HILLSBOROUGH: Township facing hike in pension payments

By Eileen Oldfield, Staff Writer
   This year’s budget woes will likely continue into next year, with one of the first increases involving pension payments the township must make.
   The township expects a 20 percent increase in pension payments for public and police employees next year, which amounts to a $367,000 increase over this year’s payments, according to Deputy Mayor Gloria McCauley.
   ”That just seems surreal in this economy,” she said at Tuesday’s Township Committee meeting. “While we heard about all the help that Trenton may give to local governments, and taxpayers, this, I have to say, is not defined as help in my opinion.
   ”The township does not set the pension rates,” she added. “The pension payment amounts are a state mandate. There is no way to reduce them by cutting something here or there next year.”
   The increase, which the state’s pension board determines based on salaries from two years ago, will amount to $220,000 for current police officers and $147,000 for current public employees. With the increase, the total amount for pension payments will be $1.5 million for police and $689,000 for public employees next year. The payments cover 55 police employees and 120 public employees.
   The pension payments will increase the township budget beyond the state-set 2 percent budget cap, meaning it will need to find other cuts to compensate. Because the state pension board sets the pension payment amounts, the township is unable to change the amount it must pay.
   ”Even if you eliminate positions, have employee furloughs, lay off employees and have salary freezes, none of it will change the 2011 pension payment amount because it is based on salaries from two years ago and actuarial forecasts,” Deputy Mayor McCauley said. “This will, unfortunately, impact on the township’s overall budget next year and will make delivery of services that much more difficult.”