Not Nervous; Not Intimidated – Not Good


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That came about. New Jersey got sued again today over the pension plan but Governor Christie is not nervous and he’s proud that he’s not nervous.

Does that make him better than me (or maybe you) who is constantly nervous these days so I…..

  • Treat every work project as if it were going to be audited by IRS or PBGC*
  • Triple-check client lists so all forms get filed timely and accurately to avoid IRS penalties **
  • Obey the law

I’m not complaining.  All this oversight keeps me focused and I am learning to appreciate it.

I wouldn’t want to be in the type of carefree position that Governor Christie puts himself in of doing what is convenient at the time knowing he can renege later without any personal blowback or being bothered.  I would be too nervous for all those (pensioners, future taxpayers, the rule of law) I would be screwing with my insouciance.  Perhaps that never occurred to him.

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* In the case of the PBGC that’s becoming a valid assumption.  With ever fewer Defined Benefit plans out there it looks like PBGC is auditing every small plan on termination while watching union plans go bust.

** Yet those notices come as filings are now all online and the IRS likes to send out penalty notices asking for money when forms have been filed after the due date but before the extended due date with fines small enough that many might pay without thinking plus we have the compliance checks and audits starting up again now that PPA has been around for a few years.

27 responses to this post.

  1. Posted by Anonymous on June 9, 2014 at 3:00 pm

    John, why does Christie believe that he is not responsible to make payments because he cannot afford to make them. Does that some defend work for any of us when we can pay our bills? Hey Electric company, I cant pay you because I dont have the money! Electric company shuts off our electric and sues us for the balance of what we owe them. I supposed the taxpayers and public employees should all stop pay taxes and sue Christie for what he owes us. Isnt that the way its supposed to work?

    Reply

    • There is a more pertinent example. If you hire someone to do work on your house, sign a contract, and then refuse to pay the full amount at the agreed time after the other party has performed the service – you get sued – and you lose the suit. The ability to pay is not admissible at trial.

      Reply

      • Posted by Tough Love on June 9, 2014 at 3:49 pm

        John, I believe the following is a more accurate example ……..

        You agree to pay a contractor for time (labor) and materials amounting to $20K for materials and $20K for labor. You’re just about to pay but find out through a friend at the supply-house that the supplier jacked up the price of materials by $5k above normal contractor cost, with a sided agreement to kick-back $5K to the contractor.

        When you find out, you refuse to pay the contractor more than $35K to eliminate the back-door deal-making.

        Reply

        • Posted by Tough Love on June 9, 2014 at 4:39 pm

          In my above example, the Contractor is akin to the Public Sector workers, taking more out of the pot than appropriate, and in a double-dealing way. The Supply-house is akin our Elected Officials, assured of repeat business from the Contractor. And the Homeowner is akin to the Taxpayer, being screwed via collusion between the Contractor and the Supply-house.

          Reply

        • Posted by Anonymous on June 9, 2014 at 5:25 pm

          wrong yet again!

          Reply

          • Posted by bpaterson on June 9, 2014 at 6:23 pm

            maybe Christie is looking at it as he is covering just the problems he created, not the ones he inherited. in that the case we could say he is doing a great job so far.

      • Posted by Tough Love on June 9, 2014 at 4:09 pm

        John, Given the lack of any true representation of Taxpayer interests, the following is perhaps a better example ……..

        You (Partner C) and 2 friends (Partners A & B) agree to start a business, each putting up equal capital and agreeing to an equal draw from profits, or to add additional capital as needed to reach a profitable position.

        After one year, it starts to look pretty clear to partners A and B (the more business savvy of the 3) that $30K in additional capital is needed, but not really wanting to pony their share of the additional $30K ($10K each), the 2 savvy partners tell the partner C that they need a total of $90K ($30K each) in additional capital. Partner C, accepting his friends’ word, hands over his $30K share and Partners A & B put up nothing.

        Partners “A” & “B” are akin to the Public Sector Unions and our Elected Officials and Partner “C” are the Taxpayers.

        Reply

    • Posted by Tough Love on June 9, 2014 at 3:43 pm

      You make it sound like you and the “taxpayers” are on the same side. Hardly, Public Sector pensions & beneifits are a noose around the necks of Private Sector taxpayers ….. a noose we’re seriously working on ridding ourselves of.

      Reply

  2. Posted by Tough Love on June 9, 2014 at 3:40 pm

    John, I’m quite sure that you take great pains NOT to promise more than you’re near certain that you can deliver …. perhaps in time, cost, or specific deliverables.

    If NJ’s elected officials had acted accordingly, we certainly would not be in the financial mess we are in today …. because had they indeed intended to deliver (i.e., FULLY FUND annually as earned) on those (pension & benefit) promises, those (pension & benefit) promises would likely be 1/3-1/2 what they are today.

    It takes a very moral & ethical sole to look away from the Union money & support constantly waived at them. Few have have the strength of character to refuse such advances, or to ignore them when voting on Public Sector pay, pensions, and benefits.

    Reply

  3. Posted by Tough Love on June 9, 2014 at 5:46 pm

    Wow, three brilliant responses to my comments from “Anonymous”, all within 5 minutes, and loaded with specific factual objections to my examples.

    Likely the same guy. You know, the guy to whom I responded in an earlier John Bury blog-post with …………”I sound as inebriated as you sound intelligent.”

    Reply

  4. Posted by Anonymous on June 9, 2014 at 6:10 pm

    The “crisis” will trigger the ability for the state treasurer to implement changes to various pension plans, read the state laws governing pensions. The union executives know they blew member protection in 2011. So all non vested employees will be rolled into dc plans, spouses and children won’t be covered under the state employee plan, they will be referred to “Obamacare”. This is what happens when the “stakeholders” do not read and analyze the intent of legislation.

    Reply

    • Posted by Tough Love on June 9, 2014 at 6:42 pm

      Pension changes only for new workers or only for the non-vested (which I believe to be 5 years in NJ ….. but not sure if 5 years applies to all of NJ’s various Plans) is woefully inadequate.

      As a wise man once said, the first step in digging yourself out of a deep hole is to stop digging. EVERY DAY we allow CURRENT workers to continue to earn pension accruals based on the current grossly excessive, unnecessary, unjust, and unsustainable pension formulas, we dig that hole we are in even deeper.

      VERY material reduction (of AT LEAST 50%) must apply to the future service of ALL (yes ALL) current workers …….. we have NO OTHER OPTIONS THAT WILL WORK.

      By far, the BEST option is to shift ALL Public Sector workers to DC plans immediately …. with ZERO $ growth in the current DB Plans.

      If DC Plans are good enough for Private Sector Taxpayers, then they’re good enough for those who are supposed to work FOR the Taxpayers.

      Reply

  5. Posted by bpaterson on June 9, 2014 at 6:38 pm

    in my industry, private and public construction, I do my work with my eye on the thought of this could end up in court. I record my notes and telcons with the time and date stamp, confirm actions by email back. The reason being any glitch always has a dollar figure attached when its being resolved and its always a finger pointing and CYA episode.

    Construction project specifications always has a “boilerplate” section usually 500-1000 pages that has all sorts of “grey” clauses, vagaries and legalese coming from the professionals who designed the project such as the architects and engrs so they can hide behind some sentence buried within. This specification 1000 page boilerplate was built up paragraph by paragraph over time by myriad lawyers creating the cya’s for the professionals to hide behind, and as a result of the professionals missing something and having to pay for it. The whole game is to try to dump as much liability on the other guy. The worse part is that jobs are normally bid competitively so its cut to the bone just to get the job and no vagaries can be addressed with extra money thrown in for the heck of it.

    The upside is that the contractors and professionals at least are gentlemen when it comes to resolving problems and can negotiate or compromise for what could be a minimal cost impact to all parties. There are some hard heads and it does cost because of them.

    The public end I wont get into but there’s where your ol’ “red tape” term comes from. The govt’s stance: They are always right, and most of the bids are still bid competitively.

    Reply

  6. Posted by MJ on June 9, 2014 at 7:11 pm

    I don’t know why public pensioners vested or otherwise would believe anything that politicians have to say given the corrupt history of law breaking, back door deal making, broken promises of not raising taxes, etc. There is no honor among thieves. Health care will be the first to go, then pensions for non-vested or non-union, and then maybe cuts to the existing retirees depending on the severity of the “crisis”. Can’t just blame the public pensioners thought given the overwhelming burden of debt that NJ has racked up through the years. One fund after the next ravaged and depleted, borrowing money like drunken sailors, is that looking out for anyone’s best interests? Article today stated that 52% of those getting ready to retire will move out of NJ according to a study conducted by FD Univ. Top reasons are outrageous taxes, high cost of living and corruption in government.

    Reply

    • Posted by Anonymous on June 9, 2014 at 11:44 pm

      Yes. It makes financial sense to earn a lot of money here, then retire to a cheaper place. That is the way the system is set up here. For better or worse. 18% of NJ households earn over $150,000. You don’t see that in almost any other state. Of course, if you save can save enough and move to a cheaper state upon retirement, you will be quite better off than a native of that state. Do you think a electrician in NC can make as much there as here? No way. PSE&G limeman make double here. Cops, teachers etc, same thing. Pound for pound it is still a great place to raise a family because of great school systems, good police protection, high paying jobs (yes in both private and public sector) My sis n law makes $38000 a year teaching 4th grade in rural VA with a masters!! Been teaching for 15 yrs and no raise for last 8. It is all relative!! This state has turned into a great place to work/raise a family (compared to most states) and is a crappy one to stay in after you retire. We are second in nation in per capita income- and among the highest in taxes. Solution: Earn what you can in NJ then split when you retire.

      Reply

  7. Posted by Anonymous on June 10, 2014 at 3:31 am

    Dp anyone really believe that politicians will take away their own healthcare and or pensions??.

    Reply

  8. Posted by MJ on June 10, 2014 at 6:39 am

    The politicians will of course grandfather themselves in to the current system. They make enough money on backdoor deals and corruption that they won’t need the extra health benefits or pensions–that will be the “perk” of “serving” the hard working taxpaying citizens.

    Reply

  9. Posted by Anonymous on June 10, 2014 at 7:54 am

    DC plans are developed by the employer and the insurer/mutual fund company. The investment and payout options vary. Public Sector dc plans can be hybrid combining the best features of a defined benefits plan and defined contribution plan. The risk in accumulation is on the employee, in payout if annuitize for lifetime income the risk is on the insurer based on longevity. The State Dept of Investments could do a better job also they could choose private equity firms with superior gains records. Elected officials are in dc plans, they can get health care through Obamacare. The State pays fees for ACTS and DROPS better deal as far address than NJABP.

    Reply

  10. Posted by Javagold on June 10, 2014 at 1:41 pm

    Hilarious. The public takers think they can continue to take their pensions out of state and yet their pensions will continue to infinity. Better chance of seeing rainbow unicorns shitting skittles. The greedy public pigs, aren’t even willing to stay here to help the pension Ponzi scam !!!!!

    Reply

    • Posted by Anonymous on June 10, 2014 at 5:58 pm

      Java, you would deny anyone the constitutional freedom of liberty, to live where you please? Would you want your creditors to pass laws to make you live in Delaware, where they can charge whatever interest rate they want?

      Reply

      • Posted by bpaterson on June 10, 2014 at 6:07 pm

        they have laws about living and working in the same county, it would just be an reformulation of that.

        Reply

  11. Posted by Anonymous on June 10, 2014 at 6:18 pm

    What is hilarious is that you are paying for it.

    Reply

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