Judith L. Tripodi Fiscal Monitor City of Hoboken 94 Washington Street Hoboken NJ 07030 201-420-2059 fax 201-420-2096
CITY OF HOBOKEN DEPARTMENT OF ADMINISTRATION
Memorandum DATE: February 5, 2009
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TO: Mayor David Roberts City Council Members FROM: Judy Tripodi, Fiscal Monitor
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SUBJECT: Unauthorized Early Retirement Incentive Program
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This is to inform you that the State of New Jersey, Department of the Treasury, Division of Pensions and Benefits has written a letter to the City reaffirming its determination that that the City enacted an unauthorized Early Retirement Incentive (ERI) program. In the letter, the Division details the basis of its determination and cites previous legal cases. A copy of this letter is available upon request. More importantly, the Division of Pensions has determined that the City’s additional pension liability for the unauthorized ERI is a total of $4,252,621 for FY 2009. The breakdown is $3,710,996 for uniformed personnel in PFRS and $541,625 for all other employees. In addition to those costs, the City was charged $6,186 in fees incurred for the preparation of the actuarial analysis. The City was presented with bills in the amount of $4,258,807 which are payable upon receipt. With the additional wages due as part of the retirement package offered by the City and the increased pension costs, there is a negative savings of $2.8M for FY 2009. It also means that the City must fund another $4.2M in its FY 2009 budget.