Gov. Chris Christie Panel Proposes Overhaul of New Jersey’s Pension System
Gov. Chris Christie’s committee to study New Jersey’s troubled pension system wants to overhaul the retirement program for public employees, freezing the current setup and replacing it with a “cash balance” plan.
The plan would spread out the current pension system’s unfunded liability over many years, and would more closely reflect benefits in the private sector, according to members of the commission. Mr. Christie endorsed the report conclusions Tuesday in a speech to the Legislature. (Dawsey/The Wall Street Journal)
Finally some sanity. Changing the state law to move all new teachers to defined contribution type plans that are protected from meddling politicians. Should be a great roadmap for PERS, PRFS, etc. Tax payers cannot be held liable for unlimited future pension and health care costs anymore, it’s killing NJ.
So the state’s bipartisan panel on pension and health reform found that without a course correction, these costs will absorb 23% of the state budget – $8 billion – within two years, roughly double the portion today.The amount of pension checks sent out will also roughly double to almost $17 billion by the end of 2017 from $8.7 billion in 2013. For perspective, the millionaire’s tax favored by Democrats would raise $600 million a year, barely enough to make a dent. There is no feasible way to raise taxes high enough to cover this cost. The same is true on the spending side. You could fire every state employee tomorrow, and you still wouldn’t raise enough money to fill this hole.