Updated September 3, 2026. Quick answer: New Jersey Public Employees’ Retirement System (PERS): the COLA is suspended by statute and has been since 2011, service credit can be purchased, and no DROP was found. Vesting takes 10 years of service credit.
Provisional. This page is published at medium confidence. The specific points that could not be confirmed are listed under What could not be verified below, and are named rather than smoothed over.
The verdicts
| Is the COLA granted? | Suspended since 2011 |
|---|---|
| Is the COLA compounded? | Not applicable (suspended) |
| Vesting | 10 years of service credit |
| Buy service credit? | Yes |
| DROP? | None found |
| State | New Jersey |
Those first two rows are separate questions and are routinely confused. Whether you get an increase at all is one thing; whether it compounds is another. A system can grant an increase automatically every year and still compute it against your original benefit forever, which is a materially worse deal than it sounds.
The COLA
New Jersey’s COLA has been off since the 2011 pension reform: under N.J.S.A. 43:3B-2, the Pension and Health Benefit Reform Law, cost-of-living adjustments for retirees of all retirement systems were suspended, with no reduction to any COLA increases already added to retiree benefits before the law’s June 28, 2011 effective date. The law leaves a reinstatement path, not a promise: “Chapter 78 provides for the establishment of Pension Committees which may consider reinstating the COLA when the retirement system reaches a “target funded ratio” established by the law”: a funded ratio that rises in equal increments from 75% to 80% over seven fiscal years. Before 2011 the increase was calculated against the initial retirement allowance, not a compounding current balance.
Buying service credit
PERS members can purchase temporary/provisional service, leaves of absence, former membership service, up to 10 years of out-of-state or U.S. government service, military service before enrollment (up to 10 years, plus 5 more for veterans), USERRA military service, and local New Jersey retirement system service. Cost is age- and salary-driven: the NJDPB bases the cost of a purchase on the member’s nearest age when the application is received, the higher of current annual salary or highest fiscal year salary posted to the account, the amount of service being purchased, and whether the purchase is a shared-cost or full-cost purchase. “The cost of the purchase will rise with an increase in your age and/or salary.” Some categories are double-cost: “the cost to you for purchasing these types of service will be twice the cost for other types of purchase.”
Run your own numbers before deciding: some purchases never recover their cost, and the calculator shows which.
Coordinate this with your overall retirement plan
An adviser can help weigh a COLA that may not compound, a service-credit purchase that may never pay for itself, or a DROP election against the rest of your retirement plan, but that does not replace the numbers in your own member statement.
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Vesting
“You are vested in the PERS after you have attained 10 years of service credit. Being vested in the PERS means that you are guaranteed the right to receive a retirement benefit when you reach normal retirement age. For Tier 1 and Tier 2 members, normal retirement age is 60. For Tier 3 and Tier 4 members it is age 62. For Tier 5 members it is age 65.” Tiers run by enrollment date under N.J.S.A. 43:1A-7: Tier 1 (before 7/1/2007) through Tier 5 (on/after 6/28/2011).
DROP
No DROP program appears in the PERS member guidebook or active-member pages reviewed this session. This is an absence-of-evidence finding, not a PERS statement denying a DROP.
DROP is rarer than it appears across the systems on this site: most have none.
What could not be verified
REFUND TERMS: this page does not state what happens to your contributions if you take a refund instead of leaving your account with the system: that comparison was not independently researched for this system this session, and is left as an open gap rather than guessed from another system’s rule. Consult your own plan’s refund/forfeiture terms before deciding. Any additional field marked “not stated” in the verdicts table above was genuinely absent from the official materials read, not omitted for space.
Sources
- NJ PERS Member Guidebook
- NJ Division of Pensions Fact Sheet #1
- NJ Pension and Health Benefit Reform, 2011
Read September 3, 2026.
Related public pension systems: New Jersey TPAF · North Carolina TSERS.
General information drawn from each system’s own official published materials, not legal, tax or financial advice. Vesting, COLA and buyback rules are set by state statute and plan tier, differ materially by hire date, and can change by future legislation. This page cannot see your own member statement, which governs. We are not a law firm, a tax adviser, or a fiduciary, and this is not personalized advice.