A major recommendation of the Steve Sweeney task force is to cut back again on public pensions. At the headquarters of the CWA in Trenton, that’s not going over so well.
“I think that it’s interesting that they’ve made a series of recommendations that everybody knows isn’t going to happen. Like they’re not going to put toll roads all over the state of New Jersey. There’s not going to be a merger of 300 school districts. What we really have is Steve Sweeney once again coming to the exact same well he always comes to, which is let’s look at the civilian public workers and see how he can turn barely middle class jobs into not-middle class jobs,” Hetty Rosenstein, CWA’s state director, said.
The task force recommended that teachers and state workers with less than five years service, and all new workers, be switched from a defined benefit to a defined contribution plan. That means a 401(k) type plan or possibly a hybrid of the two.
Two Rutgers faculty members who sit on the 25-member task force endorse that recommendation.
“There is no way, without some kind of modification to the pension system, that this state going to be in a position to fund future liabilities. It’s that simple. The numbers are clear,” said Ralph Caprio, the director of the master of health administration program at Rutgers University.
In 2011, then Gov. Chris Christie signed historic legislation requiring public workers to pay 7.5 percent of salary into the pension system. It also raised the retirement age to 65. Sweeney was instrumental in passing that bill.
In 2016, Christie went for a second round of pension reform. He appointed a task force headed by Republican Tom Healy and Democrat Tom Byrne, but nothing concrete came out of it.
Now Sweeney is back again, saying the changes made to date haven’t been enough.
“In the Christie years, we were really reliant on economic growth that was going to help raise the budget, enable us to make more contributions to the pension system, to hopefully fix the problem. That didn’t work,” task force member and assistant director of the Bloustein Local Government Research Center at Rutgers University Mark Pfeiffer said.
“The TPAF, the teachers pension fund, and the state pension funds are due to run out of money in the years 2029 and 2032 if we continue funding the way we are,” said Richard Keevey, a former state treasurer.
The CWA leader says the current $60 billion liability of the pension funds is enough to pay current retirees and doesn’t change if you keep new hires out. The state has paid in only half what it promised in 2011, she adds, and new hires would keep the money flowing in if allowed to stay in the system.
“There is nothing new here. There’s nothing innovative here. This is not going to save New Jersey. It’s not going to fix New Jersey. It’s just going to destroy the pension for thousands of people,” Rosenstein said.
She’s also unhappy with the recommendation that employee health care benefits be scaled back from platinum quality to gold.
Sweeney plans to take the task force report on the road.