As reported on NJ.Com, yesterday, Mary Jacobson, a State Superior Court Judge blocked an attempt by the Trustees of New Jersey’s largest pension funds to revise their suit seeking billions of dollars from the State to fund the pension system in light of a recent state Supreme Court decision. The state’s highest court in June found the State of New Jersey had no “legally binding, enforceable obligation” to make payments into the pension system of a State Trooper’s union. The ruling had broad implications for a number of lawsuits filed by other public workers unions.
Labor unions and the trustees of the big three pension funds — the Public Employees’ Retirement System, the Teachers’ Pension and Annuity Fund and the Police and Firemen’s Retirement System — each filed suit after Christie slashed billions of dollars from planned pension contributions. The amended complaint, which is separate from the unions’ lawsuit that was heard by the Supreme Court, is the latest in more than a year of legal fighting over pension funding and comes as the labor unions consider whether they will petition the Supreme Court of the United States for review.
In prosecuting the claim, public worker unions had stated that the 2011 pension law created a contract with the state, under which the Governor and Legislature agreed to a funding schedule that would gradually increase contributions into the retirement system to reduce the unfunded liability. Lawyers for the state, meanwhile, argued that the constitutional clauses that dictate how the state spends money and accrues debt supersede any so-called contractual right. The State’s argument was proffered and accepted by the State Supreme Court despite the fact that the plan to increase funding was based on an accord reached by Governor Christie and the Legislature that mandated public employees to make significant increases to healthcare and pension contributions. The Supreme Court agreed, siding with Christie in finding that the state cannot be bound to any expense equaling more than 1 percent of the budget, or say, $338 million of this year’s $33.8 billion budget.
The amended complaint that was dismissed by Judge Jacobson challenged whether the state really is off the hook. It argued that the State Supreme Court declared only a promise to make the appropriations unenforceable. The new argument hinges on a separate promise found elsewhere in the law. However Jacobson stated that the amended suit “seems like an end run around the Supreme Court’s decision.” “To me, there’s no sense in going forward in this case,” Jacobson said following oral arguments at the Superior Court in Mercer County. As this issue progresses on appeal, we will keep our readers posted.