New Jersey Lawmakers Send Christie Bill Mandating Quarterly State Pension Payments

New Jersey lawmakers have sent Gov. Christie a bill that would break the state’s annual pension contribution into four separate payments.

The hope, among other things, is that four smaller payments will be more palatable – and easier to pay – than one lump sum, annual payment.

From NJ.com:

The change would make it harder for the Christie to make last-minute cuts to balance the budget and increase investment earnings on the money.

[…]

The bill (S3100) passed the state Senate 25-15 and it cleared the state Assembly 52-6, with 16 abstentions.

Under the legislation, the state would make payments on the first of the month in August, November, February and May of each year, generating $100 million in additional investment income next year, Gordon said.

The potential investment returns would continue to rise as the state’s annual pension payment grows, he added.

The state would have to borrow money for the first two quarterly payments up front, but the investment rate of return would easily outpace borrowing costs, the Senate Democrats office said in a statement. It could expect to spend about $13 million in interest — at the current 0.52 percent rate on the state’s line of credit, it said.

Christie vetoed a similar bill in late 2014.

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