Posted by Matt Rooney On June 09, 2015 0 Comment
By Matt Rooney | The Save Jersey Blog
Did you hear that noise, Save Jerseyans?
It’s thousands of public sector union heads exploding in unison.
The New Jersey Supreme Court issued an 5-2 opinion in the pension payment case (Christopher Burgos v. State of New Jersey) on Tuesday morning, reversing a lower court’s directive to the Christie Administration to make a billion dollar pension payment. Click here to read it. For a little background on the Christie/pension payment controversy, click here.
The majority opinion (which did not include Chief Justice Rabner) relied on the text of the Debt Limitation Clause:
“No matter how worthy the cause to be advanced by Chapter 78, the Debt Limitation Clause speaks directly to this situation and, in pertinent part, commands:
“‘The Legislature shall not, in any manner, create in any fiscal year a debt or debts, liability or liabilities of the State, which together with any previous debts or liabilities shall exceed at any time one per centum of the total amount appropriated by the general appropriation law for that fiscal year, unless the same shall be authorized by a law for some single object or work distinctly specified therein. . . . [N]o such law shall take effect until it shall have been submitted to the people at a general election and approved by a majority of the legally qualified voters of the State voting thereon.’”
“The purpose to be achieved by the Debt Limitation Clause dovetails with the Framers’ intent for a fiscally responsible annual budget process,” the majority continued. “Efforts to dedicate monies through legislative acts other than the annual appropriations act have no binding effect. They are read as impliedly suspended when contradicted by the budgetary judgment of the presently constituted Legislature acting in concert with the Governor in their constitutionally prescribed budget formation roles. Those debt limitation and appropriations-related constitutional clauses conflict with the contractual language of Chapter 78 and thwart plaintiffs’ impairment claims.”
https://savejersey.com/2015/06/supremes-side-with-christie-on-pension-payments/
Is everybody happy now?
And the best pull quote:
That the State must get its financial house in order is plain. The need is compelling in respect of the State’s ability to honor its compensation commitment to retired employees,” it added. “But this court cannot resolve that need in place of the political branches. They will have to deal with one another to forge a solution to the tenuous financial status of New Jersey’s pension funding in a way that comports with the strictures of our constitution.” “Commitment to retired employees” Get it?
Well I guess all those TV commercials that seemed to roll every few minutes was more union money down the crapper.
Here come the concessions: maximum pensionable income will be capped at $110K like CA, with pension at 50% of that, ie $55K, in-line with current PFRS avg $57K. New employees will be moved to 401(k) style defined contribution plans, not defined benefit anymore so that politicians can no longer interfere in pension funding issues and raid the funds for peg Union projects like Xanadu, and both pension contributions and health insurance premiums paid by state workers will meaningfully increase. Bye-bye accumulated leave payouts on retirement at six months of avg final comp rate – use it or lose it. Taxes probably going up too if all of these concessions are made, the sooner the better. Christie’s dashed Prez bid means he can now use the nuclear option on certain unions and their abject greed, about time.
Down the crapper is right…where are all our union lackey toadies and sycophants now? Carey chime in?
Anyone?
The Record reported Friday that Christie gave raises to 27 staff members, totaling more than $330,000 in additional payments. The average raise was 23 percent.
So all interested party that want to sit dow with our Gov to discus how to fix the problem you have to wait till he get back.
CAMPAIGN DAYBOOK
Gov. Chris Christie, R-N.J., continues a multi-day New Hampshire swing with ‘Politics and Eggs’ at St. Anselm College in Manchester.
all fire and police are in the union
The Gov better watch his back….the state police are his escorts….they drove Corzine into a ditch.
“all fire and police are in the union” so what your point?
The decision paved the way to the federal supreme court , so the battle may not be over.
If the matter was rejected by NJ’s Supreme Court, it’s highly unlikely that The Federal Supreme Court would go the other way. The SCOTUS tends to lean slightly more to the right than their NJ colleagues. There’s also massive nationwide ramifications for the SCOTUS to consider here, as this same issue applies throughout the country. Many States and local Governments are operating at near bankruptcy. The fat lady is doing voice scales in her dressing room.
Probably worth looking at, here’s the roadmap to putting state finances on a more sustainable path now that Christi e can get on with it https://www.state.nj.us/treasury/pdf/FinalFebruaryCommissionReport.pdf
and when it comes to pensions and 401Ks and 403Bs the Federal Supreme court is very much on the side of the employee.
The Supreme Court Decision in Tibble vs. Edison Is a Game-Changer
On May 18, the United States Supreme Court issued its decision in Tibble v. Edison International. On its face, the court’s holding is unremarkable. In a rare 9-0 decision, it ruled that plan sponsors have a continuing duty to review investments in retirement plans and to decide whether or not to keep or sell them. The lower courts (the Ninth Circuit Court of Appeals and a federal District Court) previously held that, because some of the funds at issue were put into the plan in 1999, claims relating to those funds should be barred.
The Supreme Court looked at the body of law governing the conduct of trustees and applied it to the obligations of plan sponsors, stating:
“Under trust law, a trustee has a continuing duty to monitor trust investments and remove imprudent ones. This continuing duty exists separate and apart from the trustee’s duty to exercise prudence in selecting investments at the outset.”
While this might not seem ground-breaking, the ramifications of this decision are profound. Here’s my take:
Plan sponsors may require advisors to be 3(38) ERISA fiduciaries
The U.S. Department of Labor (DOL) has proposed rules that would require advisors to retirement plans to be fiduciaries. The securities industry and its powerful lobby are doing everything they can to defeat this effort.
Brokers and insurance companies are typically not 3(38) fiduciaries to retirement plans. A 3(38) fiduciary accepts all liability for the selection and monitoring of plan investments. The decision in Tibble makes it clear this liability could be extensive.
Yep, we’re close to having a path towards state bankruptcy…. healthcare benefits aren’t protected in NJ so they’re gone, but pensions will be harder