New Jersey teacher pension gap grows

New Jersey's teachers' pension fund posted market-beating 16 percent gains in fiscal 2007, but it's still falling behind the long-term cost of paying the state's growing population of retired teachers, according to the new actuarial report at http://www.state.nj.us/treasury/pensions/actuarial-rpts.htm prepared by the Wayne, Pa. office of Milliman & Co.
     The typical New Jersey teacher earned $64,000 last year. The typical newly-retired teacher collected $44,700. The number of retirees is expected to grow faster than the ranks of working teachers, which means the system has to add nearly $3 billion a year, under its complex actuarial formula, to keep up.
   The fund hasn't met that goal since 2002, when it was in balance with $35 billion in long-term assets and liabilities. By last year, assets had grown to $37 billion, but liabilities totalled $49 billion.
  Under state law, the state Division of Investment, which manages the fund, says New Jersey taxpayers should have contributed a $1.35 billion direct subsidy to teachers' pensions last year. Instaed, the cash-strapped general assembly appropriated $877 million. To help bridge the gap, the division has hired more private managers and put more money into private investments. The deficit increase last year was the smallest, by percentage, since in at least five years. But that was before last summer's credit crunch began affecting private investment values.