LEGISLATIVE FISCAL ESTIMATE
[Second Reprint]
SENATE, No. 871
STATE OF NEW JERSEY
221st LEGISLATURE
DATED: OCTOBER 30, 2024
SUMMARY
Synopsis: Establishes eligibility for enrollment in PERS and subsequent
retirement benefits for certain county fire instructors under certain
conditions.
Type of Impact: Annual State expenditure increases; annual local government
expenditure increases.
Agencies Affected: Division of Pensions and Benefits in the Department of the Treasury;
certain local governments.
Office of Legislative Services Estimate
Annual Fiscal Impact
Public Employees’ Retirement System Pension
Fund - Increase in Retirement Allowances Paid Indeterminate
State Cost Increase - Payment on Unfunded
Liability Indeterminate
State Cost Increase - Retiree Health Benefits Indeterminate
Local Cost Increase - Retiree Health Benefits Indeterminate
 The Office of Legislative Services (OLS) concludes that the additional years of service credit
granted under the bill will increase the actuarially determined unfunded liability of the Public
Employees’ Retirement System by a marginal amount and result in an indeterminate, but
marginal, increase in annual State or local government expenditures in order to retire the
unfunded liability.
 Certain fire instructors, with other Public Employees’ Retirement System eligible employment
with the State or with a local government at salaries greater than those received from their prior
employment as fire instructors only, would receive a higher pension benefit based on that
higher salary and the additional service credit accrued from their service as fire instructors.
The higher retirement allowances paid to these individuals represent an annual pension fund
expenditure increase.
Office of Legislative Services Legislative Budget and Finance Office
State House Annex Phone (609) 847-3105
P.O. Box 068 Fax (609) 777-2442
Trenton, New Jersey 08625 www.njleg.state.nj.us
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 The bill may also make certain fire instructors eligible for State-paid or local government-paid
healthcare benefits in retirement for which they otherwise might not qualify absent this
legislation. These healthcare benefits may represent an annual State or local cost increase.
BILL DESCRIPTION
This bill establishes eligibility in the Public Employees’ Retirement System for county fire
instructors employed and enrolled before November 1, 2008, who performed service as a county
fire instructor in each calendar year of membership, who received a salary greater than $1,500
annually, and who were permanent career service employees in the civil service. The bill provides
that any person who was notified that such service as a county fire instructor was determined
ineligible for enrollment in the retirement system within five years prior to the enactment of the
bill may be reenrolled in the system if they repay any contributions and interest returned to them
by the retirement system.
FISCAL ANALYSIS
EXECUTIVE BRANCH
None received.
OFFICE OF LEGISLATIVE SERVICES
The OLS concludes that the additional years of service credit granted under the bill will
increase the actuarially determined unfunded liability of the Public Employees’ Retirement System
by a marginal amount and result in an indeterminate, but marginal, annual State or local
government expenditure increase in order to retire the unfunded liability. The unfunded liability
would be created by an acceleration of benefits caused by the increase in pensionable salary that
is used to determine the retirement allowances of certain fire instructors who were contributing to
the retirement system over time at a lower amount than their final average compensation would
require in order for the pension to be fully funded. The additional years of service credit that
would be granted under the bill would also increase the benefit factor in the calculation of the
retirement allowance and add to the unfunded liability. The bill may also make certain fire
instructors eligible for State-paid or local government-paid healthcare benefits in retirement for
which they otherwise might not qualify. These benefits may represent an annual State or local
cost increase.
Under the bill, certain fire instructors would accrue service credit toward the retirement system
and retirement healthcare benefits from their service as fire instructors that they would otherwise
be ineligible to accrue absent this legislation. Data from FY 2022 suggest that approximately 40
individuals may meet the criteria of the bill and would maintain their membership in the retirement
system or be re-enrolled in the system under the provisions of the bill. Any of these individuals
with other Public Employees’ Retirement System eligible employment at salaries greater than
those received from their employment as fire instructors would receive a higher pension benefit
upon retirement based on that higher salary and the additional service credit accrued from their
service as fire instructors. This will result in an unfunded pension liability for the State or local
governments that would need to be retired over the statutorily mandated 25-year amortization
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period. The OLS is unable to discern the specifics of each fire instructor’s employment history to
establish what the annual payment would need to be to pay down this liability.
The service credit granted under the bill from their employment as fire instructors could also
make some of these individuals eligible for State-paid or local government-paid healthcare benefits
in retirement that they might not qualify for absent this legislation if the service credit allows them
to retire with at least 25 years of service credit in the retirement system or with the number of years
of service credit required by a local government to receive healthcare benefits in retirement.
Section: State Government
Analyst: Anna Harris
Assistant Fiscal Analyst
Approved: Thomas Koenig
Legislative Budget and Finance Officer
This legislative fiscal estimate has been produced by the Office of Legislative Services due to the
failure of the Executive Branch to respond to our request for a fiscal note.
This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).