State Senate President Stephen Sweeney introduced legislation last term that would permanently cement the State’s responsibility to fund government workers’ pensions within the New Jersey Constitution. The proposed constitutional amendment was approved by both houses of the Legislature (Senate: 23-16 / Assembly: 43-27-1) at the end of the session. But, our work is far from over!
In order to get the amendment on the ballot, both chambers need to approve the proposal, SCR-2 / ACR-109, this Spring. (More on the amendment below)
We need your voice on this critical issue TODAY. Please call and email your legislators TODAY and ask them to approve the amendment when it comes up for a vote this month!
Visit NJPSA’s ACTION CENTER to Contact Your Legislator
INFO ON THE AMENDMENT
What the amendment does?
- Requires a responsible, phased- in funding schedule that makes full actuarially required payments by 2022;
- Mandates the state to make its pension payments annually and on a quarterly basis;
- Protects the right of vested public employees to their earned pension benefits; and
- Provides that pension funding obligations would be enforceable in court.
Specifically, the amendment would reverse the Supreme Court’s recent decision to NOT compel the State to make required payments under the P.L.2011, c.78 (commonly referred to Chapter 78).
Chapter 78, the bi-partisan pension reform legislation endorsed by Governor Christie as a core achievement of his administration required members of the various pension systems, including those in the Teachers’ Pension and Annuity Fund (TPAF), to make increased pension contributions in exchange for the State getting back on track with their pension payment obligations. That same law also eliminated retirees’ cost of living adjustments, continued the tiering of public employee pensions and created a constitutionally protected contractual right to payment of the pension contribution by the State.
In June 2015 however, the NJ Supreme Court found in Burgos v. State, 222 NJ 175 that the State’s requirement payment was subject to the appropriations process and that barring a public referendum as proposed in SCR 184, the Legislature could not legally bind future legislatures with a mandatory payment schedule. The Burgos decision also found that Chapter 78 violated the ‘Debt Limitations Clause’ of the NJ Constitution, absent voter approval. Unfortunately the US Supreme Court has indicated it will not hear the matter so the pension amendment is our best hope for resolving this critical issue.
Approving SCR-2 / ACR-109 is the second step in gaining voter approval which will REQUIRE the State to MAKE its annual contributions. While the resolution doesn’t require the State to begin making its full pension payment until July 1, 2021, the legislation does require the State to follow a phased-up schedule with a 6/10 of full payment due in FY 2017, and increasing increments of 1/10 of full payment each consecutive fiscal year thereafter until full annual payments are due each fiscal year starting in FY 2021. Additionally, the State will be required to make its annual payments on a quarterly basis in order to avoid the events of recent years where the State no longer had funds available at the end of the fiscal year to honor its pension payment obligation in full.
Why is the legislation necessary?
Absent a constitutional amendment, the State can continue to renege on its part of the Chapter 78 agreement while requiring public employees like you to continue make increased contributions. More importantly, without the State’s contribution TPAF and the other pension funds are becoming insolvent. We need to act!
What happens now?
Under New Jersey’s constitution a proposed amendment can be passed by simple majority in two separate legislative to be considered by the voters. We need the Legislature as a whole to approve the measure.
NJPSA will be advocating, but we need YOU to be part of the record as well!
Please call AND email your Senator and Assemblypersons and let them know that YOU want them to vote YES on SCR-2 / ACR-109 when it comes up for a vote!
What we need YOU to do?
Bottom line – between NOW and the end of the is month we need YOUR help.
The best way to ensure that this happens is get all of YOU involved. Hearing from those affected by the legislation, including members of their district, is critical!
Please call and email your Legislators TODAY!