Posts Tagged ‘pension’

Christie Shorting NJ Pension by $3.8 Billion?


The story first appeared in the International Business Times (IBT) with lots of charts under the screaming headline:

Gov. Christie Shifted Pension Cash to Wall Street, Costing New Jersey Taxpayers $3.8 Billion

Today it was picked up by AOL, Esquire, and Daily Kos all using the angle that Christie wants to take money from retirees barely scrimping by so he can give it to his Wall Street friends who then donate to political campaigns of his choosing.  But is that the real story?

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Pension Study Commission Members Announced


I predicted they would be a combination of five patsies and quislings but apparently Governor Christie could not fill out that roster so he settled on some professional people but raised the number to nine so as to assure that his original intention (having this commission rubber-stamp whatever study the Divisions of Pensions is almost done with) will play out though not through blind obeisance as originally intended but through internal bickering which this commission is certain to have plenty of.  The members, per the press release:

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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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D-Days for New Jersey Pensions


As in Decision Days.

Today a judge will hear arguments on whether the State can skip pension payments (it can for this year anyway) and tomorrow:

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Who Said We Fixed the New Jersey Pension System in 2011?


Today: “no one in their right mind would say that what we did in ’11 totally fixed a problem that is in the 30-40 billion dollar range”
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but they did:
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The 401(k) Transparency (Dis)Advantage for Public Plans


New Jersey Governor Chris Christie is going to defer most of a $1.6 billion pension payment due next month into the next fiscal year to balance the budget for the current year. The announcement will be made this coming week and, to deflect from this fiscal chicanery, he will call out the legislature to get New Jersey public employees into 401(k) plans. The campaign kicked off this past week at the Peterson economic summit with a criticism of the “insanity of a defined benefit pension system”:
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and continues with an article planted in the Wall Street Journal.

But going to a Defined Contribution (DC) system does not guarantee any savings to taxpayers since DC plans can be structured to be just as expensive as the current DB system.

Though what it would provide is transparency. The cabal currently manipulating costs downward will be out of business and there would be no surprises – for taxpayers having to pay for the underfundings of the past or retirees losing their COLAs.

The other advantage (or disadvantage to some) will be the elimination of those games played to pump up benefits without having them paid for.  For example:

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Page 8


The July 1, 2013 actuarial reports for the New Jersey pension plans are coming out and if you are of a mind to explain to your teacher friends why they will soon be seeing Detroit-type ‘adjustments’ to their pensions just point them to page 8 of the Milliman report for the Teachers Plan – TPAF – (Buck does the valuations for the other 6 plans in the system) titled ‘Risk Measures.’  Search the Buck reports and you won’t even find the word ‘risk’ mentioned but Milliman beginning with their July 1, 2009 report thought it a good idea to mention that…..

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