SENATE BUDGET AND APPROPRIATIONS COMMITTEE
STATEMENT TO
SENATE, No. 2689
STATE OF NEW JERSEY
DATED: JUNE 20, 2023
The Senate Budget and Appropriations Committee reports
favorably Senate Bill No. 2689.
This bill expands the definition of a child under the Police and
Firemen’s Retirement System (PFRS) and the State Police
Retirement System (SPRS) to include the child of a deceased
member that is under the age of 24 and that is enrolled in a degree
program in an institution of higher education for at least 12 credit
hours in each semester.
Under current law, a person is considered a child under the PFRS
and SPRS if the person is:
(1) under the age of 18;
(2) 18 years of age or older and enrolled in a secondary school;
(3) under the age of 24 and enrolled in a degree program in an
institution of higher education for at least 12 credit hours in each
semester, provided that the member died in active service as a result
of an accident met in the actual performance of duty at some
definite time and place, and the death was not the result of the
member's willful misconduct; or
(4) any age who, at the time of the member's or retirant's death,
is disabled because of an intellectual disability or physical
incapacity, is unable to do any substantial, gainful work because of
the impairment and the impairment has lasted or can be expected to
last for a continuous period of not less than 12 months, as affirmed
by the medical board.
This bill would remove the requirement that if the child is under
the age of 24 and enrolled in an institution of higher education, the
child must be the survivor of a member who died in the line of duty
to be considered a child under the PFRS or SPRS. This bill would
permit any child of a deceased member that is under the age of 24
and that is enrolled in a degree program in an institution of higher
education for at least 12 credit hours in each semester to be
considered a child regardless if the member died in the line of duty
or not.
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FISCAL IMPACT:
The Office of Legislative Services (OLS) estimates that this bill
will increase total costs to the State Police Retirement System (SPRS)
by $2.5 million and total costs to the Police and Firemen’s Retirements
System (PFRS) by $18.8 million to $27.5 million. The annual
payment on the resulting liability is $509,500 for the SPRS and $3.8
million to $5.1 million for the PFRS.
According to the most recent valuation report from the Division of
Pensions and Benefits, PFRS membership is 85 percent local. As
such, the OLS anticipates that $3.3 million to $4.4 million in annual
costs will accrue to local governments and $576,000 to $1.3 million in
annual costs will accrue to the State.
The OLS cannot predict the actual number of decedents or
qualifying child beneficiaries. If the assumptions behind the analysis
were to change, the potential cost implications could be less than the
figures outlined above.