Issue Position: The Pension Plan

Issue Position

New Jersey's Public Employment Retirement System is the single largest issue facing the State of New Jersey. Our unfunded pension liability is more than 3 times the state's annual revenue. Tax money that once went toward services and infrastructure must now be spent on higher bond rates when we borrow. Bill's plan will have an immediate and positive impact on our state's credit rating.

Bill Brennan's plan:

does not raise taxes
returns the state pension system to solvency
restores retiree cost of living adjustments (eliminated due to the crisis)
increases/improves the retirement benefits for public employees
decreases the employee rate of contribution for employees
places all public employees in a single tier, and

How can we fund this?

Currently 12.4% of every public paycheck goes into the Social Security Trust Fund. Half of that comes from employee wages while the other half is paid as a matching contribution from the public employer.

Bill's plan diverts the employer's 6.4% from the social security trust and into the pension fund. The remaining 6.4% is deposited in an employee controlled 457 deferred compensation plan. https://www.irs.gov/retirement-plans/irc-457b-deferred-compensation-plans. This employee owned and controlled fund will grow to between $400,000 and $1,000,000 depending on years of service and salary.

This proposal is a win for taxpayers and workers alike:

Workers have their rate of contribution reduced to pre-crisis levels
Workers accumulate between $400,000 and $1,000,000 dollars in a tax deferred 457 retirement account.
Retirees have their Cost of Living Adjustments restored
Without raising taxes or cutting services, the state fully funds a retirement system that was pillaged by 4 separate administrations
New Jersey's Bond rating improves.

If you asked yourself: "How do we simply stop contributing to social security?"

Then you will be surprised to learn that public employees are not entitled to participate in the social security program. The state must seek permission to enroll and must have a Section 218 agreement in place with the IRS, before employees can enter the system. https://www.ssa.gov/slge/overview.htm

Bill is the only candidate with an actuary approved solution to the most serious fiscal constraint our state has ever faced. This solution saves the state billions of dollars while giving workers more money during their career and in retirement.

$15/Hour Minimum Wage

New Jersey consistently ranks in the top 10 most expensive states in which to raise a family. $8.33/hr is inadequate to provide food, housing or health care in any state let alone New Jersey. Raising the minimum wage to $15/hr will stimulate our stagnant economy by putting purchasing power into the hands of those most likely to spend it, lift thousands of workers out of poverty and ease the public assistance burden carried by taxpayers who subsidize low wage earners.

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