The Retirement Process
When a Member Wishes to Retire
A member who is planning to retire
should contact you, the employer, and the authorized carrier for
information regarding benefits and options. The carriers regularly
provide informational seminars on retirement; employers can contact
any of the carriers to arrange such informational seminars on-site.
(See "Approved Investment Providers"
below for carrier contact information.)
Required
Form
Employees who are within four to
six months of retirement must complete the Application
for Retirement, Alternate Benefits Program.
Part One of the application,
"Member Information", should be completed by the member.
The member must provide his or her name, home address, daytime
phone number, date of birth, Social Security number, investment
carrier, and date of retirement for immediate disbursement or
date of deferred retirement.
Part Two of the application,
"Certification of Employing Agency", should be completed
by the employer. The employing ageny must provide the name of
employing location, employer location number, the employee's membership
number, the last day the employee worked, and the employee's union
code at retirement. The date and the signature of the Certifying
Officer of the employing location must be included.
Minimum Retirement Age
There is no minimum retirement
age under the ABP. A member may take a cash distribution,
or begin collecting an annuity, from the investment carrier to
which contributions have been remitted, at any time after termination
of employment.
However, once a member takes
a distribution, including a rollover of any amount to an IRA,
the member is automatically considered retired, regardless of
age, and cannot participate in any State-administered retirement
system.
Please take note of the age
limits that apply to lump sum cash distributions below.
Distribution: Lump Sum, Fixed
Term Annuity, or Life Annuity
At retirement, a member may elect
to receive all or a portion of his/her account in a lump-sum distribution,
or as a fixed term or life annuity. The types of payout plans
vary from carrier to carrier and should be a major consideration
when the member selects a carrier at the time of enrollment or
transfer.
All returns of contributions and
earnings are considered taxable in the year they are received.
Age Limits, Distributions
Lump-sum cash distributions to members
under the age of 55 are limited to the member’s contributions
and earnings. The remaining employer contributions and earnings
are available only when a member reaches age 55 or thereafter.
Delaying Distribution
A member may delay collecting a benefit
from his or her 401(a) contracts following termination of employment.
The employer should make the member aware, however, that if the
member terminates ABP employment and then delays taking a distribution
(retirement) for a period of time greater than twelve months,
the member is no longer eligible for retired group life insurance
benefits under the ABP, even if the other eligibility
requirements for ABP retired group life insurance coverage
are met.
Member Group Life Insurance Coverage
in Retirement
ABP members in active service are
covered by employer-paid group life insurance, payable to their
designated beneficiaries in the amount of three and one-half times
the employee’s annual base salary in the last 12 months of
service. Active group life insurance coverage ceases 31 days after
termination of employment. (See Conversion of
Group Life Insurance below.)
Upon retirement, life insurance reduces
to one-half of the annual base salary. To be eligible for this
life insurance coverage in retirement, a member must be age 60
or older and must have completed 10 years of participation in
the ABP at an eligible New Jersey institution of higher education.
In addition, the member must have been an active employee within
the twelve months immediately preceding the initial receipt of
a retirement annuity payment, in order to receive retired group
life insurance coverage. (See "Delaying
Distribution" above).
Conversion of Group Life Insurance
As mentioned above, active group
life insurance coverage ceases 31 days after termination of employment.
During the 31-day period following termination of employment,
the member may convert existing group life insurance coverage
(less any amount of coverage carried over into retirement) into
an individual whole life policy, without medical examination.
For more information, please refer to Fact Sheet #13, Conversion
of Group Life Insurance.
ABP Long Term Disability
ABP Long Term Disability
Eligibility
A member is eligible for employer-paid
long-term disability insurance coverage after completing 12 months
of continuous full-time employment in an ABP
eligible position.
ABP Long Term Disability Benefits
If the member is deemed to be totally
disabled due to an occupational or non-occupational condition,
the ABP long term disability benefit payable, if approved, may
be up to 60% of base salary, and will be calculated using the
applicant's base salary earned during the twelve months prior
to the month in which the disabling event occurred.
A member's ABP long term disability
benefit will be offset dollar for dollar by any periodic benefit
the member is already receiving, such as Workers' Compensation,
short-term disability, or Social Security.
ABP Long Term Disability
Administration
All ABP long term disability claims
and payments are administered by the Prudential Insurance Company
of America, through the New Jersey Division of Pensions and Benefits.
Prudential Contact Information
Prudential contact information is
provided below, allowing the employer to get in touch with Prudential
at any time regarding a member's long term disability (to obtain
additional copies of the Prudential Long Term Disability Application
or to check on the status of a long term disability for an employee,
etc.). The employer may also provide this contact information
to an employee with questions or problems regarding a pending
long term disability application.
To contact the Prudential Insurance
Company of America, please call: 1-800-842-1718. When calling
Prudential regarding an ABP Long Term Disability, please provide
the following Plan Control Number: 14800.
To print a Long Term Disability Application and Carrier Election and Allocation form, please click here: ABP Long-Term Disability form.
Division of Pensions and Benefits
Alternate Benefit Program Contact Information
To contact the Alternate Benefit
Program at the New Jersey Division of Pensions and Benefits, an
employer may call (609) 777-0887, or write to:
The Division of Pensions and Benefits
Alternate Benefit Program
PO Box 295
Trenton, NJ 08625-0295
The ABP Long Term
Disability Application Process
- A member of the Alternate
Benefit Program (ABP) wishing to apply for a long term disability
begins the process by obtaining a Long Term Disability Application and Carrier Election and Allocation form from his or her employer, or by downloading and printing
it: ABP Long-Term Disability form
- The member completes the application and election form,
providing all requested information accurately, and submits
the completed application to his or her employer.
- The employer then sends the completed
Long Term Disability Application and Carrier Election and Allocation form to the New Jersey Division
of Pensions and Benefits, providing the employee's salary information
for the final 12 months prior to the month in which the disabling
event occurred.
- At that time, the Division of
Pensions and Benefits informs the New Jersey State Health Benefits
Program that an ABP long term disability is pending.
- The Division of Pensions and Benefits
then sends the employee's application, with a cover letter,
to Prudential, and processing begins.
- If employee information is missing
from the application, Prudential contacts the employee to obtain
it.
- When all information has been
obtained, Prudential makes a determination as to whether the
disability is approved. ABP long term disability processing
times vary.
When an ABP Long Term Disability
Is Approved
If the long term disability benefit
is approved, Prudential informs the employee, the employer, and
the Division of Pensions and Benefits by letter.
The Division of Pensions and Benefits
then informs the State Health Benefits Program (SHBP) that the
member's long term disability has been approved. The SHBP now
regards the member on an ABP long term disability as a retiree,
and the member will be offered SHBP retiree coverage, if eligible,
through an offering letter.
The employer and employee contributions are remitted to the investment provider indicated on the Carrier Election and Allocation form. Failure to elect an investment provider will result in the funds being remitted to the current default investment provider, despite any contract established with a provider through active employment.
The ABP long term disability benefit,
which is a monthly income benefit, will be offset dollar for dollar
by any other periodic benefit the member may be receiving, such
as Workers' Compensation, short-term disability, or Social Security.
The long term disability benefit
will continue be paid until either the member is 70 years of age,
the member chooses to take a distribution*, or the member is no
longer considered disabled (see "Periodic
Medical Evaluations" below).
When an ABP member on long term
disability reaches age 70, or chooses to take a distribution*,
his status reverts to "retired" for pension purposes.
The member should contact his or her authorized carrier at this
time to arrange for distribution of retirement
benefits.
*Note: Should the member
begin receiving payments under the retirement annuity at any time
before age 70, long term disability benefits terminate, since
the member is regarded as retired upon taking a distribution.
ABP Disability Approvals Requiring
Periodic Medical Evaluations
Some ABP long term disability approvals
require the member to receive periodic medical evaluations of
the long term disability.
If it is determined though the periodic
medical evaluation that the member is no longer considered disabled,
the long term disability coverage ends. The member can either
retire or return to work.
When an ABP Long Term Disability
Is Denied
If the ABP long term disability is
denied, Prudential mails the member a denial letter and informs
them in the letter of their right to appeal the decision.
The member must appeal within 45
days of the date of receipt of the Prudential denial letter.
If the long term disability is once
again denied, the member can appeal the decision through the Director's
Office, Division of Pensions and Benefits.
Payment of Member and Employer
Contributions while a Member Is on a Long Term Disability
Prudential makes both the member
and the employer contributions for the period during which the
member is receiving ABP long term disability payments. Both the
member’s and the employer’s mandatory contributions
are automatically credited to the member’s retirement account
while the member is considered disabled. The member continues
to accrue service credit for as long as the ABP long term disability
is in effect.
ABP Group Life Insurance Coverage
during a Long Term Disability
An ABP member with an approved long
term disability is treated as an active member in regard to group
life insurance. That means that the ABP member's group life insurance
benefit will remain at 3.5 times the member's salary until either
the member is 70 years of age, the member chooses to take a distribution,
or the member is no longer considered disabled* and chooses to
retire. At that time, the life insurance reduces to one-half of
the annual base salary, as long as the member is eligible for
retired group life insurance coverage.
* If it is determined though a required
periodic medical evaluation that a member receiving ABP long term
disability benefits is no longer considered disabled, and the
member is not yet 70 and chooses to return to ABP employment rather
than retire, the member will retain ABP active group life insurance
coverage.