A new release from New Jersey's Treasury indicates Governor Christie will move ahead with his plan to tackle New Jersey's massive unfunded pension liability and health care obligation for public sector workers. The state reports, using a discount rate of 8.25 percent, that New Jersey's unfunded pension liability has risen to $53.8 billion - up $8 billion from last year. A huge funding gap that Andrew Biggs and I find is too optimistic.
The good news is Governor Christie will ask the legislature to approve measures to stop the hemorrhaging.The plan includes rolling back a 9 percent benefit increase granted in 2001, raising the retirement age to 65, and requiring all employees to contribute 8.5 percent to their pensions. Additionally, he will also ask to legislature to eliminate the automatic Cost of Living Adjustment. These measures will significantly reduce the liability and help the state manage the crisis while helping to meet obligations.
The increased cost of public sector benefits also affect municipalities, counties, school districts.Local governments will have to spend an average of 22 percent more in the next year to fund plans.
The good news is Governor Christie will ask the legislature to approve measures to stop the hemorrhaging.The plan includes rolling back a 9 percent benefit increase granted in 2001, raising the retirement age to 65, and requiring all employees to contribute 8.5 percent to their pensions. Additionally, he will also ask to legislature to eliminate the automatic Cost of Living Adjustment. These measures will significantly reduce the liability and help the state manage the crisis while helping to meet obligations.
The increased cost of public sector benefits also affect municipalities, counties, school districts.Local governments will have to spend an average of 22 percent more in the next year to fund plans.
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