|FOR IMMEDIATE RELEASE||
CONTACT: Tom Vincz
|July 31, 2006||
The Division of Pensions and Benefits Posts Local Government
Estimated Pension Information for 2007
TRENTON -- State Treasurer Bradley Abelow announced today that the Division of Pensions and Benefits has now posted estimated “phased-in” pension contributions for local government employers on its web page. The estimated contributions, listed on an employer by employer basis, are not due to the Division until April, 2007, but are released at this time to assist local governments in their budget planning process for next year. The estimated contributions can be accessed at the following link: http://www.state.nj.us/treasury/pensions/2007-employer-billing.htm
Under a program adopted in 2003 to ease the impact of pension obligations for public employees, State and local employers have annually paid portions of the full contributions due to the major pension systems. For 2006, the full payment due from local governments was $304.6 million. At the 40 percent phased-in level permitted for 2006, however, local governments’ aggregate PERS payment was reduced to $121.8 million. For 2007, the full estimated PERS payment due from local government is $379.2 million. At the 60 percent phased-in level in effect for the 2007 payment, however, local governments’ contribution is instead estimated at $227.5 million.
Similarly, local government entities paid 60 percent ($261 million) of their total estimated contribution ($435 million) to the Police and Fire Retirement System, (PFRS) for 2006. The estimated payments posted today reflect 80 percent ($422.7 million) of what would otherwise be due ($528 million) in April of 2007.
“No matter what the percentage, the estimated contributions are large, but also symptomatic of multiple factors that are at the core of New Jersey’s structural budget and property tax problems,” he said.
“Governor Corzine has outlined a multi-faceted approach to controlling pension costs, and has embarked on fiscal reforms that will bring the State budget back under control. While these changes may not come fast enough to ease the pension contribution impact on both the State and local governments, the Governor and the Legislature are working with a sense of urgency on lasting reforms to ease the tax burden on all New Jerseyans,” he said.
Treasurer Abelow noted that the contribution information on the Division’s website includes comparisons on local government costs for PERS and/or PFRS in 2006 versus 2007. The analysis also compares each government entity’s contribution against what the full contribution would be, absent the phased-in allowance. The tables also reflect what contributions are commensurate with early retirement programs adopted on an optional basis by many local government entities.
“The incremental payments represent a double-edged sword,” said Abelow. “While they have buffered the immediate budget impact from year to year, the phased-in amounts have not kept pace with the overall growth in the liability. By not doing so, the unfunded liability problem looms as a significant growth factor when the 2008 figures are estimated at this time next year, ” he said.