New Jersey’s pension fund crisis has long been occupying headlines, but now there might actually be some good news and improvement, NJ.com reports.
The latest state budget contributes half the amount recommended by actuaries ($2.5 billion), which while low, still represents improvement. And according to S&P Global, it doesn’t expect the funding ratio to fall further.
Gov. Chris Christie had proposed a plan to increase contributions by one-tenth each year, and the S&P report indicates this is going to start paying off: The rating agency bumped the state fiscal outlook to stable from negative. The credit ratings on the state’s debt, however, remain the same and are not expected to rise in the near future.
Plus, the recent lottery law means that the state’s pension fund will receive around $1 billion per year from ticket sales, which can only help with funding the obligation. And the new law requiring quarterly pension fund payments will help stave off continual shortfalls as well.
However, by no means is New Jersey out of the woods. According to Gov. Christie’s staggered increase plan, the state will be expected to contribute 60 percent of the pension contribution in the next fiscal year and 100 percent of it in 2023—S&P has expressed concerns about New Jersey’s ability to do so.
