52:18A-165. Deferral and deduction of salary; voluntary written agreement.
3. a. The State may by a voluntary written agreement with any employee of the State provide that a portion of the employee's current salary from the State shall be deferred and deducted each payroll period for disposition by the board in accordance with the plan. b. The board may adopt, in connection with the deferred compensation plan, a written plan provision that permits the deferral or deduction from the salary of employees of the State, or a subset thereof determined by the board, an amount equal to a percent of salary specified by the board received on and after the date of hire, unless the employee makes an affirmative election not to defer or to defer at a different percentage. If the board elects to establish an automatic enrollment arrangement pursuant to this subsection, the board shall establish a default deferral percentage, may provide for periodic escalation of deferral percentages, and may provide for the periodic default reenrollment of employees who are not participating in the plan or are participating at less than the default percentage. The board shall ensure that an employee is provided with notice and reasonable opportunity to terminate deferrals or to defer a different percentage. The board may designate classes of employees who are not subject to the automatic enrollment arrangement, such as part-time, seasonal, or temporary employees. If the board elects to establish an automatic enrollment arrangement, the deduction from an employee’s salary pursuant to a default deferral percentage shall be treated as a voluntary written agreement for purposes of subsection a. of this section and shall be treated as being authorized in writing for purposes of section 4 of P.L.1965, c.173 (C.34:11-4.4). If a deferred compensation plan includes an automatic enrollment arrangement, the named fiduciary of the plan shall designate a default investment into which an employee’s deferred salary shall be invested in the absence of an affirmative investment election from the employee. c. Notwithstanding the provisions of subsection b. of this section, the State, and any other employer whose employees are represented by a union that is designated as the majority representative pursuant to the “New Jersey Employer-Employee Relations Act,” P.L.1941, c.100 (C.34:13A-1 et seq.), and eligible to participate in the New Jersey State Employees Deferred Compensation Plan established pursuant to section 2 of P.L.1978, c.39 (C.52:18A-164), shall negotiate the terms of a deferred compensation plan with such majority representative, including whether such employees represented by the majority representative shall be automatically enrolled in the plan, the default deduction percentage from an employee’s salary, if any, and the default investment, if any. The terms of a negotiated deferred compensation plan shall be consistent with any applicable rules and regulations adopted by the New Jersey State Employees Deferred Compensation Board established pursuant to P.L.1978, c.39 (C.52:18A-163 et seq.). Absent a written agreement between an employer and a majority representative, in order to participate in the New Jersey State Employees Deferred Compensation Plan, an employee represented by a majority representative shall be required to affirmatively elect to participate. L.1978, c. 39, s. 3, eff. June 19, 1978; amended 2025, c.358, s.2.