Administration May 17, 2010

NJ Officials: Benefits Changes are Legal

May 17, 2010 (PLANSPONSOR.com) – New Jersey Attorney General Paula T. Dow has asserted that changes in government worker pensions and benefits should not be disturbed in court because the changes serve the public’s interest in having an efficient health coverage program for public employees.
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A news report on the NJ.com Web site said Dow made the argument in legal papers filed in a New Jersey state court in response to a lawsuit by police and firefighter unions challenging the benefits changes approved in March.  The unions argued such amendments, scheduled to kick in May 21, would violate collective bargaining agreements by adding a requirement for government workers to pay at least 1.5% of their pay for health care costs.

Dow contended the benefits changes are within the state’s legal authority. “Plaintiffs’ opposition to sharing responsibility for their health care costs – like the overwhelming majority of state employees do – certainly does not outweigh the public’s substantial interest in a fiscally responsible health benefits system,” Dow wrote.

A court hearing has been scheduled for May 20.

The news account said the state’s pension funding deficit was $46 billion as of 2009. The state’s investment fund had a $68-billion market value in late April.

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