New Jersey Judges Exempt from Pension Reform

07/25/12

On Tuesday, New Jersey Supreme Court justices ruled that last year's state pension reform does not apply to them. The reform had required judges and justices to increase healthcare and pension contributions. In a split decision, the court found that the pension reform violates the New Jersey Constitution.

However, State Senate President Steve Sweeney said that he was disappointed, and the Democrat warned that this “will not be the final word on this issue.” Sweeney further said, “The reforms we passed last year are essential to ensuring the health and viability of every one of the state's pension systems.”

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Sweeney's sentiments were echoed by the state Senate's Republican leader, Tom Keane Jr. Mr. Keane said, “Judges should not be insulated from economic reality by a dubious claim that paying their fair share for the richest benefits in the state government is an impediment to judicial independence.”

In June 2011, New Jersey had enacted Chapter 78, which introduced changes to the underfunded retirement benefits of public employees, including that of the state's sitting judges and justices. However, the New Jersey constitution is clear on the point and declares that salaries of judges “shall not be diminished during the term of their appointment.”

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The new pension rules had required judges to increase their pension contributions from the current 3 percent to 12 percent over a period of seven years. Besides increasing pension contributions, judges were also required to more than double their healthcare contributions resulting in a neat reduction of $17,000 in take home salaries.

The opinion also mentioned that protecting the salaries of judges from cuts imposed by other branches of the government was required to “prevent those branches from placing a chokehold on the livelihood of jurists who might be required to oppose their actions.”

The decision was 3-2, with the two dissenting judges holding that the majority decision was not supported by either the constitution or the intention of the lawmakers who framed the constitution.

However, a judge hired in New Jersey after Chapter 78 was duly passed, would come under its ambit and has to make enhanced pension and healthcare contributions according to the new law.