New Jersey § 34:1b-7

§ 34:1b-7.

The Legislature finds and declares that: a. The State currently makes contributions on an annual basis to fund the State's

obligations under its various pension funds and retirement systems, consisting, in

part, of the “unfunded accrued liability contribution” representing pension benefits

earned in prior years which, pursuant to standard actuarial practices, are not yet

fully funded. b. The State's current unfunded accrued liability is approximately $3.2 billion for

the following State pension funds and retirement systems: the Teachers' Pension and

Annuity Fund; the Public Employees' Retirement System--State portion only; the Police

and Firemen's Retirement System--State portion only; the State Police Retirement

System; the Judicial Retirement System; the Prison Officers' Pension Fund; and

the Consolidated Police and Firemen's Pension Fund; and the primary reason for this

unfunded accrued liability is the required inclusion of funding for pension adjustment

or cost-of-living-adjustment benefits within these funds or systems. c. It is in the public interest to fund this unfunded accrued liability, in full or

in part, through the issuance of bonds, notes or other obligations by the New Jersey

Economic Development Authority which shall be retired through annual payments to be

made by the State, subject to appropriation by the State Legislature. d. By issuing bonds, notes or other obligations to fund, in full or in part, this

unfunded accrued liability, the State will achieve significant savings and will eliminate

the need for pension contributions on an annual basis to fund this unfunded accrued

liability. e. It is intended that the proceeds from sale or sales of bonds, notes or other obligations

for the purposes of funding the unfunded accrued pension liability shall not be less

than approximately $2.7 billion; provided, however, that notwithstanding the foregoing,

any series of bonds, notes or other obligations issued under this act, whether or

not yielding proceeds of $2.7 billion or less, shall be authorized and valid if issued

in accordance with section 4 of this act. f. It is anticipated that the bonds, notes or other obligations to be issued will

be amortized over a shorter period of time than the actuarial amortization of the

unfunded liability; and the difference between the payment of principal and interest

on the bonds, notes or other obligations and the estimated contributions by the State

under the actuarial amortization will provide significant savings to the State.