N.J. Pension System Deficit Rises to $34.4 Billion (Update2) Share | Email | Print | A A A By Stacie Servetah http://www.bloomberg.com/apps/news?pid=20601087&sid=a2UktVSb6oGQ&refer=home April 15 (Bloomberg) -- The funding deficit of New Jerseyâs public pension system climbed to $34.4 billion as of June 30, from $28.4 billion in mid-2007. The pensions were 72.6 percent funded as of June 30. That compares to a funded ratio in June 2007 of 76 percent, according to state Treasury Department officials. New Jerseyâs largest pension fund, the Public Employeesâ Retirement System, had an unfunded liability of $10.82 billion as of June 30, up from $9.07 billion as of mid-2007. That combines state and local systems. The state PERS had a funded ratio of 65.6 percent, compared with 68.8 percent in June 2007. The state has less money than it owes for anticipated pension obligations because of investment losses earlier this decade, a lowering of the retirement eligibility age and a failure by past governors to make annual contributions. The value of the pension systemâs assets dropped to $56.3 billion as of February, from more than $82 billion as of June 2007, after losses on investments. Governor Jon Corzine, a first-term Democrat seeking re- election in November, has tried to slow the deficitâs growth by making regular pension payments. His administration has contributed about $3 billion into the system since he took office, compared with $3.2 billion contributed in the previous 14 years, according to the treasurerâs office. Pension Reform Corzineâs administration also has enacted pension and benefit changes that are projected to reduce costs to the systems by more than $6 billion over the next 10 years. These include raising the retirement age and requiring newly appointed and elected officials to enroll in a less costly, defined- contribution plan, treasury spokesman Tom Vincz said. Around the U.S., many state plans are experiencing increases in unfunded liability, Vincz said. A recent report from Wilshire Consulting showed that 59 other state retirement systems reporting actuarial data from fiscal 2007 to fiscal 2008 had sharply reduced funding ratios, with the average state ratio falling by 11 percentage points, from 88 percent to 77 percent, he said. âAll of this said, there are multiple factors that influence the liabilities of the system, not the least of which is investment returns, which have not kept pace with rising liabilities,â Vincz said in an e-mail. Helping the Cash-Strapped Corzine, the former chairman of Goldman, Sachs & Co., last month proposed reducing the stateâs annual pension payment by $500 million, to $400 million, to help close a $7 billion state budget deficit for fiscal 2010, which begins July 1. The governor signed legislation allowing cash-strapped municipalities and school districts to defer half of their $1.1 billion in pension contributions due this month. The funding gap for the teachersâ and the police and firefightersâ funds also increased between 2007 and 2008, reports released this month show. The overall state pension system operates on behalf of more than 700,000 current and retired employees.