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.