New Jersey Senate Bill S180

New Jersey 2024-2025 Regular Session

• Introduced: 1/9/24
• Refer: 1/9/24

Caption

Requires cost of living increase to be granted in each of two calendar years for certain retired members and beneficiaries of PFRS; makes appropriation.

Impact

To qualify for these adjustments, retirees must have originally received a pension or benefit that was granted at or below 450 percent of the federal poverty level for a single-person household. Specifically, this means that individuals would only be eligible for COLAs if their initial retirement allowances or pensions were under a certain monetary threshold, thus ensuring that the low-income retirees benefit from this provision. Furthermore, to receive COLAs, retired individuals must be at least 62 years old as of the effective date, although others—such as surviving spouses or children—may qualify regardless of age.

Summary

Senate Bill S180 is a legislative proposal aimed at enhancing the financial security of certain retirees, specifically those who are members of the Police and Firemen's Retirement System (PFRS) in New Jersey. The bill mandates that eligible retired members and their beneficiaries receive cost-of-living adjustments (COLAs) to their monthly pensions and benefits. These increases are set to take effect on January 1 of the year following the passage of the bill and continue for an additional year, thereby providing a two-year COLA in succession.

Contention

A notable aspect of this bill revolves around the method used to calculate the COLA. The adjustments will be based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), with a maximum adjustment of 3% and a minimum of 1%, which may raise concerns about how inflation is impacting fixed-income retirees. The bill’s proponents assert that the COLA will aid many retired first responders and their families in coping with rising living costs, while critics may argue about the need for fiscal prudence given the state's budgetary commitments.

Financial_provision

To implement these changes, the state will be required to fund the modifications, as the bill commits appropriations from the State General Fund to cover the cost of these adjustments along with any necessary administrative expenses. The Board of Trustees of the PFRS will need to certify the estimated costs each year to enable the State to allocate the required funds accordingly. The bill emphasizes state accountability in ensuring that retirees receive their entitled benefits in a timely and economically sustainable manner.