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News & Press: Pension

N.J. Democrats begin final push on controversial pension maneuver

Monday, June 6, 2016   (0 Comments)
Share | 06/06/16

State lawmakers are initiating a final push Monday to get a constitutional amendment mandating contributions to New Jersey's public pension system on the ballot in November. The state Legislature approved the ballot question last year and must pass it again this year with a simple majority in order to qualify for the fall election. The controversial question would ask voters whether they want to constitutionally protect those pension payments. The measure goes before the state Assembly Judiciary Committee Monday morning. 

Absent an amendment, the size of the payment — or whether the state makes one at all — is at the governor and lawmakers' discretion. That's part of the reason the state's portion of the pension system is only about 48.6 percent funded. Two of the largest pension funds for state workers and teachers could go broke in 2024 and 2027, respectively.

Public labor leaders and Democratic lawmakers began seeking the amendment (ACR109) after the state Supreme Court ruled last year that a 2011 law that was supposed to lock the state into a seven-year payment schedule couldn't be enforced.  Unions filed that lawsuit after Gov. Chris Christie veered off that payment schedule within three years. The justices said the law does not create a "legally binding, enforceable obligation" for the state to make payments into the system and the state cannot be bound to such large future payments without voter approval.

The amendment also would force the state to make the contribution into the retirement fund in installments throughout the year. Waiting until year's end costs the state millions of dollars in investment earnings, Sweeney said, and has left it vulnerable to last-minute cuts. Christie twice vetoed such bills, calling it "an improper and unwarranted intrusion upon the longstanding executive prerogative to determine the appropriate timing of payments in order to properly match the timing of large annual expenditures with the timing of the actual receipt of state revenues."



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