A2317 —

A2317 1R FISCAL ESTIMATE   LEGISLATIVE FISCAL ESTIMATE [First Reprint] ASSEMBLY, No.

2317 STATE OF NEW JERSEY 219th LEGISLATURE   INTRODUCEDDATED: FEBRUARY 3, 2020     Sponsored by:

Assemblywoman NOVEMBER ANGELICA19, M.    SUMMARY   Synopsis:

JIMENEZ“Dominick DistrictMarino 32PFRS (BergenEnhanced andBenefits Hudson)for Assemblyman Surviving PEDROSpouses MEJIAAct”; District 32 (Bergen and Hudson) Assemblywoman  CAROL A.

MURPHY District 7 (Burlington)   Co-Sponsored by:

Assemblyman Auth, Assemblywoman Tucker, Assemblyman Giblin, Assemblywoman Swain, Assemblyman Tully, Assemblywomen Quijano, Lopez and Timberlake         SYNOPSIS       “Dominick Marino PFRS Enhanced Benefits for Surviving Spouses Act”;

  CURRENTType VERSIONof OFImpact: TEXT      As reported by the Assembly Appropriations Committee on November 12, 2020, with amendments.

  Periodic Anexpenditure Actincrease 1,to designated as the “DominickState MarinoGeneral PFRSFund Enhanced Benefits for Surviving Spouses Act,”1 concerning the accidental death benefit of the Police and Firemen’slocal Retirementgovernment Systementities. and amending P.L.1944, c.2551.1        Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 Agencies     Affected: 11.   This act shall be known as the “Dominick Marino PFRS Enhanced Benefits for Surviving Spouses Act.”1        1[1.]  2.1    Section of P.L.1944, c.255 (C.43:16A-10) is amended to read as follows:

    Division 10. of (1) Pensions Uponand theBenefits, deathDepartment of athe memberTreasury; in active service as a result of:

    local (a)  government anentities. accident met in the actual performance of duty at some definite time and place, or      (b)   service in the reserve component of the Armed Forces of the United States or the National Guard in a federal active duty status, and such death was not the result of the member's willful negligence, an accidental death benefit shall be payable if a report of the accident is filed in the office of the retirement system within 60 days next following the accident, but the board of trustees may waive such time limit, for a reasonable period, if in the judgment of the board the circumstances warrant such action.  No such application shall be valid or acted upon unless it is filed in the office of the retirement system within five years of the date of such death.

      The  provisionsOffice of thisLegislative subsectionServices shallEstimate alsoPeriodic applyFiscal toImpact aYear member1  whoYear is2  aYear fireman3  and  whoState diesCost asIncrease* a  resultIndeterminate     Local Cost Increase*   Indeterminate         ·         PFRS Employer Contribution   ·         The Office of anLegislative accidentServices met(OLS) estimates that this bill will result in indeterminate, marginal State and local cost increases because its provision would apply only when the actualannual performancecompensation of dutya asmember aof volunteerthe firemanPolice inand anyFiremen’s municipalityRetirement inSystem the(PFRS) State,is providedless than $71,429 at the member'stime deathof wasdeath.  notThe 2010 and 2013 experience studies and actuarial valuations for the resultPFRS indicate that out of ten accidental deaths since 2007, only one PFRS member, who died before 2010, had a salary below $71,429 at the member'stime willfulof negligence.death.

      (2)  ·         UponAccording the receipt of proper proofs of the death of a member on account of which an accidental death benefit is payable, there shall be paid to his widow or widower a pensionrecent ofactuarial 70%valuation, oflocal thePFRS compensationmembers [,]earn uponsalaries whichgreater contributionsthan by$71,429 theper member to the annuity savings fund were based in the last year of creditable service, or a pension of $50,000 when death occurs on or after thefour effectiveyears date of P.L.   service ,and c.   State (pendingPFRS beforemembers theearn Legislaturesalaries asgreater than this bill),amount whicheverafter isnine greater,years for the use of herselfservice. or himself and the children of the deceased member;

if  there·         isAccording noto survivingthe widow2013 orexperience widowerstudy, orthe inincident caserate theof widowa orPFRS widoweraccidental dies,death 70%is 0.296 percent, with the highest probability of suchthe compensationexpected willincidents beof payableaccidental todeath in the member's40 survivingto child44 orand surviving45 childrento in49 equalyear-old shares.age groups.

      IfBILL thereDESCRIPTION is  no      This bill enhances the accidental death benefit of a member of the PFRS for a member’s surviving widow,spouse.  widowerCurrently, orthat child,benefit 25%is percent of the compensation upon which contributions by the member to thePFRS annuity savings fund were based in the last year of creditable service,service.  willThe bebill payableprovides toan onealternative survivingbenefit, dependentif parentlarger, orof 40%$50,000 annually for the surviving spouse of sucha compensationmember willwho bedies payableon toor twoafter survivingthe parentseffective indate equalof shares.this bill.

      In  theFISCAL eventANALYSIS of  accidentalEXECUTIVE deathBRANCH occurring  in      theNone firstreceived. year of creditable service, the benefits, payable pursuant to this subsection, shall be computed at the annual rate of compensation.

      (3)  OFFICE IfOF thereLEGISLATIVE isSERVICES no  surviving      widow,The widower,OLS childestimates orthat dependentthis parent,bill therewill shallresult bein paidindeterminate, tomarginal anyState otherand beneficiarylocal cost increases because its provision would apply only when the annual compensation of a member of the deceasedPFRS is less than $71,429 at the time of death.  The 2010 and 2013 experience studies and actuarial valuations indicate that out of ten accidental death incidents since 2007, only one PFRS member, hiswho aggregatedied contributionsbefore 2010, had a salary below $71,429 at the time of death.death.  According to a recent actuarial valuation, local PFRS members earn salaries greater than $71,429 per year after four years of service and State PFRS members earn salaries greater than this amount after nine years of service.  According to the 2013 experience study, the incident rate of a PFRS accidental death is 0.296 percent with the highest probability of the expected incidents of accidental death in the 40 to 44 and 45 to 49 year-old age groups.  Currently, the total average annual compensation for all PFRS-local members is $99,691 and the total average annual compensation for a PFRS-State member is $70,507.      Section:

    State (4)  Government InAnalyst: no case shall the death benefit provided in subsection (2) be less than that provided under subsection (3).

    Aggie (5)  Szilagyi InSection additionChief toApproved: the foregoing benefits payable under subsection (2) or (3), there shall also be paid in one sum to such beneficiary, if living, as the member shall have nominated by written designation duly executed and filed with the retirement system, otherwise to the executor or administrator of the member's estate, an amount equal to 3 1/2 times the compensation upon which contributions by the member to the annuity savings fund were based in the last year of creditable service.

    Thomas (6)  Koenig InAssistant additionLegislative toBudget theand foregoingFinance benefits,Officer the  State  shallThis paylegislative tofiscal theestimate member'shas employer-sponsoredbeen healthproduced insuranceby programthe allOffice healthof insuranceLegislative premiumsServices fordue to the coveragefailure of the member'sExecutive survivingBranch widowto orrespond widowerto andour dependentrequest children.for a fiscal note.

      This 1[2.]  fiscal 3.1    estimate Thishas actbeen shallprepared takepursuant effectto immediately.P.L.1980, c.67 (C.52:13B-6 et seq.).