Christie Lies Update

2014 New Jersey pension actuarial reports are coming out on the state website (the CAFR is on there now) which is a different set of lies that I will expose when all the reports are out.

For now the headline numbers updated through June 30, 2014 are 42.5% funded with a shortfall of $113 billion though, for $1,307,431 in actuarial fees you would think that someone could have added up those numbers up for you.  Instead they have an exhibit showing $83,482,447,070  in assets and one for an unfunded totaling $113,125,550,300 that you need to total yourself and then add those two numbers to get an accrued liability of $196,607,997,380.  Then you take the $83,382,447,080 in assets and divide it by the $196,507,997,380 of liabilities to get to 42.5% funding.*

Even after you do that those numbers are rosy but that is for a future blog.  For now there are more transparent lies being thrown out there:

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IRS Sucks for ERISA Attorneys

The cover of the Bloomberg Businessweek magazine that I brought into the ‘Dialogue with the IRS’ session at this week’s Enrolled Actuaries meeting:

irs sucks

 

The story was about the IRS budget being cut and employees unhappy with the working conditions.  But how does that impact those working in the pension field?

For one thing it was confirmed by Kyle N. Brown that the IRS as of January 1, 2017 would no longer be accepting Determination Letter (DL) applications for individually designed plans.  In his own words:

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It’s Nine Credit Downgrades

According to nj.com:

Moody’s Investors Service has downgraded New Jersey’s debt rating, dealing the Garden State its record ninth ratings cut since Gov. Chris Christie took office.

The ratings drop by one notch, from A1 to A2, on $32.2 billion worth of bonds underscores the state’s “weak financial position and large structural imbalance, primarily related to continued pension contribution shortfalls,” Moody’s said in a statement Thursday.

The rating agency warned that future pension underfunding and ongoing structural deficits could drive further downgrades.

“We expect liquidity and structural balance to remain very weak through fiscal 2016,” the agency said.

Chris Christie is now on a ‘Tell It Like It Is’ tour trying to talk the country into adopting his policies to fix Social Security, Medicare, and Medicaid.

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Christie’s Downgrades:

2/9/11 S&P Downgrade: AA- from AA

4/27/11 Moody’s Downgrade: AA3 from AA2

8/18/11 Fitch Downgrade: AA- from AA

4/9/14 S&P Downgrade: A+ from AA-

5/1/14 Fitch Downgrade: A+ from AA-

5/14/14 Moodys Downgrade: A1 from AA3

9/5/14 Fitch Downgrade: A from A+

9/10/14: S&P Downgrade: A+ to A

4/16/15: Moodys Downgrade: A2 from A1

Breaking News: for ERISA Attorneys

It looks like New Jersey and Illinois are being treated as ‘outliers’ rather than the inevitable consequences of a flawed public-plan funding system so I turned to some sessions on private plans and, in my world (and maybe yours), I came across a bombshell.

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S-HNB and the demise of the Yard-Man Presumption

Public plan sessions are tomorrow with New Jersey likely to be featured but today I learned of two recent events that might mean in ten years nobody will get retiree health benefits outside of Medicare, Medicaid, or Obamacare and there will probably never be a federal bailout of pensions beyond what the PBGC can afford.

It was also announced that this will be the last EA meeting that will be recorded so in future years I may be the only one memorializing this sort of stuff:

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Nobody Is Complaining About Enrolled Actuaries

The 2015 Enrolled Actuaries meeting is underway and there promises to be a lot of discussion of public pensions.  Three of the four actuaries on the New Jersey study commission are in attendance and according to an nj.com story their work is not done as they have now been tasked with implementing their plan.

More information as it becomes available but first, in the Professional Standards/Ethical Dilemmas Seminar that kicked us off Pat McDonough of the Joint Board updated us on the complaints received against Enrolled Actuaries.

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New Jersey Lawmaker Snaps

Asemblyman Declan O’Scanlon, a Republican of Red Bank, serves on the Assembly Budget Committee and apparently he has heard a lot of criticism about the proposed pension reforms in New Jersey that basically throw in the towel on the defined benefit system and seek ways to pay off the massive accumulated debt.

To write such a vitriolic op-ed piece in the Star Ledger today I can only conjecture as to what incessant questions he has been dealing with since the Christie-Freeze plan was announced…..so I will.

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