NJ ABP for College Professionals

The New Jersey Alternate Benefit Program (ABP)

A successful retirement for teachers is the result of decades worth of careful planning. If you want to get the most out of your retirement packages, you have to be informed about the ins-and-outs contained in each one. This can be an overwhelming task for busy professionals who already struggle to find enough time in the day.

The New Jersey Alternate Benefit Program (ABP) is a tax-sheltered, 401(a) defined contribution retirement plan designed specifically for higher education faculty members. The ABP provides retirement benefits, life insurance and disability coverage.

Eligibility is generally limited to all full-time and adjunct faculty, part-time instructors, officers, visiting professors and certain professional administrative staff who are required to possess a college degree or its equivalent. This plan is considered a mandatory plan if you meet the eligibility requirements.

If you meet the eligibility requirements, the plan requires the participant to contribute 5% of their base salary on a pre-tax basis. Contributions are made as salary reductions from payroll and deposited directly into your plan’s account. Your employer is required to contribute 8% of the participant’s base salary.

The Additional Contributions Tax-Sheltered Program (ACTS)

The Additional Contributions Tax Sheltered Program (ACTS) is a 403(b) defined contribution plan. Eligibility is limited to employees of county colleges, state universities and colleges. Unlike the ABP, this plan is voluntary where participants are able to contribute through pre-tax salary reduction.

Because this plan is voluntary, you choose how much you would like to contribute, subject to limits imposed by the IRS. The amount allowed to be contributed is based on IRS guidelines. The employer makes no matching contributions to this plan.

Your contributions for both the ABP and ACTS plans are deducted from your salary on a pre-tax basis and are not subject to federal income tax withholding. This means you are not required to pay federal income tax on the growth or earnings of the investments until you begin distributions from the plan. We recommend you consult with your tax advisor for details specific to your situation.

Meet With Us About Retirement

Retirement for Teachers - NJ Alternate Benefit Plan

Proper preparation of retirement for teachers is absolutely critical to your long-term success, prosperity and legacy. Whether you have just joined the ABP plan or have been a member for many years, you can carefully review the following information about retirement to answer some of the questions or concerns you may have.


The Educator’s Educator

Who Are Our Clients?

Our clients are faculty, Deans, university presidents and other professionals. The higher education clients with whom we work tell us they are so busy that they do not have the time to properly focus on their retirement planning needs.

We offer our clients the opportunity to focus on what they do best and what is important in their lives, while we work with them to offer the advice and counsel necessary to help ensure they reach their retirement and legacy planning goals.

Our Client’s Goals

Our clients have diverse backgrounds, disciplines and financial situation. We do, however, see similarities in their retirement planning goals:

  • Generating enough current income while still saving for retirement.
  • Minimizing their risk.
  • Incorporating effective tax strategies into their planning.
  • Ensuring they have saved properly and will not outlive their retirement income.
  • Planning to distribute their wealth to the people and charitable institutions they love, in the most efficient manner possible.

Why Educators Choose Gitterman Wealth Management

Market Leadership

For more than a quarter century, the name Gitterman has resonated within the higher education and retirement planning landscape in New Jersey. Our advisors specialize in working with participants in the New Jersey Alternate Benefit Program (ABP) and the Public Employee Retirement System (PERS). Some years ago, a college professor referred to our firm as “The Educator’s Educator.”


As an independent and privately owned firm, we work with our clients to determine which strategies are best suited to their unique financial situations. Our independence allows us to be a resource and advocate for our clients seeking out the most appropriate solutions.


We are stewards of our clients’ wealth and we invest solely to meet our clients’ objectives. We pride ourselves on the integrity and the commitment we display when working with our clients.

An Enduring Presence

Since 1989, the professionals at Gitterman Wealth Management have provided financial guidance to college professionals. Since 1996, the firm has been approved by the state to provide retirement planning services to participants in the New Jersey Alternate Benefit Program (ABP) and the Public Employees Retirement System (PERS). These retirement programs, when combined with an employee’s Social Security and other savings, may provide retirement security.

Today’s Complex World

The financial landscape has become an intricate, multifaceted terrain of opportunities and corresponding risks associated with accumulating and preserving wealth. We work closely with our clients to provide the strategic planning and investment research necessary to make the most appropriate financial decisions.

NJ ABP Brochure

We'll do the planning so you can live the retired life you've always dreamed of.

More About The Programs

Top 22 Most Frequently Asked Questions of Participants within the ABP or ACTS Plans Preparing for Retirement.

1.When do I begin the process, time frame?

When planning for retirement, it is important to give yourself enough time to review your benefits and options. It is recommended that you begin the process four to six months prior to your retirement date. As well we have found that emotionally most people need about a year of “transition time” to get themselves ready.

2. Is there a minimum retirement age with the ABP?

There is no minimum retirement age with the ABP.  However, if you take any distribution you will be considered retired by the ABP. However your 403b can be accessed after 59 and a half while still employed.

3. Do I contact Human Resources regarding the program and/or retirement options?

Yes, contact a Human Resources Representative, as well as the authorized investment carrier for information regarding benefits and options.

4. Can I rescind my retirement application, once the application has been submitted to the Division of Pensions and Benefits?

Yes, you need to contact your Human Resources representative who can facilitate the rescission of your application with the Division of Pensions and Benefits.

5. Can I change the date of retirement, once the application has been submitted?

Yes, however, you will need to allow enough time for processing of your amended retirement application.

6. Is there a life insurance benefit in retirement?

Upon retirement, life insurance reduces to one-half of the annual base salary. The life insurance coverage is available in retirement only to members age 60 or older and only if the member has completed 10 years of participation in the Alternate Benefit Program at an eligible New Jersey institution of higher education.

The member also had to be an active employee in the twelve months immediately preceding the initial receipt of a retirement annuity payment. Be careful with taking reduced pay in the last year of employment as that will have an effect on your benefit amount.

Waiving Noncontributory Group Life Insurance over $50,000
You may waive your Noncontributory Group Life Insurance coverage by completing a waiver form and submitting it to the Division of Pensions and Benefits.

The waiver form must be received by the Division of Pensions and Benefits before December 31st to be effective January 1st of the next calendar year.  Once a waiver form has become effective it shall be irrevocable for the entire calendar year. The waiver will remain in effect until you submit a reinstatement form to the Division of Pensions and Benefits. The reinstatement will become effective the following January 1st.

Waiver and reinstatement forms are available from the Division of Pensions and Benefits or from your employer.

If a waiver is in effect at the time of termination of employment or retirement, you will not be permitted to convert any amount of your Noncontributory Group Life Insurance coverage over $50,000.

7. Are my dependents covered for State Health Benefits upon my retirement?

Full time employees, who are eligible for health insurance coverage until their retirement date, will be offered State Health Benefits Program coverage for themselves and their eligible dependents when they retire, as they were a participant in the Alternate Benefit Program (ABP) and retired with at least 25 years of credited ABP service or are on a long-term disability.

Your eligible dependents are your spouse, civil union partner, or an eligible same-sex domestic partner, and your children who are under age 26.

8. Prior to my retirement, do I need to contact the Social Security Administration?

Yes, if you want to receive social security benefits. Social Security offers an online retirement application.

9. Do I need to enroll in Medicare?

If you are age 65 or older, contact the local Social Security Administration office for full Medicare enrollment.

However, there is a Special enrollment period for people covered under an employer group health plan. If you’re 65 or older and covered under a group health plan, either from your own or your spouse’s current employment, you may have a “special enrollment period” in which to sign up for Medicare Part B.

This means that you may delay enrolling in Medicare Part B without having to wait for a general enrollment period and paying the penalty for late enrollment. There are limits, so we strongly advise you to contact the Centers for Medicare & Medicaid Services (CMS) for more information.

10. Do I need to enroll in Medicare Part A and B to be eligible for enrollment in the SHBP?

Yes, you and any eligible dependents must be covered by both Part A and Part B of Medicare to be eligible to enroll in the SHBP in retirement, proof of coverage is required.

11. If I am not receiving social security, how am I billed for any Medicare costs?

Medicare bills directly.

12. As a faculty member, am I compensated for my earned unused sick time in retirement?

Faculty members are not compensated for earned unused sick time in retirement.

Faculty members of the State Colleges; Rutgers, the State University; the New Jersey Institute of Technology; and the University of Medicine and Dentistry of New Jersey who have served in an administrative capacity may be eligible for Supplemental Compensation On Retirement (SCOR) based on the time served in that administrative capacity only. Such employees, if deemed eligible, shall be entitled to payment based on sick leave and salary earned while serving in an administrative title.

13. How does my investment carrier notify the Division of Pensions and Benefits of my retirement?

Make arrangements with your investment carrier to withdraw the mandatory retirement funds. Your investment carrier will submit the withdrawal form to the Division of Pensions and Benefits. You only have 30 days from your retirement date to do this or you lose your health benefits!

14. How is the ABP retirement allowance calculated?

ABP retirement benefits are based on the value of the member and employer contributions plus any interest or accumulation on those contributions (not years of service and salary).

15. Is it a lump sum cash distribution?

This depends on your specific investment within each carrier. Variable investments can be taken as a lump sum however certain fixed accounts have restrictions. Be certain to ask your representative for the details.

16. If I have an outstanding loan balance from my 401(a) ABP account, what are my options?

You should check with your investment carrier regarding repayment procedures. Any loans not paid back are treated as withdrawals for tax purposes.

17. Can I apply for a loan from my 403(b) ACTS account after retirement?

No. Once you are retired and no longer contributing to the Pension you are unable to take any loans.

18. Can I change my investment carrier in retirement?

Yes, you can elect to change your investment carrier in retirement.

19. When can I collect my Social Security benefits?

You may start receiving benefits as early as age 62 or as late as age 70.

20. How is Social Security factored into my income?

Your social security benefits may be taxable. You can refer to IRS Publication 915 for more information. Also, check with your accountant.

21. At age 70 ½, what is the mandatory amount that I must withdraw from my accounts to meet my required minimum distributions?

You are required to begin receiving distributions from your retirement account(s) in the year in which you turn 70 ½. However, you are able to defer this initial distribution until April 1 of the year following the year in which you turn 70 ½.

For all subsequent years, including the year of your initial distribution, distributions must be made by December 31 of the year. Your investment carrier representative will be able to assist you with regard to the required minimum distribution as it is a calculation which is based on the account balance as of the end of the immediately preceding calendar year.

22. Can I contribute the maximum allowed by the IRS to my 403 (b) ACTS account if I only work six months in the year of retirement?

Yes, however, there are limits on the amount of contributions that can be made to your 403(b) account each year.

When contemplating retirement, contact your human resources representative, as well as your Gitterman Wealth Management advisor, to discuss the options that are available. Retirement can be an emotional process; we can offer the tools to help you evaluate your readiness.

If you are eligible but haven’t signed up for the New Jersey Alternate Benefit Program (401(a) mandatory plan) yet, you’ll be glad to know that it’s incredibly easy to get started.

First, you will need to complete the following required forms:

If you are eligible but haven’t signed up for the New Jersey Additional Contributions Tax Sheltered Program (403(b) voluntary plan) yet, you’ll be glad to know that it’s incredibly easy to get started.

First, you will need to complete the following required forms:

Once these are complete, they will need to be provided to your human resource representative, then make an appointment with your Gitterman Wealth Management advisor to review your investment options.

When planning a retirement for teachers, it is important to give yourself enough time to review your benefits and options. Without the right support system, you might miss out on some of the many joys of retirement. Having the right people in your corner is not only essential for your financial health, but your overall well-being, too.

Even if you have put off proper retirement planning for years, it’s never too late to get started in the right direction. Gitterman Wealth Management works with people in all different stages of the planning process and we strive to create completely customized plans for each client.

Your pre-tax salary reduction contributions to either the ABP or ACTS plans are always 100% vested, meaning you have full access to these funds.

Within the ABP plan (voluntary 401(a) plan), the employer’s mandatory contributions will become vested the start of your second year of service, provided you have been employed for at least 12 months and have been making your mandatory pre-tax salary reduction contributions.

Once you are enrolled, understanding the fundamentals of the ABP or ACTS plans is the first step towards creating a solid retirement plan. Through our partnership with MassMutual, we are able to offer an array of investment options within the ABP and ACTS plans, regardless of what stage of the planning process you are currently in.

We have created our process to accommodate planning a retirement for teachers (whether you are just starting to save for retirement or have been saving for years and are looking for advice).

Our Process

Our retirement planning process begins with a detailed data-gathering meeting, which we generally complete in your home or at our offices. Your unique circumstances are analyzed and an individual retirement and investment analysis is prepared for your review. If there are any recommendations that our firm feels are appropriate, we will provide them to you in writing. If you choose to move forward with the recommendations, you may contact us and we will begin the implementation process. We will then begin to meet on a regular basis to track your progress toward reaching your goals.

Our Approach

At Gitterman Wealth Management, our goal is to develop a strategy to achieve your growth objectives. Through a disciplined approach and a long-term perspective, we help you avoid emotional investment decisions, while conscientiously preserving the capital you entrust to us. We leverage technology in a way that allows us to analyze financial intelligence and manage risk. These tools are also used to adjust your portfolio to reflect changes in your circumstances. In addition, you have easy and secure access to information about your investments.

wealth management nj nyc

Under IRC limitations, the maximum allowable outstanding loan balance is the lesser of 50% of your vested plan account balance or $50,000; however, if your vested account balance is less than $20,000, you may borrow the lesser of 100% of your vested account balance or $10,000.

Please note, these loan limits apply on a combined basis to the highest loan balance in the past year under all retirement plan accounts with the same employer. Your employer’s plan may have additional restrictions. If you have any questions, please contact your employer

About Our Firm

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