For the proposed pension reforms to work the New Jersey State Constitution needs to be changed and the reasons are explained on page 12 of the pension commission’s report:
This Report differs from other reform proposals in recognizing that some existing benefits must yield to put in place a program that is affordable, sustainable and fair to all. A particular source of difficulty for adjusting benefits is a 1997 statute that, for over a decade, extended to vested employees a “nonforfeitable right” to receive pension benefits as provided under the laws governing the retirement system at the time they reached five years of service. As events have transpired, employees with sufficient length of service—currently 89% of all employees participating in PERS at the State level and in TPAF—have been spared any reduction in their right to future pension benefit accruals. This has kept pension costs unsustainably high and has impaired the effectiveness of almost all subsequent reforms of pension benefits, as these reforms have been limited to employees who lacked the seniority at the time of the reform to claim nonforfeitable rights.
Because of claims of constitutional protection, the ability of the Legislature to reduce pension benefits for individuals claiming nonforfeitable rights protection has been questioned. As a result, the Commission believes that the best means of ensuring the freedom to effect meaningful reform would be to amend the State Constitution to confirm, notwithstanding anything in the Constitution or laws of the State of New Jersey to the contrary, the power of the State to reduce existing pension and health benefits. If sufficient health benefits savings can be achieved to permit funding
of the reduced pension obligations, it would be possible to include in the amendment a guarantee of the pension funding specified in the payment schedule.
The amendment process requires approval by the voters in a general election. Given the public’s stake in the issue, having the public agree to the terms of this solution should be seen as a virtue.
What this means is that the commission feels that the 1997 reform agreement precludes freezing accruals so they want put a question on the November ballot that would invalidate that provision of the law. Wording on the ballot question will be hotly debated but if they want to be honest about it:
Public Question #1:
Official wording: Do you approve amending the Constitution to allow reductions in existing pension and health benefits for public employees?
Unofficial interpretation: Christie Whitman in 1997 wanted to reduce income taxes so she played games to get the state to not have to make any contributions into the pension system but to get that concession from the unions she had to obligate the state into guaranteeing benefits (even future accruals) for participants in the plans with at least 5 years of service. The state did sharply reduce (even eliminate in some years) their contributions and now benefits have to be reduced since there is not enough money in the system to even pay 50% of what would be due to the retirees ALONE. Hence, this ballot question.