West Orange Township and School District Respond to Changes In Pension Reform
Sunday, October 21, 2012 • 8:36pm
WEST ORANGE, NJ - West Orange Township will save $312,070 in 2013 as part of a series of pension reforms signed into law last year.
Governor Christie signed legislative reforms in 2011 to increase health benefit and pension payments from public employees. This affects the New Jersey Teachers Pension and Annuity Fund (TPAF); the Public Employees Retirement System (PERS); the Police and Fireman's Retirement System (PFRS); the State Police Retirement System (SPRS); and, the Judicial Retirement System (JRS).
Township employees will contribute an additional $84,264 into their pension fund next year. The township police and firefighters will contribute $227,806.
West Orange Board of Education employees will contribute an additional $152,026.
West Orange Public Library employees will contribute an additional $11,339.
Governor Christie said "Our willingness to make the tough choices and achieve progress on meaningful reforms in a bipartisan way is continuing to deliver millions in long-term, sustainable property tax relief for Essex County middle-class families. Our commitment to taxpayers is to continue down the path of common sense reforms that bring down the cost of government while providing tax relief. We have an obligation to ease our overburdened middle class by delivering direct tax relief, ending the practice of cash payouts for unused sick days, promoting shared services, and closing the loopholes in the 2 percent property tax cap. I urge the legislature to continue to work as a partner, rather than an impediment, and act on our middle-class reform agenda.”
Mayor Robert Parisi was asked to comment on this information by the Alternative Press. He commented "“Employee related costs, pension and benefits, are our largest expenses behind salaries, and they have been major cost drivers over the last decade. We were blessed last year, following pension reform at the state level, to see our employee pension costs reduced. This reduction in this important, and mandated cost, helped us to keep municipal taxes level, without any increase, for the 3rd year in a row. This latest reduction was good news as we begin to prepare next year’s budget.”
Interim Superintended Jim O'Neill also commented, saying,
"As to the pension reforms; there are several components: It is fair to say that the state saved money because public workers are all contributing a higher percentage of their salary to the pension; and, that new hires are going into a very different pension system;. The old system which covers most people is a “defined benefit” pension. There is a formula, and when you retire there is a formula that calculates the dollars you are entitled to. Newly hired staff are going into a pension system that is best described as a "defined contribution" plan so while it is clear what they contribute, what they take out at the other end is at least partly dependent on how well the market does."
Mr. O'Neill had strong words over his personal experiences with state changes vis a vis public education. Mr. O'Neill left the Chatham School district when the $175,000 Superintendent salary cap went into effect in New Jersey. (Most public school Superintendents nationwide make over $210,000 per year, and more, depending on the size of the school district. West Orange currently has a school population of approximately 6,700 students).
O'Neill expressed his personal feelings over the pension issue and Superintendent's salary cap by saying "I believe Governor Christie gets too much credit for the forceful way he says things rather than a close scrutiny of the substance of his proposals. He deserves credit for tackling the pension issue but I believe this is a very short term fix. Capping Superintendent salaries, which impacted me, would be a good example. If I was not forced to retire 2 years ago unless I was willing to take a $45,000 cut, I would have been putting over $10,000 a year into the pension and taking nothing out. Instead, by retiring, I have taken out a lot of money and have put in zero. I always believed this reform was backwards; all school salaries come out of operating expenses and are paid in full every year; they have no impact on the pension. If, however, they capped the pension amount and said no matter how much you make and no matter how many years you work the maximum pension you can draw is $90,000, then there would be a positive impact on the pension, more Superintendents would have kept working and putting money in and would then have fewer years to take money out. Likewise with other staff. Teachers who retired were those with over 25 years, making the high end salaries. They retired because they felt the governor threatened their pensions, so they are taking a lot of money out and no longer putting any money in. The money going in is coming from younger lower paid teachers."
The West Orange Alternative Press then asked Mr. O'Neill about the status of the contract negotiations between the school district and teachers, which expired in June 2011. O'Neill responded by saying " we have a Memorandum of Agreement which means the big issues have all been decided but that some of the details may need some wordsmithing, etc. It means there is agreement about the amount of money the board will put into salaries but how those dollars will be divided is not resolved. Before the actual contract becomes public, the teachers need to vote and approve the contract, followed by the approval of the board. Until all that happens the board is unable to speak about the contract in public or disclose any details."
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