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.

A1268

ASSEMBLY, No. 1268

STATE OF NEW JERSEY

222nd LEGISLATURE

�

PRE-FILED FOR INTRODUCTION IN THE 2026 SESSION

Sponsored by:

Assemblyman MICHAEL INGANAMORT

District 24 (Morris, Sussex and Warren)

Co-Sponsored by:

Assemblyman Auth and Assemblywoman Fantasia

SYNOPSIS

���� 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.

CURRENT VERSION OF TEXT

���� Introduced Pending Technical Review by Legislative
Counsel.

��

An Act

concerning the enrollment of certain public
employees in the Public Employees� Retirement System and supplementing
P.L.1954, c.84 (C.43:15A-1 et seq.) and Title 43 of the Revised Statues.

����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:

���� 1.��� a.� Upon the enrollment
in the Public Employees� Retirement System of a public officer or employee
whose position requires that the officer or employee render professional
services as an attorney, engineer, accountant, auditor, physician, or
architect, the certifying officer shall complete, sign, and submit at the time
of enrollment a certification that requires the certifying officer to answer a
series of questions for the purpose of verifying that the status of the public
officer or employee being enrolled is that of an employee and not an
independent contractor.� The questions shall be based, to the extent
appropriate, on the employee test utilized by the federal Internal Revenue
Service.� The certifying officer shall submit with the certification a copy of
the resolution or ordinance adopted by the employer to create the position, the
resolution adopted by the employer to appoint the public officer or employee to
that position, and a copy of the oath of office taken by the public officer or
employee, if any.�

���� This certification shall be in
addition to any other certification required pursuant to section 1 of P.L.2011,
c.52 (C.43:3C-15) or any other law or regulation.� The form and content of the
certification shall be developed by the Division of Pensions and Benefits in
the Department of the Treasury and approved by the Board of Trustees of the
retirement system.� The board of trustees may require certifying officers to
complete the certification for positions that require the rendering of
professional services other than those specified above, as the board may
determine to be appropriate and necessary.

���� b.��� A certifying officer
shall not seek advice or rely upon representations from the public officer or
employee who is being enrolled when completing the certification required under
subsection a. of this section or when making any decision with regard to the
eligibility for enrollment in the retirement system of that public officer or
employee.� The certifying officer shall seek advice and rely upon the
representations only from an impartial individual or an employee of the
Division of Pensions and Benefits. �The certification required by this
subsection shall require the signature of the certifying officer following a
statement that the certifying officer acknowledges compliance with this
subsection.� The signature shall be in addition to the signature required under
subsection a. of this section.

���� c.���� The board of trustees
of the retirement system shall establish an audit program through which it
shall conduct a continuous review of the various public employers participating
in the system for the purpose of ensuring that only eligible public officers
and employees whose position requires the officer or employee to render
professional services are enrolled in the retirement system.� The audit program
may be conducted in cooperation with or, upon agreement, by another office or
agency within the Executive Branch of State government.

���� Every public employer whose
employees are enrolled in the retirement system, as well as enrolled officers
and employees, and any other public entity having relevant information, shall
cooperate fully with the board of trustees and the division and shall provide
all information, records, and documents requested by the board or division in
connection with an audit.�

���� The audit program shall be
initiated within 60 days following the effective date of P.L.��� , c.���
(C.������� )(pending before the Legislature as this bill) and the primary focus
of the program for the first 12 months shall be to verify the eligibility of
those public officers and employees who were enrolled prior to the effective
date.

���� d.��� Within six months
following the effective date of P.L.��� ,
c. (C. )(pending
before the Legislature as this bill), the certifications required by
subsections a. and b. of this section shall be completed by all certifying
officers for all applicable public officers and employees who were enrolled
prior to the effective date.

���� 2.��� A certifying officer or
the officer�s immediate supervisor who knowingly and willfully violates a
provision of law or regulation concerning the enrollment of a public officer or
employee in a State-administered retirement system that results in the enrollment
or continued enrollment of a public officer, employee, or other person who is
ineligible for such enrollment shall be subject to a civil penalty of $1,000
for an initial violation, $2,500 for a second violation that occurs within 10
years of an initial violation, and $5,000 for a third violation or subsequent
violation that occurs within 10 years of an initial violation. This penalty
shall be collected and enforced in proceedings in accordance with� the
"Penalty Enforcement Law of 1999," P.L.1999, c.274 (C.2A:58-10 et
seq.), and the rules of court governing actions for the collection of civil
penalties.� The Superior Court shall have jurisdiction of proceedings for the
collection and enforcement of the penalty imposed by this section.� This
penalty shall be in addition to any other penalty that may be imposed by law.

���� Appropriate disciplinary
proceedings may be initiated against the certifying officer or immediate
supervisor against whom a penalty has been imposed.

���� 3.��� This act shall take
effect on the first day of the third month following enactment.

STATEMENT

���� This bill requires the
completion of specific certifications by certifying officers of public
employers who enroll certain public officers and employees in the Public
Employee�s Retirement System (PERS).�

���� For each enrollment in the
PERS of a public officer or employee whose position requires that the officer
or employee render professional services as an attorney, engineer, accountant,
auditor, physician, or architect, the certifying officer must complete, sign,
and submit at the time of enrollment a certification that requires the
certifying officer to answer a series of questions for the purpose of verifying
that the status of the public officer or employee being enrolled is that of an
employee and not an independent contractor.� The questions will be based, to
the extent appropriate, on the employee test utilized by the federal Internal
Revenue Service.� The certifying officer must also submit with the
certification a copy of the resolution or ordinance adopted by the employer to
create the position, the resolution adopted by the employer to appoint the
individual to the position, and a copy of the oath of office taken by the
individual.� The bill also requires this certification to be completed by all
certifying officers for all applicable public officers and employees who were
enrolled prior to the bill�s effective date.

���� The bill prohibits a
certifying officer from seeking advice or relying upon representations of the
individual who is the subject of the enrollment when completing the
certification or when making any decision with regard to the eligibility for
enrollment.� The certifying officer must seek advice and rely upon
representations only from an impartial individual or an employee of the
Division of Pensions and Benefits.�

���� The bill requires the board of
trustees of the PERS to establish an audit program through which it will
conduct a continuous review of the various public employers participating in
the system for the purpose of ensuring that only eligible officers and employees
who render professional services are enrolled in the retirement system.� The
audit program must be initiated within 60 days following the bill�s effective
date and the primary focus of the program for the first 12 months must be to
verify the eligibility of public officers and employees enrolled prior to the
effective date.

���� The provisions of this bill
described above are based on the recommendations of the Office of the State
Comptroller as set forth in its report of July
17, 2012 entitled �Improper Participation by Professional Service Providers in
the State Pension System.�

���� In addition, the bill provides
for the imposition of civil penalties against a certifying officer or the
officer�s immediate supervisor who knowingly and willfully violate any
provision of law or regulation concerning the enrollment of a public officer or
employee in a State-administered retirement system that results in the
enrollment or continued enrollment of a public officer, employee, or other
person who is ineligible for such enrollment.� The penalty will be a fine of
$1,000 for an initial violation, $2,500 for a second violation that occurs
within 10 years of an initial violation, and $5,000 for a third violation or
subsequent violation that occurs within 10 years of an initial violation. The
penalty will be collected and enforced in proceedings in accordance with the
"Penalty Enforcement Law of 1999� and the rules of court governing actions
for the collection of civil penalties.