The state's 500,000 public workers await a final legislative vote today by the state Assembly on a bill that would significantly alter what they pay for their health care and retirement packages.
The proposal introduced June 13 by Senate President Steve Sweeney, D-Salem, Gloucester, Cumberland, boosts the share every public employee will pay toward health insurance premiums and to their pensions.
But as Democratic lawmakers struggled to come to an agreement on the bill last week, the fine print of the proposal has evolved to change or exclude certain provisions.
A ban on unions ever determining their health care benefit terms through collective bargaining was rewritten to sunset in 2014, a provision pushed for by Assembly Speaker Sheila Oliver, D-Essex.
On Monday, Sweeney and Oliver also removed a provision that would have limited the circumstances in which employees in the state health care plan could seek care at hospitals outside New Jersey.
Immediate changes to the pensions system mean the state’s seven pension funds will be replenished at a higher percentage of their estimated obligations. Democrats say the legislation is estimated to save the state $72 million and local governments $35 million in the first year.
Judges vested in the Judicial Retirement System pension fund will be asked for the greatest increase in contribution: a 9 percent increase, phased in over seven years.
Teachers enrolled in the Teachers’ Pension and Annuity Fund, TPAF, and workers in the Public Employees’ Retirement System, PERS, will contribute an additional 1 percent of their salary immediately, and another 1 percent phased in over seven years.
Meanwhile, employees vested in the Police and Firemen’s Retirement System, PFRS, and the State Police Retirement System, SPRS, funds will pay an additional 1.5 percent immediately. New police and fire employees would receive pensions equal to 60 percent of their salary after 25 years, rather than the current 65 percent. They would be eligible for 65 percent of their salary after 30 years of service.
Current as well as future retirees will be hit by a freeze on cost-of-living increases.
State and local governments in the future will be required to make pension payments as defined as what is “required” by actuaries, a contractual provision phased in over seven years. After that time, unions could sue the state to force payment.
The bill also sets the creation of new eight- to 10-member boards to oversee each pension fund. State and local police, firefighters and municipal employees will be allowed to create those boards immediately, while other unions must wait to do so until their pension funds are on track to reach 80 percent of obligation within seven years.
Those boards can determine cost-of-living adjustments, retirement ages and disability benefits.
The health care proposal would not affect current retirees.
Employees would be asked to pay contributions to health premiums in increments that are adjusted by salary range and ramped up over time.
People earning less than $20,000 would contribute 0.9 percent of the cost of health care premiums in their first year, and up to 3.5 percent by year four.
Those earning more than $140,000, the highest earning bracket, pay 8.8 percent in year one and 35 percent in year four.
The Assembly is scheduled to meet 1 p.m. today.
Although the out-of-state health care provision was removed from the reform bill, Democrats drafted separate emergency legislation to create a plan that would make it more expensive for workers to receive routine medical care outside New Jersey.
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