New Jersey Governor Christie Sued by Unions Over Pension, Health Cuts
By Joel Rosenblatt – Sep 1, 2011 12:01 AM ET
The lawsuit was filed yesterday by more than 20 unions and individuals, according to federal court records in Trenton, New Jersey.
The law deprives workers of their due process rights by suspending pension adjustments, increasing employees’ contributions, underfunding pensions, and delegating to pension committees an “unrestrained authority to reduce pension and change eligibility requirements,” according to a copy of the complaint on the New Jersey Education Association’s website.
Christie signed the bill into law June 28, raising pension and health-care expenses for public workers, after urging lawmakers since September to approve measures cutting health- care costs and reducing a $53.9 billion deficit in the state pension system. The plan drew protests from teachers, firefighters and other public workers and was opposed by a majority of Democratic lawmakers.
The law “illegally takes away benefits that school employees and others have already earned through their service to the people of New Jersey,” Barbara Keshishian, president of the teachers’ union, said in a statement on the union’s website. A copy of the complaint wasn’t immediately available from the court.
‘Bait and Switch’
The legislation is a “classic bait and switch for current retirees,” Keshishian said in the statement. “They’ve already retired, and are living on a fixed income. Now they’re being told that the state is reneging on its promise.”
The legislation also raises the minimum retirement age to 65 from 62 and freezes annual cost-of-living adjustments. The overhaul is aimed at restoring the state pension system to 80 percent funding in 30 years, up from the current 62 percent.
Workers will pay from 3 percent to 35 percent of their health-insurance premiums based on income. Christie’s initial proposal sought to force all workers to pay 30 percent of the premium cost by 2014.
The state and other officials in addition to Christie are named as defendants in the lawsuit.
The case is New Jersey Education Association v. State of New Jersey, 11-05024, U.S. District Court, District of New Jersey (Trenton).
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