Bill > A5175

Introduced Session

This bill reinstates automatic cost-of-living adjustments (COLAs) for annual pension, ordinary disability pension, or accidental disability pension retirement benefits for certain members of the Police and Firemen's Retirement System (PFRS). Provisions contained in P.L.2011, c.78 (C.43:3C-16 et al.), signed into law on June 28, 2011, had suspended the automatic annual adjustment for current and future retirees and beneficiaries of PFRS and other State-administered retirement systems until those systems reach a target funded ratio. Decades of underfunding those systems by the State had placed the systems in precarious financial conditions. Although this bill does not reinstate COLAs for other retirees, it serves as the first step in reinstating COLAs for all retirees of the State-administered retirement systems. Through the prioritization of PFRS, the State will begin this process with retired first responders, police and firefighters, to provide them greater financial security and stability at a time when inflation has significantly eroded the value of their retirement benefit payments, which are already based on the lower salaries of years ago. To that end, the bill includes restrictions intended to limit costs and focus on segments among PFRS retirees expected to be most in need of an immediate benefit. Under the bill, members of PFRS will receive automatic COLAs for annual pension, ordinary disability pension, and accidental disability pension benefits if the member has been retired and receiving retirement benefits for a minimum of ten years. Longer-term retirees generally will have lower pension benefits and be less able to obtain employment to offset the erosion of their benefits. Members of PFRS who are hired more than 30 days following the effective date of this act will not be considered eligible to receive these automatic COLAs. Additionally, members who are enrolled in deferred retirement will not be considered eligible for these automatic COLAs, nor will members who retired with 20 or more years of service but less than 25 years of service. The COLAs will only apply to future pension benefit payments. The bill does not provide for retroactive COLAs. The adjustment in eligible members' pension benefits will be calculated based on an amount up to $75,000 of a retiree's benefit for the first year following the enactment of this bill. Eligible members receiving up to $75,000 of pension benefits will receive a COLA tied to the CPI for Urban Wage Earners and Clerical Workers. This will ensure that greater initial benefits will be provided to those likely to be most in need. The adjustment in eligible member's pension benefits will be limited to one percent if the member receives more than $75,000 in benefits for the first year following the enactment of the bill. After the first calendar year following the enactment of the bill, the $75,000 threshold will be adjusted annually according to the CPI for Urban Wage Earners and Clerical Workers, except that the adjustment will be calculated at a rate not to exceed three percent. The bill also grants the cost-of-living adjustment to the monthly pension or survivorship benefit of a surviving spouse, child, or beneficiary that is provided by PFRS. Under the bill, if the Board of Trustees of PFRS fails to comply with the provisions of this bill within six months following the effective date, then the State Treasurer will be responsible for implementing the cost-of-living adjustments. The bill requires the Legislature to appropriate monies from the General Fund as necessary to effectuate the cost-of-living adjustments established under the bill that are sufficient to cover both State and local expenses, and to reimburse each PFRS local employer for the full cost incurred. The bill further provides that this appropriation will take precedence over any additional funding added to the annual State budget by the Legislature through non-emergency supplemental appropriations, resolutions or other changes to the Governor's budget message.

AI Summary

Committee Categories

Robert Clifton (R)*,  Joe Danielsen (D)*,  Alex Sauickie (R)*,  Alaa Abdelaziz (D),  Reginald Atkins (D),  Bob Auth (R),  John Azzariti (R),  Rosaura Bagolie (D),  David Bailey (D),  Al Barlas (R),  Christian Barranco (R),  Brian Bergen (R),  Linda Carter (D),  Alixon Collazos-Gill (D),  Wayne DeAngelo (D),  Chris DePhillips (R),  Margie Donlon (D),  Mitchelle Drulis (D),  Aura Dunn (R),  Dawn Fantasia (R),  Vicky Flynn (R),  Roy Freiman (D),  Don Guardian (R),  Shama Haider (D),  Garnet Hall (D),  Dan Hutchison (D),  Paul Kanitra (R),  Robert Karabinchak (D),  Andrea Katz (D),  Sean Kean (R),  Jim Kennedy (D),  Yvonne Lopez (D),  Julio Marenco (D),  Michele Matsikoudis (R),  Barbara McCann Stamato (D),  Antwan McClellan (R),  Greg McGuckin (R),  Cody Miller (D),  Bill Moen (D),  Nancy Muñoz (R),  Carol Murphy (D),  Ellen Park (D),  Luanne Peterpaul (D),  Erik Peterson (R),  Jessica Ramirez (D),  Verlina Reynolds-Jackson (D),  Gabriel Rodriguez (D),  William Sampson (D),  Gerry Scharfenberger (R),  Heather Simmons (D),  Erik Simonsen (R),  Bill Spearman (D),  Sterley Stanley (D),  Shavonda Sumter (D),  Lisa Swain (D),  Claire Swift (R),  Mike Torrissi (R),  Chris Tully (D), 

Introduced, Referred to Assembly State and Local Government Committee (on 01/14/2025)

Official Document