TRENTON, N.J. – Assemblyman Ned Thomson is calling for both state and federal action on legislation to save New Jersey’s chronically underfunded public employee pension plans, which are taking a heavy hit during the coronavirus crisis.
“The federal government would be a lot more inclined to help us out if we made substantial reforms first,” said Thomson (R-Monmouth), whose been lobbying Congress for more than two years for low interest federal loans. “We can’t afford to wait and miss this opportunity.”
He noted that every member of the state’s delegation sponsored a bipartisan measure (H.R. 397) that passed the U.S. House in July, but stalled in the U.S. Senate. The bill would provide low-interest loans to rescue underfunded private pension plans.
“Using low-interest federal loans would be like paying off high-interest credit cards with a debt consolidation loan,” continued Thomson, an actuary that manages pension funds. “But that only works if we stop the liability from growing. The state must enact reforms to ensure its retirement systems are managed responsibly for years to come.”
It will likely be months before the state can begin assessing the full scope of the impact of the coronavirus on the pension fund, but investments fell more 13 percent from the beginning of the July 1 fiscal year through last month. That has Thomson raising the alarm for quick action.
“With interest rates at historic lows, it makes sense to move forward, but we have to show our pension system will be a good investment,” said Thomson. “Years of mismanagement has left our pensions on the brink of insolvency. We can’t expect help if we won’t help ourselves.”
Thomson is urging Sens. Robert Menendez and Cory Booker to amend the bill to require essential reforms so that it might be enacted while interest rates are low.
“Thousands of residents are counting on us to make sure they receiving the pensions they worked for their whole lives,” concluded Thomson.