TRENTON – Union representatives sought to make the case Tuesday that the attack on public workers’ pensions – played out dramatically in New Jersey over the last week – is unnecessary and a far-reaching overreaction to short-term economic conditions.
On the same day that Gov. Chris Christie signed into law a sweeping overhaul of pension and health benefits for 750,000 public employees and retirees, an AFSCME leader and a policy analyst sought to debunk what they see as misperceptions leading to a national trend of attacking public workers’ nest eggs.
Steve Kreisberg, the director of collective bargaining for the American Federation of State, County and Municipal Employees, and Dean Baker, the co-director of the Center for Economic and Policy Research, argued that given current economic conditions a rate of return of at least 7.5 to 8 percent on pension fund investments is reasonable and undercuts “horror stories’’ of fund unsustainability that public officials are telling; and that in New Jersey in particular, public workers are being punished for political decisions dating back to the Whitman administration to withhold pension fund payments.
The unfunded pension liability in New Jersey exceeds $53 billion.
The duo said that the average AFSCME member’s pension is $19,000 a year, and that the average across the public sector altogether is $23,000 a year. These numbers, they argued, show how much of a burden public employees are shouldering when in many cases they are going without raises, states are trimming benefits, eliminating cost of living adjustments, or as New Jersey has done, legislating increased contributions.
But they maintained that in this difficult economy public worker pension funds are being rebuilt, and that although they don’t have a crystal ball for any given year, they insisted that their assumptions about rates of return are not out of line.
As for New Jersey’s particular case?
“Gov. Christie had an agenda when he came into office,’’ said Kreisberg. “He wanted to precipitate a crisis and he did.’’
Under terms of the law that was signed Tuesday, police and firefighter pension payments will go from 8.5 to 10 percent. For other public workers, the levels of increase vary.