Pension Crisis

As reported by JT Aregood from the New Jersey Observer, just months after Senate President Steve Sweeney declined to post a bill that would have effected the change with a voter-approved constitutional amendment, Democratic lawmakers in New Jersey passed a plan to require the state to make payments into its underfunded public pension system on a quarterly instead of annual basis. Having passed with an overwhelming 35-0 majority in the State Senate and a 72-0 majority in the State Assembly, the plan will now go to Governor Chris Christie’s desk.

Christie has already vetoed the proposal twice, but Sweeney said before Monday’s vote that the governor has been more receptive to the plan in their recent conversations about the bill.

In a statement after the vote, Sweeney called the bill an important step toward funding the state’s pension obligation to workers and retirees who have paid into it themselves.

“Quarterly pension payments by themselves do not solve the state’s pension crisis but this is an important step in cutting the unfunded liability and reducing the amount of money taxpayers will have to pay into the pension system in the future,” Sweeney said in a statement. “This will help make the pension funds healthier with scheduled payments that will generate financial returns. This is about living up to our commitments but it is also the best way to serve all taxpayers.”

Sweeney’s Assembly counterpart Vince Prieto, meanwhile, reiterated his support for the shelved constitutional amendment.

“The Assembly has long supported this concept, including sending it to the voters this year for consideration,” Prieto said. “New Jersey’s public servants who have done their part deserve better than repeated broken promises, but this bill would at least represent progress toward a more fiscally responsible approach.”

Once again, Governor Christie has his opportunity to be fiscally responsible by passing this bill that will result in more accountability for State Government when it comes to funding the Public Pension System.  While we agree that quarterly payments will not necessarily result in a reduction of the unfunded liability and funding of present pension obligations, signing this bill will at least demonstrate that the Governor has an interest in addressing this problem as it will now rear its ugly head every three months.  Whether its quarterly payments, bi-annual payments or annual payments stop kicking the can down the road.  If the public employees are paying into the system the government needs to undertake its legal obligation as well.