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Early Retirement Inventives
BCIA Saves Over $14 Million for Bergen County Through Refinancing of Early Retirement Obligations
In the early 1990s the state of New Jersey offered State, County, Municipal and Board of Education employees early incentive retirement programs. While the programs were completely voluntary, many local units within Bergen County, including the County itself, chose to participate.
The terms of the early incentive retirement program involved the State Division of Pensions calculating a liability for each entity that enrolled in the program and billing each entity separately for the extra liability or cost of the program over a term of years. Most entities chose the longest term of financing the cost, which resulted in 33 years of remaining payments.
In July 2002, the State Legislature passed, and the Governor signed, legislation (Chapter 42 of the Public Laws of 2002) that allowed Improvement Authorities to issue refunding bonds on behalf of government entities in order to pay off the liability to the Division of Pensions at a significant saving, due to today's lower interest rates.
The savings experienced throughout Bergen County due to the BCIA's pooled refinancing of debt from these programs saved over $14.5 million.
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