New Jersey Judges Sabotage Their Own Pensions

Judges in New Jersey now (and in the foreseeable future) pay 3% of their salaries toward funding their pensions.  Governor Chrisite wanted them to eventually pay 12% but an ‘independent’ panel of judges (yes judges) ruled yesterday that Christie can’t do that.  This Christie:

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So what is this Christie capable of doing now?

Look at the July 1, 2011 actuarial report for the Judicial Retirement System and you’ll see that the JRS had about $270 million in assets then (forget that pretend ‘actuarial value’ number of $310) and they paid out about $45 million that year to current retirees.  The state contribution was 1/7th of the ARC ($5.5 million) and the 3% of salary that the judges chip in came to another $2 million.

Do the math.  All Christie has to do is say that if the judges won’t pay their ‘fair share’, neither will the state.  Then where will the plan be in 5 years when payouts will be around $60 million, the judges’ own contributions will still be $2 million and, without state money, assets will be $0.  How are the judges going to adjudicate their pensions into existence?

42 responses to this post.

  1. Posted by Tough Love on July 25, 2012 at 11:52 am

    It’s not just Judicial pensions, it’s ALL Public Sector pensions, and at ALL pay levels ….

    The ROOT CAUSE of the financial problem is excessive Public Sector “total compensation” (cash pay + pensions + benefits), generally via grossly excessive pension and benefit (i.e., retiree healthcare) promises.

    Well hidden from the taxpayers are 2 facts:

    (1) Public Sector pensions have a value at retirement, the taxpayer paid-for share of which is ROUTINELY 2x, 4x (even 6 times for safety workers) greater than that of comparable Private Sector workers retiring at he SAME age, with the SAME years of service, and with the SAME cash pay.

    (2) ALL of the worker’s contributions (INCLUDING investment earnings throughout their career) rarely accumulates to an amount sufficient to purchase more than 10-20% of their promised pension. Taxpayer contributions (and the earnings thereon) pay for the 80-90% balance.

    These excessive “promises” were (and still are) being made by beholden politicians eager to accept Union campaign contributions and election support in exchange for favorable votes on pay, pensions, and benefits. In any other venue, such activities would be criminal. These fraudulently obtained pensions and benefits must not be honored to the extent they exceed retirement benefits Taxpayers typically get (as a % of pay) from their employers …. which as noted above is 1/6 to 1/2 as much.

    Taxpayers ….. refuse any further funding of these Plans. Let the Plans buy proportionately smaller pensions with EXISTING assets ….. and no more. The financial rape of the taxpayers by Public Sector Unions/workers and enabling politicians must end now !

    Reply

  2. Posted by Anonymous on July 25, 2012 at 12:59 pm

    I wish the Public Employees were as well versed at ripping off the publc as the insurance industry. Then they would be filthy rich like the insurance companies and their gravy sucking employees.

    Reply

    • Posted by Tough Love on July 25, 2012 at 1:41 pm

      Just as I expected ….. my above comment brought the cockroach out of his hole.

      Reply

    • Posted by CountyWatcher2 on July 25, 2012 at 4:16 pm

      The topic is public sector employees, judges to be specific. Why bring up insurance companies? And if insurance companies are ripping off the public in some way, why would you wish that public unions do a better job of ripping us off?

      How does either help the taxpayer. Although I have to say, have not been ripped off by any insurance company. I have been pretty satisfied with my service.

      Reply

      • Posted by Tough Love on July 25, 2012 at 4:44 pm

        Ignore Mr. Anonymous …. he routinely brings up all sorts or irrelevant subjects (insurance, oil companies, etc.) to try to distract the reader from the issue at hand … pension reform.

        Reply

  3. Posted by Anonymous on July 25, 2012 at 1:00 pm

    John, judges have the power and ability to twist the law anyway they wish. Dont fool yourselves

    Reply

  4. Posted by Anonymous on July 25, 2012 at 1:09 pm

    When TL speaks of financial rape of the taxpayers its laughable, since her insurance company and others financially murder policyholders without conscience. lmaooo Get ready for an angry tirade by the real gravy sucking pig, TL and the insurance industry. They are as rich as the oil companies and they get rich by sucking hard working people dry.

    Reply

    • Posted by Tough Love on July 25, 2012 at 1:44 pm

      What’s the matter …… you don’t like hearing the truth ?

      Reply

      • Posted by TREEeditor2 on July 25, 2012 at 2:49 pm

        interesting repartee. if I dont like an oil company or an insurance company i dont buy gas or a policy from those companies and just drive downt the road or make another phone call. If I don’t like the govt, then what is my alternative?

        Reply

        • Posted by Anonymous on July 25, 2012 at 4:11 pm

          Unfortunately if you dont like an oil company or insurance company you dont get very much different treatment from another company. If you pay less for gasoline than the rest of us, you should share your secrets with the rest of the world. Not a very good comparison. Also the government offers plenty of free services for people such as parks and recreation. etc. You are spoiled like all Americans but thats life. BY THE WAY IF YO DONT LIKE NJ WHY DONT YOU MOVE OUT, THERE ARE 49 OTHER STATES, THAT MORE CHOICES THAN OIL COMPANIES. LOL

          Reply

          • Posted by CountyWatcher2 on July 25, 2012 at 4:31 pm

            Sure you do. Last year I switched my auto policy and saved about $800. I consider that a substantial difference. If you shop for gas or oil, you can find substantial difference in price or service.

          • Posted by TREEeditor2 on July 27, 2012 at 3:46 pm

            this is the problem with govt workers like anon 4:11. They do not understand private sector economics thus do not understand the plight of the residents that they are actually designated to help. And interesting their response to anyone criticizing them is to move out. Again they dont even understand the united states. Of course they would say that, they have their peice of the action and so must not really care. There are those that really do understand public service as it was in the old days.

            I was here well before anon 4:11 when NJ was once a great state wtih compassion. The last 10 years the govt has been stuffed with so many friends, relatives, operative,s hacks, local poltical bosses, proven each day the media does an expose; and most of them without going thru a proper interview or vetting process. Like UMDNJ-its only based on who you know or your poltical party. How about that? A whole state with a multi billion budget, possibly trillion when you take into account every govt entity and agency and its all operatied on the friends and family plan, no experience.

            I remian here and not run away because i care for my neighbors, not like the arrogant anon.

            But in the end anon 4:11 will of course walk away with a great largesse, clueless of what havoc was wrought on others only becasue anon will be hanging around with the other anons and will never acknowlege the plight of those who are paying for anons largess. Who said life was fair. But i will continue fighting in the hopes to get rid of the slugs like anon or hopefully at least some of them.

            Uphill battle but it can be achievable. In Union County govt we were able to expose lesniaks nephew for what he was and he was the one who had to run away. score citizens- 1; corrupted system- 700,000

          • Posted by Tough Love on July 27, 2012 at 5:20 pm

            TREEeditor2,

            The BIG fight will come in a few years when these Plans are going bust. Taxpayers will need to mobilize so that the pensions are halved or quartered …. and not paid in full out of the operating budget.

            Any politician with half a brain should see the writing on the wall, and switch their allegiance to the Taxpayers, not the Public Sector workers.

  5. Posted by Anonymous on July 25, 2012 at 1:55 pm

    TL would make a terrific public employee she has plenty of free time during work hours to surf the net. But she knows she can rip off masses much more efficiently while working in the insurance industry. Insurance companies and Oil companies are the real whores of modern civilization.

    Reply

    • Posted by Tough Love on July 25, 2012 at 2:05 pm

      Really now, Public Sector workers and their Unions have mastered the art of ripping off the Taxpayers.

      Hears a real concise summary from another poster Mark D. Hill out in CA:

      “The absolute power these unions have over all of us is frightening…for me, its simply stunning that these pirates have gamed this system so well, that even with bright flashlights of truth and excesses, they don’t blink, let alone run. They believe this is their right…they are worth it…and with a straight face tell taxpayers “good luck trying to change the rules…we made em.” This County, this State and perhaps our Country, has been hijacked by these government employees who, sadly, supposedly work(ed) for us. They don’t…our Legislators, City Councils and Governor (and President), work for them…..and the credit card bills they have racked up…is undeniable evidence that. Today, tragically, they are right. God help us.”

      Time to take back those grossly excessive pension/benefit promises.

      Reply

  6. Posted by Jim on July 25, 2012 at 3:34 pm

    One small point. Not nearly all public sector workers belong to any union!

    Reply

  7. Posted by Anonymous on July 25, 2012 at 4:12 pm

    TL I thought of something positive that I can say to you. Neither of us curse and use profanity the way some people on the blog do. At least we have some manners.

    Reply

    • Posted by Tough Love on July 25, 2012 at 5:18 pm

      I rec’d an Amazon e-mail about a new book titled UNSUSTAINABLE. Sounds like you need to read it. Here’s Amazon’s quicky review:

      “UNSUSTAINABLE is packed with information that is vital to every taxpaying American. It reveals shocking information that has long been hidden from the public. It exposes how governments at every level hide the pay and exorbitant pensions they provide to themselves and use accounting trickery to keep taxpayers from knowing of the enormous costs and long-term liabilities. MacDougald shows how the federal government keeps $106 trillion of debt hidden from taxpayers, and how state and local governments hide another $3 trillion. He exposes exactly how governments often trick taxpayers into agreeing to pay more and more taxes to “save schools” or “provide police protection” when the money really goes to more pay and bigger pensions. UNSUSTAINABLE details how public sector unions have become a “money pump,” taking taxpayer dollars paid to public sector workers, then given as union dues, and then used for political contributions to politicians who will support the extraction of even more taxpayer dollars. The provocative and controversial book also documents and exposes the huge financial catastrophe that is about to befall Social Security, “baby boomers” and our younger workers and how it will threaten our economy for decades. UNSUSTAINABLE addresses the “jobs squeeze,” detailing how the private sector lost 1.5 million jobs in the last decade even as government grew by 2 million. And it reveals how Congress passes laws that they know violate our Constitutional rights and gets away with it. It is a book that all Americans, no matter what their politics, must read.”

      Reply

      • Posted by Anonymous on July 25, 2012 at 5:43 pm

        TL the one thing you are unable to realize is that Politicians have pitted us against one another. That is how they avoid taking the blame and the wrath of he people. They have screwed you and they have screwed me. They have told you that I am the one who has caused the problem, now you blame me. I was paid alot less in my job for 30 years because I was promised job security and great benefits and pension. I was always told that if I worked for the private sector I would have made more money but had less job security and weaker pensions and benefits. I know you do not believe that as the truth in my case.
        Government takes in a lot of money and doesnt use it honestly. If you would have told me 30 years ago when I was 21 years old that I was taking a job that was going to scam the taxpayer and eventually scam me out of what was promised, I would not have taken it for sure. I really never realized it was a scam. And if you and others did years ago why didnt you do something about it? Vote independent because Republicans wont help you either.

        Reply

        • Posted by Tough Love on July 25, 2012 at 5:56 pm

          Of that 30 year career, yes, the 1-st 10 might have been with pay less than your Private Sector counterpart, but certainly not for the last 20 years. With few exceptions (doctors, lawyers, and a few other high level professionals) cash pay alone in gov’t jobs has caught up and in most cases surpassed that of Private Sector workers (all per the US Gov’t BLS).

          That being the case, there is zero justification for a pension likely 2-4 times (6 times if your are a safety worker) greater than your Private Sector counterpart …. and 80-90% of which is not paid for by you, but by taxpayer contributions (and the investment earnings thereon).

          That excess needs to be clawed back.

          Reply

          • Posted by Anonymous on July 25, 2012 at 6:24 pm

            I worked for Department of Developmental Disabilities under Human Services, then we were put under DYFYS which changed to Dept of Children and Families. For the entire time I worked for these departments there was never enough money to go around. They often threatened to layoff and at times they actually did lay people off. They threatened to close my school on several occasions as well over the 30 years. Eventually they stopped serving handicapped children and started dealing with Court Adjudicated and Students at Risk. We went years without raises and usually only a 25 cent an hour raise. Again I know for sure you dont believe me but I got paid substantially less than the exact same job in the private sector. right up until the very end at which point I lost my job. Every situation is different and it can be seen on paper

          • Posted by Tough Love on July 25, 2012 at 9:42 pm

            You said you worked for 30 years. You also said …”30 years ago when I was 21 years old”. So it sounds like you left that job at age 51. It’s not clear if you officially retired or are entitled to a deferred retirement, but certainly with the very generous formula and loose provisions, it’s multiples greater than what that Private Sector counterpart you are complaining about is getting towards his/her retirement.

  8. From the NJ Law Journal:

    A statute that increases pension and health-care contributions for state employees, including judges, violates an age-old constitutional ban on diminishing judicial salaries, a divided state Supreme Court ruled Tuesday.

    The 3-2 court said the 2011 Pension and Health Care Benefits Act strikes at the heart of the principle that sitting judges ought not to have to fear economic retribution for their decision-making.

    “A Court that cannot protect its own independence is not one that can be counted on to protect the fundamental rights of others in challenging times,” Justices Jaynee LaVecchia and Barry Albin and Appellate Division Judge Dorothea Wefing wrote per curiam in DePascale v. New Jersey, A-34-11.

    Justice Anne Patterson dissented, joined by Justice Helen Hoens, saying the law “cannot be viewed as an attack on judicial independence, by intent or in effect,” noting it applies to upward of 500,000 state and local government employees. She also emphasized the narrow definition of “salaries,” which is the term used by the constitutional anti-diminution clause.

    The majority blasted the state’s position that the statute effects a “deduction” from salary rather than a “reduction” in salary, calling the distinction “a magical reformulation” and the loss, “regardless of the wordplay, an unconstitutional diminution.”

    The 1844 constitution — which included a “no-diminution clause” for the first time and was modeled after a similar provision in the U.S. Constitution, art. III, § 1 — was “meant to protect judges from retaliation by the political branches,” the majority said, tracing the desire for an independent judiciary back to the Declaration of Independence and the Federalist Papers.

    The clause carried over to the next and most recent drafting of the state constitution in 1947, and exists today in art. 6, § 6, ¶ 6.

    The replacement of “compensation” with “salary” in the 1947 constitution did not amount to a change in the protections afforded, the majority said, noting that the terms had been used interchangeably and there was no discussion of record at the constitutional convention suggesting that a substantial change was intended.

    The reform legislation, known as Chapter 78, was signed by Gov. Chris Christie on June 28, 2011. It phases in public workers’ contribution increases over seven years. Health-care contributions for judges would be doubled and pension contributions increased fourfold, effectively reducing take-home pay by $17,000 a year, a more than 10 percent hit for most judiciary members.

    Chapter 78 was the first contribution increase passed that wasn’t accompanied or preceded by a judicial salary increase, the majority said, noting that benefits deductions required for the first time in 1982 (3 percent) were offset by $15,000 salary hikes.

    A prior salary increase brought about in 1965 — when a contribution requirement was briefly imposed on judges who had been sitting since before the 1947 constitution — along with increases done in tandem with health- care contributions required in 1996 and 2007, “set the stage for all subsequent contributory requirements for judges,” the court said.

    “Such a concert of action, over so long a period, is not a coincidence,” the justices wrote.

    As for precedents, the court said: “No court of last resort — including the United States Supreme Court — has upheld the constitutionality of legislation of this kind.”

    The justices pointed to U.S. v. Will, 449 U.S. 200 (1980), where the U.S. Supreme Court held that repeals of previously granted cost-of-living increases for judges violated the federal no-diminution clause.

    The majority said federal case law has prohibited salary reductions, with the exception of “non-discriminatory” taxes that all citizens must pay, such as the Medicare tax.

    But Chapter 78 is “an employer-generated reduction in the take-home salaries” rather than “a tax burden that is shared in common with citizens of New Jersey generally,” the majority said.

    The court acknowledged the fiscal issues facing the state, the legislation’s public policy goal and the proponents’ benign motivations, but said any such changes would have to be done within the constitutional framework.

    The majority noted that all members of the judiciary appointed after the law’s enactment are subject to the increased contribution requirements.

    The ruling affirms that of Mercer County Assignment Judge Linda Feinberg, who last October voided the statute’s applicability to judges. The Supreme Court took the appeal directly.

    Patterson said in her dissent that the majority “imposes the burden on the wrong party, citing the State’s purported failure to present dispositive evidence of the Framers’ intent and the absence of federal case law on point … as if it were the State’s burden to justify the constitutionality of Chapter 78,” Patterson wrote.

    Chief Justice Stuart Rabner recused because he lobbied against the legislation in his capacity as head of the judicial branch, leaving the court with the bare quorum of five members.

    Hudson County Superior Court Judge Paul DePascale had sued to challenge the law’s constitutionality.

    His attorney, Justin Walder of Roseland’s Walder, Hayden & Brogan, said in a statement: “Should the people choose to diminish the principle of judicial independence, it is their right to do so. Until that time, however, today’s ruling will continue to protect the Judges and Justices of this State from intimidation, undue influence, or domination so that they can adjudicate each case fairly and independently as the law and fact require.”

    Walder added that the ruling mostly benefits the public, “promotes sound judicial administration” and “helps to ensure that the judiciary attracts and retains the most capable and experienced individuals.”

    The New Jersey State Bar Association was an amicus. In a statement, President Kevin McCann said the case “[o]n its face … was about the paycheck a judge takes home, and the court rightly found that decreasing that amount resulted in a reduction in compensation.”

    “More importantly for the people of New Jersey, however, this case and this decision is about maintaining the integrity of the judiciary and confirming the right of every resident to resolve disputes in an independent court system, where experienced judges apply the law and the facts of the case objectively,” he added.

    The state Attorney General’s Office argued on behalf of the state.

    Christie spokesman Michael Drewniak declines comment.

    Several proposed constitutional amendments were introduced during the past year in anticipation of a ruling against the statute.

    One measure, SCR-110, would preserve the ban on salary decreases “except for deductions from such salaries for contributions, established by law from time to time, for pensions … health benefits, and other, similar benefits.” It won Senate Budget and Appropriations Committee approval last month.

    DID NJ ARGUE THAT SINCE HEALTH BENEFITS ARE INCLUDED AS SALARY, WERE THOSE BENEFITS INCLUDED WHEN THESE JUDGES GOT SALARY INCREASES?

    WORSE IS THE ARGUMENT OF THE JUDGES BEING SUBJECTED TO “RETALIATION” . REALLY SUPREME COURT? HOW ABOUT BEING REWARDED WITH SALARY AND PENSION INCREASES IF THAT SAME COURT VOTES WITH THEIR PEERS, PRESUMABLY AT THIS TIME, WITH THE DEMOCRATS.

    UPSIDE DOWN IS RIGHT SIDE UP IN THIS EFFED UP STATE.

    CAN’T WAIT TO GET OUT.

    Reply

  9. Javagold:

    To re-quote from ZeroHedge article from an ACUTE mind:

    “Reality is not optional” ~Thomas Sowell

    Racist!

    Reply

  10. Sowell is African American with an outstanding intellect. Sowell’s records are public knowledge, unlike our President who won’t release his college transcripts. Funny how Bush’s transcripts found their way into the media, but this President’s college transcripts are “off limits” and no one at MSLSD even attempted to obtains Barack Husain Obama’s transcripts. Why does this happen?

    Poor Sowell, a noted real intellectual is hated by the left, progressive democrats, who have no tolerance for any black man wondering off the plantation, and call him the most despicable names.

    Our President says NOTHING.

    Reply

  11. Posted by Eric on July 26, 2012 at 9:24 am

    John:
    Remaining on topic, I agree, let the judges’ pension go under.
    Eric

    Reply

  12. Posted by not pc on July 26, 2012 at 10:16 am

    Good for the Judges!!!!

    All public employees to benefit next when the ILLEGAL pension/health reform law is overturned!!

    All you whiners get your checkbooks ready to pay for the increase – “There but for the grace of God go you”!!!

    Reply

    • Posted by Javagold on July 26, 2012 at 10:46 am

      yes good for the Judges, its now going to be voted on by the people of NJ……BRAVO !

      Reply

    • Posted by muni-man on July 26, 2012 at 10:55 am

      Good luck with that one – assuming it even gets to the Appellate court they’ll simply toss it because it’s perfectly legal and constitutional to change benefits for publics since you have no contractual protection in NJ under settled law. The UNCOLA is here to stay too, that is until the plans collapse and then you won’t have to worry about that ‘blatant injustice’ anymore either.

      Reply

    • Posted by Tough Love on July 26, 2012 at 11:10 am

      Nice attitude.

      Please check back in say 3-5 years. By then, 50+% of your current or future promised pension should be “history”.

      Reply

  13. So what do you think will really happen when, in 6 years, NJ is required by law to make full ARC payments into the pension fund (around 5 billion or so) every year? Do you think this is actually going to happen, or they’ll come up with some dodge whereby they don’t have to do it? If they really do have to make the full ARC, it seems taxes will have to go way up to fund it. What do you think is going to happen?

    Reply

    • You only need to look at the plan’s history. Here is a spreadsheet on the plan assets from 6/1/2000 to 6/30/2011 taken from the actuarial reports:
      https://burypensions.files.wordpress.com/2012/07/jrs-assets.xls

      It’s not a matter of ‘if’ but ‘when’ and that target date is coming fast.

      Reply

      • Posted by Tough Love on July 26, 2012 at 4:43 pm

        Hi John,

        I unhid columns B-F to see the whole spreadsheet.

        It would be instructive to roll that forward for the remaining years of the 1/7, 2/7, … 7/7 contribution grade-in period to see if/when it will blow up under say 0%, 3%, 6%, and 9% assumed annual returns on Plan assets … and perhaps with and w/o COLA-freeze reversal.

        Reply

        • It wasn’t so much hidden as scrolled all the way right. Projections may be useless since 21% of the money is in alternative investments and after two super-huge earnings years it may be due for an earnings ‘correction.’

          Then you need to figure that maybe $30 million of that money are the members’ own contributions that haven’t yet been returned to them in benefits.

          Without state contributions this plan has maybe 4 years until pay-go and at that time the annual retiree payout should be around $60 million.

          Reply

          • Posted by muni-man on July 26, 2012 at 5:46 pm

            John, are you talking millions or billions? Either way the numbers don’t compute for me. How could say 250,000 retirees be getting a payout of either $38M as listed on the s/s, or $38B, or $3.8B during plan yr. ’11 for example. I’m obviously missing something here. Thanks.

          • The spreadsheet is only for the Judges’ plan so it’s millions. Though it’s representative of the trouble the other plans dependent upon state contributions are in.

          • Posted by Tough Love on July 26, 2012 at 5:50 pm

            I’ve pondered the issue of members’ contributions as part of assets. While it certainly wouldn’t be fair to use the “actives” contributions to pay retirees, I doubt the retirees would see it that way.

            It will become a scramble for the spoils as it spirals toward zero assets.

  14. Posted by Javagold on July 26, 2012 at 6:48 pm

    whats a public taker, with 15 years on the pyramid scam, to do ?????

    Reply

  15. […] Thing is, they're shooting themselves in the feet.  […]

    Reply

  16. Posted by MJ on July 27, 2012 at 6:01 pm

    Unfortunately, the public takers do not understand what it is to have to budget for healthcare, retirement contributions, etc. They don’t understand a free market, economics or competition. Most live paycheck to paycheck under the false belief that they are immune to pay cuts, lay offs, pension reductions, etc. The privates of course will fare much better as we are used to living and working competively in a free market with competition for the goods and services we provide at a decent salary. Mr. Anonymous and his like are only trying to convince themselves that this will go on forever. Surely, he is trying to convince himself not the honest experts on this blog? The publics have negotiated themselves right out of the naturally occuring economic market forces, hence, the fall downward will be much harder to adjust to for the publics. The pensions should be severely reformed once and for all so that publics have time to adjust to the inevitable. Much crueler to keep the publics hanging than for the politicians and unions to man up and do what they know must be done—after they rape the plan for all it worth first of course!

    Reply

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