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

640px-New_Jersey_State_House

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.

[…]

“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.

 

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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