PENSION BENEFITS REPORT
Post-retirement restrictions
The New Jersey Division of Pensions and Ben-
efits has placed some restrictions for members of
the pension system on what type of job one can
take when entering into retirement. The Division
of Pensions has released Fact Sheet 86, which de-
tails the post-retirement employment restrictions.
For members of the Police and Firemen’s Retire-
ment System (PFRS), it breaks down to two types
of restrictions.
The first concerns returning to work with your
same employer after retirement. PFRS members
need to consider if they will meet the requirements
of a bona fide separation/severance of service. Bona fide severance
means a complete termination of the employer/employee relation-
ship for at least 180 days from the date of retirement. Members do
not qualify for a separation/severance of service with their employ-
er if they return within 180 days of retirement and hold a part-time
position; take a position covered by a different retirement system;
have a change of job title; become a contract employee, volunteer
or independent contractor; or do a job that was prearranged before
retirement.
This rule applies when volunteer service for the retiree’s former
employer continues or starts within the 180-day period. If retirees
seek to become a volunteer, they must determine whether the vol-
unteer services will be provided to their previous employer or to a
different entity. For example, many volunteer fire companies and
rescue squads are organized separately from the municipal gov-
ernment as nonprofit entities, perhaps with a different federal ID
number. It is likely that such nonprofit entities and the municipal
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NEW JERSEY COPS
■ APRIL 2017
government would not be considered the same employer.
The second restriction has to do with returning to service with
a different employer. Retirees in this situation also are required to
satisfy a separation from service before returning to public employ-
ment in New Jersey with a different employer (in a position cov-
ered by a different retirement system). The Division of Pensions will
notify a retiree in writing when the board of trustees has approved
the retirement. A retiree must wait at least 30 days after the date of
this notification, or 30 days following the date of retirement, which-
ever is later, before agreeing to accept employment with another
employer in a position that is not covered by the same retirement
system.
Once a retiree has satisfied the bona fide severance and re-
turns to work in a position covered by a different New Jersey state-
administered retirement system, the retirement allowance may
continue and he or she can receive a salary from the employer.
However, the retiree cannot become a member of the other retire-
ment system.
The Fraud and Abuse Unit within the Division of Pensions is
monitoring all retirement applications and has brought before the
PFRS Board of Trustees some members identified as not having
met the bona fide severance of employment. If you do not meet the
requirements for a bona fide severance of service, your retirement
benefits may be suspended or cancelled entirely, and if this occurs,
you will be responsible for the repayment of any benefits you were
not entitled to receive. You may also be required to re-enroll in your
former retirement system or a different retirement system and
make pension contributions into that system. d