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S3625
SENATE, No. 3625
STATE OF NEW JERSEY
222nd LEGISLATURE
�
INTRODUCED FEBRUARY 19, 2026
Sponsored by:
Senator� ANDREW ZWICKER
District 16 (Hunterdon, Mercer, Middlesex and Somerset)
SYNOPSIS
���� Establishes alternate calculation of retirement
benefits for members of TPAF and PERS.�
CURRENT VERSION OF TEXT
���� As introduced.
��
An Act
concerning the calculation of retirement benefits for
members of the Teachers� Pension and Annuity Fund and the Public Employees�
Retirement System and supplementing Title 18A of the New Jersey Statutes and
Title 43 of the Revised Statutes.
����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:
���� 1.� a.� Notwithstanding any
law, rule, or regulation to the contrary, upon receiving a properly completed
retirement application from a member of the Teachers� Pension and Annuity Fund,
the Division of Pensions and Benefits shall send a first notice to the member
or the member�s designated beneficiary stating the details of the final
compensation, as defined in N.J.S.18A:66-2, that shall be utilized in
calculating the member�s retirement benefits.� Within 60 days of receiving the
notice, the member or the member�s designated beneficiary shall be eligible to
request a recalculation of the member�s final compensation utilizing the
member�s average annual compensation for New Jersey service for which
contributions are made during any three calendar years of the member�s
membership providing the largest possible benefit to the member or the member's
beneficiary as an alternative to the calculation of final compensation as
defined in N.J.S.18A:66-2.
���� Within 30 days of receiving
the request for the recalculation from the member or the member�s designated
beneficiary, the Division of Pensions and Benefits, in consultation with the
board of trustees of the retirement system, shall send a second notice to the
member or the member�s designated beneficiary stating the details of the
recalculated final compensation requested by the member or beneficiary pursuant
to this subsection.�
���� Upon receiving the second
notice from the Division of Pensions and Benefits, the member or the member�s
designated beneficiary shall have 30 days to approve the recalculated final
compensation to be utilized in calculating the member�s retirement benefits.�
If the member or the member�s designated beneficiary fails to approve the
recalculated final compensation within the 30 days, the Division of Pensions
and Benefits shall utilize the final compensation stated in the first notice to
calculate the member�s retirement benefits using the calculation of final
compensation as defined in N.J.S.18A:66-2.
���� b.� Any member of the
retirement system who retired after January 1, 2025 and began receiving
retirement benefits on or before the effective date of this act, P.L.��� ,
c.���� (C.������� ) (pending before the Legislature as this bill), shall have
one year following the effective date of this act to initiate the recalculation
process provided under subsection a. of this section by submitting a
recalculation request to the Division of Pensions and Benefits.�
���� Upon completing the
recalculation process, if the member or the member�s designated beneficiary
approves the recalculated final compensation to be utilized in calculating the
member�s retirement benefits, the recalculation in the member�s retirement benefits
shall apply to such benefit entitlements granted prior to and in effect on the
effective date of this act, but only for benefit payments made after that
effective date.� No member of the retirement system shall be granted a
retroactive payment based upon the difference between the benefit the member
would have received if the recalculation had been applicable at the date of
entitlement and the benefit that the member has received from the date of
entitlement to that effective date.
���� c.� The director of the
Division of Pensions and Benefits shall promulgate such rules and regulations
as the director determines are necessary to effectuate the provisions of this section.
���� 2.� a.� Notwithstanding any
law, rule, or regulation to the contrary, upon receiving a properly completed
retirement application from a member of the Public Employees� Retirement
System, the Division of Pensions and Benefits shall send a first notice to the
member or the member�s designated beneficiary stating the details of the final
compensation, as defined in section 6 of P.L.1954, c.84 (C.43:15A-6), that
shall be utilized in calculating the member�s retirement benefits.� Within 60
days of receiving the notice, the member or the member�s designated beneficiary
shall be eligible to request a recalculation of the member�s final compensation
utilizing the member�s average annual compensation for New Jersey service for
which contributions are made during any three calendar years of the member�s
membership providing the largest possible benefit to the member or the member's
beneficiary as an alternative to the calculation of final compensation as
defined in section 6 P.L.1954, c.84 (C.43:15A-6).
���� Within 30 days of receiving
the request for the recalculation from the member or the member�s designated
beneficiary, the Division of Pensions and Benefits, in consultation with the
board of trustees of the retirement system, shall send a second notice to the
member or the member�s designated beneficiary stating the details of the
recalculated final compensation requested by the member or beneficiary pursuant
to this subsection.
���� Upon receiving the second
notice from the Division of Pensions and Benefits, the member or the member�s
designated beneficiary shall have 30 days to approve the recalculated final
compensation to be utilized in calculating the member�s retirement benefits.�
If the member or the member�s designated beneficiary fails to approve the
recalculated final compensation within the 30 days, the Division of Pensions
and Benefits shall utilize the final compensation stated in the first notice to
calculate the member�s retirement benefits using the calculation of final
compensation as defined in section 6 P.L.1954, c.84 (C.43:15A-6).
���� b.� Any member of the
retirement system who retired after January 1, 2025 and began receiving
retirement benefits on or before the effective date of this act, P.L.��� ,
c.���� (C.������� ) (pending before the Legislature as this bill), shall have
one year following the effective date of this act to initiate the recalculation
process as provided under subsection a. of this section by submitting a
recalculation request to the Division of Pensions and Benefits.�
���� Upon completing the
recalculation process, if the member or the member�s designated beneficiary
approves the recalculated final compensation to be utilized in calculating the
member�s retirement benefits, the recalculation in the member�s retirement benefits
shall apply to such benefit entitlements granted prior to and in effect on the
effective date of this act, but only for benefit payments made after that
effective date.� No member of the retirement system shall be granted a
retroactive payment based upon the difference between the benefit the member
would have received if the recalculation had been applicable at the date of
entitlement and the benefit that the member has received from the date of
entitlement to that effective date.
���� c.� The director of the
Division of Pensions and Benefits shall promulgate such rules and regulations
as the director determines are necessary to effectuate the provisions of this
section.
���� 3.� This act shall take effect
on the 90th day following the date of enactment, except that anticipatory
administrative action in advance as shall be necessary for the implementation
of this act.
STATEMENT
���� This bill establishes an
alternate calculation of retirement benefits for members in the Teachers�
Pension and Annuity Fund (TPAF) and the Public Employees� Retirement System
(PERS).
���� The bill requires the Division
of Pensions and Benefits to send a first notice to the member or the member�s
designated beneficiary stating the details of the final compensation that will
be utilized in calculating the member�s retirement benefits upon receiving a
properly completed retirement application from the member of TPAF or PERS.� Under
current law, final compensation is calculated using the member�s ultimate three
years of creditable service in New Jersey immediately preceding the member's
retirement or death, or the average annual compensation for New Jersey service
for which contributions are made during any three fiscal years of the member�s
membership providing the largest possible benefit to the member or the member's
beneficiary.
���� Under the bill, upon receiving
the notice from the Division of Pensions and Benefits, the member or the
member�s designated beneficiary is eligible to request a recalculation of the
member�s final compensation utilizing the member�s average annual compensation
for New Jersey service for which contributions are made during any three
calendar years of the member�s membership providing the largest possible
benefit to the member or the member's beneficiary as an alternative to the
stated final compensation provided by the Division of Pensions and Benefits.�
The member or the member�s beneficiary has 60 days from receipt of the notice
to submit a request for the recalculation.
���� The Division of Pensions and
Benefits, in consultation with the board of trustees of the respective retirement
system, has 30 days upon receiving the recalculation request to send a second
notice to the member or the member�s designated beneficiary stating the
recalculated final compensation.�
���� The member or the member�s
designated beneficiary has 30 days upon receiving the second notice from the
Division of Pensions and Benefits to approve the recalculated final
compensation to be utilized in calculating the member�s retirement benefits.�
If the member fails to approve the recalculated final compensation within the 30
days, the Division of Pensions and Benefits will utilize the final compensation
stated in the first notice to calculate the member�s retirement benefits.
���� Under the bill, members who
retired after January 1, 2025 and began receiving retirement benefits as of the
effective date of this bill will have one year following the effective date of
the bill to initiate the recalculation process.� However, any adjustment in
retirement benefits granted under the provisions of the bill will only apply to
benefit payments made after the effective date.