New Jersey Defends Smaller Pension Payment; Treasurer Says Full Contribution Would Cause “Unacceptable” Budget Pain

640px-New_Jersey_State_House

New Jersey planned on contributing $1.3 billion to its pension system in 2016.

But a court ruling has thrown a wrench in that plan, as a judge said last month the state needed to make its full pension payment as specified in a 2011 pension reform law that Chris Christie himself signed.

New Jersey is appealing the ruling, but if the state loses, its 2016 pension contribution could rise to nearly $3 billion.

That extra money hasn’t been budgeted for – and the state’s Treasurer on Monday testified to lawmakers that the ensuing budget cuts would have an “unacceptable impact” on New Jersey residents.

From NJ.com:

Gov. Chris Christie’s treasurer said Monday that the administration has reached out to lawmakers to comply with a judge’s orders to work together to restore $1.6 billion to this year’s pension payment, but stressed that actually doing that would mean lots of budget pain for New Jersey residents.

[…]

“Coming up with $1.6 billion in the last few months of the fiscal year would impose incredible and I believe universally unacceptable impacts upon our residents here in New Jersey,” [Treasurer Andrew Sidamon-Eristoff] said.

He also responded to criticism over the fees New Jersey’s pension fund pays to outside investment firms. From NJ.com:

Committee members also drilled down on the fees New Jersey pays its consultant to manage the pension fund’s alternative investments, about 15 percent of fund’s portfolio.

“It seems to me we need to review how we’re managing that 15 percent,” Assemblyman John Burzichelli (D-Gloucester) said.

Sidamon-Eristoff challenged reports that suggest the state spent $600 million in fees in 2014. Less than half of that figure is paid in management fees, he stressed, while the rest are performance bonuses for the investment managers.

The state’s decision to report that number in a 2014 annual report released earlier this year should be recognized as “enhanced transparency and not an opportunity to distort facts,” he said.

The treasurer addressed a handful of other issues over the course of his testimony. You can read the testimony here.

 

Photo credit: “New Jersey State House” by Marion Touvel – http://en.wikipedia.org/wiki/Image:New_Jersey_State_House.jpg. Licensed under Public domain via Wikimedia Commons – http://commons.wikimedia.org/wiki/File:New_Jersey_State_House.jpg#mediaviewer/File:New_Jersey_State_House.jpg

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