New Jersey Wants 10 Years to Ramp-Up to Full Pension Payment

New Jersey’s treasurer is making the case to lawmakers that the state needs a 10-year timeline to ramp up to making its full actuarial contribution to the state’s pension system.

Senate Democrats who studied the plan say such a schedule would bring $17.25 billion in additional costs to taxpayers over the next 30+ years.

Other critics are skeptical that the state could keep to a schedule at all; in 2011 it made a similar promise with a 7-year ramp-up, but the schedule was scrapped soon after.

More from NJ Spotlight:

Treasurer Andrew Sidamon-Eristoff told lawmakers last week that the 10-year ramp-up is more manageable and would still leave the pension system — which is deep in debt after two decades of underfunding — more than 70 percent funded at the end of a payment schedule that will stretch over the better part of the next three decades.

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“The actual difference between the seven-year phase-in required by law and the 3/10 payment schedule proposed by the governor is $17.25 billion. Every $1 we pay into the pension system over the next five budget years saves $3 in future payments for us and our children,” according to Mark Magyar, policy director for the NJ Senate Democratic Majority Office and a former reporter for NJ Spotlight.

Treasury Department figures provided to OLS for both the 5/7 and the 3/10 payment schedules show a $14.35 billion difference through FY 2045, but payments under the pension reform law actually continue through FY 2048, which makes the final differential between the two payment schedules $17.25 billion, Magyar added.

With most Democrats strongly opposing the plan, and an upcoming court ruling that could make the discussion moot, it’s unlikely the schedule ever gets put into effect.

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