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Unions Rev Up New Appeal In New Jersey Pension Case – Read the Full Complaint Here

Unions lost the first round in the pension case playing out in New Jersey, when a judge ruled last week that New Jersey was too cash-strapped to make its full contribution to the pension system. The state instead diverted that money, totaling over $800 million, towards balancing the state budget.

Unions were hoping, and still are, for a court ruling that would reverse state Gov. Chris Christie’s decision to divert that money.

To that end, attorneys for the labor groups amended their court filings on Wednesday to update their argument that Christie broke the law when he slashed the state’s pension contribution.

The contribution, unions argue, was legally required due to a law that Christie himself signed in 2011. From the Asbury Park Press:

The updated court filings are a step toward a new hearing, expected in August, and fuller vetting of the issue by Jacobson, who said claims about the 2015 budget and pension payments needed time to become “ripe.” Christie made changes in the new budget days after Jacobson’s prior ruling.

“The amended filings reflect the fact that the governor didn’t make the full 2014 payment and made his changes in the 2015 budget,” said NJEA spokesman Steve Baker. “Other than that, there’s no substantive difference in the arguments we’ve had all along.”

Christie spokesman Kevin Roberts pointed to the Republican governor’s past comments on the court case, when Christie called the spending cut “one of the hard choices the people of New Jersey expect me to make.”

“For our state’s families who are already overburdened by high taxes, raising taxes even further would not solve a problem created by decades of neglect and irresponsibility,” Christie also said.

The unions will have to make a stronger argument to Jacobson about Christie’s ability as governor to set fiscal priorities for such things as hospitals, nursing homes, tuition aid and other programs. In the June court hearing, the unions also failed to force Christie to turn $300 million from state surplus as a down payment on the shorted pensions. “The governor determined it would be extremely unwise to not maintain that amount,” Jacobson told the lawyers for the plaintiffs.

Read the full complaint here:

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Photo: “New Jersey State House” by Marion Touvel Licensed under Public domain via Wikimedia Commons

Los Angeles Pension Reforms Rescinded by Labor Board; City Will Appeal

The Employee Relations Board, a five-member panel that handles labor complaints in Los Angeles’ City Hall, probably didn’t expect to become famous overnight.

But they’ve become a household name in Los Angeles this morning, after news broke that the Board voted to rescind a series of pension reforms passed by Los Angeles in 2012.

The Board ruled that city officials did not properly negotiate the reforms –which reduced pension benefits for new hires and raised retirement ages—with municipal employee unions. From the LA Times:

The Employee Relations Board voted unanimously Monday to order the City Council to rescind a 2012 law scaling back pension benefits for new employees of the Coalition of L.A. City Unions, on the grounds that the changes were not properly negotiated. That law, backed by Mayor Eric Garcetti when he was a councilman, was expected to cut retirement costs by up to $309 million over a decade, according to city analysts.

Ellen Greenstone, a lawyer for the labor coalition, described the vote as a “huge, big deal” — one that shows the city could not unilaterally impose changes in pension benefits on its workforce.

Coalition chairwoman Cheryl Parisi said in a statement that the reduction in benefits, which included a hike in the employee retirement age, “devalues middle-class city workers and their dedication to serving the residents of Los Angeles.

The city’s labor board is a quasi-judicial body that reviews complaints from unions, managers and individual employees. Under the city’s labor ordinance, the panel has the power to invalidate decisions by the council, said the board’s executive director, Robert Bergeson.

If council members do not agree with Monday’s decision, they can file legal paperwork seeking to have a judge overturn it, Bergeson said.

City officials have previously argued that changes in the retirement benefits of future employees do not need to be negotiated. The 2012 law rolling back benefits applied only to employees hired after July 1, 2013. Budget officials had hoped that the reductions would trim the city’s retirement costs by more than $4 billion over a 30-year period.

The board’s decision comes as the city’s contributions for civilian employee retirement costs have climbed from $260 million in 2005 to an estimated $410 million this year, according to a recent budget report.

Los Angeles, meanwhile, plans to appeal the board’s decision. From Bloomberg:

Los Angeles will appeal an administrative panel’s decision to roll back changes in public employee pensions that were expected to save as much as $4.3 billion over 30 years, a spokesman for Mayor Eric Garcetti said.

The second most-populous city’s Employee Relations Board concluded yesterday that officials failed to properly consult with municipal employee unions before pushing through the changes in a City Council vote in October 2012.

The city will appeal the board’s 5-0 vote in court, Jeff Millman, a spokesman for the mayor, said by e-mail. Millman said Garcetti, a 43-year-old Democrat, disagreed with the ruling, although Millman didn’t spell out the reasons.

Los Angeles was expecting to save between $3.9 and $4.3 billion over the next 30 years. If the city does indeed appeal the ruling, the reforms will then land in front of a judge, who will have the final say.

Photo: “LA Skyline Mountains2″ by Nserrano – Own work. Licensed under Creative Commons

Chris Christie’s New Pension Proposal May Trigger Another Wave of Mass Retirements

Back in 2011, when New Jersey Gov. Chris Christie signed into law the state’s first round of pension reforms, a curious thing happened: state workers started heading for the exits. And they weren’t leaving for the weekend—they were leaving for good.

In fact, state workers retired in unprecedented numbers in 2010 and 2011, when the pension proposal was being discussed and passed through the legislature. Under the plan, workers have to contribute more of their paychecks to the pension system.

Now, Gov. Christie has announced he’s planning to propose a new set of pension reforms—and he’s made it clear that the benefits of workers will not come out unscathed.

With that news circulating, New Jersey is reporting that another wave of retirements is already in the making. The Star-Ledger reports:

As Gov. Chris Christie bangs the drum for a second round of pension reform in New Jersey, public officials and union leaders are bracing for another wave of public workers rushing to retire.

Employees in state and local government headed for the door in record numbers at the beginning of Christie’s first term, thanks in part to laws passed by the governor and state lawmakers asking public workers to pay a larger share of their health and pension costs. More than 20,000 retired in 2010, followed by 19,500 the next year.

After slowing the next two years, the pace of public worker retirements is picking up again, according to state Treasury Department figures.

A total of 11,916 employees are scheduled to retire through the end of this month — a nearly 9 percent spike from the same point in 2013. If the pace continues, about 17,000 may file papers by the end of the year. A total of 15,700 public workers retired last year.

The change comes as Christie gets ready to introduce further changes to the pension system, which is facing $40 billion in unfunded liabilities.

The Republican governor, a potential 2016 presidential candidate who rose to popularity partly because of his pension fights with public worker unions, said the previous changes didn’t go far enough. He has put curtailing the costs of public employee benefits at the top of his summer agenda, suggesting the state could go bankrupt without more action.

Union leaders have offered up various explanations for the spike. Some say the retirements are indeed caused by the virtual guarantee that workers will see their benefits decrease if they don’t lock them in by retiring.

But other union officials claim that the surge in retirements can be chalked up to random fluctuations. From NJ.com:

Some union leaders say more public workers may be planning to retire out of fear they could see their pensions and health benefits cut if they don’t get out now.

“There’s a feeling of unease about what’s going to happen,” said Pat Colligan, president of the state Policemen’s Benevolent Association. “People have left the past couple of months because they’re afraid. And there are people who have their finger on the retirement button.”

But Steve Baker, a spokesman for the New Jersey Education Association, the state teachers union, said he’s not convinced this year’s 9 percent increase in retirements was caused by Christie’s warnings, saying numbers fluctuate from year to year.

“They may be on the higher end of the range, but they’re certainly within the range,” he said.

Hetty Rosenstein, director of the state chapter of the Communications Workers of America, said she would be upset if Christie’s talk caused more public workers to retire in the coming months.

“You have people who have dedicated their life to public service,” said Rosenstein, whose union represents more than 40,000 state workers in New Jersey. “It would be really terrible and shameful if people make their retirement decisions based upon fear that after 30 years their retirement isn’t secure.”

Among public workers, retirements for teachers and non-uniformed government workers are both up 12 percent so far this year, while police and firefighter retirements are down 14 percent. Retirements for the State Police dropped from 145 to 83, the figures show.

In the decade before Christie was governor, public workers retired at a rate of 13,656 a year. Since he took office, the clip is at 17,602 — a 29 percent increase.

Bill Dressel, executive director of the New Jersey League of Municipalities, said part of the problem is that Christie has yet to unveil any details of his plan to revise public worker benefits.

“There’s always fear of the unknown,” Dressel said. “There’s not a clear message coming from our state policymakers.”

Christie is currently holding a series of town hall meetings around the state addressing pension issues. He has not announced specific details of his latest pension reform proposal, but he says he will release the proposal to the public by the end of summer.