New Jersey pension system funding plummets under new rule

[Eugene]

Source: Reuters

New Jersey pension system funding plummets under new rule

BY HILARY RUSS
Tue Nov 25, 2014 7:12pm EST

(Reuters) - New Jersey's retirement system for public employees is in worse shape than previously reported, thanks to recent accounting changes that are starting to be rolled out across the country.

In a document released on Tuesday after a bond sale, the state revealed that one of its five main pension funds will have insufficient assets to cover projected benefit payments within 10 years.

Under new pension accounting standards, issued by the Government Accounting Standards Board (GASB), the New Jersey system's overall funded level stands at 44 percent for fiscal 2014, compared to the 63 percent previously determined by standard actuarial methods. Eighty percent or more is generally considered healthy.

In the face of a budget crisis in May, Governor Chris Christie, a potential 2016 Republican presidential candidate, slashed two years of state pension contributions by about $2.5 billion altogether, prompting lawsuits by organized labor.

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Read more: http://www.reuters.com/article/2014/11/26/us-usa-new-jersey-pensions-idUSKCN0JA00I20141126

[still_one]

1. who voted for christie twice in NJ for governor?

[Erich Bloodaxe BSN]

2. That would be idiots.

Like all of the machine party Dems who schmoozed with him and tossed Buono under the bus to endorse him instead.

[still_one]

3. yup, and from my memory they expressed no remorse either

[elleng]

4. I hope not my son on law and his mother,

both of whom would be beneficiaries.

[still_one]

5. The disgrace is the Democratic politicians in NJ who supported, and encouraged folks to vote for him

[elleng]

7. Right.

[Hoppy]

6. In another attempt to improve NJ's economy, Chris Krispy privatized the state lottery.

The results are a $25 million shortfall.

[elleng]

8. DOWN THE TUBES,

and my daughter, son in law, and grandson live there.

[Historic NY]

9. So the fix is to just not contribute and exacerbate the problem...

WTF kind of fiscal responsibility is that. Maybe it time the unions go on a state wide stand-down to show how f--ked this is.

[SheilaT]

10. The problem is that states

and municipal governments have been under-funding their pension plans for decades. The employees don't deserve to lose the pensions promised to them, but it's probably going to happen to a lot of them.

Of course, private industry has done the same thing and too many companies have been able to weasel out of pension obligations through bankruptcy.

[Hoppy]

11. Wrong. N.J. pensions are funded by three entities.. employees, municipalities and the state.

The state, county and other local entities and bureaus paid their share. There was a hiatus allowed for municipalities for a year or so. Then they are supposed to repay the full amount. The employees have always paid their percentage.

The state hasn't paid their full share in 20 years. The first fiasco was when Christie Whitman borrowed from the fund to avoid raising taxes. --- seems Republicans don't like to raise taxes.

It has one downhill since.

Not for nothing, but the Democratic governors didn't pay either.

[SheilaT]

12. The specific problem varies from place to place

or from company to company. But the problem of underfunding pensions goes back a good thirty years.