New Jersey Governor Signs Public Workers Pension Law

July 15, 2010

On June 28, 2011, Governor Chris Christie passed sweeping changes to New Jersey’s pension and health care contribution laws for public workers.  Effective immediately, these changes affect employees who contribute to the Teachers’ Pension Annuity Fund (TRAF), the Judicial Retirement System (JRS), the Police and Firemen’s Retirement System (PFRS), the Public Employees’ Retirement System (PERS) and the State Police Retirement System (SPRS).

This legislation provides for increased pension contributions for public workers. Employees who contribute to PERS and TPAF must now pay 6.5 % and an additional 1%, phased-in over 7 years, which is increased from 5.6%.  JRS employees must now contribute 12% to their pension plans, phased in over 7 years, which is increased from 3%.  SPRS contributions increased from 7.5% to 9%, while PFRS and PERS Prosecutors Part employee contributions increased from 8.5% to 10%.

The law also increases the early retirement requirements for certain public workers. New members of TPAF and PERS must now be age 65 and have 30 years’ service to receive their full early retirement benefits.

Finally, the legislation requires all active, public employees to pay a certain percentage of their health care benefits coverage, with rates increasing based on salary and whether the employee’s family is covered by the plan.  No public employee will pay less than 1.5% of his or her compensation, unless the employee pays for health care based on cost of coverage.

Public employers should review their pension and health care benefit programs immediately to ensure compliance with this law.

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