Dear Mayor:

Today, Governor Jon Corzine signed into law the monumental proposal that will reform the public employee pension system. The new law implements many of the proposals that emanated from the special session of the Joint Legislative Committee on Pension Reform.

Last summer during public hearings on property tax reform, many of you testified to the necessity of reforming a system that is a primary cost driver of property taxes.   While the Special Committee dealt with only one of the three systems, the signing of S-17 is a good beginning. The primary question that will confront many of you is the question of a full time municipal attorney. Many of you employ an attorney on a full time basis with a fixed salary, as opposed to the professional contract provision. We believe full time positions will continue in PERS but it is clear that all professional contractors are excluded from membership in PERS as of January 1, 2008.  We are pleased several recommendations from the League’s COPE Report were included in the new law.

The main feature of the new law establishes a Defined Contribution Retirement Program into which all newly elected and appointed State and Local officials are required to enroll.  Current elected officials continue membership in the defined benefits PERS system. 

The four per cent interest on pension loans are eliminated as well duplicate coverage in the State Health Benefits Program. Sick leave payments for all current elected and appointed officials at all levels of government are capped at $15,000.  Moreover, the voters of the State retain the right to elect whomever they wish to represent their interest in the State House, Town Hall and County Chamber.

S-17/A-21 was a bi-partisan proposal. Its focus is prospective.

For further information, contact Helen Yeldell at (609) 695-3481, ext. 112.

Very truly yours,

                                                                        William G. Dressel, Jr.
                                                                        Executive Director