An Illinois Public Employee Retirement Systems Primer

The five public employee retirement systems in Illinois; State Employees Retirement System (SERS), Teachers Retirement System (TRS), State University Retirement System (SURS), Judges Retirement System (JRS), and the General Assembly Retirement System (GARS) have collectively promised employees $103.1 billion in benefits upon retirement.  However, these systems only have $62.3 billion in assets.  The $40.7 billion difference is known as Illinois unfunded pension liability.  To place this number into context, realize Illinois FY 2006 total general fund revenue was $28.65 billion.  Meaning Illinois $40.7 billion dollar unfunded liability represents 142 % of FY2006 total general fund revenue.

Another way to measure states unfunded pension pliability is by its funded ratio.  Funded ratio places the unfunded liabilities in the context of the retirement system's assets.  Expressed as a percentage of a system's liabilities, the funded ratio is calculated by dividing net assets by the accrued liabilities.  The result is the percentage of the accrued liabilities that are covered by assets.  At a 100 percent, a fully funded system has sufficient assets to pay all benefits earned to date by all its members. A funded ratio below 80 percent is generally considered cause for concern.  Illinois current funded ratio is 60.5 percent.

According to the most recent state comparison of unfunded pension liabilities by Wilshire Research Associates, Illinois has the worst unfunded pension liability in the nation.  The second worst, Ohio, maintains an unfunded liability of a mere $28.7 billion, nowhere near Illinois $40.7 billion.  Additionally, Illinois has the second worse funded ratio, surpassed only by West Virginia.  West Virginia has a funded ratio of 40%, however their unfunded liability is a measly $5.5 billion.  Such comparisons of states pension systems make it clear that Illinois public pension systems face a fiscal burden incomparable to any other state. 

How did Illinois' situation get so bad?

The three primary sources of contributions which finance Illinois state retirement systems are employee contributions, employer (the state) contributions and investment returns.  Each year employees have continuously made their contributions and investment returns have been quite successful.  In fact Illinois teacher contributions at 9.4% are amongst the highest in the nation and investment income in FY05 accounted for 65 % of all TRS funding. 

However, employee contributions and excellent investment returns have not been enough to counter thirty-plus years of the state failing to fund the full normal cost owed to the pension systems.  Illinois has consistently failed to make their contributions not due to the high cost of the Illinois pension system, which is 73 % below the national average, but because historically as the state has found itself short of the revenue need to cover both essential services and its required pension contributions, Illinois frequently opted to skirt full funding of the pensions to maintain spending on services.  Essentially, the Illinois state government has been borrowing against the employer contribution it owes the pension systems annually, just to cover the cost of providing services. 

Unfortunately, when the state fails to pay its required contributions, the amount it ultimately must contribute grows substantially over time.  That is because under state law, any funding shortfall must be paid back with interest, compounded at each retirement system's target rate of return, currently pegged at 8.0% to 8.5% per year, depending on the pension fund.  Thus, each year a pension obligation remains unpaid, the investment return the state must make up on the unpaid contribution compounds.  Over time, this chronic failure to make the full employer contribution is the primary reason Illinois state government arrived at where it is today, facing a $40.7 billion unfunded pension liability. 

What has been done to address the problem?

Illinois attempted to address its unfunded pension liability in 1994, pursuant to a change in Illinois law created under P.A. 88-0593, which became commonly known as the 'pension ramp'.  Intended to force increased allocations to the pension over time, this reform established a timeframe during which Illinois was required to fund the current pension contribution the state owed for existing employees, the normal cost, plus make up unpaid contributions and the return thereon for prior employees, amortized over 50 years with a target of funding 90% of total actuarial liabilities by 2045. 

Given that the total unfunded liability had grown so large, the legislation created a framework that established a 15 year ramp period, during which the newly mandated contributions Illinois had to make for current and past employees increased in gradual increments.  Since these make-up payments increased annually, they became known as the "pension ramp", that is, they "ramp-up" over time. 

The pension ramp became operative in Fiscal Year 1996.  Under the plan, if Illinois satisfied its obligations under the Pension Ramp, the state's pension systems would have achieved a Funded Ratio of 90% by the year 2045.  The initial 15 year ramp up period was designed to allow Illinois to adapt to its increased financial obligations, because there simply was not enough revenue to move immediately to the appropriate level percentage of payroll to fund the pensions systems or to amortize the liability over a shorter period.

Since it passed, Illinois funded the Pension Ramp as required every year, except FY2006 through 2007. However, the annual increases in the required contribution under the intended Pension Ramp vastly outpace natural growth in the state's tax revenue.  This reality, coupled with the constitutional requirement that Illinois balance the budget, meant the state would have to cut spending significantly on services to fund the Pension Ramp, particularly in out years.  The net result, Illinois' fiscal system simply could not accommodate the significant contribution increases contemplated under the Pension Ramp.  The first major threat to the Pension Ramp was averted with the sale of $10 billion of pension obligation bonds in 2004.  Then, reverting to past poor fiscal practices, the state significantly underfunded pensions in FY2006 and FY2007, to maintain, and in some cases expand, services.

What must be done?

Any major refinancing of the state's unfunded pension liability ought to include elimination of the current pension ramp, which irresponsibly backloads costs.  This effectively defers the problem to future generations, and constrains the state's ongoing ability to fund services.  Illinois should replace its existing pension ramp with a flat, annual payment amortizing the unfunded liability in equal, annual installments over a period of 40 to 45 years. This will make the obligation far less constrictive of state finances, as the real value of the flat annual payment will decrease over time, after inflation.

Myth vs. Reality: The Defined Benefit and Defined Contribution Systems Debate
 

Myth #1:

"Switching the public sector from a defined benefit to defined contribution system would save states money."

Reality:

• Defined contribution systems have significantly higher annual administrative costs than fully funded defined benefit systems. 
• According to the Investment Management Institute, the operating expense ratio for defined benefit plans averages 31 basis points (31 cents per $100 of assets); the average for defined contribution plans is three to six times higher at 96 to 175 basis points.
• To put that in context of the Illinois pension systems, the administrative costs of a defined contribution system would in all likelihood be anywhere from $275 million to $610 million more expensive annually than the state's current defined benefit systems. 

Myth #2:

"Defined benefit systems have inordinately high costs."

Reality:

• The weighted average "normal cost" across all five Illinois pension systems, as a percentage of active members' payroll, averages 9.13 percent. 
• The national average for state and local government is 12.5 percent, placing the normal cost of Illinois' current defined benefit program far below the national average.
• Moreover, going forward, a fully funded defined benefit system can save taxpayers money annually that would be impossible to save under a defined contribution system.
• Under a defined contribution system, all investment returns belong solely to the employees' individual account, good returns cannot be used to reduce annual costs to taxpayers.  However, in a defined benefit system returns can and frequently do assist in reducing costs to taxpayers. Take for example the experience of the Illinois Municipal Retirement Fund (IMRF).
• The IMRF, the second largest pension fund in Illinois covering public employees such as bus drivers, sewer workers and municipal administrators, has enjoyed a funding advantage for years, in large part because it has relentlessly  demanded full and on time payments from member government employers and employees.
• As a result, the IMRF has consistently maintained high levels of funding.
• As of December 31, 2006, IMRF was 100.5 percent funded on an actuarial basis.
• Because of this, government employers within the IMRF will enjoy lower contribution rates in 2007.
• Rates will fall from an average 10.04 percent in 2006 to 9.72 percent this year, saving taxpayers millions.

Myth # 3:

"Pension benefits offered to public employees in Illinois are overly generous."

Reality:

• According to U.S. census data, the average monthly pension payment to state government employees nationally was $1,374 in 2001-2002.
• At the same time, the average Illinois payment was $1,426, a difference of just 3.7 percent.
• An annual retirement income of $17,112 is barely enough to live on in Illinois.  In fact, an annual income of $17,112 is only $3,422 away from the poverty level for a family of two under federal government standards.

Myth # 3:

"Illinois has too many public employees."

Reality:

• The total number of participants in the state's various pension plans represents a meager 5.3% of Illinois' total population.
• That's because historically, Illinois has not been a high public employee head count state.
• Instead, Illinois is mostly a grant making state that is, rather than hire state employees to provide services, Illinois disburses grants to independent providers such as Lutheran Social Services or Catholic Charities, which in turn deliver the service to the public. 
• Illinois actually ranks 50^th among the states, dead last in the nation, in number of state employees per capita.

Myth # 4:

"The significant shift from defined benefit to defined contribution systems in the private sector demonstrates the undue cost and uncompetitiveness of defined benefit systems."

Reality:

• Much of the increased utilization of defined contribution systems in private industry was caused by the passage of the Employment Retirement Income Security Act ("ERISA").  ERISA established standards for defined benefit plan participation, vesting, retirement, and reporting; and imposed a tax on defined benefit plans to fund the Pension Benefit Guaranty Corporation ("PBGC"). 
• These changes reduced or eliminated incentives to private sector employers offering defined benefit plans, and increased the liability, expense, or regulatory requirements of maintaining a private sector defined benefit plan.  
• As a reaction to the importance of these new standards and costs, many small to midsized private sector businesses moved away from defined benefit systems toward defined contribution systems.
• However, state and local government pension plans are not subject to most ERISA regulations and amendments.
• Moreover, public plans are not required to make payments to the PGBC.
• As a result, the primary factor, ERISA, that pushed the private sector toward defined contribution plans does not even apply to state and local governments.   
• Interestingly, even after the ERISA motivated shift to defined contribution systems in the private sector, costs of moving to a defined contribution system were so much higher than the potential tax burden under ERISA, large, private business predominantly continued to use defined benefit systems.
• Fully 75 percent of the Fortune 500 still use defined benefit plans as their main retirement benefit system.
• Public sector employers are typically large employers. 
• If large employers in the private sector still favor defined benefit systems despite the added costs and administrative burdens imposed by ERISA, there seems to be no reason for the public sector, which does not have those costs and burdens, to abandon defined benefit systems. 
• This is especially so, given the higher administration costs that defined contribution systems would impose on taxpayers.  

Harsh Realities:

• If contribution rates remained the same, defined contribution systems can be expected to generate significantly lower retirement benefits for greater costs.  This was the specific experience of Nebraska which switched to a defined contribution system 30 years ago and recently shifted back to a defined benefit system. 

Is Illinois 90% Funding Goal Prudent?

While any major refinancing of the state's unfunded pension liability ought to include elimination of the current pension ramp, which irresponsibly backloads costs, the benefits undeniably illustrate that Illinois should not only continue to aim for a high level of funding, but should possibly increase their expectations to a 100% funding goal.  Why?

1. Savings to current taxpayers.

The "normal cost" of a pension system is the contribution required from an employer to fund the plan's benefits.  In the typical public sector defined benefit retirement system, normal cost is the annual percentage of total payroll a government employer must contribute to fund the promised benefit for its current workforce, based on actuarial tables.  This contribution can be funded from a combination of tax revenue collected from the general public and investment returns earned on plan assets, if the returns are high enough to cover anticipated benefits, plus a portion of the employer's current normal cost contribution.

Frequently, fully-funded defined benefit plans attain high enough investment returns that public sector employers are able to reduce the amount of normal cost paid from tax collections, freeing taxpayer revenue to cover services. This cost savings can be significant, as the experience of the Illinois Municipal Retirement Fund ("IMRF") demonstrates. 

The IMRF, the second largest pension fund in Illinois covering public employees such as bus drivers, sewer workers and municipal administrators, has enjoyed a funding advantage for years, in large part because it has relentlessly  demanded full and on time payments from member government employers and employees and has consistently aimed for 100% funding.

At the beginning of 2003, IMRF was 101.5 percent funded on an actuarial basis.  If they had been 90 percent funded, they would have earned 2.7 billion ($3.0 billion times 90 percent).  The difference would have been $300 million.  That difference would have been paid by future taxpayers. 

Additionally, as of December 31, 2006 IMRF employees and retirees had reached 100.5 percent of their funding pension obligations.   Because of this, public employers within the IMRF will enjoy lower contribution rates in 2007.  Rates will fall from an average 10.04 percent in 2006 to 9.72 percent this year, saving taxpayers millions.

2.  Future taxpayers are not burdened with higher taxes.

Delaying payment of the full expenses incurred by taxpayers in one year to future years places a greater burden on future generation of taxpayers.

It may make sense for future generations to pay for a municipal building with a 50 year life expectancy.  But, does it make sense for a taxpayer who moves into a state in 2004 to pay for services rendered by its employees in 1994, 1984, 1964 or 1954?

By paying less than 100% of current employee's pension costs, future generations will be forced to pick up the tab.

3. Employees will continue to make their 100% contribution.

Throughout Illinois' historical underfunding of its pension systems, employees have always made on time and full contributions to the retirement fund. Is it fair for an employer to fund a retirement benefit at 90% while requiring employee to continue their 100% contribution?

Granted, the pension is fully funded at retirement, but why should new employees contribute only a fraction of the required contribution until they become vested or until they retire?  Just like units of government, employees would probably like to have more take home pay until they need to retire.

4. It is the pension industry standard.

The Government Accounting Standard Board requires funding for 100 percent.  Monies are set aside and invested.  Investment returns reduce future employer contributions. Investment returns generally represent the vast majority of retirement systems revenue.

Prefunding retirement obligations (IMRF) can be contrasted with pay-as-you-go retirement plans (Social Security).  The problems facing Social Security boil down to who will pay the cost of an ever growing group of retirees as the labor force slows in growth. At a national level in 2000, there were 4.8 workers for every person age 65 or older.  By 2030, that number is expected to decline around 2.9.

The Face of Illinois Public Employees and Retirees

The five public employee retirement systems in Illinois are the: State Employees Retirement System ('SERS'), Downstate Teacher's Retirement System ('TRS'), State Universities Retirement System ('SURS'), Judges Retirement System ('JRS') and General Assembly Retirement System ('GARS').  Three primary sources of contributions finance Illinois' State retirement systems: employee contributions, employer contributions and returns on investments.  The figures below paint a picture of typical Illinois public employees and retirees, followed by some numbers which will help place this information into context. 

SURS in Brief

Who are the people who participate in SURS?

·   SURS participants are comprised of academics and staff serving at Illinois universities and community colleges (including the City Colleges of Chicago). 

·   The average gross salary of a SURS participant is $40,696. 

·   Each participant contributes annually 8 percent of their gross salary to their pension fund. 

Who is a typical SURS retiree?

·   A typical SURS is 62 years old and has served an Illinois University or community college for 20 years.

What sort of benefits do SURS retirees receive?

·   The typical SURS retiree receives a monthly benefit of $2,508.

SURS participants do not contribute to social security.   

TRS in Brief

Who are the people who participate in TRS?

·   TRS participants are comprised of Illinois public school teachers and administrators. 

·   The average gross salary of a TRS participant is $56,916.

·   Each participant contributes annually 9.4 percent of their gross salary to their pension fund. 

Who is a typical TRS retiree?

·   A typical TRS retiree is 69 and has served Illinois public schools for 29 years. 

What sort of benefits do TRS retirees receive?

·   The typical TRS retiree receives a monthly benefit of $3,173.

TRS participants do not contribute to social security.  

SERS in Brief

Who are the people who participate in SERS?

·   SERS participants are comprised of all state employees.

·   The average gross salary of a SERS participant is $52,479. 

·   Each participant contributes annually 4 percent of their gross salary to their pension fund. 

Who is a typical SERS retiree?

·   A typical SERS retiree is 69 years old and has served Illinois for 25 years.

What sort of benefits do SERS retirees receive?

·   The typical SERS retiree receives a monthly benefit of $1,974.35.

With the exception of police and firefighters, virtually all SERS participants contribute to social security.

GARS in Brief

Who are the people who participate in GARS?

·   GARS participants are comprised of members of the general assembly and certain state officials within Illinois. 

·   The average gross salary of a GARS participant is $69,995. 

·   Each participant contributes annually 11.5 percent of their gross salary to their pension fund. 

Who is a typical GARS retiree?

·   A typical GARS retiree is 60 years old and has served the Illinois General Assembly or state of Illinois for 14 years. 

What sort of benefits do GARS retirees receive?

·   The typical GARS retiree receives a monthly benefit of $3,650.

GARS participants do not contribute to social security.   

JRS in Brief

Who are the people who participate in JRS?

·   JRS participants are comprised of judges serving within Illinois courts. 

·   The average gross salary of a JRS participant is $147,655. 

·   Each participant contributes annually 11 percent of their gross salary to their pension fund. 

Who is a typical JRS retiree?

·   A typical JRS retiree is a 63 year old attorney who has served as an Illinois judge for 17 years.  

What sort of benefits do JRS retirees receive?

·   The typical JRS retiree receives a monthly benefit of $8,015.

JRS participants do not contribute to social security.   

The following figures provide some facts about Illinois which will allow you to place the data above into perspective.

Illinois

• The total of all participants in the state's pension plans represent only 5.3% of Illinois total population.  In fact, Illinois ranks dead last in the nation, in number of employees per capita.
• TRS makes up 49.53% of the participants in the Illinois pension plans, SURS makes up 28.79%, SERS makes up 21.3%, JRS makes up 0.97% and GARS makes up 0.27%.
• According to the Illinois State Comptroller, pension benefits paid to regular state employees in Illinois are low relative to benefits provided by other states.  Illinois ranks in the bottom one fifth of all states for retirement benefits paid to an average state worker. 
• Illinois currently faces a 40.7 billion unfunded pension liability, worst in the nation, because while employees have made their full pension contributions on time each year since the inception of the state retirement systems, the state has failed to fully fund the system since 1974.  Unfortunately, under state law, any funding shortfall must be paid back with interest. 
• Normal cost is the current total contribution required to fund the promised benefit on retirement, based on actuarial tables.  It is typically expressed as the percentage of current payroll needed to fund future benefits.  The 'normal cost' across all five Illinois' pension systems, as a percentage of active members' payroll, averages 9.13 percent.  The national average for state and local government is 12.5 percent, placing the normal cost of Illinois' current defined benefit program far below the national average.
• In fact, for Fiscal Year 2006, the normal cost was $1.33 billion.  However, the FY06 required pension payment was $2.1 billion, meaning if Illinois had no unfunded pension liability, it would have an addition $770 million for public services like education, public safety and transportation.  
• A common misconception is that taxpayers shoulder most of the cost of funding public pension systems.  To the contrary, investment income accounts for the majority of Illinois state retirement funding.  In fiscal year 2006 alone, the system spent $5.3 billion on benefits, expenses and related administrative costs.  Member and state contributions only totaled $2.3 billion; however an additional $6.7 billion was earned in investment income from a healthy world equities market leading to a $3.7 billion increase in pension assets for the year. 
• In fact investment income accounted for nearly 65% of all TRS funding for FY05.
• According to the U.S. Department of Health and Human Services the poverty level for a family of 2 is $13, 690 annually or $1,140.83 a month.  Only $834 less than the average SERS retiree.
• Moreover, Chicago's overall cost of living is about 66%  above the national average, with the typical Chicago apartment renting for just over $1,000 a month with utilities costing an average of $86 per month.

Public Sector Retirement News From Across the Country for August '07'
 

$50 Million Placed in Health Care Trust

By David White

The Birmingham News

August 16, 2007

The State Employees' Insurance Board voted Wednesday to put $50 million into a trust designed to help Alabama pay future health care costs for its retired public employees.

Lawmakers in March passed a law directing the SEIB and the board for the Public Education Employees' Health Insurance Plan each to create and run its own trust. [Read More]

California

The Pension Debate: Real Problem or Red Herring

By Anthony York

Capitol Weekly

August 16, 2007

A year after Gov. Arnold Schwarzenegger aborted his attempt at changing the state's public employee pension system, the governor and legislative leaders got together to appoint a commission to look at what is often called the state's pension crisis.  But depending on who you talk to, it is a crisis that may or may not exist. [Read More]

Initiative Aims to Cut Pension Health Costs for Public Employees

By John Woolfolk

San Jose Mercury News

August 15, 2007

As government officials throughout California grapple with the ballooning costs of public employee pensions and health care, two conservative politicians want voters to pop the bubble.  The two are seeking to qualify a ballot initiative that would dramatically shrink retirement benefits for new state and local workers. 

The proposed initiative would amend the state constitution to place limits on pensions and retiree health benefits for state and local government employees hired on or after July 1, 2009 [Read More]

CalPERS to Halt Global Screening

By Gilber Chan

The Sacramento Bee

August 14, 2007

Once touted as a bold initiative, a landmark strategy that barred investments in politically troubled emerging market countries was scrapped Monday by trustees of the California Public Employees' Retirement System. [Read More]

Retired Teachers' Health Care 'Crisis' is Overblown

By Marty Hittelman

San Francisco Chronicle

August 9, 2007

Although teachers are underpaid for the valuable work that they do, most of them have at least been able to count on district provided health insurance after they retire.  But rising health care costs are putting pressures on school and college districts to reduce or eliminate health insurance for their retirees.  One proposed solution - pre-funding- doesn't address the root of the problem, and may make matters worse.  [Read More]

University of California Reprieve on Workers' Pension Contributions

By Charles Buress

San Francisco Chronicle

August 8, 2007

About 122,000 University of California employees received welcome news Tuesday when the university announced they won't have to make individual contributions to their pensions after all, at least not for a while.

The reason: UC's $48 billion pension fund earned more than expected on its investments - 19.1 percent gross in the fiscal year ending June 30, up from 7.1 percent in the previous year.  [Read More]

California's SEIU Local 1000 Ups dues 50% to Help Fight Pension Reform Initiative

By Christine Mai-Duc

Capitol Weekly

August 6, 2007

Many State workers did a double-take on their payroll stubs last week as the 50 percent increase to member dues and fair share payments approved last year by SEIU Local 1000 took effect.

The increase, which raises dues from 1 percent to 1.5 percent of state worker salaries, has prompted an ongoing conflict among the union's rank and file over what some call an unnecessary burden on member's pocketbooks. [Read More]

Colorado

PERA says Fund Problem Fixed For Most Employees

By David Milstead

Rock Mountain News

August 21, 2007

The Colorado Public Employees' Retirement Association Believes it's fixed its funding problem for most of its employees, thanks to a great 2006 investment return and higher funding coming in the future.

Still, the plan remains unable to forecast paying off its liability to state employee, one of the largest in PERA. [Read More]

Hawaii

ERS Gains Record 17% in Fiscal Year

By Kristen Consillio

Honolulu Star Bulletin

August 14, 2007

The Hawaii Employees' Retirement System posted its fourth consecutive double-digit gain in the fiscal year, boosting its total assets to a record $11.6 billion.

The state's largest pension fund chalked up a fourth-quarter gain of 5 percent and a record 17.3 percent annual gain --- the best fiscal year performance in a decade and more than double the 8 percent yearly target return needed to meet its obligations. [Read More]

Louisiana

Bumper Returns for LASERS

By Elizabeth Pfeuti

Global Pensions

August 22, 2007

The Louisiana State Employees' Retirement System (LASERS) produced a 19.2% return for the fiscal year ending June 2007, taking its assets to US $9.1 bn.

In the past year, the organization's domestic equity portfolio outperformed the previous three and five year return rates, as emerging market equities delivered more than a 50% return. [Read More]

Massachusetts

State Pension System Takes Hit in Hedge Fund Collapse, as Does Harvard Endowment

By Christopher Rowland

The Boston Globe

August 2, 2007

The Massachusetts state pension system lost $30 million with this week's collapse of Sowood Capital Management LP, the first evidence that public money also went down the drain when the $3 billion Boston hedge fund lost more than half of its value in July.  It is the second hedge fund closing to take a toll on the state's $50 billion pension fund in less than a year.   In September, the state lost more than $50 million when energy oriented hedge fund, Amaranth Advisors LLC, shut its doors.  Sowood liquidated its fund and sold its remaining assets to Citadel Investment Group LLC on Monday.

The biggest loser so far appears to be Harvard University, which is maintaining an official silence on the issue.  Harvard's endowment lost at least $250 million, which is half of the original $500 million it invested at Sowood's inception in 2004. [Read More]

New Jersey

N.J. Towns Brace for Huge Increase in Pension Obligations

By Thomas Dunford

The Press of Atlantic City

August 26, 2007

New Jersey towns and counties face massive increases in pension fund bills due in April, according to the state Treasury Department.   In 2008, they will pay a combined $1.06 billion into pension funds, a dramatic increase over the 453 million they paid just five years ago. [Read More]

Crooked New Jersey Officials Forfeit Pensions Under New Law

The Associated Press

Ashbury Park Press

August 13, 2007

The old adage that crime doesn't pay is certainly true for any politician attempting to collecting a full pension after a public service career tainted by corruption.  The board that oversees retirement benefits of public employees has slashed the benefits of several veteran public servants who tried to collect their pensions after being convicted of public corruption.

A law that went into effect in April makes it impossible for a government employee to collect any pension benefits after a corruption conviction or guilty plea.  That law, signed by the governor without fanfare this spring, makes pension forfeitures automatic and prison time mandatory for government employees- including politicians- who accept bribes, launder money or commit related felonies. 

[Read More]

By Adrienne Lu

Herald News

August 13, 2007

For the first time ever, New Jersey's largest state workers union ratified a contract this year that requires employees and retirees to contribute to their health insurance.  The Corzine administration, however, later agreed to keep free health insurance for any retirees who enroll in a 'wellness program' that was supposed to save taxpayers money.  It turns out that 'wellness program' doesn't even exist yet.