The bill seeks to reinstate automatic cost-of-living adjustments (COLAs) for retirement benefits of certain members of the Police and Firemen's Retirement System (PFRS) in New Jersey, specifically targeting annual pension, ordinary disability pension, and accidental disability pension benefits. This reinstatement addresses the suspension of COLAs enacted by P.L.2011, c.78, which halted these adjustments until the retirement systems achieved a target funded ratio. The bill stipulates that only members who have been retired for a minimum of ten years and meet specific criteria will be eligible for these adjustments, with no retroactive payments allowed. The COLAs will be based on the Consumer Price Index, capped at one percent for members with annual pension benefits exceeding $76,000, and will have a three percent cap for annual adjustments after the first year.

In addition to reinstating COLAs, the bill amends the governance structure of the PFRS by enhancing the board of trustees' authority to manage the retirement system, allowing them to modify or reinstate benefits without requiring additional contributions from members, as long as it does not increase employer contributions or jeopardize the fund's viability. The bill also outlines the composition and responsibilities of the board, including the establishment of an Audit Committee and an Investment Committee to improve oversight. Certain provisions regarding trustee appointments have been deleted to streamline governance. Furthermore, the bill mandates the selection of an ombudsman to assist members with benefits and requires annual investment training for board members, ensuring the system's sustainability and the protection of members' benefits.

Statutes affected:
Introduced: 43:16A-13, 43:3B-2