The webcast of the May 6, 2015 oral arguments in the pension payment case is online and there was a lot more that came out beyond ‘bait and switch‘ and ‘aspirational’ that the media latched onto. In the next few blogs we will look at some points of interest brought up over those three hours beginning with the obvious question if the state prevails:
If New Jersey is free to put in whatever they choose into the state pension plan then why would future governors and legislatures simply put in nothing (as several prior governors and legislators chose to do)?
Then for the plans that the state is responsible for (TPAF, PFRS state, PERS state, State Police, and JRS) with only the employees’ own contributions coming in and about five times that amount going out there will inevitably come a time when the money will run out. Let’s say in 2021 when annual payouts to state retirees are at $10 billion and all you have coming in is $2 billion in employee contributions. Can the state continue to rely on the Appropriation Clause argument and refuse to make up that $8 billion shortfall as they had being for all those past years? If so where will the money come from?
That is pretty much the question that Judge Barry Albin was trying to get answered and, at the end of the video, Assistant Attorney General Jean Reilly puts forth a couple of options.