Tags: New Jersey | pension | fund | suit

New Jersey Union Sues Over Pension Fund Payments

Wednesday, 22 Jun 2011 05:53 PM

 

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NEW YORK — A New Jersey labor union filed a lawsuit on Wednesday over the failure by Gov. Chris Christie to make payments to the state's pension funds, claiming workers' constitutional rights were violated.

The lawsuit, filed by Local 1033 of the Communications Workers of America, claims that the failure by Christie and his predecessors to make payments to the funds violated a constitutional prohibition against the "impairment of contracts," a lawyer for the union said.

The union also claimed that as a result of the failure to make the payments, the state has made it more likely that political considerations will force a reduction in pension benefits when they come due.

The suit, which names Christie, the state treasurer and the legislative leaders, was filed in U.S. District Court in New Jersey. It asks that a judge intervene on the workers' behalf.

The lawsuit comes as the Democrat-controlled state legislature is poised to give final approval to a plan introduced by Christie, a Republican, to force public employees to pay more toward their pension and health care.

The state Senate passed the measure on Monday, and it is due to come to a vote in the state's lower house on Thursday.

"This is not about the benefits paid to retirees," said Rae Roeder, president of Local 1033. "This is about gross mismanagement by the state and its attempt to shift blame to the victims."

New Jersey's $30.7 billion unfunded pension liability makes it the seventh-worst funded system in the country, while the unfunded liability for retiree health benefits is $56.8 billion, according to Moody's Investors' Service.

Since 1998, the state has made three partial payments to the pension fund and skipped the remaining ones, a CWA spokesman said.

The governor's office declined to comment.

© 2014 Thomson/Reuters. All rights reserved.

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