The New Jersey Senate last week voted unanimously to pass reform legislation to help the state address its $34.5 billion unfunded pension liability.

The Senate approved three bills that would change state- and local-level retirement benefits. The bills would limit defined-benefit plans to full-time teachers and public employees, implement employer contribution caps for new police officers and firefighters, and restrict new teachers and public workers who hold multiple jobs to retirement benefits for one position.

Other changes include limiting unused sick time compensation for new municipal and school employees to $15,000 and restricting the carryover of vacation leave to only one successive year. State employees already have such limitations.

An additional piece of legislation, SCR-1, would change New Jersey’s constitution to require the state to pay its entire annual pension contribution. The stipulation would go into effect on July 1, 2011, the start of fiscal 2012. It would include a seven-year phase-in of allocations, with the state paying one-seventh of its full contribution in fiscal 2012 and growing by one-seventh thereafter.

Supporters of pension reform say growing retirement costs will require local governments to raise property taxes. Bill Dressel, executive director of the New Jersey League of Municipalities, said the proposed reforms would help cities and towns face swelling pension costs.

“The Senate took an important step to provide property-tax relief to our citizens,” Dressel said in a statement. “This necessary reform is the first, but important, step, to providing a more equitable system for both enrollees and taxpayers.”

The bills now move to the General Assembly for consideration.

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