Two months ago, Wall Street downgraded New Jersey’s credit rating largely over concerns about the state’s grossly underfunded pension system. Lawmakers have yet to take up several bills that sponsors say would reform the system.

Legislation to prevent elected officials and others from collecting a taxpayer-funded paycheck while simultaneously receiving payments from the public pension system has also stalled.

Instead of being debated publicly in legislative committees, pension revision measures have instead become the latest issue subjected to private negotiations between Governor Christie, a Republican, and Senate President Stephen Sweeney, D-Gloucester.

Both men say they are making progress in their talks and agree the ultimate goal is to restore fiscal health to a pension system that was underfunded by $54 billion as of the latest actuarial account.

That shortfall was cited by Standard & Poor’s in early February when the Wall Street ratings agency lowered New Jersey’s credit rating, a key factor in determining how cheap and easy it is for the state to borrow money to pay for new roads, schools and other capital investments.

Christie proposed several changes to the pension system in late 2010, leading to legislation put forward by Republican lawmakers earlier this year that would, among other things, increase the retirement age to 65 for many employees, require all public employees to contribute 8.5 percent of their salaries into the pension system, and eliminate cost-of-living increases for all current and future retirees.

Sweeney has also proposed a series of pension revisions that include changing the cost-of-living adjustments and the way employee contributions are calculated, but his legislation does not call for an increase in the retirement age, which was raised from 60 to 62 for new employees by then-Gov. Jon Corzine in 2008.

Both bills were introduced in February — around the time of the Standard & Poor’s downgrade — but have not been heard in any legislative committees or come up for votes in either house of the Legislature.

Instead, Sweeney said that he and the governor have decided to bridge the differences in their plans in private negotiations, following the same approach that led to a compromise last year on the 2 percent cap on local property tax hikes and a similar cap on interest arbitration awards that can be awarded to police and firefighter unions.

“We have been meeting on a regular basis with the governor,” Sweeney said during a briefing with reporters in Trenton last week. “We’re discussing, we’re working on it.”

Christie also addressed the status of those talks during a recent radio interview.

“We’re getting there,” he said. “We’re having meetings, we’re having conversations, and we’re getting closer.”

Tied to budget action

No formal deadline has been established for the pension changes, and as of the latest accounting, the pension system was valued at $72.6 billion. But Christie has tied passage of pension reform — and a series of health benefits changes for public employees — to the new state budget, which under the state constitution must be enacted by July 1.

The governor was asked about the pension issue during a news conference last week that also included his heavily publicized criticism of Sen. Loretta Weinberg, D-Teaneck, for collecting a $36,000 annual pension while also receiving a $49,000 legislative salary.