Early Retirement Program Memo 2/5/2009

1. Judith L. Tripodi
CITY OF HOBOKEN
Fiscal Monitor
DEPARTMENT OF
City of Hoboken
94 Washington Street
ADMINISTRATION
Hoboken NJ 07030
201-420-2059 fax 201-420-2096
Memorandum
DATE: February 5, 2009
TO: Mayor David Roberts
City Council Members
FROM: Judy Tripodi, Fiscal Monitor
SUBJECT: Unauthorized Early Retirement Incentive Program
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.