public pension system - THE RIDGEWOOD BLOG.

JOHN REITMEYER | JULY 28, 2017

Starting this month, New Jersey’s chronically underfunded public pensions are going to benefit from Lottery funds as well as from more regular payments by the state

The New Jersey public-employee pension system traditionally has received cash contributions from the state in one lump sum — and only if the annual budget has been healthy enough at the close of each fiscal year to provide the full amount set aside by lawmakers.

But thanks to two recent policy changes that took effect earlier this month with the start of a new fiscal year, the pension system is going to receive more regular cash infusions from the state, and from two different revenue sources.

Monthly contributions will come in from the state Lottery under a complicated new law that was enacted earlier this month by Gov. Chris Christie and lawmakers that effectively transferred the Lottery enterprise into the pension system for a period of 30 years.

In fact, official figures that were outlined during a public meeting of the New Jersey State Investment Council yesterday indicate pension-fund managers expect to receive just over $1 billion throughout the 2018 fiscal year from the Lottery, with monthly infusions averaging $83.4 million.

https://www.njspotlight.com/stories/17/07/27/state-s-new-ways-to-pay-into-public-pension-system-huge-step-in-right-direction/

NJ gas tax could be used to prop up public pension system

By Michael Symons December 8, 2016 6:39 PM

In a roundabout way, revenues from the increased gas tax might help shore up New Jersey’s beleaguered pension funds.

A proposed bill, S2842/A4388, would enable the Transportation Trust Fund to borrow directly from the pension funds, rather than sell bonds to investors. There would be no cap to how much could be borrowed. The pension funds are typically limited to buying 10 percent of any single bond sale.

Senate President Stephen Sweeney, D-Gloucester, said the pension funds would benefit from earning a higher interest rate than they do buying U.S. Treasury bonds. And the TTF would avoid paying the fees normally associated with a bond sale, Sweeney said.

“Why are we giving fees to Wall Street? Why are we letting other people make interest off of us when we have a pension fund that is woefully underfunded?” Sweeney said.

Sweeney estimated the impact by talking about a hypothetical $1.2 billion in borrowing by the TTF, which he said would cost the TTF $60 million in interest, at an interest rate of 5 percent, and $6 million in underwriting fees to Wall Street.

“The money is there. This is a safe bet. This is not a risk. We don’t want to risk people’s pension funds,” Sweeney said. “Why pay someone else 5 percent when we could pay ourselves?”

The bill wouldn’t require the pension funds to invest in TTF and New Jersey Infrastructure Bank bonds, but it would lift the limits on what the State Investment Council could choose to do. Other types of state debt, such as for school construction, would not be included.

Read More: NJ gas tax could be used to prop up public pension system | https://nj1015.com/nj-gas-tax-could-could-be-used-to-prop-up-public-pension-system/?trackback=tsmclip

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