The Asbury Park Press published an article in today’s Sunday edition addressing the ability of The State of New Jersey to honor its pension obligations to those public employees that have been paying into the retirement system since the start of their public employment . The article, entitled "Can New Jersey Keep its Pension Promises?" unfortunately reiterated the same information that we have been hearing for the last several years…….The Pension System is Broke.
The article stated that as of June, 2009, the state’s pension system faced unpaid liabilities in the amount of $45.8 billion dollars. However, this is assuming that the state receives an annual 8.25% return on its pension investments. At this point in time, everyone is aware that the State hasn’t seen 8.25% for several years now. Furthermore, many studies have demonstrated that the unfunded liability of $45.8 billion is a conservative estimate and the true unfunded liability is more along the lines of $173.9 billion, with unfunded health care costs reaching $55 billion dollars. Eileen Norcross, a George Mason University researcher has been quoted as stating, "It’s mathematically impossible to pay this out. It’s too large."
However, despite the fact that the public employment pension system is in dire straits, Governor Christie, has made the decision to "skip" the state’s 2010 $3billion dollar pension payment. In reviewing the administration’s decision to forgo the payment, one has to question if the Christie administration has already given up on attempting to save the state pension system and the countless amount of money that has been withheld from public employee’s paychecks on a weekly basis since the inception of the system. I bet many of you who are reading this article would like to skip a few pension payments or take a "pension holiday" the way that the state, county and local governments have over the last sever years.
A year or two ago, myself and other attorneys representing public employee labor unions filed suit against the State of New Jersey for failing to fund the State Employee Pension Systems. An argument was made that the state had a constitution mandate or obligation to fund the pension system. Unfortunately all of the suits were dismissed under the notion that the state had very broad discretion in making decisions on how to appropriate funds concerning fiscal obligations. However, the court did leave the door open and stated that a suit would be entertained if pension recipients did not receive payment due to the state’s inability to pay. With that being said, one has to ask the question: "Wont it be to late at that point in time?"
We will continue to follow this issue on this blog. You, the public employees of the State of New Jersey, and retired public employees of the state of New Jersey need to take affirmative steps to attempt to revive your retirement system. If you do not take immediate affirmative steps to protect your retirement income, unfortunately, it appears as if it will be lost due to government irresponsibility and mismanagement.