Scutari’s Statement At Benefits Reform Panel On Committee’s Final Report

TRENTON – Senator Nicholas P. Scutari, co-chair of the Joint Legislative Committee on Public Employee Benefits Reform, made the following statement today before the panel voted to release its final report.

“This past July, Governor Corzine, Senate President Codey, and Assembly Speaker Roberts, convened an unprecedented special session of the State Legislature to address New Jersey’s property tax crisis.

“As part of this effort, our Committee was charged with reevaluating a system of public employee benefits that has been evolving through legislation and negotiation for over eight decades, with an eye towards proposing sweeping, substantive reforms. We wanted to produce a system that was affordable for the taxpayers, free from abuse, and still maintained our ability to attract and retain a talented workforce to serve the people of New Jersey. Two weeks ago we issued a report that I believe fulfills these goals.

“All told, we made 41 recommendations, each one a building block towards restoring the public trust and protecting the financial integrity of the system. While I don’t think it’s necessary to recite each item, I would like to touch upon some of the reforms that are most indicative of this Committee’s robust approach:

“Such as the elimination of so-called pension holidays. In order to keep our promises to current public workers and retirees, the State must make annual, actuarially-sound payments into the pension system.

“Abuses such as ‘tacking’ and ‘boosting’ must end. Employees should be forced to designate one job for one pension. Furthermore, part-time employees, elected officials, and political appointees should be placed in a separate defined contribution system, reserving pensions for full time employees only. Vendors and contractors should be out of the retirement system altogether.

“While we respect the collective bargaining process, we must urge Governor Corzine, as part of any new contract, to require State employees to share in the cost of their health insurance premiums. Furthermore, we must give local employers participating in the State Health Benefits Program the flexibility to negotiate premium sharing and plan features with their employees in the first place.

“This Committee is unequivocal about the need to honor our pension obligations to current public workers and retirees. However, we must adopt a pension benefit for future employees that is reasonable and affordable. The n/55 multiple adopted in 2001 should be decreased to the original n/60, and the retirement age should be raised to 62.

“Make no mistake, while there is certainly some low-hanging fruit amongst our recommendations, for the most part these are long-term solutions to long-term problems. But ten, twenty, and thirty years from now, New Jerseyans will continue to reap the benefits of these reforms as the costs to the taxpayer are reduced and the current public workforce enjoys a reliable, stable source of retirement income.

“I want to thank everyone who participated in this process for their hard work and input, including fellow legislators, union representative, and members of the business community. I especially want to recognize those members of the public who took the time to contact the Committee with their views. Your letters and e-mails served as a ceaseless reminder that regardless of differing opinions, we are all New Jerseyans who care deeply about the future prosperity of our communities and our State.

“I would also like to thank Philip Murphy, Chairman of the Benefits Review Task Force, Fred Beaver, Director of the Division of Pensions and Benefits, and the Office of Legislative Services for their time and tireless efforts.

“Finally, I would be completely remiss if I did not acknowledge the hard work of the committee members themselves, especially my co-Chair, Assemblywoman Pou. It is a testament to their commitment to the general welfare of the State of New Jersey that we were able to achieve such a high degree of consensus about what needs to be done.

“With that, I look forward to the comments of my fellow Committee members.”