As of yesterday, that chart required an amendment.
As of yesterday, that chart required an amendment.
Our government loves numbers possibly because they (and those they are provided to) can be so easily manipulated.
Recently a friend got from the US Census website data going back to 1957 on public plans in New York and, for my benefit, New Jersey teachers that he put into a daunting spreadsheet from which I culled the important bits and added some pertinent columns to arrive at this spreadsheet which includes two of the scariest numbers (0.72% and 12.36%) and imparts a vital lesson (there was a time when our government had integrity).
Niel Palmieri was the Director of Facilities Management for Union County until his resignation a week ago. Last Wednesday he pled guilty to mail fraud and is looking at 46 to 56 months in prison for receiving between $120,000 and $200,000 over the last five years from vendors dealing with the county.
The question your typical panglossian voter would have is how did this guy think he could get away with this.
The question anyone with an unvarnished view of the workings of Union County government (me, for instance) would have is not whether this is a case of one bad apple but the one bad apple who got caught (though I would also be curious as to which vendor ratted – my guess is Birdsall).
But the question most of the people commenting on the story have is whether this criminal will keep his pension. Perhaps I can help with that one.
Somehow it has become a scandal when a retired government employee gets another public job that pays a salary. In an article out this week by New Jersey Watchdog the focus is on those retired on disability who get jobs working for the governor wherein state pension board member John Sierchio makes the point:
“These people are playing within the rules of the game. But the rules of the game are so absurd, they need to be changed.”
Exactly! Rules made up in essentially secret meetings based on advice from ‘experts’ paid to justify the needs of those who seek to benefit personally always seem to wind up over-benefiting those people who do pay attention (a cohort that excludes the general public and the media).
But once we have the rules then why vilify someone who plays by them and gets a windfall? Do you attack trial lawyers who get 40% of an injury settlement? Or TPAs who get 20 basis points for a 5-life-plan that happens to hold $10 million primarily from a DB rollover? Or Alex Rodriguez?
But I could be wrong. So noticing that the list of New Jersey retirees had been updated to June, 2013 I decided to search through pension records of Union County Freeholders to see if there was anything particularly irksome.
Buck Consultants (Buck) screwed up again. This time it was the Teachers’ Retirement System of Illinois (TRS) where in May they did a study that projected savings of $130.74 billion from Senate Bill 1 but now they say the savings will really be only $106.25 billion due to “a mechanical error in the spreadsheet summarizing the results.” In a letter to the members of the First Conference Committee on Senate Bill 1 the Executive Director of the TRS threw Buck under the bus:
I sincerely apologize for this error. As noted above Buck has reviewed its other analyses and no change is required to any other information that you have received from TRS. TRS staff is working closely with Buck to ensure adequate quality control on their work, including adding an additional level of review. We value the trust that the General Assembly and this conference committee has placed in TRS to provide sound analysis. We will do everything possible to ensure that we continue to deserve that trust.
But who’s to say that Buck’s original estimate won’t turn out to be closer to reality?
My guess is that as early as this week 20,000 retirees in Detroit’s two retirement systems will have their pensions reduced by a flat percentage (25%) with a cap ($50,000 annually?) and no reductions for de minimus amounts (under $10,000 annually?) so that part of the pension trust fund can be used to repay bondholders.
The Detroit Free Press editorialized today against any benefit cuts since retirees were not to blame but failed to finger any culprit. I will.
The June 30, 2012 valuation for the Detroit Police and Fire Retirement System is out* and it claims that the system is 96.1% funded with $3,675,459,604 in assets to cover $3,822,676,002 in liabilities, an enviable ratio for most public pension plans these days. So why the need for cuts? What’s the problem?
Basically that the valuation is a joke. It doesn’t honestly value the pension liabilities it recognizes while ignoring others and pretends to have more money than it reports is in the plan. What they try to hide:
The June 30, 2012 actuarial valuation report for the Detroit Police and Fire Retirement System is out. The financial report for the Detroit General Retirement System is also out but the latest actuarial valuation for them is as of June 30, 2011 so, to make better comparisons, I start with the 6/30/11 actuarial report for PFRS also. Based on these official numbers Detroit had one of the better funded public retirement systems in the country with a combined funded ratio of 91.4%. However, as I have been doing for the New Jersey plans, here’s how I see those numbers translating to reality: