States cutting benefits for public-sector retirees

September 16, 2010 at 12:00a.m.

Associated Press

TRENTON, N.J.

William Liberty began as a trash collector in Lindenwold 37 years ago and worked his way up to public- works supervisor. Until recently, he figured he would hold onto the job until he turned 65.

But last week, at 62, he was preparing his retirement papers, joining a rush among New Jersey public employees.

Liberty’s reason for getting out now: He is feeling the sting of a campaign by Republican Gov. Chris Christie and a growing number of other public officials across the U.S. to balance their budgets by making government employment — and retirement — less lucrative.

Liberty’s pay has been frozen for two years, he has been told to take unpaid furloughs, and now, “it’s going to get worse.” Pension proposals announced this week could reduce how much he receives when he retires.

Since 2008, New Jersey and at least 19 other states from Wyoming to Rhode Island have rolled back pension benefits or seriously considered doing so — and not just for new hires, but for current employees and people already retired.

It’s not just a U.S. phenomenon. In France on Wednesday, lawmakers voted to raise the retirement age from 60 to 62. If the measure wins final approval, France will become the latest European Union country to require workers to stay on the job longer because of a deficit-plagued pension system.

New Jersey’s governor spelled out the details of his proposal Tuesday after telegraphing his intentions for months. They include: repealing an increase in benefits approved years ago; eliminating automatic cost-of-living adjustments; raising the retirement age to 65 from 60 in many cases; reducing pension payouts for many future retirees; and requiring some employees to contribute more to their pensions.