By Mark Lagerkvist | New Jersey Watchdog
The bad news keeps getting worse: New Jersey’s public retirement system faces a $170 billion deficit for pensions and health benefits for government retirees, according to the latest official figures from the state Treasury.
The state pension shortfall doubled under new accounting standards, intended to provide a more realistic fiscal picture. As a result, the reported unfunded pension liability of $51 billion in 2013 expanded to a $103 billion shortfall when the new guidelines from the Governmental Accounting Standards Board took effect this June.
“This is just a financial reporting change and does not materially impact New Jersey’s fiscal position,” said Treasury spokesman Christopher Santarelli.
Instead, the new numbers offer a starker outlook for the state’s existing financial woes. Here’s a full breakdown of the Treasury’s fiscal figures for its retirement system:
- New Jersey has $82.7 billion in unfunded liability for the pension plans of state workers — up from the $37.2 billion shortfall reported last year.
- The deficit in pensions for local government employees stands at $20.7 billion, compared to $13.7 billion in 2013.
- The state is responsible for $53 billion in unfunded health benefits for retirees.
- In addition, local governments are on the hook for $13.8 billion to cover post-employment benefits of their workers.
The updated numbers were released as part of revelations to investors for the state’s bond offering to raise money for its Transportation Trust Fund.
“The state’s new disclosures…underscore the significant pension funding challenges that New Jersey faces,” stated a Moody’s Investors Service report yesterday.
Gov. Chris Christie has proclaimed solving the state’s pension dilemma as one of the priorities for his second term in office.
“This is the goal I will dedicate myself to in the remaining years of my governorship,” Christie promised in this year’s budget address.
In August, Christie appointed a nonpartisan Pension and Health Benefit Study Commission to propose reforms. The panel has yet to offer any recommendations.