PERS Retirement Information

Our PERS Retirement Pension is known as a 401A with the IRS.

PERS Pensions are based on the 3 highest years of Services (Default is the last 36 months of employment. It must be specified if the highest years are not the last 36 months).

Pension Loans can be carried into retirement.

PERS has a website http://www.state.nj.us/treasury/pensions On the left hand side of the listed web page is a link for MBOS (Online Member Services) Everyone should register on MBOS.

MBOS will show individuals entire history in PERS (MBOS is 3 months behind in reporting).

Retirement paperwork should be submitted 3-4 months prior to retiring.

Individuals can change the minds about retiring within 30 days after retiring with no penalty but whether your job is still available is between the employee and the employer.

Once retired the first pension check will be issued on the first of the month following the first full month of no employment. Example: Last day on payroll 12/15/07 = First pension check on 2/1/08 another example

Last day on payroll 12/31/07 = First pension check on 2/1/08 and one more example for good measure

Last day on payroll 1/1/08 = First pension check on 3/1/08.

The pension check is actually covering the time period of the month prior to its receipt. Example: Your 2/1/08 pension check is actually for the month of 1/1/08, therefore if a retiree passes on (dies) on 1/16/08 there will still be one more pension check issued on 2/1/08. The check would be in the full amount. Even if you’re only alive for one day of the month you or actually your estate is still eligible for the pension check on the next first of the month.

If an individual is contributing to the life insurance (3 x salary) then upon retirement (along with at least 10 years of service) the life insurance converts to 3/16 of the final salary.

If an individual has time that can be purchased back for retirement it can be paid for in two ways

First would be Lump Sum Payment

Second would be through payroll deduction at 8 ¼ % for no more the 10 years

Anyone can be the beneficiary of the pension. If option A, B, or C are chosen for the pension then if the beneficiary passes on (dies) prior to the retiree then the pension payment reverts back to the maximum payment.

If option 2 or 3 are chosen for the pension then if the beneficiary passes on (dies) prior to the retiree then the pension does not change.

Important Question and Note: If an individual is not retired then how can a beneficiary be chosen?

Upon reaching 25 years of services and eligibility for the pension individuals should register or login into MBOS (mentioned above) and choose a retirement date 12 months out from the current date. Even if an individual has no intention of retiring this should be done. When picking the date of retirement the option to choose the pension option is offered (A, B, C, 1, or 2). Also at anytime while on the MBOS site the beneficiary can be chosen for both the life insurance and pension. Once this is complete then the information is locked in with PERS. Now upon passing away (dying) prior to retiring the beneficiary will be offered the pension. Approximately 3 months prior to the retirement date chosen PERS will mail out confirmation of retirement at which time the individual can push back the retirement date 1 year. This can be done continuously without limit. If this whole process is not completed then upon the employee passing (dying) no pension will be offered to the beneficiary.

Cost of Living for the pension is based on 60% of the consumer price index and is always used against the original pension amount when first retired. The first cost of living increase occurs 25 months after retirement and then again on January preceding the first cost of living increase. Subsequent cost of living increase will occur every January.

Individuals employed prior to 1987 may have part of their pensions not taxable. W4P tax forms will be issued by the IRS.

Health Insurance for life is not automatic. At the OCBSS it is a negotiated item, which is covered by the contract.

Spouse or Domestic Partner are covered by the retirees health insurance along with children under the age of 23 who are living at home. Students away from home living at school are still considered in the home. When the child turns 23 years old they continue coverage through December of that same year. Example: Child turns 23 on March 2, 2008 then that child is covered through December 2008.

Dependents can be added to the retirees insurance after retirement at any time as long as it is reported within 60 days.

Upon the retiree passing on (dying) the health insurance for dependents terminates with them.

There is no open enrollment for retirees they only have to stay with the insurance for 12 months and then they can change. This can be done continuously as long as they stay with each for a minimum of 12 months.

2 months prior to retiree reaching the age of 65 Medicare will be mailed to retiree. Part A and Part B must be chosen but never, never, never choose Part C. If the retiree fails to choose Part A and Part B then the health insurance through PERS will be terminated. The cost of Part B is $96 per month. OCBSS retirees should submit a voucher to the board after each payment for reimbursement.

Dental insurance has 3 tiers and everyone must pay something base on the tiers. PERS determine the tiers.

Social Security can be received as early as age 62 (reduced amount). Full retirement age for Social Security can be obtained by going to http://www.socialsecurity.gov/ . Prior to reaching your full retirement age with Social Security there is a maximum amount of income that can be earned without penalty. This maximum amount changes from year to year and set by Social Security. You can go to there website for this current amount. Upon reaching your full retirement age then you can earn as much money as you desire without penalty. The pension is not earned income and therefore does not count towards any max.

If a husband and wife are both receiving Social Security on their own accounts and one dies then the survivor would receive whichever benefit amount was higher.

Useful Links:

Retirement Estimate Calculator – www.state.nj.us/treasury/pensions/estimate.htm

NJ Public Employees’ Retirement System – www.state.nj.us/treasury/pensions/pers1.htm

MBOS – www.state.nj.us/treasury/pensions/mbos_webx.htm

Social Security – www.socialsecurity.gov