Important Excerpts From the New Jersey Pension Ruling


The New Jersey Supreme Court on Tuesday ruled that the state doesn’t have to abide by a pension contribution schedule mapped out in a 2011 pension reform law signed by Chris Christie.

The immediate impact of the ruling is that the state won’t have to make its full 2015 pension payment, which it recently slashed by $1.6 billion.

Here are key passages of the court’s opinion, as collected by

“Our holding is, simply, that Chapter 78 cannot constitutionally create a legally binding, enforceable obligation on the state to annually appropriate funds as Chapter 78 purports to require.”


“The Legislature and governor, as well as the many interested parties involved in the legislative process, may have included contractual words in Chapter 78, but those words, no matter their clarity, could not create an enforceable contract of the type asserted. The Debt Limitation Clause barred it.”


“Because of the importance of maintaining the soundness of the pension funds, the loss of public trust due to the broken promises made though Chapter 78’s enactment is staggering. We recognize that the present level of the pension systems’ funding is of increasing concern, as does the dissent. But this constitutional controversy has been brought to the judiciary’s doorstep, and our obligation is to enforce the state Constitution’s limitations on legislative power. ”


“That the state must get its financial house in order is plain. The need is compelling in respect of the state’s ability to honor its compensation commitment to retired employees. But this court cannot resolve that need in place of the political branches. They will have to deal with one another to forge a solution to the tenuous financial status of New Jersey’s pension funding in a way that comports with the strictures of our Constitution.”

Read key excerpts from the dissenting opinion here.

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