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Bill

A 1685

Reinstates automatic COLA for retirement benefits of members of the State-administered retirement systems.

2026-2027 Regular Session Introduced by Rosy Bagolie and 20 co-sponsors

Restores automatic cost-of-living adjustments for state retirement benefits, contingent on funding targets and actuarial certification to protect solvency and limit employer costs.

Introduced, Referred to Assembly State and Local Government Committee
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Bill Summary · A 1685

Overview

Assembly Bill 1685 (NJ 2026 Session) aims to reinstate automatic cost-of-living adjustments (COLA) for retirement benefits of members in New Jersey’s state-administered retirement systems. The proposal touches several defined benefit plans and would modify governance structures, funding safeguards, and procedural rules to restore automatic annual increases tied to the cost of living.

Main purpose and intent

  • Reestablish automatic COLAs for eligible retirees and beneficiaries.
  • Restore an inflation-adjustment mechanism that adjusts retirees’ monthly benefits to keep pace with living costs.
  • Reintegrate COLA decisions into the governance and funding framework of the state retirement systems.

Key provisions and changes

  • Amendments to multiple retirement-system statutes (notably sections related to the Teachers' Pension and Annuity Fund, Public Employees' Retirement System, and other State-administered systems) to authorize automatic COLAs.
  • Reconfigure governance to allow the boards/committees that oversee the retirement systems to consider and implement COLA-related adjustments, subject to funding targets and actuarial review.
  • Establish or reaffirm a framework whereby COLA adjustments are contingent on the system achieving target funded ratios, with actuaries providing certification that changes will not jeopardize long-term solvency or increase employer contributions in the near term.
  • Preserve vesting and service-credit rules; ensure that COLA changes do not alter vesting requirements.
  • Maintain fiduciary and ethics protections for trustees, committees, and Division of Pensions and Benefits employees, with prohibitions on gifts and specific ethics training requirements.
  • Create or revise committee structures that would oversee adjustments (e.g., an Audit Committee, Actuary Committee, Investment Committee) and specify roles, voting requirements, timelines, and reporting to the board.
  • Impose safeguarding conditions: any COLA modification must be accompanied by actuarial certification demonstrating it will not raise current-year employer contributions and will not undermine long-term viability.
  • Provide process for regular reporting and public disclosure of financial status, funded ratio targets, and impact of any COLA changes.

Who would be affected

  • Retirees and beneficiaries of the State-administered retirement systems would receive automatic COLAs as provided by the bill.
  • Active members (as potential future retirees) and employers funding the systems would be indirectly affected through annual contribution rates if COLA decisions influence funding needs.
  • Board of Trustees, committees (Audit, Actuary, Investment), and the Division of Pensions and Benefits would oversee, approve, and implement COLA-related modifications.
  • State government employers and local government employers participating in the system, since COLAs interact with employer contribution requirements.

Procedural and timeline aspects

  • The bill is introduced in the 2026 session and would amend preexisting statutes governing multiple retirement systems.
  • COLA actions would require meeting the governance, actuarial, and funding safeguards outlined in the bill (e.g., majority votes, actuarial certifications, and compliance with target funded ratio rules).
  • Regulations and plan-document amendments would accompany any COLA changes, with regulations identifying affected members and the effective dates of modifications.
  • The bill references existing mechanisms for impasse resolution (e.g., applying statutory procedures if the board/committee cannot reach consensus).

Note: The text indicates “Introduced Pending Technical Review,” so exact drafting details may be refined during legislative counsel review.

Compiled from official sources — confirm details with the bill’s official record.

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