N.J. Assembly panel approves five bills on state employee pension, health care changes

By Lisa Fleisher/Statehouse Bureau
March 18, 2010

TRENTON — An Assembly panel today approved legislation making public worker pension and health care benefits less generous, a move designed to put the state retirement system on sounder financial footing for tens of thousands of future retirees.

The Assembly Appropriations Committee okayed the package of bills after hearing hours of testimony from union leaders, who called the measures an assault on collective bargaining. The teachers, police and fire and state worker unions also mounted a behind-the-scenes effort to slow down or amend the bills; those efforts delayed the hearing for about two hours but failed to produce any amendments.

The full Assembly is scheduled to vote Monday on the pension reform bills. The Senate previously passed three of the five bills unanimously. Two originated in the Assembly and still require Senate action. Gov. Chris Christie has said he would sign them as soon as they reach his desk.

Proposed changes in pension benefits include capping the number of unused sick and vacation days that retiring employees can cash out, requiring all government workers to contribute at least 1.5 percent of their salaries toward health care premiums and making part-timers and lobbyists ineligible for state pensions.

"This is a key step toward fixing our broken pension and benefit system with a comprehensive package that's been studied and analyzed to ensure it will result in saving taxpayer money," Assemblywoman Nellie Pou, the committee chair, said at the start of the hearing. "With this expanded and sweeping bipartisan Assembly package, we will bring real reform and relief to taxpayers and create a more reliable system for public workers."

However, Fred Beaver, director of New Jersey's Division of Pensions and Benefits, told the Assembly Budget Committee this month that the measures wouldn't begin generating savings for the state until fiscal year 2013.

Those opposing the legislation agree that the pension system is unsustainable as is and needs to be fixed. But they point to years of skipped or greatly reduced contributions by the state and say it's time for lawmakers to stop blaming government workers for the pension system deficit.

The state has contributed 10 percent of the amount it was supposed to put into the pension system over about the past two decades, Beaver said. The system is now underfunded by about $46 billion. Besides the state not putting in its share, Beaver attributed the shortfall to poor market performance and pension enhancements the Legislature gave to employees nearly a decade ago.

"What makes you think you can affect our contracts this way and just undermine everything that we've done at the bargaining table?" Franceline Ehret, president of the union representing Turnpike toll collectors, asked the lawmakers.

Bill Lavin, president of the Firefighters Mutual Benevolent Association, blamed Democrats for not standing up for the unions, who he said are being demonized by the new Republican governor.

"Because we have a new king in town, our Democratic friends talk and run," Lavin said.

The Communications Workers of America staged lunchtime protests at locations around the state to express their dismay with Christie's budget, which proposes layoffs and the privatization of unspecified services.

At the Department of Environmental Protections, workers trickled out of their offices, pulled red shirts over their work attire, grabbed red-and-white whistles and signs that read, "Privatization equals bad services, no savings."

About 50 paraded in front of the DEP building on East State Street.

"What no one is talking about is what we have given up before," said Joseph Novemsky, of Communications Workers of America Local 1036. State workers agreed to defer a 3.5 percent wage increase and take 10 furlough days in exchange for a no-layoffs pledge through December.