NJ - DCRP Forfeiture Funds

NJ Division of Pension

Pension Reform in New Jersey has created multiple tiers, rules and classification periods with information contained on the State website that is akin to exploring a labyrinth or great maze.  The secret passages do in fact lead one to the correct information, but the challenge is can you find your way back to that same information and if so, will the information still be valid?  And let us not forget, as with all good adventures there are the torturous links to dead ends, stating, "This page has moved... and no longer exists" with out any grid coordinates or forwarding address!

While the challenge is real, so is the need for clear understanding of all aspects related to pension obligations from the employers perspective as well as employees.  The (DCRP) Defined Contribution Retirement Plan is one of those offshoots of TPAF (Teachers Pension Annuity Fund) and PERS (Public Employment Retirement System) that came into existence on July 1, 2007, under the provisions of Chapter 92, P.L. 2007 and Chapter 103, P.L. 2007 and expanded under the provisions of Chapter 89, P.L. 2008, and Chapter 1, P.L. 2010.  It can be found on the NJ Division of Pension website:  http://www.state.nj.us/treasury/pensions/dcrp1.

However, even Indiana Jones can not find the information regarding "Forfeiture of Funds" unless he were to stumble into the Fact Sheets #79 (March 2014) or #82 (July 2013) and make the connection between 'Withdrawal' and 'Forfeiture'.  While these fact sheets explain eligibility and the limits for maximum compensation, $117,000 for 2014 - they simply explain, "Only the member's contributions are available for withdrawal - employer contributions are forfeited."

https://ssologin.prudential.com/app/rsosponsor/Login.fcc

Ok, so what does that mean to the employer?  The explanation stops there as you are thrown into other challenging set of topics such as Life Insurance Coverage and Long-Term Disability Coverage.  Try exploring another cavern, Prudential's website: 

Once there, you can catapult to "Forfeitures and Plan Expenses" to find the FAQ regarding Forfeiture as defined:  "Amounts that are held by the Plan and are either allocated periodically to remaining participants or are used to offset future employer contribution requirements or plan expenses.


How are forfeited dollars handled?  Answer:  Upon payout of a participant's total account balance, if there are non-vested amounts (contributions less than 1 year from enrollment), the non-vested amounts are simply deducted from the payout amount and are deposited in a special reserve account not held by any individual participant, but the by the Plan itself. Translation... they are holding your share of the money - "Employer Contributions."


They can however; be used to reduce future employer contributions which offsets future payments and keeps these funds in your Plan... the district's budget.


According to the FAQ a Forfeiture Report is provided to plan sponsors on a quarterly basis for their review and consideration.  If you haven't seen this report or have questions with respect to any balance in the Reserve account, you should contact your Client Consultant.  Based on the number of employees you have enrolled and as more individuals move into the DCRP over time, the amounts could become substantial.

Indiana House OKs bill to allow guns in school lots

A call to arms continues to make its way into the headlines and through the legislatures as Indiana is the latest state to consider the "Right to bear arms" as covered in the second Amendment (Amendment II) to the United States Constitution which protects the right of individuals to keep and bear arms.  

At the heart of the issue is the growing concern that although lockdown measures impede or slow down an active shooters advancement and ability to do harm, "hiding" in a lockdown leaves students and staff in a vulnerable position without the ability to fight back.   While response times and tactics have increased considerably since the Columbine High School shooting which occurred on April 20, 1999, many have the opinion that an immediate response to any threat is the best line of defense and that begins with arming on site security personnel or others as requested by two Republican lawmakers working on legislation to make Pennsylvania schools safer.  According to the article, "While all sides agree on the need to improve school safety, some worry about bringing guns into schools, regardless of the lawmakers intent."   http://paindependent.com/2013/01/give-teachers-administrators-right-to-bear-arms-in-schools-pa-lawmakers-say/

Submitted by Ariana Fine on Mon, 03/03/2014 - 11:30pm   

Wednesday, March 5, 2014Indy Star

A controversial bill allowing people to keep guns locked and out of sight in parked cars on school property passed the Indiana House on Monday, with mostly Republican support.

The National Rifle Association and other proponents say the change in Indiana’s gun law is needed to protect the constitutional rights of people who lawfully own guns. They shouldn’t be at risk of committing a felony simply because the weapons are inadvertently in their cars when they drop their children off at school or attend school activities, advocates say.

But opponents say having guns anywhere on school property is not wise and could lead to more gun violence. The Indiana chapter of Moms Demand Action called for legislators to kill the bill, calling it a “dangerous bill that would expand the legal carrying of firearms on school property.”

EXPANDED CONNECTIONS

PLEASE CONSIDER FOLLOWING ME ON THESE CONNECTIONS TO STAY UP ON ISSUES IN THE   BUSINESS OF EDUCATION:

Twitter - @LPepeRSBA


Linkedin - Louis Pepe


Facebook - louis.pepe.520

A Dozen Reasons Education Can't Innovate; A Dozens Ways That's Changing

A Dozen Reasons Education Can't Innovate; A Dozens Ways That's Changing

Banked CAP Explained

Visual demonstration of concept displaying spending authorization used

against backdrop of Tax Authorization at 100% of given Fiscal year. 

[City of Summit Board of School Estimate Presentation 3/6/14]

The Budget process in school districts is long and detailed spanning approximately eight months from the end of September to the middle of April for fiscal year budgets starting July 1st - June 30th. 

While the process is arduous, the approach is systemic in gathering input and analysis from all levels of the organization in order to prepare a final compressed budget representative of those needs against a backdrop of tax levy needed to support this effort.

The final stages of the budget cycle remains one of the toughest... explaining the process, outcomes and tax impact in a clear, concise manner.  Typically this is presented in a 30-40 minute presentation, "Quite Challenging".  Add to it, new concepts such as "Banked Cap", and the challenge reaches a whole new level.

This year many districts are forced to consider the use of Banked Cap:

"I am sure the BOE does not want to use Banked CAP, but not sure if they can afford not to without cutting programs next year.  We have kicked the can down the road and are at a dead end!" - Vincent Gonnella, BA Kennilworth, NJ School District

Further complicating the issue is a general reluctance to accept the fact that district's in New Jersey as established and defined by N.J.S.A. 18A:7F-39, have the additional taxing authority in construction of their budgets.  


The key factor is addressing or explaining the Banked CAP is that its generation was based on the ability of a district to deliver a final budget under the Tax Authorization in a prior year.  This demonstrates the fiscal responsiveness of that district and should not be discounted.  In many cases such as Summit, districts are forgoing the request to use even a portion of the "bank" as its establishment was created to provide emergent relief in subsequent years should the district face sever obstacles such as significant loss of revenues in preparing a budget within CAP in any given year.  As prescribed by the statute the ability to carry bank created in any given year has a shelf life of three years prior to expiration.