In 1997 Christie Whitman wanted to eliminate pension payments from the budget in order to pay for an income tax cut and generate phantom property tax reductions so, as a concession to the unions, some “non-forfeitable right” language was included in the law.
This morning the state Assembly Judiciary Committee is looking at ACR109 which seeks to add Section IV to Article VII of state constitution and starts off:
The State shall make its annual required contribution to each retirement system and pension fund for public employees administered by the State as that contribution is determined by the board of trustees of each system or fund in consultation with the actuary for that system or fund. The annual normal contribution plus the annual unfunded accrued liability contribution together shall be the annual required contribution. The actuary for each system or fund shall compute the annual required contribution based on an annual valuation of the assets and liabilities of the system or fund pursuant to consistent and generally accepted actuarial standards.
But then we get more “non-forfeitable right” language:
Vested members of a retirement system or pension fund for public employees administered by the State who were members of a system or fund prior to May 21, 2010 and who attained five years of service credit in the system or fund and were provided pursuant to law with a non-forfeitable right to receive benefits shall have an indefeasible non-forfeitable right to receive benefits as provided under the laws governing the system or fund upon the attainment of five years of service credit in the retirement system or fund. A “non-forfeitable right to receive benefits” shall mean that the benefits program, for any employee for whom the right has attached, cannot be reduced.Vested members of a retirement system or pension fund for public employees administered by the State for whom the non-forfeitable right was not provided by law who attain ten years of service credit shall have an indefeasible right to receive the benefits earned each year under the laws governing the system or fund. This paragraph shall not be construed to preclude forfeiture, suspension, or reduction in pension benefits for dishonorable service by a member.