Pension Service Credit Scheme

Are public employers in New Jersey keeping long-service part-time employees on their books only for pension service credits?

You decide:

In 2011 New Jersey made some pension reforms including:

QUESTION: What will happen to part-time employees in the Pension System?

ANSWER: Current part time employees are allowed to continue in the defined benefit pension system. They are “grandfathered in,” unless they have a break in service. New part time employees making more than $5,000 a year or current part time employees that have a break in service will be moved to a defined contribution retirement system, similar to a 401(k).

According to the PERS handbook eligibility has been redefined over the years:

pers-tiers

The idea was to get public employees who were in part-time jobs that required little work and paid nominal salaries from getting full pensions.

That YourMoney website lists 391,283 people in a data file that:

“reflects data for employees who are active members in a state pension system as reported by the employer. It lists the salary eligible for pension credit for the four most recent calendar quarters reported as well as attributes that describe the status of the member for pension purposes.”

Presumably that means the employees in the database are still earning pension credits from the jobs they hold.

Kean University lists 501 employees actively participating in the New Jersey pension system.  Here are a few of them sorted by highest paid:

kean-highest

And here are the lowest paid:

kean-lowest

The lowest paid employee of Kean University actively participating in the New Jersey pension system as of September 30, 2016 had an annual salary of $558 and, by chance, happens to be a Union County freeholder. It would have cost $40 in member contributions (7.2% of that $558 salary) to ‘earn’ that service credit which, depending on what other government job a sitting freeholder can wangle over three years to boost that average salary on which his pension would be based, could wind up being worth tens of thousands of dollars at retirement to him (and cost to taxpayers).

6 responses to this post.

  1. Posted by Anonymous on January 4, 2017 at 3:03 pm

    I see why they wanted to put the pension question on the ballot real fast last year …if much more of this corruption gets out to the public it won’t stand a chance of passing

    Reply

    • Posted by Anonymous on January 4, 2017 at 3:11 pm

      It’s need to be aired, all of it! Because it needs to stop and be included in any future ballot. Interesting these schemes are going on at the local level or autonomous governmental entities.

      Reply

  2. Posted by Anonymous on January 4, 2017 at 4:28 pm

    The lowest paid are adjunct faculty.

    Reply

  3. Posted by George on January 4, 2017 at 9:30 pm

    How does health insurance work for part timers? Are they given the same health insurance as full time workers? Are they required to pay for their health insurance, but are considered part of the full time group for the purpose of premium calculation.

    Do part timers get other perks? Free use of facilities, free tuition…?

    Reply

  4. […] 5 was supposed to exclude part-time employees hired on or after June 28, 2011 from the pension system.  But a review of active employees in the New Jersey retirement system as of September 30, 2016, […]

    Reply

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