N.J. Stat. § 43:15C-14
The disability benefit provided under a group policy or policies shall be in an amount equal to 60% of the participant's base monthly salary, reduced by periodic benefits to which the participant may be entitled during the period of total disability. For a member who is a participant pursuant to paragraph (5) of subsection a. of section 2 of P.L. 2007, c. 92(C.43:15C-2) as amended by section 12 of P.L. 2007, c. 103 and section 7 of P.L. 2010, c. 1, base monthly salary for this disability benefit shall mean the base or contractual salary upon which contributions were made to the Teachers' Pension and Annuity Fund, Police and Firemen's Retirement System, State Police Retirement System, or the Public Employees' Retirement System and to this program.
The periodic benefit by which the monthly disability benefit may be reduced shall include salary or wages, retirement benefits or benefits from any source for which the State or other public employer has paid any part of the cost or made payroll deductions, Social Security disability or other benefits, including dependents' benefits, and benefits paid by Social Security at the option of the participant before the age of 65, but not including any increase in Social Security benefits enacted after the disability benefit under such group policy or policies has commenced, and any other periodic benefits provided by law except on account of military service.
When a participant begins to receive a disability benefit under such group policy or policies, the insurance company shall pay an amount equal to the employee contribution which would have been required of the participant and deducted from the participant's base salary in order to meet the participant's obligation for the program. Such amount shall be paid by the insurance company without reduction by any other periodic benefit which the participant is eligible to receive. Such amount shall be paid by the insurance company to the insurer or insurers for the participant's retirement annuity.
Premiums for such disability coverage shall be paid from a special fund, hereby created, called the "Defined Contribution Retirement Program Disability Premium Fund." The State Treasurer shall estimate annually the amount that will be required for premiums for such benefits for the ensuing fiscal year and shall certify such amounts that shall be applied to the total State and other employer contributions due on behalf of the participants in the retirement program from the State and other employers, depositing such amounts in the premium fund. Additionally, employers will pay their share of the administrative costs of the program. The intervals for all payments and the allocation of administrative costs shall be determined by the Division of Pensions and Benefits including due dates and penalties for noncompliance.
N.J.S. § 43:15C-14