A Pension Commission Releases New Reform Recommendations. 4 Bits Informed Intel.

Which state had a commission reviewing pension reforms? New Jersey

What steps did it take to make recommendations? A report with recommendations was released in February 2015 & new supplmental recommendations in February 2016.

What are the 2016 supplemental recommendations?

Keep the cost of the state employee benefits below 15% of the budget
Align benefits more closely to private sector employer standards and new market developments
The reallocations for teacher retirees must not impact property taxes
Preserve public employees’ and retirees’ health benefit packages at levels above those prevalent in the private sector
Permit the reallocation to pension funding of over $2 billion a year in health benefits savings
Fully-fund pension benefits earned to date while insuring that benefits earned in the future remain within the State’s means

What were the initial 2015 recommendations?

Freeze the existing pension plans; benefits earned to date would not be affected, but taxpayers cannot afford additional benefits to be earned under the existing plans
Align future public employee retirement benefits with private-sector levels; this is the sensible thing to do on its own merits and the savings will make funding more secure for employees and less painful to taxpayers
Also align public employee health benefits with private-sector levels; get ahead of the curve in controlling these staggering costs before they crowd out retirement benefits from State and local budgets
Fairly realign State and local responsibility for new and sustainable pension and health benefits; this will produce the best result from the perspective of employees and the State’s taxpayers as a whole
Lock in fixed and certain pension funding with a constitutional amendment; this will protect employees and retirees from the vagaries of politics and the annual budget process, improve the State’s financial condition, and make clear to all that the people of New Jersey have taken ownership of the problem and the solution
Transfer the assets, liabilities and risks of the existing pension and new retirement plans to employee entities willing and able to assume this obligation; allow those who receive the benefits to have the power anassume the risk of managing the plans to ensure that the available funds are sufficient to pay for the provided benefits.

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