Employee Compensation Targeted

Legislators on both sides of the aisle in Trenton are proposing drastic changes in public employee pensions and overall compensation. The ideas arise from the realities of New Jersey’s budget deficit crisis.

Pension Reform A Republican proposal would enact many new policies recommended by a Pension and Benefits Review Task Force late last year. The task force, formed by then-Governor Codey, addressed both the state pension systems and the New Jersey State Health Benefits Program.

Senate Minority Leader Leonard Lance said the proposals would make state retirement benefits similar to those in the private sector. They would—

• Prohibit the boosting of pensions through large salary increases.
  
  
• Ban pensions for public contractors.
  
  
• Consider a 401k-type of retirement plan for new public employees.
  
  
• Base pension calculations on only one job, rather than on multiple public positions.

Last month, Assembly Speaker Joe Roberts unveiled a government reform package that included changes that would curtail pension padding and prevent employees from using multiple public jobs to build pension benefits.

Cut Pay Last week, a trio of Democratic legislators—Senator Stephen Sweeney and Assemblymen Paul Moriarty and Gerald Green— proposed a plan to cut employee costs by 15%, or $700 million. The recommendations include the following:

• Increase the workweek to 40 hours, from 35, for the same amount of pay.
  
  
• Ban payment for unused sick leave at all levels of government.
  
  
• Prohibit the basing of health and pension benefits on more than one public job.
  
  
• Cede the 5% salary increase already negotiated for this year.
  
  
• Allow legislators and public employees to withdraw from the state pension plan.

An administration spokesman said that Governor Corzine has no intention of interfering with contracts that have already been negotiated.

 The 2006-2007 state budget must be approved by both the Assembly and the Senate and signed by the governor by June 30. However, the Legislature has gone past this deadline before.