Friday, February 26, 2010

Pensions in New Jersey

Everyone is grousing about the generous pensions being granted to public employees. Well, there are pensions, and there are pensions. Some pensions are more equal than others.

No permanent employee is exempt from participating in the pension system.

The most generous pensions are granted to police officers. Police in New Jersey are blessed by having the toughest union, the PBA, which is represented by the shrewdest and toughest lawyers. For a long time, police contracts were subjected to binding arbitration, a legalized form of three-card monte. I believe the practice has been stopped.

Home rule is very important to New Jersey. New Jersey has about 500 municipalities, and each is a little freestanding fiefdom, with its own library, sanitation department, and police department, etc. Each police departnemt has its own officers, including a chief. There are some exceptions to this, as municipalities strive to save themselves from financial disaster. Police officers retire in their fifties, on half pay after 25 years of service. Due to strong unions, retired policemen retire with free medical benefits for life for themselves and spouse. And every year there is a cost of living adjustment (COLA for short), whether the cost of living has gone up or not.

Retirees from the public schools, including clerks, secretaries, librarians, and maintenence crews, retire after 25 years on half pay, and they also get free health benefits for life for themselves and spouse and COLA.

Ordinary retirees, such as thee and me, also can retire after 25 years. I don't know what the age requirements are, if any. No health insurance for this crew.

When I started working in New Jersey, part of my salary was put toward my pension. This was matched by the State. You were vested in your pension after 10 years, according to federal law. During Christie Whitman's tenure, employee contributions were discontinued. In other years, the State saved money by postponing their annual contribution to the pension fund. The pension fund, of course, would keep growing in good times and bad. The stock market was booming, no worries. Until the market fell.

Governor Corzine didn't halp matter any by being deeply in thrall to the unions. The Civil Service rules didn't help either.

I don't see any way out of this mess, which is contractual and based on the full faith and credit of the State, whatever that means. So the onus will fall on new hires. But that will take a long time. I personally am not prepared to die to save money for the State.

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