New Jersey Assembly Bill A2207

New Jersey 2024-2025 Regular Session

• Introduced: 1/9/24
• Refer: 1/9/24

Caption

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

Impact

The implementation of A2207 is expected to significantly impact state pension laws by aligning them with the requirements typically found in private retirement plans regulated by the Employees Retirement Income Security Act (ERISA). The legislation aims to provide additional protections for spouses, ensuring they are informed and consenting participants in decisions affecting their financial future. The bill is designed to mitigate the risk that a member could elect a benefit option detrimental to their spouse, thus providing an emotional and economic safeguard for married couples reliant on these pension funds.

Summary

Assembly Bill A2207 aims to enhance the financial security of spouses in the event of a member's death by requiring spousal consent for certain pension payout options under the Teachers' Pension and Annuity Fund (TPAF), the Judicial Retirement System (JRS), and the Public Employees' Retirement System (PERS). Specifically, the bill mandates that if a member elects a retirement benefit that is payable solely for their lifetime without refund or any provision for their spouse, the member must obtain written consent from their spouse prior to making that election. This provision also applies to any other payout option offering less than half of the member's retirement allowance for the spouse's lifetime.

Contention

While the bill is positioned as a protective measure for spouses, potential points of contention may arise regarding the implications for individual autonomy. Some critics might argue that requiring spousal consent could unnecessarily complicate the process of retirement planning for members who may wish to choose a payout option based solely on their circumstances. Additionally, there are concerns about how the bill may affect situations where a spouse is unavailable or unlocatable to provide that consent, potentially leaving members without viable options that were previously available to them.