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Compliance April 7, 2015
Fight Over New Jersey Pension Contributions Not Over
The state’s highest court has agreed to weigh in on whether New Jersey must make its promised payments.
Reported by Rebecca Moore
The New Jersey Supreme Court has agreed to hear a case about whether the state violated the law by making pension contributions that were less than what was agreed upon in 2011 pension reform.
The state is appealing the decision of a Superior Court judge who ruled the state’s failure to make promised contributions into its pension systems was a substantial impairment of public employees’ constitutionally protected contract rights. The court ordered the state to pay approximately $1.57 billion to the pension funds, which was previously approved in a fiscal year 2015 budget by the legislature, but removed by Governor Chris Christie.
According to the Associated Press, the state disagrees with the court’s decision and argued in a brief last week that Jacobson had “fabricated a constitutional entitlement to pension funding for state employees.”
The state also cut its pension fund payment for last fiscal year, but that move was approved by the courts as necessary under the Contract Clause of the State and Federal Constitutions due to the severe unanticipated revenue shortfall that arose at the end of FY 2014.
Oral arguments before the New Jersey Supreme Court have been set for May 6.