Alternate Benet Program (ABP)
Information for:
Alternate Benet Program
Page 1 March 2024 Fact Sheet #38
The Alternate Benet Program (ABP) is a tax-shel-
tered, dened contribution retirement program for
higher education faculty and certain administrators.
The ABP provides retirement benets, life insurance,
and long-term disability coverage, which — when
combined with Social Security and other tax-deferred
plans — can provide security in retirement.
ELIGIBILITY
Full-time and adjunct faculty, part-time instructors,
ocers, visiting professors, and certain professional
administrative sta required to possess a college de-
gree or its equivalent can participate in the ABP. Full-
time is dened by statute to include anyone receiving
50 percent or more of base salary, and may include
anyone on sabbatical or paid leave of absence for a
period not to exceed one year.
Individuals not eligible for membership include: tem-
porary employees (with the exception of visiting pro-
fessors appointed for a school year, a semester, or
a lesser period of time); faculty members temporar-
ily in the U.S. under an F or J visa; employees in
a career service title as dened by the New Jersey
Civil Service Commission; employees in clerical and
other nonprofessional positions; and any employee
receiving a retirement benet from any New Jersey
State-administered retirement system, including the
ABP.
The following State agencies and institutions of high-
er education are covered by the ABP:
• Atlantic Cape Community College
• Bergen Community College
• Brookdale Community College
• Camden County College
• County College of Morris
• Cumberland County College
• Department of Education
(limited positions)
• Essex County College
• Higher Education Student Assistance Authority
• Hudson County Community College
• Kean University of N.J.
• Mercer County Community College
• Middlesex County College
• Montclair State University
• New Jersey City State University
• N.J. Institute of Technology
• Ocean County College
• Passaic County Community College
• Ramapo College of N.J.
• Raritan Valley Community College
• Rowan University of N.J.
• Rowan College at Burlington County
• Rowan College at Gloucester County
• Rutgers Biomedical
• Rutgers, The State University
• Salem Community College
• Stockton University
• Sussex County Community College
• The College of New Jersey
• Thomas Edison State University
• Union County College
• University Hospital
• Warren County Community College
• William Paterson University of N.J.
TAX-SHELTERED INCOME
Members annually contribute ve percent of base or
contractual salary matched by an eight percent em-
ployer contribution* to a tax-deferred investment ac-
count. This account may be established with any of
*N.J.S.A. 18A:66-174 established that as of July 1, 2010, the employer contribution may not exceed eight percent of the maximum salary for State department ocers as established by law. Cur-
rently, N.J.S.A. 52:14-15.107 sets the maximum annual salary of department ocers at $175,000 per calendar year.
Fact Sheet #38 March 2024 Page 2
Alternate Benet Program (ABP)
This fact sheet is a summary and not intended to provide all information.
Although every attempt at accuracy is made, it cannot be guaranteed.
the current authorized providers: Equitable (former-
ly AXA), Empower (formerly MassMutual), MetLife/
Brighthouse (formerly Travelers/CitiStreet), Empow-
er (formerly Prudential), TIAA, Corebridge Financial
(formerly AIG), and VOYA.
Additional voluntary federal tax-deferred contribu-
tions under Internal Revenue Code (IRC), Section
403(b), may also be made based on the actual base
salary paid, less the mandatory ve percent member
contribution. Before having any additional contribu-
tions deducted, members should contact the autho-
rized carrier of their ABP account for a calculation
on the exact amount available to them for a Section
403(b) contribution. These contributions cannot ex-
ceed the actual dollar limits eligible for tax shelter in
a given tax year.
For most ABP members, mandatory employee and
employer contributions are held in delayed-vesting
status during the rst year of ABP-eligible employ-
ment. The member is vested in the ABP beginning in
the second year of ABP-eligible employment.
Some ABP members can be immediately vested if
the member has an existing retirement account con-
taining employee and employer contributions from
employment in higher education, or is an active or
vested member of a federal or state retirement sys-
tem and transfers that retirement system member-
ship to the ABP.
When vested, all contributions and accumulations in
the ABP account belong to the member and provide
benets when the member is eligible to receive them.
Vested members of the ABP are also eligible to ap-
ply, through their provider, for loans made from the
member’s account balance. Contact the authorized
provider for borrowing and repayment procedures.
Note: While in delayed-vesting status, loans or the
transfer of funds between carriers are not permitted.
If a member leaves ABP-eligible employment before
becoming vested, only the employee contributions,
including any investment gain or loss, can be refund-
ed. The employer contributions revert back to the
employer. The refund of contributions to a non-vest-
ed member is considered a withdrawal from the ABP.
RETIREMENT
Six months before retirement, a member should
contact the employer and the authorized carrier for
information regarding benets and options. The car-
riers regularly provide informational seminars on re-
tirement.
A member may elect to receive all or a portion of
his/her account in a lump-sum distribution, or as a
xed term or life annuity. There is no minimum retire-
ment age under the ABP; however, 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 earnings
are only available after age 55. The types of payout
plans vary and should be considered when select-
ing a carrier. All returns of contributions and earnings
are considered taxable in the year they are received.
There is no minimum retirement age under the ABP.
A member may begin collecting an annuity, or take
a cash distribution, at any time after termination of
employment; however, if you return to public employ-
ment 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 con-
tributions.
Post-Retirement
Employment Restrictions
If you are considering working after retirement, you
should be aware of the restrictions imposed by laws
and regulations governing post-retirement employ-
ment. It is your responsibility to inform your prospec-
tive employer that you are receiving retirement bene-
ts from a New Jersey State-administered retirement
system. As a retiree of the ABP, you are prohibited
from enrolling in any New Jersey State-administered
retirement system once you have collected a distri-
bution from your tax-deferred investment account. If
you want to supplement your income after you retire,
employment with a private company, the federal gov-
ernment, or another state will not aect your right to
receive your retirement benets.
Retirees are required to completely separate from
service before returning to public employment in
New Jersey in a position covered by a dierent re-
tirement system. IRC sections 401(a) and 414(d)
establish the ABP as a qualied governmental de-
ned contribution retirement program. New Jersey
State-administered retirement systems generally do
not permit the payment of retirement benets without
a complete severance from your employer. In order
to preserve the qualied status of the plan and to pro-
tect retirees from a 10 percent early distribution tax
penalty on their monthly pensions, the New Jersey
Division of Pensions & Benets (NJDPB) is required
to adopt and enforce regulations to ensure compli-
ance with the IRC requirements.
Should you return to work with your former employ-
er, you must rst determine if you have met the re-
quirements of a bona de severance of employment
as dened under N.J.A.C. 17:1-17.14(a)2. Bona de
severance from employment means there was a
complete termination of the employer/employee re-
lationship for a period of at least 180 days from the
date of your retirement. Re-employment by a dier-
ent unit of the same public employer within the 180
days of retirement, whether in a position covered by
the same retirement system or a dierent retirement
system, is considered to be employment by the same
employer. See the exception in the “Transition To Re-
tirement Programs (TTRP)” section.
Page 3 March 2024 Fact Sheet #38
Alternate Benet Program (ABP)
This fact sheet is a summary and not intended to provide all information.
Although every attempt at accuracy is made, it cannot be guaranteed.
Transition to Retirement
Program (TTRP)
For ABP members, a Transition to Retirement Pro-
gram (TTRP) allows members to collect retirement
benets in conjunction with continued active employ-
ment without penalty. Members are eligible to partic-
ipate in a TTRP if they:
• Sign a contract with the employer to participate
in a TTRP;
• Are full-time tenured faculty with a minimum age
of 55;
• Served a minimum of 10 years at a college or
university; and
• Submitted a request to retire under the terms of
the TTRP to their employer no later than April
1st of the calendar year preceding the academic
year in which they wish to participate in the pro-
gram.
If eligible to participate in a TTRP, members must ad-
here to the following program requirements:
• Participating faculty must ocially retire from the
college or university, then seek re-employment
under the terms of the program requirements;
• As retirees, participating faculty have no claims
of tenure or other rights and/or obligations of a
tenured faculty member;
• In no event shall the total assignment exceed 50
percent of a full-time faculty load; and
• Participating faculty shall receive compensation
proportional to the assignment approved by the
college or university, which shall not exceed 50
percent of their nal year’s salary.
Under N.J.A.C. 17:7-8.11, members are limited to a
maximum TTRP period of one year after the retire-
ment date. Upon request, evidence shall be submit-
ted to the NJDPB demonstrating the employer’s ac-
tions to ensure that all TTRPs are compliant with the
one-year requirement. Furthermore, ABP employers
shall provide to the NJDPB an annual listing of all
ABP members at their location who are participants
of their TTRP.
Note: Under N.J.A.C. 17:7-8.11(a)2i, a TTRP agree-
ment established prior to September 21, 2015, and
retroactive to July 1, 2008, remains in eect. Mem-
bers whose prior TTRP agreement allows for partic-
ipation for more than one year may elect to partici-
pate in their TTRP through September 21, 2020.
LIFE INSURANCE COVERAGE
All ABP members are covered by employer-paid life
insurance, payable to their designated beneciaries.
For members grandfathered under P.L. 1997, c. 113,
this amount is 3.5 times full pensionable salary. For
all other ABP members, the amount is 3.5 times
pensionable base salary for the last 12 months up
to the IRS compensation limit under IRC 401(a)(17).
This coverage is available without a medical exam-
ination to members under age 60. Newly enrolled
members 60 years of age or older must undergo a
medical examination to qualify. The Internal Revenue
Service (IRS) classies all life insurance coverage
over $50,000 as a fringe benet subject to taxation.
While the amount of the life insurance coverage is
not taxable, the premium required to pay for the life
insurance coverage is taxable. Members can elect to
waive insurance coverage over $50,000 at any time.
ABP members on a leave of absence without pay
continue to be insured for:
• Up to two years while on an approved leave of
absence for illness;
• Up to one year while on an approved leave of
absence to fulll a residency requirement for an
advanced degree; or
• Up to 93 days while on a leave for other reasons,
including child care.
Upon retirement, life insurance reduces to 50 per-
cent of the annual base salary. This life insurance
coverage is available in retirement only to members
age 60 or older, and only if the member has com-
pleted 10 years of participation in the ABP at an eli-
gible New Jersey institution of higher education. The
member also had to be an active employee in the
twelve months immediately preceding the initial re-
ceipt of a retirement annuity payment.
Life insurance coverage ceases 31 days after termi-
nation of employment. During the 31-day period fol-
lowing termination of employment, the member may
convert existing group life insurance coverage (less
any amount of coverage carried over into retirement)
into an individual whole life policy, without medical
examination. For more information, see the Conver-
sion of Group Life Insurance Fact Sheet.
LONG-TERM DISABILITY
INSURANCE COVERAGE
A member is eligible for employer-paid, long-term
disability insurance coverage after one year of par-
ticipation in the ABP. If a member is totally disabled
due to an occupational or nonoccupational condition,
the member is eligible to receive a monthly benet
of up to 60 percent of the base salary earned during
the 12 months preceding the onset of the disability.
This monthly benet is oset by any other periodic
benet the member may be receiving, such as Work-
ers’ Compensation, short-term disability, or Social
Security. In addition, while the member is considered
disabled, the member’s and the employer’s manda-
tory contributions are automatically credited to the
member’s retirement account.
The member becomes eligible for the disability ben-
et after six consecutive months of total disability. To
be considered totally disabled due to sickness or ac-
cidental bodily injury, the member must be unable to
perform any and every duty pertaining to his/her oc-
cupation. The member need not be conned to home,
Fact Sheet #38 March 2024 Page 4
Alternate Benet Program (ABP)
This fact sheet is a summary and not intended to provide all information.
Although every attempt at accuracy is made, it cannot be guaranteed.
but must be under a doctor’s regular care. Eighteen
months after the onset of long-term disability eligibility,
the member must be unable to engage in any gainful
occupation for which he/she is reasonably suited by
education, training, or experience. These benets will
be paid as long as the member remains disabled or
until the member attains age 70. Should the member
begin receiving payments under the retirement annu-
ity, disability benets will terminate. Total disability is
not considered to exist if the member is gainfully em-
ployed, incarcerated, or if the disability resulted from
an act of war or was intentionally self-inicted.
The following providers are currently approved by the
NJDPB to oer annuity investment accounts for ABP
members:
Equitable (formerly AXA)
333 Thornall Street, 8th Floor
Edison, NJ 08837
1-800-628-6673
w w w.equitable .com/nj
Empower
Gitterman Wealth Management
(formerly MassMutual)
PO Box 825764
Philadelphia, PA 19182-5764
1-866-816-4400
w w w.empower-retirement.com/njhe
MetLife/Brighthouse
(formerly Travelers/CitiStreet)
501 US Highway 22
Bridgewater, NJ 08807
1-800-543-2520
w w w.metlife.com/njabp
Empower (formerly Prudential)
8515 E. Orchard Road
Greenwood Village, CO 80111
866-657-3327
TDD line:1-877-760-5166
https://empower.com/njplans
Teachers Insurance and Annuity
Association (TIAA)
155 Village Blvd, Suite A
Princeton, NJ 08540
1-800-842-8412
w w w.tia a.org/njabp
Corebridge Financial (formerly AIG)
100 Connell Drive #2100
Berkeley Heights, NJ 07922
(908) 470-4110
https://www.corebridgenancial.com/rs/njabp
VOYA Financial Services
33 Wood Avenue South
Suite 600
Iselin, NJ 08830
1-877-873-0321 or
732-326-5613
w w w.voya.com
This fact sheet has been produced and distributed by:
New Jersey Division of Pensions & Benets
P.O. Box 295, Trenton, NJ 08625-0295
(609) 292-7524
For the hearing impaired: TRS 711 (609) 292-6683
www.nj.gov/treasury/pensions
