3. There is established in but not of the Division of Pensions in the Department of the Treasury the Pension Provider Selection Board, which shall consist of the Director of the Division of Pensions or a representative of that director; the Director of the Division of Investment or a representative of that director; the Commissioner of the Department of Insurance or a representative of that commissioner; the Director of the Division of Purchase and Property or a representative of that director; and a person appointed by the Director of the Division of Pensions who is an active participant or receiving a benefit from the alternate benefit program.

The Pension Provider Selection Board shall select through a competitive bidding process at least three unrelated insurance or mutual fund companies licensed or otherwise authorized to transact business in New Jersey from which alternate benefit contracts will be purchased. These new insurers or mutual fund companies shall be selected by competitive bidding in accordance with all applicable State laws and regulations not later than the 270th day following the effective date of P.L.1993, c.385 (C. 18A:66-172.1 et al.). The selected carriers shall be authorized to receive contributions within 60 days of their selection. Each contract shall be awarded for a period not to exceed six years with a renewal option for a period not to exceed three years. All carriers shall be subject to a performance review by the Pension Provider Selection Board every seven years and must meet such standards as the Pension Provider Selection Board shall establish by regulation in order to be renewed for another term of seven years as carriers. Removal of a carrier for cause during a seven-year term is not waived. In establishing by regulation the criteria for the initial selection and any performance review of a carrier, the Pension Provider Selection Board shall consider, among other things, the following:

a. the portability of the contracts offered or to be offered by the company, based on the number of states in which the company provides contracts under similar plans;

b. the efficacy of the contracts in the recruitment and retention of employees for the various State public institutions of higher education;

c. the nature and extent of the rights and benefits to be provided by the contracts for participating employees and their beneficiaries;

d. the relation of the rights and benefits to the amount of contributions to be made pursuant to the provisions of this article;

e. the suitability of the rights and benefits to the needs and interests of participating employees and the various State public institutions of higher education;

f. the ability of the company to provide the rights and benefits under such contracts;

g. the financial soundness of the company, the extent of the company’s financial commitment to the contracts, and whether the company meets the minimum financial criteria established by the Division of Pensions;

h. the company’s overall quality of service, its investment performance considering return on investments and risk, the administrative fee to be charged to participating employees, and the offering of a balanced array of investment opportunities; and

i. the nature of the informational or promotional materials to be provided to prospective participants.

The Pension Provider Selection Board may not designate a company which serves as a disbursement system for other providers or which charges third party administrative fees.

A company that has been designated as of January 1, 1993 by the Division of Pensions as a designated provider shall continue to be so designated until its status as a designated provider is terminated for cause by the division or by the Pension Provider Selection Board.

L.1993,c.385,s.3; amended 1994,c.48,s.193.