PLEDGE TO SUPPORT TERMINATION OF
NEW JERSEY’S DEFINED BENEFIT PLANS
WHEREAS New Jersey taxpayers cannot afford the exorbitant and nontransparent costs of maintaining benefits promised to public employees under the current Defined Benefit Plan structure sponsored by the state; and
WHEREAS public employees are not guaranteed these benefits, as witnessed by the recent elimination of promised cost-of-living-adjustments on pensions; and
WHEREAS the New Jersey Taxpayers Association deems this action necessary and prudent;
NOW THEREFORE I pledge to support a fairer pension system for all public workers and taxpayers, beginning with the termination of the New Jersey State Defined Benefit Plans.
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Terminate the New Jersey Defined Benefit Plans
- Freeze all benefit accruals immediately
- Employee contributions would go into a 401(k)-style plan
- Current shortfalls could be made up with taxes over some amortization period (as is being done now) or borrowing.
We Must Stop Digging. The Hole Is Too Big
- Politicians cannot be trusted to fund Defined Benefit plans properly
- Taxpayers cannot afford to fund the current level of benefits as well as make up prior deficiencies
- Employees need to know their contributions are not going into a Ponzi scheme
- Retirees need assurance that their benefits will not be cut off without notice (Prichard, AL; Central Falls, RI)
- Other states are moving toward the Defined Contribution concept (Alaska, District of Columbia, Michigan, Minnesota, Nebraska, Utah, West Virginia)
Rationale for Change
- Public workers need to get paid what their work is worth.
- Taxpayers need to know that amount.
- The current system encourages dishonesty in all parties when representing deferred-benefit costs