contribution purposes does not include An Interfund Transfer is the transfer of your account If eligible, in order to transfer your membership ac- overtime, bonuses, maintenance, or money a member from a SPRS employer to employment covered by a count, an Enrollment Application for the new retirement receives as an adjustment before retirement; see the different New Jersey State-administered retirement system and an Application for Interfund Transfer should “Final Compensation” section . Your pension contribu- system, or vice versa . be submitted by your employer to the NJDPB . Applica- tions are deducted from your salary and reported to the tions must be received within 30 days of the date you If you are transferring your membership account from NJDPB by your employer . meet the eligibility requirements of the new retirement another New Jersey State-administered retirement sys- • The SPRS contribution rate for Tier 1 members system . tem, an Enrollment Application and an Application for is applied to the full pensionable salary (up to the Interfund Transfer should be submitted by your employ- If there has been a break in service of more than two federal pensionable maximum described later in er to the NJDPB . Applications must be received within consecutive years since your last pension contribution this section) . 30 days of the date you meet the eligibility requirements — or if you have withdrawn your account — you can- • The SPRS contribution rate for Tier 2 members is of the new retirement system . not transfer your prior SPRS contributions and service applied to the pensionable salary up to a compen- credit to the new retirement system . You will be enrolled Note: Only service rendered as a member of the SPRS, sation limit based on the annual maximum wage for in a new account with the new retirement system . Your or credited as equivalent to SPRS service, may be Social Security deductions . Tier 2 members who new employer should file anEnrollment Application for used to satisfy the minimum creditable service require- earn in excess of the annual compensation limit the new retirement system with the NJDPB . ments for retirement . Service transferred from another will be enrolled in the Defined Contribution Retire- New Jersey State-administered retirement system on ment Program (DCRP) in addition to the SPRS . A SERVICE CREDIT or after October 22, 2019, will be considered equivalent contribution of 5 5. percent of the salary in excess Since your retirement benefits are based in part on ac- to SPRS service upon payment of the required rate dif- of the limit (plus three percent from the employer) cumulated service credit, it is important that you receive ferential between the former pension system and the will be forwarded to a DCRP account (see the “De- the correct amount of credit for the amount of time you SPRS . See the “Service under Other Retirement Sys- fined Contribution Retirement Program” section) . work . You receive one pay period of service credit for tems” section for uses of service credit transferred from each pay period a full pension contribution is made . Federal Pensionable Maximum — Since the SPRS other retirement systems prior to October 22, 2019 . is a qualified pension plan under the provisions of the Service credit established under another State-admin- If you terminate your current SPRS-covered position Internal Revenue Code (IRC), Section 401(a)(17), the istered, defined benefit retirement system such as the and accept a position covered by a different New Jer- current federal ceiling on pensionable compensation Police and Firemen’s Retirement System (PFRS) or the sey State-administered retirement system, you may applies to the base salaries of SPRS members . Public Employees’ Retirement System (PERS) may be transfer your contributions and service credit to the new purchased or transferred for credit in the SPRS . Tax Deferral — Since January 1987, all mandatory retirement system provided: pension contributions to the SPRS have been feder- • Service purchased or transferred from another • You have not withdrawn your membership (see the ally tax deferred . Under the 414(h) provisions of the New Jersey State-administered retirement system “Withdrawal from the Retirement System” section) IRC, this reduces your gross wages subject to federal on or after October 22, 2019, will be equivalent to or retired from the SPRS; income tax . Purchases of service credit are voluntary SPRS . and are not tax deferred unless funded by a rollover • It has not been more than two consecutive years • Service purchased or transferred from another since your last pension contribution; New Jersey State-administered retirement system

SPRS Member Guidebook July 2021 Page 8 State Police Retirement System

prior to October 22, 2019, is not equivalent to reg- credit provisions available to SPRS members . For addi- ular SPRS service, and cannot be used to qualify tional information, see the USERRA — Military Service for a Service or Special Retirement . It can be used, After Enrollment Fact Sheet . however, in the computation of a retirement allow- ance on the basis of one percent of Final Compen- VESTING sation for each year of such service credit . You are vested in the SPRS after you have attained Note: Only service rendered as a member of the State 10 years of service credit . Being vested in the SPRS Police may be used to satisfy the minimum creditable means that you are guaranteed* the right to receive a service requirements for a Disability Retirement . retirement benefit when you reach age 55 . See the “Service under Other Pension Systems” sec- • If you are vested and terminate your employment, tion for more information . you must file a retirement application prior to re- ceipt of any benefits for which you qualify (see the Credit For Military Service “Types of Retirement” section) or you may volun- After Enrollment tarily withdraw from the retirement system (see the “Withdrawal From The Retirement System” sec- The federal Uniformed Services Employment and Re- tion) . employment Rights Act of 1994 (USERRA) provides that a member who leaves employment to serve on ac- • If you are vested, terminate your employment tive duty is entitled to certain pension rights upon return without retiring or withdrawing, and return to to employment with the same employer . If the member SPRS-covered employment within two consecu- makes the pension contributions that would have been tive years of the last pension contribution, you may normally required upon return and within the specif- continue to make contributions to — and accrue ic time frames specified under USERRA, the military service in — the existing pension account . service will count for vesting, retirement eligibility, the • If you are vested, terminate your employment with- calculation of the retirement benefit, and, if applicable, out retiring or withdrawing, and return to SPRS- health benefits eligibility, as though the employee had covered employment two or more years after the not left . last pension contribution, you cannot resume con- When an employee returns from uniformed military tributions to the vested account . Instead you will be service to SPRS-covered employment, the employ- enrolled in a new SPRS account . er should notify the NJDPB no later than 30 days af- • If you are not vested and you terminate employ- ter the employee’s return by submitting a Request for ment before retiring, your options vary depending USERRA-Eligible Service form . Once notified, the on the nature of your termination and/or your age NJDPB will provide the employee with a quotation for at the time of your termination (see the “Terminat- the cost for purchasing the service credit . ing Employment” section) . There is a time-sensitive element to the USERRA pur- chase which differs from the other purchase of service

*Vesting provisions may not apply to SPRS members who are terminated for cause on charges of misconduct or delinquency (see the “Misconduct” section).

Page 9 July 2021 SPRS Member Guidebook Purchasing Service Credit State Police Retirement System

OVERVIEW • This service, if purchased on or after October 22, Military Service Before Enrollment Since your retirement allowance is based in part on the 2019, will be considered equivalent to SPRS ser- Members may be eligible to purchase service credit amount of service credit posted to your account at the vice upon making the required purchase payment . for up to 10 years of active service rendered prior to time of retirement, it may help you to purchase addi- • This service, if purchased prior to October 22, enrollment, provided the member is not receiving nor tional service credit if you are eligible to do so . Only ac- 2019, cannot be used to qualify for a Service or eligible to receive a military pension or a pension from tive members of the retirement systems are permitted Special Retirement . It can be used, however, in the any other state or local source for such military service . to purchase service credit . An active member is one computation of a retirement allowance on the ba- Active military service eligible for purchase means full- who has not retired or withdrawn, and who has made sis of one percent of Final Compensation for each time duty in the active military service of the United a contribution to the retirement system within two con- year of such service credit or to meet the 25-year States and includes full-time training duty, annual train- secutive years of the purchase request . In no case can requirement for retired health benefits coverage . ing duty, and attendance at a school designated as a you receive more than one year of service credit for any Note: The receipt of a public pension or retirement service school by law or by the secretary of the military calendar or fiscal year . benefit is expressly conditioned upon the rendering department concerned . It cannot include periods of of honorable service by a public officer or employee . service of less than 30 days . It does not include week- TYPES OF SERVICE ELIGIBLE FOR PURCHASE Therefore, the Board of Trustees shall disallow the pur- end drills, annual summer training of a national guard If a type of service is not listed below, it is not eligible chase of all or a portion of former service it deems to be or reserve unit, or time spent as a cadet or midshipman for purchase . dishonorable in accordance with N .J S. .A . 43:1-3 . at one of the military academies . Active military service that has been combined with re- Former Membership Service Leave of Absence Without Pay in the SPRS serve component service to qualify for a military pen- Members may be eligible to purchase service credit for sion as a reserve component member may be eligible This includes all service credited under a previous official leaves of absence without pay . The amount of for purchase . membership in the SPRS which has been terminated time eligible for purchase depends on the type of leave If you qualify as a veteran, you may be eligible to pur- after two consecutive years of inactivity in accordance that was taken . with statute; or following the withdrawal by the member chase an additional five years of military service . See of the contributions made under such membership . • Up to two years may be purchased for leaves taken the Veteran Status Fact Sheet . for personal illness . Former Membership Service • Up to three months may be purchased for leaves Military Service After Enrollment This includes all service credited under a previous taken for personal reasons . Under USERRA, members may receive credit for mili- tary service rendered after October 13, 1994 . However, membership in another New Jersey State-administered • Maternity leave is considered personal illness *. retirement system (i e. ,. PERS, PFRS, etc ). which has under N .J .A C. . 17:1-3 10,. USERRA-eligible service will been terminated after two consecutive years of inac- • Child care leave is considered personal reasons . only be used toward vesting, retirement eligibility, the tivity in accordance with statute; or following the with- A leave of absence without pay under a former mem- calculation of the retirement benefit and, if applicable, drawal by the member of the contributions made under bership in a New Jersey State-administered, defined health benefits eligibility, if the employee pays the re- such membership . benefit retirement system may be eligible for purchase . quired pension contributions that would have been re- quired if the employee had not left .

* A certification from a physician that a member was disabled due to pregnancy and a resulting disability for the period in excess of three months is required. Otherwise, three months is the maximum period of purchase for maternity.

Page 11 July 2021 SPRS Member Guidebook State Police Retirement System

Note: There is a time-sensitive element to this pur- any later purchase will be based upon your age and the SPRS Former chase . See the USERRA — Military Service After En- annual salary or highest fiscal year salary at the time of Membership; rollment Fact Sheet . your subsequent request to purchase . Former Membership COST AND PROCEDURES FOR Estimating the Cost of a Purchase under Military another State Military Service PURCHASING SERVICE CREDIT To estimate the cost of a purchase, multiply the high- System; Service after prior to The cost of a purchase is based on four factors: er of your current annual salary or highest fiscal year Leave of SPRS SPRS Age Absence Enrollment Enrollment • A purchase factor based on your nearest age at salary times the purchase factor corresponding to your 34 0 76016. .036963 .152032 the time the NJDPB receives your purchase appli- nearest age . The result is the cost of one year of ser- 35 0 77350. .037741 .154700 cation (see the “Purchase Rate Chart”); vice . Multiply this cost by the appropriate number of years being purchased . 36 .078913 .038623 .157826 • The higher of either your current annual salary or 37 .080704 .039609 .161408 highest fiscal year salary (July - June) posted to To calculate the purchase cost of Military Service be- your membership account; fore Enrollment the same procedure is used, except the 38 .082724 .040698 .165448 resulting cost is doubled . 39 .084973 .041892 169946. • The years and months of service being purchased; and SPRS Former 40 .087450 .043189 .174900 Membership; 41 .090109 .044591 180218. • The type of service purchased . Former Membership 42 .092926 .046096 185852. The cost of the purchase will rise with an increase in under Military 43 .095880 .047705 .191760 your age and/or salary . another State Military Service System; Service after prior to 44 .098957 .049419 .197914 The cost of purchasing service is borne by both you Leave of SPRS SPRS 45 .102150 .052781 .204300 and your employer with the important exception of Mil- Age Absence Enrollment Enrollment 46 .105461 .052348 .210922 itary Service before Enrollment where statute specifi- 21 .075000 .034000 150000. cally provides that the employer will not be liable for any 47 .108902 .051896 .217804 22 .075000 .034000 150000. costs of the purchase . If you purchase Military Service 48 112501. .051424 .225002 23 .075000 .034000 150000. before Enrollment, you are responsible for the full cost; 49 116298. .050934 .232596 therefore, the cost quoted to you for purchasing this 24 .075000 .034000 150000. 50 .120350 .120350 .240700 type of service will be twice the cost for other types of 25 .075000 .034000 150000. 51 .120798 .120798 .241596 purchase . 26 .075000 .034000 150000. 52 .121323 .121323 .242646 Purchases of service credit are voluntary pension con- 27 .075000 .034428 150000. 53 .121923 .121923 .243846 tributions and are not tax deferred unless funded by a 28 .075000 .034478 150000. rollover from another tax-deferred plan . See the “Roll- 54 .122600 .122600 .245200 29 .075000 .034633 150000. over for Purchase Payment” section . 55 .123353 .123353 .246706 30 .075000 .034891 150000. Note: The cost of purchasing Military Service after Enroll- Partial Purchases 31 .075000 .035253 150000. ment under USERRA is based on the required pension You may purchase all or part of any eligible service . If 32 .075000 .035719 150000. contributions for the period of military service . you make a partial purchase, you may purchase any 33 .075000 .036289 150000. remaining eligible service at a later date . The cost of

SPRS Member Guidebook July 2021 Page 12 State Police Retirement System

Example: Member, age 36, earning $60,000 a year, • By having extra payroll deductions withheld from If you return from an approved leave of absence after wishes to purchase 18 months Leave of Absence Ser- your pay . The minimum deduction is equal to one- two years, you may request that the original purchase vice: Purchase Factor = 0.078913 half of your normal rate of contribution to the retire- be resumed . The purchase will be recalculated to in- ment system over a maximum period of 10 years Purchase Factor x Annual Salary x Time Being Pur- clude additional regular interest accrued between two and includes interest at the assumed rate of return chased = Purchase Cost years after the date of the last installment payment and of the retirement system; the date the purchase is resumed . 0.078913 x $60,000 x 1.5 years = $7,102.17 • With a direct rollover or trustee-to-trustee transfer Rollover for Purchase Payment APPLYING TO PURCHASE SERVICE CREDIT of tax-deferred funds from a qualified retirement plan (see the “Rollover for Purchase Payment” Members may pay for all or part of a purchase by trans- All purchase requests must be submitted using the Pur- section); or ferring or rolling over tax-deferred funds from an eligi- chase Application through MBOS . ble or qualified retirement savings plan . • By paying a single down payment and having the Exception to the MBOS Purchase Application remainder paid through payroll deductions . The types of plans from which a transfer or rollover can be made are: Members applying for the purchase of Military Service If you retire before completing a purchase, you may after Enrollment under the provisions of USERRA must choose to receive prorated credit for the amount of • 401(a) qualified plan (including 401(k) plan) submit the Request for USERRA-Eligible Service form service you have paid for, or you can pay the balance and 403(a) qualified annuity; within the time frames required under the law . See at the time of retirement to receive full credit . See the • 403(b) – Tax-Sheltered Annuity Plan; the USERRA — Military Service After Enrollment Fact “Unsatisfied Balances” section . Sheet . • 457(b) – State and Local Government Deferred A member who authorizes a purchase of service credit Compensation Plan; Upon receipt of your MBOS Purchase Application — through payroll deductions may cancel those deduc- • IRA – With tax-deferred funds: and any required supporting documentation — a quo- tions at any time . No refunds will be made of any lump- tation of cost will be calculated provided that all pur- sum payments, partial payments, or installment pay- – Traditional IRA; chase eligibility criteria are met . Processing times vary ments . The member will receive prorated service credit – SIMPLE IRA (must have been open for two and a purchase request cannot be completed until the for the service purchased to the date installment pay- or more years); NJDPB receives all required verification of eligibility . ments cease . Any subsequent requests to purchase – Simplified Employee Pension (SEP) Plan; After the NJDPB verifies employment, you will receive the remaining service credit shall be based on the laws a Purchase Cost Quotation Letter indicating the cost of and rules in effect on the date that the subsequent re- – Conduit IRA; and quest is received in the NJDPB . . any service approved for purchase . You must respond – Rollover IRA . to the quotation letter within the specified time period . If you have an outstanding arrears obligation for the Note: The NJDPB cannot accept rollovers from a Roth purchase of additional service credit, interest may be When you agree to purchase a certain amount of ser- IRA or a Coverdell Education Savings Account (former- assessed if there is a lapse of two years or more in vice credit, the NJDPB assumes that you will complete ly known as an Education IRA) . the purchase and credits your account with the entire payments toward the purchase . Additional information on requesting a transfer or roll- amount of service, even if you are paying the cost If you have not made installment payments for the pur- over of tax-deferred funds for the purchase of service through payroll deductions . Any estimates of retirement chase of additional service credit for two years, your credit is included in the Purchase Cost Quotation Letter allowance you receive are based on the full amount of purchase will be canceled . You will receive pro rata you receive upon the NJDPB’s determination of your credit you agreed to purchase . credit for the service purchased to the date that the in- eligibility to purchase service . You may pay the cost of purchasing service credit: stallment payments ceased . • In one lump-sum payment;

Page 13 July 2021 SPRS Member Guidebook Loans State Police Retirement System

OVERVIEW • Electronic Fund Transmittal (EFT/Direct De- payment amount of a loan will be similar whether posit) is Required — All loans are disbursed by you borrow $500 or $5,000; however, the repay- If you are an active contributing member of the SPRS, Electronic Fund Transmittal (EFT) . You must have ment of a larger loan will continue for a longer pe- you may be eligible to borrow from your account twice a valid bank routing number and account num- riod of time than for a smaller loan . per calendar year . You may borrow up to one-half of ber when submitting a Loan Application through your posted pension contributions or a maximum loan Loan repayments will increase to more than the MBOS . Paper loan checks are no longer produced balance of $50,000, whichever is less . minimum deduction if the entire loan balance can- under any circumstance . not be paid within the five-year requirement, or if Loans are governed by the following conditions: • Interest Rate — Interest is charged on the de- you have an outstanding loan and take another • Service Credit — You must have three years of clining balance of the loan at a commercially rea- loan . pension service credit posted to your retirement sonable rate set annually by the New Jersey State If you have an outstanding loan balance and take system account . Pension contributions are posted Treasurer . The current interest rate is posted on another loan, the Internal Revenue Service (IRS) to your account on a quarterly basis . It normally the NJDPB website . requires that the new combined loan balance must takes 45 days after the end of a quarter for your When you borrow, you will have the same inter- be repaid within five years of the date of the first contributions to be posted to your account . For ex- est rate for the life of your loan unless you borrow loan . This means that the repayment amount may ample, if you enrolled in the retirement system on again in a different calendar year when the interest be substantially higher to ensure full repayment February 1, 2015, you would not have three years rate is different . Every time you borrow, the entire of the total loan balance within five years of the posted to your account until May of 2018, when we outstanding balance is re-certified at the current issuance of the original loan . Furthermore, the re- update the quarter in which you will attain three year’s interest rate . quested loan amount may be reduced or rejected years . if the payroll deductions required to repay the loan The interest rate is determined using the Prime • Number of Loans Per Year — You may borrow would exceed the 25 percent of salary restriction in Rate as of December 1st of the previous year plus twice in any calendar year . This is determined by State law . See the “Internal Revenue Service Re- 2 .5 percent . the date of the disbursement, not the date of the quirements” section . request . For example, if you make a request for a • Administrative Fee — An administrative process- If you are not satisfied with your loan amount or the loan on December 24th, but the disbursement date ing fee applies to all pension loans . The adminis- repayment schedule after your loan is disbursed, is January 5th, the loan is considered your first for trative processing fee is set annually and is based you can request a repayment figure for the loan the new year . on the actual costs associated with administering balance, plus any accrued interest prior to the end the pension loan program . The current administra- • Loan Amount — The minimum amount you may of the regular repayment schedule . tive processing fee is posted on the NJDPB web- borrow is $50, and loan amounts then increase in site . increments of $10 . APPLYING FOR A LOAN • Loan Repayment — Loans must be repaid with- The maximum you may borrow is 50 percent of All pension loan requests must be submitted using the in five years . The minimum deduction toward the your contributions that are posted to your account, Loan Application available through MBOS, and you repayment of a loan is equal to the pension con- up to a maximum loan balance of $50,000, which- must provide a valid bank routing number and account tribution rate (see the “Member Contribution Rate” ever is less, when added to the highest balance of number . Once you apply, you receive immediate con- section) . The maximum allowable deduction at the any loan in the last 12 months . firmation that your loan application has been received . time of application toward the repayment of your Once the loan application is submitted, a pension loan You may learn the amount you may borrow — and loan is 25 percent of your base salary . cannot be canceled . see different loan amount and repayment combi- Provided that the minimum loan repayment amount nations — by using the online Loan Application on will repay the loan balance within five years, the re- MBOS .

Page 15 July 2021 SPRS Member Guidebook State Police Retirement System

Exceptions to the MBOS Loan Application You may request a lump-sum payoff by calling the percent of base salary restriction on loan repayments . While most members are required to process loan NJDPB Office of Client Services at (609) 292-7524 . You The IRS regulations also require members to make requests through MBOS, some members may not be may request a lump-sum payoff through your MBOS timely payments toward outstanding loan balances . able to access the Loan Application for one of the fol- account by using the Letters and Statements applica- While it is your employer’s responsibility to withhold lowing reasons: tion and selecting the “Loan Payoff” option . The Loan loan deductions from your salary, if you are out of work Payoff Letter will indicate the lump-sum payoff amount, without pay, your employer has no salary from which • Employees applying for a loan within six months of the date by which the payment must be received, and to take deductions . Members who leave payroll with returning from a leave of absence; the date on which scheduled loan repayments from an outstanding loan balance will be notified after three • Employees applying for a loan within six months payroll will end . months of nonpayment and offered the option of paying of transferring to a new employer within the same off the entire loan balance or making loan repayments Loans at Retirement, Death, or retirement system, or between different retirement through personal billing . It is the member’s responsi- Termination of Employment systems; or bility to ensure that the loan balance, plus interest, is • State employees paid on a supplemental payroll If you retire before repaying the outstanding balance paid in full . of your loan, your loan payments will be carried into re- schedule . Failure to repay the loan as scheduled, either through tirement . The monthly loan payment will be calculated lump-sum payment, personal billing, or return to pay- In these cases your employer must complete a Certi- to have the loan plus interest satisfied by your five-year roll, will result in the unpaid loan balance being de- fied Loan Request to verify your salary and/or certify end date . You may also repay your outstanding loan clared in default . If a loan is in default, the loan balance that you are actively employed . balance in one lump sum prior to retirement . is declared a deemed distribution and will be reported • If your employer was late in submitting the Report If you die before repaying your loan, either before or af- to the IRS as taxable income . For the tax year in which of Contributions for the quarterly posting, you may ter retirement, the outstanding balance will be deduct- the default occurs, the NJDPB will send you a Form still be able to borrow; however, your employer ed from the proceeds of any benefits to be paid to your 1099-R for tax filing purposes . You will be required to must complete a Certified Loan Request to veri- beneficiaries . include the portion of the loan representing before-tax fy your salary and active pay status, and you may contributions as income on your federal return . In ad- only borrow based on the prior quarter’s posted If you terminate employment and withdraw your contri- dition, if you are under age 59 1/2, you will be required pension contributions . butions before repaying your loan, all your contributions less the loan balance will be returned to you . See the to pay an additional 10 percent tax for taking an early • If you have established a security freeze on your “Internal Revenue Service Requirements” section . pension distribution . pension account due to identity theft you cannot If you default on your loan, it will be your responsibil- access MBOS and must contact the NJDPB Iden- INTERNAL REVENUE SERVICE (IRS) ity to make an estimated tax payment to the IRS to tity Theft Coordinator to request a loan (for more REQUIREMENTS cover your tax liability on the deemed distribution; no information see the Identity Theft and Your Bene- IRC Section 72(p) requires that loan balances cannot withholding will be deducted from your account by the fits Fact Sheet) . exceed $50,000 and must be repaid within five years . NJDPB . If you take any subsequent loans and your original Early Loan Repayment Note: Paying taxes on a defaulted loan balance does loan balance is not completely paid off, the repayment not negate the balance . You are still responsible for You may request a repayment figure for your full loan period will remain five years from the date of the first paying the loan balance and any interest that accrues balance any time prior to the end of your regular re- loan . The repayment rules on subsequent loans may on it within the remaining period left in the original five- payment schedule . Only a lump-sum payoff of your full result in either a substantial increase in your repayment year schedule . Any repayments will be returned to your loan balance is permitted — partial payments are not amount, or may limit the amount that you can borrow if account as after-tax contributions . allowed . the payroll deductions to repay the loan exceeds the 25

SPRS Member Guidebook July 2021 Page 16 State Police Retirement System

You may not take another loan until the deemed distri- bution is paid in full . A deemed distribution cannot be canceled by resuming your loan payments or repaying the loan in full prior to the end of the tax year in which the default occurs . If you resume your loan repayments after the default, the payments received will be posted to your account as previously taxed contributions that will increase the nontaxable portion of your pension at retirement . Unlike a normal pension distribution, a loan treated as a distribution cannot be rolled over to an IRA or other qualified retirement plan .

Page 17 July 2021 SPRS Member Guidebook Supplementing Your Pension State Police Retirement System

OVERVIEW Pensions & Benefits, Supplemental Annuity Collective In addition to your regular pension contributions, there Trust, P O. . Box 295, Trenton, NJ 08625-0295 . are other opportunities to supplement your retirement Defined Contribution Retirement Program (DCRP) income and possibly set aside money on a tax-deferred basis . The DCRP was expanded to include the SPRS under the provisions of N .J .S .A . 53:5A-3 . The DCRP provides New Jersey State Employees eligible members with a tax-sheltered, defined contri- Deferred Compensation Plan (NJSEDCP) bution retirement benefit, along with life insurance and You may be eligible for the NJSEDCP (IRC Section disability coverage . 457), also known as Deferred Comp . Contributions to Individuals eligible for membership in the DCRP in- the plan are not subject to federal income tax until you clude Tier 2 SPRS members who earn salary in excess take a distribution from the plan, either at retirement or of established maximum compensation limits, see the termination before retirement . The main benefits of the Defined Contribution Retirement Program (DCRP) for plan are to help you save on federal income tax now PERS, TPAF, PFRS, and SPRS Members Fact Sheet . and to supplement your retirement income through in- The DCRP is administered for the NJDPB by Prudential vestments . Financial . Prudential provides DCRP information, in- For plan and investment information, visit the cluding investment and distribution options, on its New NJSEDCP website at: www.prudential.com/njsedcp Jersey Defined Contribution Program website . or call 1-866-NJSEDCP (1-866-657-3327) . Other infor- Employers and members can contact Prudential Finan- mation about the plan is available by writing to: New cial by telephone through Prudential’s toll-free number Jersey Division of Pensions & Benefits, New Jersey 1-866-653-2771 . State Employees Deferred Compensation Plan, P O. . Box 295, Trenton, NJ 08625-0295 . In certain circumstances, an eligible employee can vol- untarily waive participation in the DCRP by submitting a Supplemental Annuity Collective Trust (SACT) DCRP Waiver of Retirement Program Participation form The SACT is a voluntary investment program that pro- to the NJDPB . vides retirement income separate from, and in addition Additional information about DCRP enrollment, contri- to, your basic pension plan . Your contributions are in- bution rates, plan benefits, and waivers can be found in vested conservatively in the stock market . The SACT the Defined Contribution Retirement Program (DCRP) Regular Plan is available to all actively contributing for PERS, TPAF, PFRS, and SPRS Members Fact members of a New Jersey State-administered retire- Sheet, which is available on the NJDPB website . ment system . Contributions to this plan are made after deductions for federal income tax . SACT brochures and enrollment packets are available on the NJDPB website . You can also contact the SACT office by calling (609) 292-7524 or by writing to: New Jersey Division of

Page 19 July 2021 SPRS Member Guidebook Retirements State Police Retirement System

OVERVIEW tober 22, 2019, it will be considered equivalent to SPRS of the month after you attain age 55 . You must file an service upon payment of the required contributions application for retirement to receive a Deferred Retire- Mandatory Retirement to the SPRS . If you transferred or purchased service ment when you terminate covered employment or any Retirement from the State Police is mandatory upon credit from another New Jersey State-administered re- time prior to attaining your Deferred Retirement age . reaching age 55 . If you do not file an application for tirement system prior to October 22, 2019, such service If you are terminated for cause, you may not be eligi- retirement before your mandatory retirement date, you credit may be applied to your retirement allowance as ble to receive Deferred Retirement benefits . The SPRS will be automatically retired by the Board of Trustees an additional one percent of Final Compensation for Board of Trustees will make that determination at the on a Service Retirement, effective the first day of the each year of service credit up to the limits specified or time you file your application . month immediately following your 55th birthday . Even to meet the 25-year requirement for State-paid health At any time before your Deferred Retirement becomes though the Board of Trustees has retired you, you can- benefits coverage in retirement . effective, you may change your mind and apply for a not begin receiving benefits until you have filed a retire- lump-sum withdrawal of all your pension contributions . TYPES OF RETIREMENT ment application with the NJDPB through MBOS . However, once you cancel your Deferred Retirement There are several types of retirement for which you may and withdraw your contributions, all the rights and privi- Retirement Calculation Definitions qualify . leges of membership in the retirement system end . Years of Service — means the years and months of The IRS will impose a 50 percent excise tax on ac- membership service you have credited to your SPRS Service Retirement counts of members who terminate employment but do account . This type of retirement is available at any age when not retire or withdraw contributions by April 1 following you complete 20 years of creditable SPRS service . The Final Compensation — for a SPRS Tier 1 member, the calendar year in which they turn age 70 1/2 (if born amount of your annual retirement allowance is equal to Final Compensation means the salary upon which pen- before July 1, 1949) or age 72 (if born on or after July 50 percent of your Final Compensation . sion contributions were based in the last 12 months of 1, 1949) . creditable service preceding retirement . Special Retirement Please note the following important information about For a SPRS Tier 2 member, Final Compensation means This type of retirement is available at any age to mem- your life insurance, health care coverage, loans, and the average salary upon which pension contributions bers who have 25 years or more of SPRS service cred- purchase arrears if you are considering a Deferred Re- were based for any three fiscal years (July-June) of it . The amount of your annual retirement allowance is tirement: membership that provides the largest possible benefit . equal to 65 percent of your Final Compensation plus • Life Insurance — Your group life insurance cover- For all SPRS members, Final Compensation includes one percent for each year of creditable service over age is not in effect between the time you terminate the value of the maintenance allowance for the same 25 years, up to a maximum allowance of 70 percent of employment and when your Deferred Retirement period . your Final Compensation . becomes effective . If you die before your Deferred Service under other Retirement Systems — Gener- Retirement becomes effective, the beneficiary on Deferred Retirement ally, only SPRS service may be used to satisfy the min- your retirement application will receive a return of imum creditable service requirements of the retirement This type of retirement is available to SPRS members your contributions, unless a subsequent Designa- types described below . This includes the creditable with at least 10* years of service credit and are not yet tion of Beneficiary form is filed . There is no other service of members appointed to the Division of State 55 years of age when they terminate employment . The death benefit under these circumstances . For in- Police under N J. S. A. . 53:5A-5(c-d) . If you transferred annual retirement allowance is two percent of Final formation about converting your group life insur- or purchased service credit from another New Jersey Compensation for each year of service up to 25 years . ance to an individual policy at termination, see the Conversion of Group Life Insurance Fact Sheet, State-administered retirement system, on or after Oc- The effective date of a Deferred Retirement is the first which is available on the NJDPB website .

* Vesting provisions may not apply to SPRS members who are terminated for cause on charges of misconduct or delinquency. See the “Misconduct” section.

Page 21 July 2021 SPRS Member Guidebook State Police Retirement System

• Health Benefits — You will not be able to contin- also mean that the member was on an approved Note: Your employer also has the right to apply for an ue coverage under the SHBP retired group if you leave of absence, paid or unpaid, or suspension, Ordinary Disability Retirement on your behalf — either apply for Deferred Retirement . However, you are paid or unpaid, at the time of filing the application . with your consent or on an involuntary basis . See the entitled to continue coverage in the SHBP employ- If the member had pending litigation for wrongful “Involuntary Disability Retirement” section . termination filed against the employer, the member ee group for up to 18 months after termination of The application review process requires information has 30 days from the date the litigation is resolved employment in accordance with the Consolidat- from your physicians and a release of health informa- to file for Disability Retirement in order to be con- ed Omnibus Budget Reconciliation Act of 1985 tion related to your disability . The process also requires sidered a member in service; (COBRA) laws . If your retirement allowance be- corroboration of your condition by at least two medical comes due and payable during the 18 months of • Be under age 55 and have four or more years of sources . The more complete the application and sup- extended COBRA coverage, you will qualify for service credit as a State Trooper; porting information, the faster it can be evaluated, al- coverage in the SHBP retired group . In this case, though the process may take six months or more . you must contact the NJDPB and request a health • Be considered totally and permanently disabled benefits offering letter within 60 days of your eligi- (you must prove that you are physically or men- It is the applicant’s responsibility to arrange for all phy- bility for the SHBP retired group coverage . tally incapacitated from performing your normal or sicians’ statements, hospital records, and other health assigned job duties or any other position your em- information to be sent to the NJDPB . • Loans — If you terminate employment, failure to ployer may assign); repay a pension loan as scheduled may result in Once the Board of Trustees approves a member for a the unpaid loan balance being declared a taxable • Be disabled at the time you separated from service Disability Retirement, the member’s retirement applica- distribution that will be reported to the IRS . See the as a result of the alleged disability that renders you tion cannot be withdrawn, canceled, or amended . totally disabled; and “Internal Revenue Service (IRS) Requirements” Approval for Workers’ Compensation or Social Security section for more information about the IRS regula- • Submit any and all medical reports or corroborat- disability benefits has no bearing on your application tions regarding the repayment of pension loans . ing evidence on file that supports your disability for an Ordinary Disability Retirement . However, if you • Purchase Arrears — If you have not made in- within six months, or your application will be can- are approved for Ordinary Disability Retirement bene- stallment payments for the purchase of additional celed and you must refile . fits and receive a Workers’ Compensation award, your service credit for two years, your purchase will be Note: If the medical documentation supplied by Workers’ Compensation award may be reduced by the canceled . You will receive pro rata credit for the you is not sufficient to support your claim of disabil- amount of your Ordinary Disability Retirement benefit . service purchased to the date that the installment ity, the NJDPB may require you to be examined by If you have any questions concerning this issue, please payments ceased . See the “Applying to Purchase physicians selected by the retirement system . The contact the Division of Workers’ Compensation at (609) Service Credit” section for more information . examination will be scheduled at no cost to you by 292-2515 or send email to: [email protected] the NJDPB . All medical information is confidential Accidental Disability Retirement Ordinary Disability Retirement and only for use by the SPRS Board of Trustees in The processing of Ordinary Disability Retirement nor- evaluating your application . The processing of Accidental Disability Retirement benefits normally takes six to eight months . To qualify mally takes three to five months . To qualify for Ordinary If you are approved for an Ordinary Disability Retire- for Accidental Disability Retirement benefits you must: Disability Retirement you must: ment, the annual benefit calculation is equal to 40 per- • Be a member in service at the time the applica- cent of your Final Compensation or 1 .5 percent of your • Be a member in service at the time the application tion is filed with the NJDPB . Member in service Final Compensation for each year of service credit, is filed with the NJDPB (see “Ordinary Disability means that the member or employer was making whichever is higher . Retirement” for definition of “member in service”); pension contributions to the retirement system at The application process begins by filing a Retirement • Be considered totally and permanently disabled the time of filing a Retirement Application. It may Application with the NJDPB through MBOS . (you must prove that you are physically or men-

SPRS Member Guidebook July 2021 Page 22 State Police Retirement System

tally incapacitated from performing your normal or pacitation from performing his or her usual or any Approval for Workers’ Compensation or Social Secu- assigned job duties or any other position your em- other duty . rity Disability benefits has no bearing on your applica- ployer may assign) as a “direct result of a traumatic Note: When there is an issue of mental incapacity, tion for Accidental Disability Retirement . However, if event” (see definition), that happened during and the member must also establish that the event that you receive periodic Workers’ Compensation benefits as a direct result of carrying out your regular or forms the basis for an Accidental Disability was while receiving an Accidental Disability Retirement, the assigned job duties; objectively capable of causing a reasonable per- pension portion of your retirement allowance will be re- • Be an active member of the SPRS on the date of son in similar circumstances to suffer a disabling duced dollar for dollar by the amount of the periodic the traumatic event; mental injury, based on a finding that the disability benefits . resulted from “direct personal experience of a ter- • File an Application for Disability Retirement through If you apply for Accidental Disability Retirement and are rifying or horror-inducing event that involves actual MBOS within five years of the date of the traumatic found by the Board of Trustees to be totally and perma- or threatened death or serious injury, or a similarly event; nently disabled but not as a result of a traumatic event, serious threat to the physical integrity of the mem- you may be approved for an Ordinary Disability Retire- • Submit all accident reports, witness reports, and ber or another person ”. ment if you have at least four years of SPRS service . corroborating evidence on file for all accidents for You may only file for one type of Disability Retirement, which you are filing within six months; Accidental Disability for either Accidental or Ordinary Disability . The applica- World Trade Center Responders • Be examined by physicians selected by the retire- tion process begins by filing a Retirement Application ment system . The examination will be scheduled at with the NJDPB through MBOS . The application review P L. . 2019, c . 157 (Chapter 157), the Bill Ricci World no cost to you by the NJDPB . All medical informa- process requires information from your physicians, in- Trade Center Rescue, Recovery, and Cleanup Opera- tion is kept confidential and used only by the SPRS formation from your employer with questions regarding tions Act, permits current SPRS members to file for an Board of Trustees in reviewing your claim; and the traumatic event, and a release of health information Accidental Disability Retirement benefit if the member • Be disabled at the time you separated from service related to your disability . The more complete the appli- is or is to become totally and permanently disabled due as a result of a disability that renders you totally cation and supporting information, the faster it can be to participation in the rescue, recovery, or cleanup op- disabled . evaluated, although the process may take six months erations at the World Trade Center . or more . “Direct Result of a Traumatic Event” has been defined For more information, please refer to the Accidental by the courts as an occurrence that: Note: Your employer has the right to apply for an Invol- Disability Retirement Under Chapter 157 Fact Sheet . untary Accidental Disability Retirement on your behalf . • Is identifiable as to time and place; Involuntary Disability Retirement See the “Involuntary Disability Retirement” section . • Is undesigned and unexpected; Your employer has the right to apply for an Involuntary If you are approved for Accidental Disability Retire- Disability Retirement on your behalf provided that you • Is caused by a circumstance external to the mem- ment, your annual retirement allowance will be two- meet the qualifications for a Disability Retirement . ber (not the result of pre-existing disease that is thirds of your Final Compensation . aggravated or accelerated by the work); • If you are required to retire upon application by the It is the applicant’s responsibility to arrange for all phy- employer and have at least four years of service as • Occurred during and as a result of the member’s sicians’ statements and hospital records to be sent to a State Trooper, but less than 20 years, you will re- regular or assigned duties; the NJDPB . ceive an Ordinary Disability retirement allowance • Was not the result of the member’s willful negli- Once the Board of Trustees approves a member for a of 40 percent of Final Compensation or 1 .5 percent gence; and Disability Retirement, the member’s retirement applica- of Final Compensation for each year of SPRS ser- • Results in the member’s permanent and total inca- tion cannot be withdrawn, canceled, or amended . vice, whichever is higher .

Page 23 July 2021 SPRS Member Guidebook State Police Retirement System

• If you are required to retire upon application by but four to six months advance filing is recommended . group life insurance policy . Under no circumstances can a retirement become ef- the employer and have 20 or more years of SPRS To protect your conversion privilege it is suggested that fective prior to the date the application is received by service, you will receive an allowance equal to 50 you apply for conversion of your insurance at the time the NJDPB . percent of Final Compensation plus an additional you file your retirement application with the NJDPB . three percent of Final Compensation for every year • If you have not furnished proof of your age to the However, you cannot file to convert your life insurance of SPRS service over 20 up to a maximum of 25 NJDPB, you must do so when applying for retire- any earlier than six months prior to your retirement date . years . ment (see the “Proof of Age” section) . If any proof See the “Conversion of Group Life Insurance” section of age documents are given under a maiden name, • If you meet the qualifications for an Accidental Dis- and the Conversion of Group Life Insurance Fact Sheet please identify them as such . Send photocopies of ability Retirement and are required to retire upon for details . application by the employer, you will receive an any proof of age documents, as we cannot guar- Accidental Disability Retirement allowance of two- antee that original documents will be returned . Other Retirement Plans — If you participate in the fol- thirds of your Final Compensation . Please also be sure to write your pension mem- lowing retirement savings plans, you must inform them bership number or the last four digits of your So- separately of your retirement: Note: The member cannot change the date of retire- cial Security number on all documentation that you ment under an Involuntary Disability Retirement . • Contact the NJSEDCP at 1-866-NJSEDCP . submit . Your retirement application will not be pro- • Contact the SACT at (609) 292-7524 . THE RETIREMENT PROCESS cessed until the NJDPB receives copies of birth date evidence . • Contact the DCRP at 1-866-653-2771 . The time frames in this section serve as a guide to help you understand the retirement process . Actual • Ask your employer to submit a Certification of Ser- Approximately 3 Months Before Retirement processing times, however, may vary and cannot begin vice and Final Salary to the NJDPB . Your employer Health Benefits Coverage at Retirement — To see until the NJDPB receives all the necessary information will also receive an email from the NJDPB request- if you qualify for retired coverage under the SHBP, see and forms from both you and your employer . ing this certification . the Summary Program Description and the Health Ben- • It is the applicant’s responsibility to ensure that all 6-8 Months Before Retirement efits Coverage — Enrolling as a Retiree Fact Sheet . If required forms — except for the employer certifica- you do not qualify for retired SHBP coverage, see your When planning for a successful retirement, it is import- tion — are submitted to the NJDPB within 90 days employer to explore other options that may be available ant to give yourself enough time to review your benefits . of the NJDPB’s receipt of your retirement applica- for continuing your health coverage You should inquire about retirement at least six months tion . Otherwise, the retirement application will be before your retirement date . canceled and you will need to submit another ap- Approximately 1 Month Before Retirement plication for a future retirement date . 4-6 Months Before Retirement Board Approval — Your retirement will be presented When your application is received by the NJDPB, you to the SPRS Board of Trustees for approval . Retirement Applications — It is your responsibility to will receive email confirmation of its receipt . You will • You will receive a letter from the Board of Trustees . file a retirement application with the NJDPB . also be sent a letter acknowledging receipt of your re- You have 30 days from the Board approval date tirement application . All retirement applications must be submitted online or your effective retirement date (whichever is lat- using MBOS . MBOS provides fast, efficient processing Life Insurance — The amount of your life insurance er) to request a change to your retirement date . If of your retirement application . coverage through the SPRS decreases at retirement you wish to make a change after Board approval, All retirements are effective on the first of a month . You or terminates if you have less than 10 years of service your new selection must again be approved by the can submit your retirement application no more than credit . You may convert the dollar difference between Board of Trustees . This may delay your first retire- one year before your retirement date — and as late as the group coverage you had before retirement and the ment check . the last business day prior to your retirement date — group coverage you will have after retirement to a non-

SPRS Member Guidebook July 2021 Page 24 State Police Retirement System

• You may choose to cancel your retirement within of service credit, the NJDPB assumes that the obli- date, or 30 days following approval of your retirement 30 days of your retirement date or Board approval gation will be paid before your retirement . Therefore, by the SPRS Board of Trustees, whichever is later . date — whichever is later (see the “After Your Re- your account is credited with the full amount of service Once your retirement becomes due and payable you tirement Date” section) . The request to cancel your you have agreed to purchase . If this obligation has not cannot change your retirement date . retirement or change your retirement date must be been fully paid when you retire, your Quotation of Re- made via MBOS . However, if your retirement has tirement Benefits will state the balance of your arrears Note: If you return to a SPRS-eligible position before been board approved and/or you have been as- (purchase) as of your retirement date . the 30 days have elapsed, on either a paid or volun- signed a retirement number, MBOS will not be able tary basis, your retirement may be considered invalid If you do not pay off the balance, the service credit and you could be required to reimburse the retirement to process your request to cancel or change your which has not been paid for will be subtracted from your retirement date . In these cases, you should imme- system and reenroll in the SPRS . See the Employment total years and months of service . This will reduce the After Retirement Restrictions Fact Sheet . diately contact the NJDPB in writing or by email at: amount of your retirement allowance and may even af- [email protected] fect your eligibility to retire . Contact the NJDPB as soon Retirement Checks — Your first retirement check can- Note: Members who are approved for Disabili- as possible to advise whether or not you wish to pay off not be issued earlier than 30 days following your retire- ty Retirement cannot cancel their retirement or the arrears balance in full . ment date . If processing of your retirement is delayed, change their date of retirement . your first check will be retroactive to the date of your For Deferred Retirees who have an outstanding arrears retirement . obligation for the purchase of additional service credit, Approximately 2-4 Weeks Before Retirement interest may be assessed if there was a lapse in pay- Regular retirement checks are dated on the first of the You will receive a Quotation of Retirement Benefits ments of two years or more . month and are the allowance for the previous month . letter which shows your monthly retirement allowance For example, if you retire on July 1st, your first retire- along with: Shortages — A shortage in your pension account oc- ment check would be due and payable on August 1st curs when your employer does not deduct the proper and is payment for the month of July . • Any benefits payable to an eligible survivor; pension contribution from your salary . You will be noti- Change of Address — It is important that you inform • A quote of any outstanding loan balance with re- fied by the NJDPB of the amount of any shortage . You the NJDPB of a change of address by using the Retir- payment options; and are responsible for payment of any shortages at retire- ment . ee Change of Address function in MBOS, calling the • A notice of any unsatisfied balance on your ac- Automated Information System at (609) 292-7524, or count . No retirement will be paid until purchase arrears and completing a Change of Address Form available on our shortage obligations have been satisfied . Contact the website . Unsatisfied Balances NJDPB as soon as possible if your Quotation of Retire- If notifying the NJDPB of a change of address in writ- Loans — If you retire with an outstanding loan balance, ment Benefits indicates an arrears balance or shortage . ing, be sure to include both your old and new address, you may: After Your Retirement Date and your retirement number or the last four digits of • Pay the loan in full prior to receiving any retirement your Social Security number . Statement of Retirement Allowance — You will re- benefits; or ceive a letter confirming your retirement and death ben- Direct Deposit/Electronic Funds Transfer (EFT) — • Repay the loan deductions from your retirement al- efits . The letter will also supply figures needed in filing Direct deposit of retirement checks is mandatory ex- lowance until the balance of the loan plus interest your income tax return . Keep this with your important cept for foreign mailing addresses . Direct deposit will is repaid . The monthly loan payment will be calcu- papers . prevent your retirement checks from being lost, stolen, lated to have the loan plus interest satisfied by your or delayed in the mail . Due and Payable — Your retirement becomes due and five-year end date . payable after there has been a break in employment You can sign up for direct deposit up to two months Purchase Arrears — When you apply for a purchase without pay of at least 30 days following your retirement prior to your retirement date using the Electronic Funds

Page 25 July 2021 SPRS Member Guidebook State Police Retirement System

Transfer application available to pending retirees Federal Income Tax After Retirement — Every Jan- NJ State Income Tax After Retirement — If you live in through MBOS . Registered retirees can also start or uary, the NJDPB issues each retiree an annual Form New Jersey, you will be subject to New Jersey State in- change direct deposit online, at any time, using MBOS . 1099-R reflecting the taxable retirement allowance paid come tax when you have recovered in pension checks during the preceding tax year . The degree to which your the amount of pension contributions you made to the Please allow approximately 60 days for a new direct de- pension is taxed, other than Accidental Disability Re- retirement system while working . However, if you will posit, or changes to an existing direct deposit, to begin . tirement, depends on whether or not the payments you not recover your total contributions within three years Withholding Federal and N.J. State Income Tax — receive have been previously taxed . Employee contri- of retirement, contact the New Jersey Division of Tax- The NJDPB will provide for the withholding of federal butions made prior to 1987 were made with after-tax ation at 1-800-323-4400, or or visit their website at and New Jersey State income tax from your retirement dollars . That is, they were federally taxed prior to being http://www.nj.gov/treasury/taxation to determine check . made . Contributions for the purchase of service credit how your pension is taxed . The default withholding status for federal income tax are also made with after-tax dollars unless funded by a If you are receiving an Ordinary Disability or Accidental is married with three dependents regardless of your rollover from another tax-deferred plan . Disability Retirement allowance, your pension is ex- actual marital status or number of dependents . The If you began contributing to the pension plan in 1987 empt from New Jersey income tax if you are under age NJDPB is obligated to withhold federal income tax at or after, and you have not made a purchase of service 65 . When you reach age 65, your disability pension is this status unless you submit a change to your federal credit, your entire pension is subject to federal income treated as a regular pension and is considered taxable withholding through your MBOS account using the “In- tax because your contributions have never been taxed . for New Jersey income tax . come Tax Withholding” button after you receive your If you contributed to the pension plan before 1987, or if Cost-of-Living Adjustment — N J. S. A. . 43:3B-2 sus- first retirement check . you have made a purchase of service credit since 1987, pended Cost-of-Living Adjustments (COLA) for retirees New Jersey income tax withholding is voluntary, and your pension is immediately taxable based on the “ex- of all retirement systems . Please note, however, that none will be withheld unless you give instructions to pected return rule ”. Part of your retirement allowance there is no reduction to any COLA increases that were do so . Please keep in mind that if you live outside New comes from your own pension contributions that were already added to retiree benefits prior to June 28, 2011, Jersey your retirement benefits are not subject to New already taxed, and the IRS allows you to recover these the effective date of the law . Jersey State income tax, but may be subject to state or contributions tax free . This recovery is spread out over Prior to the suspension of COLA, the Pension Adjust- local taxes in the jurisdiction in which you reside . There your expected lifetime or the combined lifetime of you ment Program provided an annual Cost-of-Living Ad- is no provision for withholding any local or out-of-state and your beneficiary, according to IRS life expectancy justment to eligible retirees and their survivors who re- taxes . tables . This means that a small amount of each month- ceived a monthly retirement allowance from the SPRS . Retirees can increase or decrease existing withholding ly retirement check is tax free . The remainder of the Prior Cost-of-Living Adjustments are shown under amounts by using the federal and New Jersey W-4P monthly benefit is subject to federal income tax . the Current Earnings section of the retirement bene- applications available to retirees on MBOS . If you retired on an Accidental Disability Retirement — fit Statement of Allowances and Deductions (check or The NJDPB cannot provide tax advice . Questions or if you are a surviving spouse receiving Accidental EFT stub) . Retirees can verify current allowance and about your federal income tax should be directed to the Disability or Accidental Death benefits — the NJDPB deduction information at any time using the MBOS or IRS at 1-800-TAX-1040 . Questions about New Jersey currently reports your benefit as exempt from federal by calling the Automated Information System at (609) income tax should be directed to the New Jersey Divi- income tax . 292-7524 . sion of Taxation at 1-800-323-4400 . Ordinary Disability Retirement benefits are subject to federal tax to the same extent as other pensions . Any federal tax questions should be referred to the IRS at 1-800-TAX-1040 .

SPRS Member Guidebook July 2021 Page 26 State Police Retirement System

REDUCTION OR SUSPENSION OF YOUR BENEFITS certain that the NJDPB is provided with copies of all EMPLOYMENT AFTER RETIREMENT Normally, you will receive retirement benefits as long court orders in order to comply with them . For most SPRS retirees, working for a private indus- as you live . Your benefits, however, could be reduced try, the federal government, or a government agency Divorce or Dissolution of a or suspended if: in another state will not affect your retirement benefits . Civil Union/Domestic Partnership For SPRS retirees who resume public employment in • You return to a position covered by the SPRS and The retirement system will implement matrimonial/civ- New Jersey after retirement, there are several areas are required to reenroll (see the Employment after il union/domestic partnership dissolution court orders of concern . To learn about the rules and regulations Retirement Restrictions Fact Sheet) . granting alimony, child support, or equitable distribu- regarding post-retirement employment, please see the • You return to employment with your former em- tion . Employment After Retirement Restrictions Fact Sheet . ployer within 180 days (even in a voluntary capac- Matrimonial/partnership dissolution orders regarding ity) . your withdrawal from the retirement system will take • You have a shortage in your account at the time of effect if you voluntarily apply to withdraw your SPRS your retirement . account . See the “Withdrawal From The Retirement • You receive salary from your employer for service System” section . rendered after your date of retirement . Matrimonial/partnership dissolution orders regarding • You waive your right to a portion of any pension to your retirement will not take effect until you retire and which you are entitled . begin receiving a monthly retirement allowance . The court order can designate a specific dollar amount or • As an Accidental Disability retiree, you receive pe- percentage, or a percentage based on the number of riodic Workers’ Compensation benefits after your years of pensionable service you accrued during the retirement date . marriage/civil union, to be withheld from your retire- • You fail to file a Certificate of Eligibility when you ment allowance . The amount withheld is sent directly are asked to do so . This certificate is necessary, from the NJDPB to your former spouse/partner unless for example, if you or one of your beneficiaries has the order specifies another payee (i e. ,. a probation de- a change in marital status . partment) . • You are incarcerated (although the Board of Trust- Any court ordered withholding paid to your former ees may permit the continuance of your benefits to spouse/partner from your retirement allowance will your dependents) . terminate upon your death or the death of the former spouse/partner . • An accounting error is made and the SPRS must be repaid . Misconduct Your pension is normally exempt from any liens against The receipt of retirement benefits is expressly condi- it . Exceptions are tax liens imposed by the IRS and tioned upon the rendering of honorable service by a court orders for child support, alimony, or equitable dis- public officer or employee . In accordance with N .J .S .A . tribution . 43:1-3 1. ,. your benefits may be reduced or forfeited if A court order is effective only when you withdraw your you are convicted of a crime in any way related to your funds or when you begin to receive monthly retirement employment, or if you are suspended or dismissed payments . It is the responsibility of the member to be from your employment . See the Honorable Service Fact Sheet for further information .

Page 27 July 2021 SPRS Member Guidebook Active and Retired Death Benefits State Police Retirement System

OVERVIEW • Under the age of 18; equal to 50 percent of your Final Compensation . Upon the death of an active or retired SPRS member, • 18 years of age or older and enrolled in high If there is no surviving spouse/partner, the following two benefits are payable: school; benefit is payable to eligible children: • A monthly survivor’s pension paid to a specific • Any age who, at the time of your death, is disabled • 50 percent of final compensation to one eligible family member (or return of contributions to a ben- because of mental or physical incapacity and is child; or eficiary); and incapable of substantial gainful employment be- • 50 percent of final compensation to two or more • Group life insurance cause of the impairment . This incapacity must eligible children, payable in equal shares . last or be expected to last for a continuous period Payment of Pension to a Family Member of not less than 12 months as determined by the If there is no surviving spouse/partner or children, a Medical Review Board . pension is paid to your eligible parents as follows: Upon the death of an employed or retired member, the spouse, civil union partner, domestic partner, • For an Accidental Death Benefit, a child may also • 40 percent of Final Compensation to two parents; child(ren), or dependent parents of the member may mean an unmarried child under the age of 24 who or be entitled to a monthly pension . The benefits vary ac- is enrolled in college in a degree program for at • 25 percent of Final Compensation to one parent . cording to the status of the member at the time of the least 12 hours per semester . If there is no surviving spouse/partner, children, or death . The terms used in the explanations of benefits Parent — Your parent who was receiving at least one- parents, the employee’s contributions to the retirement are explained here: half support from you in the 12 months immediately system are paid to the named beneficiary . In the event Spouse — A person to whom you were married until preceding your death, or the accident which led to your that a specific beneficiary is not named, the funds will the date of your death . A photocopy of the Marriage death in cases of an Accidental Death Benefit . The de- be paid to the member’s estate . Certificate is required for verification . pendency of the parent will be considered terminated if he or she remarries after the death of the member . Retired Members Civil Union Partner — A person of the same sex as defined by N .J S. .A . 37:1-29, with whom you were part- Final Compensation — for a SPRS Tier 1 member en- Upon your death as a retiree your surviving spouse/part- nered in a civil union until the date of your death . A rolled on or before May 21, 2010, Final Compensation ner is eligible to receive a pension benefit equal to 50 per- photocopy of the New Jersey Civil Union Certificate, or means the salary on which pension contributions were cent of your Final Compensation . See the “Payment of a valid certification from another jurisdiction that recog- based in the 12 months immediately preceding your Pension to a Family Member” section for the definition of nizes same-sex civil unions, is required for verification . death or retirement . Final Compensation . See the Civil Unions and Domestic Partnerships Fact For a SPRS Tier 2 member, Final Compensation means If there is no surviving spouse/partner, the following Sheet for details . the average salary upon which pension contributions benefit is payable to eligible children: Domestic Partner — A person of the same sex as de- were based for any three fiscal years (July-June) of • 50 percent of Final Compensation to three or more fined by N J. S. A. . 26: 8A-3, with whom you were part- membership preceding your death or retirement that eligible children; nered into a domestic partnership until the date of your provides the largest possible benefit . • 35 percent of Final Compensation to two eligible death . A photocopy of the New Jersey Certificate of For all SPRS members, Final Compensation includes children; or Domestic Partnership dated prior to February 19, 2007, the value of the maintenance allowance for the same or a valid certification from another jurisdiction that rec- period . • 20 percent of Final Compensation to one eligible ognizes same-sex domestic partners, is required for child . verification . See the Civil Unions and Domestic Part- Active Members nerships Fact Sheet for details . Upon your death as an active member, your surviving Child — Your unmarried child: spouse/partner is eligible to receive a pension benefit

Page 29 July 2021 SPRS Member Guidebook State Police Retirement System

Accidental Death Benefit Group Life Insurance When you submit the Designation of Beneficiary, you name beneficiaries for your group life insurance ben- If you die as a result of an accident during the perfor- Your employer pays the cost of your group life insur- efits and the return of your pension contributions . You mance of your regular or assigned duties, and your ance . This Noncontributory Group Life Insurance is may name any person, organization, your estate, or death is not a result of willful negligence, your family provided through a policy issued by the insurance car- trust as beneficiary . You may change your designation may be entitled to an Accidental Death Benefit . A report rier (Prudential Financial) . at any time during your active membership by submit- of an accident must be filed with the retirement system The group policy number for the SPRS is G-14800 . ting a new Designation of Beneficiary. within 60 days of the accident . An Application for Acci- dental Death Benefits must be filed within five years of Coverage for Active Members You will be asked on your retirement application to the date of death . name a beneficiary(ies) for group life insurance ben- If your death occurs in active service before retirement, efits . You may name any person, organization, your In cases resulting in an Accidental Death Benefit, your your named beneficiary (or estate where there is no estate, or trust as beneficiary for group life insurance eligible surviving spouse, civil union partner, or same- named beneficiary) receives a group life insurance benefits . sex domestic partner is paid an annual pension of 70 benefit equal to 3 1/2 times your Final Compensation . percent of your Final Compensation (or, if appropri- If you die during the first year of creditable service, the The designation of a beneficiary on a retirement ap- ate, Adjusted Final Compensation in accordance with benefit is 3 1/2 times your creditable base salary upon plication that is filed with and accepted by the NJDPB N J. S. A. . 53:5A-14) . This benefit is a lifetime benefit which pension contributions were received . supersedes any older designation of beneficiary on file . to your surviving spouse or partner . See “Payment of The designation is effective upon acceptance by the Pension to a Family Member” section for the definition Coverage for Retired Members NJDPB, even if the retirement date on the application is of Final Compensation . If you die after retirement, your named beneficiary (or in the future or the member later cancels the retirement application . If there is no eligible surviving spouse/partner, or if the estate where there is no named beneficiary) receives surviving spouse/partner dies, a pension is paid to your a group life insurance benefit equal to 50 percent of Retirees may also change group life insurance desig- eligible children in equal shares in the amount of 70 your Final Compensation . However, if you retired on nations at any time during retirement by filing a new percent of your Final Compensation (or Adjusted Final a Disability Retirement, the amount is equal to 3 1/2 Designation of Beneficiary via MBOS or paper applica- Compensation, if appropriate) . times your Final Compensation until age 55 when it is tion, which is available on our website . reduced to 50 percent of Final Compensation . If there is no eligible surviving spouse/partner or chil- If you have additional questions regarding designa- dren, a pension will be paid to your eligible dependent Group life insurance for retired members of the SPRS tions, please see the Beneficiary Designation Fact parents in these amounts: who were enrolled on or after July 1, 1971, is payable Sheet . only if the member retired with 10 or more years of pen- • 40 percent of Final Compensation to two eligible For your protection, beneficiary designations cannot sion membership credit or retired on a Disability Re- parents; or be accepted or confirmed over the telephone or by tirement . email . Members can verify beneficiary designation on • 25 percent of Final Compensation to one eligible MBOS . Otherwise, the NJDPB will only accept a writ- parent . CHOOSING A BENEFICIARY ten request from the member to verify your beneficiary If there is no surviving spouse, child, or parent, your When a member is enrolled in the SPRS, the new designation on file . pension contributions will be paid to your named ben- member’s estate is the group life insurance beneficiary Group Life Insurance — In cases of divorce or disso- eficiary . In the event that a specific beneficiary is not on record until the NJDPB receives a new Designation lution, N J. S. A. . 3B:3 14. states that even if your Desig- named, the funds will be paid to the member’s estate . of Beneficiary . nation of Beneficiary form indicates a former spouse/ Note: Active members must complete the Designation partner and/or relatives of the former spouse/partner of Beneficiary online using MBOS . as beneficiaries for life insurance, they cannot receive

SPRS Member Guidebook July 2021 Page 30 State Police Retirement System

the benefit . Therefore, the life insurance proceeds be- dance with their requirements . A beneficiary may be The premium costs for the life insurance are deter- come payable to your remaining primary beneficiaries, considered by the Division of Taxation to be personally mined by the IRS based on your age (see the “IRS if any, contingent beneficiaries, if any, or your estate . liable for any and all inheritance and/or estate taxes Premium Rate” chart) and the life insurance in excess However, the following exceptions will be honored and until paid . of $50,000 . The remaining premium cost, if any, is the considered valid: taxable amount and is added to your income on the GROUP LIFE INSURANCE AND Form W-2 for that year . • Court orders are filed that specifically designate LEAVE OF ABSENCE your former spouse/partner to receive a life insur- Example: A SPRS member is age 52 and has noncon- ance benefit; or Your group life insurance coverage will continue in full tributory life insurance coverage. force for an official leave of absence without pay under The member’s annual base salary is $60,000. The • You file aDesignation of Beneficiary after the final the following conditions: date of judgment that names your former spouse/ member’s life insurance coverage totals $210,000 (3.5 partner and/or relatives of your former spouse/ • Up to two years while on an official leave of ab- x $60,000). sence for personal illness . partner as the life insurance beneficiary . The fringe benefit amount is determined by subtract- • Up to one year while on an official leave to fulfill ing $50,000 from the total benefit amount ($210,000), PAYMENT OF GROUP LIFE INSURANCE a residency requirement for an advanced degree which equals $160,000 ($210,000-$50,000). Group life insurance benefits for active members can or as a full-time student at an institution of higher According to the IRS, the premium cost for an individ- be paid in one of several ways (group life insurance for education . ual 52 years of age is $2.76 per $1,000 of coverage. retirees must be paid in a lump sum) . • Up to 93 days while on official leave for personal The premium cost in this example is $441.60 (160 x The options are: reasons and family leave . $2.76) and this amount would be added to your taxable • Lump Sum — A single payment to your beneficia- An official leave of absence requires documentation income. ry(ies) . that establishes the nature of the leave and the con- IRS Premium Rate* tinuing relationship between the employer and the • Annuity Certain — Equal installments over a se- (Annual cost per $1,000 of coverage) member . lected period of years . Age Premium Note: A member who has been suspended without pay • Life Annuity — Paid monthly to your beneficia- Under age 25 $0 .60 is covered for group life insurance for up to 93 days . ry(ies) for life . 25-29 $0 72. Death benefits cannot be paid until all the necessary TAXATION OF GROUP LIFE 30-34 $0 .96 information and claim forms have been received from INSURANCE PREMIUMS 35-39 $1 08. your beneficiary by the NJDPB . The IRS classifies all employer-provided life insurance 40-44 $1 .20 To report a death, contact the Office of Client Services coverage over $50,000 as a fringe benefit subject to 45-49 $1 .80 at (609) 292-7524 . A certified death certificate, obitu- taxation . The amount of life insurance coverage is not 50-54 $2 .76 ary, or the employer’s P-29 form, is required to begin taxable, but the premium required to pay for the life in- 55-59 $ 5 .16 processing the claim . surance coverage is taxable . 60-64 $7 .92 To determine the taxable amount, if any, subtract Taxation of Group Life 65-69 $15 .24 $50,000 from the total value of your Noncontributory Insurance Payments Group Life Insurance coverage . The premium rates are 70 and older $24 .72 Information regarding death claim payments are sup- then applied to the remaining life insurance amount . *These rates are subject to change by the IRS. plied to the New Jersey Division of Taxation, in accor-

Page 31 July 2021 SPRS Member Guidebook State Police Retirement System

WAIVING NONCONTRIBUTORY CONVERSION OF GROUP LIFE INSURANCE GROUP LIFE INSURANCE OVER $50,000 If you are covered by group life insurance while em- SPRS members are permitted to waive their Noncon- ployed, the coverage ends 31 days after you cease tributory Group Life Insurance over $50,000 to avoid a employment, whether for reasons of retirement, termi- possible federal and State tax liability on that benefit . nation of employment, or leave of absence without pay . Waivers of partial amounts are not permitted . Any You are eligible to convert your group life insurance member who waives Noncontributory Group Life Insur- coverage to an individual policy with Prudential Finan- ance must waive the total amount of noncontributory cial, without medical examination and at your own ex- coverage in excess of $50,000 . pense, when you retire, terminate employment, or lose coverage while on a leave of absence without pay . See In the previous example, the member’s noncontrib- the Conversion of Group Life Insurance Fact Sheet for utory life insurance coverage equals $210,000 (3 5. x details . $60,000) . In this example, the member could waive $160,000 of coverage because members are only per- mitted to waive noncontributory coverage over $50,000 . The net taxable value would be reduced to $0 00. . You may waive your Noncontributory Group Life Insur- ance coverage in excess of $50,000 by completing a Waiver of Group Life Insurance in Excess of $50,000 form and submitting it to the NJDPB . The form is avail- able from the NJDPB or your employer . The waiver form must be received by the NJDPB before December 31 in order to be effective January 1 of the next calen- dar year . Once a waiver form has become effective, it shall be irrevocable for the entire calendar year . The waiver will remain in effect until you submit another waiver form opting to reinstate coverage to the NJDPB . The reinstatement will become effective the following January 1 . If a waiver is in effect at the time of termination of em- ployment or retirement, you will not be permitted to con- vert any amount of your coverage over $50,000 . Before completing the waiver, you should completely understand the ramifications of waiving your noncon- tributory life insurance . For more information, refer to IRS Publication 525, Taxable and Nontaxable Income .

SPRS Member Guidebook July 2021 Page 32 Withdrawal State Police Retirement System

OVERVIEW benefit before your account expires — unless you are Withdrawal — your account will expire . age 53 or older, or eligible for an Ordinary or Accidental When Membership Ends Should you return to covered employment before the Disability Retirement benefit . two-year period ends, you have the option of an Inter- Your active membership in the SPRS ends 30 days af- If you terminate employment before vesting, you can fund Transfer if you otherwise qualify . See the “Trans- ter your retirement date or 30 days after the approval of choose to: fers” section . your retirement by the SPRS Board of Trustees, which- ever is later; or if: • Make an immediate withdrawal of your contribu- Should you return to covered employment after your tions; or account has expired or you have withdrawn your ac- • You die; • Leave your contributions in your SPRS account count, you will be treated as a new member in all re- • You end your employment and withdraw your con- and retain all the service credit you have earned, spects . Service credit from a former membership may tributions from the SPRS; or in the event you return to covered employment and be purchased by members returning to the system after the withdrawal of money from a former account . • You have not been contributing to the retirement resume membership . system for two consecutive years . As a general rule (see “Exceptions” listed later in this Exceptions — If you have less than 10 years of SPRS service section), if you do not resume active membership with- Your SPRS membership will not end two years after credit, two consecutive years is the limit for in- in two years, your account will automatically expire and your last contribution if: active membership before a SPRS account you will be requested to withdraw your contributions . expires . • You are granted an official leave of absence (your If your account expires or you elect to voluntarily with- two-year inactive period will not begin until your — If you have 10 years or more of SPRS ser- draw your personal contributions, all service credit leave of absence ends); vice credit, your SPRS account is vested . represented by the withdrawal is canceled . If you later However, two consecutive years remains the return to SPRS-covered employment, you may then be • You lose your job through no fault of your own, limit for inactive membership . If you return to eligible to purchase the service to have it credited to either by lay-off or abolishment of position . Your SPRS-covered employment after two or more your new account . See the “Purchasing Service Credit” inactive membership can be extended up to five years without a payroll contribution, you will section . years for the purpose of return to employment . be re-enrolled in a new SPRS account under For an extension to be granted in these cases, you the membership tier in effect at the time that Expired Accounts must submit documentation from your employer show- you return . If your membership has been inactive for 18 consecu- ing that your leave of absence was officially extended tive months, you are not vested, and you have not filed or that your employment was not terminated voluntarily Terminating Employment for a withdrawal of contributions, the NJDPB will send or for cause . If you terminate employment before you are eligible to an Expiration Notice to your last known address and a This extension only gives you the right to retain your retire, your options regarding your SPRS account vary copy to your last employer, in case they have a more contributions and service credit in the retirement sys- depending on your vesting status at the time of your current address . The Expiration Notice is a reminder tem should you again obtain public employment . It termination . See the “Vesting” section . that your money is still being held in the retirement sys- gives you no other right to benefits . Therefore, you tem . When notified, you should submit an Application If you are vested when you terminate employment, you cannot qualify for a retirement benefit unless you re- for Withdrawal to obtain your contributions in the retire- can apply for a Deferred Retirement, with payments to turn to SPRS employment during the period of extend- ment system . begin at age 55 . See the “Deferred Retirement” section . ed inactive membership in order for your account to be If you are not vested before you terminate employment, If two consecutive years have passed and the NJDPB reactivated . You would then be eligible to apply for a you will not be eligible to receive a monthly retirement has been unable to contact you — or you do not reply retirement allowance provided that you meet all other to the Expiration Notice by submitting an Application for qualifications for retirement .

SPRS Member Guidebook July 2021 Page 34 State Police Retirement System

Example: If you were age 50 with five years of mem- You may call the NJDPB Automated Information Sys- these contributions, or the balances may be deemed bership credit at the time of layoff, your account could tem at (609) 292-7524 for general information concern- as distributions . remain inactive until you reach age 55; however, you ing withdrawals or information pertaining to your partic- The employer’s obligation to make pension contribu- would not be able to qualify for retirement benefits at ular withdrawal claim . tions for members receiving Workers’ Compensation age 55 unless you returned to active employment be- If you are age 55 or older or have 10 years or more of ceases when: fore filing for retirement. service credit when you file for withdrawal, you must • The employee voluntarily files for a retirement al- waive any rights you have to any retirement or death WITHDRAWING CONTRIBUTIONS lowance that is subsequently approved; benefits . At the time you apply for withdrawal, the If you terminate covered employment before retirement, NJDPB will indicate how to obtain an estimated amount • The employer files an Involuntary Disability Retire- you may withdraw all your contributions to the fund less of any retirement benefit and will require a signed waiv- ment Application for the employee that is subse- any outstanding loan balance or other obligations . You er of such benefits, should you still wish to withdraw . quently approved; may withdraw only the money you have contributed and You must take a distribution by no later than April 1 fol- • The employee voluntarily resigns from employ- partial withdrawals are not permitted . Upon your with- lowing the calendar year in which you turn age 70 1/2 (if ment for reasons other than the inability to perform drawal, all rights and privileges of membership end . born before July 1, 1949) or age 72 (if born on or after the job’s functions due to the incident that was the Since the employer/employee relationship must be July 1, 1949) . basis for the Workers’ Compensation claim; or severed, no withdrawal will be paid if there are unre- No withdrawal application can be processed until all • The employee is terminated by the employer for solved legal matters concerning your termination of the necessary information has been received from you reasons unrelated to a Workers’ Compensation employment . and your former employer . award . All withdrawal requests must be submitted using the WORKERS’ COMPENSATION If you are approved for Ordinary Disability Retirement Application for Withdrawal program of MBOS . benefits and receive a Workers’ Compensation award, As long as you are receiving Workers’ Compensation In accordance with federal law, income tax must be your Workers’ Compensation award may be reduced benefits, either temporary or permanent, you retain the withheld on certain pension distributions that produce by the amount of your Ordinary Disability Retirement same status as an active member . You cannot with- an annual taxable income of $200 or more, unless the benefit . draw from the SPRS while you are receiving Workers’ taxable amount is directly rolled over into an Individual Compensation, have a claim pending, or are involved If you are approved for Accidental Disability Retirement Retirement Account (IRA) or a new employer’s retire- in litigation regarding Workers’ Compensation, unless benefits and receive periodic Workers’ Compensation ment plan if applicable . To qualify, this direct rollover the employer/employee relationship is severed and you benefits, the pension portion of your retirement allow- must occur within 60 days of the withdrawal check date . complete a waiver of retirement benefits . ance will be reduced dollar for dollar by the amount of If payment is made directly to you, the taxable portion the periodic benefits . is subject to 20 percent federal income tax withholding . Your employer is obligated by statute to pay your pen- In addition, if you receive payment before you reach sion contribution based on the full salary you were For additional information, see the Workers’ Compen- age 59 1/2 and you do not roll over the taxable amount, receiving immediately before you started receiving sation Fact Sheet . you may have to pay an extra tax equal to 10 percent Workers’ Compensation benefits, even if the total com- of the taxable portion of any payment . If you have any pensation you receive is less than 100 percent of your questions concerning this federal law, call the IRS at full salary . 1-800-829-1040 . Your employer is not obligated to make voluntary con- tributions such as loans or purchase arrears payments . However, as the employee, you must continue to make

Page 35 July 2021 SPRS Member Guidebook Appeals State Police Retirement System

OVERVIEW peal involves solely a question of law, an OAL hearing is not likely to be approved . In that case, the Board shall If you wish to appeal any administrative decision of the reject your hearing request and issue detailed findings NJDPB, address your appeal to: of fact and conclusions of law . These findings and con- Secretary to the Board of Trustees clusions will become the Board’s Final Administrative State Police Retirement System Determination and may be appealed to the Superior New Jersey Division of Pensions & Benefits Court, Appellate Division . P O. . Box 295 Trenton, NJ 08625-0295 Your appeal to the Board of Trustees must include a copy of the administrative decision, a detailed explana- tion of your basis for disagreement with the decision, and all supporting documentation that you wish to be considered by the Board . The Board will address your appeal and issue a written determination . If you disagree with the determination of the Board, you may request a formal hearing before an Administra- tive Law Judge within the Office of Administrative Law (OAL), by sending a written statement to the Board within 45 days from the date of the Board’s decision . State in detail the reasons for your disagreement with the Board’s determination and submit any and all sup- porting documentation if you have not already done so . If no such written statement is received within the 45- day period, the determination shall be considered final . If your request for a formal hearing is approved, the Board will submit the matter to the OAL . Upon comple- tion of this hearing, the Administrative Law Judge will submit to the Board an initial decision which the Board may adopt, reject, or modify . If the Board rejects or modifies the initial decision, it will issue a detailed find- ings of fact and conclusions of law which will become the Board’s final administrative determination and may then be appealed to the Superior Court, Appellate Di- vision . When the Board reviews your request for a hearing in the OAL, it determines whether the matter involves contested facts or is solely a question of law . If the ap-

Page 37 July 2021 SPRS Member Guidebook