True to form New Jersey is once again making reforms to the state’s public pension system that will cause taxpayers to struggle financially even more, encouraging more property owners to flee the #1 ranked state that residents are leaving, as reported by United Van Lines.
New Jersey’s pension system has been ranked as the nation’s worst funded, with blame being directed at the state for not making annual pension payments. Public sector employees receive taxpayer dollars in the form of a matching pension contribution from the government entity where they’re employed. The state shouldn’t be using taxpayer dollars a second time to help fund the pension system.
The reason the state pension funds are headed towards insolvency falls on the shoulders of public employees. The system allows employees to work short careers of only 25 to 30 years, enabling them to retire in their late forties to mid-fifties. When investing into a retirement fund early in one’s career, the 25 to 30 year mark is a critical time to allow the fund to continue growing. Around this time in most cases, the investment has grown enough that it will start earning sizeable annual returns, allowing the retirement account holder to retire comfortably in 10 to 15 years.
Any retirement system that is allowed to operate like a public pension fund is doomed from the start. When a public employee retires early they sever the ability of the fund to start growing exponentially. Retiring early also undermines the pension fund because employee contributions to the fund cease at retirement, and the pension payout can extend an extra 15 years or more. The private sector should not be funding the state’s pension funds a second time. This payment is the equivalent of welfare, all because public employees don’t want to work full careers.