Joanna Capasso & Thomas Harrington are the incoming chairpersons for 2018-2020. Look for updates soon.
In the Governor’s State of the State Report, he put forward the idea of using the money from the state lottery towards the pension fund. NJEA has not taken a position on this proposal as of this writing because of many unanswered questions from the governor’s office.
The five year contract with Express Scripts is coming to an end and companies are able to bid on a new contract. Even if a new company is selected, the present prescription plan benefits would stay in place.
Based on the report from 2015-16 our pension fund is currently funded at 49% due to a down market return. At this rate of return the fund would not reach 80%, which the reinstatement of our COLA is based on, until the year 2047.
On a somewhat brighter note, the quarterly pension payment into our pension fund was passed and the first quarterly payment was made in March of this year. Future quarterly payments are to be made in June, September, December and each quarter thereafter.
As part of the gas tax increase legislation, beginning in 2017, most retirees will be able to exclude an additional amount of retirement and pension income from their New Jersey incomes taxes compared to previous years. No changes have been made to the federal income tax provisions as a result of this law.
The state legislature will reconvene next week and they have until June 30 to put together a balanced budget, so stay tuned.
Lastly, in December 2015, President Barack Obama signed the Every Student Succeeds Act (ESSA) into law. ESSA brings opportunities and new responsibilities to local school districts. By law NJEA members have a seat at the table. NJREA members who are interested in providing supportive and meaningful input may wish to serve as a community member of the local stakeholder engagement team. Although there remains some uncertainty surrounding ESSA’s implications for school districts, enough is known that stakeholder engagement is a required component. Questions about ESSA can be directed to Sean Hadley, Association Director for Government Relations at firstname.lastname@example.org.
NJ Tax Law Benefits Retirees
Within the legislation that increased the gas tax by 23 cents a gallon in October, there were adjustments made for taxes in other areas. As a result, beginning in 2017, certain retirees may be able to exclude an additional amount of retirement and pension income from their New Jersey income taxes. By 2020, the amount of retirement and pension income that could be excluded from New Jersey income taxes will increase five-fold.
For those retirees who qualify—some age and income restrictions do apply—the exclusion amount will increase over a five-year phase-in period.
It’s important to note that no changes have been made to the federal income tax provisions for public employee pensions as a result of this law. To learn more about whether or not you qualify for the exclusion, visit bit.ly/njpensiontaxlaw or contact the Division of Taxation at 609-292-6400.Individuals with specific questions regarding their personal taxes should seek guidance from a tax professional.
MCREA and your Government Relations Committee continue to monitor all legislative efforts which might affect our pension and/or health benefits. When an item of particular note comes up, our Technology and Website Chairperson, Kathi Eckert, quickly sends out an email blast to the membership for whom we have email information on file. If you need to update or add your email address, please send the info to email@example.com.
Currently legislation (A-3296) sponsored by Assemblyman Troy Singleton and Benji Wimberly has been introduced to credit increases from employee pension contributions to the state pension funds, rather than as an offset of employer pension contributions. As of this writing (Jan. 28), this bill has been referred to the Assembly Appropriations Committee. We would like to see this bill passed and ask that you contact your assembly members and urge them to co-sponsor this legislation.
The background on this bill began in 2011 under P.L. 2011, c.78, when all public employees were forced to contribute more toward their pensions. Specifically, employee contributions from TPAF and PERS members were increased from 5.5 to 6.5 percent of salary. Two years after the law was passed, the state changed its methodology and began using the increased employee pension contributions to offset the employer contributions. This allowed the state to reduce its contribution into the pension system. While this legislation does not dig us out of our pension crisis, it prevents the state from using accounting maneuvers to lower its share of public employer contributions into the pension system.
NJ’s Supreme Court Ruling on the COLA
NJ’s SUPREME COURT ruled on June 9 AGAINST restoring the annual cost-of-living for retired government employees. They upheld the 2011 law freezing our cost-of-living adjustments. With this ruling it could be decades before COLA’s can be restored.
To quote Charles Ouslander, a retired prosecutor and plaintiff in the case, “Based on this decision, all public employees should be gravely concerned that their remaining pension benefits have any legal protections left.” (quoted from full article on NJ.com).
Members, we need your help! Please sign up as a pension activist on the NJEA website and volunteer to serve on one of MCREA’s GR Action Committees. To join a committee please email our Committee co-chairs listed below:
Stacy Morgan Santo and Joe Santo at firstname.lastname@example.org.