up for New Jersey
“New Jersey’s pension system may have already reached an unfixable tipping point,” the report notes. That echoes the thoughts of a financial analyst who warned, back in 2015, “You can’t grow your way” out of so vast a hole, even with higher investments. “It’s almost mathematically impossible to close the [funding] gap.”
The nightmare has been long in the making.
Jersey’s system guarantees government employees juicy benefits whether or not the economy lags, tax revenues dip and pension fund investments fall short. Few private sector employees enjoy such guarantees; their bosses contribute to their 401(k) plans, but those fluctuate with the stock market.
As a result, the Garden State now boasts America’s most underwater pension fund, with a mind blowing $124 billion in debt, Standard Poor’s notes. Assets cover just 30 percent of what’s needed for future obligations, well below the 40 percent mark the Rockefeller Institute of Government deems “crisis” level ## ## .
California is also struggling with pension costs, though it’s 68 percent funded. A state court there shocked everyone by saying benefits could be rolled back as long as payments are “reasonable” (though an appeals court later pushed back on that).
Compounding the problem, Murphy is labor’s darling and so unlikely to curb pension perks, let alone push for anything like a switch to 401(k)s. Instead, he’s vowed $1.3 billion in tax hikes, though he already committed some of the new revenue.