The New Jersey Supreme Court ruled 6-to-1 Thursday that the state can continue to freeze cost-of-living adjustment payments to those collecting public pensions.
The decision upholds a 201l reform law to suspend the payments that was supported by Democrats and signed by Christie. According to the Associated Press, the ruling will save the state approximately $17.5 billion in added pension liabilities.
Thursday’s ruling received cautious optimism from Moody’s Investors Service, which said it “eliminates a major threat to the state’s fiscal stability, which is already challenged by narrow reserves and large, rapidly growing pension costs.”
“New Jersey’s finances have been more stable in recent years, and the state projects that 2016 reserves will remain on target and above prior years at $550 million,” Moody’s said. “However, reserves at this level will provide limited cushion against further budget volatility.”
Earlier this week, the Assembly Judiciary Committee advanced a measure that seeks to task voters with deciding on a constitutional amendment to require regular pension payments.