The Senate Republican Caucus in a letter sent today, asked the Pension and Health Benefits Review Commission to provide information pertaining to the effects that the Corzine Administration’s pension deferral proposal will have on long-term costs to New Jersey property taxpayers and any detrimental effect on the health of the state pension systems. The letter is attached.
“We have asked the Pension Review Board to stand with us in opposition to Governor Corzine’s imprudent plan to allow towns to defer part of their pension obligations, ” Kean stated. “The Caucus has also asked the Board to provide us with information about the long-term costs to middle-class property taxpayers and to the health of the pension systems.”
February 6, 2009
Members of the Pension and Health Benefits Review Commission
c/o Mary Ann Ryan, Executive Director
P.O. Box 295
Trenton, New Jersey 08625-0295
We are writing to express our strong opposition to legislation (Senate Bill No. 7) on the February 13 meeting agenda of the Pension and Health Benefits Review Commission. The legislation allows employers to expediently postpone pension payments in the near future and increases pressures on property taxpayers and already-underfunded pension systems by more than $1 billion.
Senate Bill No. 7 will cause pension funds to be even more underfunded than they already are – not just because more than $1 billion payments will have been skipped, but because potential investment earnings on those payments will be lost. Ironically, the legislation will allow for postponed payments at exactly the time that investing is most appropriate – while markets are at significant lows.
Local pension systems are already grossly underfunded and skipping payments now will mean even higher taxes or more substantial cuts in benefits in the future to address the imbalance. Senate Bill No. 7 amounts to “kicking the can down the road” and will hurt taxpayers and public retirees alike, all for short-term expedience.
In addition to asking you to recommend against enactment of Senate Bill No. 7, we are asking that you cause to be prepared an actuarial analysis quantifying the extent to which the legislation will increase the underfunding of the pension systems, thereby requiring later property tax increases or benefit reductions to bring the funds into balance.
Sincerely,
Thomas H. Kean, Jr.
Diane Allen
Bill Baroni
Christopher Bateman
Jennifer Beck
Anthony Bucco
Gerald Cardinale
Andrew Ciesla
Christopher Connors
Philip Haines
Sean Kean
Joseph Kyrillos
Kevin O’Toole
Steven Oroho
Joseph Pennacchio
Robert Singer
Marcia Karrow, Assemblywoman and Senator-Elect
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