UPDATE: B-REA President Says Senate Passage Of Pension, Healthcare Benefits Bill Not Unexpected

The New Jersey State Senate approved a bill Monday afternoon aimed at increasing contributions to health benefits and pension payments for public employees, by a margin of 24-15, a move that Steve Beatty said was not unexpected.

"The next step will be the Assembly," he said. "We have optimism that there are many Democrats looking to slow it down before it goes to the Assembly."

The bill makes various changes to the manner in which the Teachers’ Pension and Annuity Fund (TPAF), the Judicial Retirement System (JRS), the Public Employees’ Retirement System (PERS), the Police and Firemen’s Retirement System (PFRS), and the State Police Retirement System (SPRS) operates and to the benefit provisions of those systems, according to a press release from the Senate.

Gov. Chris Christie released a statement commending the passage of the bill.

“I am encouraged by the bi-partisan Senate vote today and the continued display of support for common-sense pension and health benefits reform," Gov. Christie said via a press release. "This is a watershed moment for New Jersey, proving that the stakes are too high and the consequences all too real to stand by and do nothing. As a result of Democrats and Republicans coming together to confront the tough issues, we are providing a sustainable future for our pension and health benefit system, saving New Jersey taxpayers hundreds of billions of dollars and securing a fiscally responsible future for our state.”

Unions representing teachers and other public employees have been rallying supporters in Trenton for several days to oppose the measure, which now goes to the state Assembly, where passage seems likely. The legislation has been a top priority for Gov Chris Christie and Senate Majority Leader Steve Sweeney (D-Gloucester).

The bill provides for increases in the employee contribution rates to their pension funds:

from 5.5 percent to 6.5 percent, plus an additional 1 percent phased-in over seven years beginning in the first year, meaning after 12 months, after the bill’s effective date for TPAF and PERS (including legislators, Law Enforcement Officer (LEO) members, and workers compensation judges); from 3 percent to 12 percent for JRS phased-in over seven years; from 8.5 percent to 10 percent for PFRS members and members of PERS Prosecutors Part; and from 7.5 percent to 9 percent for SPRS members, according to the bill.

The bill also repeals earlier legislation that provides a member of PERS or PFRS the ability to retire while holding an elective public office covered by PERS or PFRS, while continuing to receive the full salary for that office.

The bill states that the automatic cost-of-living adjustment will no longer be provided to current and future retirees and beneficiaries.

As for health benefits reform, the bill requires all public employees and certain public retirees to contribute toward the cost of health care benefits coverage based upon a percentage of the cost of coverage. Under the bill, all active public employees will pay a percentage of the cost of health care benefits coverage for themselves and any dependents, according to the Senate press release. Lower compensated employees will pay a smaller percentage and more highly compensated employees will pay a higher percentage. The rates will gradually increase based on an employee’s compensation, at intervals of $5,000. 

Click here for more information on senate bill S-2937.

Beatty said the New Jersey Education Association is actually hoping that the bill is split in two and considered separately.

"We know pension is in need of change, and we are not fully against that part," he said. "But it's the benefits bill that needs to be looked at."

"The Republicans look at greater local control, and what could be better than giving the local boards the opportunity to do what they are elected to do," he added. "It is sad to take away collective bargaining."

Beatty said the union is not afraid to talk about reform, and that that's what collective bargaining should really be about.

As for a possible vote by the Assembly Thursday, Beatty said the NJEA is hoping to have a rally in Trenton at the State House, and that he is planning to try and get some teachers together to go down that day.

"By then, everyone should be out of school, and that's when the NJEA is looking to get a big push," he said. "We could all go down to Trenton to coincide with the Assembly work."

Beatty said the union is not planning any rallies or moves locally at this point.

"We are encouraging people to go down on Thursday," he said.