Despite mass mobilizations from union members and community supporters and strong opposition from the majority of the Democratic Caucus in both Houses, landmark health insurance and pension benefits legislation passed in Trenton June, 2011. A small group of Democrats, including those in leadership positions, sided with the Governor and Republicans. The legislation will have an immediate negative impact on AFTNJ members and severely restricts collective bargaining rights for the future.
Pensions Contributions Rising
Members who are enrolled in the state Public Employees Retirement System (PERS) or the Teachers’ Pension and Annuity Fund (TPAF) program will see one-percent of salary increase coming out of pay into the system starting in October. An additional increase to be phased over the next 7 years will bring the total pension contribution rate to 7.5% of salary.
See details for PERS at http://www.state.nj.us/treasury/pensions/reform-2011.shtml#pers and for TPAF at http://www.state.nj.us/treasury/pensions/reform-2011.shtml#tpaf
Those enrolled in the 401k-styled Alternate Benefits Program (ABP, which has the carriers such as TIAA‐CREF, Met Life, ING, etc.) will not have changes. Health Insurance Costs Rise for All
There will be significant increases in costs for those participating in the State Health Benefits Program (SHBP) and the School Employees’ Health Benefits Program (SEHBP). Increased costs will be based on a percentage of the premium and will be phased in over four years, based on salary as indicated at http://www.state.nj.us/treasury/pensions/reform-hb-qa.shtml.
New plans are anticipated to be available during Open Enrollment in the Fall of 2011 with an effective date of coverage of January 1, 2012. The pricing of the new plans will then set the actual rate from which the percentage of the premium will be deducted.
Retirees
Retirees pension cost of living adjustments have been frozen and will not increase unless the level of the fund increases to meet certain targets, which is likely to take a long time. Fortunately, retirees and those with more than 20 years in the retirement system will not be charged more for retirement health insurance. Those with more than 20 years in the system, but less than 25, they will pay the same percent of the premium as an active employee. However they will only have to pay 1.5% of their final salary for retiree health care.
New Hires
Those who join the system will immediately pay health insurance costs at the maximum amount for their pay grade, which will make recruiting the best and brightest to the profession more difficult.
What Did the Union Do?
AFTNJ members participated in mass rallies in Trenton, signed email petitions, called legislators and talked to the press. See www.aftnj.org for photos and videos of members and links to articles. The union vigorously opposed this legislation as harmful to members individually, a threat to collective bargaining and poor public policy.
What Did Our Activism Achieve?
Although the final bill is a terrible piece of legislation, it is far better than the Governor’s initial proposal, which called for an across-the-board health insurance contribution along with increasing individual pensions costs at a higher levels than the bill which was passed without a phase-in period. His legislation would not have only dramatically hurt lower-paid workers, but all public employees.
The Governor had also voiced his position that all retirees, current and future, should have to pay for their health benefits premiums at the same high percentage he proposed for future retirees. We were able to get an exemption for current retirees and those with more than 20 years of service from additional costs for retirement benefits. Finally, our activism forced the legislators to exclude the language that would prohibit or limit employees from seeking care from out‐of‐state doctors were defeated.
What’s Next?
AFTNJ is working with the other public sector unions to evaluate a legal strategy in imposition of this legislation, but our struggles are on many fronts. The continuing attack on collective bargaining, unions and the public-sector is part a coordinated right-wing campaign to suppress wages and workers rights. We will continue working for collective bargaining and economic justice for our members and New Jersey.
Union leadership cannot fight this battle alone. We need your participation. AFTNJ will be looking for volunteers to help us elect and re-elect representatives in November that will work with us and stand up for New Jersey’s working families. Email union@aftnj.org to get involved with AFTNJ’s Committee On Political Education.
