NJ retirement rate rises in face of pension changes

Reuters Business News
Posted: Feb 28, 2011 6:51 PM
NJ retirement rate rises in face of pension changes

By Edith Honan

NEW YORK (Reuters) - New Jersey workers are retiring at a much higher rate to lock in pension and health care packages ahead of expected action by the state to make the system less generous, public worker unions said on Monday.

New Jersey Governor Chris Christie, a Republican who has been in office for just over a year, has made reforming the pension and health care plans a signature issue in his platform of fiscal conservatism.

Among New Jersey firefighters, the number of new retirees grew to 467 in 2010 from 224 in 2009 and 197 in 2008, according to Dominick Marino, president of the state chapter of the International Association of Firefighters.

"Many members are retiring at least to know what they are retiring with," Marino said, noting that many of his union members were attracted to their jobs because they were certain they and their families would be provided for after retirement.

The retirement rate of teachers in New Jersey has also ballooned. The New Jersey Education Association said the number of teachers' union members whose retirement applications were submitted and approved by the pension fund almost doubled to about 7,250 in 2010 from 2009.

A review by the Star-Ledger newspaper in Newark, New Jersey, found the retirement rate of public employees rose by 60 percent in 2010 from a year earlier, with more than 20,000 police officers, firefighters, teachers and other public employees submitting retirement papers last year.

As Republican governors from Wisconsin to Ohio seek to scale back pension and benefit packages promised to public sector workers, a sudden increase in the number of retirees could swell pension rolls further.

In Wisconsin, Governor Scott Walker's effort to address public sector pensions and curb the collective bargaining powers of their unions has been met with mass protests that have nearly brought the state capitol to a standstill.

Union representatives in Wisconsin said they expect a rush of members who meet age requirements to retire earlier than they might have otherwise.

In New Jersey, Christie's reform package -- which must be approved by the Democrat-controlled state legislature -- would raise the retirement age and increase employee contributions to the pension system. His health plan would force public employees to pay for 30 percent of the cost of benefits.

The state's top Democrats have agreed to work with Christie to reform the system, which they also call unaffordable for New Jersey taxpayers.

New Jersey union leaders say they are open to higher payments but say Christie has demonized them.

(Reporting by Edith Honan; Editing by Leslie Adler)