State: Market bolsters pension funds Thursday, May 17, 2007 • BY DUNSTAN MCNICHOL • Star-Ledger Staff The healthy stock market is boosting New Jersey's beleaguered pension funds, state Treasurer Bradley Abelow reported yesterday. Investment returns on the $91 billion portfolio are running at nearly 16 percent for the budget year that ends June 30, the treasurer said. That's better than last year's 12.2 percent return, and almost double the 8.25 percent state officials count on the fund's holdings to earn when they determine how much they need to pay into the pension system each year. After years of under-funding, the pension accounts contain at least $25 billion less than experts say they need to cover the long-term retirement benefits promised to working and retired public employees. Gov. Jon Corzine's proposed budget includes $1.1 billion in pension payments, but that is only half the amount actuaries say the state needs to pay to stay on pace for keeping the fund solvent. Abelow told members of the Senate Budget and Appropriation Committee he was "pleased" to report the positive earnings, which over time could help offset the state's skipped payments into the retirement accounts. But after the hearing he cautioned that market gains can be fickle. "This is today," he said. The good news was heard by only a limited audience. By the time Abelow presented his report on the Division of Investment and the entire pension system, only half the committee members were still present. The hearing lasted only about 20 minutes, and concluded after lawmakers had asked Abelow only two questions. That's in sharp contrast to the sentiments the same senators expressed a month ago, when published reports alleging accounting problems in the state pension system prompted lawmakers to demand better information on the retirement accounts. At that April meeting, Sen. Shirley Turner (D-Mercer), a longtime member of the Budget Committee, said: "I had no idea we were in the company of some of the same corporations that I have condemned for not funding their pensions." Yesterday, Turner made no apologies for the budget panel's decision to truncate the annual budget hearing on the pension system, noting the treasurer had presented an upbeat report on revenues and investment performance. "Everybody's more or less star-struck with the fact we're not as deep in the woods as we were," Turner said. "I don't think anyone wants to dwell on the bad news." Dunstan McNichol may be reached at dmcnichol@starledger.com or (609) 989-0341 © 2007 The Star-Ledger. Used with permission.