Wendell Steinhauer, president of the 200,000-member New Jersey Education Association, came out with an op-ed on njspotlight today urging:
“a constitutional amendment to require the state to fund its pension obligations responsibly. It’s the least expensive, most responsible way to solve the problem created by a generation of fiscal irresponsibility. Amending the constitution to impose the fiscal discipline that our elected leaders lack is the only solution that will work.”
No it’s not and New Jersey has already set out on the another path. Now it’s up to the actuarial community to pave the way by officially sanctioning the default assumption.
The Asbury Park Press (APP) powers a government-records website that tracks, among other things, people receiving New Jersey government pensions (326,401) and convicts (308,207). These are separate databases but apparently can be cross-checked which is what APP did for a story where they found:
Dozens of convicted criminals are collecting more than a million dollars in taxpayer-funded retirement checks, including at least one who is still behind bars, an Asbury Park Press investigation found.
The list of convicts profiting from state pensions reads like a who’s who of New Jersey corruption: former mayors, an assemblyman, county executives and other politicians convicted of tainting their offices, the Press found.
And while state law bars convicts from receiving a pension check while behind bars, the Press found that wasn’t the case for convicted corrections officer Bobby Singletary, 58, of Paterson. He was paid an annual pension of $51,278 for the past 27 months while in prison. He is serving seven years for smuggling drugs to prisoners.
Since the Press’ discovery, the state Treasury Department said it will cut off Singletary’s checks “later this summer.”
This story is getting some play as a cure-all but for me it summoned up Dr. Evil:
At a panel discussion today on “The State of State Pensions” at the Kimmel Center in Philadelphia a bunch of politicians seemed to think this was a good idea:
Take pension money and invest it in local projects that produce a guaranteed return, such as a toll road.
That was one of the ideas suggested by former Maryland Gov. Martin O’Malley to fix the sorry state of public pensions nationally. Those in New Jersey and Pennsylvania were the nation’s worst funded last year.
“There are opportunities we’ve yet to realize, such as having our pension funds invest in local, sustainable projects with a double bottom line,” said O’Malley.
Here’s why a New Jersey politician would favor this route:
On June 28, 2016 while the City of Cleveland, OH was preparing for the Republican National Convention, 68 miles away in Austintown, OH real life was going on.
As reported on nj1015.com, Gov. Chris Christie will nominate Labor & Workforce Development Commissioner Harold Wirths as a member of the State Parole Board, prompting questions about his qualifications from State Senator Raymond Lesniak, D-Union, who said he’ll vote against Wirths’ nomination explaining:
“It’s just another example of more waste of taxpayer dollars. We have a Parole Board that is a dumping ground for political appointees…..[T]his looks like another pension-padding scheme by Gov. Christie on behalf of the commissioner of labor.”
Is it? The story goes on to name the board members for us to judge:
Defined Benefit retirement systems across the country are all severely underfunded because an actuarial/political cabal has allowed Generally Asinine Approaches to Payments to pass for Generally Accepted Actuarial Principles. Now even the lowball contribution ‘requirements’ these methods are yielding have become onerous obligations for governments unprepared to actually pay for the promises they might have thought they could afford. Which leads to some desperate measures:
Whenever news of a hedge fund blowing up comes out, like it did today, I wonder if the New Jersey Retirement System had a stake.