The Newark Star-Ledger reported that the new bills also roll back a 9%-pension benefit hike granted in 2001, requires pension payments to be based on one public job, and caps sick-leave payments for future New Jersey workers to $15,000. Current retirees are not impacted.
The state’s $46-billion pension gap is largely the result of stock market losses and New Jersey officials failing to make payments into the investment fund, the news report said.
Though the package of three reform bills swiftly passed through the Senate, they had a rocky ride through the Assembly, where some members fought to make changes. Over the past few weeks, labor unions representing teachers, police and firefighters, and other public workers argued the bills would undermine collective bargaining, lead to mass retirements of experienced employees, and punish workers for a problem they did not create (see Proposed Benefits Cuts in NJ Inch Closer to Approval).
The only piece of the package bill with a tallied savings is one that would require public workers to pay at least 1.5% of their salary toward their health care, generating an expected saving for local government of at least $314 million annually.
The Senate also approved a measure to place a constitutional amendment on the ballot in November asking voters to ensure the state pays its pension bill. The full payment would be phased in over seven years (see NJ Senate Takes on Pension Reform). The measure must be approved by the Assembly, but does not need Christie’s signature.