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Christie signs bill requiring N.J. to make quarterly pension payments

Friday, December 16, 2016   (0 Comments)
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NJ.com 12/16/16

Gov. Chris Christie on Thursday signed a bill that will require the state to make quarterly payments to New Jersey's ailing public worker pension system. The bill is a reworked version of a measure Christie twice vetoed. The new law will require governor to make pension payments on a quarterly basis by Sept. 30, Dec. 31, March 31 and June 30 of each year, instead of at the end of the fiscal year in June. In exchange, the pension fund would reimburse state treasury for any losses incurred if the state has to borrow money to make a payment.

State lawmakers voted overwhelmingly last month to approve the measure. It cleared the state Senate by a 35-0 vote and the state Assembly 72-0. The legislation (S2810) resembled a provision of a proposed constitutional amendment that would have required the state to make a full pension payment suggested by actuaries each year. However, Senate President Stephen Sweeney (D-Gloucester), who pushed the amendment, pulled his support for it over concerns about the state's ability to make the payment which drew outrage from public worker unions.

On Thursday, Sweeney said making pension quarterly pension payments "will provide greater stability to state finances, produce ongoing savings for the taxpayers and help make the pension funds more secure.m A scheduled timetable for making the already-required payments will help correct the costly and irresponsible mistakes of the past when contributions were delayed, deferred or ignored altogether." But the change in the bill to have the pension fund pick up the cost of borrowing if needed may address the governor's previous concerns.

Decades of underfunding have weakened the pension system, as have more recent poor investment returns. The fund lost 0.87 percent in the fiscal year that ended in June, based on unaudited figures, and investment returns in the year before were 4.16 percentAs of July 1, 2015, New Jersey's state and local pension funds have just 37.5 percent of the funding it needs to pay for future benefits. That is based on new reporting standards that require the state to project lower investment returns and had bleak consequences for the state's estimates.  New Jersey joins California, Indiana, North Carolina and Pennsylvania in states that have rules requiring quarterly pension payments.


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