Thought Leadership

Pension Reform: Did Anything Happen in New Jersey?

July 31, 2017

In this commentary, Bryan Laing, our Vice President of Credit Research in Fixed Income Investments, discusses the challenges state and local governments face in order to create incremental progress toward a viable solution to pension liabilities.  
 
Commentary Highlights:

  • The official slogan for the New Jersey State Lottery is “Anything can happen in Jersey.” A recent pension reform move raises the question “Did anything really happen in New Jersey?” Essentially, New Jersey looked to its balance sheet and shifted one of its large, cash producing assets into its pension fund to counterbalance the liability to pensioners.
  • With a particular history of pension burdens in the last decade, states like New Jersey and Pennsylvania have considered creative measures toward solving the nationwide problem of growing pension liabilities.
  • As seen through widening spreads, the market for municipal debt has consistently penalized issuers who have failed to address pension burdens, and we expect to see this trend continue.

Please click here to read the commentary.