STATE – The New Jersey Education Association says that the pension and benefit reform bill heading for final passage tomorrow would leave retirees facing “crippling” cuts to their pensions.
Among the provisions of the bill, annual cost-of-living adjustments would be eliminated for all current and future retirees.
“Legislators do not seem to understand the impact this legislation will have on retired school employees,” said NJEA President Barbara Keshishian. “Without a cost-of-living adjustment, the purchasing power of their pensions will erode to levels that will cause them terrible hardship at the most vulnerable time of their lives.”
According to the union, retirees would see the purchasing power of their pensions decline between 33 and 44 percent, depending on their life expectancies and assuming an annual inflation rate of three percent per year.
Keshishian added that the legislation will force teachers and school employees to pay more into the pension system for declining benefits, while failing to require the state to immediately make its required contributions – a primary reason the pension systems are so deeply under-funded.
“Not only are current employees being asked to increase their personal contributions to the pension system from 5.5 to 7.5 percent of every paycheck, but they now face retirements that will be marked by a steady decline in their purchasing power,” Keshishian said.
“I urge members of the Assembly to search their consciences, and ask themselves if they think it is right to change the rules for people who have contributed so much to the quality of life in New Jersey,” she said.
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