New Jersey Assembly Bill A3066

New Jersey 2022-2023 Regular Session

• Introduced: 2/28/22
• Refer: 2/28/22

Caption

Addresses repayment of pension loans by certain retired members of State-administered retirement systems and requiring annual audits of such repayments.

Impact

This legislation is expected to provide significant relief to retirees who have previously faced hardships due to unexpected penalties and increased financial obligations from loan repayment failures. There have been notable instances reported where retirees were informed long after their retirement that loan payments had not been appropriately deducted, resulting in accumulating debts they were unaware of. The bill aims to rectify such situations, thereby enhancing the financial security of retirees who depend on their pensions for their livelihood.

Summary

A3066 is a bill introduced in the State of New Jersey aimed at addressing the repayment of pension loans by certain retired members of State-administered retirement systems. The primary provision of the bill specifies that retired members who have outstanding loans at the time of their retirement will only be liable to repay the initial loan amount and accrued interest based on the original loan agreement. Importantly, they will not be subject to any additional interest or penalties arising from instances where the retirement system fails to withhold the necessary loan payments from their monthly retirement allowance. Furthermore, the repayment duration is set to a maximum of five years, excluding any periods where payments were not withheld appropriately by the retirement system or relevant division.

Contention

One of the critical components of A3066 is the requirement that the Division of Pensions and Benefits conducts annual audits for each State-administered retirement system. This audit will specifically focus on identifying failures in the timely withholding of loan payments from retirees' monthly allowances. By holding the Division accountable through these audits, the bill seeks to foster transparency within the retirement system and protect retired members from financial mismanagement. However, the effectiveness of the bill is contingent upon obtaining federal approval for certain provisions, particularly regarding the prohibition of additional penalties, which introduces a potential area of contention and uncertainty in its implementation.