US - Governor Chris Christie has unveiled a proposed series of cuts across state pensions as he tries to shore up a deficit that sits at $46bn, and growing.
"You may hate me now but 8, 9, 10 years from now, you're going to look back and say that it was this governor that saved your pension," said Christie at a town hall meeting in Camden County, New Jersey.
Christie plans to abolish the 9% increase for future service that was put in place in 2001 for teachers and public employees and increase the retirement age to 65 with consequences for those who take early retirement.
Pension benefits for members of the Public Employees Retirement System and the Teachers Pension and Annuity Fund would also be calculated using the average salaries over the highest five years, instead of three years.
Benefits calculations would also change for members of the Police and Fire Retirement System and the State Police Retirement System, with their benefits calculated using the highest three years of pay, instead of one.
Christie suggests freezing the cost of living adjustments for all employees and instituting a flat contribution rate across the board of 8.5%. Rates currently fluctuate between 3% and 8.5% depending on the pension fund.
Christie says the pension-cut plan will lower the gap for health and pensions to $23b in 30 years, from a projected $181bn.
"I know these reforms will not be popular with everyone," said Christie. "I also know that failure to follow through with dramatic pension reform will imperil the system for everyone, and that failure to control and share costs of health care benefits will continue to eat away at our state and local budgets. We must reverse the damage caused by fairy tale promises that have fattened benefits and pensions to unsustainable levels while ballooning unfunded liabilities to breathtaking levels."
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