The New Jersey Business & Industry Association (NJBIA) has voiced its opposition to legislation that would change public worker pension reforms established in 2007. The proposed bill, A-5160/S-3997, is being considered by the state Legislature during the lame duck session and was scheduled for review by both the Assembly Appropriations Committee and the Senate Budget & Appropriations Committee.
Chris Emigholz, NJBIA Chief Government Affairs Officer, said: “The pension reforms enacted under the Corzine administration and continued in the Christie Administration were made because New Jersey taxpayers who pay public workers’ salaries could not afford to provide platinum level retirement benefits.”
He added: “This legislation will potentially cost state and local taxpayers hundreds of millions of dollars that we currently do not have available in our state budget.”
If enacted as written, the bill would remove existing membership tiers within the Public Employees’ Retirement System (PERS) and move all current non-retired PERS members to Tier 1—the most expensive level—according to standards set by the Division of Pensions and Benefits. The Office of Legislative Services (OLS) estimates this provision alone could increase costs for state and local taxpayers by about $537.9 million annually, with nearly 70% affecting local property taxpayers. However, NJBIA noted that amendments may be forthcoming that could alter these figures.
Additionally, the bill allows public employees enrolled in the Defined Contribution Retirement Program (DCRP), a 401K-style plan for newer or part-time workers such as bus drivers and classroom paraprofessionals, to transfer into PERS. OLS did not provide a cost estimate for this transfer option, but Emigholz said it would still impose additional taxpayer costs.
After discussions began in the Senate committee meeting, it was announced S-3997 might not receive a vote as expected. Emigholz described this as positive news for taxpayers.
“NJBIA opposes this bill because our state budget is not remotely close to being in a position to be able to roll back the prior cost-saving bipartisan pension reforms,” Emigholz stated. “Additionally, the affordability issues in New Jersey that just dominated the statewide elections a few months ago demand that this poor legislation not move forward.
“We hope that this is a sign the Legislature realizes this bad bill only makes us less affordable,” he said.
NJBIA represents employers across many sectors including manufacturing, retail, wholesale, contracting, and services throughout New Jersey. The organization promotes business success through advocacy efforts and partnerships with government entities and academic institutions. It is recognized as one of the largest statewide employer associations in the country according to its official website and offers essential information and services to support private-sector employers across New Jersey official website.
