Labor Law
Proposed Changes to the Police and Fire Pension System Could Impact You
By: Charles E. Schlager, Jr., Esquire
Pay close attention!! Governor Christie’s pension reform proposals, include reducing PFRS pensions to 60% at 25 years of service, 65% at 30 years of service for any PFRS member with less than 25 years in the system, eliminating cost of living increases, and basing the calculation for pension benefits on an employee’s three highest years rather than final twelve months.
Read MoreCan the State create a law that reduces an employee’s pension? When testifying before the Joint Legislative Committee on Public Employee Benefits reform on August 23, 2006, Peter J. Kelly, principal counsel for the non-partisan Office of Legislative Services, noted that provisions in the United States and New Jersey Constitutions prohibiting the impairment of a contract would prevent any reduction in promised pension benefits The Attorney General’s Office under Governor Corzine’s Administration reached the same conclusion when asked the same question.
The State has skipped a $3.1 billion payment into the public employee pension fund this year and the public employee pension system is currently underfunded by 53.9 billion dollars according to the state treasurer. While Senate President Steven Sweeney has commented that any attempt at pension reform would hinge on the Governor’s agreement to start paying into the system, no legislation is currently pending.
Current cases in Colorado and Minnesota, where the pension systems are in better shape than New Jersey’s, address whether those states’ decisions to cut cost-of-living increases are justified because pension funds are headed toward bankruptcy and cuts in benefits will preserve the financial stability of the systems. Stay tuned as those decisions could impact what happens here.
For further information on this case please contact Charles E. Schlager, Jr., Esq. at (856) 547-7888.
