Judge Anne E. Thompson of the U.S. District Court in New Jersey dismissed the pension and benefit suit March 5. The case which was brought against the State of New Jersey Governor Chris Christie NJ State Treasurer Andrew Sidamon-Eristoff and the NJ State Assembly and Senate by various public employee unions including NJPSA the NJEA the State PBA the CWA the AFL-CIO and other state organizations was dismissed on the grounds that the federal court did not have jurisdiction in the case.
The suit which was filed August 31 2011 on behalf of more than 800000 public employees who were affected by the passage of health and pension legislation P.L. 2011 c.78 alleged 17 violations of state and federal law as well as violation of both the New Jersey State Constitution and the US Constitution (NJPSA Joins Suit on Behalf of Members on Pension & Benefit Changes August 31 2011)..
Specifically the suit challenged the reduction in COLA the increase in pension contributions and the failure of the state to make its required contributions.
Under the law which took effect last year everyone in the state pension plan was required to contribute an additional 1 percent of their salary immediately and pay an additional seventh every year for seven years until reaching the maximum of 7.5%.
In addition the law required over the next four years that employees pay up to 35% of their healthcare premiums based upon their income. The contribution amount is phased in over a period of four years.
The law also changed the retirement age to 65 for new plan members.
Finally the law eliminated cost of living adjustments for current and future retirees until the retirement fund reaches 80 percent funding and the new board established under the bill agrees to reinstate COLA.
Plaintiffs are now considering their options. They can either appeal the ruling to the U.S. 3rd Circuit Court of Appeals or refile in the State courts.