As reported by nj.com on February 8, 2011, Governor Christie’s plan to drastically change the State’s troubled pension system was introduced by Republican lawmakers on February 7, 2011, but Democrats who control the Legislature indicated they will push their own plan instead.
Assemblymen Declan O’Scanlon and Gary Chiusano sponsored Christie’s proposals in the lower house, while State Senator Joseph Pennacchio said he would introduce them in the upper house. The 139 page bill mirrors ideas Christie first laid out in the fall and would only affect future retirees. “We’re in dire shape and we’re trying to save the system,” said O’Scanlon.
The State’s pension fund faces a $54 billion shortfall, brought on by investment losses, increased benefits, growth in the number of public employees and the State’s decision over the years to repeatedly reduce or skip payments. Last year, Christie skipped a $3.1 billion payment. The proposals would not affect already-retired workers. Among the biggest changes:
· All public employees would pay 8.5 percent of their wages towards pensions
· The retirement age would be raised to 65 for most workers. To retire early, employees would need to have accumulated 30 years on the job, rather than 25, and would be docked one-quarter of 1 percent for every month of their age under 65
· Pensions for most workers would be calculated on a five-year average of their highest salaries, up from three
· The 9 percent pension bump given to employees 10 years ago would be rolled back for current and future employees
· Police and firefighter retirees would see their maximum benefit shrink from 70 percent to 65 percent of their salaries
· Annual cost of living adjustments would be eliminated
Democrats also promoted their own proposal outlined in January. That plan would create joint labor/management boards to administer the system; force employees to pay more if the fund’s fiscal health declines; roll back the pension boost or make employees pay more for it; and eliminate cost of living adjustment for new and recent hires.
“The Senate President has put forward a plan that would blow up the pension system as it currently exists and recreate it so it works and is no longer a political football,” said Chris Donnelly, a spokesman for Senate President Stephen Sweeney. “The Governor’s plan is simply more of the same that got us to where we are now.”