The State Treasury Department reported today that the state pension fund lost more than $5 billion last month, bringing loses from the previous year to $12 billion. During the current budget year, which began July 1, the fund has lost more than 8.8%.
As the Star-Ledger aptly points out,
For taxpayers, that performance is troublesome. Actuaries who calculate each year how much the state should put into the pension accounts to meet future benefit payments assume the money on hand will earn an average of 8.25 percent each year.
When longterm returns miss that mark, taxpayers must make up the difference. This year, between state and local taxes, taxpayers put more than $2 billion into the accounts, which bankroll retirement benefits for 700,000 teachers and public employees.
The need for sweeping reform to the state's pension system, including the gradual movement of all state workers into a 401(k) style system, continues to grow. While the changes passed as part of this year's budget process are significant, they do not provide overwhelming relief to the burden on New Jersey's taxpayers. Without real reform, the spiral of asking taxpayers to pay more for a system they could not afford in the first place, will continue.
