TRENTON – Senate Majority Leader Barbara Buono (D-Middlesex), a prime sponsor of one of the pension reform bills unveiled today, issued the following statement sizing up the current state of New Jersey’s pension and benefits system and underscoring the need for swift and bold action:
“We introduced a package of pension and benefit reform bills this week because our plans are in dire straits and our taxpayers can no longer afford them. In fact, the situation is so bleak that if the state plans were funded by a private business, it would have already declared bankruptcy and terminated them.
“A recent actuarial study reveals something that should not come as a surprise to anyone – the plans are experiencing a negative cash flow to the tune of billions of dollars in some cases. Indeed, in Fiscal Year 2009, the teachers’ pension plan had about $2.7 billion paid out in pension benefits and expenses, but only $585 million put in and an investment loss of $771 million. Obviously, that negative spiral is unsustainable.
“Something must be done and fast if we are to save our system from collapsing under the weight of its debt and failing to deliver on its promise to provide long-term security for people who have dedicated their lives to teaching our children, protecting our citizens, and enforcing our laws. We cannot afford to punt on the critical decisions that must be made to avert a complete collapse of the pension system. In order to save our system, we must take honest ownership of the perilous state it is in and implement the long overdue reforms necessary to reverse its decline.
“Embracing these changes, and putting an end to abuses by those at the fringes, will protect the benefits for the bulk of our hardworking and well-deserving employees. For starters, we need to move the pension calculation back to the N/60 system for new employees because this represents the single, most significant threat that will bankrupt our pension system. If we erred by legislatively enacting an unaffordable benefit enhancement based on false assumptions, don’t we collectively share the responsibility to enact a legislative remedy?
“I would like to thank Governor Christie for lending his support to these far-reaching efforts. Now is the time to act before any more damage is inflicted on the solvency of our pensions and move this legislative package forward,” said Sen. Buono.
Sen. Buono is the prime sponsor of one of the reform bills (S-4), which would, among other things, uniformly rein in exorbitant payouts for accrued sick and vacation time by requiring local government and school employees to adhere to some of the reforms approved in 2006 for state employees. This would include limiting sick leave payout to $15,000 and allowing only one year’s worth of vacation time to be carried over from year-to-year.
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