DJ Kurz
Lambertville
It might be useful for readers to do some homework when it comes to the state’s claims regarding its unfunded pension and retiree health care liabilities.
The state reports its pension system has an unfunded $41.8 billion liability. However, this unfunded liability number is vastly understated!
According to Andrew Biggs, of the American Enterprise Institute, if the state calculated its pension liabilities in a manner consistent with private-sector accounting requirements — methods that economists almost universally agree to be more appropriate — New Jersey’s unfunded benefit obligation rises to $173.9 billion.
New Jersey has made a $174 billion promise without any idea of how it will pay for it.
To make matters worse, the current investment environment is characterized by low returns. State actuaries estimate that if pension system assets return less than 8 percent — which is highly likely — the NJ pension system will run out of money to make benefit payments as soon as 2013.
I would say this is a looming crisis that every reader should be concerned about — not just those receiving a monthly pension check and retiree health care benefits for life.

