An Assurance for New Jersey Public Workers on their Pensions

The Christie administration warned potential investors earlier this month that future pension payments — estimated to grow from $1.7 billion next year to about $5.5 billion by 2018 — will drain resources and “create a significant burden on all aspects of the State’s finances.”

“No assurances can be given as to the level of the State’s pension contributions in future fiscal years,” the prospectus reads.

Yet when pension ‘reform’ was passed in 2011 assurances were made and are still being made.

It was further reported today that:

Christie spokesman Colin Reed downplayed the importance of the disclosure, describing it as a legally-cautious approach and not a departure from the administration’s public promises.

“This administration is committed to making the full required payments into the pension system, and our budget priorities reflect that fact,” Reed said. “All risks, even remote risks, have to be disclosed to investors under federal securities laws.”

The 2011 law even includes this paragraph:

One section of the bill provides that each member of the TPAF, JRS, Prison Officers’ Pension Fund, PERS, Consolidated Police and Firemen’s Pension Fund, PFRS, and SPRS will have a contractual right to the annual required contribution made by the employer or by any other public entity.  The contractual right to the annual required contribution means that the employer or other public entity must make the annual required contribution on a timely basis to help ensure that the retirement system is securely funded and that the retirement benefits to which the members are entitled by statute and in consideration for their public service and in compensation for their work will be paid upon retirement.  The failure of the State or any other public employer to make the annually required contribution will be deemed to be an impairment of the contractual right of each employee.  The Superior Court, Law Division will have jurisdiction over any action brought by a member of any system or fund or any board of trustees to enforce the contractual right set forth in this bill.  The State and other public employers will submit to the jurisdiction of the Superior Court, Law Division and will not assert sovereign immunity in such an action.  If a member or board prevails in litigation to enforce the contractual right set forth in this bill, the court may award that party their reasonable attorney’s fees.  That section also provides that the rights reserved to the State in current law to alter, modify, or amend such retirement systems and funds, or to create in any member a right in the corpus or management of a retirement system or pension fund, cannot diminish the contractual right of employees established by this bill.

And if it’s video evidence you need:

.

.

It’s in the law.  Is the state of New Jersey telling bondholders and the SEC, who have the power to cut the credit card and send you to jail respectively, that they will not follow the law if necessary?

Yes, when it comes to keeping their gravy trains fueled the majority of New Jersey politicians will cut any benefit (other than their own), rewrite (i.e. break) any law, and shun any moral obligation.  Public workers have that assurance.

31 responses to this post.

  1. Posted by Al Moncrief on May 15, 2013 at 12:25 pm

    Shunning moral obligations?

    ARGENTINE AND COLORADO PENSION PIRACY . . . MORALLY EQUIVALENT?

    In 2008, the Argentine Legislature passed a bill taking $25 billion in pension assets in which millions of Argentines held a property interest. This taking bolstered the Argentina’s financial condition.

    In 2010, the Colorado Legislature passed a bill abrogating the contractual obligation of Colorado PERA employers to pay approximately one-third of a PERA member’s accrued PERA pension benefits. Thousands of Colorado pensioners hold a property interest in this PERA contracted annuity. This taking bolstered Colorado’s financial condition.

    Which government has the greater respect for property rights? How is Colorado’s taking of pension property rights not the moral equivalent of Argentina’s taking of pension property rights?

    http://truth-out.org/news/item/13498-pensions-a-promise-is-a-promise-unless-its-inconvenient

    From the organization “Friends of PERA”:

    “There is a misconception that the ‘taxpayers’ are owners of the (PERA pension) fund; the trust fund is owned by the beneficiaries of the fund . . .”

    http://www.friendsofpera.com/facts/index.html

    These two instances, in which pension contracts were breached by a legislative body (the Argentine National Congress and the Colorado General Assembly), are not factually identical, but they are quite similar. In both cases pension contracts were violated to make additional funds available to a government for that government’s discretionary expenditures, and to curry political favor.

    If contracts are meaningless in the United States, if U.S. state and local governments are permitted to take accrued pension benefits with impunity, the moral standing of our nation is diminished. We will find ourselves on the same moral plane with governments that brush aside the rule of law. How exceptional will we find a United States that takes, by force, property earned by its citizens over decades? Does the theft of contracted pension benefits not somewhat diminish the luster of that “shining city upon a hill”?

    The Wall Street Journal on the Argentine pension taking:

    “‘With the [latest, Argentine] announcement, the custom of violating the rules of the game has been repeated, which deepens the lack of confidence,’ political analyst Rosendo Fraga wrote in the Buenos Aires daily La Nacion.”

    http://online.wsj.com/article/SB122460155879054331.html

    Professor Secunda of Marquette University on U.S. state government takings of accrued pension benefits:

    “What the states are trying to do is change the rules in the middle of the game.”
    http://truth-out.org/news/item/13498-pensions-a-promise-is-a-promise-unless-its-inconvenient

    Colorado Supreme Court in Bills:

    “Whether it be in the field of sports or in the halls of the legislature it is not consonant with American traditions of fairness and justice to change the ground rules in the middle of the game.”

    Wall Street Journal:

    “Buenos Aires economist Aldo Abram, among many other economists, wasn’t buying that argument. ‘They were in a tight situation and this was an accessible source of funds,’ he said.”

    “Opposition leader Elisa Carrió vowed to contest it, saying, ‘The government measures aren’t designed to better the retirement system but rather to plunder the funds of the retirees.'”

    Washington Post:

    “The proposal by (Argentine) President Cristina Fernández de Kirchner last month to nationalize about $25 billion in private pension funds provoked an outburst of criticism that the government was seizing retirement savings for cash to shore up its finances.”

    “‘The announced nationalization-expropriation of the Argentine pension funds constitutes one of the most blatant acts of financial piracy in the country’s recent history,’ wrote Claudio Loser, senior fellow at the Inter-American Dialogue, in the Latin American Advisor newsletter.”

    “Sen. Ernesto Sanz of Mendoza, who opposed the nationalization, said: ‘We don’t have any doubt that this is violating the right to private property. Not just for us, but for all society and the world. This is clearly confiscation.'”

    http://articles.washingtonpost.com/2008-11-21/world/36794754_1_pension-system-pension-funds-private-pension

    Colorado Court of Appeals on PERA pensioner property rights:

    “See Lynch v. United States, 292 U.S. 571, 579 (1934) (contract rights can constitute property interests protected by the Takings Clause) . . . In light of our conclusion that the court erred in that regard, we also reverse the summary judgment on the Takings Clause claim.”

    http://saveperacola.files.wordpress.com/2010/01/2012-10-11-judgment-reversed-and-case.pdf

    New York Times:

    “The (Argentine) measure . . . was criticized by political opponents and analysts as a move to shore up government coffers to try to head off a fiscal crisis in 2009 . . .”

    “The announcement . . . led analysts to question whether the nationalization, which is subject to approval by the Argentine Legislature, puts property rights at risk and threatens the rule of law in the country.”

    “It may be the first time a Latin American government has expropriated cash.”

    Argentina’s President, Mrs. Kirchner: ” . . . we are protecting our retirees and our workers.”

    “She dismissed criticism that the move was simply a grab for cash . . .”

    “The opposition leader Elisa Carrio . . . told radio Mitre on Tuesday that the government was trying to ‘loot the funds of retirees.'”

    “By taking over the pension funds the government can continue to spend on programs that help it retain political support.”

    “If the move is approved, her government may have secured an important electoral asset, which could help guarantee Mrs. Kirchner’s political survival.”

    http://www.nytimes.com/2008/10/22/business/worldbusiness/22argentina.html

    Lebanon, Pennsylvania Daily News Editorial:

    “The reasons for the pirating of deposits or the nationalization of pensions don’t matter nearly as much as the demonstrated willingness of government to treat money – privately held money, money earned by individuals – as a state resource, as needed.”

    “And we have to wonder, again, who might be paying attention in this country (the USA); how good are our protections against such a thing. Forget lip service and what anyone may claim ‘could never happen.'”

    (My comment: As we have seen, it not only can happen, it is happening . . . in Colorado.)

    “How good are our protections? How strong are the underpinnings of our individual rights against such demonstrable government-first thinking?”

    http://www.ldnews.com/editorial/ci_22872828/argentina-private-pension-holders-well-just-take-that

    The Colorado Legislator’s Oath of Office: “I do solemnly swear by the everliving God, that I will support the Constitution of the United States and of the State of Colorado . . .”

    The Colorado Constitution: “No ex post facto law, nor law impairing the obligation of contracts, or retrospective in its operation . . . shall be passed by the general assembly.”

    Support contractual public pension rights and the rule of law in the United States. Contribute at saveperacola.com. “Friend” Save Pera Cola on Facebook.

    Reply

  2. Posted by Tough Love on May 15, 2013 at 12:41 pm

    Notwithstanding the fact that the HIGHER ($5.5 Billion figure) figure is the full ARC, considering the steep 7-year grade-in to that figure, and the tenuous condition of NJ’s economy, it would be irresponsible, and likely a violation of NJ’s agreement with the SEC if it did NOT included such a statement in a prospectus to potential investors.

    Besides, all it’s saying is that “No assurances can be given ….”. Any investor who thought otherwise is an idiot.

    And as far as the … “administration’s public promises” …… anyone who believes that, is ALSO an idiot.

    Reply

    • Posted by Anonymous on May 15, 2013 at 1:25 pm

      Al always fails to mention how ridiculous these pension promises were/are and that although non-publics and current non public retirees have to roll with the punches of low interest returns etc etc that somehow there is a moral contract to keep paying these so called promised pensions. That is the immorality of it all but there is no honor among thrives political or otherwise.

      Reply

      • Posted by Anonymous on May 15, 2013 at 1:26 pm

        Oops. Meant thieves!

        Reply

      • Posted by Tough Love on May 15, 2013 at 2:57 pm

        Al likes to stomp his feet and yell … but I was promised. I can picture an old man having a child-like tandrum.

        But he never mentions that those EXCESSIVE promises were made by colluding parties, one of which most certainly had a primary obligation to look out for Taxpayer interests, but instead betrayed them.

        Reply

        • Posted by Al Moncrief on May 16, 2013 at 2:06 pm

          Come now TL, there is no “foot-stomping” happening here. Simply advocacy on behalf of a group you would like to steal from. You live under the protections of the U.S. Constitution. One provision of the U.S. Constitution protects your right to propose that money be taken from elderly pensioners to keep your taxes low. It’s ironic that another provision of that same U.S. Constitution protects the contractual right to earned compensation for the pensioner’s labor.

          TL, we have been over this “collusion” argument of yours many times. In Colorado, public pension enhancements were enacted by a Republican Governor and a Republican Legislature. They were not trying to do favors for public sector unions. They were encouraging early retirement to shift labor costs from state and local governments to the Colorado PERA pension system.

          Thank you ascribing youthful characteristics to me with your comment of “child-like.” I feel energized!

          Reply

          • Posted by Tough Love on May 16, 2013 at 11:18 pm

            Quoting …”In Colorado, public pension enhancements were enacted by a Republican Governor and a Republican Legislature. They were not trying to do favors for public sector unions. They were encouraging early retirement to shift labor costs from state and local governments to the Colorado PERA pension system. ”

            Pensions enhancement are debt assign to taxpayers. I call that a theft of Taxpayer wealth. Why is it Ok (with you) for such theft of OUR wealth while you so righteously protest when we simply want to reverse that theft (via for example the COLA freeze) ?

    • Posted by muni-man on May 16, 2013 at 2:46 pm

      Publics continue to live in their employment cocoons and still firmly believe it’s entirely possible to pick up a piece of crap by the clean end. The NJ underfunding is good and is simply the price publics pay for the unaffordable benefits they glommed from TP’s in the first place via collective gouging and collusion. Think of underfunding as NJ’s low-key way of ‘encouraging’ the conversion to a DC-system at an opportune political time before the decade’s out. It’s coming. Big public benefit clawbacks will become routine in the months to come, like Chicago just did with retiree healthcare. It’s really not that hard to do when there’s no $’s left. Perilous times ahead for publics.

      Reply

  3. Posted by MJ on May 15, 2013 at 6:15 pm

    No he doesn’t mention the excessiveness now does he? Excessive, that’s a real understatement. Collusion, outlandish, unrealistic promises in exchange for votes, lying, greed, wasting our hard earned tax dollars, spending like drunken sailors, no accountability at all—-That’s the real immorality but in the sordid minds of public workers, they were promised, they are entitled, they have a contract. Al never talks about that immorality. Only his ramblings about CO pension contracts shine through and his contract law rants. Funny that you think him old, I think he is one of those 58 year old “retirees” who is now fearful that he might live to be 95 with a very reduced pension.

    Reply

    • Posted by Tough Love on May 15, 2013 at 6:28 pm

      I just saw a report that said the INCREMNETAL healthcare costs of retiring at age 55 vs 65 is $226K per person ($452K for a Couple) … which for PUBLIC Sector workers is often courtesy of the Taxpayers along with that very early full (unreduced) pension.

      It’s WAY past time to change this, and for CURRENT, not just new workers.

      Reply

  4. Posted by Javagold on May 15, 2013 at 10:21 pm

    They all deserve what is coming.

    Reply

    • Posted by Anonymous on May 15, 2013 at 11:04 pm

      And so do you, if you and others elect Christie president. Do you think he will honor the “promise” of social security and medicare?

      Reply

      • Posted by Tough Love on May 16, 2013 at 12:01 am

        Whether we like it or not Medicare (as currently structured) is unsustainable. The options to fix SS are MUCH simpler.

        So shall we do nothing and just put our heads in the sand ?

        Reply

    • Posted by Al Moncrief on May 16, 2013 at 2:09 pm

      Agreed Java, contracts will be honored in the United States. The contracts of public sector workers are not inferior to corporate contracts in the U.S. Thank God we live in a country where the rule of law will prevail!

      Reply

      • Posted by Tough Love on May 16, 2013 at 3:57 pm

        Al, That’s funny, Do you realize that Java doesn’t support YOUR position AT ALL ?

        Reply

        • Posted by Anonymous on May 16, 2013 at 8:18 pm

          Al, contracts will be honored but at .50 on the dollar depending on the plan. I know it is hard to accept reality but there simply isn’t anything left and b/c the taxpayers have been gouged to the limit tax increases to pay for public retirement is laughable. Read what John wrote. Pensioners can be assured that the gravy train will end !

          Reply

          • Posted by Al Moncrief on May 16, 2013 at 8:38 pm

            Hi Anon, I think that there will be few examples of municipalities in the U.S. that able to reduce their public pension obligations through Chapter 9, perhaps 10-20 of the thousands of cities and towns in the nation, i.e., a tiny fraction of one percent. If you believe that taxpayers are gouged providing the 2-3 percent of all state and local government expenditures in the U.S. to support public pensions, then you should support legal, prospective public pension reform. Note that public pension unfunded liabilities are a contractual obligation of public sector plan sponsors, and accordingly all of us (including you Anon) will help plan sponsors meet these obligations with our tax contributions. Here’s to the U.S. Constitution!

          • Posted by Tough Love on May 16, 2013 at 8:56 pm

            Now now AL, stop lying … you know that while the % of total expenditures needed to support pensions is numerically small at the State level, it is multiples higher at the local level, increasingly approaching 25% of entire local budgets.

            And, it’s only such a small % at the State level because of the many very large expenses that come out of State budget (e.g., Medicare, education, etc.).

        • Posted by Al Moncrief on May 16, 2013 at 8:28 pm

          Yes TL, I was messing with him. Al

          Reply

          • Posted by Anonymous on May 16, 2013 at 9:18 pm

            Al. I do support reform for past, current and future. Its not about bankruptcy its about reforming now so that there is revenue for needed services. No matter how you want to spin it, it’s nothing but a shell game. No need to reply or retort as I glean from your rumblings that you think otherwise and are expecting yours no matter what. Good luck

          • Posted by Al Moncrief on May 16, 2013 at 11:01 pm

            Good luck to you as well Anon. I hope that the contracts you choose to enter in your life are honored by all parties involved. I hope your mortgage company does not decide to retroactively and unilaterally raise your mortgage interest rate. If any person or government fails to perform according to the terms of a contract to which you are a party (that is tries to steal money from your pocket) I hope you will defend your constitutional rights vigorously! Be wary Anon, there are many you would happily take your property through deceit, comments made on this blog provide much evidence of this fact.

      • Posted by briandin on May 21, 2013 at 7:45 pm

        And of course, “private sector contract” obligations ARE DISCHARGEABLE IN BANKRUPTCY!. Which part of this do the public sector leaches not understand when describing the so-called sanctity of contracts in the USA.

        Reply

  5. Posted by Anonymous on May 17, 2013 at 12:11 pm

    The contracts that I choose to enter into are just that–voluntary. I choose to enter into them voluntarily. I read the fine print, consider all of the options, consider long term and short term consequences and then make the best informed decision that I can. We as taxpayers were bamboozled into these excessive and ridiculous pensions–in NJ the debt should be repudiated as taxpayers should have had the legal right to vote on spending but did not through the lies and deceit of the politicians and unions. You still fail to talk about the excessiveness of these pensions and benefits in comparison to comparable private sector workers and I’m sure I know why—how could anyone other someone so entitled possible defend running their private counterparts and future generations into the ground as long as you get yours.

    BTW–I don’t need luck as I have been responsibly and realistically preparing for my own retirement not planning on sucking off of my employer and neighbors for 30 years of retirement when I only worked 25 while expecting them to pay for their own. And make no doubt, if the government tried to impinge upon my constitutional rights, I will defend myself.

    Reply

    • Posted by Al Moncrief on May 19, 2013 at 2:32 pm

      Anon, public pensions in the USA consume 2-3 percent of all public sector expenditures. Public entities are hardly being run into the ground. Since you so scrupulously review contracts you enter, I am confident that, if you were a party to a public pension contract, you would defend your contractual rights. Your position is that, if one does not like the terms of a contract to which one is a party, one should have the ability to renege on that contract. You would feel more comfortable with this position if you moved to a Banana Republic.

      The comparability of public sector and private sector compensation may have relevance in the negotiation of future public pension contracts. Under the US Constitution, existing contracts cannot be impaired, in spite of the desire of many to take money from old people. If you find the US Constitution inconvenient, move to a country where anarchy prevails.

      Reply

      • Posted by Tough Love on May 19, 2013 at 5:45 pm

        Lying again AL?

        I guess I’ll rep[eat my above comment. IF you disagree. say so. Here it is:
        ****************************************************************************
        Now now AL, stop lying … you know that while the % of total expenditures needed to support pensions is numerically small at the State level, it is multiples higher at the local level, increasingly approaching 25% of entire local budgets.

        And, it’s only such a small % at the State level because of the many very large expenses that come out of State budget (e.g., Medicare, education, etc.).

        Reply

      • Posted by Anonymous on May 20, 2013 at 10:50 am

        Anarchy already prevails here hence the burdensome debt, taxes, corruption , lies and greed. If politicians had been serving taxpayers and following their state constitutions we would not have these problems. Lots more anarchy to come as publics scramble for what might be left after the Officials make sure they get theirs first.

        Reply

        • Posted by Tough Love on May 20, 2013 at 10:56 pm

          At some point I see the younger lower service “actives” finally standing up to the “senior” Union guys (those already and soon to be retired), realizing that all their pension contributions are simply going “out the door” to pay the FULL benefits of a seriously underfunded Plan, leaving little left for THEM.

          The fun begins when they wake up and demand that THEIR contributions be held in trust only for THEM and tell the retiree that they’re on their own..

          Reply

  6. […] Making pensions a contractual obligation […]

    Reply

  7. […] Making pensions a contractual obligation […]

    Reply

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: