The United States Supreme Court today heard oral arguments in Advocate Health Care Network v. Stapleton as to, in the words of the Washington Times, whether some of the nation’s largest hospitals should be allowed to sidestep federal laws protecting pension benefits for workers. The court agreed last December to hear the case and will likely withhold any decision until their session ends this June.
The three supposed church plans involved, with links to their latest 990 filings including the page with pension obligations, are:
- New Jersey-based St. Peter’s Healthcare System – $112,548,076
- Illinois-based Advocate Health System – $114,939,487
- California-based Dignity Health – $688,650,936
Another State of Affairs program with another gubernatorial candidate and again it is the pension question up front:
Presumably a reference to more Pension Obligation Bonds which would certainly not have solved anything but rather made one aspect of the equation (the state’s deposits) slightly more predictable which was the heart of the 2011 reforms (trading away COLAs for some ‘guarantee’ of funding) and maintains in the minds of these politicians:
S3040 passed the Assembly tonight 61-4, with 10 abstentions so, if Christie signs off, management of what will likely start off as a $20 billion pension fund for New Jersey Police and Firemen will be transferred to a panel controlled by the unions to oversee investments and benefits.
As with that quarterly contribution diversion the overwhelming support for this bill by politicians is rooted in its revenue neutrality. It is all about panels, committees, and procedures with no commitment to having to come up with any more money. Otherwise, were the unions to go to government employers with a request for the real cost of benefits it would, with surprisingly few alterations, play out something like this:
Ed Donnelly is president of the New Jersey State Firefighters Mutual Benevolent Association who argues in an op-ed on njspotlight today in favor of Police and Firefighters managing their own pension system.
The state’s failure to meet its obligations and its willingness to give local employers a pass through “pension holidays” created a shortfall in the PFRS system of more than $11.1 billion. The state is on the hook for more than $2.7 billion and local employers owe $8.373 billion.
Shortfall numbers from the July 1, 2016 PFRS actuarial report and one of several points that Mr. Donnelly gets dangerously wrong.
Opinion: Heads They Win, Tails You Lose
Police and fire unions’ power grab sticks New Jersey’s taxpayers with the pension bill.
That power grab is S-3040 which former New Jersey state treasurer Sidamon-Eristoff views as “demonstrably insane to give public employees unqualified power to set their own benefit levels and require that government employers (and taxpayers) pay the tab.”
One problem with that logic:
The July 1, 2016 actuarial reports for the New Jersey Retirement System plans are out and their main practical purpose is delineating the contributions for the fiscal year ended June 30, 2018. That total contribution amount would be $6,768,969,201 except we have laws that bring it down to $4,260,031,483 ($2,508,937,717 by the state and $1,751,093,766 by localities) with public workers expected to contribute another $1,977,904,061.
By far the largest portion of that total calculated contribution (84.6%) is the 30-year amortization of the underfunding which comes to $5,724,532,942 and develops through a combination of missed contributions and absurdly understated liability values. Here are two worksheets taken from contribution exhibits with some observations: