Frightening Census of New Jersey Teacher Pensions

Our government loves numbers possibly because they (and those they are provided to) can be so easily manipulated.

Recently a friend got from the US Census website data going back to 1957 on public plans in New York and, for my benefit, New Jersey teachers that he put into a daunting spreadsheet from which I culled the important bits and added some pertinent columns to arrive at this spreadsheet which includes two of the scariest numbers (0.72% and 12.36%) and imparts a vital lesson (there was a time when our government had integrity).

0.72% is what the New Jersey government contribution in relation to trust assets for the year ended June 30, 2011 was and is the best barometer of how serious they are about funding their promises.  Historically the employees themselves have been contributing about 2% while the state had been contributing about 5% until the Florio gimmicks took hold in 1994 and the government contributions have never approached their pre-Florio days, even disappearing for a time.  There was a blip in 1997 when it got to 10% but that was due entirely to a $1.7 billion infusion of Pension Obligation Bonds.

12.36% is what retirees are being paid out annually as a percentage of trust assets which is double what the percentage was prior to 2001 when it began a steady ascent.

There are a million other numbers out there but many are there to deflect, distract, and defuse where possible.  If you are a New Jersey teacher counting on a secure pension the numbers to focus on are 3% in (and steady) and 12% out (and rising).  Add it up for yourself and it does not come out to a promise being kept.

18 responses to this post.

  1. Posted by Anonymous on November 8, 2013 at 12:59 pm

    I dont see any problem at all. Chris Christie says the feds should use NJ as an example for government that works. Chris is telling the truth isnt he? The people believe him and trust him!


    • Posted by Tough Love on November 8, 2013 at 1:28 pm

      The “truth” that Gov. Christie has addressed (granted, only marginally so far), is that NJ Public Sector Pensions promises are too generous and must be reduced for CUIRRENT workers. MUCH more is clearly needed. “Funding” FOLLOWS “generosity”. We must fix the excessive “generositry” problem first.

      Thank goodness that the in-the-Union’s-pocket Barbara Buono (who would have handed ALL of the Taxpayers’ money to the Public Sector workers) was trounced in the election.

      The voters have wised up Barbara …… your ship has sailed.


  2. Posted by Tough Love on November 8, 2013 at 1:19 pm


    Unless there was a mistake in prior year data (or a huge number of MUCH-shorter-than-typical-service employees retired in 2007), the drop in the Benefit Payout starting in 2007 (in EXCEL Cell F13) seems unreasonable. This is the source of the big drop in average annual payout in 2007..

    What happened?


    • That may be the next blog. Here are the asset reconciliations from the Milliman valuations from 6/30/99 to 6/30/12 that are on the NJ website:
      The blip in the spreadsheet taken from US Census data is a decrease in payouts from $2,812,073 to $2,476,690 between 2006 and 2007 which throws the averages off. It looks like they stopped reporting Post Retirement Medical as part of the payouts in 2007 but if so you would expect the government contributions number to go down also but instead it went way up in 2007 and 2008. The asset value as of 6/30/07 also took a big jump to $33 million before plummeting. However the oddest thing may be that the market value of assets as of 6/30/2000 was reported in the Milliman report to be around $36 million, far above the $25 million the census picked up – not what you would call a rounding error.

      The next blog may be either on Detroit or a similar spreadsheet using Milliman actuarial report numbers.


  3. Posted by brooklyn91941 on November 8, 2013 at 1:23 pm

    It seems nobody is paying attention to this. Christie doesn’t mention the under funded plans and the public is too stupid, The day of reckoning is coming, and not only to New Jersey. Pay heed to what’s happening in Detroit!


    • Posted by Tough Love on November 8, 2013 at 1:35 pm

      You’re correct, as it’s unavoidable.

      But hopefully that “reckoning” will NOT be in the form of massive tax increases (as the Public Sector Unions would like to see), but in the form of very material reductions in the promised pensions & benefits of all CURRENT workers (ROUTINELY multiples greater than what comparable Private Sector Taxpayers get from their employers).

      It’s called “fairness”.


  4. Posted by Javagold on November 8, 2013 at 1:40 pm

    3-12+3-12+3-12+3-12+3-12+3-12+3-12+3-12+3-12+3-12+3-12+3-12 = 0


  5. Posted by Anonymous on November 8, 2013 at 4:02 pm

    Free Health Insurance Benefits are only in effect until the retiree reaches 65, at that point Medicare becomes the primary. People on this site often spread the falsehood that the Health Insurance Benefits are free for life. They also state every employee receivves them. Only employees with 25 years of service have received them in the past and in the future, I dont believe that even with 25 years, free benefits will be given anymore.


    • Posted by bpaterson on November 8, 2013 at 4:38 pm

      anon, the question is who pays for the medicare then? If its the recipient/teacher then you are right that they don’t get free health benefits for life. Anyone confirm either claim?

      also if JB1 is correct in all his numbers over the years, and I have no reason to doubt him cause I know him, why aren’t the teachers and the union raising holy heck? Sure they may have sued back in 97-98, but then then folded like sheep. Something is up about all these years of no peep. Maybe the union knows something the public doesn’t like the state would be mandated to sell of assets such as parks, turnpikes and other publicly owned institutions and assets.


  6. Posted by Anonymous on November 8, 2013 at 5:15 pm

    I believe the unions are out for themselves just like politicians.


  7. Posted by MJ on November 8, 2013 at 6:14 pm

    Beg to differ but the health benefits are free even after age 65. True the pensioner must go on Medicare but they still receive the public sector health benefits for free as their supplemental policy. As far as the pensions, they are still being paid aren’t they? Christie is the least of the 2 evils. Running for president? What a joke!


    • Posted by Tough Love on November 8, 2013 at 7:26 pm

      Question, Ok, so the Medicare Supplement policy is free.

      Do NJ’s Retirees also get reimbursed for the Medicare Part B premiums?

      Anyone know ?


      • Posted by Anonymous on November 8, 2013 at 8:01 pm

        Not sure about part B but spouses get to stay on the supplemental plan too! Must be so nice not to have to worry about health insurance. I might have to go public!


      • Posted by Anonymous on November 9, 2013 at 6:22 pm

        It never fails to amaze me how people will ask the question does anyone know and then put full stock in any answer that is given. Why not do the research yourself and find out the facts. Too lazy I guess


        • Posted by Tough Love on November 9, 2013 at 8:23 pm

          And why do you find so important that you pont out who is lazy?


        • Anon–in the time it took you to type your critical response, you could have researched the answer yourself and then joined a productive conversation and enlightened us on the matter.


    • Posted by Anonymous on November 9, 2013 at 6:20 pm

      Christie will win unfortunately


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