Pension reform plan could have system largely funded by 2043
As discussion about the public employees' pension system continues, one plan has been proposed that would have pensions 74.4 percent funded by 2043.
Gov. Chris Christie and the legislature are awaiting a ruling that could require the state to pay an additional $3.4 billion dollars into the public employees' pension system. Meanwhile, the governor continues to call for more pension reforms. Christie has not announced a detailed plan, but at a recent Senate Budget Committee hearing his treasurer discussed one idea that is getting serious consideration.
Under a 2011 law signed by Christie the state is required to increase pension payments by one-seventh annually until the system is being fully funded. The governor did not make the full payment this fiscal year and does not plan to make the full payment next fiscal year.
State Treasurer Andrew Sidamon-Eristoff said one reform proposal could be found in one paragraph in this year's budget summary which includes the governor's recommendation to move to a one-tenth payment plan which would have the pension system 74.4 percent funded by 2043.
"That's not perfect. That's not 80 percent or more, but it's certainly well beyond the crisis zone," Sidamon-Eristoff said. "We would have the ability to fund and keep that commitment in one-tenth increments. It's just over $500 million a year or so."
The State Supreme Court is expected to rule very soon on a lawsuit seeking to force Christie to contribute an additional $1.57 billion into the public employees' pension system this fiscal year. Pending that decision, a Superior Court judge has delayed hearing arguments in a suit that seeks to force Christie to contribute an extra $1.8 billion into the fund next fiscal year.
Public union leaders and high ranking Democrats are demanding that the governor make the full pension contribution as required by the very law he signed. Christie has said in no uncertain terms that the state simply doesn't have the money to meet that commitment. The treasurer said the possible proposal to change how the system is funded would be a game changer.
"If you use a one-tenth increment strategy it really does get us where we need to be. Over time I think that's the best and most sustainable approach," Sidamon-Eristoff said.