NJ Retirement System Hits $11B

nj1015.com put together a useful story from state pension data updated through March, 2018 putting names and faces to the $11 billion that it estimates is being paid out annually to retirees. However, there was no downloadable spreadsheet of the data so I put one together and also did some calculations for the retirees with the seven highest payouts. I agreed with 4 of the pensions while it looks like two should be getting more and one less.

Below are highlights from the story and my calculations.

It’s not likely to happen this month, when the battle over the state budget shares center stage with major issues like school funding, sports betting and marijuana legalization. But expect lawmakers to renew attention this summer on making changes to public worker pensions, among other structural reforms.

This year, public workers and the governments that employ them will put over $6.5 billion into New Jersey’s pension funds, including the state’s largest-ever contribution. But still the unfunded liability is growing, approaching $60 billion as of the most recent valuation last summer.

And so despite four cuts to pension benefits since 2007, the bipartisan Economic and Fiscal Policy Working Group that has been meeting in private for three months is expected to seek more changes.

“We have problems that need to be fixed,” said Senate President Stephen Sweeney, D-Gloucester. “We addressed them in 2011, somewhat. We need to go even further to fix this. Not to take it out or pick on our workforce at all, but we all need to be in this together because people can’t afford to live in this state anymore.”

The raw pension data I downloaded seems to be the same data that nj101.5 used and, after eliminating those with $0 benefits, I get 332,716 retirees getting annualized pensions of $10,821,212,105. Among the retirees with $0 benefits is former State Senator Raymond J. Lesniak who is listed as retiring as of January, 2018 with 492 months of service and a salary for pension purposes of $153,930.65. This would mean an annual pension of $114,748.30 ($153,930.65 * 492/12/55) that is not yet in the official figures.

When I apply this formula to the top seven I get:

A Z Yamba retired in 2010 when the 415 dollar maximum on annual pensions was $195,000. However in 2010 he was 72 years old and the dollar maximum in the private sector is actuarially increased for deferred retirement. Something similar might apply to Nicholas Sacco since $190,275 is 88.5% of the $215,000 dollar maximum in 2017 so they might have applied the accrual fraction (588/12/55) to the dollar maximum instead of applying the fraction to the salary and then limiting it to the dollar maximum. Both these guys might have an argument that they are being gypped.


10 responses to this post.

  1. Posted by NJ2AZ on June 4, 2018 at 2:07 pm

    once the funds are depleted and the system is Paygo, i suspect these high dollar pensions are going to be on the chopping block….because “fairness”


  2. For those not familiar with the 415 dollar maximum benefit limits…

    “Retirement benefits that exceed Section 415 dollar limits are not ‘illegal.’”



  3. how did lesniak get a public salary of $154,000? i thought he only was paid 49k as a senator, and all his other monies was all thru his law firms cronyistic work forced on public entities. JB1-were did you get that 154 number and what is it comprised of? thanks.


    • Here is the link to data on Lesniak:


      He was around for a while so there may have been a year where he could have had jobs as a municipal attorney or prosecutor that inflated his pension salary.


      • Posted by Tough Love on June 4, 2018 at 5:01 pm

        Most Private Sector DB Plans base “pensionable income” on something like ….. the highest consecutive 3 years withing the 10 years prior to retirement.

        What is the Definition in NJ’s Plans ?
        Also, is it the same for all of the Plans or does it vary by Plan ?


        • Posted by El gaupo on June 4, 2018 at 5:05 pm

          Varies by plan and tier.
          B.C. (Before Christie)
          Pfrs last 12 months salary
          Others last 3 years.
          After 2011.
          Pfrs. Final 3
          Others final 5.
          Also as a side note. Minor correction. Prior to 2011 the Pfrs contribution rate was 8.5%. 7.5 for the troopers. (Whose fund is in worse shape).


        • They redid the state website, taking away the handbooks and putting up these fact sheets.
          The top 7 were all PERS and TPAF since they are easy formulas to calculate with the data they give you. These 7 were probably final 3-year-salary.


  4. […] fund is paying out $11 billion annually and even with the additional money that localities and employees are putting in we still have […]


  5. […] According to actuarial valaution data as of June 30, 2017 public employees made $2 billion in contributions (8% of salaries) that year while taxpayers paid in $3.6 billion (14.5% of salaries) with a large chunk of the taxpayer portion theoretically going to reduce the shortfall from prior years. Annual payouts were $10.4 billion then and are likely $11 billion now. […]


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