As reported by nj.com, dozens of unions and public workers filed suit against the newly enacted pension and health benefit overhaul in federal court yesterday. The 58-page, 17-count suit charges the state violated the state and federal constitutions by suspending cost of living adjustments for at least 30 years, failing to make full payments into the pension system for the last decade, and handing administration of the systems to committees. The suit, whose plaintiffs include the NJEA, the CWA, and all the major public safety unions, charges that the law is a “violation of substantive and procedural due process rights.”  

“This lawsuit is about basic fairness and justice. Governor Christie and the Legislature passed a law which illegally takes away benefits that school employees and other have already earned through their service to the people of New Jersey,” said NJEA President Barbara Keshishian. “Perhaps most troubling is that this legislation amounts to a classic ‘bait and switch’ for current retirees. These are people who worked their entire careers believing in the promise that their pension benefits would be honored. They’ve already retired, and are living on a fixed income. Now they’re being told that the state is reneging on its promise.”

The law, pushed through the Legislature with the help of Democratic legislative leaders and signed by Governor Chris Christie on June 28, seeks to cut costs because the pension and health benefit systems are underfunded by a combined $120 billion. Unions fiercely protested against the bill, saying it prevented them from collectively bargaining their medical benefits, which will be set by a panel of union members and state managers.

All public workers-including police officers, firefighters, and teachers-will pay more for their pensions and health benefits. It would suspend cost-of-living increases to pensions for retirees and raise the retirement age for new workers.

Employees have “non-forfeitable rights” to cost-of-living adjustments, says the suit, which includes eight retirees as plaintiffs. “While employed and when they retired, these Class Plaintiffs fully expected and relied upon the promise that they would receive the promised required COLAs every year,” it reads.

It also says the state’s underfunding of the pension system violates workers’ contractual rights, and that forcing workers with fewer than 20 years of service to pay more for health benefits “violates the promises made to, and the contractual property rights of, active public employees with less than 20 years of credited service.”