As we reported in our January blog post, New Jersey reinstated an old regulation to require actuarial verification of New Jersey state reserve reports IF a charity offers flexible deferred gift annuities (FGAs). This requirement is enforced even if the charity has never issued an FGA, as long as they are marketing the gift vehicle.
In a stunning update, New Jersey has now decided that it will accept a Washington state reserve report that has been verified by an actuary, provided that it is submitted with an unverified New Jersey or New York state reserve report and a NJ certificate of valuation.
Historically, New Jersey has been willing to accept a New York state reserve report in lieu of a New Jersey state reserve report because New York’s methodology is more conservative. In offering to accept a Washington state reserve report that is actuarially verified, New Jersey is citing the same statute that allows New York to substitute for New Jersey. However, it does not require that the Washington state reserve report has the same run date. This means a charity could submit a New Jersey unverified report run for 12/31/26 with a verified Washington state reserve report run for 6/30/26. A NJ certificate of valuation form, signed by the actuary, must still accompany the verified report.
While it may seem confusing, this new opportunity to fulfill the obligation for actuarial verification represents financial relief for clients who were already annually filing in Washington state and dreaded doubling actuary expenses to satisfy New Jersey. For those using PG Calc’s ResVal service, there is an added charge from the actuary for completion of the certificate of valuation form, but it is less than a complete second verification. If you wish to use a Washington actuarial for a New Jersey filing, please specify that when providing your reserve reports to PG Calc, so that we can make that request to the actuary.
Organizations offering FGAs with annual filing requirements in New Jersey can follow one of these four paths (with a NJ certificate of valuation required in all instances):
Submit a New Jersey state reserve report that has been verified by an actuary.
Submit a New York state reserve report that has been verified by an actuary.
Submit an unverified New Jersey report with an actuarially verified Washington state reserve report.
Submit an unverified New York report with an actuarially verified Washington state reserve report.
If New Jersey further refines its process, we will report on it in the PG Calc blog and the eRate monthly newsletter.