Governor Vetoes Bill That Would Require Employee Contributions Not Subsidize State Requirement

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Governor Chris Christie vetoed legislation, A-3310 (Wimberly/Gordon), September 11 that would have compelled the State credit any increase in employee contributions resulting from P.L.2011, c.78 (the pension and benefits reform law) as additional contributions to the retirement systems and not use the amount to reduce the normal contributions required of the state or other public employers. 

Under this year’s budget, the administration incorporated a revised methodology that used the increased employee contributions to offset and reduce the amount the state must pay into the pension systems by approximately $250 million.

The reforms passed in 2011 by the legislature were designed to boost the solvency of the state-administered pension systems by increasing the percentage of salary employee members contribute as follows:

  • Teachers' Pension and Annuity Fund, from 5.5% to 6.5%, with an additional contribution of 1% to be phased-in in equal increments over a period of seven years;
  • Public Employees' Retirement System, from 5.5% to 6.5%, with an additional contribution of 1% to be phased-in in equal increments over a period of seven years;
  • Judicial Retirement System an additional 9% to be phased-in in equal increments over a period of seven years;
  • Police and Firemen's Retirement System, from 8.5% to 10%; and State Police Retirement System, from 7.5% to 9%.

The legislation was introduced and passed by the Legislature in late June as part of the budget package.  The bill passed largely along party lines in both houses – with the Assembly voting 51-28-0 on June 26 and the Senate voting 24-11 on June 30.  No override attempt is expected.