A new law in New Jersey could be used to help millions of elderly residents pay for their own retirement
Chris Christie’s administration has been asked by the Legislature to consider a proposal that would allow New Jerseyans to pay for an increase in their pension benefits by buying into a new insurance plan.
Under the proposal, an individual who is eligible for the state’s state-run pension plan would be able to purchase the New Jersey Advantage plan.
The plan would cost an average of $4,000 per person.
The premium for that plan would also be $5,000, but Christie’s office said the plan would provide the option to buy into the New York-based plan.
Christie has previously said that he believes an increase to the state pension plan could help pay for the cost of the $1.3 trillion plan.
But a recent analysis by the New Brunswick-based Pension Reform Institute, a New Jersey think tank, concluded that such an increase would only raise the cost to the plan by about $400 million, or 0.5 percent, a difference that would be insignificant.
Christie spokesman Michael Drewniak said Christie’s position was that the plan should be funded with tax revenues and that the current state plan would not be a “cost-effective solution.”
“While the governor believes that a new state pension is needed, he believes it would be a cost-effective and fair way to fund this initiative,” Drewnik said.
The new proposal, which is being introduced as part of a legislative package, comes as Christie is struggling to stem a national trend of pension woes.
A survey released last month by the National Association of Insurance Commissioners found that just 17 percent of Americans had a high-quality pension plan in their retirement, the lowest level in nearly two decades.
Christie, a former Republican presidential candidate, has also been criticized for not spending enough on pension plans.