newjerseynewsroom.com

BY BOB HOLT

NEWJERSEYNEWSROOM.COM

It's getting harder and harder to consider retirement if you work in New Jersey.

The estimated total amount of New Jersey's pension liability needed to pay current and future state, county and municipal employees — grew by $8.05 billion between June 2009 and June 2010, according to a report released by the Department of Treasury which indicated the state has a $53.9 billion unfunded promise.

Also, the report shows New Jersey has a $66.8 billion unfunded promise to future and current employees for lifetime health benefits.

Gov. Chris Christie has said reforming the pension and health system is a priority for the new year and leaders in the Legislature have agreed to discuss reforms.

NJ.com reports that this year Christie skipped a $3.1 billion pension payment — continuing a decade of gubernatorial administrations shortchanging the system. Christie has said he will not contribute funds until the system is changed.

His administration said the gap, which reflected the state's investment positions as of June 30, highlighted the need for proposed cuts to current public workers' pensions.

The new numbers mean the state has 62% of the money it needs to pay retirement benefits promised to more than 720,000 state and local workers over the next decade, down from 66% a year earlier.

In reporting the increase, the administration included a summary of the proposals Christie has made to reform the pension and health systems. They include rolling back a 9 percent increase that was granted for 2011, raising the retirement age to 65 and requiring all employees pay 8.5 percent of their salary to the pension. The plan would also require employees to pay 66 percent of their health costs.

According to philly.com, governors of both parties dating to at least Gov. Jim Florio in 1992 have, with the permission of the Legislature, shortchanged the state's public employee pensions in various ways, including skipping some or all of the required payments, changing the way assets and liabilities are calculated, altering the assumed rate of return on investments, increasing benefits without figuring out how to pay for them, and changing the length of time the state gives itself to pay its pension liabilities.

Since 2004, state and local governments have skipped more than $14 billion in "required" payments into the public employee pensions.

The Wall Street Journal reports average annual pensions for new retirees as of July 2009 were roughly $39,500 for state workers, $46,400 for teachers, $73,500 for police officers and firefighters, and $105,600 for judges.

Other states face staggering pension shortfalls, but New Jersey stands out for its lack of payments into the pension funds and for paying a smaller share of its annual required contributions in recent years than any other state.

Last year, the pension funds paid out $3.18 billion more than they took in.