34:1B-7.46. Findings, declarations relative to issuance of bonds, notes, other obligations to fund accrued pension liability

2. 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.

L.1997,c.114,s.2.