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The Associated Press March 23, 2010, 8:22AM ET

NJ governor signs worker pension reform measures

Gov. Chris Christie has signed three bills designed to save taxpayers billions of dollars by making pensions and health benefits for government workers less generous.

The Republican governor signed the reform measures late Monday, lingering at the Statehouse until about 8:30 p.m. when the bills reached his desk. He then held a public bill-signing, approving his first legislation taking office in January.

"Today is a great day for the taxpayers of the state of New Jersey," Christie said. "We've been talking for more than four years about the need for this type of beginning, fundamental reform."

The bills require all government workers to contribute at least 1.5 percent of their salaries toward health care costs, cap the amount of unused sick and vacation time workers can cash out at retirement and bar part-timers from enrolling in the state pension system.

One bill rolls back a 9 percent pension benefits increase the Legislature approved nearly a decade ago so that new employees won't be entitled to enhanced pensions. Another provision stops each worker from having more than one pension-eligible job at a time.

The bills advanced over the objections of the unions representing state workers, teachers, police officers and firefighters, all of whom argued that the reforms infringed on collective bargaining.

The Legislature tried to enact similar measures before but failed. Efforts in 2006 and 2008 were largely halted by then-Gov. Jon Corzine, a Democrat, who said he wanted benefits issues to be negotiated, not legislated.

Assembly Speaker Sheila Oliver said she understood the unions' point of view but insisted the actions taken Monday were to help ensure the long-term financial health of the pension system.

"We cannot continue the track we are on," she said.

Christie said the legislation signed Monday has far-reaching savings. He said two of the bills are projected to save $8 billion over 15 years. The third bill, which requires a health care contribution from all workers, is projected to save local governments and school boards $315 million in the coming year alone.

Two other reform bills, both originating in the Assembly, were held. One would bar quasi-government employees from enrolling in the pension system. The other would apply pension reforms to employees of authorities, boards and commissions.

Oliver said those bills would be worked on over the next couple of months and returned for consideration when the Legislature returns from a break in May.

Proponents said the approved reforms will help keep the pension system solvent. Opponents blamed the state for the system's fiscal problems, saying years of missed or greatly reduced state contributions have resulted in a system underfunded by about $46 billion.

The Senate on Monday passed a resolution that would require the state to begin making its annual pension system contribution. The constitutional amendment has yet to be considered by the Assembly. It also would require voter approval.

Christie's budget proposes that the state skip its entire $3 billion contribution in the fiscal year that begins July 1.

Earlier, members of New Jersey's largest teachers union crowded into the Statehouse to voice opposition to the bills.

The teachers said they were worried about being able to retire and concerned cafeteria aides and bus drivers considered part-time employees will be left without benefits.

Though most of the reforms are for new employees, not existing workers, Morristown teacher Kerri Lee Farrell said she worried about a run on the pension system by teachers and others who have worked enough years to retire and who fear a loss of benefits if they remain in the system.

The Assembly also was concerned about the solvency of the system. It insisted on killing a provision that would have allowed employees with less than 10 years in the system to opt out in favor of a 401(k)-style plan.

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