TOWNSHIP OF JACKSON NOTES TO FINANCIAL STATEMENTS (continued): FOR THE YEAR ENDED DECEMBER 31, 2014
Note 4. Pension (continued):
B. Funding Policy
The System’s designated purpose is to provide retirement, death, disability and medical benefits to certain qualified members. Membership in the System is mandatory for substantially all full-time employees of the State of New Jersey or any county, municipality, school district or public agency, provided the employee is not required to be a member of another state-administered retirement system or other state or local jurisdiction. The System’s Board of Trustees is primarily responsible for the administration of the System.
According to the State of New Jersey administrative code, all obligations of the System will be assumed by the State of New Jersey should the System terminate.
Plan members are required to contribute 6.5%, effective October 1, 2011, of their annual covered salary for P.E.R.S, 10%, effective October 1, 2011, of their annual covered salary for P.F.R.S. and the Township is required to contribute at an actuarially determined rate. The contribution requirements of plan members and the Township are established and may be amended by the plan’s Board of Trustees.
The Township’s contributions to P.E.R.S. for the years ending December 31, 2014, 2013 and 2012 were $649,662, $759,294 and $823,495, respectively, equal to the required contributions for each year, and to P.F.R.S. for the years ending December 31, 2014, 2013 and 2012 were $1,918,335, $2,137,931 and $2,169,961, respectively, equal to the required contributions for each year.
C. Post-Employment Benefits
Chapter 384 of Public Laws 1987 and Chapter 6 of Public Laws 1990 requires the PERS to fund post-retirement medical benefits for those employees covered by the State Plan, who retire after reaching age 60 and accumulating 25 years of credited services. The cost of these benefits is actuarially determined and funded through contributions by the State in accordance with Chapter 62, P.L. 1994. Funding of the post-retirement medical premiums changed from a prefunding basis to a pay-as-you-go basis beginning in 1996, which increased the medical reserve by one-half of 1% of payroll.
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