The life insurance you receive for working at Ramapo College of New Jersey is part of the Alternative Benefits Program.(ABP)
All ABP members are covered by employer-paid life insurance. For members grandfathered under P.L. 1997, c. 113, this amount is 3.5 times full pensionable salary. For all other ABP members, the amount is 3.5 times pensionable base salary for the last 12 months up to the IRS compensation limit under IRC 401(a)(17).
The Internal Revenue Service (IRS) classifies all life insurance coverage over $50,000 as a fringe benefit subject to taxation. While the amount of the life insurance coverage is not taxable, the premium required to pay for the life insurance coverage is taxable.
If you have noticed a tax for life insurance in your pay-stub, know that you can elect to waive insurance coverage over $50,000 at any time. Doing so will eliminate that tax.
If you have questions about the Alternative Benefits Program or wish to waive coverage over $50,000, contact: