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

N.J. School Boards Association Applauds Pension and Benefits Reform

TRENTON, February 18, 2010—The state Senate’s proposed pension and health benefits reform package is “long overdue,” a representative of the New Jersey School Boards Association told a legislative committee today.

“The reform package reflects concepts that provide long-term stability for the retirement system,” Barbara Horl of NJSBA’s governmental relations department told the Senate State Government, Wagering, Tourism and Historic Preservation Committee.

Horl focused attention on Senate Bill 3 (Doherty, Whelan), a component of the reform package that addresses employee health benefits and would implement key changes recommended in 2006 by the Joint Legislative Committee on Public Employee Benefits Reform. That report called for all government employees and retirees to contribute toward their health benefits.

Under S-3, public employees would contribute 1.5 percent of their base salary toward the cost of healthcare coverage. In addition, the bill would address the cost of post-retirement medical benefits by requiring contributions from future retirees.

“Controlling health benefit costs has been a serious issue for more than a decade,” said Horl. “This year, for example, two-thirds of new teacher contracts reflect cost-containment of health benefits, such as higher deductibles, tiered coverage and employee contribution to premium.

“There is good reason for the focus on health coverage,” she explained. “Benefits, like health insurance, constitute approximately 30 percent of compensation in school districts, according to the Bureau of Labor Statistics, and health coverage has been the most rapidly increasing area of compensation.”

At today’s meeting, the Senate committee released the entire pension/health benefits reform package, S-2, S-3, S-4 and SCR-1 (a proposed constitutional amendment requiring the state to fully fund the pension system in the future). S-2, S-3 and S-4 are scheduled for a vote by the full Senate on Monday, Feb. 22.

The New Jersey School Boards Association, a federation of district boards of education, advocates the interests of school districts, trains local school board members, and provides resources for the advancement of public education.