Photo: jimmywayne via Flickr
Moody’s Investor Services is out with a review of New Jersey Governor Christ Christie’s pension reform proposals and the short of it is: not good enough. The Wall Street Journal website reports:
New Jersey Gov. Chris Christie’s proposed public pension reforms are a good start, but even if they are enacted, the pension system–already the 7th-lowest funded in the U.S.–will continue to deteriorate, Moody’s Investors Service said in a note.
The pension system, which has a $30.7 billion unfunded liability, won’t return to its current funding levels for at least a decade, Moody’s said. That’s because the state won’t make a full contribution to its pension system until 2018.
Not contributing to the pensions has helped create the state’s sizable pension funding problems.
“The funded ratio, at 62% in 2009, has declined sharply over recent years because annual pension contributions were cut to fractions of the annual required contribution or eliminated completely,” Moody’s said.
Indeed, Christie skipped a $3 billion pension payment last year.
New Jersey’s unfunded pension liability is a significant factor in the decision not to buy state debt for Eaton Vance’s tax-advantaged bond strategies group, said portfolio manager Evan Rourke.
You can read the rest here.
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