Who knows what pensions are really worth

Turn on the lights and rats scatter though ever mindful to bring along their spoils. As regards the value of public pensions, because of the failings of the actuarial profession and individual desires, most find themselves in a very dark room

Take for example municipal attorneys in New Jersey who got to be in the state pension plan until a 2007 law ceased their accruals (though some didn’t get the memo).  Based on this recent list of local attorneys in Union County those who grasped the impact of the pension cessation and were at retirement age took their cheese:

Clark: Joseph Triarsi – March, 2009 – $30,286i
Cranford: Carl R. Woodward
Elizabeth: William Holzapfel
Fanwood: Daniel Antonelli
Garwood: Robert Renaud December, 2007 – $34,358
Hillside: Christine Burgess
Kenilworth: Harvey Fruchter
Linden: Edward Kologi – August, 2010 – $62,666i
Linden: Asst. John G. Hudak
Linden: Asst. Daniel McCarthy
Mountainside: John Post – March, 2010 – $16,676
New Providence: Carl R. Woodward
Plainfield: Daniel Williamson
Rahway: Louis Rainone
Roselle: John G. Hudak
Roselle Park: Blake Johnstone
Scotch Plains: Jeffrey Lehrer
Springfield: Jeffrey Lehrer
Summit: Barry Osmun – January, 2010 – $12,939
Union: Daniel Antonelli
Westfield: Robert Cockren – April, 2011 – $35,753

These guys are hardly the reason that the New Jersey pension system is bankrupt.  Rather, what they represent is the absolute ignorance of  politicians when it comes to understanding the value of the promises they are saddling taxpayers with.

These municipal attorneys are aware that getting $20 – $40 thousand a year to sit through scores of public meetings and work sessions doesn’t make sense without the pension component.  (The job then becomes public service instead of hitting the deferred-pay jackpot.)  But for those who are older and maybe have been in government service before at a higher salary that annual accrual could tack on another $50,000 to their compensation package.  They know that.  The reason the New Jersey pension system is bankrupt is that politicians and taxpayers don’t.

6 responses to this post.

  1. Posted by Anonymous on July 23, 2012 at 5:21 pm

    TL never says a bad word about the lawyers. She needs the lawyers to make laws that favor her employer.

    Reply

  2. Posted by Tough Love on July 23, 2012 at 6:54 pm

    John, commenting on your last paragraph ……………….

    Which is why the standard for accruing one year of pension service should be (at a minimum) what it is in the Private Sector, 1000 (verifiable) hours of paid service in a Plan-year, and NOT a small dollar-specified amount ($7,500, and recently raised from a lower amount) as is the current practice in NJ’s Plans. NONE of NJ’s part-timers should be earning a pension.

    Of course, those who do not meet the definition of “employee” should be also barred from the Pension Plan participation regardless of how many hours are worked in a year.

    Reply

  3. Posted by Dave Haas on July 23, 2012 at 11:17 pm

    JOHN, NOT ALL POLITICIANS.

    In Westfield there were two of us on council every year, before the law change saying it was wrong – But it was pointed out to me several times that we never won an election on this issue and that it wasn’t costing the town much money at the time.

    It was never hard to understand – you take a one or two night a month job fior 20 years – then retire from your regular job and work 3 years full time at something like $100,000 per year in another politically appointed position and get close to $50,000 a year for life after retirement. Who doesn’t smell something wrong there?

    Never mind that it was creating a huge unfunded, completely unnecessary expensive perk that future tax payers would have to face in order to fund our current legal needs. When the town did a survey, before the law changed close to 25% of the responding towns in the county had their attorneys on retainer rather than as employees in the system. It wasn’t necessary and it was wrong then….The only thing that changed in 2007 was that it became against the law as well.

    Also, The problem was much bigger than one attorney. The Board of adjustments attorney, the planning board attorney, the public defender, the municipal prosecutor –the judge -> all accrued years of service while having full time jobs in their firms before the law changed. Some, either before or after their service in Westfield took full time positions for three years after retiring from their regular full time jobs and then got virtually unfunded pensions as if they’d been full time employees all 20 or 25 years. The problem was big enough at one point that it was listed as one of the top 4 changes that needed to be made by commissions under at least two different governors.

    As I said, the law change just made it illegal. It was wrong ethically and morally from long before that.

    Reply

  4. Linden attorneys do not work under a contract. They are hired by Linden as any other employee. Why? Don’t know why because they all suck.

    Like any professional who wants to contribute to their town, the local attorneys should serve and go on their merry way. Evidently, someone, somehow, put these attorneys on the permanent payroll. Hell, in Linden we even established a “law department”. for these idiot lawyers. Now we have John Hudak (not too bright), Dan McCarthy (a real gem of the DaTruthSquad fame) and Allen Roth (not too bright either). All of them do work for the County. Linden partners with the UCIA. We have lawsuits that IMO were caused, in large part, by the UCIA. We have blocks of empty land that the UCIA bought up with Linden taxpayer dollars that have sat empty for over a decade.

    Does any council member from Linden question the UCIA? Has any member of Linden Council been appointed to attend UCIA meeting even though we have millions invested with this sham outfit. No. Not one council person attends UCIA meetings. That is a DISGRACE. Of course not, least they face the wrath of the UCIA Executive Director who also serves as the Union County Dem chair, the majority of our council who serve under her. More dispicable, even out own Mayor won’t question her.

    Like the saying goes, we get what we deserve. My kid has moved out and I can’t wait to leave next because I know there is no one representing me or my neighbor’s interest.

    We have all self-serving politicians in this County. I can’t even name one who represents my interests in this entire County. No one. Either they are part of the cabal or too stupid to realize they are being had.

    Does Linden really think it can rely on its attorneys, the same attorneys, who work for the County, to ask for advice? How about John Hudak, our City attorney? What if, and it’s not a big what if, if Hudak did something to cause a lawsuit against the City of Linden. Hudak’s son is the city democrat chair. How many council members, the majority of which are democrats and seek the support of the city democrat chair, could speak up against the city attorney?

    They are all crapping in their pants. The majority of council are too afraid to say anything, much less do something about it.

    This is a very real and serious situation. As a taxpayer, I have to sit here silent while my own councilman sits silent because he needs the support of Hudak Jr. the son of, Hudak Sr, whose fault Linden taxpayers are going to get sued their pants off.

    If this happens, I will bring my own suit for malpractice against Sr. No kidding.

    Are those council members going to do the right thing and risk losing the support of attorney Hudak’s son, who is the municipal chair?

    I don’t think so.

    What do these lawyers do for Linden, besides make campaign contributions to the cog Nothing.

    Reply

  5. Posted by Not a Berkshire Hathaway sales rep. on July 26, 2012 at 7:34 pm

    According to BRKDirect.com a $30,000 a year annuity, for a couple each born 6/30/1962 payable yearly starting 9/1/2012 is worth $796,700. The annuity is not inflation adjusted, Warren Buffett will not cut you off no matter how demonized you are in the press. The likelihood of default of the state of NJ and Berkshire Hathaway are not the same. Assuming a 20 year work life $796,700/20 is about $40,000 a year. Again the big one is the inflation adjust. The inflation adjustment is really what caused the big increase in benefits.

    Health care is another story too. Retiree healthcare for a couple could easily be worth $30k a year.

    Reply

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