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GFOA Editorial - Pension Update

Thursday, February 19, 2015   (0 Comments)
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The following editorial was submitted by GFOA of NJ member L. Mason Neely in response to NJ Advance Media's article titled "Nearly 2,000 retired N.J. public workers collecting $100,000-plus pensions, report says."

I saw your article on the number of those that have retired with pension payments of  $100,000.00 or more.  It seems to me that most of them are part of the  TPAF system which the state funds in full.  It seems a big part of the state’s unfunded liability problem is the fact they have agreed to pay the cost of the TPAF  and the post medical benefits for all who retire from the same system.   I might think there is a disconnect because one level (the locals school )  employ and the other level (state ) pay for retirement.  This is not good for control and management.
 
But the Locals pay all of the costs that  apply to PERS,  both the pension and post retirement benefits if such apply.  It might be of interest to look at the spit between the two methods.  In a few weeks the Division of Pensions will release the new Valuation Reports for the various systems based upon the year ending  6/30/2014  and again the unfunded obligation will grow for both the State and the Locals.  The rate of growth  at the State level will be greater than at the Local level because the locals made full payment, investment income was greater than assumed, and the employees  made their full payments.  The locals will remain funded at the 73+% level, and the State will be funded at the 48% level  and because the State is not making full payments they will grow deeper into the hole.   But the locals can see the light at the end as their funding requirements will level off. 
 
There are some that wish to shift the State’s burden to the local property tax payer and call it reform.  I am sure you will report the difference when the Division of Pension wishes to release the data from their latest Valuation Reports.
 
As you can see I have copied the various local government groups on this e mail.  We all are watching to see what type of options the Pension Study Commission  may offer the spending problem the state has.


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