As reported in NJ.COM, New Jersey’s unfunded public employee pension liabilities have soared to $83 billion, more than double previous estimates, as the state comes into compliance with new accounting rules, according to a report released today by Moody’s Investors Services,  a Wall Street ratings agency.

Governor Chris Christie’s administration acknowledged the change in a Nov. 25 supplement attached to a Transportation Trust Fund bond offering.  In a report released today examining the disclosure, Moody’s said it “underscores the significant pension funding challenges that New Jersey faces.”

The two largest pension plans, Public Employees Retirement System and the Teachers Pension and Annuity Fund, could run out of money by the end of 2024 and 2027, respectively, according to the bond disclosure.

A Moody’s ranking of pension liabilities as a percentage of total revenue puts New Jersey fourth behind Illinois, Connecticut and Kentucky. One reason for the higher pension liability is that the new rules call for a smaller rate of return when estimating how much money the pension system will earn in interest and investments.

New Jersey has been basing its calculations on optimistic investment returns of 7.9 percent. The new rules say that past the point a pension plan is projected to run out of money, liabilities will be based on a lower rate of return tied to municipal bond rates, Moody’s analyst Ted Hampton said.  With that change, the unfunded liability ballooned from $37.3 billion to $82.8 billion, according to the state’s bond offering.  Moody’s own methodology estimates unfunded liabilities at $77 billion for 2013, and once revised for 2014, that amount is expected to surpass the state’s $83 billion figure, Hampton said.

The bond disclosure identified changes to both the asset and liability sides of the ledger. New Jersey has $40 billion in assets and $122.8 billion in liabilities, rather than $44 billion in assets and $81 billion in liabilities, according to Moody’s report.

State Sen. Paul Sarlo (D-Bergen), chairman of the senate budget committee, added that no matter the accounting standard, it’s clear the pension fund is grossly underfunded.

A task force appointed by Christie is expected to make recommendations on how state should deal with its pension problems.

A report issued by the commission in September said that the state faces $53 billion in unfunded health benefit liabilities on top of the pension problem.

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Photo of Frank M. Crivelli Frank M. Crivelli

Frank M. Crivelli’s practice revolves around the representation of over eighty-five (85) labor unions in various capacities, the majority of which bargain for law enforcement entities. He is proud to be called on a daily basis to provide counsel to over 12,000 state…

Frank M. Crivelli’s practice revolves around the representation of over eighty-five (85) labor unions in various capacities, the majority of which bargain for law enforcement entities. He is proud to be called on a daily basis to provide counsel to over 12,000 state, county and local law enforcement officers, firefighters and EMS workers.

Mr. Crivelli specializes his individual practice in collective negotiations.  Over the past twenty (20) years, Mr. Crivelli has negotiated well over one hundred (100) collective bargaining agreements for various state, county, municipal and private organizations and has resolved over thirty-five (35) labor agreements that have reached impasse through compulsory interest arbitration.  Mr. Crivelli routinely litigates matters in front of the New Jersey State Public Employment Relations Commission, the New Jersey Office of Administrative Law, third party neutrals for mediation, grievance and interest arbitration, the Superior Court of New Jersey and the United States District Court for the District of New Jersey.

Mr. Crivelli founded and created the New Jersey Public Safety Officers Law Blog ( approximately fifteen (15) years ago where he and members of his firm routinely publish blog posts regarding legal issues related to the employment of New Jersey Public Safety Officers.  The blog now contains over six hundred (600) articles and is reviewed and relied upon by thousands of public employees.  Mr. Crivelli has also published books and manuals pertaining to New Jersey Public Employee Disability Pension Appeals and the New Jersey Worker’s Compensation System. Currently, he is drafting a publication on how to Prepare and Negotiate a Collective Bargaining Agreement.  He lectures annually at the New Jersey State PBA Collective Bargaining Seminar, the National Association of Police Organization’s Legal Seminar, the New Jersey Public Employment Relations Commission Seminar on Public Employment Labor Law, the United States Marine Corps’ Commander’s Media Training Symposium and to Union Executive Boards and General Membership bodies on various labor related topics.

Prior to entering private practice, Mr. Crivelli joined the United States Marine Corps where he served as a Judge Advocate with the Legal Services Support Section of the First Force Services Support Group in Camp Pendleton, California.  While serving in the Marine Corps, Mr. Crivelli defended and prosecuted hundreds of Special and General Court Martial cases and administrative separation matters.  In addition to his trial duties, Mr. Crivelli was also charged with the responsibility of training various Marine and Naval combat command elements on the interpretation and implementation of the rules of engagement for various military conflicts that were ongoing throughout the world at that time. After leaving active duty, Mr. Crivelli remained in the Marine Corps Reserves where he was promoted to the rank of Major before leaving the service.

For the past fifteen (15) years, Mr. Crivelli has been certified as a Civil Trial Attorney by the Supreme Court for the State of New Jersey, a certification which less than two percent (2%) of the attorneys in New Jersey have achieved.  He is a graduate of Washington College (B.A.), the City University of New York School of Law (J.D.), the United States Naval Justice School, and the Harvard Law School Program on Negotiation.