Task
force to analyze New Jersey benefits
tab
Thursday, May 26, 2005 • BY JOE
DONOHUE AND DUNSTAN MCNICHOL • Star-Ledger
Staff
An eight-member task force headed by a
major Democratic donor will examine the state's soaring
fringe benefit costs under an executive order signed
yesterday by acting Gov. Richard J. Codey.
One day after state Treasurer John
McCormac warned lawmakers that the state's pension system is
underfunded by at least $25 billion, Codey named a study
group that includes four business leaders, two professors
and two cabinet members.
Chairing the panel will be Philip Murphy
of Red Bank, a retired partner of Goldman Sachs who has
donated more than $1 million to state and local Democrats
during the past five years, according to the Election Law
Enforcement Commission and Center for Responsive Politics.
He is a former colleague of Sen. Jon Corzine (D-N.J.), the
Democratic candidate for governor this fall and retired
Goldman Sachs chairman.
Murphy previously led a three-person
panel that advised Codey on other budget matters.
McCormac and Labor Commissioner Thomas
Carver are on the new panel, along with:
- Richard Quinn, managing
director-human resources for Public Service Enterprise
Group.
- David Alai, vice president-corporate
human resources, Sharp Electronics Corp.
- Thomas Meyers, senior vice president
and chief financial officer, NJM Insurance
Group.
- Paula Voos, chairwoman, Labor Studies
and Employment Relations Department, School of Management
and Labor Relations, Rutgers University.
- William Rodgers, III, professor of
public policy, Edward J. Bloustein School of Planning and
Public Policy and chief economist, John J. Heldrich
Center for Workforce Development.
Codey has asked the panel to review laws
covering benefits and pensions for state and local
government workers and recommend ways to control their
cost.
A theme in his January State of the State
address, employee benefits are expected to make up 14
percent of the pending budget that takes effect July 1. Four
years ago, they consumed less than 9 percent. Projections
indicate they will make up 20 percent within five
years.
"This is a problem we can no longer
ignore. We need people with real working experience to
provide options for the state to consider," said Codey, a
Democrat.
State lawmakers began planning their own
response to the newly prominent crisis in pension funding.
Assemblyman Neil Cohen (D-Union) wants to create a separate
17-member commission that would include organized labor
representatives in the benefits review.
Assemblyman Reed Gusciora (D-Mercer),
whose districts includes many state workers, asked the
nonpartisan Office of Legislative Services to review the
potential savings from a menu of possible changes to the
pension system that would affect new employees. Among other
things, Gusciora asked OLS to estimate how much money would
be saved by replacing the state's current "defined benefit"
retirement system with a 401(k) type system of defined
contributions.
He also sought information on the
potential savings that would be realized by basing an
employee's pension on the average salary of their final five
years of work, instead of the current three-year average and
by scrapping the current system of awarding a year of
pension system credit for any year in which an employee
earns at least $1,500, and replacing it with a requirement
that a worker put in at least 12 hours per-week to earn
pension credit.
Joe Donohue covers state government and politics. He may
be reached at jdonohue@starledger.com or (609) 989-0208
© 2005 The Star-Ledger. Used by NJ.com with
permission.
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