N.J.’s pension strategy: ‘Promise to pay up later, OK?’ — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily
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N.J.’s pension strategy: ‘Promise to pay up later, OK?’

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in Human Resources

Tough times call for tough measures. To cope with the effects of the state’s $1.2 billion budget shortfall on its pension obligations, Gov. Jon Corzine has suggested a time-honored, if not terribly innovative, remedy: an IOU.

Corzine proposed letting municipalities defer half of the $1 billion they’re due to pay into the state pension fund in April. Employing what some might call optimism and others might call leverage, he pointed out that the move would stave off double-digit property tax increases. Following a lukewarm reception, Corzine tried posting a personal appeal on YouTube.

That didn’t change too many minds. Turns out, most people close enough to retirement to care don’t get their news from YouTube. No sale so far to the 700,000 people who are counting on the fund for future income.

The fund had already lost $23 billion by November 2008. No word at press time on a Plan B.

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