Wednesday, September 12, 2012

Sign the Pledge for Fairer Pension System in New Jersey



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.

To E-sign the pledge, please CLICK HERE

For a paper copy of the pledge, please CLICK HERE


Terminate the New Jersey Defined Benefit Plans
  1. Freeze all benefit accruals immediately
  2. Employee contributions would go into a 401(k)-style plan
  3. 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
Without this change the over $100 billion in unfunded liabilities already in the pension system will continue to grow. Terminating the Defined Benefit plan now would force that obligation to be dealt with while we still have viable options. What we have now is a Ponzi scheme destined to blow up, though likely not in one noticeable mushroom cloud of a Madoff-blast but in stages with portions of promised benefits disintegrating while escalating taxes to pay for both current and past benefit promises force municipalities into bankruptcy.