N.J. Stat. § 43:12-1.13
The payment of pensions granted pursuant to this act shall be provided for in the budget of the employer granting the pension. If the employer was contributing to a retirement system on behalf of said employee and his widow, the adoption of the provisions of this act and the payment of pension or widow's benefits provided hereunder shall be considered as a discharge of the employer's liability to the retirement system with respect to such employee and his widow so that a credit for the discharge of such liability shall be reflected in the subsequent valuations of the employer's liabilities under the retirement system for all other employees.
Upon the employee's or his widow's acceptance of the pension granted pursuant to this act, and as a condition thereof, the employee or his widow shall pay over to the employer the value of his contribution and interest which was credited to his account in any retirement system established by the State or any of its political subdivisions in order to defray part of the cost of the pension to be paid by the employer.
N.J.S. § 43:12-1.13