The pension reform passed last year helped lower the state’s unfunded pension liability from $53.9 billion to $36.3 billion, but the state’s pension hole grew by $5.5 billion by the end of the 2011 budget year, largely because the state failed to make a pension payment, an annual actuarial report on the pension funds shows, according to the Newark Star-Ledger.
The newspaper said the state was supposed to pay about $3 billion into the pension fund this year, but will only be paying about $480 million. Next year, the state will only pay about $900 million of its $3 billion bill, records show.
Overall, the state has only 67% of the money it needs to meet its future pension obligation, and that figure is expected to worsen as the state phases in its full pension payment over the next seven years.
Under the legislation passed last year, workers are required to pay more into their pensions and for their healthcare, and their contributions are calculated as a percentage of premiums instead of salary (see NJ Legislature Approves Cuts to Public Worker Benefits). New employees must work longer to get a full pension.
Following the bill’s passage, a lawsuit was filed by more than 20 New Jersey public employee unions and individuals against Governor Chris Christie and other state officials seeking to block its implementation (see NJ Public Workers Sue over Benefit Changes).