N.J. Admin. Code § 17:2-6.14

Current through Register Vol. 56, No. 21, November 4, 2024

Section 17:2-6.14 - Disability retirant; annual report (employment, earnings, test and adjustment)

(a) Pursuant to 43:15A-44, if a disability retirant is engaged in gainful employment that does not require reenrollment in the PERS, 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, which 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 System'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 System, which may include copies of the retirant's IRS 1040 forms and W-2 forms and 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 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 sum of 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 excess earnings, limited to the pension portion of the retirement allowance. 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 shall be made in anticipation of excess earnings in the current year. After proof is submitted in the subsequent year, if it is determined that the salary earned in the previous year was higher, appropriate repayment to the System 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 System 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.

N.J. Admin. Code § 17:2-6.14

Amended by 50 N.J.R. 646(a), effective 1/16/2018