The Bond Buyer
Tax overhaul, pension change are an ‘unwelcome gift’ for new N.J. governor
New Jersey and its municipalities are likely to face greater fiscal pressures in the year ahead after the state opted to lower the assumed rate of return for pension assets, according to Municipal Market Analytics.
The state treasury’s decision to change the investment return assumption to 7% from 7.65% is “an unwelcome gift” from outgoing Gov. Chris Christie to Governor-Elect Phil Murphy, MMA analyst Lisa Washburn said in a Jan. 3 report. The more fiscally conservative assumption will translate into higher unfunded pension liabilities, lower funded ratios and higher required contributions for New Jersey local governments, Washburn said. The timing is also problematic, she said, because the state’s revenue...