chris christie | Pension360

New Jersey Lawyers: 2011 Pension Reforms Invalid, State Doesn’t Have to Contribute to Pension System

New Jersey’s lawyers argued in court yesterday that Chris Christie was acting legally when he cut the state’s pension contribution last year by over $1 billion.

They argued that it didn’t matter that the state’s 2011 pension law – signed by Christie – mandated full pension payments from the state, because that law is unconstitutional.

Top Police Union Official Says Christie Used “Bait and Switch” on Pensions

The New Jersey Police Benevolent Association is one of the dozen unions that filed a lawsuit against the state when Chris Christie opted to cut the state’s pension contributions by over $2 billion in 2014 and 2015.

And while lawyers are arguing the case in the courtroom, NJPBA president Patrick Culligan made his case in a letter to members this week, where he accused Christie of using a “bait and switch” to feign pension reform.

From the letter:

We are expecting that the Governor will propose significant further pension and healthcare reductions. We believe that the formal report of the Governor’s Pension Commission will be released very soon to support the Governor’s expected message today.

[…]

In the 2012 State of the State, Governor Christie proudly proclaimed ‘we saved their pensions’. He added; ‘Our pension system, which was on a path to insolvency, is now on much more sound footing. With your help, we tackled the problem head on.’ It was a success he shouted on the national stage for years after. He has repeatedly called Chapter 78 his crowning bipartisan achievement.

But his reflections on Chapter 78 mask his own deliberate acts to destroy pensions as we know them. I would like to remind everybody that in 2014 the Governor declared parts of his reforms ‘illegal’ in the State’s own legal briefs responding to our pension lawsuit. The former Federal Prosecutor, the attorney, the Governor who signed that law declared his obligation to make a pension payment to be ‘illegal’ and unenforceable. He also vetoed bipartisan legislation that would have required our additional contributions required by Chapter 78 to actually go back into PFRS where they belong. He has proven time and time again that he wants our system to fail.

This unfortunately is the kind of bait and switch we have come to expect from Governor Christie’s ‘promises’.

Read the full letter here.

Photo By Walter Burns [CC BY 2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons

Video: Chris Christie Talks Pensions in “State of the State” Address

Chris Christie gave his “State of the State” address on Tuesday, and some observers thought he would use the platform to reveal specifics about the series of pension changes he is considering.

He didn’t, but he did speak generally about pensions for about 4 minutes. Watch the video above to hear the section of his speech dealing with pensions.

Thanks to John Bury of Bury Pensions for capturing the remarks.

Feature photo credit: Bob Jagendorf from Manalapan, NJ, USA (NJ Governor Chris Christie) [CC BY 2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons

Christie Mum on Pension Specifics During “State of the State” Address

New Jersey Gov. Chris Christie announced this summer that another round of pension reforms would be coming to the state, and he all but promised that benefit cuts would be part of the deal.

But details have been sparse since then. It was thought Christie might use his “State of the State” speech to unveil a few more details about what’s coming down the pension reform pipeline.

But his address offered few specifics.

From NJ.com:

In his fifth State of the State address Tuesday, Gov. Chris Christie called the state’s struggling pension system “an insatiable beast.”

But despite rumors swirling the past week that he might use the platform to unveil a massive pension overhaul based on the recommendations from his pension commission, Christie offered little on how he intended to tame it.

The governor, who spoke at length about drug treatment and a Camden turnaround, dedicated roughly 10 percent of his remarks to the pension system without delivering any solutions.

“This is not just a New Jersey problem. This is a national problem,” he said. “A long-term solution and sustainable future for our pension and health benefit plans are difficult but worthy things to achieve.”

While crediting his 2011 reforms with saving the taxpayers more than $120 billion over the next three decades, Christie said pensions remain one of New Jersey’s “largest and most immediate” obligations.

“But the fact that is that while we have been making up ground, the pension fund is underfunded because of poor decisions by governors and legislatures of both parties over decades, not years,” he said. “These sins of the past have made the system unaffordable. But we do not have the luxury to ignore this problem.”

[…]

“Think of it this way, in order to close the current shortfall in just the pension system alone, every family in New Jersey would have to write a check for $12,000,” he said. “That is the nature of long-term entitlements which grow faster than the economy, and in that regard our problem here in New Jersey is not that different from Washington’s entitlement problem.”

Over the summer, Christie put together a panel to review the state’s pension system and offer recommendations for reform. But the committee has been silent for months, although Christie said they are “hard at work”.

Photo By Walter Burns [CC BY 2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons

Stakeholders Listening for Hints on Pension Reform in Chris Christie’s Annual Address

Chris Christie will deliver New Jersey’s “State of the State” address on Tuesday. The question on the minds of lawmakers, labor leaders and public workers is: how much will he reveal about his plans for reforming the state’s pension system?

Christie indicated over the summer that a new round of pension reforms are necessary, and they would likely involve benefit cuts.

But new details have been scarce, and the state’s Pension and Benefit Study Commission hasn’t released its recommendations.

From NJ.com:

When Gov. Chris Christie delivers his 2015 State of the State address Tuesday, lawmakers and public workers will no doubt be listening for remarks on pension reform.

On the eve of that speech, and months after a commission’s report on recommendations for the ailing pension system was expected to be released, legislators, union leaders and lobbyists say they are expecting to hear from the governor on one of the biggest issues facing Trenton. Christie’s office has not yet provided any details about his annual address to the state Legislature.

The governor made mention of the ailing public employee pension system nine times in his 2014 address, proposing to crack down on pension fraud and engage on pension reform.

“If we do not choose to reduce our soaring pension and debt service costs, we will miss the opportunity to improve the lives of every New Jersey citizen, not just a select few,” he said at this time last year.

The debate over pensions heated up again last spring when a budget gap suddenly erupted and Christie cut back on payments that were promised in a highly touted pension reform law he signed in his first term.

Since late summer, recommending ideas about overhauling public worker pensions has been the job of a bipartisan commission Christie designated. The commission issued a report in September laying out the severity of the state’s unfunded pension and health benefit liabilities, but has not released a final report with recommendations. The commission’s chairman Thomas J. Healey did not return calls for comment.

The state is shouldering $83 billion in pension liabilities, as measured by new GASB accounting rules.

Photo By Walter Burns [CC BY 2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons

Pension Funding May Be First Fight of 2015 for New Jersey Lawmakers

At some point in 2015, pension reform will become a hot topic in the New Jersey Legislature. The only question is when the battle will heat up.

From the looks of things, the fight over pension reform could begin sooner than later.

From New Jersey 101.5:

Funding New Jersey’s public employees’ pension system could be the first major fight in 2015 and it will likely pit long-time allies against one another. Gov. Chris Christie is calling for new reform, but state Sen. President Steve Sweeney (D-West Deptford) has drawn a line in the sand and said he will support further reform.

“He (Christie) has to fund it. We actually did the things that were necessary to fix it. He needs to fund the pension fund,” Sweeney said. “No matter what changes you make to a pension system, if you don’t meet the financial needs of it at the same time – no fix will work.”

The law required the state to contribute $1.6 billion into the pension system last fiscal year, but Christie paid in only $696 million. He signed an executive order to enable the lesser payment. The payment for this fiscal year was to be $2.25 billion, but the governor said he’ll contribute $681 million.

The governor must make the full $2.25 billion payment this year, according to Sweeney, who acknowledged it will be difficult.

“It’s going to put a lot of pressure on the budget, but we knew it. The big picture here is the lack of growth in the economy and he’s been the governor for five years now so he can’t point fingers at others,” Sweeney said.

[…]

Last fall, Christie began making his case for pension reform. He said it is an important, long-term project.

“It’s something that we can’t ignore because it will first crowd out any other type of investments the state wants to make in important projects around the state, and it will then ultimately bankrupt the state,” Christie said.

Gov. Christie has made it clear that reforms would likely mean further benefit cuts.

Sweeney, on the other hand, is pushing for a funding solution that involves more state money going to the pension system.

Photo By Walter Burns [CC BY 2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons

Video: Chris Christie Talks New Jersey Pension System and Cutting the State’s Contribution

New Jersey Gov. Chris Christie gave an extended interview this week, during which he talked about his decision to cut the state’s pension contribution and paying off pension debt by increasing the tax on millionaires.

The pension conversation starts just past the 18:00 mark.

Feature photo by Walter Burns [CC BY 2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons

Union Leader: Solutions to New Jersey Pension Woes Are in Christie’s Hands

Dominick Marino, the president of the Professional Firefighters Association of New Jersey, penned an op-ed in Wednesday’s Times of Trenton calling on New Jersey Gov. Chris Christie to take responsibility for the state’s pension problems – and to fix them.

Marino writes:

Gov. Chris Christie continues to blame everyone for the state’s pension problems – previous governors, lawmakers, firefighters and police officers – but he refuses to take responsibility for his own actions on the issue.

Apparently, he wants the public to believe that when it comes to pensions, the buck stops elsewhere. That’s wrong and he knows it. It was Christie who, in 2011, signed a law dramatically overhauling New Jersey’s public pension system, increasing the out-of-pocket contributions from workers and mandating a seven-year schedule of state payments to get the system back in the black.

Since the 2011 signing, everyone has been doing their part to follow the law except Christie. He has decided the state simply cannot afford to live up to the terms of the law he signed and has cut $1.6 billion from the state’s obligation of $2.25 billion for the current fiscal year.

[…]

The governor can point fingers all he wants, but it will likely be up to the courts to sort through Christie’s smoke-and-mirrors approach to pensions. Three of the state’s largest pension funds are suing Christie and his administration for failing to make the legally required payments.

According to Standard and Poor’s, the problem with the pension fund is not public employees and not the economy. It’s Christie not paying his bill. This from the ratings agency: “The long-term impact of continuation of a funding policy that allows the State to contribute less than the actuarially recommended contribution could impact, at some point, the Pension Plans’ ability to meet their obligations absent significant additional contributions by the State, increased investment returns, or actions or events resulting in reductions to liabilities of the Pension Plans.”

Read the entire piece here.

Photo by Bob Jagendorf from Manalapan, NJ, USA (NJ Governor Chris Christie) [CC BY 2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons

New Jersey Senate Fails to Overturn Christie Veto of Bill Changing State Pension Contribution Schedule; Would Have Made Cutting Payments More Difficult

The New Jersey Senate attempted but ultimately failed on Thursday to override Gov. Christie’s veto of a bill that would have altered the schedule on which the state pays its annual pension payments.

The amended schedule would have made it more difficult for the state to cut its pension contributions in the future. The bill was proposed after Gov. Christie cut the state’s pension payments by over $2 billion to plug revenue shortfalls in the general budget.

From NJ.com:

The bill (S2265) would have required the governor to make pension payments quarterly in July, October, January and April, instead of at the end of the fiscal year in June.

Sen. Robert Gordon (D-Bergen) said that spreading the payments out could have increased the likelihood the state would make its contribution.

Legislators introduced the measure following Christie’s move to balance the budgets ending in June and beginning in July by withholding $2.4 billion from planned pension payments when gross income tax collections came up short.

In his veto of the bill, Christie called it “an improper and unwarranted intrusion upon the longstanding executive prerogative to determine the appropriate timing of payments” so those expenditures line up with tax collection cycles.

“Simply wishing in a law that sufficient funds will be available on specific future dates does not change the fiscal realities of revenue collection during the course of a 12-month year,” he said.

While the bill easily passed in both houses — 36-3 in the Senate and 62-13 in the Assembly — Republicans weren’t expected to go along for the override.

The Democratic-controlled state Legislature has never won a veto override, in part because the Republicans who vote with the Democrats decline to override and risk crossing Christie.

The vote failed 25-12.

Read the bill here.

Photo credit: “New Jersey State House” by Marion Touvel – http://en.wikipedia.org/wiki/Image:New_Jersey_State_House.jpg. Licensed under Public domain via Wikimedia Commons

Pension Funds Sue Chris Christie Over State Contribution Cut

New Jersey’s three largest pension funds filed a lawsuit against New Jersey Gov. Chris Christie on Wednesday for slicing the state’s required pension contribution by $900 million in 2014.

The complaint can be read here.