TRENTON — Republicans in the Legislature have proposed bills to reform the state’s pension system based on Gov. Chris Christie’s ideas. The bills would roll back past pension increases, raise the retirement age, and make public workers pay a greater contribution into their pensions. The ideas mirror those Gov. Chris Christie has laid out at town hall meetings since...
Assemblyman Declan O' Scanlon looks at the voting tally board as members of the Assembly vote at the Statehouse in Trenton in this January file photo. O'Scanlon (R-Monmouth) and Assemblyman Gary Chiusano (R-Sussex) proposed a pension reform bill today.TRENTON — Republicans in the Legislature have proposed bills to reform the state’s pension system based on Gov. Chris Christie’s ideas.
The bills would roll back past pension increases, raise the retirement age, and make public workers pay a greater contribution into their pensions. The ideas mirror those Gov. Chris Christie has laid out at town hall meetings since September.
Assemblymen Declan O’Scanlon (R-Monmouth) and Gary Chiusano (R-Sussex) proposed the bill Thursday, while state Sen. Joseph Pennacchio (R-Morris) announced he plans to do so soon.
“The alternative to doing nothing would be catastrophic, to both retirees and taxpayers,” said Pennacchio (R-Morris) in a prepared statement.
The biggest changes:
• Employee contributions would be raised to 8.5 percent. Teachers and public employees currently pay 5.5 percent, while judges pay 3 percent and state police pay 7.5 percent. Other police and firefighters already pay 8.5 percent.
• The way the pensions are calculated would also changed. For most workers, they're currently determined based on the average of the highest three years of salary. That would change to the average of the highest five years, while for police and firefighters it would change from the highest year to the average of the highest three.
• A 9 percent pension bump given to employees 10 years ago would be rolled back for current and future employees.
• The retirement age would be raised from 60 to 65 for most workers. To retire early, employees would need to have accumulated 30 years on the job, rather than the current 25, and would be docked one-quarter of one percent for every month of their age under 65.
• 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.
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 to repeatedly skip payments or shortfund the system. Last year, Christie skipped a $3.1 billion payment.
“We’re in dire shape, and we’re trying to save the system,” said O’Scanlon.
Democrats, who control the Legislature, have proposed their own changes to the pension system to model it after private sector funds. They would create joint labor/management boards to administer the system; force employees to pay more into the system if its fiscal health declines; roll back the pension boost or make employees pay more; eliminate cost of living adjustments for new and recent hires, and force veteran workers to pay more for them.
“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 (D-Gloucester). “The governor's plan is simply more of the same that got us to where we are now.”
Assembly Speaker Sheila Oliver (D-Essex) said she “welcomes all ideas and will certainly review any thoughtful and responsible proposals.”
Editor's Note: An earlier version of this story contained two errors. The story said the proposed changes would not affect already-retired workers. In fact, the proposal to eliminate future cost of living adjustments would affect current and retired workers. The story also incorrectly stated when the bill was introduced. It was first publicized Monday, but introduced in the Assembly on Thursday and the state Senate Monday.
Previous coverage:
• Gov. Christie pushes for Democrats to act on pension, health care reforms
• N.J. pension fund for retired teachers, state workers gains nearly 9 percent this fiscal year
• Star-Ledger editorial: What happens when a pension fund goes broke?
• N.J. Democratic leaders propose overhauling troubled pension system
• N.J. Senate President Sweeney says state must pay into pension system for reform to happen
• Sweeney vows to block Gov. Christie's pension reform bills until N.J. relieves overburdened fund
• N.J. files response to lawsuit challenging public worker pension, benefit changes
• N.J. police, firefighter unions sue to stop pension reform laws