Years of underfunding left New Jersey with one of the nation’s worst-funded public-worker retirement systems. That’s starting to change as a result of recent efforts to ramp up contributions into the state pension fund.
A new report on the fiscal health of state pension plans highlighted New Jersey’s pension-funding ramp-up that started under Gov. Chris Christie and has continued throughout Gov. Phil Murphy’s first four years in office.
The state’s latest annual budget, enacted by Murphy earlier this year, is funding what will be New Jersey’s first “full” pension payment in more than two decades — enough money to cover what the state’s actuaries have calculated as necessary to cover all current obligations and to help restore the fund to good health.
The series of increased employer contributions have put New Jersey’s pension fund in a better position to capitalize on soaring investment returns recorded during the 2021 fiscal year. The impact of those returns was highlighted in the new report on state pension funding, issued earlier this week by The Pew Charitable Trusts.
The report also urged state policymakers to plan for the future since investment returns are likely to sag and overall economic conditions may make it harder to maintain robust funding levels.
— Graphics by Genesis Obando