The July 1, 2016 actuarial reports for the New Jersey Retirement System plans are out and their main practical purpose is delineating the contributions for the fiscal year ended June 30, 2018. That total contribution amount would be $6,768,969,201 except we have laws that bring it down to $4,260,031,483 ($2,508,937,717 by the state and $1,751,093,766 by localities) with public workers expected to contribute another $1,977,904,061.
By far the largest portion of that total calculated contribution (84.6%) is the 30-year amortization of the underfunding which comes to $5,724,532,942 and develops through a combination of missed contributions and absurdly understated liability values. Here are two worksheets taken from contribution exhibits with some observations:
- In theory public employees cover though their contributions 67% of benefits being accrued ($4,504 out of $6,685 annually) but that’s only because that $6,685 amount is ridiculously undervalued.
- For some reason member contributions are expected to stay steady overall and for some plans (Teachers, PFRS, and State Police) even decrease.