CWA says Sweeney plan could damage pensions, not save them

TRENTON — With the introduction of bills enacting parts of Senate President Steve Sweeney’s Path to Progress expected soon, the largest union representing state workers is stepping up its criticism of its ideas to revamp pensions and health benefits.

Hetty Rosenstein, the New Jersey area director for the Communications Workers of America, said shifting new workers out of the traditional, defined-benefit pension system could weaken the plan for current retirees if it eliminates the 7.5% of their salary being paid in by current employees.

“It might even cause more damage,” Rosenstein said. “You end up relying entirely upon cashing out investments to pay retirees. It’s exactly what would happen if you stopped Social Security right now.”

“You will destabilize the entire system, and at the end of the day, why? So that the state doesn’t pay 2 or 2.5 percent into a pension plan for a DPW worker?” she said. “It doesn’t even make any sense. It’s a tiny amount of money.”

Rosenstein said the CWA had an actuary a decade ago look into what would happen if current employees were diverted from the pension system.

“And the actuary said you’ll destabilize your plan and it will go under. You can’t do that,” she said.

“It’s a very dangerous thing, and it doesn’t really do anything,” Rosenstein said. “And what does it do? It says we’re not going to give a decent pension plan to the lowest-wage workers in the plans that are almost overwhelmingly women and people of color.”

Rosenstein said changes to health benefits developed with input from the union and through collective bargaining have led to more than $800 million in annual savings, with more savings in progress.

Sweeney, a Democrat from Gloucester County, has been touring the state to promote the fiscal and reform plan.

“The Path To Progress is about preventing a fiscal crisis that could have disastrous consequences for everyone, including public workers and taxpayers,” Sweeney said in a statement. “The recommended reforms will provide savings for public employees, the taxpayers and state and local government.

“The needed reforms will help protect and preserve the pension system, health benefits and the fiscal stability of state finances,” he said. “We are all in this together and if we don’t take the steps needed to restore the integrity of public finances we will all suffer the consequences.”

A spokesman for Sweeney said there is not yet a timetable for the introduction of legislation. Rosenstein expects it will be done soon.

“He’s doing something that is not going to be good for the state, not going to be good for the workers, completely reneges on his promise on pension as well as collective bargaining, all at the same time while protecting millionaires,” Rosenstein said.

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