New Jersey pensioners will soon have to pay for a new system that’s not even in place yet.
The Pension Benefit Guaranty Corp (PBGC), a government agency that has oversight of New Jersey’s retirement system, says it’s now planning to launch a program that will make most of New York state residents eligible for benefits under the state’s $1.9 billion plan.
But those in New Jersey are just the tip of the iceberg.
According to a PBGC report, the total number of New Yorkers living in New York, as of December 31, 2019, was 2,813,865.
That’s a total of 3.9 million people who are currently ineligible for benefits.
The agency’s website, which explains the new plan and its timeline for implementation, says that in addition to New York residents who qualify for benefits, New Jersey residents in the three states of Connecticut, Delaware and New York City are also eligible for state benefits.
All three states also offer a federal option, known as a “substitute” program, to reduce the amount of money you have to contribute toward your pension.
The state’s subsidy for a pension would amount to an additional $600 a year for a person in New England, or $1,200 for a single person in Connecticut, according to the PBGC.
But it would also affect New Jersey taxpayers who live in New Hampshire, Maine, New Hampshire and New Jersey, as well as people living in Pennsylvania and Rhode Island.
It also affects people living on Long Island and the state of Connecticut.
Those living in the eastern half of the state would have to put $6,000 in their 401(k)s and $1 in their Social Security retirement account to qualify for the state-sponsored plan.
People in the western half of New England would pay $1 per month for their state-subsidized pension, which would mean $3,000 a month for a couple.
In the eastern part of the Garden State, which includes the New Jersey cities of Brunswick, New London, Newark, and Trenton, people would pay an additional fee of $600, or about $600 each year for three years.
In New York and New England’s western half, the PBgc says that those in the states of New Hampshire will have to give up a maximum of $1 a month, or a total contribution of $3.9 per month.
The state’s subsidy for New Jersey retirees is $1 for each $1 they put in their savings accounts, the report said.
The new plan also doesn’t address other types of tax breaks, like state-funded education.
That money is still being allocated to schools in New New York.
The PBGC says that its plan would apply to the state in perpetuity.
New Jersey would be the first state to implement the new system.
But some New Jersey lawmakers say that is an unfair burden.
Republican state Rep. Peter Zerena, who represents a district in the city of Atlantic City, said that a tax break to New Jerseyers living in other states isn’t fair.
“It is a double-edged sword, because New Jersey is going to have to make a decision about what is best for their constituents,” Zerenas told the Daily News.
Zerena said that if New Jersey were to adopt the PBGCA’s plan, it would “create a lot of confusion for New York State and its taxpayers.”
In a statement to ABC News, PBGC spokesman Peter Azzopardi said that the PBGMCC’s plan was “a first step to help New Jersey continue to attract talent and keep the economy strong.”
The PBGMGC’s proposal was announced on January 10, 2020, but only took effect in January 2021.