Senate Passes Sweeney/Kean Amendment Requiring State Fulfill Pension Obligation

Senate Majority Leader, Stephen Sweeney (D-Salem, Cumberland, Gloucester) speaking at the bill signing for Pension and Benefits Reform.

TRENTON – A constitutional amendment sponsored by Senate President Stephen M. Sweeney and Republican Leader Tom Kean that would require the state to meet its full annual pension obligations was today passed by the Senate.

If passed by the Assembly, the measure would appear on the November General Election ballot.

“All of our pension reforms and other steps to nurse the system back to health will mean nothing if the state continues decide to skips its required payments,” said Sweeney (D-Gloucester/Cumberland/Salem). “We need to get back to basics in our pension system, and that includes using the force of our constitution to make our full annual payment.”

“The state has failed, for many years, to meet its obligation to fully fund the pension system,” said Kean (R-Union/Essex/Morris/Somerset). “This situation has put the retirement funds of thousands of hard working state employees in jeopardy.

If approved by voters, the amendment would give the state seven years beginning with the 2012 fiscal year to catch up to its full obligation – starting with Fiscal Year 2019, the full payment would be required every year.

The leaders noted that the seven-year ramp-up is the most fiscally prudent course, since the state’s multi-billion annual obligation would require the state to otherwise make draconian cuts elsewhere in the budget to make full payment. They said that by building up to a full payment schedule, the state could wisely prioritize its budgets to ensure that pension obligations do not crowd-out other worthy programs.

The measure, which passed 29-7, now heads to the full Assembly for consideration.

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