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December 1, 2009

RE: State Report Confirms Need for Pension and Benefit Reforms

Dear Mayor:

The today’s report of the New Jersey Commission of Investigation, titled The Beat Goes On: Waste and Abuse in Local Government Employee Compensation and Benefits demonstrates what the League has long argued:  the State must establish reasonable benefits standards for all government employees. Access the report at
http://www.state.nj.us/sci/pdf/The%20Beat%20Goes%20On.pdf

As the SCI’s report notes, the League has been in the forefront of benefit and pension reform for some time.  For example, the League supports a statewide cap on sick leave buyouts for local government employees.  Currently, sick leave buyouts at retirement for state government employees are capped at $15,000.  Both the SCI and the League agree that applying this cap at all levels, including local government, would save the taxpayers a significant amount of money.

In 2006, in response to Governor Codey’s Benefit Review Task Force, the League issued the Correction of Pension Errors (COPE) report.  The purpose of this report was to fill in the gaps of the Governor’s Task Force report and to offer workable solutions to the problem of skyrocketing pension and benefit costs.  Taken together, the SCI report and the COPE report offer a comprehensive plan to deal with the current crisis.

The SCI and the COPE report differ in one important aspect. While the SCI report makes scattered mention of the difference between the strict benefit limits of certain local public employees versus the police and fire employees, the COPE report notes legislative mandates have created different benefits for employees covered by Public Employee Retirement System (PERS) versus employees covered by the Police and Fire Retirement System (PFRS).  These mandates have made PFRS the most expensive local pension system. Any efforts at change must include reform of the compensation and benefits of all local government employees, including police and firefighters.

The League believes that the SCI report, along with the COPE report, represents an excellent guidepost on the path towards repairing public employee compensation, benefits, and pensions.  This long process has already begun with the recent reforms to our pension systems:  the creation of a Defined Contribution Retirement Plan, increasing the requirements to enroll in the pension system, capping the benefit level of new members, raising employee contributions and increasing the retirement age.  Many towns are contractually obligated to provide the current level of compensation and benefits.  The United States Constitution prohibits any state from passing a law that would interfere with contractual obligations.  Thus, we must all hone in on providing a better future for our children and grandchildren.  We look forward to working with municipal officials, state legislators, and the executive branch in implementing reasonable reforms that treat public employees fairly while saving taxpayer dollars.

For further information contact me at (609) 915-9072 or bdressel@njslom.com.

Very truly yours,

William G. Dressel, Jr.
Executive Director

 

 

 

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