POTENTIAL BALLOT QUESTION TO

CHANGE THE CONSTITUTION

WHAT DOES IT MEAN?

Assembly Concurrent Resolution 109 (ACR 109) is a proposed constitutional

amendment, which would alter current pension law and insert major changes into the
state constitution.
It would have two major effects in regards to New Jersey public pensions: (1)
enhancing the constitutional protections of government personnel contracts at the
expense of taxpayers and residentsessentially preventing any meaningful reforms
to the pension status quo regardless of the states financial situation now or in the
futureand (2) mandating full pension payments into the system regardless of other
budgetary needs.
New Jersey public employees already enjoy some of the strongest constitutional
protections for their pension benefits. This amendment will raise these protections to
unprecedented levels.
Today, New Jersey has a staggering $225 billion in unfunded pension liabilities (5th
highest nationally) with $25,163 in unfunded liabilities per capita (6th highest) and a
funded ratio of 27.7% (6th worst nationally). The massive growth in pension costs has
impacted the states ability to provide services and is continuing to threaten funding
for other priorities and essential services.
Historically, New Jersey has made its full required contribution to the pension system,
however for the last several years, economic and fiscal policy decisions have led to the
state missing over a billion dollars in pension payments.

THE PROBLEM
Foremost, ACR 109 would prevent even modest pension reform to address the current
problem. The non-forfeitable benefit clause in the amendment would prevent New
Jersey from enacting any structural reforms to its pension program. Once an employee
was promised any amount of pension benefits, they would be unable to be altered in
any meaningful way.
This would essentially enshrine in the state constitution a promise for the life of
the member and their beneficiaries and prevent any meaningful reform of current
benefit structures, no matter how dire circumstances may get in the future.

 We have already seen the disastrous impact of this restriction in Illinois. Despite
bipartisan political will to fix a failing pension system, several major, negotiated
reforms both at the state level and in Chicago have been ruled unconstitutional
by the Illinois Supreme Court. As a result, pension systems in Illinois are wreaking
fiscal disaster on taxpayers and leaving public employees and retirees in an
unsustainable, broken system.
Like Illinois, passing ACR 109 would only enshrine coming fiscal disaster into New
Jerseys constitution.
In fact, had this constitutional provision been in place it would have prevented
the freeze on cost of living adjustments necessary to help the assets of the plan
recover which was just upheld by the New Jersey Supreme Court.
Second, ACR 109 would mandate that New Jersey fund the pension system at the full
amount every year. While New Jersey should look to always fully fund the pension
systemdelayed payments now will lead to higher future taxpayer burdensthe state
will continue to see public employee pension costs crowd out spending on schools,
roads, and public safety instead of finding a balance. ACR 109 would do nothing
meaningful to set the stage for needed structural pension reforms, nothing to advance
the streamlining of government needed to deal with the impacts of the pension crisis,
and nothing to reduce pressure for ever more taxes.
Instead, ACR 109 would make it even more difficult to solve the problem.

THE SOLUTION
The legislature must reject ACR 109. As discussed previously, this amendment will cause
more problems than it will solve. Rather than guaranteeing unsustainable benefits and
payments, the legislature should work to reform the current benefit structure to more
accurately reflect benefits in the private sector. By creating flexible and affordable
retirement solutions, New Jersey can take the first step towards meeting all obligations
but still protect taxpayers in the process.

HOW TO GET INVOLVED

Get connected with AFPs efforts by contacting State Director Erica Jedynak. AFP is
lobbying legislators for real pension reform and launching field efforts on the ground
across the State of New Jersey.

550 West Main Street, Suite 5, Boonton NJ 07005

New Jersey State Director Erica Jedynak
E: EJedynak@afphq.org | M: 862-229-4953