The New Jersey Supreme Court has declined to hear a case seeking full funding of TPAF. In rejecting the case June 22 the court let stand a ruling by a three-judge appellate panel that said New Jersey is not constitutionally required to pay the millions it owes every year into the fund for teachers’ pensions (NJ Appellate Panel Finds State Not Required to Pay Annually Toward Pensions March 10 2010).
The New Jersey Education Association sued in 2003 saying its members’ pensions were at risk because the state did not pay its pension bills in full.
A New Jersey appellate panel in New Jersey Education Association v. State of New Jersey ruled March 4 that members of the the Teachers’ Pension and Annuity Fund possess no constitutionally protected contract right to the particular level manner or method of state funding of TPAF by statute. Nonetheless the court affirmed that TPAF member are entitled by law to the receipt of vested benefits upon retirement.
For more than a decade the state’s legislatures and governors of both parties have overriden a law requiring full payments. When the state does not pay its bill one year it makes future bills larger – which could lead to fewer services or higher taxes.
As of last June New Jersey owed nearly $46 billion more than it had available to pay its $135 billion bill for current and future retirees’ pensions according to calculations released in March.
Meanwhile nearly 6500 New Jersey school employees have filed for retirement so far this year almost double that of all last year. Most of the filings came in recent months with 5106 putting in their papers to step down in July.