Senate President Steve Sweeney wants the federal government to provide $500 billion to shore up local and state pension plans amid the COVID-19 crisis.
“The pension crisis will get worse if state and local governments grappling with revenue shortfalls and a lingering economic slowdown caused by the coronavirus are unable to make required pension payments,” Sweeney said. “We are committed to keeping up our pension payment schedules in New Jersey, but others may not be able to do so. This plan is a cost-effective way to provide state and local governments not only with short-term relief, but with a long-term solution to a pension crisis that has been building for two decades.”
Governors in New York and Maryland have signed onto the plan, and a similar measure has been introduced by U.S. Sen. Bob Menendez.
Under the Pension Infrastructure Finance and Innovation Act, state and local governments with sufficiently high credit ratings would be able to apply for 30-year low-interest loans.
“We believe the PIFIA program will have broad support in both red states and blue states because it addresses the persistent underfunding of both pensions and infrastructure,” Sweeney said. “Virtually every state has pension systems that could benefit from participation in the PIFIA loan program.”