Breaking News: NJ COLA Decision Out

Last March Standard and Poor’s Ratings Services lowered its outlook for New Jersey debt from stable to negative citing:

the potential impact of a lawsuit pending before the New Jersey Supreme Court that could require the state to reinstate cost-of-living (COLA) increases for retired public workers, which would boost the state’s $40 billion in unfunded liabilities  higher and annual required payments even higher. (The state’s unfunded liabilities are $135.7 billion under a different accounting standard)

At the time Returers reported:

S&P’s change in outlook “reflects our view of the significant long-term pressures the state is under related to its postemployment benefits and the potential for New Jersey’s situation to worsen over the next year or two based on current litigation and proposed legislation,” S&P analyst John Sugden said in a report.

That COLA decision came out today.

More detail later but, for now, from the opinion:

The judgment of the Appellate Division is REVERSED, and the trial court’s judgment dismissing the complaints is REINSTATED.

JUSTICE ALBIN, DISSENTING, expresses the view that the pension statutes at issue are clear and unambiguous, and guarantee COLAs for retired public employees. Justice Albin believes that, because the cost-ofliving adjustment was contained in laws “governing the retirement system or fund” and not subject to any exclusion in the non-forfeitable-right statute, plaintiffs are entitled to COLAs as a part of their full pension benefits.

CHIEF JUSTICE RABNER; JUSTICES PATTERSON, FERNANDEZ-VINA, and SOLOMON; and JUDGE CUFF (temporarily assigned), join in JUSTICE LaVECCHIA’s opinion. JUSTICE ALBIN filed a separate, dissenting opinion.




17 responses to this post.

  1. Posted by dentss dunnigan on June 9, 2016 at 11:52 am

    I always like to look for the silver lining in any news …..which here it makes it harder for the state to borrow their way to prosperity ….which has proven fruitless for over 40 years .


  2. Posted by George on June 9, 2016 at 12:02 pm

    Does this mean future COLA increases or can the pension scheme reduce payments to all current retirees by the amount of past COLA increases? Can already paid amounts be clawed back?

    Anyone old enough to remember the UnCola man (hint: a soft drink commercial)?


  3. Posted by hard worker on June 9, 2016 at 12:05 pm

    there is no silver lining. the state employees who are average working people in the state had a contract….. while they were working they accepted lower wages and lower cost of living increases that private sector workers were getting so that the state could save the money and give tax cuts to the rich. now a contract is no longer valid in this state and has been broken. the state need not go into debt to pay their obligation. the people of the state got the services during those years, put off paying so they could get a tax cut and now should pay.


    • Posted by dentss dunnigan on June 9, 2016 at 1:27 pm

      You don’t believe the state should stop borrowing ? …because that is a silver lining ,if this state was stopped years ago from borrowing , their would be money to put into the pensions since debt service cost are about 27% of the budget …..


    • “The state employees who are average working people in the state had a contract….. while they were working they accepted lower wages and lower cost of living increases that private sector workers were getting.”

      Were benefits retroactively increased? If so, were public wages commensurately reduced?

      And if private sector wages are falling, as they are over the long term ignoring the business cycle, how does that change things?

      As for those who benefitted from lower taxes, they are in Florida or the grave or heading there. If you can get money back from them, I’m in favor, but that isn’t so easy.


  4. when stuff like this happens that makes no sense, i start looking for ulterior motives….

    are they looking to roll all the funds together with social security and have one payer?

    something is going on, nothing makes sense.


    • Posted by S Moderation Douglas on June 9, 2016 at 7:07 pm



      • i prefer if you refrain from replying to my comments. many questions i raise are rhetorical, meant to stimulate thought….

        please refrain from replying to my comments.


        • Posted by S Moderation Douglas on June 10, 2016 at 9:11 am

          your comment makes no sense. new jersey law eliminated cost of living raises. the new jersey supreme court decided that law was constitutional. a similar law in illinois was declared unconstitutional. different states, different laws, different constitutions.

          i am not an expert on nj constitution. it would be silly for me to second guess their supreme court. i am glad it was a six to one decision. three to four decisions make me nervous.

          “roll all the funds together with social security” ???

          that comes from way out in left field. it makes no sense. how could a decision on colas lead to such an off the wall speculation? no state, nowhere, nohow is going to combine an employee pension system with social security.

          in other words,



          • No they will default to social security – one at a time. Around the same time as national one size fits all health care is imposed on everyone. The reason the so called blue states like single payer is they can offload the burden of unsustainable promised pw retiree benefits to the national taxpayer living in more responsible states (those not populated by grasshoppers)

    • all this legal talk is supposed to be confusing, but this is ridiculous.

      its hard to tell which side won. at first i thought the cola increase won but now i think the cola increase lost, which is good.

      it looks like the people trying to crash up the system (into one payer) are going to lose in the end


      • Posted by S Moderation Douglas on June 10, 2016 at 9:21 am

        where did this “one payer” idea come from? what “people” even hinted at such a scheme?

        how could they?

        why would they?


  5. Posted by Javagold on June 9, 2016 at 11:19 pm

    If you don’t hold it,you don’t own it Understand yet ???


  6. Posted by Anonymous on June 10, 2016 at 6:25 am

    The highest court in the state has spoken. The legislators who bought votes from the unions using legislation of favorable pension benefits as a bargining chip are now saying a famous line from the classic film “Animal House”…”you fucked up, you trusted us”. The public workers made their bed…you know the rest!


    • This is not the end. It is not even the begininning of the end. But if the taxpayers of NJ are lucky, it may at least be the end of the beginning.


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