Berg v. Christie

The issue before the New Jersey Supreme Court in this case was whether the 2011 suspension of State pension cost-of-living adjustments (COLAs) contravened a term of the contract right granted under the earlier enacted non-forfeitable right statute, L.1997, c.113 (codified as N.J.S.A.43:3C-9.5). Qualifying members of the State's public pension systems or funds were granted a non-forfeitable right to receive benefits as provided under the laws governing the retirement system or fund. By codifying that non-forfeitable right to receive benefits, the Legislature provided that the benefits program, for any employee for whom the right has attached, could not be reduced. Whether COLAs were part of the benefits program protected by N.J.S.A. 43:3C-9.5 depended on whether the Legislature, in enacting N.J.S.A. 43:3C-9.5(a) and (b), intended to create a contractual right to COLAs. The Supreme Court found in this instance, proof of unequivocal intent to create a non-forfeitable right to yet-unreceived COLAs was lacking. Although both plaintiff retirees and the State advanced plausible arguments on that question, "the lack of such unmistakable legislative intent dooms plaintiffs' position." The Court concluded that the Legislature retained its inherent sovereign right to act in its best judgment of the public interest and to pass legislation suspending further COLAs. Having determined that there was no contract violation, and because the additional arguments advanced by plaintiffs were not meritorious, the Court reversed the Appellate Division's judgment holding to the contrary. View "Berg v. Christie" on Justia Law