Pension Aspect of Bridgegate Scandal

The Christie Bridgegate scandal is fascinating for not only revealing the indifference the political class really has for the general public but, in this case, how certain operatives would actively work to damage a segment of that public to whatever degree as long as some level of political gain could be expected.

Obamacare was not intended to be a fiasco.  It was intended to enrich insurance and pharmaceutical companies who would kick back campaign contributions with their excess profits.  The Obama administration did not set out to inconvenience/oppress the public however inevitable that outcome would be considering the level of ignorance/bias the drafters possessed.  The reprisals against the other Hudson County mayor on the Christie enemies list are more in keeping with this nature of governmental dysfunction and they involve pensions.

Some employees of Jersey City have their own pension plan separate from the New Jersey state plans and the Jersey City Employees Retirement System (JCERS) is severely underfunded.  According to a Fiscal Estimate on Senate bill S3096 that will be passed on Monday:

As of the 2012 actuarial evaluation of the JCERS, that was conducted by Aon Hewitt an actuarial consulting firm that also contracts with the State, the net pension obligation of the JCERS was approximately $185 million.  The actuarial value of plan assets was $77.6 million and the unfunded actuarial accrued liability was estimated to be approximately $107 million, rendering a funded level of 41.9 percent.

So will S3096 resuscitate this zombie plan?  No, and that was never the intention which was to allow Jersey City taxpayers/politicians to pony up between $12 and $20 million less over the next 8 years by making reforms similar to what the state plans did in 2011.  However, a Christie-Crat had an idea:

Sweeney has scheduled a hearing on a bill, but with an amendment. Under the new version, all the money Jersey City saves from reducing certain expenses would go back into the city’s underfunded pension system – not its general budget.

“This pension is the unhealthiest in the state,” Sweeney said. “I can’t see taking money away from the pension, or away from the retirees, and then putting it in the budget. That’s not right.”

Presumably then there will be two valuations performed each year under both the pre- and post-law reforms with the JCERS contribution determined assuming there were no changes and the second valuation taking into account the changes.  However when New Jersey with their own pathetically funded plans passed their ‘reforms’ the Senate president believed the problem was fixed without the need to funnel any savings back into the state plans:
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No one is accusing these politicians of intentionally stealing promised pensions since it’s not as blatant as a traffic jam.

5 responses to this post.

  1. Posted by Anonymous on January 11, 2014 at 9:50 pm

    It should be apparent that the theft of pension funds goes beyond “theft” all the way to revenge and payback for the unions’ support of CC’s opponents.

    Reply

    • Posted by Tough Love on January 11, 2014 at 10:43 pm

      “Theft” of pension funds ?

      Please identify even $1 that has ever been improperly WITHDRAWN from NJ’s pension funds.

      NJ certainly has not made it’s ARC for many years and clearly. the workers would like to have their promised benefits fully funded (via tax increases).

      But as a NJ Taxpayer, my perspective is that NJ’s grossly excessive
      pensions (by any reasonable metric …including comparison to Private Sector compensation in comparable jobs) should NOT be fully funded via tax increases or further cuts in services. .Instead these grossly excessive promised pensions should be reduced, and for CURRENT as well as new workers

      Reply

      • Posted by skip3house on January 12, 2014 at 10:13 am

        Something like this reduction was suggested here a couple years back., perhaps by Mr. Bury?
        More like a compression (down) of benefits, with zero medical. Compression so the lower incomes would not be hit too hard, if at all?

        Reply

      • Pensions are a fixed income.Pensioners do not collect any other retirement to fall back on like Social Security. If you reduce a pensioners pension then you are quite possibly making it impossible for that person to to live in NJ. Retirees have all the same bills everyone else does and they pay taxes like everyone else.
        Comparing the state pension plan to a 401k and saying “since 401ks are down we should force pensions to take less” is a shortcut to thinking and it is the same “race to the bottom” mentality that keeps bringing ALL of us down one click at a time.

        I offer a real life example of how “cutting a retired pensioners pension would be cruel at the very least. My mother is a widow and handicap and she gets a pension. Before my father died he fixed the house so my mother can get around in the wheelchair. For the past 10 years she has been able to live in the house because of her fixed income pension. Recently she has been diagnosed with cancer. Since these bills and the cost of living going up she needs my help with finances. I have no problem with this as she is my mother and I would give her my left arm. It is what family does.

        If her pension were to be reduced to stay on even keel with say a 401k retiree (sounds like a very socialist idea) she would be forced to have to move out of her home (which her and my father put close to a 100k dollars of renovations so that it is handicap accessible) into an other “arrangement”.
        How many retired pensioners are getting by pay check to pay check in this state?? Things are bad so lets go after the aged and the weak and voiceless. Lets nickle and dime them till their pension can no long sustain them. Why not? I never understood how a generally decent people can become cruel and sadistic,

        Reply

        • Posted by Tough Love on January 15, 2014 at 6:17 pm

          Fred, Let’s clarify a few issues.

          (1) about 75% of all of the entire country’s (roughly 20 Million) Public Sector workers are in fact IN Social Security…..you make it sound like none participate in SS.

          (2) Even for the few Private Sector workers who are still lucky enough to have the old-style “Traditional” Defined Benefit Pension Plans (like those routinely granted Public Sector workers everywhere), Private Sector DB Plans NEVER have annual post-retirement COLA increases. While Private Sector Social Security benefits are COLA-adjusted, these SS benefits are typically about 1/4 as large as the TYPICAL Public Sector pension.

          Why are YOU entitled to have (as you are arguing for) 4 times as much of your retirement benefits COLA-adjusted? Are you “more deserving” of a better deal than the Private Sector Taxpayers whose (Tax-imposed) pension contributions and the investment earnings thereon typically pay for 80-90% of YOUR entire pension?

          (3) and speaking of “a better deal”, why, when Public Sector workers earn no less in “cash pay” than their Private Sector counterparts and with EQUAL PUBLIC/PRIVATE Sector “Total Compensation” (cash pay plus pensions plus benefits) being a reasonable “goal” should Taxpayer-funded PUBLIC Sector pensions be ANY (yes ANY) greater than those of their Private Sector counterparts (making the SAME pay, retiring at the SAME age, and having the SAME years of service)……. noting that RIGHT NOW, Public Sector pensions EVERYWHERE, when taking into account BOTH the much richer PUBLIC Sector pension “formulas” and the MUCH more generous and costly “provisions” (e.g.,COLA increases, very young full retirement ages, etc.), are always AT LEAST 2 times greater in value at retirement, MOST OFTEN 3-4 times greater, and for safety workers, often 4-6 times greater ?

          (4) and yes, Public Sector workers pay taxes like everyone else, but have you noticed that nobody but those who pay no taxes (e.g.,welfare recipients) and Public Sector workers ACTIVELY support tax INCREASES? Well, for Welfare recipients the reason is obvious…they get free services. But Public Sector workers know where their bread is buttered.They know that for every incremental $1 in taxes THEY pay, they’ll likely get $5 back (in taxes collected from EVERYONE) just to support their very rich pensions and benefits ….. a pretty good gig, wouldn’t you say ?

          (5) your example with your mother was interesting (but you present it as though it’s only a PUBLIC Sector retiree problem). Wouldn’t you also agree it’s “cruel” for Private Sector workers… who get so much LESS in retirement benefits… to be forced to support the MUCH MUCH greater pensions and better benefits promised Public Sector workers…..all to THEIR detriment?

          Reply

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