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The 2015 Pension 40: Chris Christie

No. 3 Chris Christie, Governor / New Jersey

By Tyler Davies

December 22, 2015

< The 2015 Pension 40: The Long Climb

Chris Christie

Governor /
New Jersey

Last year: 9

With less than a year before the 2016 U.S. presidential election, New Jersey Governor Chris Christie, 53, is still running for the GOP nomination despite polling at about 3 percent. Back in the Garden State, Christie has another, even less promising number to ponder: $83 billion in unfunded state pension liabilities. For the past decade or so, starting with governor Christine Todd Whitman, New Jersey cut back on pension payments — when it didn’t skip them outright. “Politically, it was the path of least resistance,” says Tom Byrne, head of Princeton, New Jersey–based Byrne Asset Management and chairman of the New Jersey State Investment Council (and son of a former Democratic governor, Brendan Byrne), which oversees the state’s pension investments. “This is the fault of the past six governors, both Democrat and Republican, who didn’t push through the contributions.” The system is only about 63 percent funded. Christie signed bills in March 2010 and June 2011 that mandated higher contributions from plan members, the freezing of cost-of-living increases, lower payouts to new hires and the system’s contractual right to full state funding. But in May 2015 he kicked the can down the road. Arguing that the problem wasn’t caused by his administration, he said New Jersey would pay $1.3 billion into the system rather than the $3.1 billion promised in the 2011 bill. In June the New Jersey Supreme Court ruled that Christie could withhold the funds, and this fall the court heard arguments about whether the 2011 freezing of cost-of-living hikes is constitutional. Christie created a pension commission that released a plan in February that would shift the pension burden to local districts, forcing a bump in already-steep property taxes. Meanwhile, New Jersey’s credit rating has been steadily downgraded, state-issued securities have been beaten down, and pension fund performance has fallen, forcing the fund to seek higher-fee alternative assets — the vicious cycle of a pension system in distress.

The 2015 Pension 40