TRENTON – Senator Barbara Buono today released the following statement regarding the signing of the “Public Employee Pension and Benefits Reform Act of 2008.”
“I stand before you today in the midst of a Wall Street meltdown caused by freewheeling, profligate borrowing gone bad.
“The vote in Washington today on the $700 billion pledge of public money is said to be necessary in order to save and rebuild the nation’s financial system but the impact is already being felt on Main Street.
“While some portray that vote today as Congress belatedly taking ownership of the crisis it helped to create, here in New Jersey, we are bracing ourselves to see how much of a hit our tax revenues will take. We’ve already had a taste of how investment returns to our public employee pension system have been negatively impacted.
“I don’t think anyone would argue that the public employee pension system is impervious to the turmoil that has rocked our financial system to its very core.
“Its time for New Jersey to belatedly take ownership and responsibility for our collective role in destabilizing our public employee retirement systems. Even if Congress ultimately supports the bailout, we aren’t going to see the economy suddenly rebound.
“This turn of events just heightens the urgency to make changes in order to end those practices that threaten the financial security of the public employee retirement system. It wasn’t always this way in New Jersey. Up until the 1990’s the state’s retirement systems were operated according to sound actuarial principles allowing it to grow into a stable, well-funded pension system. But it fell victim to its success in that multiple administrations used it as a tool to balance the budget, to offset tax reductions, to maintain or expand current programs. This was coupled with the inevitable downturn in the market in 2001, and a change in how the plans assets were measured in an effort to mask the true cost of benefit enhancements and to reduce employer or employee contributions.
“Now, the liabilities exceed the actuarial value of the assets by more than $28 billion and growing.
“Faced with that stark reality we have to ask ourselves– at this rate, how long can the system continue to provide the hard-earned benefits that were promised to our current workforce?
“If there is a way to escape the fortunes of fate without making some changes, I’d sure like to hear it.
“This legislation is the culmination of a bi-partisan effort where we have finally demonstrated the courage to take ownership of the perilous state our pension system is in and to begin to turn the ship around.
“This legislation isn’t perfect but it will begin to chip away at the culture of abuses and excess that has plagued the pension system for years.
“By signing this into law, Governor Corzine enhances the effort to end the abuses and to ensure that benefits will be there for the workers who have been promised them and who have rightfully earned them.”