Garden State Worker Contract Includes Pension, Health Givebacks

February 22, 2007 ( - A tentative agreement with the largest union for New Jersey state workers calls for employees to pay 1.5% of salary toward their health premiums, pay more for their pensions and more for doctors' visits and prescription drugs.

The deal between the administration of Governor Jon Corzine and the Communications Workers of America (CWA) also includes an increased retirement age to 60 for new workers, according to a Gannett News Service report.

In return, union workers won pay raises that compounded, total 13.6% over the next four years and avoided drastic cuts to their existing retirement benefits, according to the report.

While teachers negotiate their benefits with individual school districts, their union, the New Jersey Education Association (NJEA), has also agreed to accept increased pension contributions and new penalties for educators who retire before turning 60.

According to the news report, the health care payments and pension contribution increase, from 5% of salary now to 5.5%, affect all workers.

The union givebacks are expected to save the state more than $100 million in the next fiscal year and hundreds of millions a year by 2022.The pension reforms are expected to save $475.5 million per year beginning in 2022, according to the administration.

For the average CWA worker, who currently earns about $50,000, the salary increases could total roughly $16,300 over the four-year contract. Increased health care and pension costs, above the existing contract, would cost $4,300, or roughly 27% of the total raise, the news report said.

The deal avoids cuts in pensions and state holidays that were recommended by some lawmakers.