The Newark Star-Ledger reported that underperforming investments and missed contributions by the state have left the retirement funds for the state’s teachers and school employees with a $13 billion shortfall.
According to the newspaper, the accounting report on the teachers fund – the largest pension fund of the Garden State’s seven – is the first in a series of annual studies on New Jersey’s public retirement plans. Even if the fund now has enough money to cover monthly checks for 66,000 retirees and beneficiaries, the resources may not be enough to cover the promised retirement for the 143,000 active teachers and employees, the newspaper reported.
The report highlighted that the gap between the money the fund held and the promised retirement stood at $13.3 billion at the end of June 2005, with $29.6 billion in the fund to cover $42.9 billion in promised benefits, the newspaper reported.
Part of this downturn is due to poor investment returns, according to the Star-Ledger, with investment returns plummeting to $1.3 billion short of what it needed to meet the gains in the actuary’s financial statements. Partly at fault is the state’s repeated failure to pay into the fund, coming up with only $60 million of the $916 million due.