Jaime L. Brockway of IFAwebnews.com reports that more than 20 New Jersey public employee unions and individuals sued Gov. Chris Christie and other state officials to fight a law they say illegally reduces pensions and health benefits.
The civil complaint, filed Aug. 31 in federal court in Trenton, N.J., asks a judge to block enforcement of Public Law 2011, Chapter 78, enacted June 28, and order the state to fully fund the pension systems.
The suit charges that the state illegally took away contractual benefits by eliminating the Cost of Living Adjustment (COLA), which is part of the pension formula for most New Jersey public employees, according to the New Jersey Education Association (NJEA), one of the organizations against the law.
The suit says that certain provisions, including requiring future retirees to pay a “substantial” percentage of their health insurance premiums and requiring larger pension contributions from employees, also violate the state and federal contract rights of the affected employees.
The lawsuit also targets the state’s choice phase in its contributions over seven years rather than paying its full actuarially required contribution immediately.
“We are deeply disappointed that Governor Christie and the Legislature chose to pass a law which so clearly violates the legal rights of school employees and other public employees,” said NJEA President Barbara Keshishian in a statement. “Rather than working in good faith to arrive at a negotiated solution to the pension crisis they have created, they chose political grandstanding. What our members have been promised and have already worked to earn cannot be taken away by the governor or the Legislature simply because politicians have failed to do their part to keep the pension system on a sound footing.”
The legislation raises the minimum retirement age to 65 from 62 and freezes annual cost-of-living adjustments.
The overhaul was designed to restore the state pension system to 80% funding in 30 years, up from the current 62%, according to Bloomberg.
Workers will pay 3% to 35% of their health insurance premiums, based on income.
The law is meant to fix the pension system, according to Senate President Stephen Sweeney (D-Salem, Cumberland and Gloucester), the bill sponsor and a defendant in the lawsuit.
“We have structural problems in the pension system due to lack of payments [in the last 10 years] by the state government but also through overly generous benefits that were granted,” Sweeney told Bloomberg. “We had to fix it.”
Collective bargaining over health insurance will return after four years and cost-of-living-adjustments will resume when the fund is restored to health, according to Sweeney. He said the pension overhaul created labor-management boards, did not reduce payouts and required funding of future benefit increases.
There are about 802,000 current and retired employees in the New Jersey pension system, according to Bloomberg.
Other plaintiffs include unions for firefighters, police, teachers and other public employees