Public Employees’ Retirement System Chair Discusses New Pension Lawsuit
Posted On: Jul 27, 2015
NJTV News - Another shot fired in the court battle over public worker pension payments. Four years ago unions cut a deal with Gov. Chris Christie to put pension payments on a secure footing. But when less than expected revenue came in, the state balanced the budget by contributing less than expected payments. The unions sued and the state Supreme Court effectively let the state off the hook. Now the unions have amended their suit citing breach of contract and they’re demanding billions of dollars in damages. The Public Employees’ Retirement System Chair Tom Bruno spoke with NJTV News Anchor Mary Alice Williams about the new lawsuit.
Bruno says this filing from the trustees uses a new tactic different from the previous lawsuit from the unions.
“The union lawsuit that the Supreme Court ruled on was basically the union trying to compel the payment, compel the allocation by the Legislature and the governor. The trustees are using a different tact. We’re not compelling, or not asking for the courts to compel the allocation, we’re simply saying that the Supreme Court ruling did not undo the Chapter 78. In fact it upheld Chapter 78, said it was indeed a contract. The only thing that the Supreme Court said is that the debt limitations clause precludes us from collecting the money,” he said.
The state Supreme Court ruled New Jersey didn’t have to make promised pension contributions, however Bruno says that they had a contract and are looking for the money in the form of a judgement.
“That was the reason for the amended filing for our suit. The trustees suit was different from the unions suit. So the trustees have said this is money owed, we’ve given you a bill every year,” Bruno said. “In fact, even in 2014 they allocated the money, the governor signed the legislation allocating the money and then didn’t pay it because of a fiscal emergency. What we’re saying is but that met all the requirements of a contract. … We’re saying that money needs to come back to us now in a form of a judgement. We’re trying to get a judgement against the state which puts us in the front of the line, but it also invokes the contract collections.”
The governor and the pension commission has said there simply is not enough money to fund the current pension and benefit system for state workers. Bruno said that cutting certain corporate tax breaks could solve the problem.
“From a literal standpoint, the trustees don’t tell the governor how to run the government, but I can tell you that if he’s giving a tax break to corporations on a pretense of job creation and those jobs were not created — $5.4 billion dollars since he took office. If he just cut half of those tax breaks it wouldn’t raise taxes, just eliminate the tax breaks on half of that, that would be enough to pay what he owes so far,” Bruno said.
So what’s the next step?
“We’re going to continue. We’re fiduciaries of the fund. We have an obligation to collect the monies. We collect it from our members, we need to collect it from the employers as well. These are delayed wages. The Supreme Court has held that, the Constitution holds — these are deferred wages,” he said. “The people already worked for these wages so the idea that it’s an entitlement first of all is wrong. It’s no more an entitlement than Social Security is. You pay into it, you expect to get your money back when you retire. The same thing with this. The employees have put money in, and the state deferred some of their wages on the pretense of paying it later. So we’re going to continue to try to seek some kind of legal remedy. It may require legislative action.”