NJEA, in conjunction with unions and organizations representing other public employees in New Jersey, has filed suit over a new pension and health benefits law implemented in June.
The suit, which has been in preparation since the law was passed, charges that the state has illegally taken away promised and earned contractual benefits by eliminating the Cost of Living Adjustment (COLA) that is part of the pension formula for most New Jersey public employees.
The suit also challenges other aspects of the law on similar grounds, noting that provisions requiring future retirees to pay a substantial percentage of their health insurance premiums and requiring substantially larger pension contributions from employees also violate the state and federal contract rights of the affected employees.
The final element of the suit concerns the state’s choice to make the unfunded liability of the pension systems substantially worse by phasing in its contributions over seven years rather than paying its full actuarially required contribution immediately.
NJEA president Barbara Keshishian issued the following statement regarding the lawsuit filed today:
“This lawsuit is about basic fairness and justice. Governor Christie and the Legislature passed a law which illegally takes away benefits that school employees and others have already earned through their service to the people of New Jersey.
“Perhaps most troubling is that this legislation amounts to a classic ‘bait and switch’ for current retirees. These are people who worked their entire careers believing in the promise that their pension benefits would be honored. They’ve already retired, and are living on a fixed income. Now they’re being told that the state is reneging on its promise. That’s a travesty.
“Pensions and health benefits are not gifts from employers or the state. They are earned compensation. What our members have been promised and have already worked to earn cannot be taken away by the governor or the Legislature simply because politicians have failed to do their part to keep the pension system on a sound footing.”
“We would have preferred not to have to contest this issue in the courts. These issues should have been discussed and dealt with collaboratively, with all parties at the table and all options under consideration. Unfortunately, politics triumphed over pragmatism, and New Jersey was presented with an illegal, indefensible, and false solution to a very real problem.
“We are deeply disappointed that Governor Christie and the Legislature chose to pass a law which so clearly violates the legal rights of school employees and other public employees. Rather than working in good faith to arrive at a negotiated solution to the pension crisis they have created, they chose political grandstanding. They chose to illegally reach into the pockets of active and retired public employees to generate more funding for the pension systems at a time when they are still not making their own full contributions. Taxpayers will pay the price, both in the cost of defending the state’s illegal action and in the time lost when we should be coming up with real solutions to the problems New Jersey’s politicians have created through their irresponsibility with the pension system.
“We remain ready to work with other public employee unions and the politicians in Trenton on real solutions. But the state must cease its illegal attempt to take away our members’ earned pension and health benefit rights.”