New Jersey teachers pension fund is ‘unfunded’ after massive pension shortfall
New Jersey state teachers’ pension fund for the New Jersey school district is “unfunded” after massive underfunding, the state’s education secretary said Friday.
“This is the first time we’ve had a teacher-related pension fund that’s not fully funded, and that’s a big issue,” Christine Todd Whitman, the secretary of the state Department of Education, told The Associated Press.
“It’s a concern that we’ve been having and it’s something that we’ll continue to be looking at.”
The pension fund has been receiving $14 billion in state funding since its inception in 2008.
That has come from the state of New Jersey, the federal government, and federal grants.
The fund has received $12 billion in funding since 2012.
The state has already received $8.6 billion from the federal Community Reinvestment Act and $6 billion through the state budget.
Whitman said the state would need to continue to seek additional funding from the Department of Treasury to cover its shortfall.
The New Jersey Education Association said the teachers pension plan has $5 billion in assets under management.
It said the fund has already passed $4.7 billion in its current financial year.
The association, which represents about 20,000 public school teachers, had requested $3.5 billion for the next two years.
Whitman told the AP that the teachers fund is currently “underfunded” by $3 billion.
“The teachers have had to make difficult decisions about whether they’re going to have to retire early,” she said.
“We want to do everything we can to help them make the right decision, but they’re not making the right choice.”
The New York Times first reported on the pension shortfall in a July 1 story.
Whitman, who is also the director of the New York City Department of Health, said the $4 billion in the state pension fund was for the cost of administering the state plan.
The plan has a maximum payout of $2,000 per year.
Teachers are entitled to a maximum of $3,000.