Report: State pension hole may be as deep as $173B
BY João-PIERRE S. RuTH senior research fellow at the center, said Gov. nomic theory and practice,” she said. and 2019. Norcross said it would be a challenge
A reporT releASed last week asserts New Jer- Chris Christie’s office received the report and The report lists more than 770,000 workers for the state to cover pension benefits under
sey’s pension hole may be far deeper than previ- expressed interest in the findings. She said covered by the pension plans, as well as more current circumstances. “even if you take the
ously estimated, claiming current state actuarial other states also face big pension woes when than 250,000 retirees receiving nearly $6 billion lower figure, [it] is going to tough to close that
practices put New Jersey’s unfunded liability at valuing the liability on pension investment with in annual benefits. gap,” she said.
$45.8 billion, but practices used in the private practices from the private sector rather. Norcross said the pension liabilities other states faced with uncovered pension
sector indicate a liability of $173 billion. “The practice that states are using is to should be discounted according to risk. She benefit liability include Illinois, connecticut and
“The crisis in public Sector pension plans: discount pension liabilities by the rate of return said state pension payments should be low risk, Indiana. “They’re not earning what they thought
A Blueprint for reform in New Jersey,” was they think the assets can earn in the market,” and applied the Treasury yield of 3.5 percent in they might earn on those assets,” Norcross said;
published June 23 by the Mercatus center, at Norcross said. New Jersey’s rate of return was her report. not making the annual contributions to the plans
virginia’s George Mason University. set at 8.25 percent, she said. The report also projects the state will run also added to the growing problem. u
report co-author Eileen Norcross, a “This principle runs afoul of financial eco- out of funds to pay for benefits between 2013 E-mail to jpruth@njbiz.com
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state Commission on
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commission oversees
Peter Reczek certain grants and
other funding programs available to
technology companies in the state, but at
press time, its survival was uncertain.
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