Archive for the ‘New Jersesy Pension’ Category

Emphasis on the ‘We’ Not the ‘It’

When Governor Christie claims “We can’t afford it” (with ‘we’ being New Jersey government and ‘it’ being public employee pensions) public employees like teacher Mark Weber in a NJSpotlight piece today latch onto the ‘it’ part and trot out the old bromides:

  • it’s not really that much
  • we earned it
  • the state should have seen this coming
  • there are ways to come up with the money

while completely ignoring the sad state of the guarantor of his pension – the New Jersey political spoils system masquerading as government.

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New Jersey Petitioning Against COLAs – Highlights

New Jersey filed its cross-petition in the Berg v. Christie COLA case yesterday kicking off with:

Applying the wrong legal standard, the Appellate Division determined that NJSA 43:3C-9.5 creates a contractual right to cost-of-living adjustments. This determination upends the Legislature’s carefully crafted pension reform, threatens the fiscal integrity of the pension systems for active employees, and potentially puts a critical strain on State resources that already face many worthwhile, competing demands. (Preliminary Statement – page 1)

It gets funnier.

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Surge in New Jersey Retirees Coming?

Christie’s new pension reform push could lead to new surge in N.J. retirements
July 27, 2014 page one headline

Is that so and, if so, is that so bad?

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Q & A & The Truth on New Jersey Pensions

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:

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How “Sacred” Is Christie’s Trust?

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.


Gov. Christie

“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:

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Monkeying with New Jersey Pension Math

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’.

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Rating State Pension Benefits

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….

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Pensions Frying in New Jersey Too

‘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:

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Breaking (Though Not Unexpected) News

The state of New Jersey will appeal the Berg v. Christie and NJEA v. New Jersey decisions of June 26, 2014 to the Supreme Count of New Jersey on the issue of:

“the court’s determination that N.J.S.A. 43:3C-9.5(a)-(b) creates a contractual right to receipt of cost-of-living adjustments.”

Another stalling tactic since there seems no way to win this appeal unless they are thinking of…..

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But New Jersey Is a Disaster

There have been those out there who do not see a public pension crisis including Teresa Ghilarducci who took to public TV yesterday to make that exact claim but…..when it came to New Jersey:

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