LEGISLATIVE FISCAL ESTIMATE

ASSEMBLY, No. 3323

STATE OF NEW JERSEY

221st LEGISLATURE

 

DATED: JUNE 26, 2024

 

 

SUMMARY

 

Synopsis:

Requires pay for extracurricular activities to be included in compensation for TPAF purposes.

Type of Impact:

Annual State expenditure increase.

Agencies Affected:

Division of Pensions and Benefits in the Department of the Treasury.

 

 

Office of Legislative Services Estimate

Fiscal Impact

Annual 

 

State Expenditure Increase

Indeterminate

 

 

 

 

·         The Office of Legislative Services (OLS) estimates that revising the definition of compensation for members of the Teachers’ Pension and Annuity Fund (TPAF) to include pay for performing extracurricular duties beyond the regular school day or the regular school year will result in indeterminate expenditure increases to the State for local boards of education that separate compensation for the performance of extracurricular duties from the regular contractual salary of employees.

·         The number of such boards of education, the number of impacted members, and the additional remuneration paid to such members, as commonly determined through a collective negotiations agreement between the employee representative and the local board of education, will determine the expenditure increase to the State to pay the full cost of the employer contribution owed to the Teachers’ Pension and Annuity Fund for the members by law.

 

 

BILL DESCRIPTION

 

      This bill amends the definition of compensation for members of the Teachers’ Pension and Annuity Fund to include additional pay for performing extracurricular duties beyond the regular school day or the regular school year as provided in accordance with the established salary policies of the member’s employer.  Current law defines compensation as the contractual salary for services provided as a teacher in accordance with the established salary policies of the member’s employer, but does not include additional pay for extracurricular duties.             

      By law, the State is responsible for paying employer contributions to the Teachers’ Pension and Annuity Fund, excluding administrative costs.

      Under the bill, extracurricular duties include, but are not limited to, preparation for and involvement in public performances, contests, athletic competitions, demonstrations, displays, and club activities.   

 

 

FISCAL ANALYSIS

 

EXECUTIVE BRANCH

 

        None received.

 

OFFICE OF LEGISLATIVE SERVICES

 

      The OLS estimates that revising the definition of compensation for members of the Teachers’ Pension and Annuity Fund to include pay for performing extracurricular duties beyond the regular school day or the regular school year will result in indeterminate expenditure increases to the State for local boards of education that separate compensation for the performance of extracurricular duties from the regular contractual salary of employees.

      The number of such boards of education, the number of impacted members, and the additional remuneration paid to such members, as commonly determined through a collective negotiations agreement between the employee representative and the local board of education, will determine the expenditure increase to the State to pay the full cost of the employer contribution owed to the Teachers’ Pension and Annuity Fund for the members by law.

      The OLS cannot know the number of such boards of education, the number of impacted members, nor the additional compensation pay for such members under various collective negotiations agreements, but estimates that the expenditure increase to the State for an individual member earning a regular contractual salary of $60,000 per year who earns an additional $2,000 annually for the performance of extracurricular duties will be approximately $676 based on the statistics provided in the most recent publicly available actuarial valuation report for the Teachers’ Pension and Annuity Fund.

 

Section:

State Government

Analyst:

Anna Harris

Assistant Fiscal Analyst

Approved:

Thomas Koenig

Legislative Budget and Finance Officer

 

This legislative fiscal estimate has been produced by the Office of Legislative Services due to the failure of the Executive Branch to respond to our request for a fiscal note.

 

This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).