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Newjerseynewsroom.com - Inside Christie-Sweeney plan to make N.J. public employees pay more for pension, health benefits...Assembly Budget Committee to review proposal on Monday
Asbury Park Press - Pension legislation hits snag “An effort to pass major pension and benefit reform legislation hit a snag late Tuesday when the Republican state senators balked at supporting the 120-page bill because of clauses that limit workers’ rights to use out-of-state medical providers...”
Star Ledger - Against own party's wishes, Sweeney pushes overhaul to pension system for N.J. public employees “Despite a rising chorus of opposition from fellow Democrats, the Senate president and Assembly speaker pressed forward Tuesday to overhaul health and pension benefits for the state’s 500,000 public employees.”
Njspotlight.com - Fine Print: Senate Bill No. 2937
Proposed legislation would dictate sweeping changes to public employees' pensions and healthcare benefits
NEWJERSEYNEWSROOM.COM - Inside Christie-Sweeney plan to make N.J. public employees pay more for pension, health benefits
Tuesday, 14 June 2011 18:03 pm
Assembly Budget Committee to review proposal on Monday
BY TOM HESTER SR.
In a new twist to the controversial plan to make 500,000 New Jersey public employees pay more for their pension and health insurance, Assembly Speaker Sheila Y. Oliver (D-Essex) announced on Tuesday that the lower house’s Budget Committee will meet Monday to consider the so-called compromise legislation to bring about the payment increases that has been introduced in the Senate.
Last week, Oliver said she would introduce her own version of the legislation but aides said on Tuesday that she will have the version sponsored by Senate President Stephen M. Sweeney (D-Gloucester) considered. The Sweeney version is a compromise struck with Gov. Chris Christie. Oliver’s aides stressed that they expect the proposal to be amended in the Assembly.
The Senate Budget and Appropriations Committee is set to meet Thursday on the legislation.
Oliver and Assemblyman Lou Greenwald (D-Camden), the Assembly Budget Committee chairman, consider the Monday hearing important enough that the scheduled Assembly voting session has been canceled.
“I continue to work to bring everyone together on a plan that protects taxpayers and worker rights, and I am yet not committing to putting the bill up for a full Assembly vote as we continue discussions,” Oliver said on Tuesday. “I expect the bill very well may be amended as we move forward, but we will get this important public debate started and begin the legislative process for the benefit of our taxpayers and public workers alike.”
Greenwald (D-Camden) said he intends to sponsor the bill in the Assembly.
“This compromise bill protects both taxpayers and future collective bargaining rights and is the right thing to do to steer New Jersey through this economic crisis,” Greenwald said. “Without question, this is an emotional debate, but the bottom line is we need to protect New Jersey taxpayers. This bill will be a major step toward accomplishing that goal.”
Sweeney has come under vocal criticism from public employee union leaders. On Tuesday, the senator issued what was described as a breakdown of what the legislation provides:
These changes will save local governments $35 million in the first year, and $497 million in the seventh year. They will save the State $72 million in the first year and $514 million in the seventh year.
In addition, these changes allow all pension systems to reach an 80 percent funding ratio, which is the Government Accountability Office standard for a healthy pension system. For example:
With these changes, the state Public Employees Retirement System will reach 80 percent funding before 2040. Without them, the PERS will be below 50 percent funding in 2040.
With these changes, The Police and Fire retirement fund will reach 80 percent funding in 2041. Without them, TPAF will be below 50 percent funding in 2041.
With these changes, PFRS Local would reach 80 percent funding immediately and stay well funded. Without them, PFRS Local would fall to approximately 60 percent funding by 2041.
Without these changes, New Jersey’s pension funds may run dry by 2018.
Additional sacrifice by employees is required:
PERS: additional 1 percent employee contribution immediately; additional 1 percent phased in over 7 years (total of 2 percent increase). The governor’s original proposal called for an immediate 3 percent increase for these employees.
TPAF: additional 1 percent immediately; additional 1 percent phased in over 7 years (total of 2 percent increase). The governor’s original proposal called for an immediate 3 percent increase for these employees.
SPRS: additional 1.5 percent immediately
PFRS: additional 1.5 percent immediately
JRS: additional 9 percent employee contribution, phased in over 7 years
Automatic annual retirement COLAs for all pension plans are eliminated. However, they can be restored by new pension management boards when fund reaches “target fund ratio”, or on an ad hoc basis.
For new PERS and TPAF employees, the retirement age is raised to 65 years, with early retirement penalties adjusted accordingly. Thirty years will be required for early retirement for those new employees. Current employees would not be affected by this change.
For new PFRS employees, regular pension would be 65 percent of salary at 30 years, 60 percent at 25 years. Current law is 65 percent of salary at 25 years, but current employees would not be affected by this change.
Note that the governor’s original proposal made similar changes to current employees, and also reduced the pension calculation for current PERS and TPAF employees to 65 percent.
The state would no longer be able to skip its required pension payments. The bill contains language providing a new contractual right to employees for the state to make its actuarially-required payment.
The contractual right will include the 1/7 per year phase-in. From that point on it could not be altered.
If the state doesn’t make its payment, employees will be able to sue and have grounds in court to force the state to make payments.
A healthy pension fund will allow employees more of a role in pension governance. Politics will be removed from financial decisions.
Each pension fund will have a new 8- or 10-member governance committee. It will contain an equal number of employee and employer representatives.
Impasses will be resolved through a form of superconciliation.
Unions will directly select employee representatives. This will allow unions currently unrepresented on the state pension boards, such as the Fraternal Order of Police and Professional Firefighters Association, to be represented.
In any year where the pension fund is at or above the “target funded ratio” (defined in a subsequent bullet), the committee will be authorized to:
Hire their own actuaries and consultants
Determine N/X for future accruals
Determine employee contribution rates
Determine formula for calculation of final average salary
Determine retirement age
Determine normal and early retirement ages/benefits
Determine disability benefits
Determine whether a COLA shall be provided to retirees in years during which the system is above the TFR. The committee would be able to revise how a COLA is calculated
The committee would be precluded from making any change that the pension system actuary determines will place the fund back below the TFR within the following 30 years.
In year one, the target fund ratio (TFR) = 75 percent and TFR will increase over 7 years until reaching 80 percent.
PFRS Local, SPRS, and PERS Local will all have the option of adopting the new governance system immediately, as they will all have a greater than 75 percent funded ratio when the law goes into effect.
This new system creates an incentive to make smart funding decisions. Irresponsible decisions mean lost control of the board and the ability to provide a COLA or restore reductions made pursuant to this act.
HEALTH CARE
Current retirees will not be impacted. Current employees with 25 years of service on the effective date of the act will not be affected when they retire.
All government employees will pay a percent of premium for SHBP and non-SHBP plans. It would be phased in over four years, and include a sliding scale based upon income. The grid would not impact employees currently in a collective bargaining agreement, until that agreement expires.
The premium share would be “smoothed” for employees close to, but not yet at, 25 years of service. An employee with 24 years of service on the effective date of the act would only pay 1/5th of the required premium share in retirement; an employee with 23 years of service on the effective date would pay 2/5th of the required premium share in retirement; and so on.
Under this new grid, employees under the most-expensive family coverage would pay 5-6 percent of their salaries towards their health coverage. This matches the national average for workers with employer sponsored family coverage.
The requirement for use of the premium grid sunsets in four years after the effective date. For any contract that expires over the next four years, the subsequent contract will require use of the new premium grid. After that point, the premium grid could be altered through contract negotiations.
For SHBP and SEHBP, state-level joint employee-employer committees will be established.
The two committees will include half employee and half employer representation. Employer reps will be chosen by the Governor, and employee reps will be chosen directly by unions.
The boards will be responsible for designing health plans offered through the SHBP and SEHBP. They would work with participating insurers to develop the plans. This includes co-pays, deductibles, network, out-of-network reimbursement rates, etc. The committees could not rescind health coverage mandates, such as mammograms.
The committees would be required to work with insurers to develop at least 3 plans for each level of coverage (individual, family, and individual +1), differentiated by out of pocket costs to the employee.
The boards would be required to develop a health savings account, high-deductible plan. Entry into this plan would be totally optional for employees.
Out-of-pocket costs currently dictated in statute would be eliminated so that the board could develop these costs.
A form of super-conciliation would be used to solve impasses.
At the local level, if the employer is not participating in the SHBP/SEHBP, then the employer and employee could agree to a different premium share and out-of-pocket cost arrangement that results in the same level of savings as the statutory premium share formula and plan design changes. Savings would have to be certified by the state.
All local government employers would be required to participate in a Section 125 “cafeteria plan.” This will allow employees to make required premium payments for health care prior to withholding of taxes.
The state would be required to conduct an annual study of the risk impact of employers moving in and out of SHBP and private plans, long term sustainability of SHBP/SEHBP, and impact of the changes under the law.
Star Ledger - Against own party's wishes, Sweeney pushes overhaul to pension system for N.J. public employees “Despite a rising chorus of opposition from fellow Democrats, the Senate president and Assembly speaker pressed forward Tuesday to overhaul health and pension benefits for the state’s 500,000 public employees.”
Published: Wednesday, June 15, 2011, 6:00 AM Updated: Wednesday, June 15, 2011, 6:05 AM
TRENTON — Despite a rising chorus of opposition from fellow Democrats, the Senate president and Assembly speaker pressed forward Tuesday to overhaul health and pension benefits for the state’s 500,000 public employees.
After trying for a week to line up Democratic support for the measure — with little success — Assembly Speaker Sheila Oliver (D-Essex) announced that she had scheduled a hearing on the controversial plan on Monday.
"The bill does not have the support of even half the majority caucus, and frankly shouldn’t be posted," said Joe Cryan (D-Union), the second-highest ranking member of the Assembly.
Oliver’s decision came on the same day that Senate President Stephen Sweeney (D-Gloucester) introduced his 120-page bill, which is scheduled for a hearing before the budget committee on Thursday. It shifts more of the costs of pension and health benefits onto public workers in the form of increased contributions, along with eliminating cost of living adjustments for retirees and pushing back the retirement age.
Nearly all of the state’s public workers would see their health insurance costs at least double and in many instances triple.
As momentum has built for the plan among Senate leaders eager for an agreement, so has union opposition.
Labor leaders are urging members to rally at the Statehouse on Thursday to block what they see as a crucial blow to the collective bargaining rights in the state.
In an e-mail to the state’s retired teachers, Roe Jankowski, a former school employee, said motorists should drive the speed limit around Trenton — and not a mile per hour more — to tie up traffic and delay legislators.
"There are terrible changes that need to be voted on and these changes will not only affect the pension and health benefits of the active members but will affect the retired members as well," she wrote. "This is a fight."
Unlike Sweeney, who is relying largely on Republicans, Oliver has said she will not move the bill without "significant" support of her party. Tuesday she said she wanted to use the committee hearing to touch off an earnest debate.
"I continue to work to bring everyone together on a plan that protects taxpayers and worker rights, and I am not yet committed to putting the bill up for a full Assembly vote as we continue discussions," Oliver said.
The Assembly bill will be sponsored by Lou Greenwald (D-Camden), who said: "Without question, this is an emotional debate, but the bottom line is we need to protect New Jersey taxpayers. This bill will be a major step."
So far Gov. Chris Christie — despite working with Sweeney on the measure — has not publicly endorsed it.
Union members and lawmakers have not expressed their opposition to the portion of the bill concerning pensions, and several lawmakers want the pension and health changes put in separate bills.
Currently, the average public employee earns about $60,000 a year and pays 1.5 percent of that salary, or $900 a year, for health benefits.
Under the Sweeney bill, the same employee could pay $2,056 annually for single coverage and $3,230 annually for a family plan.
Employees with the lowest incomes would pay about 2 percent of their salaries for health benefits while those who earn $110,000 would kick in 6 percent of their salaries.
The bill would create a board that would be required to create additional health plans for offering fewer benefits at lower prices, including at least one high deductible plan.
"This plan recognizes the simple truth that workers need to put more towards their own health care, but in a way that is fair to them, their families, and their neighbors who are picking up the tab," Sweeney said.
But Assemblywoman Bonnie Watson-Coleman (D-Mercer) saw the situation differently. In a letter to her colleagues she said that it "pains me to see how we have been strategically and systematically manipulated to compromise the value of our majority in support of this governor’s agenda."
Asbury Park Press - Pension legislation hits snag “An effort to pass major pension and benefit reform legislation hit a snag late Tuesday when the Republican state senators balked at supporting the 120-page bill because of clauses that limit workers’ rights to use out-of-state medical providers...”
11:24 PM, Jun. 14, 2011 |
By Jason Method | Statehouse Bureau
TRENTON — An effort to pass major pension and benefit reform legislation hit a snag late Tuesday when the Republican state senators balked at supporting the 120-page bill because of clauses that limit workers’ rights to use out-of-state medical providers.
Statehouse sources contended the measure may be a plum for South Jersey Democratic boss George Norcross, who leads a medical insurance brokerage business and is chairman of Cooper University Hospital in Camden.
Norcross is a backer of the bill sponsor, Democratic state Senate President Stephen M. Sweeney of Gloucester County. In April, Sweeney had removed a provision in an earlier version of the bill that would have frozen the state health benefits program so that municipalities currently out of the state program could not join.
Critics had contended that such a restriction would have helped Norcross’ insurance brokerage business.
Adam R. Bauer, a spokesman for the Senate Republican minority, declined to comment on a Norcross connection. But he said his caucus would not sign on as co-sponsors to the legislation until the section was clarified.
“This has been identified and acknowledged as a sticking point — especially because it was a bit of a surprise,” Bauer said in an emailed statement. “Republicans are generally leery of getting in between patients and their doctors/choice of doctors. We need to know what it means before taking a position on the bill.”
Sweeney spokesman Derek Roseman said the clause was to “create incentive for folks to use New Jersey hospitals.”
Hearing Monday
Also Tuesday, Assembly Speaker Sheila Y. Oliver, D-Essex, who has insisted that pension reform receive ample support from Democrats in the Assembly before it is voted on, scheduled a hearing in the Assembly Budget Committee for Monday.
Oliver said in a statement she had not yet committed to putting the bill up for a full vote.
“I continue to work to bring everyone together on a plan that protects taxpayers and worker rights,” Oliver said. “I expect the bill very well may be amended as we move forward, but we will get this important pubic debate started.”
The legislation is aimed at addressing New Jersey’s looming $120 billion liability for pensions and health benefits for retirees. The bill also attempts to rein in health insurance costs for current workers by forcing them to pay toward their premium, among other changes.
A protest by state unions is scheduled for Thursday as the state Senate Budget Committee conducts a hearing on the bill.
Jason Method: 609-292-5158
Njspotlight.com - Fine Print: Senate Bill No. 2937
Proposed legislation would dictate sweeping changes to public employees' pensions and healthcare benefits
By John Mooney, June 15 in Education|Post a Comment
Synopsis: "An act concerning public employee pension and health care benefits, and amending and supplementing various parts of the statutory law and repealing P.L.1999, c.96 and P.L.1985, c.414. Makes various changes to pension and healthcare benefits for public employees"
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Primary sponsor: Senate President Stephen Sweeney (D-Gloucester)
What it means: The 120-page bill makes sweeping changes to public employees' contributions to their pension and health benefit plans, and to the rules that dictate those benefits. Pensions and benefits have been at the center of debate between Gov. Chris Christie and the legislature since Christie took office, and the apparent agreement on this bill -- at least for now -- has consumed Trenton for much of the last week and likely for the next.
It's all in the details: The new bill, introduced yesterday, would require public employees pay up to an additional 2.5 percent of their salaries toward their pensions, and up to 30 percent of their healthcare premiums. But how the law meets those thresholds represents the key differences between what Christie has sought and what Sweeney now proposes, with the Democratic leader phasing in some of the increases and also scaling the healthcare contribution, depending on salary. Low-paid public workers will barely make any contribution at all.
Riding off into the sunset clause: Sweeney struck a deal with Assembly Speaker Sheila Oliver (D-Essex) in introducing the bill to also include Oliver’s proposal that the health benefits changes would have a "sunset clause" and revert to being a subject of collective bargaining in 2014. Christie has not yet commented on the proposed sunset, but has appeared reluctant to back any reforms that have a limited shelf life.
What’s next: The Senate budget committee is set to hold a hearing on the bill tomorrow, with the Assembly budget committee slated to hold its own hearing on the companion bill on Monday.
The reaction: Needless to say, public employees unions aren't taking too well to the ideas, and have big protests planned tomorrow for the Statehouse and maybe legislators’ homes. The New Jersey Education Association (NJEA) is also holding a press conference today to point out what it calls the false assumptions and savings in the proposals.
Will it pass? That of course, is the bottom line. It's as close as ever to passage, to be sure, but it faces lots of questions both in substance and politics. Sweeney has said he will push it through, even if it means defying some of his Democratic caucus. Oliver has been less willing, and has indicated she may not post it for final vote without consent of her members.
In the end, it will require what was once unfathomable: a sizable number of Democrats going against organized labor during an election year. But these are remarkable times, with similar measures passing in other states with Democratic support.
