Christie’s Pension and Healthcare Proposals
Pension:
For anyone with less than 25 years of service, change the formula
Years of Service/55 to Years of Service/65 (An 18% cut)
Change the Final Average Salary from 3 years to 5 years
Change the Normal Retirement age from 62 to 65.
Eliminate all Cost of Living Adjustments.
Pay 8.5% of pay – 3% more – as a pension contribution.
Healthcare:
Everyone pays 30% of the cost of their premium instead of 1.5% of pay.
Increase co pays.
Retirees will have increased co pays and deductibles.
What does this do to the average public worker?
Stan is a Motor Vehicle worker. He’s 45 years old. He’s got 15 years in the system and he earns $47,000 a year. He’s got family healthcare. Currently Stan pays $2585 each year toward his pension and $705 toward his healthcare. Under the Christie plan, Stan will be paying $3,995 toward his pension and about $5081 toward his Family Healthcare.
Stan will go from paying $3290 for his annual benefits to paying $9076 for his annual benefits. That is a 276% increase.
What does that do to Stan’s income? It decreases it by $5786 – a loss of 12% in pay.
What does Christie’s plan do to Stan’s pension:
Stan is 45 years only now and has 15 years in the system. He was going to retire at age 62 – in another 17 years. We assume that Stan gets some raises but there are also some wage freezes, so we are going to raise Stan’s wages so that his final average salary is $60,000, 17 years from now.
Stan is going to have 32 years of service by the time he is 62 years old. His pension was going to be 32/55 X 60,000 = $34,909.
Under Christie’s plan, Stan’s pension at age 62 will be 32/65 X 60 reduced 3% a year for each year under 65. That’s 32/65 X 60,000 X .91 = $26,880 – That’s a 23% cut in Stan’s pension.
Figure out what Christie’s Proposals could do to your Family
What is your annual salary? ____________________
How much do you pay for healthcare now (1.5% of pay) : ____________________
How much do you pay for pension now (5.5% of pay) : __________________
A. Total cost of benefits now: ______________________
What is 30% of your healthcare coverage (see chart below): ______________
How much would an 8.5% pension contribution cost: __________
B. Total costs under Christie’s proposal: _______________
Increase cost to you under Christie’s proposal (B – A): ___________________
The Christie Pension Proposals reduce pensions 18% if you retire at age 65. If you retire any earlier than that, your benefits are reduced 3% more for every year you retire early.
Approximate cost of healthcare premiums with prescription drug coverage:
Coverage Annual cost 30% of annual cost
Single
Member/Spouse $15,240 $4,572
Family $16,936 $5,081
Parent + Child(ren) $ 9,284 $2,845