NJ Transit Announces 401(k), Salary Cuts

March 4, 2010 (PLANSPONSOR.com) - NJ TRANSIT announced that it has implemented an emergency spending freeze, and that it will reduce its workforce by more than 200, rollback spending on retirement accounts, and cut executive salaries.

According to the announcement, the corporation’s contributions to employee 401(k) accounts will be reduced by one-third, and executive salaries will be cut 5%. These reductions follow hiring and salary freezes that began last year, as well as unpaid furloughs for administrative (non-agreement) employees, the announcement said.

A total of more than $30 million in reductions have been identified by TRANSIT officials to help solve a combined $300 million budget gap projected for FY 2010 and 2011.  The force reduction represents about 2% of the total workforce, and includes both union agreement and non-agreement employees.

Officials also have identified cost reductions in parts, fuel, utilities, and contracts that will be renegotiated to avoid escalations. The emergency spending freeze allows the agency to halt spending that is not directly tied to operations or that is not critical for safety.

The agency said it is also continuing to develop fare and service change plans which will be announced next week.