NJ Lawmakers Hammer out Pension Reform Measure

June 23, 2008 (PLANSPONSOR.com) - Despite dissatisfaction among unions representing New Jersey state employees, lawmakers hammered out a compromise bill Friday evening instituting pension reform in the Garden State.

A Gannett news service report   said the bill (See NJ Lawmakers Sanction Benefit Reform Package ) raises the retirement age for future government hires for the second straight year from 60 to 62. The retirement age was reset last year from 55 to 60.

According to Gannett, the new bill would require part-time workers to earn $7,500 per year to qualify for a pension credit. That is up from the $1,500 now required for state, county, and local workers and $500 for education workers, but down from the $10,000 some lawmakers proposed and without an earlier requirement that workers put in at least 30 hours per week.

That $7,500 threshold will be raised each year to keep pace with inflation, though capped at 4% officials said.

According to the news report, the bill also:

  • allows state workers to buy back out-of-state service time for pension considerations in New Jersey, but not for retiree health benefits, and
  • allows the government to offer incentives to workers who opt out of public health benefits and require part-timers to work 20 hours to qualify for health benefits.

Unions called the legislation an attack on collective bargaining and pension savings they have already agreed to and said they’re being treated as scapegoats for the state’s fiscal mismanagement. Robert Master, CWA’s regional political director, said the measures disregard issues the unions have bargained – including concessions reached last year that participants in the negotiations said could save the state $6.5 billion over 15 years.

Another wrinkle, introduced earlier Friday, would reduce the number of state holidays from 13 to 12 by combining Lincoln’s Birthday with Washington’s Birthday into a single February holiday. That would take effect at the end of the current state workers contract in three years.