NJ Senate Considers Pension Reform Bills
Two bills that would facilitate reform of New Jersey’s public pension plans are now before the state Senate. Senate Bill 2555
and Senate Concurrent Resolution 123
have been filed in the chamber by Sens. Joseph Kyrillos (R-Red Bank) and Steven Oroho (R-Sparta).
would create a task force to develop the proposals for pension and health care benefits reform outlined by the New Jersey Pension and Health benefit Study Commission in its reports published in February 2015
and February 2016
The new task force would have seven months from its first meeting (which wouldn’t take place until all of its members were selected) to issue a final report that would detail “recommendations to such a comprehensive degree and level as to readily enable the drafting of appropriate and necessary legislation to implement those recommendations.”
The aforementioned commission reports recommended freezing the state pension plans and creating a new cash balance plan. The legality of this proposal is contingent on the ability of the state to alter its existing benefits structure. New Jersey courts have construed grants of public employer benefits as binding agreements that the state cannot alter. Therefore, the commission’s reports noted that an amendment to the state constitution expressly authorizing the state to modify existing benefits to the extent necessary to allow for the Commission’s proposed reforms would be needed. SCR 123 creates that constitutional amendment.
Both bills were immediately referred to the Senate State Government, Wagering, Tourism & Historic Preservation Committee.
Ray Harmon, Esq. is government affairs counsel to the American Retirement Association.