Plainfield's public employee pension cost rises 121%

Public employee pension contributions for FY2008.




Police and Fire pension contributions for FY2008.
(Click on images to enlarge.)

Plainfield's contributions to the state pension plan for the coming fiscal year (FY2008) will give taxpayers that sinking feeling in the pit of their stomachs. PERS (Public Employee) contributions will be up 121% over the previous year.

Everyone expected some increase, but chances are not anything like those the state has laid out (links to the reports -- in PDF -- are here).

Contributions to the PERS (Public Employee Retirement System -- all non-police, non-fire employees) will increase by $290,320 to a total in the upcoming budget of $684,858 to fund 80% of the total bill. That is 121% over the straight-line projection from last year's contribution of $394,538, which represented 60% of the total bill.

The state has been requiring municipalities to increase their share of the total cost on a five year schedule until they carry the full freight of the pension costs. Plainfield will face one more year of increase to its PERS share, which will then be fully funded by local taxpayers.

Police and fire personnel are in a separate pension plan -- PFRS (Police and Fire Retirement System). The total contribution by Plainfield to the system for FY2008 is set at $4,350,630. At an increase of $897,599, that is 30% over the straight-line projection ($690,606) from last year's share. As of this year's increment, Plainfield taxpayers will be funding 100% of the annual pension cost for police and fire personnel.

The total increase for Plainfield to both pension funds for FY2008 of $1,187,919 is $366,134 -- or 44% -- over the straight-line expectation of $821,785 based on last year's contribution.

All of this represents just the first step in factors influencing Plainfield taxpayers' final tax bills for the upcoming fiscal year.

Health benefits, another significant chunk of the taxpayer burden, are calculated on a calendar year basis, and projections for CY2008 will not be available to municipalities until late in the year -- typically by mid-November.

The health care costs are usually the last piece of the cost side of each year's new budget. Coming as they do late in the year helps explain why it is unlikely the City Council can ever adopt a budget before five months into a given fiscal year at the earliest.

Meanwhile, with only one business session scheduled for August, the Council is not likely to get anything firm budget-wise from the Administration until well after Labor Day.

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More Info --

• Also see the related post: "Why state pension plans must squeeze or gamble"
  
  
• Star-Ledger - 7/21/2007: "Numbers show communities face huge bills for pensions" -- The Ledger story details several communities' contributions.
  
• Division of Pensions: "Projected Local Employer Pension Contributions - FY2008" -- Links to reports, which are in PDF format.
  

-- Dan Damon

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