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Wimberly, Cryan & Singleton Bill Protecting Employee Pension Payments from Being Hijacked by Christie Admin Gains Assembly Approval

Measure Would Bar Administration from Using Increased Employee Contributions to Offset State’s Obligation

By a vote of 51-28, the General Assembly on Thursday approved legislation sponsored by Assembly Democrats Benjie Wimberly, Joseph Cryan and Troy Singleton to prevent Gov. Christie and future administrations from trying to hijack the increased pension contributions made by public employees to offset the contributions owed by the state.

“Hard-working, rank and file public employees have stepped up for the last three years and contributed more to help restore solvency to their retirement systems under the pension and benefit reforms that were passed in 2011,” said Wimberly (D-Bergen/Passaic). “It’s unacceptable for the administration to try and manipulate the books and pawn those contributions off as the state’s.”

Specifically, the bill (A-3310) provides that beginning with the July 1, 2015 actuarial valuations of the five state-administered pension systems, any increased employee contributions resulting from the 2011 pension and benefits reform law will be credited as additional contributions to those retirement systems and cannot not be used to reduce the normal contributions required of the state or other public employers.

Under Gov. Christie’s proposed FY 2015 budget, the administration incorporated a revised methodology that used the increased employee contributions to offset and reduce the amount the state must pay into the pension systems by approximately $250 million.

“In 2011 we were told the only way to save the public employee retirement systems was for everyone to roll up their sleeves and pitch in more,” said Cryan (D-Union). “Struggling public employees continue to meet their new obligations amidst a lingering recession. It’s only fair and just that the state live up to its end of the bargain too.”

“The state has a legal obligation to make increased payments into the public employee retirement systems,” said Singleton (D-Burlington). “It also has a moral obligation to do right by the employees who have stepped up to the plate and fulfilled their end of the bargain. Bailing on this responsibility would be a dereliction of duty.”

The reforms passed in 2011 by the legislature were designed to boost the solvency of the state-administered pension systems by increasing the percentage of salary employee members contribute as follows:

– Teachers’ Pension and Annuity Fund, from 5.5% to 6.5%, with an additional contribution of 1% to be phased-in in equal increments over a period of seven years;

– Public Employees’ Retirement System, from 5.5% to 6.5%, with an additional contribution of 1% to be phased-in in equal increments over a period of seven years;

– Judicial Retirement System an additional 9% to be phased-in in equal increments over a period of seven years;

– Police and Firemen’s Retirement System, from 8.5% to 10%; and State Police Retirement System, from 7.5% to 9%.

Under the bill that has been approved, the pension funding yielded from these increases will not offset the state and local public employer shares of the normal cost of those systems but will be credited as additional contributions by employees.