New Jersey State Senate President Thinks His Job On Pension Reform Is Done

State Senate President Stephen Sweeney sees his job as done on pension reform in New Jersey:

There may be a clinical term for this type of behaviour and Senate president Stephen Sweeney might not technically be classified a lunatic but anyone believing that the pension aspect of this latest reform bill “clearly fixes the pension for 800,000 people” is some combination of liar and naif.

The elimination of Cost-Of-Living-Adjustments is the only significant benefit reduction and that faces serious legal challenges.

The language that is supposed to force the state to make its Annual Required Contribution (ARC) remains weak:

Each member of the Teachers’ Pension and Annuity Fund, the Judicial Retirement System, the Prison Officers’ Pension Fund, the Public Employees’ Retirement System, the Consolidated Police and Firemen’s Pension Fund, the Police and Firemen’s Retirement System, and the State Police Retirement System shall have a contractual right to the annual required contribution amount being made by the member’s employer or by any other public entity.

The contractual right to the annual required contribution means that the employer or other public entity shall make the annual required contribution on a timely basis to help ensure that the retirement system is securely funded and that the retirement benefits to which the members are entitled by statute and in consideration for their public service and in compensation for their work will be paid upon retirement. The failure of the State or any other public employer to make the annually required contribution shall be deemed to be an impairment of the contractual right of each employee.

The Superior Court, Law Division shall have jurisdiction over any action brought by a member of any system or fund or any board of trustees to enforce the contractual right set forth in this subsection. The State and other public employers shall submit to the jurisdiction of the Superior Court, Law Division and shall not assert sovereign immunity in such an action. If a member or board prevails in litigation to enforce the contractual right set forth in this subsection, the court may award that party their reasonable attorney’s fees.

Surely there is some government lawyer who can spot a loophole and, failing that, there is always the actuary to further low-ball the ARC as necessary and, failing that, we have the New Jersey Supreme Court with a history of providing rulings that are more convenient than legal.

And how have those committees overseeing Taft-Hartley (Union) plans worked out?

This new law will not forestall the bankruptcy of the New Jersey retirement system.  If the COLA elimination sticks it may defer it a few months but real reform would look completely different.  It would force New Jersey to start contributing $10 billion (not $1 billion) a year or it would reduce accrued benefits (even for retirees) by 60%.  That is not going to happen so politicians need to lie, even to themselves, about the efficacy of what they can get done….which isn’t much.

This post originally appeared at Burypensions Blog.

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