State Supreme Court: Court Will Not Legislate Pension Issues

NJ Supreme Court heard oral arguments about reforms to the state pension systems. The state facing a budget shortfall and a Governor with Presidential aspirations reformed the pension system, including:

• suspending cost-of-living adjustments
• raising the retirement age
• increasing workers’ contributions into the fund and
• requiring the state tomove toward full payment recommendations from actuaries.

The chain of events:

• NJ paid up for two years
• Then revenues slowed and NJ cut pension payments
• Pension argues the State broke the law by withholding $1.57 billion in pension payments from the current budget.
• NJ argues that the 2011 law conflicts with a constitutional clause barring the state from taking on new debt without the voters’ approval and another barring the state from telling future Legislatures how to spend its money. In short, the law prohibits NJ from funding the pensions.

New Jersey Advance Media