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.
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