Print Page   |   Sign In   |   Register
Search
News & Press: Pension

How will N.J.'s next governor fix the pension system? We asked the candidates.

Friday, February 17, 2017   (0 Comments)
Share |

NJ.com 02/17/17

One of the biggest challenges confronting New Jersey's next governor will be how to stop the runaway train that is our state's pension mess. The long-term pension hole is $44 billion -- nearly $10 billion more than the state spends on everything in given year.

With the primaries a few months away, we asked Democratic and Republican governor candidates for their pension fixes. Some said they'll release their plans in weeks to come.  Those with plans on the board propose everything from cutting public worker benefits and reinstating a millionaire's tax to using legalized marijuana or a north Jersey casino as a pension cash cow.

Take a look at what they're saying. 

 

Assemblyman Jack Ciattarelli (R-Somerset) insists that the state will be financially "paralyzed" on all other spending if it doesn't resolve its pension crisis.

His plan offers know easy answers, but plenty of hard ones. They include:

-No post-retirement healthcare benefit for current and future public worker retirees if pension plus Social Security exceeds $50,000 per year.

-All public workers with less than 10 years in system must switch over to cash balance pension plan that has some components of a 401k, and all newly hired public workers must enroll in defined contribution pension plan similar to a 401k.

-All newly hired teachers will have pension and Social Security paid by the local school district, not the state.

 

A campaign spokesman for Lt. Gov. Kim Guadagno declined to supply NJ Advance Media with her plan to fix the retirement system, saying it would be forthcoming in the weeks to come.

Guadagno has publicly disagreed with Gov. Chris Christie's decision to sign into a law a bill requiring quarterly pension payments. 

 

 

Democratic stalwart state Sen. Raymond Lesniak (D-Union) has what he calls a "simple" plan to save pensions: More taxes, less waste, and moving a whole lot of retirees to Medicare.

The taxes would fall mainly on the rich, and on corporations.

Re-establishing the "millionaire's tax" would raise $615 million in revenue per year. Between that, the closure of corporate tax loopholes and the elimination of "more than a billion dollars of government waste" the state will be able to make a full pension payment, he says.

With that in place, Lesniak says he will negotiate with the public employee unions heath care reforms "such as having eligible retirees move to Medicare" and eliminating pension padding by "extending the time over which a retiree's top salary's is calculated."

 

 

A former Goldman Sachs executive, multi-millionaire Democratic front-runner Phil Murphy is also the former chairman of Gov. Jon Corzine's task force on pension reform.

In his 2005 task force report, Murphy criticized the state's approach to pension benefits as "haphazard at best and excessively influenced by political instead of fiscal motivations."

A dozen years later, his prescription as a candidate for governor is simple, and anti-Wall Street.

The solution, he says, will be to "divest from hedge funds and reinvest fees and close tax loopholes to promote fairness."

The former top U.S. diplomat to Germany, Murphy also thinks the poisonous atmosphere and acrimonious rhetoric between Christie and the state's largest teachers union, the New Jersey Education Association, requires someone new who will "respect collective bargaining, restore trust, and remain committed to bringing all parties to the table."

 

 

Assmblyman John Wisniewski (D-Middlesex) acknowledged that the state's grossly underfunded pension system is "broken" but in announcing his run, promised that "if you have earned a state pension, you will get your pension."

His main solution is for the state to make the required payments into the retirement system. "Without these payments, the unfunded liability continues to grow and the problem will only worsen," said Wisniewski.

To find the funds, Wisniewwski said he would work "to end the hundreds of millions of dollars in fees that go to Wall Street executives and hedge funds every year" for investing state pension dollars.

Wisniewski also promises that he will "partner with public sector unions to make well-thought out changes to public health benefits." For example, he plans to "solve the surprise billing problem" wherein Garden State health care consumers are often "surprised to find out that some hospitals employ out of network attendants" resulting in unexpected charges.

"This will result in saving tens of millions of dollars for state health plans," Wisniewski said.


Sign In
Sign In securely
Latest News