NJ nears pension changes for state workers

Reuters News
Posted: Jun 20, 2011 11:05 AM
NJ nears pension changes for state workers

By Edith Honan

TRENTON, New Jersey (Reuters) - New Jersey lawmakers were set to move closer to approving sweeping changes to the state's pension and benefits system for public workers on Monday, while union leaders vowed to rally against the plan in the state capital.

Since he took office in 2010, Republican Governor Chris Christie's top priority has been to force teachers, police and other public workers to pay more toward future benefits and reduce the state's burden by potentially billions of dollars.

The Democrat-controlled state legislature will take center stage. The State Senate is due to vote on the measure on Monday, while New Jersey's lower house will hold hearings on the bill.

Pension costs are ballooning in states across the country, and promised payments have not been funded. New Jersey -- which has repeatedly skipped payments to its pension fund, including under Christie -- has one of the largest unfunded pension liabilities of any state.

The issue has sparked heated debate, most notably in Wisconsin's capital, Madison, where thousands of union demonstrators took to the streets in February over the collective bargaining rights of public worker unions.

A deal reached last week between Christie and New Jersey's two top Democrats, Senate President Steve Sweeney and Assembly Speaker Sheila Oliver, would require New Jersey's 500,000 public employees to pay more toward their pension and health benefits. It also would raise the retirement age for new employees.

Unions say public sector workers have been made scapegoats for the state's larger fiscal problems.

One especially contentious issue is a proposed rule that would limit state workers' access to out-of-state medical care.

For example, employees would only be able to seek in-network care with a specialist in another state when it is deemed "medically necessary," or "there is no provider reasonably available to them in New Jersey or close to their home," according to the senate leadership.

(Reporting by Edith Honan; Editing by Dan Grebler)