NJEA joins in lawsuit over pension, benefit law

“A classic ‘bait and switch’ for current retirees”

Published on Wednesday, August 31, 2011

NJEA, in conjunction with unions and organizations representing other public employees in New Jersey, has filed a lawsuit over Public Law 2011, Chapter 78, the new pension and health benefits law implemented in June.

The suit, which has been in preparation since Chapter 78 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, including teachers and educational support personnel.

The suit also challenges other aspects of the law on similar grounds, arguing 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.

Basic fairness

“This lawsuit is about basic fairness and justice,” said NJEA President Barbara Keshishian in a statement issued this morning. “Gov. Christie and the Legislature passed a law that illegally takes away benefits that school employees and others have already earned through their service to the people of New Jersey.”

Keshishian called the law a classic “bait and switch” for current retirees who worked their entire careers believing in the promise that their pension benefits would be honored.

“Now that they’re living on a fixed income, they’re being told that the state is reneging on its promise,” she said. “That’s a travesty.”

Keshishian pointed out that pensions and health benefits are not gifts, but 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,” she said.

Pension’s unfunded liability

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.

“We would have preferred not to have to contest this issue in the courts,” Keshishian said. “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.”

Keshishian said that NJEA remains committed to working with other public employee unions and the Legislature to negotiate sustainable solutions that treat public employees, including teachers and educational support professionals, fairly and justly.

Members protest legislation

In June, NJEA members by the thousands joined other public employees in Trenton to protest the then proposed law three times over the course of one week. Tens of thousands more followed developments via njea.org, Twitter, and Facebook through accounts set up for the protest—@TrentonBattle2 on Twitter and Trenton Battle 2.0 on Facebook—as well as NJEA’s standard Twitter and Facebook accounts. NJEA also launched a text messaging service to keep members informed of up-to-the-minute developments.

Introduced by Senate President Steven Sweeney with the strong backing of Christie, the bill could not have passed through the Legislature without additional Democratic support. Not one of the Legislators—Democratic or Republican—who voted for Chapter 78 (then S-2937 and A4133) was endorsed by the NJEA PAC Operating Committee at its meeting on Aug. 6.

“Our members refuse to give precious resources and their own time to campaign for legislators who hurt them and their families,” Keshishian said. “But make no mistake, fewer endorsements do not mean NJEA will be less involved in the upcoming elections. If anything, we will be more committed and will work harder to support pro-public education candidates who have shown they care about public school employees, our families, and the students we educate.” 


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