Leave of Absence
and Your Benefits
Information for:
All Funds
Page 1 February 2019 Fact Sheet #20
This fact sheet addresses leave of absence and its
effect on your pension service credit, group life in-
surance, and health benefits coverage under the
New Jersey State-administered retirement programs.
It also addresses family leave and leave for military
service.
DEFINED BENEFIT RETIREMENT SYSTEMS
The State-administered defined benefit retirement
systems include the Public Employees’ Retirement
System (PERS), Teachers’ Pension and Annui-
ty Fund (TPAF), Police and Firemen’s Retirement
System (PFRS), State Police Retirement System
(SPRS), and Judicial Retirement System (JRS).
Pension Service Credit
If a member is on an intermittent or a continuous
leave of absence so that there is some amount of pay
over several months/pay periods, there will be no im-
pact on the member’s pension as long as the mem-
ber earns sufficient salary to make normal pension
contributions during each month/pay period. Since
the member’s regular deduction is based on his or
her contractual salary, the member will receive credit
for both service and full salary during that month/pay
period that the contribution is made.
Conversely, if a member does not earn sufficient sal-
ary in any given month/pay period to cover the reg-
ular pension deductions, the member will be consid-
ered to be on a leave of absence without pay for that
month/pay period.
If a member is on a leave of absence and earns
no pay in any given month/pay period, the member
will not receive any pension service credit for those
months/pay periods since the member did not work
and pension contributions were not made. Upon re-
turn to active payroll status, PERS, TPAF, PFRS, and
SPRS members may apply to purchase this service
credit like any other authorized leave of absence.
Leave of Absence Without Pay –
Purchasing Service Credit
Members of the PERS, TPAF, PFRS, and SPRS are
eligible to purchase service credit for each official
leave of absence without pay. The amount of ser-
vice credit eligible for purchase depends on the type
of leave that was taken (Out-of-State and Federal
leaves are not eligible for purchase).
• Up to two years may be purchased for leaves
taken for personal illness;
• Uptothreemonthsmaybepurchasedforleaves
taken for personal reasons (includes maternity –
see below).
Conditions that pertain to the purchase of eligible
leaves of absence:
• Anofcialleaveofabsencerequiresdocumenta-
tion that establishes the nature of the leave and
the continuing relationship between the employ-
er and the member.
• To be eligible for purchase, each leave of ab-
sence must be shown to have been approved in
advance.
• Aleaveofabsencewithoutpayunderaformer
membership may be eligible for purchase.
• Anemployeewhoispaid10monthsayearand
who was on an approved leave that includes
the month of September may be allowed to pur-
chase service for the months of July and August
as part of the leave of absence.
• Employers must certify the amount of time a
member was under a doctor’s care for leaves for
personal illness.
• Employeesareeligibletopurchaseupto three
months leave for personal illness for maternity.
If a leave is in excess of three months, it must
be certified by a physician that the member was
disabled beyond three months due to the preg-
nancy.
• Child care leaveis considered a leavefor per-
sonal reasons and is limited to a maximum eligi-
ble purchase of three months.
Members of the Defined Contribution Retirement
Program (DCRP) or Alternate Benefit Program
(ABP) are not eligible to purchase any portion of ser-
vice credit for official leaves of absence without pay.
See the “Defined Contribution Retirement Program
(DCRP)” and the “Alternate Benefits Program (ABP)”
sections.
Fact Sheet #20 February 2019 Page 2
Leave of Absence and Your Benefits
This fact sheet is a summary and not intended to provide all information.
Although every attempt at accuracy is made, it cannot be guaranteed.
Group Life Insurance
While employed, most defined benefit plan mem-
bers are covered by Noncontributory Group Life
Insurance. PERS and TPAF members may also be
covered by Contributory Group Life Insurance. (JRS
members, see below.)
Group life insurance will continue in full force while on
an intermittent or continuous leave of absence with
pay.
Group life insurance will continue in full force for an
official leave of absence without pay under the follow-
ing conditions:
• Uptotwoyearswhileonanofcialleaveofab-
sence for personal illness. In this case, contribu-
tions are not necessary for PERS or TPAF mem-
bers to continue contributory insurance.
• Uptooneyear while on an official leave to fulfill
aresidencyrequirementforanadvanceddegree
or as a full-time student at an institution of higher
education. In this case, contributions are nec-
essary for PERS or TPAF members to continue
contributory insurance.
• Upto93dayswhileonofcialleaveforpersonal
reasons (also family leave). In this case, contri-
butions are necessary for PERS or TPAF mem-
bers to continue contributory insurance.
Note: Remittance of PERS or TPAF Contribu-
tory Group Life Insurance premiums should be
done immediately upon leaving the employer’s
payroll. If a member does not make these op-
tional premium payments, contributory insur-
ance is suspended until the member returns to
the employer’s regular payroll. Members must
complete a Personal Insurance Contribution
Remittance form, which is available from your
employer or can be found on the New Jersey
Division of Pensions & Benefits (NJDPB) website
at: www.nj.gov/treasury/pensions
Anofcialleaveofabsencerequiresdocumentation
that establishes the nature of the leave and the con-
tinuing relationship between the employer and the
member.
At the end of the covered period, PERS, TPAF,
PFRS, and SPRS members have the option to con-
vert group life insurance to a private policy. (See the
Conversion of Group Life Insurance Fact Sheet.)
Otherwise, group life insurance coverage will end.
JRS members are eligible for Noncontributory Group
Life Insurance and one of two types of Contributory
Group Life Insurance: Group Term Life Insurance or
Group Variable Universal Life (GVUL). In most cases,
JRS group life insurance continues while on an ap-
proved leave of absence. JRS members who leave
covered service as a judge may convert Noncon-
tributory Group Life Insurance and Group Term Life
Insurance coverage to a private policy. GVUL insur-
ance is portable coverage, which means that cover-
age can be continued by paying a monthly premium.
JRS members should contact Prudential for details.
DEFINED CONTRIBUTION
RETIREMENT PROGRAM (DCRP)
Salary and Service Credit
If a DCRP member is on an approved leave of ab-
sence on intermittent days or for a partial month but
earnsmorethan50percentofhisorherregularbase
salary, the full 5.5 percent employee deduction and
the three percent employer share will continue to be
contributed as though he or she received full base
salary.
If a DCRP member receives less than 50 percent
of his or her base salary, no employee or employ-
er contributions are made and no service credit is
earned for that month. Since there are no provisions
for purchasing service credit in the DCRP, this period
of service cannot be reclaimed.
Group Life Insurance
While employed, most DCRP members are covered
by employer-paid life insurance. This insurance will
continue in full force while on an intermittent or con-
tinuous leave of absence with pay.
DCRP members continue to be insured for up to two
years if on an approved leave of absence without pay
for personal illness. DCRP members continue to be
insured for up to one year to fulfill a residency re-
quirementforanadvanceddegreeorifonanofcial
leave due to maternity.
For other types of leave without pay, members on a
leaveofabsencecontinuetobeinsuredforupto93
days (including child care).
Duringthis93-dayperiod,amembermayconvertex-
isting group life insurance coverage into an individual
whole life policy, without medical examination. For
more information, see the Conversion of Group Life
Insurance Fact Sheet.
Anofcialleaveofabsencerequiresdocumentation
that establishes the nature of the leave and the con-
tinuing relationship between the employer and the
member.
ALTERNATE BENEFITS PROGRAM (ABP)
Salary and Service Credit
If an ABP member is on a leave of absence on in-
termittent days or for a partial month but earns more
than50percentofhisorherregularbasesalary,the
full five percent employee deduction and the eight
percent employer share will continue to be contrib-
uted as though he or she received full base salary.
IfanABPmemberreceiveslessthan50percentof
his or her base salary, no employee or employer con-
tributions are made and no service credit is earned
for that month. Since there are no provisions for pur-
chasing service credit in the ABP, this period of ser-
vice cannot be reclaimed.
Page 3 February 2019 Fact Sheet #20
Leave of Absence and Your Benefits
This fact sheet is a summary and not intended to provide all information.
Although every attempt at accuracy is made, it cannot be guaranteed.
Group Life Insurance
While employed, most ABP members are covered by
employer-paid life insurance. ABP members continue
to be insured for up to two years if on an approved
leave of absence without pay for personal illness.
ABP members on other types of leave of absence
withoutpaycontinuetobeinsuredforupto93days
when such leave is due to any reason other than ill-
ness (including child care).
Duringthis93-dayperiod,amembermayconvertex-
isting group life insurance coverage into an individual
whole life policy, without medical examination. For
more information, see the Conversion of Group Life
Insurance Fact Sheet.
Anofcialleaveofabsencerequiresdocumentation
that establishes the nature of the leave and the con-
tinuing relationship between the employer and the
member.
LEAVE OF ABSENCE AND HEALTH BENEFITS
Members of the PERS, TPAF, PFRS, SPRS, JRS,
DCRP, or ABP may continue coverage in the State
Health Benefits Program (SHBP) or School Employ-
ees’ Health Benefits Program (SEHBP) while on an
approved leave of absence provided that:
1.The member is eligible for, and enrolled in,
SHBP or SEHBP coverage prior to the leave of
absence; and
2. The employer participates in the SHBP or
SEHBP.
If the member is on an intermittent or a continuous
leave of absence with pay, there will be no impact
on the member’s SHBP or SEHBP coverage as long
as the member earns sufficient salary to make any
normallyrequiredhealthbenetspremiumpayments
during each month/pay period.
If the member is on an approved leave of absence
without pay, the continuation of health benefits is as
follows:
• Leave of absence for illness — If the member
is a State biweekly employee, SHBP coverage
will continue for the first six pay periods follow-
ing the last day the employee would normally
be covered. During this time, the member is re-
sponsibleforpayinganynormallyrequiredpre-
mium payments. Coverage may continue for an
additional20payperiodsprovidedtheemployee
pays the full cost of the coverage.
If the member is a State monthly employee, the
employer may pay for SHBP coverage for the
first three months following the last day the em-
ployee would normally be covered. During this
time, the member is responsible for paying any
normallyrequiredpremiumpayments. Coverage
may continue for an additional nine months pro-
vided the employee pays the full cost of the cov-
erage. If an employer does not extend coverage
for the initial three-month period, the employee
may only elect to continue coverage for a maxi-
mum of nine months.
If the member is an employee of a local govern-
ment or local education employer that partici-
pates in the SHBP or SEHBP, the employer may
pay for SHBP or SEHBP coverage for the first
three months following the last day the employee
would normally be covered. During this time the
member is responsible for paying any normal-
ly required premium payments. Coverage may
continue for an additional nine months provided
the employee pays the full cost of the coverage.
If an employer does not extend coverage for the
initial three-month period, the employee may
only elect to continue coverage for a maximum
of nine months. The employer may not discrimi-
nate against any eligible employee or groups of
employees.
Note: Certain local education employers may
adopttheprovisionsofP.L.1989,c.127(Chap-
ter127),whichpermitstheemployertocontinue
to pay for the coverage of an employee granted
an approved leave of absence (with or without
pay) for up to a two-year period, provided that
the employee has worked for the location for at
least three years.
• Leave of absence other than illness — A mem-
ber who is on an approved leave of absence for
reasons other than illness, family leave, or fur-
lough, may continue health coverage under the
SHBPorSEHBPforuptoninemonthsor20bi-
weekly pay periods. The full cost of the coverage
must be paid to the employer in advance. If the
employee remains on a leave beyond the time of
the coverage that has been purchased, Active
Group coverage will terminate; however, cover-
age may be be extended under the Consolidat-
edOmnibusBudgetReconciliationActof1985
(COBRA)foraperiodnottoexceed18months,
including the total leave time. Leave that quali-
fies under the Federal or State Family Leave Act
is not deducted from the total COBRA eligibility
period.
Because the member may pay some or all of the
cost of continued health benefits coverage while
on a leave of absence, a member may choose
to reduce his or her level of coverage for the du-
ration of the leave and increase it again upon
return from the leave. For example, a member
can reduce Family coverage to either Parent and
Child or Single coverage. Please note that it is
necessary to complete a Health Benefits Enroll-
ment and/or Change Form to decrease the cov-
erage and also to reinstate it when the member
returns to work.
Fact Sheet #20 February 2019 Page 4
Leave of Absence and Your Benefits
This fact sheet is a summary and not intended to provide all information.
Although every attempt at accuracy is made, it cannot be guaranteed.
• Family Leave under the provisions of the fed-
eral Family and Medical Leave Act (FMLA)
and the New Jersey Family Leave Act
(NJFLA) — State and local employees enrolled
in the SHBP or SEHBP are entitled to have their
health benefits coverage continued at the ex-
pense of their employer while they are on federal
and/or State family leave; however, the member
isresponsible forpayinganynormally required
premium payment or health benefits contribution
to the employer in advance of the leave.
LEAVE FOR MILITARY SERVICE
Leave of absence when taken for military service is
covered under the federal Uniformed Services Em-
ployment and Reemployment Rights Act of 1994
(USERRA), which provides that a member who
leaves employment to serve on active duty is entitled
to certain pension rights upon return to employment
with the same employer. The time in military service
is to count, for vesting and retirement eligibility pur-
poses, as though the employee had not left. Howev-
er, the member will, at a minimum, have to make the
pensioncontributionsnormallyrequiredtohavethe
military service time included in the calculation of the
retirement benefit.
When an employee returns from uniformed military
service to public employment covered by a State-ad-
ministered retirement system (PERS, TPAF, PFRS,
SPRS, JRS) within the time frames specified under
USERRA, the employer should notify the NJDPB
nolaterthan30daysaftertheemployee’sreturnby
submitting a Request for USERRA-Eligible Service
form. Once notified, the NJDPB will annotate the
employee’s pension account to reflect the USERRA
credit for benefits eligibility and will provide the em-
ployee with a quotation for the cost for purchasing
the pension service credit so that it counts toward the
calculation of benefits. For more information, see the
USERRA — Military Service After Enrollment Fact
Sheet.
WORkERS’ COMPENSATION
Workers’ Compensation is designed to compensate
employees who suffer work-related injuries or illness-
es. If a member is on an unpaid leave of absence
due to a Workers’ Compensation claim, the member
should have his/her employer forward pension con-
tributions on the employee’s behalf to the NJDPB. If
necessary,themembermaysubmitawrittenrequest
directly to the Audit Section of the NJDPB to deter-
mine if the member’s employer may be responsible
for remitting normal pension contributions. A member
that is receiving Workers’ Compensation is not enti-
tled to purchase service credit for that same covered
period. See the Workers’ Compensation Fact Sheet
for additional information.
This fact sheet has been produced and distributed by:
New Jersey Division of Pensions & Benefits
P.O. Box 295, Trenton, NJ 08625-0295
(609) 292-7524
For the hearing impaired: TRS 711 (609) 292-6683
www.nj.gov/treasury/pensions