Long term crisis threatens NJ teachers retirement plan

By: Tom MacDonald

New Jersey teachers are worried about their underfunded pension plan. Even though the plan has over $35 billion in assets, chronic underpayments from Trenton have put it in a major hole.

New Jersey teachers are worried about their underfunded pension plan. Even though the plan has over $35 billion in assets, chronic underpayments from Trenton have put it in a major hole.

Transcript:
The fund that pays the pensions of New Jersey teachers is about $14 billion short, and the state doesn’t have money to bridge the gap.

William Lipkin is head of the New Jersey branch of the American Federation of Teachers.

Lipkin: “I think it’s unconscionable to think that teachers who rely on pensions, who have been paying into a pension for 10, 20, 30 years and rely on that money for their retirement, should be told they will have to take a reduction in their pension or have their pension frozen.”

Lipkin says teachers shouldn’t be forced to give up guaranteed pensions for more risky 401K retirement savings programs.

A Rutgers University expert says the state has two basic choices to make the fund solvent – pay its fair share, or in a move he wouldn’t recommend, have the pension plan take on more investment risk.

Listen:
Click on the play button below or right click on this link and choose “Save Link As” to download. [audio: reports20090404njteachers.mp3]