Thank you, Fox Business

Even if the Arnold Foundation might be paying for it Fox Business has done the best job among major media outlets of covering the public pension crisis and related matters with their Gathering Storm series.

Today they link to two stories very close to me: NJ Style Pension Funding & Diverting Money and Gov. Christie Warns of Fiscal Calamity Blames Pensions highlighting fiscal gimmickry in county budgeting and the impending unspecified pension cuts coming in New Jersey, topics that directly impact every New Jerseyan yet the state’s largest newspaper alludes to the pension aspect when it can be tied to some sensationalistic angle like threatening funds for cancer research.

There are three major stories here:

  1. Detroit-Central Falls-Prichard pension cuts coming across the nation
  2. No accountability in government accounting
  3. State and federal governments ignoring (1) and (2) above

Fox Business is on them all.

15 responses to this post.

  1. Posted by Tough Love on April 23, 2014 at 11:42 am

    Looking to hear Christie’s latest proposal …. should be interesting, and certainly bring about a brand new barrage of misinformation, distortions, and outright lies from the Public Sector Unions/workers steadfastly refusing to even give even an inch (for each mile needed) on their grossly overstuffed pension & benefits.

    Reply

    • Christie is probably anxious to hear his latest proposal too.

      Reply

    • Posted by Anonymous on April 23, 2014 at 1:37 pm

      TL you are so gullible, you still believe in Chris Christie, it is suckers like you that are partly the cause of this mess because you continue to put your faith in these dishonestly politicians just because they tell you they are going to do something! I guess you are desperate and see no other answer. I dont blame you I suppose.

      Reply

      • Posted by Tough Love on April 23, 2014 at 2:29 pm

        Gullible as to what ?

        There is a HUGE financial problem in NJ due to grossly excessive Public Sector pensions & benefits. Perhaps Christie will do something to get these reduced and perhaps he won’t.

        I’m hoping he does. By my hoping he does so, does that make me “gullible”?

        He didn’t create this mess. The politicians that preceded him did, NOT via a lack of “funding”, but by acquiescing to the outrageous demands of the insatiably greedy Public Sector Unions/workers, and granting these grossly excessive and unnecessarily pensions & benefits in exchange for Public Sector Union campaign contributions and election support.

        The system that allows this legalized-bribery needs to be changed and these grossly excessive pension & benefits promises need to be materially reduced by AT LEAST 50% for all CURRENT workers….. and if so reduced, they would STILL be more generous than the pensions afforded 90% of Taxpayers called upon to pay 80-90% of the Total Cost of Public Sector pensions.

        Reply

  2. Posted by Tough Love on April 23, 2014 at 3:47 pm

    John, It’s not only Union County that’s a mess of corruption, and self-dealing, and a political cesspool..

    See the following article:

    http://www.northjersey.com/news/ex-chief-of-human-services-threatens-lawsuit-1.1000981

    Reading this gets me sick to my stomach. All of these political actors could care less about creating ONLY those jobs with legitimate functions and filling them with competent individuals. To them its but a game of political patronage and a mechanism to keep incumbents in-line and reward favored sons.

    We need a way to make such actions criminal offenses or at least hold these actors financially responsible (personally) for indefensible/egregious actions that result in Civil judgements. Now, at best, legitimate workers wronged by such actions simply win lawsuits … with the judgement (and legal fees) paid for by the Taxpayers …. with the offenders getting off sot-free.
    ————————————————-

    Sounds like Wildstein and Kelly fit quite well into this category of offenders as well.

    Reply

  3. Posted by Richard on April 24, 2014 at 1:54 pm

    The dishonest accounting needs to be addressed regardless of one’s position on the the level of public pensions. Taxpayers and employees both lose if the plan is underfunded for years as is typically the case. ERISA rules would seem to be an answer. As I understand it the reason that state and local plans are not covered by ERISA is a constitutional question. I would think, however, that a state could voluntarily comply with ERISA without raising those questions. Bond rating services could be players here. The Feds could also help things along by disallowing the tax preferences for employee contributions in states that do not voluntarily follow the standards. These rules changed sometime in the 80’s so there would not appear to be a constitutional question. Of course, the politicians would hate it.

    Reply

    • Posted by Tough Love on April 24, 2014 at 5:28 pm

      Quoting … ” Taxpayers and employees both lose if the plan is underfunded for years as is typically the case. ”

      Not exactly …

      Indeed, Taxpayers lose in 2 ways::

      (1) Primarily by their elected officials granting pensions far greater than they would have had they been required to FULLY fund those promises over the working careers of the employees to which the promises were made, and
      (2) secondarily, by in inter-generational transfer to later generations to pay the pension costs of those who retired in the past and for whom no serves were rendered.

      But …. the employees ONLY lose if their promised pension are reduced (NOT even ONCE in NJ…yet)… the timing of funding is irrelevant. And in the rare instances when the employee contributions are increased, those increases are ALWAYS VERY minor in the context of the huge cost of these promises.

      Recognizing the grossly excessive nature of these pension & benefit promises (and hence COST), REAL solutions will take exactly THAT … very material (50+%) reductions in the promised pensions.

      Reply

      • Posted by Tough Love on April 24, 2014 at 5:34 pm

        Clarification…. While I’m sure the employees would consider the suspension of their COLAs a benefit reduction, it looks like they will be retroactively reinstated via Court decision shortly.

        Reply

  4. Posted by Richard on April 25, 2014 at 2:00 am

    I would think that you would support honest accounting. But apparently not. You are only focused on the level of pensions.

    Reply

    • Posted by Tough Love on April 25, 2014 at 10:59 pm

      Richard, if your above comment is directed at me, …….

      I ABSOLUTELY support honest accounting and appropriate (reasonably conservative) actuarial assumptions. There is no justification for methodology that has more than a SMALL probability of leaving the Taxpayers on the hook for payments in addition to those made IN THE YEAR of accrual.

      And to be fair to BOTH the employees AND the Taxpayers … if the use of appropriate (reasonably conservative) assumptions results in over-funding, a way to deal with that is to “dividend” the excess over a cushion such as 125% of full funding (the test-level used in certain IRS regulations in the regulation of Private Sector Pension Plans) back to the contributors (the employees and the Taxpayers) in proportion to their contributions ….. perhaps with the employee’s share being applied to increase their pension benefits.

      Had we been REQUIRED to FULLY FUND accruals (in the year earned), the huge unfunded liabilities we have today would not exist, but that’s NOT because we would have the contributed huge amounts necessary to fully fund the current high level of promises, but BECAUSE our elected officials NEVER would have granted the grossly excessive promises in place today if they knew that actually had to FULLY pay for them … as accrued.

      It’s BECAUSE those CURRENT pension promises are so grossly excessive, that Taxpayers should NOT fund at the VERY VERY high level necessary to fully pay them.

      The pension BENEFITS must come down to the level that would likely have been promised in the absence of the Public Sector Union/Politician collusion …. and doing so would require AT LEAST a 50% for ALL non-safety workers, and a larger reduction for safety workers (who have the richest pensions).

      Reply

      • Posted by dentss d on April 27, 2014 at 6:36 pm

        More bargaining with nobody representing the taxpayer ..Acting Governor DiFrancesco late Friday signed legislation that would increase pension benefits for retired teachers and other public employees by 9%,

        The pension enhancement bill, S-2450/A-3506, applies to both current retirees and active members of the state�s two major retirement programs�the Teachers� Pension and Annuity Fund and the Public Employees� Retirement System. The increased cost of the benefits will be covered by surplus funds in the retirement systems. Retirees will begin receiving larger checks in the fall,

        Reply

        • Posted by Tough Love on April 27, 2014 at 11:20 pm

          Rightfully That 9% RETROACTIVE increase (and ALL post-employment pension increases) will be at the top of the list for reversal when NJ’s Plans run out of assets (in just a few years)..

          Reply

  5. I won’t tell you anything new, but it is just the same in any other field.
    You would think past teaches us at least anything, but no.
    Feel free to disagree but the world changes, and we have no control whatsoever over it.
    For instance, imagine Barack had any balls to put Putin to his place, but it seems like it’s not happening, welcome third world war.
    A truly inspiring post, thanks!
    Sarah http://phyto-renew350i.com/

    Reply

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