D-Days for New Jersey Pensions

As in Decision Days.

Today a judge will hear arguments on whether the State can skip pension payments (it can for this year anyway) and tomorrow:

According to the New Jersey Courts website:

Expected Appellate Court Opinions for June 26, 2014


A-5973-11T4** / A-6002-11T4** / A-0632-12T1**

The legality of whether New Jersey can essentially take away pension cost-of-living adjustments may have been decided and an Opinion will be published tomorrow.

Much more when the decision comes out but for now what do you think?



15 responses to this post.

  1. Posted by truthnolie on June 25, 2014 at 1:06 pm

    If the fix isn’t already in as I expect it to be (although I’m not 100% sure like I would have been before Judges were included prior to the amendment), the only fair answer is the COLAs must be restored.

    Anyone who disagrees must then be willing, in fairness, to then go along with no COLA ever in Social Security AND the freezing/reduction in benefits for all who are on or will get SS (since the system is “unsustainable” (sound familiar) and will one day impode)…..what many won’t accept is the a pension to police/fire is like SS for the normal working guy. Yes police/fire have never paid in so they will never be able to take out but SS still gets periodic COLAs……and even when the pension systems were getting increases I believe the formula was 0.60% of whatever the SS increase was.

    If we’re saying both systems are in serious trouble and doomed to fail without reductions, then only the most hypocritical here (TL, Javagold, etc) will continue to push for no COLA or changes that screw others & except themselves from being affected in an allegedly similar failing system (SS)


    • Posted by Tough Love on June 25, 2014 at 1:47 pm

      Tell you what, the average SS benefit is about $15K annually, so how about we agree to COLA adjust (on the SAME terms as SS) ONLY the first $15K of Public Sector pensions.

      That’s called EQUAL.

      Acceptable to you?

      If not, might it be GREED ?


    • Posted by Tough Love on June 25, 2014 at 3:16 pm

      Quoting truthnolie … “what many won’t accept is the a pension to police/fire is like SS for the normal working guy.”

      While a Police/Fire pension may be “like” Private Sector Social Security in the sence that both provide funds to meed retirement needs, the similarity ends there.

      The difference in the level of “generosity” between the two is SO EXTREME to make it clear that you are a Public Sector worker or retiree riding the Public Sector pig-fest (on the Taxpayers’ dime) and want to keep it that way.

      Let’s compare a Private Sector worker’s Social Security benefit to that of a NJ Police officer, both retiring at age 60 after 30 years of service in 2014 and both with a final pay of $120K (just about what a typical NJ patrolman would earn).

      Let’s calculate the Private Sector worker’s SS benefit first …

      Per the US gov’t , The maximum SS benefit depends on the age you retire. For example, if you retire at full retirement age in 2014, your maximum benefit would be $2,642. However, if you retire at age 62 in 2014, your maximum benefit would be $1,992.

      Ok, the MAXIMUM SS benefit is $1,992/mo at age 62 (not 60), and to get that maximum, you have to have worked for 35 years (not just 30) and earned the maximum wage base in each of those 35 years. If you only worker for 30 years, the SS calculation methodology would factor in five zeros for the missing 5 years, bringing the $1,992/mo down to $1,992 x 30/35 = $1707.42/mo or $20,489 annually. And yes, this $20,489 Social Security benefit would be COLA-increased annually.

      Now let’s calculate the Police officers pension. While I know that it would be 65% of pay after 25 years, I’m not exactly sure of the annual increment from 25-30 years so let’s go with a 70% pension after 30 years (noting that it’s likely AT LEAST 70%).
      so, 70% x $120,000 = $84,000 annually.

      Now we can compare these, and assuming the Police Officer’s COLAs are reinstated, we have an apples-to-apples comparison as follows (and remember that BOTH workers retired at the SAME age, had the SAME pay, and had the SAME years of service):

      Private Sector worker’s SS benefit = $20,489 annually
      Police Officer’s Pension = $84,000 annually

      Note that the Police Officer’s pension is $84,000/$20,489 = 4.1 times GREATER than the Private Sector workers SS benefit.

      And should the Police Officer’s pension NOT be reinstated, we can make an adjustment to arrive at an apples-to-apples SS vs pension comparison in that case as well:

      The Private Sector worker has SS benefits that start at $20,489 and are COLA-adjusted thereafter. That annually increasing benefit has a mathematically value just about equivalent to a LEVEL pension of $26,000 annually.

      So assuming the the Police Officer’s COLA is NOT reinstated, the apples-to-apples SS vs pension comparison is:

      Private Sector worker’s SS benefit = $26,000 annually
      Police Officer’s Pension = $84,000 annually

      In summary, for 2 workers, one Private and one Public Sector (a Police Officer) whereby BOTH workers retired at the SAME age, had the SAME pay, and had the SAME years of service, the Police pension is:

      $84,000/$26,000 = 3.23 times greater than that of the comparable (in pay, age, and service) Private Sector worker.


      So NO truthnolie, Social Security CANNOT be even remotely compared to the Grossly EXCESSIVE pensions afforded NJ’s PUBLIC Sector workers, and your statement …………. “what many won’t accept is the a pension to police/fire is like SS for the normal working guy.” ……….. is just more of your ongoing BS.


      • Posted by truthnolie on June 25, 2014 at 5:32 pm

        What you fail to factor in is how much a private sector worker has contributed to SS vs. what a PE has been mandated to contribute from their salaries. Currently police/fire must contribute 10% of their salaries to the pension fund….this is in ADDITION to state taxes, fed taxes and now paying up to 35% of the medical premium costs that were illegally mandated by chapter 78.

        So….again…fuzzy math = fuzzy stats…..not surprising as you’re good at that.


        • Posted by Tough Love on June 25, 2014 at 6:20 pm

          Oh that’s easy. Private Sector workers have contributed near the current rate of 6.2% of pay for many years, and since we are comparing workers at the SAME pay level, the slightly higher % of pay that Police officers now contribute is negligible compared to the 4.1. (or 3.32) times greater Police pensions than Private Sector SS.

          Even when the full 10% of pay is in place, most current officers AVERAGE %-of-pay over their careers will be much lower, and even for new workers paying that 10% over their full careers, they’re STILL getting 4.1 times the pension for 10.0/6.2 = 1.61 times the contributions.

          Seems like I’ve countered more of your BS attempt at justification of your grossly excessive pensions and benefits. And speaking of benefits, tell me exactly WHY police officers (or ANY Public Sector workers) should get ANY Taxpayer-funded retiree healthcare when Private Sector employers RARELY provide ANY subsidy at all.


          • Posted by Pat on June 25, 2014 at 6:53 pm

            I think the BS is your repeated quoting of these calculations which have not been repeated anywhere else. At least your fuzzy math is unique!

          • Posted by Tough Love on June 25, 2014 at 7:01 pm

            The math is original …. and I VERY qualified to do these calculation.

            Mr. Bury, if you feel my calculations are not reasonable please state so.

          • Posted by dentss s on June 25, 2014 at 8:59 pm

            TL workers contribute 6.5% and your employer contributes 6.5% which really comes out of the money a employee would get so the total contribution is 13%

          • Posted by Tough Love on June 25, 2014 at 9:36 pm

            Dentis, the OASDI contribution is actually 12.4% split equally between the employee & the employer. I was aware of that (extra 6.2%) that may rightfully be considered Private Sector employee benefits “in lieu of wages”, but since the Police Office pension ADVANTAGE was so great even WITHOUT bringing that up, I chose to leave it off the table rather than potentially take the discussion off track.

            Had I based the comparison assuming a 12.4% Private Sector %-of-pay SS contribution, the Police Officer Pension ADVBANTAGE would look even greater than I demonstrated above.

            Thanks for your input.

  2. Posted by Anonymous on June 25, 2014 at 7:37 pm

    Well the judge ruled Christie can cut the pension payment this year. She said the workers have a contractual right to the payment but its OK for Christie to skip the full payment because he is between a rock and a hard place. Great legal reasoning.

    I propose that next year the payments be made monthly not one lump sum at the end of the year that will not be there it will be stolen again.


  3. Posted by Javagold on June 25, 2014 at 7:58 pm

    No payment… HA. HA. HA. ……still not reading the tea leaves ????…..oh well, not my problem…….still waiting for them to dump you public takers into Obamacare , where you belong !!!!……you should be happy if you got away with taxpayers money these past 25 years, but the gig is up.


  4. Posted by Tough Love on June 25, 2014 at 8:20 pm

    Here’s a quote I came across yesterday .. from Mary Pat Cambell, a NY actuary who blogs on Public Sector pension issues. It perfectly reflects the greed, the entitlement mentality, and the refusal to MATERIALLY contribute to solutions:

    “Too many public unions think they can brazen it out, sue money for pensions into existence, and it will all be hunky-dory. Or that they can negotiate for pay increases now while waving hands at inadequate pension contributions, thinking that the pensions will always be made whole. Somehow. Eventually.”


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