Via Cubachi, a sneak preview of the next phase of Christie-style Hopenchange: Figuring out how to bring sustainability to a public pension system which, by law, requires an increase of nine percent per year.
The governor, who took office in January, skipped a $3 billion payment into the $66.9 billion fund in his first budget as he coped with a record $10.7 billion deficit. The fund, which provides benefits for almost 800,000 current and retired teachers and government workers, had a gap between assets and anticipated payouts of $46 billion as of June 30, 2009…
The governor said he intends to work with lawmakers later this year on a series of changes to lower future pension costs. Those initiatives may include scaling back a 9 percent pension increase enacted in 2001 and reducing future benefits for current workers, he said.
In March, the first-term Republican signed a package of bills barring part-time workers from the pension system, capping payouts for unused sick-time and requiring employees to pay 1.5 percent of their salaries for health insurance.
Lowry, singing his praises, calls him an adult in an increasingly juvenile political world. I couldn’t agree more, but when it comes to hard choices about entitlements on a national level, I honestly don’t know how viable that degree of adulthood will ever be. Just ask the resident adult in the House GOP caucus…
Update: My mistake. The nine percent increase isn’t mandated annually. From a pension consultant in New Jersey:
Years ago the formula for the pension for members of the Public Employees Retirement System was years of service divided by 60 times final average salary. The formula was changed to years of service divided by 55 times final avg salary. This resulted in a 9% increase in pension benefits. It does not mean that members of the retirement system receive increases of 9% each year. There is a cost of living adjustment, however that is based on 60% of the difference in the CPI from the date you retired to today’s CPI. This resulted in no increase this year.