December 15, 2009
Re: S-3136/A-4362 - Reduces Required Local Employer Contributions to PERS and PFRS for State Fiscal Year 2010
During Thursday’s Senate session, Senator Cunningham introduced S-3136, a Pension Payment Deferral bill and was referred to the Senate Budget and Appropriations Committee. This permissive bill would allow municipalities to pay 50% of PERS and PFRS payments due in State fiscal year 2010.
If a municipality elects to pay 100% of their PERS and PFRS payment, they will be credited with the full payment and such amounts will not be included in their unfunded liability. For municipalities that chose to pay the reduce rate their unfunded liability will be paid in level annual payments over a 15 year period beginning with payments due in the State Fiscal Year ending June 30, 2013. The repayment will be adjusted by the rate of return on the actuarial value of assets.
The Pension Payment Deferral plan has in the past been touted as a short-term property tax relief initiative for municipalities facing ballooning public employee pension liabilities and an economy in peril. Its purpose is to keep property taxes down and prevent service cutbacks and possible lay-offs.
The Assembly companion is A-4362, but it is not yet assigned to a Committee.
Please contact your State Senator and Assembly representatives to communicate the absolute need for the option to defer pension payments, if all municipalities are to continue to be able to deliver essential public services to their citizens, at a time when we are all seeing daily reports of foreclosures, job losses and business failures for both large and small employers.
For more information, please contact Jon Moran at 609-695-3481 x121.
Very truly yours,
William G. Dressel, Jr.