Requires eligibility checklist and audit for enrollment in PERS of certain public employees who provide professional services; imposes fine on certifying officer or supervisor for ineligible enrollments.
To enhance compliance and integrity within the PERS, the bill also requires the creation of an auditing program by the board of trustees. This program aims to continuously review the enrollment practices of public employers participating in the system. The primary focus in the first year will be verifying the eligibility of individuals who were enrolled prior to the bill’s enactment. The requirement for such audits and the establishment of a structured verification system are critical steps toward addressing improper enrollment practices in the retirement system.
Senate Bill 1837 introduces significant measures aimed at ensuring that only eligible public officers and employees are enrolled in the Public Employees' Retirement System (PERS). The bill mandates that certifying officers must complete a specific certification process at the time of enrollment for certain public employees whose positions require professional services such as those by attorneys, engineers, accountants, auditors, physicians, and architects. This certification process is designed to verify that these individuals qualify as employees rather than independent contractors, using criteria from the Internal Revenue Service employee test.
A significant point of contention in this bill is the imposition of civil penalties for certifying officers or their supervisors who knowingly violate enrollment regulations. Financial penalties of $1,000 for first offenses, escalating to $5,000 for repeated violations within ten years, serve as a strong deterrent against non-compliance. This aspect has raised concerns among some stakeholders about potential overreach or punitive measures that could discourage public officers from fulfilling their duties.
Overall, S1837 aims to bolster the governance of the public employee retirement framework in New Jersey by introducing clearer eligibility standards, stringent auditing practices, and meaningful penalties for violations. While it aims to protect the system's integrity and ensure proper administration, stakeholders are divided on the potential impacts of such stringent measures. Some advocate it as a necessary step toward accountability, while others view it as potentially burdensome for certifying officers and public employers.