Understanding your retirement

by the NJEA Pension Policy Committee 

NJEA members are in one of four retirement programs—two are defined benefit pension systems and two are retirement savings account programs. The retirement system you are in is determined by your job, where you are employed and the date your employment began.  

Defined benefit pension systems 

The two defined benefit pension systems for NJEA members are the Public Employees’ Retirement System (PERS) and Teachers’ Pension and Annuity Fund (TPAF). In both PERS and TPAF, you contribute 7.5% of each paycheck to your pension. If you are enrolled in PERS or TPAF and work at least 10 years or reach the minimum age to retire, you will qualify for a pension that you will receive monthly for the rest of your life.  

  • TPAF: K-12 certificated members such as teachers, guidance counselors, child study team, certified school nurses. 
  • PERS: Support staff such as custodians, maintenance, bus drivers, secretaries, aides, technology, and others at both K-12 and higher education levels. 

If you were hired after May 21, 2010 and do not work at least 32 hours per week you are not eligible for enrollment in TPAF or PERS, but you can be enrolled in the Defined Contribution Retirement Program (DCRP). There’s more information on the DCRP later in this article.

Starting in 2007, enrollment requirements, retirement age, and the formulas to determine retirement benefits began to change in both PERS and TPAF, creating a system of tiers based on the year in which a member enrolled. This chart can help you determine your tier.

PERS and TPAF Pension Tiers 

Pension Enrollment DateTierEnrollment Requirements
Before July 1, 20071Minimum salary $500 for certificated staff and $1,500 for support staff
July 1, 2007 to Nov. 1, 20082Minimum salary $500 for certificated staff and $1,500 for support staff
Nov. 2, 2008 to May 21, 20103Must be making more than $9,000 (this amount increases slightly each year)
May 22, 2010 to June 27, 20114Must work at least 32 hours/week
June 28, 2011 or later5Must work at least 32 hours/week

Use MBOS to review your pension 

If you are in PERS or TPAF you can look at an overview of your pension through your Member Benefits Online System (MBOS) account. You should be periodically accessing MBOS and reviewing your Personal Benefits Statement to ensure everything looks correct in your pension account.  

Keep in mind this statement runs a few months behind, because the New Jersey Division of Pensions and Benefits updates your pension credit on a quarterly basis. You can see when the last update was made by looking at the date at the top of the page. Your Personal Benefit Statement should have the correct pension tier, enrollment date, and years and months of pension credit.  

Register for MBOS here.

You will need your Social Security number and pension number to set up this account. If you cannot find your pension number, you can reach out to the business or human resources office in your school district.  

When you set up MBOS, you will create a login ID and password. Be sure to keep your MBOS username and password in a safe place. If you lose your login and password, you will need to know the email address you entered when you set up your account. Instructions on how to set up a new username and password will be sent to the email address you used to set up the account. 

The state has also instituted multifactor authentication (MFA) for your MBOS account. This is to prevent someone gaining access to your account fraudulently. If you have already set up your MBOS account but have not logged in recently, you will need to set up MFA by registering your cellphone number or an authenticator app. Each time you log into your MBOS you will receive a code via a text message or an authenticator app. 

Unpaid leaves of absence and your pension 

If you are on an unpaid leave for any reason, you will not receive pension credit during the time you are not receiving pay. Depending on the length and reason for your leave, you may be able to purchase all or some of the time you were unpaid once you return to active employment. See this fact sheet to see whether your unpaid leave can be purchased.  

Changing districts or positions 

If you take a job in another district, even if it is the same type of position, you will need to transfer your pension account. You should let your employer know you have a pension account, and they will complete a report of transfer online through the employer system. 

Similarly, if you change job types—for example, you are an aide and then become a teacher—you must transfer your pension account. This is because support staff members are in a different pension fund than certificated members. If you do change job types that would result in your being in a different pension fund, an interfund transfer form must be completed by you and your former employer.  

Keep in mind that it is your responsibility to ensure that any transfer of your pension is completed properly and submitted in a timely manner. You can verify that a transfer was completed by checking your MBOS account and seeing that you have credit for all of your years and months of service. Also, your enrollment date should reflect the date you were originally hired. It typically takes several months for the update to go through. 

If a transfer does not take place within two years, the former pension account will become inactive. If the former pension account has less than 10 years of service credit, you will have to purchase that time into your new pension account. If the former pension account has more than 10 years of service credit, you will either have two pension accounts or you can do a tier-to-tier transfer into the active account.  

If you are a tenured employee and you are subject to a reduction in force (RIF), you can extend the active status of your pension account for up to 10 years. This means that you have 10 years to find a full-time, pensionable position before your account becomes inactive. To qualify for an extension, you will need documentation from your board of education supporting the fact that you lost your position due to budgetary reasons.  

If you have received a communication from the Division of Pensions that indicates your pension account is expiring when it should have been transferred, call your UniServ office. You can find your UniServ office’s contact information at njea.org/regional-offices.  

Retirement savings account programs 

Both the Alternate Benefit Program (ABP) and the Defined Contribution Retirement Program (DCRP) are types of savings accounts. In these retirement programs the employee and the employer contribute a percentage of salary to an account and the employee can choose what the monies are invested in.  

When the employee retires, they can choose either to receive withdrawals from their funds in the form of an annuity, which is a set payment, or draw down their funds as they would like. Keep in mind that while years of credit in ABP do count toward the 25 years needed for post-retirement medical benefits, DCRP years do not count toward post-retirement medical benefits.  

Alternate Benefit Program  

The Alternate Benefit Program (ABP) is for full-time higher education faculty, officers and administrative staff who are required to have a bachelor’s degree. Some adjunct faculty and part-time instructors are eligible, but they must make at least 50% of the normal base salary. ABP members contribute 5% of salary, and the college/university contributes 8% of salary.  

You will have an account with a provider where you can invest your funds on a pre-federal tax basis. ABP members have the choice of six providers, including Equitable, Empower, MetLife, TIAA, Corebridge and Voya. This is not a pension, but rather a savings account that you can draw from or turn into an annuity in retirement. 

Defined Contribution Retirment Program – For those not eligible for TPAF, PERS or ABP enrollment 

The Defined Contribution Retirement Program (DCRP) is for education employees (K-12 and higher education) not meeting the minimum enrollment requirements for ABP, PERS or TPAF. Many adjunct or part-time faculty are enrolled in DCRP as well as part-time support staff and certificated staff depending on their hire date.  

For K-12 employees, those hired after May 21, 2010 who work less than 32 hours a week (but make at least $5,000) are in the Defined Contribution Retirement Program (DCRP). This is not a pension, but rather a savings account that you can draw from or turn into an annuity in retirement.  

DCRP members contribute 5.5% of pay into the account and the employer contributes 3% of pay. DCRP members have an investment account through Empower and can select which fund(s) to invest in.  

Vesting in DCRP happens once someone commences the second year of DCRP covered employment. Once you are vested, if you pull contributions out of DCRP or roll them over to another account, you are considered retired. This means that you would not be eligible to participate in any of the other state-administered retirement systems. This applies even if you obtain a full-time, pensionable position. A financial advisor may not be aware of this and may recommend that you roll DCRP monies into another retirement account—which you should not do.  

What happens if I have an ABP or DCRP account and then get a different job that makes me eligible for the pension system? 

If you have a DCRP or ABP account and then enroll in the pension system in PERS or TPAF, you need to leave your money in the DCRP or ABP account until you are ready to retire from the PERS or TPAF position. ABP years do count toward the 25 years needed for state-sponsored health benefits in retirement, but DCRP years do not. 

Importance of updating your beneficiaries  

Regardless of which retirement program you are enrolled in, make sure that your beneficiaries are updated for your life insurance and your pension or defined contribution account.  

For TPAF or PERS members, changes to the life insurance and pension beneficiary can be made through MBOS. Click the “Designation of Beneficiary” button to make changes.  

For ABP and DCRP, you can change your life insurance beneficiary by completing the form found here.

Beneficiaries for the retirement savings account must be made through the defined contribution plan provider.

The NJEA Pension Policy Committee

The NJEA Pension Policy Committee studies public employee retirement pension and benefit programs and makes recommendations to improve and protect public employee pensions. The committee reviews legislative proposals related to changes in the Teachers’ Pension and Annuity Fund (TPAF) and the Public Employees’ Retirement System (PERS). The committee also monitors the actions of the state’s pension systems’ boards of trustees. 

The current committee members are: 

Atlantic: Karol E. Ball 

Bergen: Howard D. Lipoff 

Camden: David M. Regn 

Essex: Lauren B. Greenfield 

Gloucester: Michael Acchione 

Hudson: Mark C. Azzarello 

Mercer: Daniel A. Siegel 

Middlesex: Kenneth J. Veres 

Monmouth: Casey A. Barilka 

Morris: Kathleen L. Paterek 

NJREA: Irene Savicky 

Passaic: Pamela B. Fadden 

Somerset: Theresa L. Fuller 

Union: Linda A. Cortinas 

Staff contact: Sarah Favinger 

Associate staff contact: Roxie Muhsin