Bill Text: NJ ACR244 | 2014-2015 | Regular Session | Introduced

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Bill Title: Urges Governor to make, by July 15, 2015, State pension payment of $1.3 billion for State Fiscal Year 2016.

Spectrum: Partisan Bill (Democrat 5-0)

Status: (Passed) 2015-06-29 - Filed with Secretary of State [ACR244 Detail]

Download: New_Jersey-2014-ACR244-Introduced.html

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ASSEMBLY CONCURRENT RESOLUTION No. 244

STATE OF NEW JERSEY

216th LEGISLATURE

INTRODUCED JUNE 29, 2015

 

 

Sponsored by:

Assemblyman  VINCENT PRIETO

District 32 (Bergen and Hudson)

Assemblyman  LOUIS D. GREENWALD

District 6 (Burlington and Camden)

 

 

 

 

SYNOPSIS

     Urges Governor to make, by July 15, 2015, State pension payment of $1.3 billion for State Fiscal Year 2016.

 

 

CURRENT VERSION OF TEXT

     As introduced.

 

A Concurrent Resolution urging the Governor of the State of New Jersey to make, by July 15, 2015, to the State-administered pension systems the State budgeted pension payment of $1.3 billion for State Fiscal Year 2016.

 

Whereas, On March 22, 2010, the Governor signed into law P.L.2010, c.1, which made changes to the public employee pension systems; and

Whereas, One provision of that law imposed a requirement upon the State to pay the full annual State contribution to the Teachers' Pension and Annuity Fund, the Judicial Retirement System, the Prison Officers' Pension Fund, the Public Employees' Retirement System, the Consolidated Police and Firemen's Pension Fund, the Police and Firemen's Retirement System, and the State Police Retirement System; and

Whereas, The amount of the annual required contribution is the amount determined by the actuaries of each pension system, based on the annual valuation of the assets and the liabilities of each system pursuant to consistent and generally accepted actuarial standards; and

Whereas, The contribution includes both the normal contribution and the unfunded accrued liability contribution; and

Whereas, The law permits the State to phase in this requirement over a period of years; and

Whereas, The full payment for State Fiscal Year 2014 was to be three-sevenths of the actuarially determined contribution, and for State Fiscal Year 2015, the full payment was to be four-sevenths of the actuarially determined contribution; and

Whereas, The Governor made a payment of the normal contribution for State Fiscal Year 2014 and will make a payment of the normal contribution for State Fiscal Year 2015, but has not made a payment toward the unfunded accrued liability; and

Whereas, Due to the failure to comply with the law by not making the required full contribution in each year, the State has deprived the pension systems of funds essential to increasing the funded levels and meeting the obligations of these pension systems; and

Whereas, The Governor failed to fulfill his promise to responsibly fund the State's share of annual contributions to the various State-administered retirement systems for public employees, as required by law; and

Whereas, While the Annual Appropriations Act for State Fiscal Year 2016 as passed by the Legislature includes appropriations for the full State contribution required by law to be made to the various State-administered pension systems, the Governor has reduced those appropriations to $1.3 billion, an amount that represents only three-tenths of the actuarially determined contribution for the fiscal year; and

Whereas, If that payment of $1.3 billion is made by July 15, 2015, it could generate a projected $87 million in additional investment income for the pension systems over the course of the fiscal year, based on a seven percent annual rate of return; and

Whereas, Making the payment by July 15, 2015 would reassure the bond rating agencies and the public employee members and retirees of those pension systems that the payment for State Fiscal Year 2016 will indeed be made; and

Whereas, To make the payment by July 15, 2015, the State Treasurer can use the State's line of credit, an extension of the normal practice of short-term borrowing during the fiscal year; and

Whereas, During State Fiscal Year 2015, the interest rate on the State's line of credit was approximately one half of one percent, so that the investment earnings for the pension systems would clearly dwarf the interest cost for the short-term borrowing; and

Whereas, Making the $1.3 billion payment by July 15, 2015 places funds into the pension systems as quickly as possible to maximize the return on investment, reduce the unfunded accrued liability, and save money for future taxpayers; and

Whereas,  It is in the best interests of the State, its employees and retirees, and the various State-administered pension systems to accelerate to the beginning of State Fiscal Year 2016 the payment of the budgeted $1.3 billion State pension contribution by using the State's line of credit; now, therefore,

 

Be It Resolved by the General Assembly of the State of New Jersey (the Senate concurring):

 

     1.  The Legislature urges the Governor to make the State contribution of $1.3 billion budgeted for State Fiscal Year 2016 to the various State-administered pension systems and funds by July 15, 2015.

 

     2.  A copy of this concurrent resolution, as filed with the Secretary of State, shall be transmitted by the Secretary of the Senate or the Clerk of the General Assembly to the Governor of the State of New Jersey.

 

 

STATEMENT

 

     This Assembly Concurrent Resolution urges the Governor to pay, by July 15, 2015, the State's budgeted contribution of $1.3 billion for State Fiscal Year 2016 to the various State-administered pension systems.