Unjustified PerksTake Toll on NJ Turnpike Authority Benefits Costs

October 27, 2010 (PLANSPONSOR.com) - The New Jersey Turnpike Authority has approved four measures to cut the cost of employees' pay and benefits.

NewJerseynewsroom.com reports that the measures are in response to a report by the State Comptroller’s Office that NJTPA squandered at least $43 million on unnecessary perks, unjustified bonuses, inappropriate sick leave payouts, and a poorly managed health benefits plan. The measures eliminate the perks of toll-free passage for employees commuting to and from work; annual “cash-in” by non-union employees of unused sick and vacation time; future increases in longevity payments to non-bargaining employees for years of service; and separation payments made to non-bargaining employees who retire with ten or more years of full-time service.  

The State Comptroller’s audit found that the Authority granted approximately $30 million in bonuses to its employees and management in 2008 and 2009 without consideration of performance. For example, in addition to paying employees overtime for removing snow and working holidays, the Authority gave out additional “snow removal bonuses” and “holiday bonuses,” according to the news report.  

Employees that belonged to one collective bargaining unit were also paid bonuses for working on their birthday.  

The audit also found that public toll dollars were used to set up an employee relations account that provided $12,000 to sponsor an employee bowling league, $89,000 to provide scholarships for children of Authority employees, and $10,000 to cover costs for a toll operators event that none of the Aauthority’s employees actually attended.  

NJTPA employees also received free E-Z Pass transponders to commute to and from work without incurring the cost of any tolls on the turnpike or Garden State Parkway, an estimated annual cost of $430,000.  

Contrary to standard practice for state workers, Authority employees were also given the option to cash out a portion of their unused sick and vacation days at the end of each year, the news report said. In doing so, the audit found, the workers are effectively able to circumvent the current $15,000 limit for sick leave payouts upon retirement. During 2008 and 2009, the Authority expended a total of $3.8 million for annual sick leave payouts.  

The audit also found the Authority could have saved millions of dollars if it had participated in the state Health Benefits Program instead of using a private carrier for health insurance. Specifically, the report said had NJTPA used the state plan from 2007 to 2010 it could have saved up to $12.8 million. Instead, NJTPA never performed a comparative analysis to determine which health plan was most cost-effective.

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