    |
Alternate Benefit Program (ABP)
The Alternate Benefit Program is a tax-sheltered, defined contribution retirement program for higher education faculty and certain professional administrative staff. Full-time staff that are required to possess a college degree or its equivalent participate in the ABP. "Full-time" has been defined to include anyone receiving 50 % or more of base salary. Individuals not eligible for membership include: part-time, temporary employees, employees with F or J visas, employees in a career service title as defined by the NJ State Department of Personnel, employees in a clerical and other nonprofessional positions, and any employee receiving a retirement benefit from any NJ State retirement system including ABP.
Members annually contribute 5% of base or contractual salary matched by an 8% employer contribution to a tax-deferred investment account. Six investment carriers are authorized to provide investment options and services in the Alternate Benefit Program.
The following ABP/ACTS Pensions Benefit Providers are currently approved by the Division of Pensions and Benefits to offer annuity investment accounts for ABP members.
If an ABP member has an existing retirement account containing employee and employer contributions based on employment in higher education, or is an active or vested member of a federal or state retirement system, the member is immediately vested. Vested members of ABP are eligible to apply for loans from their carrier. Such loans are made from the member's account balances. Members should contact their authorized carrier for details and repayment procedures.
If an ABP member is not vested, the mandatory (5%) employee and (8%) employer contributions are held in a delayed vesting status during the initial year of employment. If an employee leaves employment before becoming vested, a refund for contributions may be applied for from the carrier. The employer contributions revert back to the employer. While in delayed vesting status, loans and transfer of funds between carriers are not permitted.
ABP Enrollment Application: http://www.state.nj.us/treasury/pensions/epbam/exhibits/pdf/abp100001.pdf
ABP Transfer Form: http://www.state.nj.us/treasury/pensions/epbam/exhibits/pdf/abp800069.pdf
ABP Salary Agreement Vendor Allocation form (Microsoft Word document)
Retirement
Six months before retirement, a member should contact their authorized investment carrier(s) for information regarding benefits and options. 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 considered when selecting a carrier. All returns of contributions and earning are considered taxable in the year they are received.
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 earning are only available after age 55.
There is no minimum retirement age under ABP. A member may begin collecting an annuity, or take a cash distribution, at any time after termination on employment however, if you return to public employment in New Jersey, you cannot participate in any State-administered retirement system. The member will automatically be considered retired, regardless of age, if there is any distribution of mandatory contributions.
ABP Retirement Application: http://www.state.nj.us/treasury/pensions/epbam/exhibits/pdf/abp220.pdf
Group Life Insurance
All ABP members are covered by employer-paid life insurance, payable to their designated beneficiaries, in the amount of three and one-half times the employee's annual base salary. This coverage is available without a medical examination to members under age 60. Newly enrolled members 60 years of age or older must undergo a medical examination to qualify.
Upon retirement life insurance reduces to one-half of the annual base salary.
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 into an individual whole life policy, without medical examination.
For more information concerning pensions and benefits, please refer to NJ Division Pensions and Benefits web site and Fact Sheet #38 Alternate Benefit Program - http://www.state.nj.us/treasury/pensions/fact38.htm.
