“Requires State to pay its pension contributions quarterly on July 15, October 15, January 15 and April 15.”
The New Jersey Education Association supports S-2265 (Gordon, Sweeney) / A-3487 (Cryan, Wimberly, Pinton Marin. This legislation would require the State to make its required employer-contributions to the State-administered defined benefit retirement systems each State fiscal year on a quarterly basis on July 15, October 15, January 15 and April 15. The bill specifically defines the State-administered defined benefit pension systems are: 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. The bill would take effect immediately.
Local governments and public employees make regular payments, based on the employers’ payroll schedule, to fund the retirement systems. This puts the money to work as soon as possible, thus increasing the rate of return of the pension trust funds and ultimately saving the employers and taxpayers money by reducing the employer cost to fund the systems.
Quarterly pension payments by the State would have a similar impact, reducing the cost to fund the state-administered retirement systems and saving taxpayers money by increasing the rate of investment returns. Currently, the State is required by the actuary to add 7.95% to the State’s required contributions to fund the various retirement systems to make up for the lost investment returns because the Treasurer does not make the annual pension contributions until the end of the State’s fiscal year.
NJEA urges you to support S-2265 / A-3487.