New Jersey Senate Bill S1583

New Jersey 2022-2023 Regular Session

• Introduced: 2/14/22
• Refer: 2/14/22

Caption

Requires spousal consent to election of certain pension payout options under TPAF, JRS and PERS.

Impact

The enactment of S1583 is expected to reinforce protections for spouses of members in the specified retirement systems. It requires that the consent must be witnessed by either a representative of the Division of Pensions and Benefits or a notary public, ensuring an additional layer of legitimacy and protection for the spouse. This aligns with similar requirements found in federal legislation regarding private retirement plans, specifically the Employees Retirement Income Security Act (ERISA), emphasizing the importance of spousal rights in financial decisions affecting family security post-retirement.

Summary

Senate Bill S1583 seeks to introduce a requirement for spousal consent when certain pension payout options are elected by members of several retirement systems in New Jersey, specifically the Teachers' Pension and Annuity Fund (TPAF), Judicial Retirement System (JRS), and Public Employees' Retirement System (PERS). Under this bill, if a retiree opts for a retirement benefit that is exclusively for their lifetime and does not provide any benefits to their spouse upon their death, they will need to obtain written consent from their spouse before the election can take effect. This aims to ensure that spouses are fully informed and protected regarding the financial implications of pension elections made by their partners.

Contention

Notable points of contention regarding S1583 include concerns about the administrative burden it may place on both the pension systems and the members. Critics might argue that requiring spousal consent could complicate the process of selecting a pension payout option, potentially delaying retirees' access to their benefits. Furthermore, some may question whether this requirement is a necessary step, or if it unnecessarily intrudes upon an individual's autonomy in deciding how to manage their pension benefits, particularly in cases where spouses may not be actively involved in financial decision-making.