New calculations troubling for NJ pension system
DECEMBER 7, 2014 LAST UPDATED: SUNDAY, DECEMBER 7, 2014, 12:10 AM
BY JOHN REITMEYER AND MELISSA HAYES
STATE HO– USE BUREAU |
New calculations show that the pension fund covering retirement benefits for most of New Jersey’s public employees is projected to go broke in a decade, not the 30 years officials had estimated just months ago.
The fund that covers retirements for judges and court workers has less than 10 years.
And the largest of New Jersey’s pension funds, the one for teachers, will run out of money in 13 years.
The actual values of the pension funds have not changed, and the investments are still growing at rates much better than managers had predicted. What did change was the formula used to account for how much money will be needed to cover benefits for future retirees. When the impact of that change was made public in a Wall Street analysis last month, the differences were stark.
The new projections are not the most conservative, but experts say they are more realistic than those New Jersey had been making before it switched to the new accounting method. But they remain only estimates, and a number of factors could change the depletion dates, including how much money is deposited in the system in the future and whether investments can beat the anticipated |returns.
Oddly, both the Christie administration and the unions fighting in court to force the governor to restore billions in payments to those funds have embraced the new figures.