Assembly Announces Its
Version of Pension Reform

The Assembly leadership last week announced its version of a pension/health benefits reform plan. The four major components – three bills and a constitutional amendment requiring the state to pay its annual pension obligations – are identical to measures that were introduced in the Senate on Feb. 8. The upper house passed the three bills, by a 36-0 vote, 14 days later.

It is clear that the Assembly plans to move on the issue at a slower pace. Consequently, the reform package will not be on Gov. Christie’s desk by his March 16 budget message, a goal expressed by the administration and Senate leadership.

Release of the actual text of the four Assembly measures is expected on Thursday, March 4. The bills have not been formally assigned to a committee. Most likely, Speaker Sheila Oliver will place them with the Assembly State Government Committee.

On Thursday, another Assembly panel, the Budget Committee, will hold a hearing with invited speakers to discuss the status of New Jersey’s pension system.  The meeting, however, will be discussion only and will not involve action on any bills.

Major components of the Assembly plan include the following bills:

A-2460 (Senate version, S-3) would require public employees to pay 1.5 percent of their salary toward health benefits after the expiration of a current contract. NJSBA had supported an amendment to the Senate version, which extended the mandatory contribution to all school district staff members, whether they are covered by the School Employees Health Benefits Program or a private carrier. It is not clear if A-2460, as introduced, will include that provision.

As in the Senate version, A-2460 would result in any employee contribution going to the local school district – and not to the state – to offset the cost of health coverage. The bill is based on recommendations of the Legislature’s Special Session on Property Tax Reform, which addressed strategies to reduce local tax levies and expenditures.

A-2461 (identical to S-2) would alter the calculations of pension payments. It would roll back a 9 percent increase in benefits put into place in 2001; average the highest five years of salary rather than three years to determine pension payments; and ban future part-time workers from participating in the pension system.

A-2459 (identical to S-4) would cap payment for unused sick leave at $15,000 for all public employees, reflecting the limit already in effect for state employees. It would also limit carry-over of vacation time for public employees.

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