The Senate has scheduled a hearing today on a resolution that ultimately would be decided by voters because it changes the state constitution. According to the Associated Press, there is more than enough Senate support to move the resolution forward. If voters approve the ballot question, the state and other public employers would be bound to make one-seventh of their pension contribution in the next fiscal year, and they would be required to increase the contribution by one-seventh every year until the entire portion is being paid in FY2017.
The state’s full payment next year is about $3 billion.
A new analysis by the state Treasury department says that the Garden State’s pension system is underfunded by nearly $46 billion (as of June 30, 2009), up nearly a third in just a year (the gap had been $34.4 billion a year earlier). Those are for the pensions only, and do not include the state’s health care benefits liability.
The state’s decision to skip or reduce annual payments (since 2004, the state has put in about $2.4 billion of the nearly $12 billion required contributions, according to one report), investment losses and benefit increases granted nearly a decade ago have contributed to putting the state on an unsustainable path, Janet Cranna, an actuary with Secaucus-based Buck Consultants, said at a presentation to state pension boards, according to a report on NJ.com.
The state’s pension funds cover retirement benefits for about 700,000 current and retired state and local workers, firefighters, police officers, judges and teachers.