While Workers Make 100% of Pension Payments, State Makes Less Than 10% of Required Contributions
TRENTON, NJ -- The Communications Workers of America responded to the release of a State actuary's report by calling on the State Legislature to fund the pension plans of hundreds of thousands of public workers and retirees.
"The actuary's report and the recent Pew Study confirm what CWA has been saying all along - that the pension is in trouble because the Governor and the Legislature haven't funded the plan," said Hetty Rosenstein, the Communications Workers of America's (CWA) New Jersey Director. "The pension boards have passed motions asking for a more responsible and deliberative process - one that will make sure to fund the pensions plans for thousands of New Jersey's hardworking public employees."
At the hearing today, members of the four public pension boards voted to send a letter to the State Legislature asking that the Legislature talk to actuaries and examine the actuarial report before acting on legislation that would make changes to the pension.
The actuary's report found that the state's pension system is 30% more underfunded than it was in the previous year, and is now underfunded by nearly $46 billion. Overall, the pension fund has dropped $17 billion to $66 billion over the course of the year which ended on June 30, 2009.
Members of the Public Employee Retirement System (PERS) pay 5.5% of pay toward the cost of the pension plan. Their contributions equal 53% of the yearly payment that is supposed to be made to the pension plan for state government and over 60% of the yearly payment that is supposed to be made for local government. The representative from Buck Consulting testified that last year 2009, workers contributed more than $687 million to the pension funds, but state and local employers contributed only $23 million. In the past 12 years the state has contributed less than 10% of what it is supposed to contribute.
"Any benefit reforms that only change the benefits for new hires would not have an immediate impact on the system," said Janet Cranna, an actuary with Buck Consultants who is testifying before the pension board today.
CWA also criticized a Senate Bill calling for a Constitutional Amendment to force funding of the pension. As it is currently written, the Bill would continue to allow the state not to make its full contribution to the pension fund for another eight years. "The law currently requires that the State fully fund the pension plan and make its payments," said Rosenstein. "The workers have paid their share every year. What our elected officials have done in not funding the plan is a disgrace."
In the News: "Public Worker Pensions" on NJN, February 25.
