New Jersey 2024-2025 Regular Session

New Jersey Assembly Bill A946

Introduced
1/9/24  

Caption

Provides that public employee pension benefits are calculated on base salary exclusive of various forms of extra compensation.

Impact

The passage of A946 would significantly affect the financial landscape of public retirement systems in New Jersey. By excluding extra forms of compensation such as overtime pay, bonuses, and adjustments made primarily for retirement considerations, the bill seeks to mitigate pension 'spiking', where employees inflate their final salaries to boost retirement benefits. This could promote fiscal responsibility within pension systems and ensure that pensions remain financially sustainable over the long term.

Summary

Assembly Bill A946 aims to regulate the manner in which public employee pension benefits are calculated, establishing that these benefits should be derived solely from the base salary and exclude various forms of extra compensation. The proposal includes a detailed definition of what constitutes base salary and explicitly lists forms of extra compensation that should not influence the pension calculations. By limiting pension benefits to base salary, the bill intends to standardize how pension contributions and credits are calculated within the state's retirement systems.

Contention

Opposition to A946 may arise from public employee unions and associations that argue this bill could devalue the total compensation of state employees, thus demotivating current and future employees. They might contend that flexibility in salary adjustments is necessary for recruitment and retention of skilled workers in the public sector. Proponents argue that by reducing potential abuses of the pension system, the bill will safeguard taxpayers and ensure equitable treatment of all public employees.

Companion Bills

NJ A221

Carry Over Provides that public employee pension benefits are calculated on base salary exclusive of various forms of extra compensation.

Previously Filed As

NJ A221

Provides that public employee pension benefits are calculated on base salary exclusive of various forms of extra compensation.

NJ A3323

Requires pay for extracurricular activities to be included in compensation for TPAF purposes.

NJ H7274

Amends sections of law relating to retirement of various public employees and the calculation of their final average salary and service accruals.

NJ HB4098

PENSIONS-VARIOUS

NJ HB5448

PENSIONS-VARIOUS

NJ A4359

Requires pay for extracurricular activities to be included in compensation for TPAF purposes.

NJ S3713

Requires pay for extracurricular activities to be included in compensation for TPAF purposes.

NJ A224

Bars certain employees of certain public agencies from participating in PERS; repeals law permitting PERS and TPAF members on leave who work for labor organization to purchase pension credit.

NJ AB2493

County employees’ retirement: disallowed compensation: benefit adjustments and calculations.

NJ A948

Bars certain employees of certain public agencies from participating in PERS; repeals law permitting PERS and TPAF members on leave who work for labor organization to purchase pension credit.

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