TRENTON, N.J. – The American Legislative Exchange Council (ALEC) released a new report on Wednesday which found New Jersey nursing one of America’s worst unfunded pension liabilities per capita.
“Few states have engaged in overt underfunding as egregious as New Jersey,” explained the ALEC report’s authors.
“Only the local portion of the state-administered plans contributed an amount which would hypothetically meet their obligation to retirees. Policymakers might assume a plan making regular contributions approximately equal to the ARC [Actuarially Recommended Contributions] is not a crisis. However, repeated underfunding of the New Jersey’s pension system is inexcusable. The mismanagement of the New Jersey state pension system has put state retirees, taxpayers, and current state employees in jeopardy by the threat of lower benefits and higher taxes.”
Each New Jerseyan’s share of the total pension liability, the product of two decades of mismanagement, is now a staggering $26,174; a separate analysis from 2018 found New Jersey’s pension benefits rising 4.3-times faster than its gross domestic product (GDP).
Click here to read the full ALEC report.
Governor Phil Murphy has repeatedly resisted calls to advance pension and benefits reforms undertaken during the Christie Administration.
“This new ALEC report confirms what we’ve long known about New Jersey’s pension system: It’s failing. This crisis has been looming over our state for decades, and it’s only going to get worse,” said Americans for Prosperity-New Jersey (AFP-NJ) Deputy State Director Tony Howley. “ALEC confirms what we’ve known for some time, and that is that New Jersey residents cannot afford further inaction. Legislators in New Jersey should take immediate action to save our state by finding a legislative solution to shore up our pension crisis.”