State calls in Hoboken’s $4.2M bill

HOBOKEN — Fourth Ward Councilman Michael Lenz announced at the City Council meeting last night that a $4.2 million bill from the state pension division is no longer hanging over Hoboken’s head — It’s now staring Hoboken in the face.
Last year, the city offered employees a “voluntary severance package” in an attempt to save money for the city, but the state put the kibosh on the plan midway through its implementation and claimed the city had not gotten required approvals.
Like early retirement incentive plans, the severance package creates additional costs for state pension payouts because workers are calling in their pensions sooner rather than later.
Last year, the state calculated a $4.2 million bill for the city due to the increased pension costs for a dozen people who had already enrolled.
The city is also dealing with a group of 25 employees who enrolled in the plan – some of whom began using up vacation days – and were denied after the state nixed it. These employees are considering a lawsuit against the city, according to one former employee.
Fiscal Monitor Judy Tripodi said in an interview today that the state called asking for the $4.2 payment this week.
She said she is working with Mayor Dawn Zimmer and the City Council to sort out when and how the bill will be paid.
Tripodi will recommend that the city ask the state to spread out the payments over three to five years.
Zimmer was not immediately available for comment. — TJC

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