Possible Solution to Cash-strapped NJ Pension Fund Could Hurt Municipalities

There's behind the scenes discussions in Trenton about merging the state's cash-strapped pension fund with the healthy municipal pension fund as a possible solution to getting it out of the red, according to Bill Dressel, Executive Director of the New Jersey State League of Municipalities. 

"The state pension system is a ticking time bomb," warned Dressel at the monthly meeting of the Ocean County Mayors this week in Toms River. "Our system is in the black. It's about 74% funded. The state's system is not in the black," he said.

Dressel accused both sides of the political aisle of borrowing from the state pension system and diverting dollars that should have gone into the system for their own purposes.

"We're concerned that what they're going to do is blend the two systems," Dressel said. "To make their system look a little bit better and put it on solid ground is to blend the two together, and that would be a big mistake."

Dressel told the mayors that municipalities should not be penalized for mismanagement of the state's pension system.

"You have bit the the bullet. You have paid your pension bills. They have not," he said.

Dressel explained why he feels merging the two pension fund systems would be a mistake.

"Your contributions would go up considerably. You taxes would go up considerably. You would have to reduce more services," he warned.

Dressel added he expects such a proposal to surface soon and told the Mayors when it does they need to be loud on the issue.