The New Jersey Senate today unanimously passed a CIANJ-supported package of public employee pension reforms that are designed to help bring stability to an unsustainable pension system.
Some of the major changes include:
- Requiring current employees and future retirees to contribute at least 1.5% of their salaries toward health benefits
- Placing new hires who work less than 35 hours per week into a defined-contribution system
- Rolling back the 9% pension increase passed by the legislature in 2001
- Capping sick time cashouts at $15,000 upon retirement for all public workers
The Senate did not vote on a proposed Constitutional Amendment that would mandate the legislature appropriate a full contribution to the pension fund each year. The Assembly is expected to begin consideration of the package within the next two weeks.
Despite union claims (and a giant rat) to the contrary, this does not represent a "pension betrayal". If anything, the reforms do not go far enough and will likely need to be revisited. Because most of the reforms do not impact current employees, it will take up to 20 years before a majority of state workers fall under the above-guidelines. Also contrary to big labor's position, these were not passed in a hurried manner. The reforms were first put forth by a joint legislative committee in 2006.
Although the Association maintains concerns about the overall health of the pension fund, CIANJ is supportive of the measures and commends the legislature for choosing to improve the status quo. The 36-0 vote in the face of such fierce lobbying demonstrates a commitment to better governing.
Special thanks are in order for Senate President Sweeney and Senate Republican Leader Kean who came together on this critical taxpayer issue.
Comments