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Judge: NJ doesn't have to pay COLAs for retirees

Judge: NJ doesn't have to pay COLAs for retirees

May 29th, 2012 in News

TRENTON, N.J. (AP) - A judge has ruled that the state can withhold cost-of-living adjustments for retired public employees who collect state pensions.

The decision last week by Superior Court Judge Douglas Hurd upholds part of the state's new pension law, which denies the adjustments until the retirement systems reach targeted funding levels.

New Jersey Education Association Spokesman Steve Wollmer said Tuesday that it could take decades to reach those targets, noting the state frequently fails to meet its commitment to the funds. He said it's unfair to deny retirees the payments they have bargained and planned for, which is a reason why unions like his challenged the law.

A decision on whether to appeal Hurd's ruling hasn't been made, Wollmer said.

"We obviously disagree with the ruling and will explore all possibilities," he said.

The labor-related law enacted last year is a centerpiece of Gov. Chris Christie's attempts to control government spending.

Along with eliminating cost-of-living increases for future retirees and those already collecting pensions, the law raised the retirement age by three years, to 65, for newly hired workers. It also required the state to begin paying its share into the retirement accounts.

Workers hired before 2008 can still retire at 60. Police and firefighters are still eligible to retire after 25 years.

A federal judge in March threw out another lawsuit brought by New Jersey teachers, police officers, firefighters and other public workers challenging a portion of the law requiring them to pay more for pensions and health benefits. U.S. District Court Judge Anne Thompson dismissed the lawsuit on jurisdictional grounds.

Unions claimed the state has no right to unilaterally reduce pensions, which they said are part of a worker's negotiated deferred compensation package, and promised an appeal.

The law was designed to help shore up the seriously underfunded pension and health benefits systems, which faced the prospect of insolvency unless changes were made.

New Jersey has 800,000 police, firefighters, teachers and others who take part in public pension funds.