(Bloomberg) -- Governor Chris Christie contributed 18.6 percent of what New Jersey’s pension fund needed in fiscal 2014, lowest among U.S. states, according to Moody’s Investors Service.
The governor, a 53-year-old Republican seeking the presidential nomination, skipped billions of dollars in payments for 2014 and 2015, and reduced the 2016 planned contribution, saying the state didn’t have the money.
A state Supreme Court ruling in June allowed Christie to bypass his own 2011 law requiring a series of extra payments to bring the fund, with 800,000 beneficiaries, closer to actuarial demands.
For 2014, adjusted net pension liabilities declined for 27 states, driven by strong investment returns. Still, 50-state aggregate liabilities increased to $1.3 trillion, and Moody’s expects fiscal 2015 liabilities to grow because of weaker market performance.
“Most states made budgetary contributions at or close to their actuarially determined contribution levels,” according to a report released Friday by Moody’s. Thirty-six gave more than 90 percent. Only two--New Jersey and California, at 48.2 percent--fell below 60 percent.
Kevin Roberts, a Christie spokesman, said the governor “has contributed more to the pension system than any other governor in New Jersey history.” By June, he said in an e-mail, the total will be $4.4 billion. The governor has urged Democrats who control the legislature to agree to more benefits changes, saying the cuts made during his first term didn’t go far enough.
“The statistic to focus on is how broken and outsized the benefits structure is, when a teacher who works for 30 years and pays only a total of $126,000 for his pension and health insurance, over his entire career, retires and takes $2.4 million out of the system in return,” Roberts said.
California is using more conservative actuarial assumptions, according to Moody’s, and is making extra payments.
New Jersey is $83 billion short of what it needs to make good on retiree payments, and the stress has led to nine credit-rating downgrades under Christie, a record for a New Jersey governor.
“Several states coping with pension underfunding and outsized liabilities will continue to face significant credit challenges,” Moody’s wrote. The company gives New Jersey a rating of A2, sixth-highest, with a negative outlook, indicating another downgrade is a possibility. Only Illinois has a worse credit rating.
Copyright 2018 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.
Your access to unlimited BenefitsPRO content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking benefits news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
