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EssentialThe Expert View

Pension Case Study: If It's Broke, Don't Fix It

Featuring Thomas Healey

Feb 13, 2020 • 26 minutes

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Essential

The Expert View

Pension Case Study: If It's Broke, Don't Fix It

Five years ago, New Jersey's state pension was underfunded by $80 billion. Since then, the hole has ballooned to almost $130 billion.

Featuring Thomas Healey

Feb 13, 2020 • 26 minutes

$80 billion – that was the size of the hole in New Jersey’s state pension just 5 years ago when they empowered a commission to investigate its underfunding problems. Since then, the hole has ballooned to almost $130 billion. Thomas Healey, former Goldman Sachs executive and Assistant Secretary to the Treasury under Reagan, chaired a commission that found that politicians incentivized to provide new services and disincentivized to raise taxes were using the pension system as a piggy bank – perpetually kicking the can down the road and leaving pensions serially underfunded. Fortunately for New Jersey, there was light at the end of the tunnel and the commission was able to find a golden goose in the form of its generous health care benefits… Unfortunately, the same problems which led to the underfunding reared their ugly heads again, and the state failed to act on the findings of the commission. Healey reveals the reasons why New Jersey is still underfunding its pension today, and the $130 billion number is only set to grow. Filmed on January 28, 2020 in New York. Show More

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Subject-matter experts offer in-depth analysis of global investment risk and opportunity. Expert View probes the top minds from relevant fields, offering critical insights into every corner of financial markets.

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