18A:66-97. a. Until the effective date of P.L.2005, c.328, any pension fund created or to be created as provided in this article shall be under the control and management of the board of seven trustees, no more than three of whom shall be employees of the same board of education. The two trustees of the board added pursuant to this act, P.L.2001, c.454, shall be retirees of the pension fund elected by the retirees of the pension fund, and each such member shall serve for a term of two years. The first board selected as provided in section 18A:66-96 shall serve until the month of January following the incorporation of such association. At such time four members of the association shall be elected as trustees, in place of the four first selected, by a majority vote of the members of the association as follows: one for the term of one year, one for the term of two years, one for the term of three years, and one for the term of four years, who shall serve for the respective terms for which they are each chosen. Thereafter in the month of January of each year a member shall be chosen for a full term of four years to serve in place of the trustee whose term shall have expired.

b. After the effective date of P.L.2005, c.328, any pension fund created as provided in this article shall be under the control and management of the board of seven trustees, at least one of whom shall be an active member until the last active member of the fund retires and one of whom shall be a retiree. The remaining trustees may be either active members or retirees as the number of each may be determined by the bylaws of the board of trustees prior to an election. Commencing with the first January following the enactment of this act, P.L.2005, c.328, and continuing each January thereafter, two individuals shall be elected as trustees in the place of two sitting trustees by a majority vote, for a term of three years. Active member trustees shall be elected by a majority vote of the active members of the association, and retiree trustees shall be elected by a majority vote of the retirees of the pension fund. The transition in trustee terms and the number of trustees elected shall be accomplished as determined by the board.

In any election for a trustee in which there is only one candidate for a position, a vote of retirees or active members shall not be held and the candidate shall be designated a trustee by a majority vote of the sitting board of trustees.

Any vacancy occurring among the board of trustees or in the office of chairperson, vice-chairperson, secretary, treasurer, or other officers of such corporation shall be filled in the manner provided in bylaws, and in the absence of such provision shall be filled by the board of trustees.

c. Any pension fund created as provided in this article shall be (1) a governmental plan under section 414(d) of the federal Internal Revenue Code; (2) a qualified pension plan under section 401(a) of the Internal Revenue Code; and (3) shall hold assets in a tax exempt trust under section 501 of the Internal Revenue Code.

d. In accordance with the provisions of section 401(a)(2) of the federal Internal Revenue Code, and subject to such exceptions as may be permitted for governmental plans under section 401(a)(2) of the federal Internal Revenue Code, at no time prior to the satisfaction of all liabilities with respect to members and their beneficiaries under any pension fund created as provided in this article shall any part of the corpus or income of the pension fund, within the taxable year or thereafter, be used for or diverted to purposes other than for the exclusive benefit of the members or their beneficiaries.

e. Notwithstanding any law, rule or regulation to the contrary, the contributions to and benefits payable under any pension fund created as provided in this article shall not exceed the limitations provided under section 415 of the federal Internal Revenue Code and the regulations issued by the United States Department of the Treasury under that code section, as applicable to a governmental plan as defined in section 414(d) of the federal Internal Revenue Code, and as indexed in accordance with section 415(d) of the federal Internal Revenue Code.

Any applicable limitation as adjusted under section 415(d) of the federal Internal Revenue code shall apply automatically to contributions to and benefits payable under any pension fund created as provided in this article as of January 1 following such adjustment. This automatic annual adjustment shall apply to members who have had a severance from employment. If this pension fund must be aggregated with another plan to determine the effect of section 415 of the federal Internal Revenue Code on a member’s benefits or contributions, and such benefits or contributions must be reduced to comply with that code section, then such reduction shall be made pro rata between the plans in proportion to the member’s creditable service in each plan.

f. Notwithstanding any law, rule or regulation to the contrary, for members of any pension fund created as provided in this article, the amount of compensation which may be used for member contributions and benefits shall not exceed the compensation limitation of section 401 (a) (17) of the federal Internal Revenue Code of 1986, (26 U.S.C. § 401 (a) (17)), as amended pursuant to section 13212 of the Omnibus Budget Reconciliation Act of 1993, Pub.L.103-66, 107 Stat. 312 or as hereafter amended or supplemented, to the extent applicable to governmental plans.

g. Notwithstanding any law, rule or regulation to the contrary, the form and timing of all distributions from any pension fund created as provided in this article to a member, or to the beneficiary of a member if the member dies before the member’s entire interest has been distributed, shall conform to the required distribution provisions of section 401(a)(9) of the federal Internal Revenue Code and the regulations issued by the United States Department of the Treasury under that code section only to the extent applicable to a governmental plan as defined in section 414(d) of the federal Internal Revenue Code, including the incidental death benefit requirements of section 401(a)(9)(G) of the federal Internal Revenue Code. In addition, in no event shall payments under any such pension fund commence to be paid to a member later than the member’s required beginning date, without regard to whether the member has filed application therefor. For this purpose, a member’s required beginning date is the April 1 of the calendar year following the later of (1) the calendar year in which the member attains age 701/2 or (2) the calendar year in which the member retires. The actuarial adjustment described in section 401(a)(9)(C)(iii) of the federal Internal Revenue Code shall not apply.

h. In accordance with the provisions of section 401(a)(31) of the federal Internal Revenue Code, any pension fund created as provided in this article shall permit direct transfer of a distribution from the fund that is an eligible rollover distribution to an eligible retirement plan.

i. Any pension fund created as provided in this article shall operate in compliance with the federal “Uniformed Services Employment and Reemployment Rights Act of 1994,” Pub.L.103-353 (38 U.S.C. § 4301 et seq.) and section 414(u) of the federal Internal Revenue Code. In addition, in accordance with section 401(a)(37) of the federal Internal Revenue code, if a member dies on or after January 1, 2007 while performing qualified military service, as defined in section 414(u)(5) of the federal Internal Revenue Code, such member’s designated beneficiaries shall be entitled to any additional benefits, other than benefit accruals relating to the period of qualified military service, that would have been provided under any pension fund created as provided in this article if the member had resumed and then terminated employment on account of death.

amended 1983, c.216, s.1; 2001, c.454, s.1; 2005, c.328, s.1; 2013, c.16, s.1.