The board overseeing PERS voted this week to initiate a lawsuit against New Jersey Governor Chris Christie over his plan to take $2.4 billion, meant for the pension system, over two years, according to a news report in The Star-Ledger of Newark. The lawsuit is meant to compel Christie to make $3.8 billion in payments to the pension system over two years, instead of the $1.38 billion Christie is proposing as way of dealing with the state’s budget crisis.
Board Chairman Thomas Bruno said Christie signed a pension overhaul in 2011 that gave public workers a contractual right to the full $3.8 billion over two years (see “NJ Not Making Its Share of Pension Contribution”). Under the state and federal constitutions, New Jersey cannot break its contracts, unions argue.
According to the news report, the pension board filed its lawsuit in response to more than 10,000 letters submitted by public workers worried about the financial security of their retirement plans.
Christie initiated the cutting down of two yearly pension payments to cover the cost only of employees currently active in the pension system, claiming that the state cannot to pay for lack of contributions by previous administrations since 1997. Unfunded liabilities for the pension system currently stand at nearly $50 billion.
« Women Narrowing Financial Literacy Gap