NJ Changes Pension Payment Funding Formula In Hopes Of Earning More Interest
by KYW's David Madden
TRENTON, NJ (CBS) -- A newly approved law in New Jersey will require the state to make quarterly rather than annual payments into the pension system.
It's all about making the most of the money.
The change takes effect with the next fiscal year starting in July. State Senate President Steve Sweeney has been pushing this idea for awhile now. In fact, Governor Chris Christie vetoed the plan twice before. But this time, Sweeney suggests, the numbers added up better.
"By making quarterly pension payments, you're actually getting the dollars into the pension fund sooner and they're getting invested and you're earning interest," Sweeney (D-West Deptford) told KYW Newsradio.
How much interest?
"We should net close to 100 million dollars in interest, if our investments work out this year," Sweeney added. "And once we ramp up our payments as we are doing, it'll get to a point where we'll be making an additional 200 million a year."
He estimates the total interest could amount to some 8 billion dollars over the next 30 years.
A spokesman for Christie, in a statement, suggests going quarterly is a "revenue neutral approach" that could lead to future pension reforms.
