New Jersey Assembly Bill A3957

New Jersey 2026-2027 Regular Session

• Introduced: 1/13/26
• Refer: 1/13/26

Caption

Makes local government business administrators eligible for membership in PERS; provides for transfer from Defined Contribution Retirement Program to PERS.

Summary

Assembly Bill 3957 would change the retirement status of local government business administrators in New Jersey. Under current law, these officials generally participate in the Defined Contribution Retirement Program (DCRP). The bill makes them eligible for membership in the Public Employees’ Retirement System (PERS) instead, and it applies to business administrators already employed and participating in the DCRP as of the bill’s effective date. The bill defines “business administrator” broadly to include the executive and administrative officer of a political subdivision or related local entity, such as a municipal or county administrator, manager, city manager, town manager, village manager, borough manager, township manager, or a functional equivalent. Eligible employees would be enrolled in PERS within 90 days of enactment, with notice sent within 15 days. Their DCRP account balances would be transferred into PERS through a trustee-to-trustee transfer, and their service would count toward PERS service credit, including for determining eligibility for employer-paid retiree health benefits and retirement tier placement.

Impact

The bill amends the DCRP eligibility statute and adds a new section governing the transfer of business administrators into PERS. It creates a specific exception to the general rule that certain appointed local officials participate in the DCRP, and it requires PERS to treat covered business administrators as members rather than DCRP participants. The measure also directs the PERS actuary to calculate the resulting unfunded accrued liability and amortize it over 20 years, which could affect employer contribution obligations and system finances. It further preserves federal tax treatment by requiring direct trustee-to-trustee transfers and specifies that transferred service counts for retiree health benefit eligibility and tier determination.

Sentiment

The bill’s stated purpose is administrative and retirement-related rather than punitive or controversial, and the text reflects a policy choice to place local government business administrators in the more traditional defined-benefit PERS system. Because no committee transcripts or votes are provided, there is no recorded floor or committee sentiment to assess. Based on the bill’s structure, the likely general sentiment is supportive among sponsors and affected local administrators, with attention to retirement fairness and benefit consistency.

Contention

The main points of potential contention are fiscal and policy-based. Moving business administrators from the DCRP to PERS could increase long-term pension liabilities, which is why the bill requires an actuarial calculation and 20-year amortization of the unfunded accrued liability. Another possible issue is whether these officials should be treated like other appointed local officers who remain in the DCRP, or whether their executive/administrative role justifies PERS membership. Stakeholders most likely to focus on these concerns include pension administrators, local governments, and budget-conscious policymakers, while affected business administrators would likely favor the change.