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NJ PERS Vesting

Guest Maja

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Hello. I'm currently a NJ state employee with 7.5 years in the PERS (414h) pension system. Repeatedly, bills have been introduced in the legislature seeking to lower the vesting requirement from 10 years to 5, but for some other reason other benefit enhancements are always passed instead. It doesn't even look like the bill will make it out of committee this legislative season. I will most likely have to leave the state soon due to heatlh reasons, but am trying to hang on until I'm vested. I've noticed that most states, including NY, PA, DE, etc., require only 5 years for vesting purposes. In fact, it seems like most states nowadays only require 5 years. Also, this defined benefit plan is not covered under ERISA.

Do you know of any federal law that might require the state to change this vesting requirement soon? I have no idea why the NJ legislature prefers to remain out-of-synch with the times. Any information would be greatly appreciated.

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AS you state, ERISA does not cover this plan. Vesting provisions are contained in the plan, and determined by the plan sponsor (i.e., the state). No federal statute will change that, nor is one likely.

I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.

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Where did you get the idea that NJ PERS has a 10 year requirement for vesting?

George D. Burns

Cost Reduction Strategies

Burns and Associates, Inc

www.costreductionstrategies.com(under construction)

www.employeebenefitsstrategies.com(under construction)

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Hi, again. Here is what the website states:


DEFERRED RETIREMENT is available to those members who have at least ten years of service credit and are not yet 60 years of age when they terminate employment. The retirement would be effective on the first of the month after attaining age 60. You will receive a retirement allowance based on the Service Retirement formula. You may apply for a Deferred Retirement when you terminate covered employment.

Also, ten years are needed for a disability retirement. I am also many years away from "normal retirement age". If you have less than 10 years of service credit, all you receive is your investment plus 2% interest per annum.

Does anyone know why New Jersey has not reduced its vesting requirement like other states? I am starting to lose all hope. :(

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