New Jersey State Senator, Vin Gopal, is planning to introduce legislation barring the NJ pension system from investing in manufacturers of firearms and firearm ammunition. While we applaud his effort and legislative objective, given NJ’s significant underfunding and the burden that this is placing on the State’s fiscal status, I wish that his enthusiasm for pension reform would include other meaningful reforms while he’s at it.
Let’s see NJ’s Senate pass legislation that mandates that the annual required contribution (ARC) is paid. Let’s also restructure the oversight of the plan so that the asset side of the equation starts talking to the benefit side so that true asset/liability management can be attained. Let’s mandate that NJ use multiple discount rates, and not just the return on asset assumption (ROA) so that the true scale of the underfunding is known and can thus be managed.
NJ needs pension reform in order to protect this important benefit but doing the same old, same old is creating a pension deficit that has the potential to create a devastating economic impact on the State’s social safety net, while likely leading to an exodus of well-heeled residents.