The Legislature and Governor Christie secured final legislative passage of landmark pension and health benefit reform. The fundamental reforms, passed with bipartisan support from Senate President Steve Sweeney and Assembly Speaker Sheila Oliver, will shake up New Jersey’s out-of-date, antiquated and increasingly expensive pension and health benefit systems. These historic reforms bring to an end years of broken promises and fiscal mismanagement by securing the long-term solvency of the pension and benefit systems, while at the same time achieving critical savings for state and local governments. Pension reform alone will provide savings to New Jersey taxpayers of over $120 billion over the next 30 years, and an additional $3.1 billion over the next 10 years from health benefits reform.
“Together, we’re showing New Jersey is serious about providing long-term fiscal stability for our children and grandchildren. We are putting the people first and daring to touch the third rail of politics in order to bring reform to an unsustainable system,” Governor Chris Christie said. “I want to thank Senate President Sweeney and Speaker Oliver for putting aside politics, committing themselves to reform and remaining unwilling to settle for anything less than the real, viable solutions New Jerseyans have been demanding.”
The reform legislation both secures the long-term solvency of the pension system by achieving a projected funding ratio of 88% within the next thirty years while providing over $120 billion in savings for New Jersey taxpayers. Similarly, the reforms to the health benefit system will save New Jersey taxpayers $3.1 billion over the next 10 years alone while offering greater choice and affordability. The combined savings from these reforms directly translates to real property tax relief for New Jersey families and budget relief for local governments.
Governor Christie continued, “We are once again showing the people of New Jersey that our state is leading the way on the biggest challenges before us and remains unafraid to do what is hard, but necessary. Instead of just talking about reform, New Jersey has come together in a bipartisan way, put our heads down and actually gotten the work done. We are fixing our pension and health benefit systems in order to save them and in the process bringing fiscal sanity to our state.”
In September 2010, Governor Christie first laid out a series of ambitious reform proposals to deal with an immediate combined unfunded liability for the pension and benefit system of $121 billion. Recognized as key cost-drivers for government at the state and local levels, the Governor once again made clear in his 2011 State of the State that modernizing the pension and benefit system in New Jersey was one of the big things to be achieved this year.
Governor Christie will sign the landmark reforms into law on Monday, June 27.