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New Jersey’s Suspension of Cost-of-Living Pension Boosts Is Upheld

  • State Supreme Court rules Christie acted lawfully in 2011
  • Moody’s estimated restoring COLAs might have cost $13 billion
Chris Christie, governor of New Jersey, speaks in Tampa, Florida, on March 14, 2016.

Chris Christie, governor of New Jersey, speaks in Tampa, Florida, on March 14, 2016.

Photographer: Andrew Harrer/Bloomberg
Updated on

Governor Chris Christie and the state Legislature acted legally in suspending cost-of-living adjustments on pensions for retired public workers, New Jersey’s Supreme Court ruled, preventing a multibillion-dollar hit to a budget already facing a shortfall.

Christie and lawmakers halted the payments in 2011 as part of legislation that forced hundreds of thousands of employees to pay more into the underfunded system and raised their minimum retirement age. State workers sued, arguing that the adjustments had the same protections as the pensions. Moody’s Investors Service said a ruling in favor of workers would have increased the unfunded pension liability by $13 billion.