Is that so and, if so, is that so bad?
From an AP story posted today with my comments/corrections:
Gov. Chris Christie says he will unveil a plan this summer to rein in public workers’ pension costs, which he says are taking up too much taxpayer money.
Even ahead of his announcement, the political debate has ramped up. Christie’s summertime town-hall style meetings are called “No Pain, No Gain” and are addressing pensions. He even advertised the talks with a movie trailer-style video that his opponents quickly ridiculed. Public workers protested the first summer meeting last week and expect to keep at it.
Here is a look at problems surrounding the state public employee pensions:
When running for election to be governor of New Jersey the story was:
“The claim that any harm would come to your pension when I’m elected Governor is absolutely untrue. It is a 100% lie,” Chris Christie wrote to New Jersey law enforcement officers during his campaign against Jon Corzine. The 2009 letter, and a near-carbon copy sent to firefighters, has resurfaced amid Christie’s bid to overhaul public servants’ pension system.
“Nothing will change for the pensions of current officers, future officers or retirees in a Christie Administration,” says the “Open Letter to Members of Our Law Enforcement Community,” simply signed “Chris.”
“I have repeated time and time again that the pension agreement we made with our member our law enforcement community must be respected,” the 2009 letter adds. “It is a sacred trust.”
Christie sent a similar “sacred trust” letter to firefighters through the state, adding: “The notion that I would eliminate, change, or alter your pension is not only a lie, but cannot be further from the truth.
“No one will stand up for you more than I will.”
“Do not believe the lies that have been spread about my proposals,” Christie told both groups. “Your pension will be protected when I am elected Governor.”
True enough there was no mention of cost-of-living-adjustments as a protected benefit and these days Christie is making those promises exclusively to retirees:
Chris Christie held a town hall meeting yesterday where he explained that changes to the New Jersey pension system would need to be made that will cost “everybody a lot of money” though he skipped over little details like who, when, and how much (presumably because the youtubes aren’t all done yet). But what he does get, and gleefully professes, are the “sins of his predecessors” who brought us to this sad state in part because they “monkeyed with the math’.
This started out as a quickie blog to get a simple point across about the underlying precept of New Jersey Governor Christie’s initiative to reduce public pension benefits, namely that the benefits New Jersey provides are overly generous. Is that true?
Policypedia has a good compilation of official data from various sources but because there are no set standards among plans there is no easy way to compare benefits among state plans by only using asset and liability numbers. You have to find the website where each state keeps their actuarial reports, go to the Summary of Benefits section of either the actuarial report or the CAFR, and see how those benefit formulas compare with what New Jersey’s is providing to most of its public employees (from page 44 of the PERS report: about 1.82% of pay times year of service at retirement age 60).
So I did and here are all the links to where the reports are by state and plan. Actuarial reports all have a section that describes the benefit formula and after a review of a few plans I found….
‘Kentucky Fried Pensions: A Culture of Cover-up and Corruption‘ by Chris Tobe primarily focuses on the killings nefarious elements in the exotic-investment industry made by selling snake oil to severely underfunded public pension plans desperate to find ways to pay those promised pensions by any means except the obvious one – making contributions.
The focus is on Kentucky and Illinois but with New Jersey moving towards having 38% of their remaining trust assets in alternative investments the lessons of Arrowhawk and Record Currency Management will likely be visited upon us (assuming they haven’t already been and no one with any sense of public duty has found out as yet).
Among the thought-provoking excerpts from the book:
The Star Ledger reported that Union County is being sued over alleged sex assaults at the juvenile center but what they did not report is that, because of the county’s participation in New Jersey’s flourishing pay-to-play system, county taxpayers are already on the hook for up to $100,000 in legal fees to mostly connected law firms as county counsel determined that the fourteen defendants in Fowler v. UC, et als need different outside law firms to represent them with each of the firms starting the meter at $10,000, an amount that, based on past experience, will escalate regularly over the course of the case to what should eventually hit six figures for each. Those firms: