Supporters of the proposal — dubbed the “burnout bill” — say it’s designed to help a small number of public safety workers who find it difficult to keep doing the job because of mental or physical exhaustion.
Opponents warn it would burden taxpayers by further straining New Jersey’s notoriously underfunded pension system and raising costs for local governments at a time of economic uncertainty.
State law requires members of the state’s Police and Firemen’s Retirement System to retire at 65 with their full pension.
A 1999 state law allowed people with 20 years of service to retire, albeit at half their final compensation. But that was changed during then-Gov. Chris Christie’s administration so anyone hired after January 2000 has to be at least 55 years old or have 25 years of service to retire early.
But Gov. Phil Murphy signed a law in 2021 allowing nearly 8,000 police officers and firefighters about to reach 20 years of service a two-year window to retire early, regardless of their age or enrollment date, with half their final compensation. The unions who advocated for the change said the law was not creating a new benefit, but bringing workers in line with those hired before 2000 to correct what they argued was a misrepresentation of the 1999 law by Christie’s administration.
Now the temporary law Murphy approved is set to expire in May, and this new bill (S3090) would technically be an indefinite extension of it, allowing all PFRS members the option to retire after 20 years.
The state Senate passed the bipartisan proposal 36-0 a week ago. It would still need to be approved by the full state Assembly before Murphy could decide whether to sign it into law. The Assembly is scheduled to vote on it Thursday.
“It’s a very stressful job,” state Sen. Vin Gopal, D- Monmouth, a main sponsor, told NJ Advance Media. “If a police officer is at 20 years, why should we have them continue to work if they’re not able to? Very few officers take this.”
One concern of the 2021 law was that it would inspire many of the 7,630 of workers it covered to retire early. But police and fire union officials said only about 280 did in the last two years.
Speaking to the Assembly Appropriations Committee on Thursday, Rob Nixon, director of government affairs for the New Jersey Policemen’s Benevolent Association, argued this is simply “removing a sunset put in place because of bad math in 2021 that presumed every eligible member would jump at the opportunity to do this and would greatly increase” the state’s unfunded pension liability.
Instead, Nixon said, this benefits “a minor number of individuals who truly, truly need to focus on their mental and physical health and just can’t do the job anymore.” He noted they would leave between $1.6 million and $2.7 million on the table if they retire at reduced benefits.
Supporters also argued this would reduce payrolls for local governments because higher-salaried employees would leave and there would be fewer overtime costs for those employees calling out sick.
“This immediately saves the cities money and it allows the person that cannot do this job, taking a significant price reduction of their salary and the benefits they can get, and allows them to retire with dignity instead of staying around for another five years and calling in sick and keeping not only the people they work with less safe but the citizens left safe,” said Anthony Tarantino, vice president of the Professional Firefighters of New Jersey.
Others, though, say it’s not that simple.
The nonpartisan state Office of Legislative Services said in a fiscal analysis of the bill it did not know how many police and firefighters would retire because of the legislation and did not attach a cost to the it.
But the office said the measure would “result in an indeterminate increase in the annual contributions” the state and local governments would be required to pay to the pension system.
New Jersey’s pension system has long been woefully underfunded, though Murphy’s new state budget proposal includes a full payment for the third consecutive year.
Still, the system continues to face challenging financial markets and rising health care costs that weigh on local governments.
John Donnadio, executive director of the New Jersey Association of Counties, said the focus should be on “strengthening the pension system to maintain its long-term success and long-term viability.”
“I don’t see how this bill strengthens the pension system,” Donnadio said.
He noted that local governments still would have to hire replacement officers to those who retire and pay them pension and benefits.
Lori Buckelew, deputy executive director of the New Jersey League of Municipalities, said the pension system “needs to be shored up before we do any enhanced benefits.”
But lawmakers aren’t as worried.
Senate Majority Leader Teresa Ruiz, D- Essex, said at a hearing Monday that while some people may see the bill and think “we’re dropping the timeframe” for all workers to retire, this is for a small pool of people who are in “dire need” and have an “extraordinary decision to make” to leave their jobs at a lesser pension.
Assemblyman Wayne D’Angelo, D- Mercer, another sponsor, said this would allow retirees to get out and start another career.
Sen. Declan O’Scanlon, R- Monmouth, said he understands the worry but added not as many cops and firefighters retired as feared.
If the opposite happened, O’Scanlon said, “I’d be making the other argument.”
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