Police and Firemen’s
Retirement System (PFRS)
Member Guidebook
Pensions & Benefits
SP-0492-0824
PFRS Member Guidebook August 2024 Page 2
Police and Firemen’s Retirement System
TABLE OF CONTENTS
PFRS General Information ...................3
Foreword ...............................4
The Retirement System ....................4
Contacting the NJDPB .....................4
Police and Firemen’s Mortgage Program .......5
Plan Information ..........................5
Eligibility ..................................6
Membership .............................7
Age Requirements ........................8
Part-time Employees ......................8
Enrollments ...............................9
Overview ..............................10
Dual Membership ........................11
Transfers ..............................11
Service Credit. . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Vesting ................................13
Purchasing Service Credit ..................14
Overview ..............................15
Types of Service Eligible for Purchase. . . . . . . . 15
Important Purchase Notes ................16
Cost and Procedures for
Purchasing Service Credit .................16
Applying to Purchase Service Credit .........17
Loans ...................................19
Overview ..............................20
Applying for a Loan ......................20
Internal Revenue Service Requirements ......21
Supplementing your Pension ................23
Overview ..............................24
Retirements ..............................25
Overview ..............................26
Types of Retirement ......................26
The Retirement Process ..................29
Reduction or Suspension of Your Benets .....32
Employment After Retirement ..............33
Active and Retired Death Benets ............34
Overview ..............................35
Accidental Death Benet ..................36
Group Life Insurance .....................36
Choosing a Beneciary ...................36
Payment of Group Life Insurance ...........37
Group Life Insurance and
Leave of Absence. . . . . . . . . . . . . . . . . . . . . . . . 37
Taxation of Group Life Insurance
Premiums ..............................37
Waiving Noncontributory Group
Life Insurance over $50,000. . . . . . . . . . . . . . . . 38
Conversion of Group Life Insurance .........38
Withdrawal ..............................39
Overview ..............................40
Withdrawing Contributions .................41
Workers’ Compensation ...................41
Appeals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Overview ..............................43
PFRS General
Information
PFRS Member Guidebook August 2024 Page 4
Police and Firemen’s Retirement System
FOREWORD
The New Jersey Police and Firemen’s Retirement
System (PFRS) Member Guidebook provides a sum-
mary description of the benets of the plan and out-
lines the rules and regulations governing the plan. The
PFRS Member Guidebook should provide you with all
the information you need about your PFRS benets.
However, if there is a conict with statutes governing
the plan or regulations implementing the statutes, the
statutes and regulations will take precedence. Com-
plete terms governing any employee benet program
are set forth in the New Jersey Statutes Annotated.
Regulations, new or amended, are published in the
New Jersey Register by the State Oce of Adminis-
trative Law supplementing the New Jersey Admin-
istrative Code. This guidebook, containing current
updates, is available for viewing on our website at:
www.nj.gov/treasury/pensions While at the New Jer-
sey Division of Pensions & Benets (NJDPB) website,
be sure to check for PFRS-related forms, fact sheets,
and news aecting the PFRS.
The purpose of this guidebook is to provide you with
information about the retirement system to assist you
in making decisions concerning you and your family’s
future. If you have questions concerning your retire-
ment system benets, please see the “Contacting the
NJDPB” section.
Since this is your guidebook, we would appreciate any
comments or suggestions for improvement that you
might have. Please send them to the address listed be-
low.
New Jersey Division of Pensions & Benets
ATTN: Oce of Communications
P.O. Box 295
Trenton, NJ 08625-0295
THE RETIREMENT SYSTEM
The State of New Jersey established the PFRS in 1944.
The NJDPB is assigned all administrative functions of
the retirement system except for investment.
P.L. 2018, c. 55 (Chapter 55), established a new
Police and Firemen’s Retirement System of New
Jersey (PFRSNJ) Board of Trustees, eective Febru-
ary 1, 2019. The PFRSNJ Board of Trustees has the
responsibility for the proper operation of the retirement
system. The Board consists of:
• Three active police representatives: one elected
by the active members of the system; one appoint-
ed by the president of the New Jersey State Police-
men’s Benevolent Association; and one appointed
by the President of the New Jersey State Fraternal
Order of Police;
• Three active re representatives: one elected by
the active members of the system; one appointed
by the president of the New Jersey State Fireght-
ers Mutual Benevolent Association, and one ap-
pointed by the President of the Professional Fire-
ghters Association of New Jersey;
• One retiree elected from the retirees of the system;
and
• Five trustees appointed by the Governor.
The Board meets once a month. A PFRS member
who wishes to be a candidate upon a vacancy for the
PFRSNJ Board of Trustees must be nominated by pe-
titions bearing the signatures of 500 active members in
the case of a police trustee, 300 active members in the
case of a re trustee, and 100 retired members in the
case of a retired member trustee. Nominating petition
forms, together with instructions for ling, are available
upon written request to the Secretary of the PFRSNJ
Board of Trustees, P.O. Box 297, Trenton, NJ 08625-
0297.
CONTACTING THE NJDPB
Member Benets Online System
The Member Benets Online System (MBOS) allows
registered PFRS members access to their pension
and, if applicable, health benets account information
online. Resources available through MBOS include:
member account information; beneciary designation;
online pension loan; purchase of service credit; with-
drawal application; and retirement applications. If ap-
plicable, account information for the New Jersey State
Employees’ Deferred Compensation Plan (NJSEDCP),
the Supplemental Annuity Collective Trust (SACT)
plan, and the State Health Benets Program (SHBP)
is also available.
Retirees may also use MBOS to: view retirement ac-
count information; update an address; change direct
deposit information; change a beneciary designation;
or update federal and/or New Jersey State income tax
withholding.
Before you can begin using MBOS, you must be reg-
istered with MBOS and the MyNewJersey website.
Registration information can be found on the NJDPB
website.
If you need assistance registering for MBOS, call
the MBOS Help Line at (609) 292-7524 or send
an email with the subject line “MBOS Email” to:
pensions.nj@treas.nj.gov
Telephone Numbers
• For computerized information about your individ-
ual pension account 24 hours a day, seven days
a week, call our Automated Information System at
(609) 292-7524. With Interactive Voice Response
and added services, all you need is your Social
Security number and membership number to hear
personalized benets information on loans, pur-
chases, retirement benets, and withdrawal.
Page 5 August 2024 PFRS Member Guidebook
Police and Firemen’s Retirement System
• To speak with a representative about your PFRS
account or health benets account, call (609)
292-7524 weekdays (except State holidays). The
most current hours of operation can be found on
our website. If you require the services of a relay
operator, please dial 711 and provide the operator
with the following number, (609) 292-6683. You
will then be connected to a Client Services phone
representative for assistance.
• To speak with a plan representative about the
NJSEDCP, also known as Deferred Comp, call
Empower (formerly Prudential) at 1-866-NJSED-
CP (1-866-657-3327) weekdays between 8:00
a.m. and 9:00 p.m. (except State holidays). A plan
representative will answer your questions and pro-
vide enrollment and distribution forms.
• To speak with a plan representative about the
SACT, call (609) 292-7524 weekdays (except State
holidays). The most current hours of operation can
be found on our website. SACT representatives
will answer your questions and provide enrollment
and distribution forms.
Internet, Email, and Mailing Address
General information and most publications of the
NJDPB can be found on the NJDPB website. You can
email the NJDPB at: pensions.nj@treas.nj.gov
Our postal address is:
New Jersey Division of Pensions & Benets
P.O. Box 295
Trenton, NJ 08625-0295
On all correspondence, be sure to include your mem-
bership number or the last four digits of your Social Se-
curity number.
Counseling Services
The NJDPB oers individual counseling services to
members of the retirement systems and other benet
programs. Online video-based personal counseling
appointments are available for members of the PERS,
TPAF, PFRS, SPRS, and DCRP. In-person counsel-
ing is available by appointment only on a limited basis
for members of the PERS, TPAF, PFRS, SPRS, and
DCRP. Walk-in counseling services will not be avail-
able. Appointments can be made on our website.
POLICE AND FIREMEN’S MORTGAGE PRO-
GRAM
A currently employed police ocer or reghter, who is
a member of the PFRS with at least one year of credit-
able service, is eligible to apply for a mortgage through
the PFRS. The mortgage program is administered
through private lenders in New Jersey and is applicable
to an owner-occupied principal residence.
For additional information on interest rates, fees, or for
a list of participating lending institutions, contact the
New Jersey Housing and Mortgage Finance Agency, at
1-800-NJ-HOUSE.
PLAN INFORMATION
Name of Plan
The Police and Firemen’s Retirement System of New
Jersey (PFRS).
Administration
The PFRS is a dened benet plan administered by the
New Jersey Division of Pensions & Benets (NJDPB).
Provisions of Law
The PFRS was established by New Jersey Statutes
and can be found in the New Jersey Statutes Annotat-
ed, Title 43, Chapter 16A. Changes in the law can only
be made by an act of the State Legislature. Rules gov-
erning the operation and administration of the system
may be found in Title 17, Chapters 1 and 4 of the New
Jersey Administrative Code.
Funding
The funds used to pay benets come from three sourc-
es: employer contributions, employee contributions,
and investment income from those contributions. All
contributions not required for current operations are in-
vested by the State Division of Investment.
Plan Year
For record-keeping purposes the plan year is July 1
through June 30.
Service of Legal Process
Legal process must be served on the Attorney General
of New Jersey pursuant to New Jersey Court Rules, R.
4:4-4(7).
Employment Rights Not Implied
Membership in the PFRS does not give you the right to
be retained in the employ of a participating employer,
nor does it give you a right of claim to any benet you
have not accrued under terms of the system.
Benets and provisions of the PFRS are subject
to changes by the legislature, courts, and other
ocials. While this guidebook outlines the ben-
et and contribution schedules of the Police and
Firemen’s Retirement System, it is not a nal
statement. Complete terms governing any em-
ployee benet program are set forth in the New
Jersey Statutes Annotated. Regulations, new or
amended, are published in the New Jersey Reg-
ister by the State Oce of Administrative Law
supplementing the New Jersey Administrative
Code.
Eligibility
Page 7 August 2024 PFRS Member Guidebook
Police and Firemen’s Retirement System
MEMBERSHIP
Membership in the PFRS is required for permanent,
full-time employees appointed to positions in law en-
forcement or re ghting in the State of New Jersey.
PFRS Membership Tiers
PFRS members are categorized by specic member-
ship tiers based on enrollment date. Membership tiers
aect a member’s enrollment and retirement eligibility.
These membership tiers, pursuant to N.J.S.A. 43:16A-1,
are dened as follows:
• Membership Tier 1 — Members enrolled on or
before May 21, 2010.
• Membership Tier 2 — Members enrolled after
May 21, 2010, and on or before June 28, 2011.
• Membership Tier 3 — Members enrolled after
June 28, 2011.
Unless otherwise indicated by membership tier, the
benets listed in this guidebook are the same for all
PFRS members.
Eligibility Criteria
Eligibility in the PFRS is determined by:
• Your job title;
• Your age;
• Your health; and
• Successful completion of approved training courses.
Please note that:
• Municipal employees in eligible job titles who do
not meet the age and/or medical requirements for
membership in the PFRS are ineligible for enroll-
ment in the PFRS or any other State-administered
retirement system.
• State and county employees in eligible PFRS titles
who do not meet the age and/or medical require-
ments are eligible to enroll in the Public Employ-
ees’ Retirement System (PERS) and possibly, de-
pending on job title, as Law Enforcement Ocers
(LEO) in the PERS.
Eligible Job Titles
A new employee hired as a permanent, full-time law
enforcement ocer (police ocer) or reghter in an
eligible PFRS job title or classication, who also meets
the age, medical, and training criteria for membership,
must be enrolled in the PFRS.
Because the list of the PFRS-eligible job titles changes
periodically, an updated list of civil service and non-civil
service PFRS titles is available on the NJDPB website.
If a job title is not found on the list and an employee
or employer of a law enforcement or reghting unit
believes that the employee’s duties meet the denition
of police ocer or reghter, the employer may le an
application for membership in the PFRS with the Di-
rector of the NJDPB, stating in detail the basis for the
belief that the position qualies as a police ocer or
reghter title. The NJDPB will review the application
and determine whether the employee meets the de-
nition of police ocer or reghter, and then make a
recommendation to the PFRSNJ Board of Trustees as
to whether the employee’s title should be included as
an eligible title in the system.
If, after considering the recommendation of the
NJDPB, the Board determines that the position meets
the denition of police ocer or reghter, the Board
will publish a notice in the New Jersey Register pro-
posing to include the position in the retirement system.
Interested parties will be given 30 days to comment on
the proposal.
If the Board determines that the employee does not
meet the denition of police ocer or reghter, the
employee will be oered an opportunity for a hearing.
Training Requirements
For a position to be eligible for participation in the
PFRS, it must include the mandate that a candidate for
the position successfully complete specic training re-
quirements:*
• Police ocers enrolled in the PFRS must be certi-
ed in the basic training course for police ocers
as prescribed by the Police Training Commission
(PTC).
• Correction ocers enrolled in the PFRS must be
certied in the basic training course for correction
ocers as prescribed by the PTC.
• County investigators enrolled in the PFRS must be
certied in the basic training course for county in-
vestigators as prescribed by the PTC.
• Fireghters enrolled in the PFRS must complete
and receive Fireghter 1 certication through the
New Jersey Department of Community Aairs, Di-
vision of Fire Safety.
Medical Requirements
There are medical requirements for acceptance into
the PFRS. When you apply for membership, you must
have a medical examination to determine if you satisfy
these requirements. The examination should be docu-
mented by the department physician, another physician
designated by the employer, or if required, a physician
designated by the retirement system. This medical doc-
umentation should be retained by the employer for fu-
ture reference.
*Prescribed in N.J.S.A. 43:16A-1 and 52:17B-66 et seq.
PFRS Member Guidebook August 2024 Page 8
Police and Firemen’s Retirement System
AGE REQUIREMENTS
Current law prescribes a maximum age for entry into
the PFRS. Employees must not be one day past their
35th birthday to qualify for enrollment.
Determining the age for entry in the PFRS may vary be-
tween Civil Service and non-Civil Service jurisdictions.
All employees covered by:
• Civil Service (Title 11) — whether State, coun-
ty, or municipal — candidates cannot be past their
35th birthday as of the announced closing date of
the Civil Service examination. Those candidates
meeting the age requirements at that time will be
considered as having met the maximum age re-
quirement for the duration of the ensuing Civil Ser-
vice Eligibility List from which appointments may
be made.
• Non-Civil Service — primarily municipal — em-
ployees cannot be one day past their 35th birthday
as of their ocial date of hire.
There are certain exceptions to the maximum age re-
quirement:
Military Service — Once you have met the denition
of a veteran for pension purposes, certain periods of
military service may be used on a one-for-one basis
to “reduce” one’s age for entry. Only that period of ser-
vice in the area of conict may be subtracted from an
individual’s age for PFRS eligibility purposes. The New
Jersey Department of Military and Veterans Aairs is
the only agency to verify eligible foreign and sea ser-
vice for purposes of determining if any service qualies
to reduce age in the PFRS. Such military service must
have occurred during the:
— Panama Peacekeeping Mission – December
20, 1989, to January 31, 1990;
— Operation Desert Shield/Storm – August 2,
1990, to February 28, 1991;
— Operation Restore Hope in Somalia – Decem-
ber 5, 1992, to March 31, 1994;
— Operations Joint Endeavor/Joint Guard-Re-
public of Bosnia and Herzegovina – Novem-
ber 20, 1995, to June 20, 1998;
— Operation Enduring Freedom – September 11,
2001, to present; and/or
— Operation Iraqi Freedom – March 19, 2003, to
present.
The prospective member must have served at least 14
days in the country or region or on ships patrolling in
the territorial waters of these nations.
If the start of the member’s service began on or after
the beginning date of the war era, veteran status will be
granted as long as any one of the 14 days of service fell
on or within the dates listed above.
If the start of the member’s service was prior to the be-
ginning date of the war era, then the member must have
served all 14 days in the area within the dates specied
for the conict in order to be considered a veteran.
The 14-day requirement for service can be waived if
the veteran was discharged because of a service-in-
curred disability.
Absent Without Leave (AWOL) status must be deduct-
ed from active service; if this reduces the active service
to less than the 14-day service requirement, consider-
ation will be denied.
Prior Police Service — In order to meet the maximum
age requirement of 35 years for the position of a mu-
nicipal police ocer, a former State trooper; sheri’s
ocer or deputy; county or municipal police ocer;
or SEPTA, Delaware River Port Authority, Burlington
County Bridge Commission, or Amtrak police ocer is
permitted to use that previous service to reduce actual
age. Prior experience in federal law enforcement agen-
cies or law enforcement agencies of other states would
also qualify to reduce a candidate’s age for the position
of municipal police ocer. No person may be appointed
over the age of 45 except for those who were previously
terminated involuntarily (laid o, or part of a reduction in
force) from their former employment, or if they return to
employment from a Disability Retirement.
Volunteer Fireghters
While volunteer reghters may be appointed to paid
positions within part-paid re departments up to age
40 (N.J.S.A. 40A:14-44), any such reghter over age
35 is eligible for enrollment in the PERS, not the PFRS.
Candidates Who Exceed the Age Limit
Individuals employed by the State or a county who ex-
ceed the maximum age requirement in the PFRS, but
who are otherwise eligible for the position, must estab-
lish membership in the PERS immediately upon being
permanently appointed to the title.
Individuals seeking employment with a municipality in
an eligible PFRS title, who are over age 35 on the date
of hire even after any reductions in age have been tak-
en into account, cannot establish membership in any
State-administered retirement system. Since enroll-
ment in the PFRS is a condition of employment, these
individuals cannot be hired.
PART-TIME EMPLOYEES
Part-time ocers were previously enrolled into the
PERS if they were otherwise eligible for enrollment pur-
suant to N.J.A.C. 17:2-2.8. Those hired after May 21,
2010, who work below the number of hours required for
PERS Tier 4 or 5 membership (35 hours for State loca-
tions or 32 hours for local government locations), can
only be enrolled in the Dened Contribution Retirement
System (DCRP), not the PERS.
Enrollments
PFRS Member Guidebook August 2024 Page 10
Police and Firemen’s Retirement System
OVERVIEW
Enrollment/Certication of Payroll Deductions
Your employer must complete an Enrollment Applica-
tion through the Employer Pensions and Benets Infor-
mation Connection (EPIC).
Online enrollments are processed immediately by the
NJDPB. You and the employer receive a conrmation
that includes your PFRS membership number.
The PFRS date of enrollment for employees in a regu-
lar classied appointment that is covered by Civil Ser-
vice, or a regular budgeted position not covered by Civil
Service, is the rst of the month* following successful
completion of required police or reghter training.
Employees in unclassied service are considered to
begin service as of the date of employment, with a
compulsory PFRS enrollment date the rst of the month
following successful completion of required police or
reghter training.
When enrollment processing is complete, you and your
employer will receive a Certication of Payroll Deduc-
tions showing the date pension deductions will begin,
your rate of contribution, and any back deductions due.
You may wish to keep the Certication of Payroll De-
ductions on le with your other important papers as a
record of your enrollment in the retirement system.
Proof of Age
All members of the PFRS must provide documentation
that proves their age. If possible, you should provide
your proof of age to the NJDPB when you enroll; how-
ever, it does not delay the processing of your enrollment
application if you do not. Proof of age will be required
to be eligible to retire.
Acceptable evidence of your age includes a photocopy
of:
• Birth certicate — with visible seal;
• Passport or a U.S. Passport Card;
• A current digital New Jersey driver’s license or
identication card (for non-drivers) issued by the
N.J. Motor Vehicle Commission;
• A current digital Pennsylvania or New York driver’s
license; or
• Naturalization or immigration papers.
You should forward evidence of your proof of age to
your employer. For more information about PFRS age
requirements see the “Age Restrictions” section.
Unacceptable documentation includes expired docu-
mentation, out-of-state driver’s licenses except P.A.
and N.Y., hospital birth certicates, marriage certi-
cates, census records, baptismal records, adavits
from older family members, or military records indicat-
ing your age.
Designating a Beneciary
When the Enrollment Application is submitted, the new
member should also submit a Designation of Bene-
ciary to the NJDPB. Your PFRS membership number
is required and is included in the conrmation of your
online enrollment.
Note: The new member’s estate is the beneciary on
record until the NJDPB receives a properly completed
designation.
For your protection, beneciary designations cannot
be accepted or conrmed over the telephone or by
email. Members can verify beneciary designations on
MBOS. Otherwise, the NJDPB will only accept a writ-
ten request for verication from the member.
Public Information and Restrictions
Most of the information maintained by the retirement
system, including member salary and/or pension ben-
et information, is considered a public record under
N.J.S.A. 47:1A-1 et seq., the Open Public Records Act
(OPRA). However, certain personal information, such
as a member’s address, telephone number, Social Se-
curity number, pension membership numbers, bene-
ciary information while the member is living, and medi-
cal information is restricted from public access.
Further restrictions to personal health information ex-
ist under the privacy provisions of the federal Health
Insurance Portability and Accountability Act (HIPAA).
Members may be required to provide specic written
authorization for the release of medical information to
a third party who is not a doctor, hospital, or business
partner of the NJDPB or the health benet programs.
Information about HIPAA is available on the NJDPB
website.
The NJDPB has implemented additional protection for
members in accordance with the New Jersey Identity
Theft Prevention Act, N.J.S.A. 56:11-28 et seq. Secu-
rity Freeze procedures are available to restrict access
to the accounts of members who are, or have a serious
risk of becoming, victims of identity theft. Additional
information is available in the Identity Theft and Your
Benets Fact Sheet.
Member Contribution Rate
The PFRS member contribution rate is 10 percent
of base salary. This is also the minimum repayment
amount required for pension loans or for the cost of a
purchase of service credit for repayments certied after
June 28, 2011.
Pensionable Salary — The contribution rate is applied
to your base salary to determine your pension deduc-
*First day of the following biweekly pay period if the employee is paid through State Centralized Payroll.
Page 11 August 2024 PFRS Member Guidebook
Police and Firemen’s Retirement System
tions. Base salary means the annual compensation of
the member in accordance with the established salary
policies of the member’s employer for all employees
in the same position, or all employees covered by the
same collective bargaining agreement. Base salary is
paid in regular, periodic installments in accordance with
the payroll cycle of the employer.
• The PFRS contribution rate for Tier 1 members en-
rolled on or before May 21, 2010, is applied to the
full pensionable salary (up to the federal pension-
able maximum described later in this section).
• The PFRS contribution rate for Tier 2 and Tier 3
members enrolled after May 21, 2010, is applied to
the pensionable salary up to a compensation lim-
it based on the annual maximum wage for Social
Security deductions. Members who earn in excess
of the annual compensation limit will be enrolled in
the DCRP in addition to the PFRS. A contribution
of 5.5 percent of the salary in excess of the limit
(plus three percent from the employer) will be for-
warded to a DCRP account (see the “New Jersey
State Employees Deferred Compensation Plan”
section).
Extra compensation is not included in base salary. Ex-
tra compensation means individual salary adjustments
granted primarily in anticipation of retirement, or as
additional compensation for performing temporary du-
ties beyond the regular workday. Extra compensation
includes, but is not limited to, overtime, bonuses, lump-
sum longevity, vacation pay, holiday pay, and compen-
sation not included in normal routine paychecks.
Federal Pensionable Maximum — Since the PFRS
is a qualied pension plan under the provisions of the
Internal Revenue Code (IRC), Section 401(a)(17), the
current federal ceiling on pensionable compensation
applies to the base salaries of PFRS members.
Tax Deferral — Since January 1987, all mandatory
pension contributions to the PFRS have been feder-
ally tax deferred. Under the 414(h) provisions of the
IRC, this reduces your gross wages subject to federal
income tax. Purchases of service credit are voluntary
and are not tax deferred unless funded by a rollover
from another tax-deferred plan. See the “Rollover for
Purchase Payment” section.
DUAL MEMBERSHIP
You are considered a dual member if you are a mem-
ber of more than one New Jersey State-administered
retirement system at the same time.
Example: If you are a county corrections ocer en-
rolled in the PFRS and a part-time municipal adminis-
trative assistant enrolled in the PERS, you are a dual
member.
When establishing dual membership, an Enrollment
Application is led by each employer with the dierent
retirement systems.
A dual member’s contributions and service credit are
kept separate, and benets for a dual member are paid
separately from each retirement system in the event of
retirement, death, or withdrawal.
A dual member may also retire from one retirement
system and remain an active, contributing member of
the second retirement system, except Alternate Benet
Program (ABP) and DCRP members.
TRANSFERS
Intrafund Transfer
An Intrafund Transfer is the transfer of your account
from one PFRS employer to another PFRS employer.
If you terminate your current PFRS position and accept
a PFRS position with a dierent employer, you are eli-
gible to transfer your PFRS account and maintain your
original PFRS membership tier status provided:
• You have not withdrawn your membership (see the
“Withdrawal from the Retirement System” section);
• It has not been more than two consecutive years
since your last pension contribution; and
• You meet the eligibility requirements of PFRS
membership with the new PFRS employer.
If you meet the criteria listed above, your new employer
should le a Report of Transfer form with the NJDPB.
Note: PFRS members who are serving with a law en-
forcement or reghting unit and receive an appoint-
ment to an administrative or supervisory position,
either with the same department or the police or re
department of any other municipality, are permitted to
continue their PFRS membership in the new adminis-
trative or supervisory capacities. To be eligible for this
continued PFRS membership, the appointment to the
position must occur within six months of your last PFRS
contribution.
If there has been a break in service of more than two
consecutive years since your last pension contribution,
you cannot continue contributions under your prior
PFRS membership. The new employer should sub-
mit an Enrollment Application through EPIC with the
NJDPB. You will be enrolled in a new PFRS account
under the membership tier in eect at the time you re-
turn to PFRS employment.
PFRS Member Guidebook August 2024 Page 12
Police and Firemen’s Retirement System
If you are vested in your prior, inactive PFRS account
(see the “Vesting” section), you may be eligible for a
transfer of your old membership account to your new
membership account. This type of transfer is called a
“Tier-to-Tier Transfer” and is completed by submitting
a Tier-to-Tier Transfer Form. It is important to note that
by completing a Tier-to-Tier Transfer Form you waive
all rights to retirement benets as provided under the
original, inactive membership tier.
If you are not vested in your prior, inactive PFRS ac-
count, you may withdraw your contributions. See the
“Withdrawal from the Retirement System” section.
If you have withdrawn your prior PFRS account, wheth-
er you have a break in service of more than two con-
secutive years or not, the new employer must le an
Enrollment Application with the NJDPB and you will be
enrolled in a new PFRS account under the membership
tier in eect at the time you return to PFRS membership.
The service credit under the prior, inactive membership
may then be eligible for purchase as Former Member-
ship. See the “Purchasing Service Credit” section.
Interfund Transfer
An Interfund Transfer is the transfer of your account
from a PFRS employer to employment covered by a
dierent New Jersey State-administered dened ben-
et retirement system, or vice versa.
If you terminate your current PFRS-covered position
and accept a position covered by a dierent New Jer-
sey State-administered retirement system, you may
transfer your contributions and service credit to the
new retirement system provided:
• You have not withdrawn your membership (see the
“Withdrawal from the Retirement System” section)
or retired from the PFRS;
• It has not been more than two consecutive years
since your last pension contribution;
• You are not a dual member with any concurrent
service in any other retirement system (see the
“Dual Membership” section);
• You meet the eligibility requirements of the new re-
tirement system; and
• You apply for the Interfund Transfer within 30 days
of the date you meet the eligibility requirements of
the new retirement system.
If eligible, in order to transfer your membership account,
an online Enrollment Application for the new retirement
system and an Application for Interfund Transfer should
be submitted by your employer to the NJDPB.
If you are vested in the PFRS (see the “Vesting” sec-
tion), you should determine if it is more advantageous
to select a Deferred Retirement from the PFRS or
transfer your pension contributions and service credit
to the new retirement fund.
If there has been a break in service of more than two
consecutive years since your last pension contribution
— or if you have withdrawn your account — you can-
not transfer your prior PFRS contributions and service
credit to the new retirement system. You will be enrolled
in a new account with the new retirement system. Your
new employer must le an Enrollment Application for
the new retirement system with the NJDPB.
SERVICE CREDIT
Since retirement benets are based in part on accu-
mulated service credit, it is important that you receive
the correct amount of credit for the amount of time you
work.
• Monthly employees receive one month of service
credit for each month a full pension contribution is
made.
• Employees whose employers report service and
contributions biweekly will receive one pay period
of service credit for each pay period a full pension
contribution is made.
Credit For Military Service
After Enrollment
The federal Uniformed Services Employment and Re-
employment Rights Act of 1994 (USERRA) provides
that a member who leaves employment to serve on ac-
tive duty is entitled to certain pension rights upon return
to employment with the same employer. If the mem-
ber makes the pension contributions that would have
been normally required upon return and within the time
frames specied under USERRA, the military service
will count for vesting, retirement eligibility, the calcula-
tion of the retirement benet and, if applicable, health
benets eligibility, as though the employee had not left.
When an employee returns from uniformed military
service to PFRS-covered employment, the employ-
er should notify the NJDPB no later than 30 days af-
ter the employee’s return by submitting a Request for
USERRA-Eligible Service form. Once notied, the
NJDPB will provide the employee with a quotation for
the cost of purchasing the service credit.
There is a time-sensitive element to the USERRA pur-
chase which diers from the other purchase of service
credit provisions available to PFRS members. For addi-
tional information, see the USERRA — Military Service
After Enrollment Fact Sheet.
Page 13 August 2024 PFRS Member Guidebook
Police and Firemen’s Retirement System
VESTING
You are vested in the PFRS after you have attained
10 years of service credit. Being vested in the PFRS
means that you are guaranteed* the right to receive a
retirement benet when you reach age 55.
• If you are vested and terminate your employment,
you must le a retirement application prior to re-
ceipt of any benets for which you may qualify (see
the “Types of Retirement” section) or you may vol-
untarily withdraw from the retirement system. See
the “Withdrawal from the Retirement System” sec-
tion.
• If you are vested, terminate your employment with-
out retiring or withdrawing, and return to PFRS-
covered employment within two consecutive years
of the last pension contribution, you may continue
to make contributions to — and accrue service in
— the existing pension account.
• If you are vested, terminate your employment with-
out retiring or withdrawing, and return to PFRS-cov-
ered employment two or more years after the last
pension contribution, you cannot resume contribu-
tions to the vested account. Instead, you will be
enrolled in a new PFRS account, if eligible.
• If you are not vested and you terminate employ-
ment before retiring, your options vary depending
on the nature of your termination and/or your age
at the time of your termination (see the “Terminat-
ing Employment” section).
*Vesting provisions may not apply to PFRS members who are terminated for cause on charges of misconduct or delinquency. See the “Misconduct” section.
Purchasing
Service Credit
Page 15 August 2024 PFRS Member Guidebook
Police and Firemen’s Retirement System
OVERVIEW
Since your retirement allowance is based in part on the
amount of service credit posted to your account at the
time of retirement, it may help you to purchase addition-
al service credit if you are eligible to do so.
Only active members of the retirement systems are
permitted to purchase service credit. An active member
is one who has not retired or withdrawn, and who has
made a contribution to the retirement system within two
consecutive years of the purchase request.
In no case can you receive more than one year of ser-
vice credit for any calendar or scal year. A dual mem-
ber cannot purchase concurrent service from any other
retirement system. See the “Dual Membership” section.
TYPES OF SERVICE ELIGIBLE FOR PURCHASE
If a type of service is not listed, it is not eligible for pur-
chase.
Temporary Service
Members may be eligible to purchase temporary em-
ployment provided the service rendered was in a title
eligible for participation in the PFRS, was continuous,
immediately preceded a permanent or regular appoint-
ment, and meets eligibility requirements for the tier in
which the member is enrolled.
• Members are allowed to purchase temporary ser-
vice rendered under a former account.
• Members are not allowed to purchase service as a
Special Police Ocer.
Leave of Absence Without Pay
Members may be eligible to purchase credit for time
spent on ocial, authorized leaves of absence without
pay. The amount of time eligible for purchase depends
on the type of leave that was taken.
• Up to two years may be purchased for leaves tak-
en for personal illness.
• Up to three months may be purchased for leaves
taken for personal reasons.
• Maternity leave is considered personal illness.*
• Child care leave is eligible for purchase as a leave
for personal reasons.
A leave of absence without pay under a former mem-
bership in a New Jersey State-administered retirement
system may be eligible for purchase.
Former Membership Service
Members may be eligible to purchase service cred-
ited under a previous membership in a New Jersey
State-administered retirement system (PERS, PFRS,
etc.) which has been terminated after two consecu-
tive years of inactivity in accordance with statute; or by
withdrawal by the member of the contributions made
under such membership.
Out-of-State Service
Members may be eligible to purchase up to 10 years
of public employment rendered in any state, county,
municipality, school district, or public agency outside
the State of New Jersey, provided the service ren-
dered would have been eligible for membership in a
New Jersey State-administered retirement system.
This service is only eligible for purchase if the member
is not receiving or eligible to receive retirement benets
from the out-of-state public pension fund.
U.S. Government Service
Members may be eligible to purchase up to 10 years
of credit for civilian service rendered with the United
States government if the public employment would
have been eligible for credit in a New Jersey State-ad-
ministered retirement system. This service is only el-
igible for purchase if the member is not receiving or
eligible to receive retirement benets from the federal
government based in whole or in part on this service.
Military Service Before Enrollment
Members may be eligible to purchase up to 10 years
of active-duty military service rendered prior to enroll-
ment, provided the member is not receiving or eligible
to receive a military pension or a pension from any oth-
er state or local source for such military service.
Active military service eligible for purchase means
full-time duty in the active military service of the Unit-
ed States and includes full-time training duty, annual
training duty, and attendance at a school designated
as a service school by law or by the secretary of the
military department concerned. It cannot include peri-
ods of service of less than 30 days. It does not include
weekend drills or annual summer training of a national
guard or reserve unit.
Active military service that has been combined with re-
serve component service to qualify for a military pen-
sion as a reserve component member may be eligible
for purchase.
If you qualify as a veteran, you may be eligible to pur-
chase an additional ve years of military service. See
the “Important Purchase Notes” section.
*A certication from a physician that a member was disabled due to pregnancy and a resulting disability for the period in excess of three months is required. Otherwise, three months is the
maximum period for purchase for maternity.
PFRS Member Guidebook August 2024 Page 16
Police and Firemen’s Retirement System
Military Service After Enrollment
Under the requirements of USERRA, members may
receive credit for military service rendered after Oc-
tober 13, 1994. See the “Credit for Military Service
after Enrollment” section. However, under N.J.A.C.
17:1-3.10, USERRA-eligible service will only be used
toward vesting, retirement eligibility, the calculation of
the retirement benet and, if applicable, health bene-
ts eligibility, if the employee pays the required pension
contributions that would have been required if the em-
ployee had not left.
Note: There is a time-sensitive element to this pur-
chase. See the USERRA — Military Service After En-
rollment Fact Sheet.
Uncredited Service
Members may be eligible to purchase regular employ-
ment with a public employer in New Jersey for which
the member did not receive service credit but which
would have required compulsory membership in the re-
tirement system at the time it was rendered.
Employment With Other Agencies
If you have at least 20 years of service credit in the
PFRS and you leave to accept a full-time position (with
your employer’s approval) in one of the agencies listed
below, you may be eligible to purchase a maximum of
three years of such service upon your return to covered
employment. Such agencies include:
• A federal agency;
• An agency of another state or local government; or
• An organization whose principal function is oer-
ing professional, advisory, research, educational,
or developmental services to governments or uni-
versities concerned with police management.
Layo
Members of the PFRS who were laid o and were in
good standing at the time of separation from employ-
ment (not released for misconduct or delinquency), and
who are subsequently rehired to a similar (police or re-
ghter) service position in the PFRS, may be eligible to
purchase up to three years for the time period in which
the member was laid o. The member must be an ac-
tively contributing member of PFRS to make this type
of purchase.
The cost of a layo purchase is calculated using the
salary for the 12 months prior to the layo.
Local Retirement System Service
Members may be eligible to purchase service cred-
it established within a local retirement system in New
Jersey if they were ineligible to transfer that service to
the PFRS upon withdrawal from the local retirement
system. This service is only eligible for purchase if the
member is not receiving nor eligible to receive retire-
ment benets from that public retirement system.
IMPORTANT PURCHASE NOTES
• If you qualify as a non-veteran, you are eligible
to purchase an aggregate of 10 years of service
credit for work outside New Jersey (Out-of-State,
Military, and U.S. Government Service).
• If you qualify as a military veteran (see the “Age
Requirements” section), you may be eligible to pur-
chase an additional ve years of military service
rendered during periods of war for an aggregate
of 15 years of service outside New Jersey (Out-of-
State, Military, and U.S. Government Service).
• To qualify for an Ordinary Disability Retirement,
PFRS members need four years of New Jersey
service; therefore, the purchase of U.S. Govern-
ment, Out-of-State, or Military Service cannot be
used to qualify for this type of retirement.
• Purchases of service credit are voluntary and are
not tax deferred unless funded by a rollover from
another tax-deferred plan. See the “Rollover for
Purchase Payment” section.
COST AND PROCEDURES
FOR PURCHASING SERVICE CREDIT
You can receive an estimate of the cost of purchasing
service credit by calling the Automated Information
System at (609) 292-7524 or by using the online Pur-
chase Calculator on MBOS.
The cost of a purchase is based on four factors:
• A purchase factor based on your nearest age at
the time the NJDPB receives your purchase appli-
cation (see the “Purchase Rate Chart”);
• The higher of either your current annual salary or
highest scal year salary (July - June) posted to
your membership account (except for layo pur-
chase, see the “Layo” section);
• The years and months of service being purchased;
and
• The type of service purchased.
The cost of the purchase will rise with an increase in
your age and/or salary.
The cost of purchasing service is borne by both you
and the participating employers with the important ex-
ceptions of Military Service before Enrollment, U.S.
Government Service, Local Retirement System Ser-
vice, Layo, and Employment with Other Agencies —
where statute specically provides that the employer
will not be liable for any costs of the purchase. If you
purchase U.S. Government Service, Military Service
before Enrollment, Local Retirement System Service,
Layo, or Employment with Other Agencies, you, as the
member, are responsible for the full cost; therefore, the
cost quoted to you for purchasing these types of ser-
vice will be twice the cost for other types of purchase.
Page 17 August 2024 PFRS Member Guidebook
Police and Firemen’s Retirement System
Partial Purchases
You may purchase all or part of any eligible service. If
you make a partial purchase, you may purchase any
remaining eligible service at a later date. The cost of
any later purchase will be based upon your age and the
annual salary or highest scal year salary at the time of
your subsequent request to purchase.
Estimating the Cost of a Shared Cost Purchase
To estimate the cost of a purchase, multiply the high-
er of your current annual salary or highest scal year
salary times the purchase factor corresponding to your
nearest age; see the “Purchase Rate Chart.” The result
is the cost of one year of service. Multiply this cost by
the appropriate number of years being purchased. This
procedure can be used for calculating the cost of Tem-
porary Service, Former Membership, Leaves of Ab-
sence, Uncredited Service, and Out-of-State Service.
To calculate the purchase cost of Military Service be-
fore Enrollment, U.S. Government Service, Local Re-
tirement System Service, or Employment with Other
Agencies, the same procedure is used except the re-
sulting cost is doubled.
For Layo Service, use the annual salary for the 12
months prior to the layo and double the resulting cost.
Note: The cost of purchasing Military Service after
Enrollment under USERRA is based on the required
pension contributions for the period of military service.
Example: A member, age 45, earning $60,000 a year,
wishes to purchase 18 months Temporary Service.
Purchase Factor (from chart) = 0.102150
Purchase Factor x Annual Salary x Time Being Pur-
chased = Purchase Cost
0.102150 x $60,000 x 1.5 years = $9,193.50
If the same member were to purchase 18 months of
Military Service, the Purchase Cost would be $18,387
— twice the amount of the Temporary Service.
An online Purchase Cost Calculator and additional pur-
chase of service credit resources are available on the
NJDPB website.
Purchase Rate Chart
Age
Purchase
Factor Age
Purchase
Factor
33 and under .075000 50 .120350
34 .076016 51 .12079 8
35 .077350 52 .121323
36 .078913 53 .121923
37 .080704 54 .1226 0 0
38 .082724 55 .123353
39 .084973 56 .124181
40 .087450 57 .12508 6
41 .090109 58 .126067
42 .092926 59 .127124
43 .095880 60 .128257
44 .098957 61 .129466
45 .102150 62 .13 0751
46 .105 461 63 .132113
47 .10 8902 64 .133550
48 .112501 65 and older .135000
49 .116298
APPLYING TO PURCHASE SERVICE CREDIT
All purchase requests must be submitted using the Pur-
chase Application program of MBOS.
Exceptions to the MBOS Purchase Application
While PFRS members are usually required to submit
purchase requests through MBOS, members are not
able to use MBOS for the following reasons:
• Members applying for a purchase fewer than
30 days before their retirement date or Board of
Trustees approval date. The member must re-
quest a paper Purchase Application by emailing:
pensions.nj@treas.nj.gov An application will be
provided upon verication of the Board or retire-
ment date status. Members without a valid board
or retirement date will be instructed to apply using
MBOS.
• Members applying for the purchase of Military
Service after Enrollment under the provisions of
USERRA. To purchase this service the employer
must submit the Request for USERRA-Eligible
Service form within the time frames required under
the law (see the USERRA — Military Service After
Enrollment Fact Sheet).
Please note that these are the only circumstances
where paper purchase requests are permitted. Any
other paper applications to purchase service credit re-
ceived by mail will not be processed, and the member
will be mailed instructions on submitting the request
through MBOS.
Upon receipt of your MBOS Purchase Application —
and any required supporting documentation — a quota-
tion of cost will be calculated provided that all purchase
eligibility criteria are met. Processing times vary and a
request cannot be completed until the NJDPB receives
all required verication of eligibility. It is the member’s
responsibility to obtain certication of employment from
PFRS Member Guidebook August 2024 Page 18
Police and Firemen’s Retirement System
a former employer for the purchase of Out-of-State or
U.S. Government Service.
After the NJDPB veries employment, you will receive
a Purchase Cost Quotation Letter indicating the cost of
any service approved for purchase. You must respond
to the quotation letter within the specied time period.
When you agree to purchase a certain amount of ser-
vice credit, the NJDPB assumes that you will complete
the purchase and credits your account with the entire
amount of service, even if you are paying the cost
through payroll deductions. Any estimates of retirement
allowance you receive are based on the full amount of
credit you agreed to purchase.
You may pay the cost of purchasing service credit:
• In one lump-sum payment;
• By having extra payroll deductions withheld from
your pay. The minimum deduction is equal to one-
half of your normal rate of contribution to the retire-
ment system over a maximum period of 10 years
and includes interest based on the assumed rate of
return of the retirement system;
• By paying a single down payment and having the
remainder paid through payroll deductions; or
• With a direct rollover or trustee-to-trustee transfer
of tax-deferred funds from a qualied plan (see the
“Rollover for Purchase Payment” section).
If you retire before completing a purchase, you may
choose to receive prorated credit for the amount of
service you have paid for, or you can pay the balance
at the time of retirement to receive full credit. See the
“Unsatised Balances” section.
A member who authorizes a purchase of service credit
through payroll deductions may cancel those deduc-
tions at any time. No refunds will be made of any lump-
sum payments, partial payments, or installment pay-
ments. The member will receive prorated service credit
for the service purchased to the date installment pay-
ments cease. Any subsequent requests to purchase
the remaining service credit shall be based on the laws
and rules in eect on the date that the subsequent re-
quest is received.
If you have an outstanding arrears obligation for the
purchase of additional service credit, interest may be
assessed if there is a lapse of two years or more in
payments toward the purchase.
If you have not made installment payments for the pur-
chase of additional service credit for two years, your
purchase will be canceled. You will receive pro rata
credit for the service purchased to the date that the in-
stallment payments ceased.
If you return from an approved leave of absence after
two years, you may request that the original purchase
be resumed. The purchase will be recalculated to in-
clude additional regular interest accrued between two
years after the date of the last installment payment and
the date the purchase is resumed.
Rollover for Purchase Payment
Members may pay for all or part of a purchase by trans-
ferring or rolling over tax-deferred funds from an eligible
or qualied retirement savings plan. The types of plans
from which a transfer or rollover can be made are:
• 401(a) qualied plan (including 401(k) plan) and
403(a) qualied annuity;
• 403(b) – Tax-Sheltered Annuity Plan;
• 457(b) – State and Local Government Deferred
Compensation Plan; or
• IRA – With tax-deferred funds:
– Traditional IRA;
– SIMPLE IRA (must have been open for two or
more years);
– Simplied Employee Pension (SEP) Plan;
– Conduit IRA; or
– Rollover IRA.
Note: The NJDPB cannot accept rollovers from a Roth
IRA or a Coverdell Education Savings Account (former-
ly known as an Education IRA).
Additional information on requesting a transfer or roll-
over of tax-deferred funds for the purchase of service
credit is included in the Purchase Cost Quotation Letter
you receive upon the NJDPB’s determination of your
eligibility to purchase service.
Loans
PFRS Member Guidebook August 2024 Page 20
Police and Firemen’s Retirement System
OVERVIEW
If you are an active contributing member of the PFRS,
you may be eligible to borrow from your pension ac-
count.
Loans are governed by the following conditions:
• Service Credit — You must have three years of
pension service credit posted to your retirement
system account. Pension contributions are posted
to your account on a quarterly basis. It normally
takes 45 days after the end of a quarter for your
contributions to be posted to your account. For ex-
ample, if you enrolled in the retirement system on
February 1, 2015, you would not have three years
posted to your account until May of 2018, when we
update the quarter in which you will attain three
years.
• Number of Loans Per Year — You may borrow
twice in any calendar year. This is determined by
the date of the disbursement, not the date of the
request. For example, if you make a request for a
loan on December 24th, but the disbursement date
is January 5th, the loan is considered your rst for
the new year.
• Loan Amount — The minimum amount you may
borrow is $50, and loan amounts then increase in
increments of $10.
The maximum you may borrow is 50 percent of
your contributions that are posted to your account,
up to a maximum loan balance of $50,000, which-
ever is less, when added to the highest balance of
any loan in the last 12 months.
You may learn the amount you may borrow, see
dierent loan amount and repayment combina-
tions, and apply for a loan by using the online Loan
Application on MBOS.
• Electronic Fund Transmittal (EFT/Direct De-
posit) is Required — All loans are disbursed by
Electronic Fund Transmittal (EFT). You must have
a valid bank routing number and account num-
ber when submitting a Loan Application through
MBOS. Paper loan checks are no longer produced
under any circumstance.
• Interest Rate — Interest is charged on the de-
clining balance of the loan at a commercially rea-
sonable rate set annually by the New Jersey State
Treasurer. The current interest rate is posted on
the NJDPB website.
When you borrow, you will have the same inter-
est rate for the life of your loan unless you borrow
again in a dierent calendar year after the inter-
est rate has changed. Every time you borrow, the
entire outstanding balance is re-certied at the
current year’s interest rate. The new loan must be
repaid within ve years of the original loan date.
The interest rate is determined using the Prime
Rate as of December of the previous year plus 2.5
percent.
• Administrative Fee — An administrative process-
ing fee applies to all pension loans. The adminis-
trative processing fee is set annually and is based
on the actual costs associated with administering
the pension loan program. The current administra-
tive processing fee is posted on the NJDPB web-
site.
• Loan Repayment — Loans must be repaid with-
in ve years. The minimum deduction toward the
repayment of a loan is equal to the pension contri-
bution rate of 10 percent for PFRS members. The
maximum allowable deduction at the time of ap-
plication toward the repayment of your loan is 25
percent of your base salary. Provided that the min-
imum loan repayment amount will repay the loan
balance within ve years, the repayment amount
of a loan will be similar whether you borrow $500
or $5,000; however, the repayment of a larger loan
will continue for a longer period of time than for a
smaller loan.
Loan repayments will increase to more than the
minimum deduction if the entire loan balance can-
not be paid within the ve-year requirement, or if
you have an outstanding loan and take another
loan.
If you have an outstanding loan balance and take
another loan, the Internal Revenue Service (IRS)
requires that the new combined loan balance must
be repaid within ve years of the date of the rst
loan. This means that the repayment amount may
be substantially higher to ensure full repayment
of the total loan balance within ve years of the
issuance of the original loan. Furthermore, the re-
quested loan amount may be reduced, or the loan
request may be rejected, if the payroll deductions
required to repay the loan within this ve-year pe-
riod would exceed the 25 percent of salary restric-
tion in State law (see the “Internal Revenue Ser-
vice Requirements” section).
If you are not satised with your loan amount or the
repayment schedule after your loan is disbursed,
you can request a repayment gure for the loan
balance, plus any accrued interest prior to the end
of the regular repayment schedule.
APPLYING FOR A LOAN
All pension loan requests must be submitted using the
Loan Application program of MBOS and you must pro-
vide a valid bank routing number and account number.
Once you apply, you receive immediate conrmation
that your loan application has been received. Once the
loan application is submitted, a pension loan cannot be
canceled.
Page 21 August 2024 PFRS Member Guidebook
Police and Firemen’s Retirement System
Exceptions to the MBOS Loan Application
While most members are required to process loan
requests through MBOS, some members may not be
able to access the Loan Application for one of the fol-
lowing reasons:
• Members applying for a loan within six months of
returning from a leave of absence;
• Members applying for a loan within six months of
transferring to a new employer within the same re-
tirement system, or between dierent retirement
systems; or
• State employees who are paid on a supplemental
payroll schedule.
In these cases your employer must complete a Cer-
tied Loan Request Form to verify your salary and/or
certify that you are actively employed.
• If your employer was late in submitting the Report
of Contributions for the quarterly posting, you may
still be able to borrow; however, your employer
must complete a Certied Loan Request Form to
verify your salary and active pay status, and you
may only borrow based on the prior quarter’s post-
ed pension contributions.
• If you have established a security freeze on your
pension account due to identity theft, you cannot
access MBOS and must contact the NJDPB’s
Identity Theft Coordinator to request a loan. For
more information, see the Identity Theft and Your
Benets Fact Sheet.
Please note that these are the only circumstances
where paper loan requests are permitted.
Early Loan Repayment
You may request a repayment gure for your full loan
balance any time prior to the end of your regular re-
payment schedule. Only a lump-sum payo of your full
loan balance is permitted — partial payments are not
allowed.
You may request a lump-sum payo through your
MBOS account by using the Letters and Statements
application and selecting the “Loan Payo” option. The
Loan Payo Letter will indicate the lump-sum payo
amount, the date by which the payment must be re-
ceived, and the date on which scheduled loan repay-
ments from payroll will end.
Loans at Retirement, Death, or
Termination of Employment
If you retire before repaying the outstanding balance of
your loan, your loan payments will be carried into re-
tirement. The monthly loan payment will be calculated
to have the loan plus interest satised by your ve-year
end date. You may also repay your outstanding loan
balance in one lump sum prior to retirement.
If you die before repaying your loan, either before or af-
ter retirement, the outstanding balance will be deduct-
ed from the proceeds of any benets to be paid to your
beneciaries.
If you terminate employment and withdraw your contri-
butions before repaying your loan, all your contributions
less the loan balance will be returned to you. See the
“Internal Revenue Service Requirements” section.
INTERNAL REVENUE SERVICE
REQUIREMENTS
IRC Section 72(p) requires that loan balances cannot
exceed $50,000 and must be repaid within ve years.
If you take any subsequent loans and your original
loan balance is not completely paid o, the repayment
period will remain ve years from the date of the rst
loan. The repayment rules on subsequent loans may
result in either a substantial increase in your repayment
amount, or may limit the amount that you can borrow if
the payroll deductions to repay the loan exceeds the 25
percent of base salary restriction on loan repayments.
The IRS regulations also require members to make
timely payments toward outstanding loan balances.
While it is your employer’s responsibility to withhold
loan deductions from your salary, if you are out of work
without pay, your employer has no salary from which
to take deductions. Members who leave payroll with
an outstanding loan balance will be notied after three
months of nonpayment and oered the option of paying
o the entire loan balance or making loan repayments
through personal billing. It is the member’s responsibil-
ity to ensure that the loan balance, plus interest, is paid
in full in accordance with IRS regulations.
Failure to repay the loan as scheduled, either through
lump-sum payment, personal billing, or return to pay-
roll, will result in the unpaid loan balance being de-
clared in default. If a loan is in default, the loan balance
is declared a deemed distribution and will be reported
to the IRS as taxable income. For the tax year in which
the default occurs, the NJDPB will send you a Form
1099-R for tax ling purposes. You will be required to
include the portion of the loan representing before-tax
contributions as income on your federal return. In ad-
dition, if you are under age 59 1/2, you will be required
to pay an additional 10 percent tax for taking an early
pension distribution.
If you default on your loan, it will be your responsibil-
ity to make an estimated tax payment to the IRS to
cover your tax liability on the deemed distribution; no
withholding will be deducted from your account by the
NJDPB.
Note: Paying taxes on a defaulted loan balance does
not negate the balance; you are still responsible for
paying the loan balance and any interest that accrues
on it within the remaining period left in the original ve-
PFRS Member Guidebook August 2024 Page 22
Police and Firemen’s Retirement System
year schedule. Any repayments will be returned to your
account as after-tax contributions.
You may not take another loan until the deemed distri-
bution is paid in full. A deemed distribution cannot be
canceled by resuming your loan payments or repaying
the loan in full prior to the end of the tax year in which
the default occurs. If you resume your loan repayments
after the default, the payments received are posted to
your account as previously taxed contributions that will
increase the nontaxable portion of your pension at re-
tirement.
Unlike a normal pension distribution, a loan treated as
a distribution cannot be rolled over to an IRA or other
qualied retirement plan.
Supplementing
Your Pension
PFRS Member Guidebook August 2024 Page 24
Police and Firemen’s Retirement System
OVERVIEW
In addition to your regular pension contributions, there
are other opportunities to supplement your retirement
income and possibly set aside money on a tax-deferred
basis.
New Jersey State Employees
Deferred Compensation Plan (NJSEDCP)
If you are an employee of the State, you may be eligible
for the NJSEDCP (IRC Section 457). Contributions to
the plan are not subject to federal income tax until you
take a distribution from the plan, either at retirement
or termination before retirement. The main benets of
the plan are to help you save on federal income tax
now and to supplement your retirement income through
investments.
For plan and investment information, visit the
NJSEDCP website at: ht tps://newjersey.retirepru.com/
or call 1-866-NJSEDCP (1-866-657-3327). Other infor-
mation about the plan is available by writing to: New
Jersey Division of Pensions & Benets, New Jersey
State Employees Deferred Compensation Plan, P.O.
Box 295, Trenton, NJ 08625-0295.
Local Deferred Compensation Plans
PFRS members employed by a municipality, county, or
county college may also be eligible to contribute to oth-
er employer-sponsored deferred compensation plans.
Contact your employer to see what plans are available
to you.
Supplemental Annuity Collective Trust (SACT)
The SACT is a voluntary investment program that pro-
vides retirement income separate from, and in addition
to, your basic pension plan. Your contributions are in-
vested conservatively in the stock market. The program
consists of two separate plans:
• The SACT Regular Plan is available to all actively
contributing members of a New Jersey State-ad-
ministered retirement system. Contributions to this
plan are made after deductions for federal income
tax.
• The SACT Tax-Sheltered Plan (IRC Section
403(b)) is available to actively contributing mem-
bers of public educational institutions. Contribu-
tions to this plan are made before deductions for
federal income tax.
SACT brochures and enrollment packets are available
on the NJDPB website.
You can also contact the SACT oce by calling
(609) 292-7524 or by writing to: New Jersey Division of
Pensions & Benets, Supplemental Annuity Collective
Trust, P.O. Box 295, Trenton, NJ 08625-0295.
Dened Contribution Retirement Program (DCRP)
The DCRP was established under the provisions of
N.J.S.A. 43:15C-1. The DCRP provides eligible mem-
bers with a tax-sheltered, dened contribution retire-
ment benet, along with life insurance and disability
coverage.
Individuals eligible for membership in the DCRP include
employees enrolled after May 21, 2010, in membership
Tier 2 or Tier 3 of the PFRS who earn salary in excess
of established maximum compensation limits.
The DCRP is administered for the NJDPB by Empower.
Empower provides DCRP information, including invest-
ment and distribution options, on the DCRP website:
ht tps://newjersey.retirepru.com/
Employers and members can contact Empower via their
toll-free telephone number: 1-866-653-2771. In certain
circumstances, an eligible employee can voluntarily
waive participation in the DCRP by submitting a DCRP
Waiver of Retirement Program Participation form to the
NJDPB. Additional information about DCRP enroll-
ment, contribution rates, plan benets, and waivers
can be found in the DCRP for PERS, TPAF, PFRS, and
SPRS Members Fact Sheet, which is available on the
NJDPB website.
Retirements
PFRS Member Guidebook August 2024 Page 26
Police and Firemen’s Retirement System
OVERVIEW
Mandatory Retirement
Retirement for PFRS members is mandatory at age
65. If you do not le a retirement application before
age 65, you are automatically retired on the rst of the
month following your 65th birthday. Retirement bene-
ts, however, are not payable until you le the applica-
tion through MBOS. It is the member’s responsibility to
apply for retirement and ensure that all required docu-
ments are received by the NJDPB within 90 days.
Exceptions: 1) Elected ocials are exempt from man-
datory retirement from their elected position. 2) Cur-
rent police and re chiefs who attain age 65 before
April 30, 2024, may remain active members of the
PFRS until the end of the calendar year in which they
turn 67 under the provisions of P.L. 2022, c. 9 (Chapter
9), provided the appointing authority approves, in writ-
ing, the retention and continued service of the member
as the chief after the age of 65.
TYPES OF RETIREMENT
There are several types of retirement for which you
may qualify. The calculation of your retirement benet
is based on your Final Compensation.
Final Compensation — for a PFRS Tier 1 member
enrolled on or before May 21, 2010, Final Compensa-
tion means the salary upon which pension contribu-
tions were based in the last 12 months of creditable
service preceding retirement.
For a PFRS Tier 2 member enrolled after May 21,
2010, and on or before June 28, 2011, or a PFRS Tier
3 member enrolled after June 28, 2011, Final Compen-
sation means the average salary upon which pension
contributions were based for the last three years of
Service Retirement
Type 1 Eligibility Age 55 or older.
Benet Formula Years of Service x 2% x Final Compensation* = Annual Maximum Pension.
Up to 30 years plus 1% for each year over 30 years.
Type 2 Eligibility 20 or more years of service (but less than 25 years of service) if enrolled in the PFRS before April 19,
2021 (see Note for specic details).
Benet Formula 50% x Final Compensation = Annual Maximum Pension.
Type 3 Eligibility Mandatory Retirement at 65, with 20 or more years of service but less than 25 years of service.**
Benet Formula 50% x Final Compensation,* plus 3% x Final Compensation* for each year of service over 20, up to 25
years = Annual Maximum Pension.
*Final Compensation is dened dierently for Tier 1 members versus Tier 2 and Tier 3 members.
**Mandatory retirement at age 65, with exceptions. See the “Mandatory Retirement” section.
Special Retirement
Eligibility Any age with 25 or more years of service credit in the PFRS.
Benet Formula Tier 1
and Tier 2
65% x Final Compensation* plus 1% per year over 25 years (up to 30 years) = Annual Maximum Pension.
Maximum Benet = 70% of Final Compensation.
Benet Formula Tier 3 60% x Final Compensation* plus 1% per year over 25 years (up to 30 years) = Annual Maximum Pension.
Maximum Benet = 65% of Final Compensation.
*Final Compensation is dened dierently for Tier 1 members versus Tier 2 and Tier 3 members.
service or any three scal years of membership preceding
retirement that provides the largest possible benet.
Deferred Retirement
Available to members who have at least 10 years of ser-
vice credit and are not yet 55 years of age when they termi-
nate employment. The retirement would be eective on the
rst of the month after attaining age 55. The annual benet
for a Deferred Retirement is equal to two percent of Final
Compensation for each year of service.
You may apply for a Deferred Retirement when you ter-
minate covered employment or at any time prior to age
55. Under no circumstances can a retirement become ef-
fective prior to the date the application is received by the
NJDPB.
If a member is removed from employment for cause on
charges of misconduct or delinquency, the member will be
ineligible for Deferred Retirement.
At any time before your Deferred Retirement becomes ef-
fective, you may change your mind and apply for a lump-
sum withdrawal of all your pension contributions. However,
Note: P.L. 2023, c. 92 (Chapter 92) extends PFRS Service Retirement eligibility at 20 years of service, regardless of age, for those enrolled in the PFRS and who were still a member of the
PFRS before April 19, 2021, the eective date of P.L. 2021, c. 52 (Chapter 52), and who retire no later than the rst day of the 61st month following the eective date of Chapter 52 (May 1, 2026).
Page 27 August 2024 PFRS Member Guidebook
Police and Firemen’s Retirement System
once you withdraw your contributions, all the rights and
privileges of membership in the retirement system end.
Please note the following important information about
your life insurance, health care coverage, loans, and
purchase arrears if you are considering a Deferred Re-
tirement:
• Life Insurance — Your life insurance coverage will
end 31 days after you terminate employment, and
will not be in eect until your Deferred Retirement
becomes payable. If you die before your Deferred
Retirement becomes eective, the last named
beneciary will receive a return of your pension
contributions. There is no life insurance benet
under these circumstances. However, during the
31-day period after you terminate employment you
may convert your group life insurance coverage to
a private policy with Prudential Financial. For more
information see the “Conversion of Group Life In-
surance” section.
• Health Benets — PFRS members who are
electing Deferred Retirement and are covered
under the State Health Benets Program (SHBP)
cannot transfer their active health care coverage
to the retired group of the SHBP. However, those
electing Deferred Retirement may be eligible for
continuation of SHBP coverage under the Con-
solidated Omnibus Budget Reconciliation Act of
1985 (COBRA) legislation for up to 18 months if
they were covered by the SHBP just prior to termi-
nating employment. If the actual retirement com-
mences while the 18 months of COBRA coverage
is in eect, the retiree may then transfer from the
COBRA coverage and continue the SHBP cover-
age into retirement. If the 18 months of COBRA
coverage ends before the retirement commences,
the member will not be entitled to maintain health
coverage through the SHBP. Participants should
contact their employer to see if they qualify for
COBRA continuation.
• Loans — If you terminate employment, failure to
repay a pension loan as scheduled may result in
the unpaid loan balance being declared a taxable
distribution that will be reported to the IRS. See the
“Internal Revenue Service (IRS) Requirements”
section.
• Purchase Arrears — If you have not made in-
stallment payments for the purchase of additional
service credit for two years, your purchase will be
canceled. You will receive pro rata credit for the
service purchased to the date that the installment
payments ceased. See the “Applying to Purchase
Service Credit” section for more information.
Ordinary Disability Retirement
To qualify for an Ordinary Disability Retirement you
must:
• Be a member in service at the time the applica-
tion is led with the NJDPB. Member in service
means that the member or employer was making
pension contributions to the retirement system at
the time of ling a Retirement Application. It may
also mean that the member was on an approved
leave of absence, paid or unpaid, or suspension,
paid or unpaid, at the time of ling the application.
If the member had pending litigation for wrongful
termination led against the employer, the member
has 30 days from the date the litigation is resolved
to le for Disability Retirement in order to be con-
sidered a member in service.
• Have four or more years of New Jersey service
credit (Out-of-State, Military, and U.S. Govern-
ment Service purchases cannot be used to attain
the four years);
• Be considered totally and permanently disabled.
You must prove that you are physically or mentally
incapacitated from performing your normal or as-
signed job duties or any other position your em-
ployer may assign;
• Be disabled at the time you separated from service
as a result of the alleged disability that renders you
totally disabled; and
• Submit all medical reports or corroborating ev-
idence on le that supports your disability within
six months or your application will be canceled and
you must rele.
Note: If the medical documentation supplied by
you is not sucient to support your claim of dis-
ability, the NJDPB may also require you to be ex-
amined by physicians selected by the retirement
system. The examination will be scheduled at no
cost to you by the NJDPB. All medical information
is condential and only for use by the PFRSNJ
Board of Trustees in evaluating your application.
If you are approved for an Ordinary Disability Retire-
ment, the annual benet calculation is equal to 40 per-
cent of your Final Compensation or 1.5 percent of your
Final Compensation for each year of service credit,
whichever is higher.
The application process begins by ling a Retirement
Application with the NJDPB through MBOS. The appli-
cation review process requires information from your
physicians and a release of health information related
to your disability. The process also requires corrobora-
tion of your condition by at least two medical sources.
The more complete the application and supporting in-
formation, the faster it can be evaluated, although the
process may take six months or more.
It is the applicant’s responsibility to arrange for all phy-
sicians’ statements, hospital records, and other health
information to be sent to the NJDPB.
Once the Board of Trustees approves a member for a
Disability Retirement, the member’s retirement applica-
tion cannot be withdrawn, canceled, or amended.
PFRS Member Guidebook August 2024 Page 28
Police and Firemen’s Retirement System
Approval for Workers’ Compensation or Social Security
disability benets has no bearing on your application
for an Ordinary Disability Retirement. However, if you
are approved for Ordinary Disability Retirement bene-
ts and receive a Workers’ Compensation award, your
Workers’ Compensation award may be reduced by the
amount of your Ordinary Disability Retirement benet.
If you have any questions concerning this issue, please
contact the Division of Workers’ Compensation at (609)
292-2515 or send an email to: [email protected]
Special Disability Retirement
To qualify for a Special Disability Retirement you must:
• Be a member in service at the time the applica-
tion is led with the NJDPB (an ocial leave of ab-
sence is considered in service);
• Be under 55 years of age;
• Have ve or more years of New Jersey service
credit; and
• Receive a heart transplant.
The annual benet calculation for a Special Disability
Retirement is equal to 50 percent of Final Compensa-
tion.
Accidental Disability Retirement
To qualify for an Accidental Disability Retirement you
must:
• Be a member in service at the time the applica-
tion is led with the NJDPB. Member in service
means that the member or employer was making
pension contributions to the retirement system at
the time of ling an application for Disability Retire-
ment. It may also mean that the member was on
an approved leave of absence, paid or unpaid, or
suspension, paid or unpaid, at the time of ling the
application. If the member had pending litigation
for wrongful termination led against the employer,
the member has 30 days from the date the litiga-
tion is resolved to le for Disability Retirement in
order to be considered a member in service.
• Be considered totally and permanently disabled.
You must prove that you are physically or mentally
incapacitated from performing your normal or as-
signed job duties or any other position your em-
ployer may assign as a “direct result of a traumatic
event” (denition to follow);
• Be an active member of the PFRS on the date of
the traumatic event;
• File an application for Disability Retirement within
ve years of the date of the traumatic event;
• Be disabled at the time you separated from service
as a result of the alleged disability that renders you
totally disabled;
• Submit any and all accident reports, witness re-
ports, and corroborating evidence on le for any
and all accidents for which you are ling within six
months; and
• Be examined by physicians selected by the re-
tirement system. The examination will be sched-
uled at no cost to you by the NJDPB. All medical
information is kept condential and used only by
the PFRSNJ Board of Trustees in reviewing your
claim.
If you are approved for Accidental Disability Retire-
ment, your annual retirement allowance will be 2/3 of
your annual compensation for which contributions were
being made at the time of the traumatic event or at the
time of retirement, whichever provides the largest pos-
sible benet.
“Direct Result of a Traumatic Event” has been dened
by the courts as an occurrence that:
• Is identiable as to time and place;
• Is undesigned and unexpected;
• Is caused by a circumstance external to the mem-
ber (not the result of pre-existing disease that is
aggravated or accelerated by the work);
• Occurred during and as a result of the member’s
regular or assigned duties;
• Was not the result of the member’s willful negli-
gence; and
• Results in the member’s permanent and total inca-
pacitation from performing his or her usual or any
other duty.
Note: When there is an issue of mental incapacity,
the member must also establish that the event that
forms the basis for an Accidental Disability was
objectively capable of causing a reasonable per-
son in similar circumstances to suer a disabling
mental injury, based on a nding that the disability
resulted from “direct personal experience of a ter-
rifying or horror-inducing event that involves actual
or threatened death or serious injury, or a similarly
serious threat to the physical integrity of the mem-
ber or another person.”
The application process begins by ling a Retirement
Application with the NJDPB through MBOS. You may
le for only one type of Disability Retirement, either Ac-
cidental or Ordinary Disability.The application review
process requires information from your physicians, in-
formation from your employer with questions regarding
the traumatic event, and a release of health information
related to your disability. The more complete the appli-
cation and supporting information, the faster it can be
evaluated, although the process may take six months
or more.
It is the applicant’s responsibility to arrange for all phy-
Page 29 August 2024 PFRS Member Guidebook
Police and Firemen’s Retirement System
sicians’ statements and hospital records to be sent to
the NJDPB.
Once the Board of Trustees approves a member for a
Disability Retirement, the member’s retirement applica-
tion cannot be withdrawn, canceled, or amended.
Approval for Workers’ Compensation or Social Secu-
rity Disability benets has no bearing on your applica-
tion for Accidental Disability Retirement. However, if
you receive periodic Workers’ Compensation benets
while receiving an Accidental Disability Retirement, the
pension portion of your retirement allowance will be re-
duced dollar for dollar by the amount of the periodic
benets.
If you apply for Accidental Disability Retirement and
are found by the Board of Trustees to be totally and
permanently disabled but not as a result of a traumatic
event, you may be approved for an Ordinary Disability
Retirement if you have the required service credit. See
the “Ordinary Disability Retirement” section.
Accidental Disability for
World Trade Center Responders
P.L. 2019, c. 157 (Chapter 157), the Bill Ricci World
Trade Center Rescue, Recovery, and Cleanup Opera-
tions Act, permits current PFRS members to le for an
Accidental Disabillity Retirement benet if the member
is or is to become totally and permanently disabled due
to participation in the rescue, recovery, or cleanup op-
erations at the World Trade Center.
For more information, please refer to the Accidental
Disability Retirement Under Chapter 157 Fact Sheet.
Involuntary Disability Retirement
Your employer has the right to apply for an Involuntary
Disability Retirement on your behalf provided that you
meet the qualications for a Disability Retirement pre-
viously described.
• If you are required to retire upon application by the
employer and have at least four years of New Jer-
sey service, but less than 20 years, you will receive
an Ordinary Disability retirement allowance of 40
percent of Final Compensation, or 1.5 percent
of Final Compensation for each year of service,
whichever is higher.
• If you are required to retire upon application by the
employer and have 20 or more years of service,
you will receive an allowance equal to 50 percent
of Final Compensation plus an additional three
percent of Final Compensation for every year of
service over 20 up to a maximum of 25 years.
• If you meet the qualications for an Accidental Dis-
ability Retirement and are required to retire upon
application by the employer, you will receive an Ac-
cidental Disability Retirement allowance of 2/3 of
your annual compensation for which contributions
were being made at the time of the traumatic event
or at the time of retirement, whichever provides the
largest possible benet.
In addition to the retirement application, State employ-
ers must provide a letter from the Department’s highest
ranking authority and local employers must provide a
copy of a resolution adopted by the governing body.
The letter/resolution must indicate the intent to involun-
tarily retire the employee and state that, in the employ-
ing authority’s opinion, the employee is totally and per-
manently disabled from fullling his or her job duties.
Employers should also include any pertinent medical
records.
Note: The member cannot change the date of retire-
ment under an Involuntary Disability Retirement.
THE RETIREMENT PROCESS
The time frames in this section serve as a guide to help
you understand the retirement process. Actual pro-
cessing times, however, may vary and cannot begin
until the NJDPB receives all the necessary information
and forms from both you and your employer.
6-8 Months Before Retirement
When planning for a successful retirement, it is import-
ant to give yourself enough time to review your benets.
You should inquire about retirement at least six months
before your retirement date.
Retirement Estimates — Members within two years
of retirement can:
• Obtain an Estimate of Retirement Benets using
MBOS. This provides you with a printable estimate
of the retirement allowances available and the
amount of your group life insurance benets. Using
the retirement estimate calculator on MBOS allows
you to obtain and compare estimates for dierent
retirement dates.
• Hear an estimate of retirement benets over the
phone by calling the NJDPB Automated Informa-
tion System at (609) 292-7524.
Your employer is not notied if you request a retirement
estimate.
For long term retirement planning, the NJDPB also pro-
vides an online retirement estimate calculator that uses
service and salary information that you provide. This
calculator is available on our website.
4-6 Months Before Retirement
Retirement Applications — It is your responsibility
to le a retirement application with the NJDPB. All re-
tirement applications must be submitted online using
MBOS. MBOS provides fast, ecient processing of
your retirement application.
All retirements are eective on the rst of a month. You
can submit your retirement application no more than
one year before your retirement date — and as late as
the last business day prior to your retirement date —
but four to six months advance ling is recommended.
Under no circumstances can a retirement become ef-
fective prior to the date the application is received by
the NJDPB.
PFRS Member Guidebook August 2024 Page 30
Police and Firemen’s Retirement System
• If you have not furnished proof of your age to the
NJDPB, you must do so when applying for retire-
ment (see the “Proof of Age” section for acceptable
proofs of age). If any proof of age documents are
given under a maiden name, please identify them
as such. Send photocopies of any proof of age
documents, as we cannot guarantee that original
documents will be returned. Please also be sure
to write your pension membership number or last
four digits of your Social Security number on all
documentation that you submit. Your retirement
application will not be processed until the NJDPB
receives copies of birth date evidence.
• Ask your employer to submit a Certication of Ser-
vice and Final Salary to the NJDPB. Your employer
will also receive an email from the NJDPB request-
ing this certication.
• It is the applicant’s responsibility to ensure that all
required forms — except for the employer certica-
tion — are submitted to the NJDPB within 90 days
of the NJDPB’s receipt of your retirement applica-
tion. Otherwise, the retirement application will be
canceled and you will need to submit another ap-
plication for a future retirement date.
When your application is submitted to the NJDPB, you
will receive an email conrmation of its receipt. You
will also be sent a letter acknowledging receipt of your
retirement application.
Life Insurance — The amount of your life insurance
coverage through the PFRS decreases at retirement
or terminates if you have less than 10 years of service
credit. You may convert the dollar dierence between
the group coverage you had before retirement and the
group coverage you will have after retirement to a non-
group life insurance policy.
To protect your conversion privilege it is suggested that
you apply for conversion of your insurance at the time
you le your retirement application with the NJDPB.
However, you cannot le to convert your life insurance
any earlier than six months prior to your retirement date.
See the “Conversion of Group Life Insurance” section
and the Conversion of Group Life Insurance Fact Sheet
for details.
Other Retirement Plans — If you participate in the fol-
lowing other retirement savings plans, you must inform
them separately of your plans to retire:
• Contact the NJSEDCP at 1-866-NJSEDCP.
• Contact SACT at (609) 292-7524.
• Contact the DCRP at 1-866-653-2771.
Approximately 3 Months Before Retirement
Health Benets Coverage at Retirement — To see
if you qualify for retired coverage under the SHBP, see
the Summary Program Description and the Health Ben-
ets Coverage — Enrolling as a Retiree Fact Sheet. If
you do not qualify for retired SHBP coverage, see your
employer to explore other options that may be available
for continuing your health coverage.
Approximately 1 Month Before Retirement
Board Approval — Your retirement will be presented to
the PFRSNJ Board of Trustees for approval.
• Once approved, you will receive a letter from the
Board of Trustees. You have 30 days from the
Board approval date or your eective retirement
date (whichever is later) to request a change to
your retirement date. If you wish to make a change
after Board approval, your new selection must
again be approved by the Board of Trustees. This
may delay your rst retirement check.
• You may choose to cancel your retirement within
30 days of your retirement date or Board approv-
al date (whichever is later). The request to cancel
your retirement or change your retirement date
must be made via MBOS. However, if your retire-
ment has been board approved and/or you have
been assigned a retirement number, MBOS will
not be able to process your request to cancel or
change your retirement date. In these cases, you
should immediately contact the NJDPB in writing
or by email at:pensions.nj@treas.nj.gov
Note: Members who are approved for Disability Re-
tirement cannot cancel their retirement or change their
date of retirement.
Approximately 2-4 Weeks Before Retirement
You will receive a Quotation of Retirement Benets
letter which shows your monthly retirement allowance,
along with:
• Any benets payable to an eligible survivor;
• A quote of any outstanding loan balance with re-
payment options; and
• A notice of any unsatised balance on your ac-
count (see the “Unsatised Balances” section).
Unsatised Balances
Loans — If you retire with an outstanding loan balance,
you may:
• Pay the loan in full prior to receiving any retirement
benets; or
• Repay the loan deductions from your retirement al-
lowance until the balance of the loan plus interest
is repaid. The monthly loan payment will be calcu-
lated to have the loan plus interest satised by your
ve-year end date.
Page 31 August 2024 PFRS Member Guidebook
Police and Firemen’s Retirement System
Purchase Arrears — When you apply for a purchase
of service credit, the NJDPB assumes that the obli-
gation will be paid before your retirement. Therefore,
your account is credited with the full amount of service
you have agreed to purchase. If this obligation has not
been fully paid when you retire, your Quotation of Re-
tirement Benets will state the balance of your arrears
(purchase) as of your retirement date. At that time, you
must pay the balance of your arrears.
If you do not pay o the balance, the service credit
which has not been paid for will be subtracted from your
total years and months of service. This will reduce the
amount of your retirement allowance and may even af-
fect your eligibility to retire. Contact the NJDPB as soon
as possible to advise whether or not you wish to pay o
the arrears balance in full.
For Deferred Retirees who have an outstanding arrears
obligation for the purchase of additional service credit,
interest may be assessed if there was a lapse in pay-
ments of two years or more.
Shortages — A shortage in your pension account oc-
curs when your employer does not deduct the proper
pension contribution from your salary. You will be noti-
ed by the NJDPB of the amount of any shortage. You
are responsible for payment of any shortages at retire-
ment.
No retirement will be paid until purchase arrears and
shortage obligations have been satised. Contact the
NJDPB as soon as possible if your Quotation of Retire-
ment Benets indicates an arrears balance or shortage.
After Your Retirement Date
Statement of Retirement Allowance — You will re-
ceive a letter conrming your retirement and death ben-
ets. The letter will also supply gures needed in ling
your income tax return. Keep this with your important
papers.
Due and Payable — Your retirement becomes due and
payable after there has been a break in employment
without pay of at least 30 days following your retirement
date, or 30 days following approval of your retirement
by the PFRSNJ Board of Trustees, whichever is later.
Once your retirement becomes due and payable you
cannot change your retirement date.
Note: If you return to a PFRS-eligible position before
the 30 days have elapsed, on either a paid or voluntary
basis, your retirement may be considered invalid and
you could be required to reimburse the retirement sys-
tem and reenroll in the PFRS. The same is true if you
return to your former employer/employee relationship
before meeting the requirements of a bona de sever-
ance of employment, having terminated your employ-
ment relationship for at least 180 days from your date
of retirement. See the Employment After Retirement
Restrictions Fact Sheet for additional requirements of
a valid retirement.
Retirement Checks — Your rst retirement check can-
not be issued earlier than 30 days following your retire-
ment date. If processing of your retirement is delayed,
your rst check will be retroactive to the date of your
retirement.
Regular retirement checks are dated on the rst of the
month and are the allowance for the previous month.
For example, if you retire on July 1st, your rst retire-
ment check would be due and payable on August 1st
and is payment for the month of July.
Change of Address — It is important that you inform
the NJDPB of the change by using the Retiree Change
of Address function in MBOS, calling the Automated
Information System at (609) 292-7524, or completing
a Change of Address Form available on our website.
If notifying the NJDPB of a change of address in writ-
ing, be sure to include both your old and your new ad-
dress and your retirement number or last four digits of
your Social Security number.
Direct Deposit/Electronic Funds Transfer (EFT) —
Direct deposit of retirement checks is mandatory ex-
cept for foreign mailing addresses. Direct deposit will
prevent your retirement checks from being lost, stolen,
or delayed in the mail.
You can sign up for direct deposit up to two months
prior to your retirement date using the Electronic Funds
Transfer application available to pending retirees
through MBOS. Registered retirees can also start or
change direct deposit online, at any time, using MBOS.
Please allow approximately 60 days for a new direct de-
posit, or changes to an existing direct deposit, to begin.
Withholding Federal and N.J. State Income Tax —
The NJDPB will provide for the withholding of federal
and New Jersey State income tax from your retirement
check.
The default withholding status for federal income tax
is Single with no adjustments regardless of your ac-
tual marital status or number of dependents. The
NJDPB is obligated to withhold federal income tax at
this status unless you submit a change to your federal
withholding through your MBOS account using the “In-
come Tax Withholding” button after you receive your
rst retirement check. Refer to IRS Form W-4P for in-
structions regarding federal tax withholding.
New Jersey income tax withholding is voluntary, and
none will be withheld unless you give instructions to do
so. Please keep in mind that if you live outside New
Jersey your retirement benets are not subject to New
Jersey State income tax, but may be subject to state or
local taxes in the jurisdiction in which you reside. There
is no provision for withholding any local or out-of-state
taxes.
Retirees can increase or decrease existing withhold-
ing amounts by using the online federal and New Jer-
sey W-4P applications available to retirees on MBOS.
Please note that IRS Form W-4R should be used for
non-periodic payments and eligible rollover distribu-
PFRS Member Guidebook August 2024 Page 32
Police and Firemen’s Retirement System
tions. This form can be found on the IRS website at
www.irs.gov
The NJDPB cannot provide tax advice. Questions
about your federal income tax should be directed
to your tax preparer or the IRS at 1-800-TAX-1040.
Questions about New Jersey income tax should be
directed to the New Jersey Division of Taxation at
1-800-323-4400.
Federal Income Tax After Retirement — Every Jan-
uary, the NJDPB issues each retiree an annual Form
1099-R reecting the taxable retirement allowance
paid during the preceding tax year. If you are a non-res-
ident alien or foreign estate, you will receive a Form
1042-S Foreign Person’s U.S Source Income Subject
to Withholding.
The degree to which your pension is taxed, other than
Accidental Disability Retirement, depends on whether
or not the payments you receive have been previously
taxed. Employee contributions made prior to 1987 were
made with after-tax dollars. That is, they were feder-
ally taxed prior to being made. Contributions for the
purchase of service credit are also made with after-tax
dollars unless funded by a rollover from another tax-de-
ferred plan.
If you began contributing to the pension plan in 1987
or after, and you have not made a purchase of service
credit, your entire pension is subject to federal income
tax because your contributions have never been taxed.
If you contributed to the pension plan before 1987, or if
you have made a purchase of service credit since 1987,
your pension is immediately taxable based on the “ex-
pected return rule.” Part of your retirement allowance
comes from your own pension contributions that were
already taxed, and the IRS allows you to recover these
contributions tax free. This recovery is spread out over
your expected lifetime or the combined lifetime of you
and your beneciary, according to IRS life expectancy
tables. This means that a small amount of each month-
ly retirement check is tax free. The remainder of the
monthly benet is subject to federal income tax.
If you retired on an Accidental Disability Retirement —
or if you are a surviving spouse receiving Accidental
Disability or Accidental Death benets — the NJDPB
currently reports your benet as exempt from federal
income tax.
Ordinary Disability Retirement benets are subject to
federal tax to the same extent as other pensions.
Any federal tax questions should be referred to the IRS
at 1-800-TAX-1040.
N.J. State Income Tax After Retirement — If you
live in New Jersey, you will be subject to New Jersey
State income tax when you have recovered in pension
checks the amount of pension contributions you made
to the retirement system while working. However, if you
will not recover your total contributions within three
years of retirement, contact the New Jersey Division
of Taxation at 1-800-323-4400, or visit their website
at http://www.nj.gov/treasury/taxation to determine
how your pension is taxed.
If you are receiving an Ordinary Disability or Acciden-
tal Disability Retirement allowance, your pension is ex-
empt from New Jersey income tax if you are under age
65. When you reach age 65, your disability pension is
treated as a regular pension and is considered taxable
for New Jersey income tax.
Cost-of-Living Adjustment — The Pension and
Health Benet Reform Law, N.J.S.A. 43:3B-2, sus-
pended Cost-of-Living Adjustments (COLA) for retirees
of all retirement systems. Please note, however, that
there is no reduction to any COLA increases that were
already added to retiree benets prior to June 28, 2011,
the eective date of the law.
Prior Cost-of-Living Adjustments are shown under
the Current Earnings section of the retirement bene-
t Statement of Allowances and Deductions (check or
EFT stub).
Retirees can also verify current allowance and deduc-
tion information at any time using the retiree account
information available through MBOS or by calling the
Automated Information System at (609) 292-7524.
REDUCTION OR SUSPENSION
OF YOUR BENEFITS
Normally, you will receive retirement benets as long
as you live. Your benets, however, could be reduced
or suspended if:
• You return to a position covered by the PFRS and
are required to reenroll (see the Employment After
Retirement Restrictions Fact Sheet).
• You return to employment with your former em-
ployer within 180 days (even in a voluntary capaci-
ty).
• You have a shortage in your account at the time of
retirement.
• You receive salary from your employer for service
rendered after your date of retirement.
• You waive your right to a portion of any pension to
which you are entitled.
• As an Accidental Disability retiree, you receive pe-
riodic Workers’ Compensation benets after your
retirement date.
• As a Disability retiree, you fail to appear for a peri-
odic medical re-examination when requested to do
so.
• You fail to le a Certicate of Eligibility when you
are asked to do so. This certicate is necessary,
for example, if you or one of your beneciaries has
Page 33 August 2024 PFRS Member Guidebook
Police and Firemen’s Retirement System
a change in marital status.
• You are incarcerated (although the Board of Trust-
ees may permit the continuance of your benets to
your dependents).
• An accounting error is made and the PFRS must
be repaid.
Your pension is normally exempt from any liens against
it. Exceptions are: tax liens imposed by the IRS and
court orders for child support, alimony, or equitable dis-
tribution.
A court order is eective only when you withdraw your
funds or when you begin to receive monthly retirement
payments. It is the responsibility of the member to be
certain that the NJDPB is provided with copies of all
court orders in order to comply with them.
Divorce or Dissolution of a
Civil Union/Domestic Partnership
The retirement system will implement matrimonial/part-
nership dissolution court orders granting alimony, child
support, or equitable distribution.
Matrimonial/partnership dissolution orders regarding
your withdrawal from the retirement system will take
eect if you voluntarily apply to withdraw your PFRS
account. See the “Withdrawal from the Retirement Sys-
tem” section.
Matrimonial/partnership dissolution orders regarding
your retirement will not take eect until you retire and
begin receiving a monthly retirement allowance. The
court order can designate a specic dollar amount or
percentage, or a percentage based on the number of
years of pensionable service you accrued during the
marriage/partnership to be withheld from your retire-
ment allowance. The amount withheld is sent directly
from the NJDPB to your former spouse/partner unless
the order species another payee (i.e., a probation de-
partment).
Any court-ordered withholding paid to your former
spouse/partner from your retirement allowance will
terminate upon your death or the death of the former
spouse/partner.
Misconduct
The receipt of retirement benets is expressly condi-
tioned upon the rendering of honorable service by a
public ocer or employee. In accordance with N.J.S.A.
43:1-3, your benets may be reduced or forfeited if you
are convicted of a crime in any way related to your em-
ployment, or if you are suspended or dismissed from
your employment. See the Honorable Service Fact
Sheet available on our website for further information.
EMPLOYMENT AFTER RETIREMENT
For most PFRS retirees, working for a private indus-
try, the federal government, or a government agency
in another state will not aect your retirement benets.
For PFRS retirees who resume public employment in
New Jersey after retirement, there are several areas
of concern. To learn about the rules and regulations
regarding post-retirement employment, please see the
Employment After Retirement Restrictions Fact Sheet
available on our website.
Active and Retired
Death Benets
Page 35 August 2024 PFRS Member Guidebook
Police and Firemen’s Retirement System
OVERVIEW
Upon the death of an active or retired PFRS member,
two benets are payable:
• A monthly survivor’s pension paid to a specic
family member (or return of contributions to a ben-
eciary); and
• Group life insurance.
The monthly survivor’s pension to a family member is
explained below. See also the “Group Life Insurance”
section.
Payment of Pension to a Family Member
Upon the death of an employed or retired member, the
spouse, civil union partner, domestic partner, child(ren),
or dependent parents of the member may be entitled
to a monthly pension. The benets vary according to
the status of the member at the time of the death. The
terms used in the explanations of benets are dened
as follows:
Spouse — A person to whom you were married on
the date of your death and who has not remarried or
entered into a civil union. For an exception, see the
“Accidental Death Benets” section. Documentation
required for verication includes a copy of your govern-
ment issued marriage certicate (if the marriage cer-
ticate is in a language other than English, an English
translation must also be submitted), and a copy of your
most recent tax return (Form 1040). A copy of the tax
return is not required if the marriage occurs within 12
months of the date the member passed. Only the rst
page of the tax return is required and must include the
spouse’s name (nancial data and all but the last four
digits of Social Security numbers should be redacted to
protect privacy). The tax return must show a “Married”
ling status. If the subscriber and dependent spouse
reside at separate addresses, both the subscriber’s
and the spouse’s most recent tax return must be sub-
mitted. (If the subscriber or spouse submits a “Head of
Household” ling status on their return, the other indi-
vidual’s return must have a “Married ling separately”
ling status. Tax returns with a “Single” ling status will
not be accepted.)
Civil Union Partner — A person of the same sex as
dened by N.J.S.A. 37:1-29, with whom you were part-
nered in a civil union until the date of your death and
who has not entered into a new civil union or married.
For an exception, see the “Accidental Death Benets”
section. Documentation required for verication in-
cludes a copy of the New Jersey certicate of civil union
dated prior to October 2013, or a valid certication from
another State or foreign jurisdiction that recognizes
same-sex civil union partners and a copy of the rst
page of both partners’ N.J. tax return from the previous
year that includes the partner (nancial data and all but
the last four digits of Social Security numbers should be
redacted to protect privacy). See the Civil Unions and
Domestic Partnerships Fact Sheet for details.
Domestic Partner — A person of the same sex as de-
ned by N.J.S.A. 26:8A-1, with whom you were part-
nered in a domestic partnership until the date of your
death and who has not entered into a civil union or
married. For an exception, see the “Accidental Death
Benets” section. For an employee or retiree of a lo-
cal public entity, the local entity’s governing body must
have adopted a resolution to provide Domestic Partner
pension benets. Documentation required for verica-
tion includes a copy of the New Jersey certicate of
domestic partnership dated prior to February 19, 2007,
or a valid certication from another State or foreign ju-
risdiction that recognizes same-sex domestic partners
and a copy of the rst page of both partners’ N.J. tax
return from the previous year that includes the partner
(nancial data and all but the last four digits of Social
Security numbers should be redacted to protect priva-
cy). See the Civil Unions and Domestic Partnerships
Fact Sheet for details.
Child — Your unmarried child:
• Under the age of 18;
• 18 years of age or older and enrolled in high school;
• Any age who, at the time of your death, is disabled
because of mental or physical incapacity and is
incapable of substantial gainful employment be-
cause of the impairment. This incapacity must last
or be expected to last for a continuous period of
not less than 12 months as determined by the Med-
ical Review Board; or
• For an Accidental Death Benet (see the “Acciden-
tal Death Benets” section), a child may also mean
an unmarried child under the age of 24 who is en-
rolled in college in a degree program for at least 12
hours per semester.
Parent — Your parent who was receiving at least one-
half support from you in the 12 months immediately
preceding your death, or the accident which led to your
death in cases of an Accidental Death Benet. The de-
pendency of the parent will be considered terminated
if he or she remarries after the death of the member.
Final Compensation — for a Tier 1 member enrolled
on or before May 21, 2010, Final Compensation means
the salary upon which pension contributions were
based in the 12 months immediately preceding your
death or retirement.
For a Tier 2 or Tier 3 member enrolled after May 21,
2010, Final Compensation means the average salary
upon which pension contributions were based for the
last three years of service or any three scal years of
membership preceding your death or retirement that
provides the largest possible benet.
Active Members
Upon your death as an active member, your surviving
spouse/partner is eligible to receive a pension benet
equal to 50 percent of your Final Compensation.
PFRS Member Guidebook August 2024 Page 36
Police and Firemen’s Retirement System
If there is no surviving spouse/partner, the following
benet is payable to eligible children:
• 50 percent of nal compensation to one eligible
child; or
• 50 percent of nal compensation to two or more
eligible children, payable in equal shares.
If there is no surviving spouse/partner or children, a
pension is paid to your eligible parents as follows:
• 40 percent of Final Compensation to two parents; or
• 25 percent of Final Compensation to one parent.
If there is no surviving spouse/partner, children, or par-
ents, the employee’s contributions to the retirement
system are paid to the named beneciary. In the event
that a specic beneciary is not named, the funds will
be paid to the member’s estate.
Retired Members
For PFRS members who retired January 1, 1968 and
after, upon your death your surviving spouse/partner is
eligible to receive a pension benet equal to 50 percent
of your Final Compensation, plus 15 percent of your
Final Compensation for one eligible child or 25 percent
of your Final Compensation for two or more eligible
children.
If there is no surviving spouse/partner, the following
benet is payable to eligible children:
• 50 percent of Final Compensation to three or more
eligible children;
• 35 percent of Final Compensation to two eligible
children; or
• 20 percent of Final Compensation to one eligible
child.
ACCIDENTAL DEATH BENEFIT
If you die as a result of an accident during the perfor-
mance of your regular or assigned duties, and your
death is not a result of willful negligence, your family
may be entitled to an Accidental Death Benet. A re-
port of an accident must be led with the retirement
system within 60 days of the accident. An Application
for Accidental Death Benets must be led within ve
years of the date of death.
In cases resulting in an Accidental Death Benet, your
eligible surviving spouse, civil union partner, or same-
sex domestic partner is paid an annual pension of 70
percent of your Compensation. This benet is a lifetime
benet to your surviving spouse or partner.
Compensation — For all PFRS members, Compen-
sation means the salary upon which pension contribu-
tions were based in the 12 months immediately preced-
ing your death or the accident which led to your death.
If there is no eligible surviving spouse/partner, or if the
surviving spouse/partner dies, a pension is paid to your
eligible children in equal shares, in the amount of 70
percent of your Compensation.
If there is no eligible surviving spouse/partner or chil-
dren, a pension will be paid to your eligible dependent
parents in these amounts:
• 40 percent of Compensation to two eligible par-
ents; or
• 25 percent of Compensation to one eligible parent.
If there is no surviving spouse, child, or parent, your
pension contributions will be paid to your named ben-
eciary. In the event that a specic beneciary is not
named, the funds will be paid to the member’s estate.
GROUP LIFE INSURANCE
Your employer pays the cost of your group life insur-
ance. This Noncontributory Group Life Insurance is
provided through policies issued by the insurance car-
rier (Prudential Financial).
The group policy number for the PFRS is G-14800.
Compensation — PFRS group life insurance bene-
ts are calculated using the salary on which pension
contributions were based in the 12 months immediately
preceding your death or retirement.
Coverage for Active Members
If your death occurs in active service before retirement,
your named beneciary (or estate where there is no
named beneciary) receives a group life insurance
benet equal to 3 1/2 times your Compensation. If you
die during the rst year of creditable service, the bene-
t is 3 1/2 times your creditable base salary upon which
pension contributions were paid.
Coverage for Retired Members
If you die after retirement, your named beneciary (or
estate where there is no named beneciary) receives
a group life insurance benet equal to 50 percent of
your Compensation. However, if you retired on a Dis-
ability Retirement, the amount is equal to 3 1/2 times
your Compensation until age 55 when it is reduced to
50 percent of your Compensation.
Group life insurance for retired members of the PFRS
who were enrolled on or after July 1, 1971, is payable
only if the member retired with 10 or more years of pen-
sion membership credit or retired on a Disability Re-
tirement.
CHOOSING A BENEFICIARY
When a member is enrolled in the PFRS, the new
member’s estate is the group life insurance beneciary
on record until the NJDPB receives a new Designation
of Beneciary.
Note: Active and retired members must complete the
Page 37 August 2024 PFRS Member Guidebook
Police and Firemen’s Retirement System
Designation of Beneciary online using MBOS.
When you submit the Designation of Beneciary, you
name beneciaries for your group life insurance bene-
ts and, if applicable, the return of your pension contri-
butions. You may name any person, organization, your
estate, or trust as beneciary. You may change your
designation at any time during your active membership
by submitting a new Designation of Beneciary.
At retirement, you are asked on your retirement appli-
cation to name a beneciary(ies) for group life insur-
ance benets. You may name any person, organiza-
tion, your estate, or trust as beneciary for group life
insurance benets.
The designation of a beneciary on a retirement ap-
plication that is led with and accepted by the NJDPB
supersedes any older designation of beneciary on le.
The designation is eective upon acceptance by the
NJDPB, even if the retirement date on the application is
in the future or the member later cancels the retirement
application.
Retirees may also change group life insurance desig-
nations at any time during retirement by ling a new
Designation of Beneciary via MBOS.
If you have additional questions regarding designations,
please see the Beneciary Designation Fact Sheet.
For your protection, beneciary designations cannot
be accepted or conrmed over the telephone or by
email. Members can verify beneciary designation on
MBOS. Otherwise, the NJDPB will only accept a writ-
ten request from the member to verify your beneciary
designation on le.
Group Life Insurance — In cases of divorce or disso-
lution, N.J.S.A. 3B:3.14 states that even if your Desig-
nation of Beneciary form indicates a former spouse/
partner and/or relatives of the former spouse/partner
as beneciaries for life insurance, they cannot receive
the benet. Therefore, the life insurance proceeds be-
come payable to your remaining primary beneciaries,
if any; contingent beneciaries, if any; or your estate.
However, the following exceptions will be honored and
considered valid:
• Court orders are led that specically designate
your former spouse/partner to receive a life insur-
ance benet; or
• You le a Designation of Beneciary after the nal
date of judgment that names your former spouse/
partner and/or relatives of your former spouse/
partner as the life insurance beneciary.
PAYMENT OF GROUP LIFE INSURANCE
Group life insurance benets for active members can
be paid in one of several ways (group life insurance for
retirees must be paid in a lump sum). The options are:
• Lump Sum — A single payment to your benecia-
ry(ies).
• Annuity Certain — Equal installments over a se-
lected period of years.
• Life Annuity — Paid monthly to your benecia-
ry(ies) for life.
Death benets cannot be paid until all the necessary
information, including proper proof of death and claim
forms, have been received from your beneciary by the
NJDPB.
To report a death, contact the Oce of Client Services
at (609) 292-7524. A certied death certicate, obitu-
ary, or the employer’s P-29 form is required to begin
processing the claim.
Taxation of Group Life Insurance Payments
Information regarding death claim payments are sup-
plied to the New Jersey Division of Taxation, in accor-
dance with their requirements. A beneciary or bene-
ciaries may be considered by the Division of Taxation
to be personally liable for any and all inheritance and/or
estate taxes until paid.
GROUP LIFE INSURANCE AND
LEAVE OF ABSENCE
Your group life insurance coverage will continue in full
force for an ocial leave of absence without pay under
the following conditions:
• Up to two years while on an ocial leave of ab-
sence for personal illness.
• Up to one year while on an ocial leave to fulll
a residency requirement for an advanced degree
or as a full-time student at an institution of higher
education.
• Up to 93 days while on ocial leave for personal
reasons and family leave.
An ocial leave of absence requires documentation
that establishes the nature of the leave and the continu-
ing relationship between the employer and the member.
Note: A member who has been suspended without pay
is covered for group life insurance for up to 93 days.
TAXATION OF GROUP LIFE
INSURANCE PREMIUMS
The IRS classies all employer-provided life insurance
coverage over $50,000 as a fringe benet subject to
taxation. The amount of life insurance coverage is not
taxable, but the premium required to pay for the life in-
surance coverage is taxable.
To determine the taxable amount, if any, subtract
$50,000 from that total value of your Noncontributory
Group Life Insurance coverage. The premium rates are
then applied to the remaining life insurance amount.
The premium costs for the life insurance are deter-
mined by the IRS based on your age (see the “IRS
Premium Rates” chart) and the life insurance in excess
PFRS Member Guidebook August 2024 Page 38
Police and Firemen’s Retirement System
of $50,000. The remaining premium cost, if any, is the
taxable amount and is added to your income on the
Form W-2 for that year.
Example: A PFRS member is age 56 and has life in-
surance coverage.
The member’s annual base salary is $60,000. The
member’s life insurance coverage totals $210,000 (3.5
x $60,000).
The fringe benet amount is determined by subtract-
ing $50,000 from the total benet amount ($210,000),
which equals $160,000 ($210,000-$50,000).
According to the IRS, the premium cost for an individ-
ual 52 years of age is $2.76 per $1,000 of coverage.
The premium cost in this example is $441.60 (160 x
$2.76) and this amount would be added to your taxable
income.
IRS Premium Rates*
(Annual cost per $1,000 of coverage)
Age Premium
Under age 25 $0.60
25-29 $0.72
30-34 $0.96
35-39 $1.08
40-44 $1.20
45-49 $1.80
50-54 $2.76
55-59 $5.16
60-64 $7.92
65-69 $15.24
70 and older $24.72
*These rates are subject to change by the IRS
WAIVING NONCONTRIBUTORY
GROUP LIFE INSURANCE OVER $50,000
PFRS members are permitted to waive their group life
insurance over $50,000 to avoid a possible federal and
State tax liability on that benet.
Waivers of partial amounts are not permitted. Any
member who waives group life insurance must waive
the total amount of coverage in excess of $50,000.
In the previous example, the member’s coverage
equals $210,000 (3.5 x $60,000). In this example the
member could waive $160,000 of coverage because
members are only permitted to waive life insurance
coverage over $50,000. The net taxable value would
be reduced to $0.00.
You may waive your Noncontributory Group Life Insur-
ance coverage in excess of $50,000 by completing a
Waiver of Group Life Insurance in Excess of $50,000
form and submitting it to the NJDPB. The form is avail-
able from the NJDPB or your employer. The waiver form
must be received by the NJDPB before December 31
in order to be eective January 1 of the next calendar
year. Once a waiver form has become eective it shall
be irrevocable for the entire calendar year. The waiv-
er will remain in eect until you submit submit another
waiver form opting to reinstate coverage to the NJDPB.
to the NJDPB. The reinstatement will become eective
the following January 1.
If a waiver is in eect at the time of termination of em-
ployment or retirement, you will not be permitted to con-
vert any amount of your group life insurance coverage
over $50,000.
Before completing the waiver, you should completely
understand the ramications of waiving your life insur-
ance. For more information, refer to IRS Publication
525, Taxable and Nontaxable Income.
CONVERSION OF GROUP LIFE INSURANCE
If you are covered by group life insurance while em-
ployed, the coverage ends 31 days after you cease
employment, whether for reasons of retirement, termi-
nation of employment, or leave of absence without pay.
You are eligible to convert your group life insurance
coverage to an individual policy with Prudential Finan-
cial, without medical examination and at your own ex-
pense, when you retire, terminate employment, or lose
coverage while on a leave of absence without pay. See
the Conversion of Group Life Insurance Fact Sheet for
details.
Withdrawal
PFRS Member Guidebook August 2024 Page 40
Police and Firemen’s Retirement System
OVERVIEW
When Membership Ends
Your active membership in the PFRS ends 30 days af-
ter your retirement date or 30 days after the approval
of your retirement by the PFRSNJ Board of Trustees,
whichever is later; or if:
• You die;
• You end your employment and withdraw your con-
tributions from the PFRS; or
• You have not been contributing to the retirement
system for two consecutive years.
— If you have less than 10 years of PFRS service
credit, two consecutive years is the limit for
inactive membership before a PFRS account
expires.
— If you have 10 years or more of PFRS service
credit, your PFRS account is vested. Howev-
er, two consecutive years remains the limit for
inactive membership. If you return to PFRS-
covered employment after two or more con-
secutive years without a payroll contribution,
you will be reenrolled in a new PFRS account
in the membership tier in eect at the time that
you return.
Terminating Employment
If you terminate employment before you are eligible to
retire, your options regarding your PFRS account vary
depending on your vesting status at the time of your
termination. See the “Vesting” section.
If you are vested when you terminate employment, you
can apply for a Deferred Retirement; see the “Deferred
Retirement” section. You must le an application for re-
tirement through MBOS before the requested date of
retirement. The IRS will impose a 50 percent excise tax
on accounts of members who terminate employment
but do not retire or withdraw contributions by April 1
following the calendar year in which they turn age 70
1/2 (if born before July 1, 1949) or age 72 (if born on or
after July 1, 1949).
If you are not vested before you terminate employment,
you will not be eligible to receive a monthly retirement
benet before your account expires — unless you are
age 53 or older, or eligible for an Ordinary or Accidental
Disability Retirement benet.
If you terminate employment before vesting, you can
choose to:
• Make an immediate withdrawal of your contribu-
tions; or
• Leave your contributions in your PFRS account
and retain all the service credit you have earned,
in the event you return to covered employment and
resume membership.
As a general rule (see “Exceptions” listed later in this
section), if you do not resume active membership within
two years, your account will automatically expire and
you will be requested to withdraw your contributions.
If your account expires or you elect to voluntarily with-
draw your personal contributions, all service credit
under this membership is canceled. If you later return
to PFRS-covered employment, you may be eligible to
purchase the service to have it credited to your new
account. See the “Purchasing Service Credit” section.
Expired Accounts
If your membership has been inactive for 18 consecu-
tive months, you are not vested, and you have not led
for a withdrawal of contributions, the NJDPB will send
an Expiration Notice to your last known address and a
copy to your last employer, in case they have a more
current address. The Expiration Notice is a reminder
that your money is still being held in the retirement sys-
tem. When notied, you should submit an Application
for Withdrawal through MBOS to obtain your contribu-
tions in the retirement system.
If two consecutive years have passed and the NJDPB
has been unable to contact you — or you do not reply
to the Expiration Notice by submitting an Application
for Withdrawal — your account will expire. Should you
return to covered employment before the two-year pe-
riod ends, you have the option of a reinstatement, an
Intrafund or Interfund Transfer if you otherwise qualify.
See the “Transfers” section.
Should you return to covered employment after your
account has expired or you have withdrawn your ac-
count, you will be treated as a new member in all re-
spects. Service credit from a former membership may
be purchased by members returning to the system after
the withdrawal of money from a former account.
Exceptions
Your PFRS membership will not end two years after
your last contribution if:
• You are granted an ocial leave of absence by
your employer (your two-year inactive period will
not begin until your leave of absence ends); or
• You lose your job through no fault of your own, ei-
ther by layo or abolishment of position. Your inac-
tive membership can be extended up to ve years
for the purpose of return to employment.
For an extension to be granted in these cases, you
must submit documentation from your employer show-
ing that your leave of absence was ocially extended
or that your employment was not terminated voluntarily
or for cause.
This extension only gives you the right to retain your
contributions and service credit in the retirement sys-
tem should you again obtain public employment. (Po-
lice members of the PFRS see “Prior Police Service”
under the “Age Requirements” section.) It gives you no
Page 41 August 2024 PFRS Member Guidebook
Police and Firemen’s Retirement System
other right to benets. Therefore, you cannot qualify for
a retirement benet unless you return to PFRS employ-
ment during the period of extended inactive member-
ship in order for your account to be reactivated. You
would then be eligible to apply for a retirement allow-
ance provided that you meet all other qualications for
retirement.
Example: If you were age 50 with ve years of mem-
bership credit at the time of layo, your account could
remain inactive until you reach age 55; however, you
would not be able to qualify for retirement benets at
age 55 unless you returned to active employment be-
fore ling for retirement.
WITHDRAWING CONTRIBUTIONS
If you terminate covered employment before retire-
ment, you may withdraw all your contributions to the
fund, less any outstanding loan balance or other obli-
gations. You may withdraw only the money you have
contributed, and partial withdrawals are not permitted.
Upon your withdrawal, all rights and privileges of mem-
bership end.
Since the employer/employee relationship must be sev-
ered, no withdrawal will be paid if there are unresolved
legal matters concerning your termination of employ-
ment.
All withdrawal requests must be submitted using the
Application for Withdrawal program of MBOS.
In accordance with federal law, income tax must be
withheld on certain pension distributions that produce
an annual taxable income of $200 or more, unless the
taxable amount is directly rolled over into an Individual
Retirement Account (IRA) or a new employer’s retire-
ment plan if applicable. To qualify, this direct rollover
must occur within 60 days of the withdrawal check date.
If payment is made directly to you, the taxable portion
is subject to 20 percent income tax withholding. If you
reside in the United States and wish to withhold more
than the default 20 percent federal income tax on the
taxable portion of your payment, you must complete a
Federal Form W-4R. In addition, if you receive payment
before you reach age 59 1/2 and you do not roll over
the taxable amount, you may have to pay an extra tax
equal to 10 percent of the taxable portion of any pay-
ment. If you have any questions concerning this federal
law, call the IRS at 1-800-829-1040.
You may call the NJDPB Automated Information Sys-
tem at (609) 292-7524 for general information concern-
ing withdrawals or information pertaining to your partic-
ular withdrawal claim.
If you are vested or of retirement age and choose to
withdraw, you must waive any rights you have to any
retirement or death benet. At the time you apply for
withdrawal, the NJDPB will indicate how to obtain an
estimated amount of any retirement benet and will re-
quire a signed waiver of such benets should you still
wish to withdraw. You must take a distribution by no
later than April 1 following the calendar year in which
you turn age 70 1/2 (if born before July 1, 1949) or age
72 (if born on or after July 1, 1949).
No withdrawal application can be processed until all
the necessary information has been received from you
and your former employer.
WORKERS’ COMPENSATION
As long as you are receiving Workers’ Compensation
benets, either temporary or permanent, you retain the
same status as an active member. You cannot with-
draw from the PFRS while you are receiving Workers’
Compensation, have a claim pending, or are involved
in litigation regarding Workers’ Compensation unless
the employer/employee relationship is severed and you
complete a waiver of retirement benets.
Your employer is obligated by statute to pay your pen-
sion contribution based on the full salary you were
receiving immediately before you started receiving
Workers’ Compensation benets, even if the total com-
pensation you receive is less than 100 percent of your
full salary.
Your employer is not obligated to make voluntary contri-
butions, such as loans or purchase arrears payments.
However, as the employee, you must continue to make
contributions, or the balances may be deemed as dis-
tributions.
The employer’s obligation to make pension contribu-
tions for members receiving Workers’ Compensation
ceases when:
• The employee voluntarily les for a retirement al-
lowance that is subsequently approved;
• The employer les an Involuntary Disability Retire-
ment application for the employee that is subse-
quently approved;
• The employee voluntarily resigns from employ-
ment for reasons other than the inability to perform
the job’s functions due to the incident that was the
basis for the Workers’ Compensation claim; or
• The employee is terminated by the employer for
reasons unrelated to a Workers’ Compensation
award.
If you are approved for Ordinary Disability Retirement
benets and receive a Workers’ Compensation award,
your Workers’ Compensation award may be reduced
by the amount of your Ordinary Disability Retirement
benet.
If you are approved for Accidental Disability Retirement
benets and receive periodic Workers’ Compensation
benets, the pension portion of your retirement allow-
ance will be reduced dollar for dollar by the amount of
the periodic benets.
For additional information, see the Workers’ Compen-
sation Fact Sheet.
Appeals
Page 43 August 2024 PFRS Member Guidebook
Police and Firemen’s Retirement System
OVERVIEW
If you wish to appeal any administrative decision of the
NJDPB, address your appeal to:
Secretary to the Board of Trustees
Police and Firemen’s Retirement System of New Jersey
New Jersey Division of Pensions & Benets
P.O. Box 297
Trenton, NJ 08625-0295
Your appeal to the Board of Trustees must include a
copy of the administrative decision, a detailed explana-
tion of your basis for disagreement with the decision,
and all supporting documentation that you wish to be
considered by the Board. The Board will address your
appeal and issue a written determination.
If you disagree with the determination of the Board,
you may request a formal hearing before an Admin-
istrative Law Judge within the Oce of Administrative
Law (OAL), by sending a written statement to the Board
within 45 days from the date of the Board’s decision.
State in detail the reasons for your disagreement with
the Board’s determination and submit any and all sup-
porting documentation if you have not already done so.
If no such written statement is received within the 45-
day period, the determination shall be considered nal.
If your request for a formal hearing is approved by the
Board, the Board will submit the matter to the OAL.
Upon completion of this hearing, the Administrative
Law Judge will submit to the Board an initial decision
which the Board may adopt, reject, or modify. If the
Board rejects or modies the initial decision, it will is-
sue a detailed ndings of fact and conclusions of law
which will become the Board’s Final Administrative De-
termination and may then be appealed to the Superior
Court, Appellate Division.
When the Board reviews your request for a hearing
in the OAL, it determines whether the matter involves
contested facts or is solely a question of law. If the ap-
peal involves solely a question of law, an OAL hearing
is not likely to be approved. In that case, the Board shall
reject your hearing request and issue detailed ndings
of fact and conclusions of law. These ndings and con-
clusions will become the Board’s Final Administrative
Determination and may be appealed to the Superior
Court, Appellate Division.
