New Jersey lawmakers approve judicial pension measure

Reuters News
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Posted: Jul 30, 2012 3:18 PM
New Jersey lawmakers approve judicial pension measure

(Reuters) - New Jersey lawmakers voted on Monday to change the state constitution, in a swift retort to a decision by the state's Supreme Court that judges were exempt from last year's pension reform.

The resounding bi-partisan approval by both houses of the legislature allows the measure to be put before voters in November.

If approved by voters, the change would clarify that the legislature has the authority to pass laws that take amounts from judges' salaries to put toward their benefits.

"This is not about penalizing judges," New Jersey Assembly Speaker Sheila Oliver said in a statement. "Public approval of this ballot measure will ensure that everyone contributes equally to a fiscally responsible plan that will help shore up our pension systems."

Across the United States, most states are in some stage of reforming their public pension systems after years of underfunding, poor investment returns and growing liabilities have left them with an estimated collective shortfall of $1.38 trillion.

New Jersey, like other states, has more than one pension fund, including one that is only for its judges and justices.

Democratic state senators said on Monday that the judicial pension fund has about $280.5 million less than it needs to pay out to current and future retirees.

The fund has 52 percent of the money it should contain, making it the "most unstable" of New Jersey's pension funds, the senators said.

On July 24, New Jersey Supreme Court justices ruled in a split decision that a 2011 law -- which called for public employees in the state to increase their pension and healthcare contributions -- violated the New Jersey constitution as ratified in 1947.

The reform amounted to a change in judges' salaries, which are supposed to be protected from cuts by other branches of government in order to ensure an independent judiciary, they ruled. Judges and justices sometimes oppose actions by governors and legislatures.

The amendment to the constitution passed the state Assembly by a vote of 62 to 3 on Monday and swept through the state Senate by a vote of 28 to 0.

The New Jersey State Bar Association said last week that the amendment "represents a rash reaction... and a dangerous intrusion by one branch of government into the independence of another, co-equal, branch of government."

Judges must be free to rule objectively without fear of retribution, the association said.

And unlike other public employees and lawmakers, they are barred from earning extra money from outside work and are not covered by collective bargaining agreements, among other restrictions, the association noted.

Republican Governor Chris Christie said in a statement on Monday that he backed the amendment.

"Rarely has the public seen such unanimity between the legislative and executive branches that the judicial branch was dead wrong," he said.

(Reporting by Hilary Russ; Editing by Leslie Gevirtz and Andrew Hay)