Moody’s warns of teacher pension risk to N.J. school districts under Christie plan

By Samantha Marcus, NJ Advance Media for NJ.com

TRENTON — A new report from a Wall Street rating agency warns that Gov. Chris Christie’s seemingly dormant plan to overhaul government worker pension and health benefits to save the state billions of dollars could come at a risk to school districts.

If Christie’s proposed reforms don’t play out as envisioned, Moody’s Investors Service said, it could burden school districts that have few options but to raise taxes, cut costs, borrow money or spend their reserves to pay the tab for teacher pensions.

That proposal, devised by a special pension commission and unveiled in February, would freeze the existing pension plan and shift workers onto less generous retirement and health care plans. While the state, which pays for school employees pension and health benefits, would continue to pay for the current system’s existing debts, school districts would have to assume the costs of the new system and retirees’ health care.

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