Statement of Support for Constitutional Amendment Requiring NJ to Make Full Pension Payments

President Charles Wowkanech issued the following statement on the introduction of legislation to put a constitutional amendment on the ballot requiring the state to fully fund pensions:

“The New Jersey State AFL-CIO strongly supports legislation to place a constitutional amendment on the 2016 ballot requiring the state to make its full pension payments. We applaud Senate President Steve Sweeney’s ongoing efforts to restore New Jersey’s pension system to fiscal health on behalf of this state’s 650,000 active and retired public-sector workers."

“In addition, the constitutional amendment will require the state to make its pension payments on a quarterly basis. This is a fiscally sound approach that eliminates the skipped or partial payments that threaten the system. Many of the best-run pension systems in the country follow this formula, and it’s time that New Jersey got smarter about how it makes its pension contributions. Making the payments quarterly, rather than on the last day of the fiscal year, gives the money more time to accrue interest. This simple budgetary adjustment would return millions in additional interest to our pension system and cut our unfunded liability by an estimated $5 billion over the next 30 years"

“Let’s not forget that a constitutional amendment to require pension contributions was proposed as part of the 2011 pension reform law, a law that everyone has been obeying – except the governor who signed it. Retirees forfeited their cost-of-living increases, active employees are paying more, local governments have never skipped a payment and the Legislature has drafted budgets that included the required pension funding. Changing the Constitution is not a step we support lightly. But, we believe this action is the only way to force the state to abide by the law and fully fund pensions.”

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