New Jersey Public Employees Retirement System

Pension Funds Sue Chris Christie Over State Contribution Cut

New Jersey’s three largest pension funds filed a lawsuit against New Jersey Gov. Chris Christie on Wednesday for slicing the state’s required pension contribution by $900 million in 2014.

The complaint can be read here.

More from New Jersey Watchdog:

Filed Wednesday in Mercer County Superior Court, the lawsuit is the latest conflict in the wake of Christie’s decision last June to balance the state budget by chopping nearly $900 million from a scheduled public-pension contribution of $1.6 billion. The governor also announced plans to cut $1.6 billion from the state’s obligation of $2.25 billion for the current fiscal year.

“The governor is not living up to his own pension reform,” said Wayne Hall, chairman of the Police and Firemen’s Retirement System, told New Jersey Watchdog. “We had to step up and do this; we had to protect our members.”

The other plaintiffs are the Public Employees’ Retirement System and the Teachers’ Pension and Annuity Fund. Combined, the three pension plans represent roughly 290,000 retired public-sector workers and 475,000 active members.

Overall, the state’s retirement systems face a $170-billion shortfall, according to the state’s official numbers. That includes:

– $82.7 billion in unfunded liability for the pension plans of state workers.

– A $20.7 billion shortfall for the pensions of local government employees.

– $53 billion in unfunded health benefits for state retirees.

– $13.8 billion to cover the post-employment benefits local government workers.

The lawsuit asks the court to force the state to make its full payment.

Moody’s: New Jersey Pensions Could Run Dry In 10 Years

In a new report from Moody’s, the ratings agency warns that two of New Jersey’s largest state-level pension systems – the New Jersey Public Employees Retirement System (PERS) and the Teachers’ Pension and Annuity Fund (TPAF) – could dry up in the next decade.

Reported by the Associated Press:

The finding by Moody’s comes after the state’s recent announcement that public pension liabilities nearly doubled to $83 million, due to new accounting rules.

The agency laid out its concerns in a report this week. Among the concerns it raises are the possible depletion of public worker and teacher pension funds by 2024 and 2027, respectively.

Despite the concerns, Moody’s said the new liability figure is in line with its own calculations. Moody’s has downgraded the state’s credit rating twice, in part due to the pension fund.

Gov. Chris Christie cut the state’s contribution to pensions earlier this year amid budget hardships by nearly $1 billion, lowering it to almost $700 million.

New Jersey recently began implementing new GASB accounting rules. The rules change the way the state calculates pension liabilities, which is why the funding ratio of the state’s pension systems dropped 20 points last week.

But the change was expected, and was already figured into Moody’s analysis of the state’s pension funding situation.

Photo by B Smith via Flickr CC License

Lagerkvist: Here Are the Seven Deadly Sins of the New Jersey Pension System

New Jersey’s pension system is shouldering $51 billion of unfunded liabilities. How did it get that way?

In an editorial in the Philadelphia Inquirer, investigative reporter Mark Lagerkvist goes through what he calls the “seven deadly sins” of the state’s pension system. Excerpted from the article:

#1 – Retirement shams

A New Jersey Watchdog investigation revealed state attorneys general rehired 23 of their own retirees as investigators and supervisors. More than half of those law enforcement officials “retired” for only one day before they went back to work for the state.

The rehired retirees collected $3.77 million a year — $1.56 million a year in pension pay plus $2.21 million in salaries. Such costly personnel maneuvers have happened so often that state officials even have a name for it — “resignation pickup.”

#2 – Full pensions for part timers

The loophole, exclusive to the Public Employees Retirement System, is open to a wide range of part-time elected and appointed officials from New Jersey’s 565 municipalities, 590 public school districts, 21 counties and other governmental entities.

The list includes state legislators, county freeholders, mayors, councilmen, school board members, prosecutors, judges, town attorneys, tax assessors and many others who work for public entities covered under PERS, the largest New Jersey retirement fund.
#3 – Double-dippers and triple-dippers

Eighty percent of New Jersey sheriffs — elected in 17 of the state’s 21 counties — collect pensions as law enforcement retirees in addition to their six-figure salaries. Their payrolls include 29 undersheriffs who also double-dip. Overall, those 46 top county cops rake in $8.3 million a year – $3.4 million in retirement pay plus $4.9 million in salaries.

#4 – Disability pension abuses

5,500 retired police officers in New Jersey receive more than $200 million a year in disability pensions. They have been judged “totally and permanently disabled” by the state Police and Firemen’s Retirement System or State Police Retirement System.

“I’d say 95 percent of the disability applications are questionable,” said John Sierchio, former chair of the PFRS Board of Trustees. “It’s people who don’t want to work anymore.”

#5 – Ill-advised health benefit costs

If you think a $51 billion pension deficit is bad, here’s something worse.

The New Jersey state retirement system also faces a staggering $53-billion shortfall in funding retiree medical benefits, according to a report released by state actuaries last month.

#6 – The deadbeat state

From fiscal 2006 through 2011, New Jersey shortchanged its pension funds by more than $10 billion. Instead of contributing the expected $13.1 billion to the retirement accounts during that period, the state only pitched in $2.3 billion, according to a report by Common Sense Institute of New Jersey.

#7 – The $100,000 Club

New Jersey’s $100,000 Club of retired public officials has ballooned by 75 percent in the past three years. It is growing at a faster rate than the state’s pension deficit.

A total of 1,731 retirees collected $100,000 a year or more from state pensions last year, an increase of 739 pensioners since 2010, according to a New Jersey Watchdog analysis of Treasury data.

Mark Lagerkvist is an investigative reporter at the watchdog group New Jersey Watchdog.

There’s much more in the way of explanation over at the article, here.