New Jersey Administrative Code
Title 17 - TREASURY - GENERAL
Chapter 7 - ALTERNATE BENEFIT PROGRAM
Subchapter 12 - NEW JERSEY ADDITIONAL CONTRIBUTIONS TAX-SHELTERED PROGRAM (ACTS)
Section 17:7-12.1 - Employee elective deferrals to ACTS; additional voluntary contributions

Universal Citation: NJ Admin Code 17:7-12.1

Current through Register Vol. 55, No. 48, December 18, 2023

(a) The Board of Governors of Rutgers, the State University; the Board of Trustees of the New Jersey Institute of Technology; the Board of Trustees of Rowan University; the boards of trustees of State and county colleges; and local boards of education are hereby authorized to enter into an agreement with each employee participating in the ABP whereby the employee agrees to make elective deferrals by a reduction in salary with respect to amounts earned after the effective date of such agreement in return for the agreement of the respective institution to use a corresponding amount to purchase an annuity for such employee, so as to obtain the benefits afforded under IRC § 403(b). Any such salary reduction agreement shall specify the amount of such reduction, the effective date thereof, and shall be legally binding and irrevocable with respect to amounts earned while the agreement is in effect; provided, however, that such agreement may be terminated after it has been in effect for a period of not less than one year upon notice in writing by either party, and provided further that not more than one such agreement shall be entered into during any taxable year of the employee. For the purposes of this section, any investment option and annuity or other contract offered by the DSP that meets the requirements of IRC § 403(b), may be utilized. The amount of the reduction in salary under any agreement entered into between the institutions and any employee pursuant to this section shall not exceed the limitations set forth in IRC §§ 415(c) and 403(b).

1. Employees of University Hospital are prohibited from making new contributions to the ACTS Program under Federal Internal Revenue Code provisions, but they shall be permitted to continue to participate in the ACTS Program with respect to their existing account as of June 30, 2014, and they shall also be permitted to enter into salary reduction agreements in the 457(b) program known as the New Jersey State Employees' Deferred Compensation Plan.

2. ABP members employed by the former UMDNJ on June 30, 2013, who became employees of University Hospital on July 1, 2013, under special provisions of P.L. 2012, c. 45, may maintain any ACTS accounts opened before July 1, 2013; however, they will not be permitted to make additional contributions to ACTS after June 30, 2014, and their ACTS salary reduction agreements will no longer be valid.

(b) Amounts payable pursuant to this section by an institution on behalf of an employee for a pay period shall be transmitted and credited not later than the fifth business day after the date on which the employee is paid for that pay period.

(c) Employee elective deferrals are permitted as follows:

1. The employee elective deferral shall be made by a salary reduction contribution and shall be computed on the participant's base salary.

2. A participant electing to make such employee elective deferrals shall enter into a salary reduction agreement with the employer in accordance with IRC § 402(g)(4).

3. A participant shall be permitted to enter into more than one salary reduction agreement with the employer during a calendar year by replacing one salary reduction agreement with another agreement. The employer shall determine the number of times during the course of the calendar year that such a change is permitted.

4. The salary reduction agreement between the participant and employer shall continue indefinitely until amended or terminated by due notice to the institution by the participant, subject to the following conditions:
i. If the participant terminates employment with the employer, the salary reduction agreement, or any amendments made thereon, shall automatically terminate; and

ii. If the Division terminates ACTS, the salary reduction agreement shall automatically terminate.

(d) In addition to elective deferrals, an employee may make additional voluntary contributions to the ACTS subject to the limits of IRC § 415(c), if these contributions are accepted in the investment option.

(e) The following employees are excluded from eligibility to have elective deferrals made on their behalf under the ACTS:

1. Employees who are students performing services described in IRC § 3121(b)(10);

2. Employees who normally work fewer than 20 hours per week. An employee normally works fewer than 20 hours per week if, for the 12-month period beginning on the date the employee's employment commenced, the employer reasonably expects the employee to work fewer than 1,000 hours of service (as defined under IRC § 410(a) (3)(C)) in such period, and, for each plan year ending after the close of that 12-month period, the employee has worked fewer than 1,000 hours of service in the preceding 12-month period. Under this provision, an employee who works 1,000 or more hours of service in the 12-month period beginning on the date the employee's employment commenced or in a plan year ending after the close of that 12-month period shall then be eligible to participate in the ACTS; and

3. Nonresident aliens pursuant to IRC § 410(b)(3)(C) and Treasury Reg. § 1.403(b)-5(b)(4)(ii)(C).

(f) Each participant shall provide to the Plan Administrator at the time of initial enrollment, and later if there are any changes, any information necessary or advisable for the Plan Administrator to administer the ACTS, including any information required under the investment options.

(g) Unless the salary reduction agreement is otherwise revised, if an employee is absent from work by leave of absence, elective deferrals under the ACTS shall continue to the extent that compensation continues.

Adopted by 47 N.J.R. 905(b), effective 5/4/2015.

Amended by 50 N.J.R. 1616(a), effective 7/16/2018

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