Alternate Benefit Program Overview

Alternate Benefit Program Overview

Below are the important features if the Alternate Benefit Program (ABP). This website is intended to be a summary of the plan provisions. In the event that a conflict exists between the information contained within and the plan document, the plan document provisions prevail.

The ABP is a defined contribution retirement program that is offered to eligible employees of New Jersey's public institutions of higher education as an alternative to the State Defined Benefits Pension Plan. ABP provides retirement benefits and coverage which, when combined with Social Security and other tax-deferred plans, can help provide income in retirement. 

With ABP, you contribute a percentage of your base or contractual salary as determined by state law to a variable annuity. Your contributions are then matched by an employer contribution. Contributions are made on a pre-tax basis, which means you defer paying taxes on the contributions and any earnings until the money is distributed from the account.


  • Asset building - A great way to invest for future needs and supplement your retirement income. 
  • Tax-deferred investing – Under the Internal Revenue Code, your ABP contributions and any earnings are taxed only when you begin to take distributions, which could be in retirement when you may be in a lower tax bracket.
  • Various investment options - You can choose how to allocate your contributions from the available investment options.
  • Periodic payments for the future - Under the annuity provisions, you choose the payout option that best fits your future needs. 
  • Portability of your account to other eligible retirement plans.



Eligibility is limited to state or county college and state university full-time officers, part-time or adjunct faculty, administrative personnel who are required to possess a bachelor’s degree or its equivalent as a condition of employment, and certain other state agencies involved with higher education. This includes visiting professors and faculty paid by federal grant. Eligible employees must elect to participate in the ABP instead of the Public Employees’ Retirement System (PERS). A retiree from any other system is ineligible to participate in the ABP.


Mandatory Pension Contribution

The employer contributes 8% of the participant’s contractual base salary. Participants contribute a mandatory 5% of base pay on a pre-tax basis. For purposes of ABP contributions, compensation taken into account is limited to a maximum annual salary dollar amount (currently $141,000) established under state law.

The maximum annual contribution limit to the ABP is set by IRS guidelines on a yearly basis. You may view the current limits here.


There is no deferred sales charge upon withdrawal. Withdrawals may be subject to an IRS 10% premature distribution penalty tax, and certain distributions are also subject to a mandatory 20% federal withholding. Withdrawals from the fixed interest option are subject to certain restrictions and may be subject to a Market Value Adjustment. Please refer to your plan document and your contract prospectus for details, or speak with your campus representative.

Payout Options

  • A lump-sum or partial withdrawal (may be subject to federal withholding and possible tax penalties)
  • A systematic payout option specifying a percentage, dollar amount, or a time period. This requires a $3,000 minimum account balance and a $250 minimum payment.
  • Payments guaranteed for your lifetime or for as long as you and your beneficiary are alive (guarantees based on the claims-paying ability of Voya Retirement Insurance and Annuity Company)

You should consider the investment objectives, risks, and charges and expenses of the variable product and its underlying fund options carefully before investing. The prospectuses/prospectus summaries containing this and other information can be obtained by contacting your local representative. Please read the information carefully before investing.

Variable annuities are intended as long-term investments designed for retirement purposes. Withdrawals from an annuity may be subject to an early withdrawal fee and, if taken prior to age 59½, an IRS 10% premature distribution penalty tax will apply, unless an IRS exception applies. Money taken from the annuity will be taxed as ordinary income in the year the money is distributed. Account values fluctuate with market conditions, and when surrendered the principal may be worth more or less than its original amount invested. An annuity does not provide any additional tax deferral benefit, as tax deferral is provided by the plan. Annuities may be subject to additional fees and expenses to which other tax-qualified funding vehicles may not be subject. However, an annuity does provide other features and benefits, such as lifetime income payments and death benefits, which may be valuable to you.                                                           

For 403(b)(1) fixed or variable annuities, employee deferrals (including earnings) may generally be distributed only upon your: attainment of age 59½, severance from employment, death, disability, or hardship. Note: Hardship withdrawals are limited to employee deferrals made after 12/31/88. Exceptions to the distribution rules: No Internal Revenue Code withdrawal restrictions apply to '88 cash value (employee deferrals (including earnings) as of 12/31/88) and employer contributions (including earnings). However, employer contributions made to an annuity contract issued after December 31, 2008 may not be paid or made available before a distributable event occurs. Such amounts may be distributed to a participant or if applicable, the beneficiary: upon the participant's severance from employment or upon the occurrence of an event, such as after a fixed number of years, the attainment of a stated age, or disability.