NJ Politicians Pension-Picking

It’s that time of year again when elected officials who are also government employees and in the New Jersey retirement system look over the smorgasbord of benefits available to them and chow down.

Linden will get a new mayor tomorrow who today is also a county employee but is now having second thoughts about a campaign promise he made to leave that job according to an nj.com story:

Mayor-elect Derek Armstead is re-thinking his plans and may hang on to his Union County job when he takes the oath of office for city’s top job later this week.

As mayor, Armstead said, he must join a different state pension system. Leaving his job in the county IT division would cause him to lose the 17 years accrued in the state Public Employee Retirement System.*

He also has 21 years in that system as a Linden city councilman. Armstead said he has been told that, as mayor, he would be in the separate defined contribution retirement program.

Armstead said he is talking with state pension officials to resolve the issue, but admits he may not leave the county job.

“I have to look out for my family,” said Armstead. “I will figure out a way to work both jobs. I think we’ll be able to handle it.”

He currently receives $56,156 for his county job and another $17,708 as a city councilman.

After defeating incumbent Richard Gerbounka in the November election, Armstead said he would leave the county post.

Taking the mayor’s full-time salary of $67,000 would be a pay cut from his current income, but switching pension systems would cost him benefits, Armstead said.

In 2007 then governor Jon Corzine got through a series of pension reforms:

  • New enrollment procedures will apply only to new enrollees who are hired after July 1, 2007 (unless otherwise noted below).
  • New “Elected Officials” will no longer be considered optional enrollees under the PERS and will be enrolled into the new Defined Contribution Retirement Program. Specific plan information is being developed.

The state set up an Enrollment Guide on their website to help elected officials determine eligibility but mayor-elect Armstead’s situation is still not clear as he is now getting credit for both his current jobs, as are two other Linden council people, Christopher Kolibas and Michele Yamakaitis.  The DCRP will require him to deposit 5.5% for which he will get an employer match of 3%.  Staying in PERS with both salaries will likely mean a doubling of his pension as long as the system remains solvent*.

The questions are whether a move to mayor from councilman is considered a newly elected position and how salaries in both positions will be treated for pension purposes with resolutions to these and related issues likely coming from those with a personal stake in the answers.



* He will NOT lose his 17 years of accrued service since benefits are vested after 10 years of service but that’s a quibbling point since he will likely lose that service anyway when the plan goes bankrupt.

4 responses to this post.

  1. Posted by Anonymous on December 31, 2014 at 4:11 pm

    Hey bud it’s time to choose which FULL TIME job you want. You wanted to be a Full Time Mayor now live with it or resign.


  2. Posted by Javagold on December 31, 2014 at 11:21 pm

    If he doesn’t resign his county job AS HE PROMISED, the taxpayers should have the right to toss him out the next day. Or storm the mayors office and physically throw him out. (Although he most likely will be at his county job). Are you idiots everywhere in NJ, really all going to just sit there and allow these lies and thefts to continue ?????


  3. Posted by MJ on January 1, 2015 at 8:32 pm

    Dont worry Java it is only a matter of time. Sometimes it is best to let the problem sit in the corner until it resolves itself. In this case, it would be insolvency or bankruptcy as John pointed out in his last sentence. Sometimes it is the gluttonous publics who can not see the forest through the trees until it is too late of course. Some greedy publics will come out of it but most will go down with the ship. As I’ve said so many times, if there was a way to fund the pension system as it currently exists then why in the hell wouldn’t the politicians fund it? I think the answer is obvious but what do I know? Happy New Year!


  4. Posted by bpaterson on January 6, 2015 at 7:49 pm

    Just one correction JB1-Mirabella wasn’t a freeholder since 1991. he became a freeholder roughly around 1998. Not 100% sure, but what must have put him in the pension credits was that he was a roselle park councilman in the early 90’s and then jumped to freeholder later in the 90’s.

    Still, its all accumulated in PERS.

    Havent you wondered about senator lesniak’s nephew ex-county manager of union county and his strange pension longevity going back to the early 80’s? Yet he only worked full time for the county as manager for less than 10 years. And then retired at 49yo with 25 years service (lets leave out the reason why he “retired” early) .

    Lesniak placed him as an aide in his legislative office on a small stipend that accumulated the credits. That was for about 12-13 years, then he moved up to big paying jobs, first in Elizabeth, then Union county. No one talks about that budgeted legislative slush fund for each legislator to do what he wants so they put their buddies and relatives in part time, no and low show aide jobs until the chance comes to bump the pension with fulltime high pay public jobs. Back then you got pension credits at a $1,500/annual threshold.


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