NJ Public Employees Ready to Hit Gov. Christie with New Pension-Funding Suit

Unions want Christie back in court to explain why he plans to skimp on billions of dollars in committed payments in coming fiscal year

Credit: C-Span via NewsWorks
New Jersey public-employee unions, already in court with Gov. Chris Christie’s administration over the state pension contribution in the current fiscal year, say they are preparing to file a new lawsuit challenging Christie’s planned payment into the pension system for the next fiscal year.

A total of 14 unions representing teachers, firefighters, police officers, and other public workers said their attorneys are readying the new suit to contest Christie’s plan to make a $1.3 billion employer contribution into the pension system during the fiscal year that begins July 1. Christie announced that contribution amount while putting forward his new, $33.8 billion budget last week.

True, a $1.3 billion pension contribution would be the largest ever made by the state, but it’s far below the roughly $3 billion payment the state committed to make after Christie signed benefits-reform legislation in 2010 and 2011.

Though the leaders of the New Jersey Education Association said they were open to discussing some aspects of a sweeping new benefits-reform proposal Christie put forward last week, they were among the union officials who called for the new lawsuit over state pension contributions yesterday. The pension system covers the retirements of roughly 773,000 current and retired employees.

“It’s time to return to the rule of law in our state and to protect the future of hundreds of thousands of New Jersey families,” said NJEA President Wendell Steinhauer.

It’s the 2010 and 2011 legislation that formed the basis of the suit the unions filed against the state last year to compel the Christie administration to put in more than the $681 million contribution that’s budgeted for the current fiscal year. Superior Court Judge Mary Jacobson sided in favor of the unions last week, ordering Christie and lawmakers to find ways to come up with another $1.6 billion to live up to a $2.25 billion state contribution that was called for in the reform legislation, which also required the
employees to contribute more.

Christie has said the state simply can’t afford to make the pension payments he committed to, and his spokesman said last week that the governor is appealing Jacobson’s ruling.

Last week, Christie also called for another massive overhaul of public-employee benefits in New Jersey, saying the current pension system should be frozen and that all employees should be moved instead into a hybrid retirement system with some features of a 401(k) plan. Christie also said public-worker health benefits should be cut, and that the savings should go toward paying down pension system debt, which measures between $37 billion and $83 billion.

“This governor’s continuing disregard for his own pension-funding law leaves us no choice but to go back to court to resume this fight in court on behalf of hundreds of thousands of public-sector workers who make their full pension contributions and depend on the modest income they earn in retirement,” said Charles Wowkanech, president of the New Jersey State AFL-CIO.

Christie spokesman Kevin Roberts said yesterday that the unions are ignoring “the basic math and reality of the situation we face.”

“The Governor is focused on working towards a real solution with those unions and legislators who are willing to come to the table so that we can achieve lasting reform, rather than push this problem off to tomorrow,” Roberts said.

It’s unclear right now whether Jacobson will accept the unions’ new lawsuit or wait for the current litigation to go through the appeals process first. Last year, when the unions also challenged the state pension contribution for the coming fiscal year, Jacobson said she could only consider a suit over the pension contribution once the associated fiscal year had begun.

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