Municipal Government

NJ AFL-CIO Will Continue to Fight for Full Pension Funding, the State’s Economy and Middle-Class Families

June 10, 2015

New Jersey State AFL-CIO President Charles Wowkanech and New Jersey Senate President Stephen Sweeney discuss the pension case in Trenton.

By Charles Wowkanech

The New Jersey State AFL-CIO is outraged that the New Jersey State Supreme Court ruled against 800,000 current and retired members of the New Jersey public pension system by overturning a Superior Court decision that Gov. Christie violated his own law when he withheld state pension payments.

This ruling is disheartening for current and retired employees who have gone to work, lived by the rules and faithfully paid into the system. After dedicating their entire careers to public service, this ruling leaves them more worried than ever that their modest pensions won’t be there when they need them.

It is important to understand that this isn’t solely a setback for public employees. This is a setback for the entire state, and in particular, our economy. The failure of the governor to act responsibly has resulted in a record nine credit downgrades and has made New Jersey the poster child for fiscal irresponsibility.

The New Jersey State AFL-CIO and 16 public employee unions sued after Gov. Christie broke the pension reform law he signed in 2011 by cutting $1.57 billion from the payment the state was legally required to make to the system in FY 2015. The state Supreme Court heard arguments in May and ruled on Tuesday.

While the ruling did not go the way we had hoped, we are encouraged by the court’s clear recognition that pensions are deferred compensation that has been earned and is an obligation that must be paid to pensioners. The court also recognized that the Legislature and the governor intended to create a contractual right for retirees to receive their pensions in the law.

Furthermore, the court admonished the governor and Legislature to get the State’s financial house in order and to respect the state’s commitment to retired employees.

We’re also heartened that Senate President Stephen Sweeney and Assembly Speaker Vincent Prieto joined our lawsuit, and for their commitment to pass a budget that includes the required pension contribution, just as they did last year.

Everyone has been doing their part to restore the pension system to fiscal health, except the governor. Pensioners have increased their contributions, retirees have forfeited cost-of-living increases, local governments have paid their full share, and the Legislature has sent the governor a balanced budget with full pension funding, which he of course vetoed.

What kind of example are we setting for future generations? We teach our children that our word is our bond, and yet we have the state’s highest-ranking elected official breaking his bond with the public and getting a pass.

The New Jersey State AFL-CIO and our affiliates will continue to fight for the solvency of the public employee pension system by working with the Legislature to fully fund pensions and by holding our elected officials accountable to uphold the pension reform law they enacted.

Charles Wowkanech is the President of the New Jersey AFL-CIO

June 10, 2015

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