Legislative Update June 20, 2011

Pension & Health Benefits:  S-2937 (Sweeney, Pennacchio )/A-4133 (Greenwald, O’Scanlon) .  S-2937 passed the Senate by a 24-15-0 vote (Senator Rice was absent).  A-4133 was released from the Assembly Budget and Appropriations Committee by a 7 – 5 vote.  The bill is scheduled for a vote in the full Assembly on Thursday, June 23, 2011.  The legislation, which NJEA opposed, would change TPAF and PERS to:

1. Increase the employee contribution rate for members of the Teachers’ Pension and Annuity Fund (TPAF) and Public Employees’ Retirement System (PERS) by one percent, effective July 1, 2011.
2. Add another one percent increase to the contribution rate to be phased-in over a seven year time period.
3. Add a new tier to the pension systems for new members who enroll after the effective date of the legislation.  This tier will increase the retirement age to age 65, and other changes in the retirement formula for new members only.
4. Freeze cost-of-living-adjustments (COLA) for current and future retirees.
5. Change the governance structure of each retirement system to add Taft-Hartley-like provisions - establish appointed, not elected boards, to address funding levels and future changes to the respective pension systems.   

In addition, the proposed legislation would make changes impacting health benefits and collective bargaining to:

1. Replace the 1.5% of salary premium sharing under P.L. 2010, c.2 (Senate Bill No. 3) with premium sharing based on the employee’s salary -- ranging from 3% to 35% of the cost of health insurance, which will be phased in over four years.
2. Provide employees with the ability to reduce their premium costs by selecting a lower cost – High Deductible Health Insurance plan.
3. Grandfather premium-free, post-retirement medical benefits for retirees and employees with 20 years of service credit as of the effective dae of the bill (which is immediately).
4. Compel employees with less than 20 years of service credit, as of the effective date of the bill, to pay part of the premium for post-retirement medical benefits.
5. Sunset in 2014.
6. The bill takes effect immediately.

NJEA opposes this legislation. 

Out-Of-State Health Care:  S-2959 (Sweeney, Allen)/A-4162 (Greenwald, O’Scanlon, Chiusano)  S-2959 passed in the Senate by a 24-14 vote, after being introduced and immediately brought to second reading; A-4162 was released from the Assembly Budget Committee by a 7-5 vote and is now on second reading in the Assembly.  It is scheduled for a vote in the Assembly on Thursday, June 23.  This bill would amend S-2937/A-4133, the bill that changes pensions and benefits for public workers.  The bill is designed to fix the limitations on out-of-state medical care.  The bill would require all public employers to offer at least one health insurance plan that limits access to out-of-state providers and one that does not limit such access.  Employees who choose the plan that does not limit access would have to pay “any additional premium or periodic charge” for that plan, although the bill does not specify the basis for paying additional charges.  NJEA strongly opposes this bill.