Legislation Assembly Speaker Vincent Prieto sponsored to require the state to make required contributions to the state-administered retirement systems each fiscal year on a quarterly basis has been signed into law.
The Assembly passed similar bills in 2014 and 2015 and also approved a constitutional amendment in 2016 that would have required quarterly pension fund payments, but the Senate did not post it.
“The Assembly has long supported this concept, including sending it to the voters this year for consideration,” said Prieto (D-Hudson/Bergen). “New Jersey’s public servants who have done their part deserve better than repeated broken promises, but this law will at least represent progress toward a more fiscally responsible approach. Having the state wait until the end of the fiscal year to make one payment is an invitation to skip it, so this will be a common sense improvement.”
Speaker Prieto noted quarterly payments could mean increased returns in the pension system from investing a portion of the payment earlier in the fiscal year.
“The intent is to ensure the state makes regular payments into the pension system and help ensure the pension payment is not used as the sole budget solution when revenue falls short of projections in future years,” Prieto said.
The new law (S-2810/A-4) requires the state to make its required contributions to the state-administered defined benefit retirement systems each state fiscal year on a quarterly basis on the following schedule:
· At least 25 percent by Sept. 30;
· At least 50 percent by Dec. 31;
· At least 75 percent by March 31, and;
· At least 100 percent by June 30.
The state-administered defined benefit retirement systems are the Teachers’ Pension and Annuity Fund, the Judicial Retirement System, the Prison Officers’ Pension Fund, the Public Employees’ Retirement System, the Consolidated Police and Firemen’s Pension Fund, the Police and Firemen’s Retirement System and the State Police Retirement System.
The quarterly payment requirement will commence in the state fiscal year that starts next July 1.