Judge Rules State Pension, Benefits Overhaul Does Not Apply To NJ Judges

 

As reported by nj.com, Superior Court judges and Supreme Court justices, protected by the state Constitution from salary reductions while in office, are exempt from Governor Chris Christie’s new pension and health benefits plan requiring them to contribute a larger share of their salary, a judge ruled yesterday. 

Christie immediately lashed out at the ruling handed down by Superior Court Assignment Judge Linda Feinberg and indicated the state would appeal. “This outrageous, self-serving decision, where a judge is protecting her own pocketbook and those of her colleagues, is why the public has grown to have such little faith in the objectivity of the judiciary,” the governor said in statement issued by his office.

In reaching her decision, Feinberg concluded that the increased contributions Christie is requiring of judges and almost 700,000 current and retired state employees is an indirect reduction in pay that the Constitution specifically forbids for judges and justices. Feinberg also rejected the State’s contention that the increase is similar to a tax and is not discriminatory because it applies to all state employees.”

Superior Court Judge Paul DePascale of Hudson County filed the lawsuit challenging the measure in July after Christie signed legislation on June 28 increasing judges’ pension contributions from 3 percent to 12 percent of their annual salaries and requiring them to pay 35 percent of their health care premiums.

State law allows judges to hear cases that directly affect them when there is no other appropriate court to address the matter. The case did not go to U.S. District Court because it does not involve any federal allegations.

It is not the first time Christie has tangled with the courts, though this time he is seeking redress from the very body he has had sharp words for. He has repeatedly said the state Supreme Court justices have overstepped their bounds by influencing policy and budget decisions best left to the governor and the Legislature.

In making her ruling, Feinberg said the salaries cannot be touched, even in difficult economic times, and noted the provision is in the Constitution to protect judges from potentially vindictive acts of the executive and legislative branches of government.

Two weeks ago a group of state employees tried to tie their own legal challenge to the changes in pensions and benefits to DePascale’s case, but Feinberg ruled the two were not closely enough related to consolidate them.

U.S. State Pensions Face Overhaul in Bad Economy

 

Recently, Karen Pierog and Jim Christie published an article addressing state pension overhauls during these tough economic times. Specifically, the article examines how Illinois, California, and other states have instituted reforms to combat increasing and debilitating unfunded pension liabilities. 

According to the article, the National Association of State Retirement Administrators found a nearly $443 billion collective unfunded liability for the 125 state, local government, and teacher pension funds in its most recent survey. The situation is likely to worsen as the recession punches holes in budgets nationwide and causes big investment losses for defined-benefit pension plans that pay out a fixed income. As a result, it is suggested that the economic downturn may also lead to more reforms as politicians and taxpayers realize they can no longer afford plush pensions compared to defined-contribution 401(k) plans in the private sector which pay income based on variable investment returns. 

This year, laws were enacted in Georgia, Louisiana, Nevada, New Mexico, Rhode Island, and Texas that reduced benefits for new employees. On the local level, New York City has repeatedly trimmed pension benefits for new hires by creating pension tiers. Illinois and California are among the states evaluating various reform suggestions and/or establishing pension commissions in order to adequately address the problem. In all, it is clear state pension systems are facing a major overhaul in response to the poor economic climate.

This article is of particular importance because the status of the New Jersey public pension system is vital to every resident of this state and especially crucial to public safety employees. Consequently, all current or retired New Jersey public safety officers should read this article in order to fully understand the measures being taken across the country to rectify the problems that have become prevalent in defined-benefit pension plans. To read the full article, click on the following link.