Bill Text: NJ SCR124 | 2014-2015 | Regular Session | Introduced
Bill Title: Amends State Constitution to require use of generally accepted actuarial standards to fund State-administered public employee retirement systems and to require quarterly payments to systems by public employers.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2014-07-10 - Introduced in the Senate, Referred to Senate State Government, Wagering, Tourism & Historic Preservation Committee [SCR124 Detail]
Download: New_Jersey-2014-SCR124-Introduced.html
Sponsored by:
Senator SHIRLEY K. TURNER
District 15 (Hunterdon and Mercer)
SYNOPSIS
Amends State Constitution to require use of generally accepted actuarial standards to fund State-administered public employee retirement systems and to require quarterly payments to systems by public employers.
CURRENT VERSION OF TEXT
As introduced.
A Concurrent Resolution proposing to amend Article VII of the New Jersey Constitution by adding a new Section IV.
Be It Resolved by the Senate of the State of New Jersey (the General Assembly concurring):
1. The following proposed amendment to the Constitution of the State of New Jersey is agreed to:
PROPOSED AMENDMENT
Amend Article VII by adding a new Section IV to read as follows:
Each State-administered retirement system for public employees shall be valued and funded using methods and assumptions that are consistent with generally accepted actuarial standards. Public employers shall contribute on a quarterly basis on July 15, October 15, January 15, and April 15 of each fiscal year to each State-administered retirement system the amount that is certified by the board of trustees of the system as actuarially sound and necessary.
2. When this proposed amendment to the Constitution is finally agreed to pursuant to Article IX, paragraph 1 of the Constitution, it shall be submitted to the people at the next general election occurring more than three months after the final agreement and shall be published at least once in at least one newspaper of each county designated by the President of the Senate, the Speaker of the General Assembly and the Secretary of State, not less than three months prior to the general election.
3. This proposed amendment to the Constitution shall be submitted to the people at that election in the following manner and form:
There shall be printed on each official ballot to be used at the general election, the following:
a. In every municipality in which voting machines are not used, a legend which shall immediately precede the question as follows:
If you favor the proposition printed below make a cross (X), plus (+), or check (a) in the square opposite the word "Yes." If you are opposed thereto make a cross (X), plus (+) or check (a) in the square opposite the word "No."
b. In every municipality the following question:
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CONSTITUTIONAL AMENDMENT REQUIRING PUBLIC EMPLOYEE RETIREMENT SYSTEMS TO BE VALUED AND FUNDED ACCORDING TO ACCEPTED STANDARDS AND PUBLIC EMPLOYERS TO MAKE CONTRIBUTIONS TO SUCH SYSTEMS ON A QUARTERLY BASIS |
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YES |
Do you approve amending the Constitution to require State pension systems to use generally accepted actuarial standards when valuing the funds? This amendment would also require public employers to contribute to the systems each quarter. |
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INTERPRETIVE STATEMENT |
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NO |
This amendment requires State pension systems to use generally accepted actuarial standards when valuing the funds. It also requires public employers to make their contributions to these funds on a quarterly basis. Sizeable liabilities have accrued in these retirement systems because consistent standards were not used to value and fund the systems. Contributions made quarterly would ensure the pension systems are funded in a sound and necessary manner. |
SCHEDULE
This amendment shall be applicable to the contributions to the State-administered retirement systems required to be made by public employers on or after January 1, 2015.
STATEMENT
This constitutional amendment requires each State-administered retirement system for public employees to be valued and funded using methods and assumptions that are consistent with generally accepted actuarial standards. In addition, this amendment requires public employers to contribute on a quarterly basis on July 15, October 15, January 15, and April 15 of each fiscal year to each system the amount that is certified by the board of trustees of the system as actuarially sound and necessary.
This amendment is proposed in response to policies of the State, implemented by legislation, that have permitted sizeable liabilities to accrue in the State-administered retirement systems because consistent standards were not used to value and fund the systems and annual contributions to the systems by public employers have been deferred.
Addressing these liabilities will place a great burden on the budgets of the State and of local public employers for years to come. In the future, imprudent practices that diminish the assets of these systems should be avoided and the valuation and funding of these systems should be based on consistent and reliably sound actuarial principles.
The 2005 report of the Benefits Review Task Force, created by Executive Order of Governor Richard J. Codey, found that "[u]nsound funding techniques should not be a part of the state's future fiscal practices" with regard to the public employee retirement systems, and that the "State and local employers participating in the retirement systems must be required, by explicit legislation, to make the full employer contribution each year as determined by the plan actuaries." Also, the 2006 report of the Joint Legislative Committee on Public Employee Benefits Reform found that "[i]n recent years, the State has not used consistent actuarial methods to determine pension fund assets, obligations and annual contributions" and recommended that "the State maintain consistent and accepted actuarial standards to determine pension fund assets, obligations and annual contributions."
