That United States Supreme Court will not rule on whether New Jersey has to honor contracts but, as important as that may be for anyone doing business with the state, it has absolutely nothing to do with properly funding public pensions as this northjersey.com story would have you believe.
The decision means that — unless New Jersey voters approve a constitutional amendment to guarantee pension funding — New Jersey governors and lawmakers have discretion over how much money to send to the troubled retirement funds every year.
That discretion would still be there, with or without the amendment, since for public plans there are no (or very few):
- funding rules
- numerate people making decisions
- honest actuaries
New Jersey governors and lawmakers would still get to pick their contribution amounts and, even if we get a constitutional amendment requiring that those manufactured contributions be deposited, unless the three items mentioned above magically appear the plans will run out of liquid assets shortly and no court ruling will make them reappear.