Pension payments on the rise

Monroe and Jamesburg face larger retirement contributions next year.

By: Leon Tovey
   Monroe and Jamesburg will pay more in retirement contributions next year than it did this year as part of a state plan to make up for money not paid into state pension systems between 1997 and 2003.
   Monroe will be required to pay $155,236 into the state Public Employees Retirement System in 2006, an increase of $103,007 over its 2005 contribution, according to a contribution chart issued by the state Department of Treasury.
   Jamesburg will be required to pay $15,362 into PERS in 2006, $10,059 more than in 2005.
   All municipal employees except for police and fire employees pay into the PERS.
   Wayne Hamilton, Monroe’s business administrator, said the township would also be required to increase its payments to the Police and Firemen’s Retirement System. The township’s contribution will be $226,580 in 2006, an increase of $125,183 from 2005.
   Jamesburg will pay $94,518 into the Police and Firemen’s Retirement System in 2006, $47,001 more than this year, according the Department of Treasury.
   The total in increased payments will have a bigger impact on tax bills in Jamesburg than in Monroe.
   In Jamesburg, a tax point — the amount of money needed to increase the tax rate by 1 cent — is just under $24,000. However, in Monroe a tax point is more than $300,000.
   The combined increases will mean Jamesburg will have to appropriate an additional $57,060 in the 2006 municipal budget. That would likely mean a municipal property tax increase of more than 2 cents per $100 of assessed valuation, though Mayor Tony LaMantia, who chairs the borough’s Committee on Finance and Budgeting, said officials are still looking at alternatives.
   "We’re looking at the budget now and trying to see what we can come up with," he said Wednesday. "This is another one of those things we don’t need — another example of state elected officials not realizing how their actions impact the municipalities. That’s Trenton."
   Mr. Hamilton agreed. While Monroe’s combined $228,190 increase will have far less of an impact (less than a tax point) Mr. Hamilton criticized the state for poor planning — first for deferring payments into the system and second for instituting successive increases of 20 percent.
   "Obviously, it has an impact and will continue to have an impact, especially on smaller municipalities," he said. "And it’s not just the increases; look at what (the deferments) have been doing to the state budget."
   Municipalities’ payments into the pension funds were deferred starting in 1997, during the administration of Gov. Christine Todd Whitman, because of a surplus in funds during the economic boom of the late 1990s.
   But according to an August e-mail from Treasury spokeswoman Kathy Hennessy, "by 2004 the surplus assets were gone and employer pension contributions were again required at a time when governments were in a very bad position to make them without drastically affecting other important programs."
   Rather than hit municipalities with their full contribution, the state has been gradually increasing the required payments.
   Employees have also been hit by the increases, Monroe Financial Officer Wendy Matson said. Employees were paying 3 percent and police were paying 5 percent of their weekly salaries into the pensions. For 2005 those payments increased to 5 percent for regular employees and 8 percent for police, she said.
   But the increases for municipalities have been far larger. This year, Monroe paid $52,229, or 20 percent of its actual contribution of $261,145, while Jamesburg paid $5,303 of its $26,515 actual contribution. The required payment for municipalities in 2006 will be 40 percent of the required contribution.
   According to Ms. Hennessy, once the phase-in is complete, the increases in payments would not be as drastic. However, she said, there are no estimates for what those payments, or increases, will be.
   Nor is it certain that those payments or increases will actually occur, Wayne Holliday, business administrator for the Monroe Board of Education, pointed out Tuesday.
   "You have to remember, we are going to have a brand-new administration in Trenton a week from today," Mr. Holliday said. "And whatever administration that is, it should have some impact on this because both (gubernatorial candidates) have said they’re going to look very close at the pension system."
   Mr. Holliday said the district had to include the increased contribution for 2006 in its 2005-06 budget, which was approved by voters in April. But the impact of the $78,572 increase was negligible since a tax point for the Monroe School District is around $622,000.
   "Obviously, we did not look favorably on the large — in strict dollar terms — increase," Mr. Holliday said. "But in terms of the overall impact, it’s not a huge increase."
   Tom Reynolds, business administrator for the Jamesburg School District, agreed. The state-mandated $6,011 increase in the district’s contribution only represented about ¼ of a tax point, he said.
   Both Mr. Reynolds and Mr. Holliday said the small impact on the schools is a function of the fact that most of the two districts’ employees are teachers who receive their pensions from the Teachers Pension Annuity. Monroe employs about 250 support staff, while Jamesburg employs 21.