Archive for the ‘New Jersesy Pension’ Category

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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Christie on CNBC on New Jersey Pension

Chris Christie just finished up a live promotional spot on CNBC for his presidential candidacy and he spent five minutes dodging questions on the the fiasco that is the New Jersey pension system that he is smack dab in the middle of gutting.  John Meachum points up some obvious hypocrisy in his position but eventually backs off….
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No Brain. No Plan.

To put this into some perspective when Governor Christie came into office in 2010 he set upon reforming the state’s pension system. His ill-thought out, knee-jerk reforms failed miserably in every respect and with cost-of-living-adjustments for retirees about to return and a crash in the values of alternative investments about to decimate the ‘trust’ there is every likelihood that New Jersey retirees will see draconian benefit cuts even as taxpayers and current employees are intimidated into paying more to fund even the reduced benefits to come.

So what’s the plan?……
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Who’s Double-Crossing Whom Here?

So the democrat narrative is becoming clear. Despite the Dems having control of the legislature for decades and having sporadic control of the Governor’s seat it’s not their fault that the pension system went unfunded and it’s certainly not their fault the system has gone beyond the point of saving. No, no, no, the fault is Christie and only Christie.

I think Christie is a massive SOB but if the NJ Dems are looking for who is at fault for the pension systems unavoidable collapse the best place to start is with a mirror.

Posted by Hoboken_Guy on July 10, 2014 at 12:28 am

A perfect illustration of this mindset appeared today as Sen. Linda R. Greenstein (D) representing the 14th Legislative District and serving on the Senate Budget and Appropriations Committee had an opinion piece in the Trenton Times where she trotted out every sanctimonious piece of blather in the democratic playbook on the pension issue:
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Pension Default as White House Strategy

Politics is the art of the possible.Otto Von Bismarck, remark, Aug. 11, 1867
German Prussian politician (1815 – 1898)

Gay marriage, flag burning, stem cells, medical marijuana, and other social issues designed to inflame an electorate to mindlessly vote their prejudices might work to get Chris Christie into the White House.  Pension reform in New Jersey won’t.

If given the choice between having a fully funded state pension system and a talking point to bash unions and default on pensions I have no doubt that Christie would much prefer the former and never have to deal with another pension reform.  Yet a Bloomberg story today quotes several politicians and pundits as seeing this as some sort of strategem for 2016:

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