Citing a need to ensure sustainability of public pensions, New Jersey Gov. Chris Christie (R) on Aug. 1 announced the formation of a commission that will include study of the state pension system and how to reform it. This is necessary, Christie said, to ensure that the system is sustainable. Christie made the announcement in Executive Order No. 161.
The New Jersey Treasury Department, and its Division of Pensions and Benefits, already are reviewing proposals for doing that, which the order notes, so it is not breaking entirely new ground. But Chrisite intends it to help reform along.
The order notes that the payments the New Jersey state pension system makes are projected to rise to $5 billion per year by fiscal year 2018. It rules out raising state taxes, which it calls “already high,” to help in meeting those outlays. Consequently, the state has to find other ways to keep the state pension system funded and viable.
The commission is intended to help the state legislature in considering reforms, but also to inform: to advise public employees on what changes will be made to their benefits and to inform New Jersey taxpayers about just what challenges face the system — and, therefore, them — and the risks of failure to implement change.
The commission is to issue a report to the governor which is to include:
- estimates of future benefit payments, expenses, investment returns, funded status and funding requirements of the pension and health benefit system, including the impact of funding requirements on the state’s budget;
- an examination of the competitiveness of the pension programs within a total compensation perspective available to participants in the plans compared to similarly situated employees and to New Jersey residents working in the private sector; and
- an examination of the necessary constitutional, legislative, and regulatory actions required to implement the proposed changes.
The commission also is to evaluate and consider the work the state Treasury Department already has done, and to ask for the assistance of all state departments, divisions, offices and agencies.
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