New Jersey Public Safety Officers Law Blog : New Jersey Public Safety Employee Lawyer & Attorney : Pellettieri, Rabstein & Altman Law Firm : Workers Compensation, Discipline Representation for Police & Firefighters : New Jersey

As reported by nj.com, the state’s top lawmakers said Monday they cleared a significant hurdle in efforts to overhaul public employee benefits after agreeing to a plan that shifts more medical costs onto workers while protecting future collective bargaining rights.

The spotlight now turns to Governor Chris Christie, who has been uncharacteristically quiet as Assembly Speaker Sheila Oliver and Senate President Stephen Sweeney hammer out the final details of a controversial bill overhauling pension and health benefits that is scheduled for its first legislative hearing on Thursday. 

Sweeney endorsed a plan Monday being promoted by Oliver that would increase health benefits contributions for all of the state’s 500,000 public workers but allow unions to seek lower rates at the negotiating table starting in 2014. “The sunset provision is certainly fair and is another example of the kinds of compromise we have been able to achieve with this legislation,” Sweeney said in a written statement.

A spokesman for Christie, Michael Drewniak, said the governor had no comment on the sunset provision or the broader proposal. Christie has spent the last 18 months as governor making his case for overhauling what he has contended are overly lavish pension and health benefits for the state’s public employees, often resorting to blunt criticism of them, their union leaders and Democratic lawmakers.

Sweeney and Christie recently agreed on a plan that shifts more of the costs of pensions and health benefits to public workers in the form of increased contributions, along with pushing back the retirement age and freezing cost-of-living adjustments for retirees. Leaders of the state’s public unions have mounted a fierce opposition to the proposal, urging members to reach out to legislators, lobbying in the halls of the Statehouse and issuing blistering news releases questioning lawmakers’ commitment to collective bargaining.

Sweeny has decided to bring the bill to the Senate floor despite lack of support from Democrats, and will rely on Republicans to approve the measure. Facing similar opposition, Oliver has said she will not move the bill without “significant” support from Assembly Democrats, and it’s unclear whether the sunset provision has resulted in enough support to overcome that self-imposed threshold.

The sunset provision may attract lawmakers who were on the fence, but it will probably do little to persuade staunch supporters of collective bargaining, like Assemblywoman Bonnie Watson Coleman, whose district includes many state employees. “Any legislative attempt to erode the rights of public workers is a mistake,” said Watson Coleman.

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As reported by nj.com, Senate President Stephen Sweeney said today he plans to introduce legislation to increase health and pension benefits payments for public workers and that the Budget and Appropriation Committee will hold a hearing on it next week.

Sweeney and Governor Chris Christie have reached an agreement on the measure, but Assembly Speaker Sheila Oliver has not signed onto it. Under the proposal, police and firefighters would pay an additional 1.5 percent of their salaries toward their pensions, and non-uniform public workers would immediately pay an additional 1 percent and eventually reach an additional 2 percent, for a total of 7.5 percent of their salaries.

Workers would also pay more for their health benefits on a sliding scale, with higher income workers paying up to 30 percent of their premiums and the lowest-income workers paying 3 percent. 

In recent interviews, several Assembly members called for the measures to be split into separate bills, one dealing with pensions and the other with health benefits. “Of course they want to do the pension bill, you know, that’s what the unions want,” Sweeney said. “They want their pensions fixed, but they don’t want to have to deal with the health care component. You know who needs the health care component. The taxpayers.” Sweeney also said, “This is not about being unfair to the unions, it’s about being unfair to the taxpayers.”

Assemblyman Jack McKeon said he supports splitting the bills because lawmakers have traditionally dealt with pension issues in the past, while unions negotiated health benefits. “The concept of combining these is foreign,” he said. Asked about Sweeney’s comments, McKeon responded, “We don’t need two bullies.”

A short time later, Oliver issued a written statement that said she was “committed to getting it done.” She added, however, “My caucus had legitimate questions after seeing the details of this concept for the first time. Working through these concerns is reasonable and appropriate. Reforming the public worker pension and health insurance system at all levels of government to bring relief to taxpayers while respecting worker rights is my priority.”

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As reported by nj.com, Governor Chris Christie and Senate President Stephen Sweeney were poised to announce an agreement on a plan to overhaul health and pension benefits for public employees, but were stymied after the compromise received a chilly reception in the Assembly. “We are not there yet,” said Speaker Sheila Oliver, who found herself wedged between two of the state’s most powerful politicians.

Word of the agreement also drew quick opposition from public labor unions across the state, who said it represented an attack on collective bargaining rights by taking away their ability to negotiate health benefits. 

The plan would require the state’s 500,000 public employees to contribute more money for their pensions and health benefits than they currently do and freezing cost-of-living adjustments for retirees until the pension funds stabilize. The overhaul, which lawmakers have agonized over since Christie took office a year and a half ago, would address two of the most costly issues facing the state.

New Jersey has promised $66.7 billion in medical benefits to current and future retirees, the highest tag among the 50 states, but has not set aside a single penny to pay for it. At the same time, the state has about 66 percent of the assets needed to meet its future pension obligations, ranking it among the worst funded in the nation. 

Oliver outlined the plan to caucus members in a closed-door meeting, where many told her that while changes in the pension plan were needed, they agreed with union leaders that the health benefits should be negotiated and not legislated. More than a dozen union leaders stood outside the room where the Assembly Democrats had gathered, hoping the members of lower chamber would provide a bulwark against the part of the package that addresses health benefits.

Facing a similar lack of support, Sweeney has lined up a small group of Democratic senators who have agreed to join with Republicans to make sure there are enough votes to pass the overhaul, which will be wrapped up in one bill. In a written statement, Sweeney said the plan would save taxpayers $120 billion over an unspecified period of time, while protecting the pensions and health benefits of low- to middle-income workers. Notably, the statement did not include any details about the plan, such as how it would save taxpayers $120 billion.

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As reported by nj.com, public workers would pay more for their pension and health benefits under a deal struck between Governor Chris Christie and Senate President Stephen Sweeney. Under the deal, most public workers would immediately pay an additional 1 percent of their salaries for their pensions, while police and firefighters would pay an additional 1.5 percent. The State would pledge to increase its pension contributions to legally required levels.

Workers would pay up to 30 percent of their health care premiums after a four-year period. But, unlike Governor Christie’s original proposal, the payments would be tiered based on income, so employees with lower salaries pay less.

CWA New Jersey Director Hetty Rosenstein declined to discuss the specifics of the proposal, but said she’s opposed to legislation that “undermines collective bargaining.” “This proposal attacks collective bargaining. It’s absolutely unaffordable. And it does not one thing-there’s no indication that it does anything to address the high cost of health care,” she said. 

Public unions want health benefits to be decided through collective bargaining, not legislation. “We feel there is an avenue in the Assembly where we can protect our collective bargaining rights,” said Dominick Marino, president of the Professional Firefighters Association of New Jersey.  

Assemblywoman Joan Quigley said there is vocal opposition to health benefits legislation inside her caucus. “The Assembly is really just learning for the first time of the deal. There are millions of questions, and right now I don’t think there’s a consensus either way,” she said.

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As reported by nj.com, a double-dipping pension practice that stoked outrage earlier this year may become a thing of the past. The Senate Budget and Appropriations Committee unanimously approved two bills to prevent elected officials from collecting their pensions without actually stepping down from their jobs. The bills would only affect elected officials who have not yet taken advantage of the loophole, which has been broadened since its inception in 1985.

Many elected officials and public employees retire, start collecting a pension, then get a different government job. But the law targeted by the committee allows elected officials like lawmakers and sheriffs to start collecting a pension while still holding the same job and collecting a paycheck, as long as they are eligible to retire and once had a different public job. Five lawmakers, some sheriffs and county surrogates have used the loophole.

Although the overall dollar figure involved is small, state Sen. Steve Oroho, the bill’s sponsor, said it’s important to eliminate lucrative exceptions for elected officials. “The perception and appearance is what really matters,” he said. “It’s an issue of the public trust.”

The bills had been stalled for years until news reports in April said Essex County Executive Joseph N. DiVincenzo, Jr. had been using the loophole since August. He had “retired” three months before winning his unprecedented third term in office. State records peg his monthly pension at almost $5,740, while his salary was $153,207 last year.

The bill now goes to the full Senate for a vote. Similar bills in the Assembly have not yet advanced.     

DiVincenzo has defended his pension as legal and in the best interests of his family. In a statement, he said the committee’s decision “represents a noteworthy shift” in the Legislature. “Pension costs contribute to financial challenges being faced by state, county, and municipal governments,” he said. “I hope today’s vote enables us to continue the discussion and find additional ways to provide relief.”

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As reported in the Trentonian on February 9, 2010, legislation requiring public workers to assume a portion of their health benefits costs and providing relief to the State pension system has been introduced. The package of bills introduced follows vows by Democratic leaders in the State Senate to revisit pension reform recommendations made four years ago.

One bill requires state, local, and school district workers to contribute at least 1.5 percent of their salary toward their health care costs. Another caps at $15,000 the amount of unused sick time that can be cashed in at retirement. A third bill repeals the 9 percent pension benefit increase put in place in 2001 by changing the way pensions are calculated. The last bill in the package requires the State to make its annual payment to the pension system, not skip it or short it, as has been the custom in recent years.

Most of the proposals would affect new hires, not those already in the pension system. However, the measure requiring public workers to contribute toward their health care costs would take effect when their current contract expires. No figures were immediately available on the potential savings. 

The pension system is underfunded by about $34 billion and is in danger of becoming insolvent unless fixes are made. The proposals were first made in 2006 after the Legislature met in special session to come up with ways to lower New Jersey’s property taxes, which average $7,045 a household and are the highest in the country. Pension and health care costs are major drivers of property taxes. 

Former Governor Jon Corzine halted some of the legislative-driven reforms, arguing that they should be part of the collective bargaining process. The State’s Unions, which have long resisted pension reforms, supported Corzine’s position. 

Other highlights of the bills include: (1) limiting enrollment in the pension system to those considered full time; (2) enrollment in a defined contribution plan for part-timers; (3) calculating pension benefits based on the 5 highest years of salary, instead of the 3 highest years, for future public workers, and basing benefits on the 3 highest years, instead of the highest year, for future State Police employees; and (4) allowing pension benefits based on one job, not multiple positions.  

Please check this blog periodically to ascertain updates with regard to this proposed legislation. Were the bills ultimately passed, there is no doubt they would have a drastic effect on New Jersey Public Safety Officers.

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Following up on our previous entry, this article will help our readers understand the criteria that must be met in order for a public employee to qualify for an ordinary or accidental disability pension within one of the following State pension systems, the Public Employees Retirement System, the Teachers Pension and Annuity Fund, the State Police Retirement System, and the Judicial Retirement System. While these pension plans are similar in defined benefits and criteria for eligibility, each has their own specific nuances that are particular to the membership they serve. 

Accidental v. Ordinary Disability Benefits

Public Employees Retirement System and Teachers Pension and Annuity Fund

In accordance with the Public Employees Retirement System (“PERS”) and Teachers Pension and Annuity Fund (“TPAF”) handbooks, in order to qualify for an ordinary disability retirement, an employee must:

·         Have an active pension account;

·         Have 10 or more years of New Jersey service credit;

·         Be considered totally and permanently disabled; and

·         Submit medical reports certifying the disability.

In order to qualify for an accidental disability retirement, a member must:

·         Be an active member of PERS or TPAF on the date of the “traumatic event”;

·         Be considered totally and permanently disabled as a result of a “traumatic event” that happened during and as a direct result of carrying out the member’s regular or assigned job duties;

·         File an application for disability retirement within five (5) years of the date of the “traumatic event”; and

·         Be examined by physicians selected by the retirement system.

If an employee claiming membership to either one of these retirement funds qualified for accidental disability, his/her annual retirement allowance will be 72.7% of their salary at the time of the “traumatic event.”

Should the public employee be receiving periodic workers’ compensation benefits, the accidental disability retirement benefits will be reduced dollar for dollar by the periodic benefits paid after the retirement date. However, the retirement benefit is not reduced by any Social Security or private insurance benefits that may be payable.

The New Jersey Division of Pensions and Benefits reports accidental disability retirement benefits as exempt from federal income tax. The benefits are also

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