New Jersey Senate Bill SCR57

New Jersey 2024-2025 Regular Session

• Introduced: 1/9/24
• Refer: 1/9/24

Caption

Proposes constitutional amendment to require payments by State to State-administered retirement systems and establish in Constitution right of public employees to pension benefit; provides for enforcement of funding obligations and benefit rights.

Impact

If enacted, SCR57 will establish an enforceable obligation for the State to make its pension contributions starting from July 1, 2023, with a schedule delineating quarterly payments throughout the fiscal year. It will require that pension contributions be included in the annual budget, providing a legal framework that overrides previous limitations. This amendment is designed to address ongoing concerns about the funding and sustainability of public pension systems, which have been under financial strain, with past contributions often falling short of required levels as determined by actuaries

Summary

Senate Concurrent Resolution No. 57 (SCR57) proposes a constitutional amendment that mandates the State of New Jersey to make its annual contributions to public employee pension systems. This legislative effort arises in response to a ruling from the New Jersey Supreme Court, which stated that the State's obligation to fund these pensions was unenforceable due to existing constitutional provisions. The proposed amendment aims to reinforce the State’s commitment to fund pensions and ensure the rights of public employees to receive their earned benefits are explicitly stated within the state's Constitution.

Contention

The amendment has sparked discussions regarding its implications for state budget priorities and the sustainability of public employee benefits. Notably, the measure preserves existing rights for vested members hired before May 21, 2010, while also extending rights to newer employees after ten years of service. Critics may argue that mandating such payments could limit the State's fiscal flexibility, especially in times of economic downturn. Proponents, on the other hand, view this as a crucial step to uphold the State's commitments to its employees and secure the future of pension systems.