New Jersey Pension Lawsuit Could Affect New Jersey’s Pension Funds

October 7, 2021 by Lewis
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New Jersey pension lawsuit is still in federal court. The recent federal lawsuit brought against state government employee unions by state government employee unions in an effort to overturn New Jersey’s landmark pension reform legislation continues to grind onward, as other state courts have recently ruled in favor of pensioners. The latest development in this labor dispute comes from the state supreme court, which has taken up the case after three lower court judges ruling against the state’s top pension board. If the state’s high court declines to hear the case, the legislative pension plan will go back to its original version.

What exactly is this latest lawsuit all about? It involves a dispute between two municipalities-the City of Jersey City and the state of New Jersey-over the legality of the board’s decision to allow pension plans without employer contributions to these pension funds. According to the complaint filed by the New Jersey Education Association, which is the local teachers’ union, the three New Jersey state court judges improperly influenced the pension plan’s approval process. The complaint contends that the judges violated the state constitution and the statutory law governing pensions when they changed the rules in June of 2021. This new lawsuit is part of the larger tug of war playing out between the unions and the Christie administration over pension reform law. While no one disputes that the pension laws need to be changed to help current and future retirees, the latest legal skirmish over the law’s implementation seems to have spilled over into another area entirely.

One of the most significant outcomes of the New Jersey pension lawsuit is the ruling that NJ state employees can now petition for wage increases, job adjustments, and other benefits within twenty-four months of the date of the final judgment. Because the pension changes go into effect in January, the change will not go into affect until the next year, providing no extra time for appeals. If the unions go on strike in the next twelve months, this would be an enormous benefit for the citizens of New Jersey, who would no longer have to pay for the extra costs associated with the illegal closures and pension hikes. The next year, when the pension of every New Jersey citizen will have increased by at least five percent, the savings associated with the settlement must be made.

One other major development in the New Jersey pension lawsuit involves a request by two New Jersey state representatives to the federal court from the United Steelworkers union and the American Federation of Retired Executives (AFT) for class-action status for the retirees. The lawyers for the state claim that the settlements between the unions and the AFT were improperly negotiated by the state and that the terms of the settlements do not comply with the settlement orders from the federal court. A motion to dismiss was also filed by the state. Both motions have so far been denied by the courts. Both unions are challenging the legality of the settlements through the federal court.

According to the actuaries of both the state of New Jersey and the United States government, the pension reforms passed by the Obama administration will increase the financial security of the retirees of New Jersey and other states. This will increase tax revenue, which will be used to improve the state’s economy. The pension system is currently underfunded as estimated, and the new Jersey pension lawsuit may push the state to increase funding for the system once it becomes fully funded.

Another part of the pension lawsuit that has the potential to substantially affect the New Jersey budget is the recent announcement by the New York Port Authority and the George Hobbs Ferry Company that they would be merging. The two bodies will be using the same ferry system to deliver freight between New Jersey and New York City. This will, in effect, cut the combined commuter toll by about fifty percent. The pension fund would lose out, but the new companies will create new jobs in the construction industry, resulting in new tax dollars for the state. According to the new jersey pension lawsuit, the merger should be reviewed by the United States Federal mediator in New Jersey. Failure to do so could jeopardize the entire pension fund and the future of the funds in both the New Jersey and New York combined.

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