By Samantha Marcus | NJ Advance Media for NJ.com
New Jersey’s pension fund for government workers remains the most severely underfunded in the nation even though the state is pumping more and more money into the system each year, a new survey says.
For the fiscal year that ended June 30, 2018, the most-recent year for which records are available, the public pension fund had enough money to cover just 38.4 percent of what it needs to provide retirement benefits to some 800,000 current and future retired workers, according to the S&P Global Ratings comparison of public pension liabilities.
That funded ratio, as it’s called, reflected improvement in the health of the pension system. That year, the system’s unfunded liabilities dropped by nearly $12 billion to $130.7 billion. The ratio of assets to liabilities increased nearly three percentage points.
New Jersey governors and lawmakers for decades contributed less than the amount recommended by actuaries or nothing at all. But the system has been on a path to full funding. This year, the state is contributing 70 percent of what the actuaries recommend and should hit the full contribution, nearly $6.6 billion, in 2023.
The Wall Street rating agency compared states on their reported assets and liabilities as measured under national accounting standards. Calculated this way, the public pension system had $81.5 billion in assets and $212.2 billion in liabilities. That leaves a $130.7 billion unfunded liability — a daunting funding gap the state will grapple with for decades to come.
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