P.O. Box 909 ● Trenton, NJ 08605-0909 ● Phone: 609.695.7600 ● Fax: 609.695.0413 ● Web: www.njsba.org/PI

NJSBA Applauds Direction of Christie Pension Reform

TRENTON, September 15, 2010 —The New Jersey School Boards Association today applauded the Christie Administration effort to make substantial reforms to the state’s pension and employee health benefits programs.

“If we want viable pension and health benefits programs a generation from now, radical changes will be necessary, and that will require flexibility and greater flexibility on the part of our employees,” said Marie S. Bilik, NJSBA executive director.

NJSBA supports system-wide reform of employee benefits that would relieve school districts of burdensome costs and ensure the financial health of the programs. The Association will analyze the Administration’s proposed pension and health benefits reforms and their impact on local school districts.

At a town hall-style meeting in Camden County yesterday, the governor outlined the proposed changes that would affect current employees. According to news reports, the changes announced today are more far-reaching than earlier proposals. They include the following:

• Increase the retirement age from 62 to 65, which would result in a lower-than-maximum pension income for individuals who retire prior to age 65.
• Base retirement income on the five highest, rather than the three highest, salary years.
• Revise the formula for calculating retirement benefits to eliminate the 9-percent across-the-board increase implemented in 2001.
• “Gradually transition” the level of employee contributions to health benefits from the recently established 1.5 percent of salary contribution to 30 percent of premium costs.
• Increase worker contributions to their pension funds from the current 5.5 percent of salary to 8.5 percent.

The governor’s plan would also reduce the pension funds’ projected rate of return on investments, thereby increasing the liability of state and local governments, according to news reports.

Tuesday’s meeting was one of a series of town hall-style session scheduled by Christie to unveil reforms in government ethics, pensions and benefits, economic development and public education. Scheduled for the last week of September, the town hall meeting on education reform will address changes in tenure, seniority and school funding. The date and location have not yet been announced.

The New Jersey School Boards Association is a federation of 588 local boards of education and includes 44 charter school associate members. NJSBA advocates the interests of school districts, trains local school board members, and provides resources for the advancement of public education.