Americans for Prosperity Urges State to Fix Pension Crisis

Jun 11, 2015 by AFP

Americans for Prosperity Urges State to Fix Pension Crisis

Pro-Taxpayer Group Says Inaction Risks Devastating Consequences

TRENTON – Americans for Prosperity and a host of reform advocates including Republican Budget Officer, Asm. Declan O’Scanlon, Deputy Minority Leader, Asm. Anthony Bucco, Morris County Freeholder Hank Lyon, took to the steps of the State House today to urge legislative action to address the state’s pension and health benefits crisis and to warn that the state’s residents are facing a bleak future if the issue goes unresolved.

Americans for Prosperity State Director Erica Klemens said Tuesday’s Supreme Court ruling made it clear that the onus is on legislators and Gov. Christie to find a resolution to the crisis which has saddled the state with at least $170 billion in unfunded liabilities. Klemens said that one reform lawmakers can take up right away is moving new workers into defined contribution plans.

“Lawmakers can take action right now to stop the bleeding by moving new hires to 401k-style plans, which would literally save billions of dollars,” Klemens said, “The infrastructure is already in place to do this since part-time workers in the public sector are already enrolled in defined contribution plans.”

Dr. Adrian Moore, Vice President of the Reason Foundation, and one of the nation’s leading experts on pension reform, noted that this idea has been a key aspect of successful reforms in other places around the country, including Rhode Island and Oklahoma. Moore acknowledged that “dealing with unsustainable government worker pension systems is a complex and politically contentious process,” but offered that “the good news is that a number of jurisdictions have paved the way for substantive reform.” Moore identified five principles of successful reform efforts.

“First, reforms must ensure adequate benefits and secure retirement for workers while at the same time being sustainable for taxpayers and avoiding passing debt on to future generations. Second, you have to stop digging the hole deeper and a key part of that is shifting all new employees to a quality defined contribution or hybrid pension plan. Third, you have to make full adequate payments into the pension system to cover the costs of commitments made. Fourth, you have to assess if workers and taxpayers are both fairly contributing to the cost of current benefits. And fifth, you have to ensure governance of pension plans–from pension boards to oversight and auditing to actuarial assumptions–are sensible, transparent and accountable.”

Americans for Prosperity State Director Erica Klemens went on to paint a grim picture of life in the state and for its residents if nothing is done to tackle the pension and health benefits crisis now.

“The future of our state is at stake and inaction risks devastating consequences for all of us,” cautioned Klemens. “Pension payments could soar as high as $6 billion in the near future which will eat away at funding for things such as police, fire, and EMS—not to mention funding for our roads, parks and schools. These are essential services that assure our quality of life, enrich our communities and protect property values.”

“Our elected leaders cannot allow this to happen, nor can they allow politics or feelings of bitterness about the past to get in the way. This issue is far too important to do nothing. Solutions exist for fixing this problem,” maintained Klemens. “It just requires the moral courage to stand up and do the right thing.”

Americans for Prosperity plans a sustained, grassroots effort on the pension issue, beginning with the launch of an online petition letter to members of the Legislature. AFP has also released a policy brief on the New Jersey’s pension crisis.


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Americans for Prosperity (AFP) is a nationwide organization of citizen-leaders committed to advancing every individual’s right to economic freedom and opportunity. AFP believes reducing the size and intrusiveness of government is the best way to promote individual productivity and prosperity for all Americans. For more information, visit