Judge These Numbers

Three judges in New Jersey don’t believe that they should be paying more to fund their pensions since that would be an improper diminution of their salaries* which the state constitution bars so as to shield judges from legislative reprisal for unpopular opinions.

How will this play out for the Judicial Retirement System?  I believe that this spreadsheet created from valuation reports going back to 2001 says it all:

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Back in 2000 the JRS was paying out $22 million to retirees from a trust that had $420 million – 5.2%.  These days the payouts are at $45 million and the trust might have $250 million left – 18%.

Without substantial changes to the benefits of sitting judges combined with another black plague that hist only retired judges that payout figure will climb.  With0ut significant state contributions (unlikely now that Christie and Sweeney are miffed) the earnings can’t possibly keep up especially with a declining asset base.

Other notes from the spreadsheet (not all readily explainable):

  1. Before 2006 premiums for Non-Contributory Group Insurance came directly out of the fund.  Subsequently the state reimbursed the trust.
  2. With this asset mix there have been substantial earnings ‘corrections’ in 2001, 2002, and 2008.  With 21% of the trust in alternative investments we may be due for another one.
  3. It looks like New Jersey went through the ARC phase-in route before as, coming out of the dark days of the Whitman contribution holidays,  2003 through 2007 saw 1/5th step adjustments which held for 2008 before the next holiday season.
  4. Judges contributions seem to have actually declined in the early 2000’s.  No word on whether this was due to some string of favorable rulings.
  5. Administrative expenses in 2000 with a $420 million trust were $33,078.  Beginning in 2004 they ranged from $157,524 to $212,923.
  6. Going from 3% to 12% employee contributions might be a huge take-home-pay cut but the extra $6 million would hardly make up the hundreds of millions of dollars the state is withholding when it periodically redefines the ARC by dividing it by an arbitrary number.

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* Odd that there’s nothing in the constitution about precluding salary augmentation for judges who make favorable decisions.  Judge Hurd might be in line for a raise.

20 responses to this post.

  1. Posted by Javagold on July 27, 2012 at 12:11 pm

    watch all the public takers fight for the chairs as the music starts to slow down and STOP !!!!…….it will be every man for himself …….dont want to miss it, pass the popcorn !

    PS whats up with the moderation on union watchdog website, you dont want people posting any more ?????

    Reply

    • It’s always been moderated as all comments have to be approved. I approve all mine but I’ve stopped approving comments on Tina’s posts (like I used to do until a few months ago) and she doesn’t appear to go on the site as often as I do.

      Reply

  2. Posted by Tough Love on July 27, 2012 at 12:28 pm

    The judges likely just shrug at the precarious position of their Plan’s financials, knowing it’s REAL unlikely that their payments will stop even if the fund goes to zero.

    Now THAT”S an opportunity … for taxpayers and politicians with some guts. Tell the judges that general revenue will NOT be used when the funds run dry ….. and that the paychecks will simply stop.

    And that the same practice will apply to ALL of NJ’s pension Plans.
    ***********************************************************************
    By-the-way, whats the legal stance in NJ re Plans that run dry ? Can we just stop paying ? If so, that’s a BIG incentive for compromise.

    Reply

  3. Posted by Eric on July 27, 2012 at 5:20 pm

    John:
    I vote that the judges’ pension should go “Prichard” and agree with Tough Love to stop the checks altogether. Somewhere I read about a possible compromise pertaining to the average salary for the given state and that no pension could exceed 150% of that figure. For example, if a state has an average salary of its working population of $40.000.00 per year, the maximum pension for a state employee of that state would be $60,000.00. Public employees would therefore be in a tough position to argue that the pension is too small if it is 50% more than what the average working stiff is bringing home.
    I am sure that the judges would love that.
    Eric

    Reply

    • Posted by Tough Love on July 27, 2012 at 6:04 pm

      Actually Eric, I’m simply looking to pay ALL Civil Servants “Total Compensation” (cash pay + pensions + benefits) equal to but not better than their Private Sector counterparts.

      With cash pay in the Public and Private sectors being very close (per the US Gov’t BLS), this means that pensions and benefits should not be greater in the Public Sector …. but they are by a factor of 2-4 times (5-6x for safety workers).

      Therefore Public Sector pensions need to AT LEAST be halved (and most cases be reduced by much more). Now realistically, reducing pensions for already accrued PAST service is a tough nut, so ….. subject to taxpayers not going broke by the need for MORE cuts …. I would simply like to see this 50+% reduction in the pension accrual rate for FUTURE service for CURRENT workers implemented immediately …… simply on the basis that (a) it’s eminently FAIR, and (b) we MUST stop digging the financial hole we are in even deeper, and ever day CURRENT workers continue to accrue pension benefits that are unsustainable, and far more than necessary to attract and retain a qualified workforce. And … retiree healthcare benefits must end (Private Sector workers do not get these any longer …. and Taxpayers should not pay for theirs)

      At to be blunt …. I don’t give a crap what Public Sector workers were “promised”, those “promises” having been made by politicians beholden the Public Sector Unions after accepting their campaign contributions and election support.

      Reply

      • Posted by not pc on July 28, 2012 at 1:25 am

        “I’m simply looking to pay ALL Civil Servants “Total Compensation” (cash pay + pensions + benefits) equal to but not better than their Private Sector counterparts…..pensions and benefits should not be greater in the Public Sector” –

        What’s the matter……mad because someone is getting more than you because you were too stupid to get a secure gov’t. job with benefits. Something tells me (with all the time you apparently have to post your idiotic rants) that you at some point lost your job or were demoted/downsized making you now VERY bitter towards anyone who has it better than you due to wiser career choices/.

        Oh….and by the way….you keep blabbing about somehow “equalizing” public workers with private workers. Why then do you not ever factor in that the majority of public employees DON’T GET SOCIAL SECURITY nor do they get DISABILITY??? Something you conveniently always leave out of your moronic rants.

        Reply

        • Posted by Tough Love on July 28, 2012 at 10:34 am

          Most Public Sector workers (those making say $50k or more) who do not get SS benefit by not being in SS because it’s a “good deal” only for the lowest paid …… a VERY poor return on the funds contributed ….. as long as you invested what you otherwise would have paid into SS.

          So you (as a Civil Servant) do believe you are entitled to more than you counterparts ….. you offered no response to my assertion that you are paid more, other than some childlike insults.

          What are you going to do when the Plans fail ?

          Reply

          • Posted by not pc on July 28, 2012 at 3:38 pm

            You mean the plans that all NJ politicians are part of?? The plan that they rely on to scam (double pensions, etc. – still not changed) and further line their pockets?? That plan will fail??? Hahaha……Now’s who is being naive??

  4. Posted by Eric on July 27, 2012 at 6:20 pm

    Tough Love:
    When you say that retiree healthcare benefits must end,does that include those already retired or is it just for those who are still active in the system? I needed clarification on this if it is a separate argument from the pension argument of leaving retirees alone.
    Thanks,
    Eric

    Reply

    • Posted by Tough Love on July 27, 2012 at 7:00 pm

      Blanket answers are clearly difficult. E.g., Even if “fair” vs the Private Sector worker, do we really want to eliminate all retiree healthcare subsidy from a lower-pension not-yet Medicare eligible retiree ? Of course not.

      But for those on Medicare, and for pre-Medicare retirees with substantive pensions … yes.

      Here is a concrete proposal:

      Over the next 5 years grade into the following: a 50% subsidy towards the cost of a modest (not Cadillac) Healthcare Plan for those with 35 years of FULL-TIME service (excluding “air-time” purchases), with proportionately less subsidy for less service.

      Many Public Sector workers would call this “draconian”, but that doesn’t concern me, as most Private Sector workers get a lot less, if anything. With earning no less in cash pay (than their Private Sector counterparts), there is simply no need nor justification for more.

      Reply

  5. Posted by speedkillsu@yahoo.com on July 28, 2012 at 1:48 pm

    Interesting piece on this mess ..In a letter to the Treasury Department sent this morning, Thompson noted that given that the Court ruled that Judges’ “salary” includes their pensions and health care, the men and women in black have been under contributing to those funds since 1982.

    Thompson wrote:

    In order to justify the ruling in Depascale v. State of New Jersey, the NJ Supreme Court had to first establish that salary encompasses not only wages but also benefits, specifically pension and healthcare. Their opinion goes to great length in an attempt to establish this as fact, leading ultimately to their conclusion, salary does indeed, encompass pension and healthcare. They also state unequivocally, the statutes covering pension and healthcare benefits in existence prior to enactment of Chapter 78 are constitutional.

    Those statutes specified members of the Judicial Retirement System shall contribute 3% of their salary towards their pension and 1.5% of their salary towards their healthcare costs. These contributions were always calculated on the assumption that salary was only wages. Based upon the Supreme Courts’ ruling, this assumption was erroneous which leads to the conclusion all members of the judiciary have contributed less than the statutorily required amount since 1982 when the JRS Act was amended by N.J.S.A. 43:6A-34.1(b) and when healthcare contributions were mandated by L. 2007, c.103 S 22.

    In accordance with the Supreme Courts’ definition, members should have been contributing initially 3% and subsequently 4.5% not only of their wages but also similar percentages of the increased value of their pensions with each additional year of service. Considering the amount judicial pensions increase with each added year of service, obviously these underpayments were significant and collecting these funds would assist in addressing the $270 million unfunded liability in the JRS….http://www.moremonmouthmusings.net/2012/07/27/crafty-senator-sam-thompson-wants-treasury-to-collect-judges-unpaid-contributions-to-pension-and-health-benefit-funds/

    Reply

  6. Posted by Anonymous on July 28, 2012 at 3:42 pm

    You foolish people will never realize that the judges will make the decisions, not you. They will do whatever it takes and you cant stop them. FOOLS

    Reply

    • Posted by Tough Love on July 28, 2012 at 6:54 pm

      Assuredly, this Nov. there will be a ballet amendment OVERWHELMINGLY approved by voters to amend the NJ Constitution to allow increasing the Judges healthcare premiums and pension premiums.

      Reply

  7. Posted by Eric on July 28, 2012 at 4:06 pm

    Anonymous:
    They will certainly be stopped by economics when a six figure pension will only buy a stick of chewing gum since it is paid out in good old depreciated US dollars!
    Look to Weimar, as a dress rehearsal, where all of the German marks in the entire country did not have enough purchasing power to buy a newspaper. FOOL.
    Eric

    Reply

    • Posted by Anonymous on July 28, 2012 at 4:31 pm

      They will only stop once you are bled dry and there is more money to steal. They will bury you all, you fools.

      Reply

  8. Posted by Eric on July 28, 2012 at 5:12 pm

    Anonymous:
    Are you a judge? Remember, paper dollars are only cotton. They have not been backed by gold since1971. In my travels, many people have thrown my paper dollars down onto the street in disgust, depending upon the country. Soon Americans will likewise throw the paper dollars onto the street as well.
    Eric

    Reply

    • Posted by TREEeditor2 on August 1, 2012 at 6:44 pm

      hey eric, all i need is for every american just to throw one dollar down on the street for me to pick up..i’ll be satisfied.

      Reply

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