NJ pension plans are struggling to cope with a record number of people joining the program
NEWARK, N.J. — New Jersey’s pension systems are struggling with a double whammy of high-risk retiree and high-payout enrollees, and a sudden spike in enrollment in the new program for the state’s top retirees.
The state’s three largest pension funds have a combined $7.4 billion in retiree payments and other benefits from the program, and more than 4.6 million people enrolled in New Jersey’s public pensions, according to state data.
The latest numbers are more than half the total number of eligible people in the program when it began in 2015.
That includes 1.7 million eligible New Jerseyans and nearly 4 million who were already on the state program, according a state official.
Those who signed up for the new pension plan are now required to take an extra year of service in the private sector to get paid, or a total of three years to complete the work.
They will get up to $9,000 a month, which is an average of $19,000 per year, or $25,000 in 2017.
The second wave of enrollments in the public program, in 2020, hit a record of 3.3 million.
This year, the state has had more than 6.4 million people on the public plan.
The third wave of new enrolments started in 2020 and has reached an estimated 3.6 billion, state data show.
This time, the New Jersey State Retirement System is projected to have about 6.5 million eligible retirees and about 2.6 and 1.3 percent of the state workforce, respectively.
New Jersey has already started to ramp up the public pension plan’s benefits.
It has made a $2 billion commitment to the public plans, including a $100 billion plan for the public workers, and the state will add another $150 billion to the plan by 2021.
While the state is already covering most of the costs for the retirement plan, some states, like New York, are not expected to be paying for the full cost.
New York and other states have been considering whether to keep the state plan in place or move it to a separate program.
In New Jersey, some retirees are not on the new state pension plan, but they can still be eligible for federal pension funds or the state of Delaware.
In New York state, which has been at the forefront of efforts to overhaul its pension system, the public pensions are paid by the state.