Governor-elect Phil Murphy on Tuesday declined to give an opinion on a bill that would boost pensions for politicians, even though a benefits task force he once chaired called for an end to pension padding by the politically connected.
“I don’t know the bill, per se,” Murphy said when asked about legislation that has sped through the lame duck Legislature and would give outgoing Camden Mayor Dana Redd and a few other elected officials heftier pensions.
Instead of weighing in on the controversial bill, the incoming governor reminded reporters in Trenton that he chaired a task force that made several recommendations to save the state’s cash-strapped pension system, which is now $90 billion underwater. Murphy highlighted that the panel said in a 2005 report the state and local governments should honor their obligations to make payments into the pension system. “Folks have to get back to trusting our state and our pension, and our pension moves speak volumes about our ability to regain that trust,” he said.
That same report, though, also said the state should “end pension boosting, padding, tacking and other systemic abuses.”
“The state pension system primarily exists to provide retirement security to public employees who dedicate their careers to public employment,” the report said. “It was never intended to be a means for a handful of politically connected individuals to enhance their own retirement benefits at public expense.”
When asked whether it was appropriate to give elected officials bigger pensions at a time when public workers who are not politically connected have seen cutbacks to their benefits, Murphy said: “I haven’t looked at the specifics of it. The bigger picture is we need to get to a better place on pensions.”
His commission’s report gave a clearer answer: “The pension system was meant for career employees. Abuses by the politically well-connected are more than simply inappropriate; they erode the integrity of the system.”
The Senate passed the pension padding bill for politicians on Monday, and an Assembly committee advanced the bill in the lower house of the Legislature. The bill could be approved by the Assembly and signed by Gov. Chris Christie — a Redd ally — during the waning days of the lame-duck Legislature. The legislative session ends Jan. 9.
At issue is a 2007 law that put new elected officials in a retirement plan, similar to a 401(k), called the “Defined Contribution Retirement Program.” That plan offers less generous benefits than PERS, one of the state’s largest and least financially sound pension funds. (In 2005, Murphy’s task force wrote: “Elected officials and appointees should participate in defined contribution plans.”)
Elected officials already enrolled in PERS before July 1, 2007, however, were allowed to keep building up their heftier PERS pensions as long as they remained in the same elected office, with an exception for lawmakers who jumped between the Assembly and Senate.
Redd, a Democrat allied with Christie and South Jersey power broker George Norcross, became Camden’s mayor in 2010. She had to resign the simultaneous offices she held in the city council and state Senate when she became mayor, and the PERS pension she had been accruing was frozen.
The new Senate bill would allow Redd and others who served in elected office on July 1, 2007 — but later jumped to another elected office — to re-enroll in the PERS fund, so long as they have served at least 15 years with no break in time between holding different offices. Those elected officials also would be able to make their pension enrollment retroactive to the date of taking any previous elected office.
The bill would allow Redd to return to PERS and draw a pension commensurate with her more than $100,000-a-year salary as mayor, and she also would be able to accrue more time toward her pension because of the retroactivity provision, accounting for her years of service in the city council.
The bill could also benefit Assemblyman Ralph Caputo (D-Essex) and Sen. James Beach (D-Camden), Senate President Steve Sweeney (D-Gloucester) said Monday. It’s unclear who else would be affected by the bill and how much it would cost the state’s pension system.
Murphy was asked about the bill during a news conference to announce that he would nominate Assemblywoman Marlene Caride to become the state’s next banking and insurance commissioner. Caride (D-Bergen) voted to advance the pension padding bill from the Assembly Appropriations Committee, which released the bill in roughly one minute with no debate.
Asked what that vote said about her deliberative process, Caride said the legislation is meant to “correct the intent” of the 2007 law “to help bring individuals that were already in the pension plan to continue in the pension plan.” But she incorrectly said the new bill would affect lawmakers who jumped between the Assembly and Senate. The 2007 law specifically carved out an exemption for state lawmakers, letting them hold different offices in the Legislature and stay in the pension system. “It will also help a small group of council members that may have ended their positions locally” and then served in higher office, forcing them out of the PERS system, she added.
