Current through Register Vol. 56, No. 18, September 16, 2024
(a) Pursuant to
18A:66-40, if a disability
retirant is engaged in gainful employment that does not require reenrollment in
the TPAF, then the amount of the retirant's pension benefit and cost-of-living
increases based on the pension benefit, but not the annuity benefit, shall be
reduced to an amount, when added to the amount then earned, shall not exceed
the amount of salary now attributable to the position from which the member
retired.
1. For the purposes of determining
the amount of salary attributable to the position from which the member
retired, the Division shall apply the salary assumption used by the Fund's
actuaries in each calendar year of retirement to the retirant's final year's
salary.
2. If the retirant can
prove through written verification from the former employer that the salary for
the position from which the member retired is higher than that assumed under
the provisions of (a)1 above, the Division shall use that salary to determine
what reduction in benefits should be made.
(b) Earnings from employment in New Jersey
shall be obtained through the New Jersey Department of Labor and Workforce
Development. For all other earnings the disability retirants shall be required
to file a report with the Fund, which may include copies of the retirant's IRS
1040 forms and W-2 forms, as well as any other proofs of employment requested
of a specific retirant indicating the type of employment they are engaged in,
if any, and the gross earned income realized therefrom as of December 31 of the
prior year. The Division may also require the retirant to complete the Federal
Form 4506-T, Request for Transcript of Tax Return. In cases where a disability
retirant does not provide the forms required for reporting earnings, as
specified above, the retirant's disability retirement benefits will be
suspended.
(c) If the Department of
Labor and Workforce Development or a retirant reports employment and earnings,
then the following tests shall be made by the Division:
1. If the retirant is engaged in employment,
and the gross earned income for the preceding calendar year exceeds the
difference between the pension portion of the retirement benefit and the salary
the retirant would have been receiving had the retirant continued to work for
the former employer, the retirant shall be billed for the amount of the
overpayment. Further, the Division shall assume that the retirant continues to
be employed at the same level of salary for the current year. Therefore, a
dollar for dollar reduction may be made in anticipation of excess earnings in
the current year. If, in the subsequent year, it is determined that the salary
earned in the previous year was higher, appropriate repayment to the Fund shall
be requested by the Division. If the salary earned was less, then a refund
shall be made minus any outstanding amounts owed. If the gainful employment
ends, the retirant must notify the Division in order to have the amount of
reduction recalculated.
2. If it is
found by the Division that gross earned income for the prior calendar year
exceeded the difference between the pension portion of the retirement benefit
and the salary of the retirant's former position and if the retirant does not
refund the excess pension to the Fund within 30 days of notification of the
difference, the pension portion of the retirement allowance shall be further
reduced in order to recover the overpayment. If the remaining pension portion
of the retirement benefit is not large enough to recover the amounts owed after
a dollar for dollar reduction has been taken, then the annuity portion of the
benefit as well as any death benefits or survivor's benefits shall be reduced
by the amounts owed.
3. System
interest shall be assessed on any repayment schedules.
(d) Retirants who retired on or before
October 1, 1992, and who are age 60 or older, shall be exempt from the above
earnings test beginning with the calendar year in which they attain the age of
60. Retirants who retired on or after November 1, 1992 are subject to the
earnings test for their lifetime.
