Scutari, Pou Recommend Methods of Reducing Costly Abuses & Reforming Benefits System
TRENTON – Senator Nicholas P. Scutari and Assemblywoman Nellie Pou, the co-chairs of the Joint Legislative Committee on Public Employee Benefits Reform, today submitted a report to legislative leaders that includes more than 40 specific reform recommendations, many of them aimed at cracking down on abusive practices that have undermined the security and solvency of the state’s public employees’ pensions and health benefits system.
“A key focus of our committee was eliminating the abuses of the retirement system that harm both taxpayers and honest, hard-working public employees,” said Scutari D-Union, Middlesex and Somerset. “To that end, we developed several reform measures designed to curtail the ‘padding’ and ‘tacking’ that create significant unfunded liabilities and threaten the pension system’s financial stability.”
“For the sake of taxpayers and career government employees, New Jersey has to do a better job of managing and safeguarding its massive pensions and health benefits system,” said Pou (D-Passaic/Bergen). “The mounting costs and instability of the public benefits system threatens to starve other state programs of resources and cripple the state’s ability to provide aid to schools and towns.”
Scutari and Pou highlighted several recommendations from their co-chair report, including:
Limiting defined benefit pension plans to full-time, career employees and creating a new defined contribution program for all new part-time employees, elected officials, and full-time appointed officials;
Prohibiting public officials convicted of crimes involving abuse of their office from collecting retirement benefits;
Designating one job for one pension;
Prohibiting professional service contractors from participating in the Public Employee’s Retirement System (PERS).
A ban on dual office holding that would prospectively prohibit New Jersey elected officials from simultaneously holding another elective office.
“These proposals will go a long way toward putting an end to the abuses that have dominated our system of public employee retirement benefits,” said Pou. “The days of public officials, contractors, and unscrupulous individuals gaming and abusing a system of benefits designed for hard-working, career public employees are numbered.”
“Crafting these reforms was no easy task, and doubtlessly there are recommendations that will be met with disagreement from parties on all sides of the issue,” said Scutari. “However, I am satisfied that we have developed a series of reforms that will allow us to attract and retain a talented workforce while delivering a benefits system that is more equitable and more affordable for the taxpayers.”
The co-chairs said they were encouraged by the committee member’s work in addressing the complex issues involving benefits reform.
“In 10 weeks time, we have achieved more in terms of restoring the integrity of our retirement systems than in the previous 10 years,” said Scutari.
“The actuarial numbers show that we must reverse the status quo of under-funding the state’s pension obligations and allowing non-career employees to milk the system,” said Pou. “Unless we make bold and lasting changes, pensions and health benefits will consume a whopping 21 percent of the state budget in just three more budget cycles.”
The co-chairs said they expect to formally present their final report to the full joint committee at a public meeting next week for ratification and adoption. Once adopted, legislation stemming from the recommendations in the report will be introduced and submitted to the Legislature for further consideration. Scutari and Pou said they will work with the leadership of their respective houses to pass the bulk of this legislation by the end of the year.
The co-chairs praised their fellow members who worked on a bipartisan basis to achieve reforms that will make a difference for New Jersey taxpayers and career public employees. They noted that the committee’s two Republican members – Senator William Gormley and Assemblyman Kevin O’Toole – have already signed onto the report’s recommendations.