N.J. Admin. Code § 17:8-1.6

Current through Register Vol. 56, No. 23, December 2, 2024

Section 17:8-1.6 - Variable Benefit Account

(a) At the retirement of a participant, the number of equity units credited to a participant in his accumulation account as of the date of retirement shall be transferred to the Variable Benefit Account.

(b) The number of equity units to be transferred into the Variable Benefit Account shall be the sum of the equity units credited to his account as of the first day of the current quarter increased by one third of one percent per month for each month since the end of the prior quarter to the end of the month of retirement plus the additional equity units credited for contributions, if any, during the current quarter.

(c) In the event a participant elects a lump sum payment at retirement, the amount payable shall be the product of the number of equity units in his Variable Accumulation Account multiplied by the value per equity unit as of the end of the month of retirement.

(d) Annuities shall be payable to a participant from the Variable Benefit Account and will be expressed in terms of a number of equity units.

(e) The number of units payable monthly to a participant or his beneficiary shall be determined by dividing the number of equity units transferred to the Variable Benefit Account at retirement by the present value of one equity unit payable monthly for life on the basis of the interest and mortality tables then in effect, modified as appropriate for optional selections.

(f) The dollar amount of a retired participant's monthly annuity payment shall be the number of units payable to him monthly, multiplied by the value of each unit as of the end of the quarter preceding the month during which the current annuity payment is made.

1. This monthly dollar amount would vary from quarter to quarter, or otherwise at the discretion of the council, with changes in the value of the equity unit.

2. However, the number of units payable monthly to a participant or his beneficiary shall, except for modification under an option, remain constant.

(g) The total number of equity units credited to all retired participants or their beneficiaries in the Variable Benefit Account will be decreased by the total number of units paid each month.

(h) The total number of equity units credited to the Variable Benefit Account will be increased by one third of one percent per month.

(i) The total number of equity units in force in the Variable Benefit Account at the end of each month shall be determined as follows:

1. The number of equity units in force at the start of the month; plus

2. The number of equity units transferred from the Variable Accumulation Account as of the first of the month for retirements during the preceding month; less

3. The number of equity units paid out to retired participants or their beneficiaries during the current month; plus

4. One third of one percent of the balance so obtained.

(j) The number of equity units in force will be reviewed at least once in every three-year period and, if necessary, adjusted to equal the total present value in equity units of all annuities in force on the basis of actuarial valuation. The mortality gain or loss for the period shall be allocated to the Income Distribution Summary and then apportioned to the Variable Accumulation Account and the Variable Benefit Account as herein provided.

N.J. Admin. Code § 17:8-1.6