New Jersey Pension Miscellany

All the activity in the last week concerning the impending implosion of the New Jersey pension system merits several individual blogs, which may still happen, but for now to catch up:

New Jersey Budget Signed with a mini-payment for pensions

On February 25, 2014 Governor Christie put out his proposed budget for the 7/1/14 – 6/30/15 fiscal year which included on page 28 of the Summary this bit of braggadocio:

In September of 2010, Governor Christie put forward a bold, ambitious and unprecedented plan to deal with the enormous unfunded liability in New Jersey’s State and local public pension funds. The result was a series of landmark, bipartisan reforms enacted in June of 2011 that dramatically improved the long term financial stability of the State-administered retirement systems. Those historic reforms, which were hailed as the “first knot in the rescue rope as the State tries to pull itself out of a terrifyingly deep $120 billion pension and health benefits hole…,” recognized the system was broken and unaffordable. Under Governor Christie’s leadership, leaders of both parties came to the table and made the choice – together – to begin to change course and control these costs.

Making the Choice in 2011 to Touch the Third Rail The bipartisan pension reforms of 2011 are expected to save New Jersey’s state and local governments $122 billion in the 30 years from 2011 to 2041. It accomplished this with tough, responsible choices that served as a national model for bipartisanship and real reform: • Raising the ages for early and regular retirement for the pension systems • Increasing employee contributions • Ending mandated Cost-of-Living-Adjustments (COLAs) until the funds are healthy • Better management of the individual pension systems through reformed management boards • Mandating a healthy level of funding for each system that cannot be violated once it is reached Governor Christie has met those systematic reforms with a firm commitment from the state to meet its own funding obligations to retirees. (emphasis added)

California Dreamin’

In his gubernatorial salad days – lecturing Governor Jerry Brown on leadership
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And what have we been led into? According to a Bloomberg story for the first time since 1977 a lower bond rating than California:

“I don’t believe New Jersey has the ability to fix the pension the way it needs to,” said Roberto Roffo, who helps oversee $1.8 billion of munis at Advisors Asset Management Inc. in Princeton, New Jersey. “There are too many roadblocks right now to really reverse the trend the way California did. The political landscape is almost impossible to deal with.”

Talking Points

From the CNBC interview yesterday which touched (without penetrating) many salient points with my explanatory comments on top:
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21 responses to this post.

  1. Posted by skip3house on July 2, 2014 at 1:59 pm

    The seed to drop free NJ Retiree Medical was dropped some time ago. Maybe a tree will come from it?

    Reply

  2. Posted by Mr. Anonymous on July 2, 2014 at 2:07 pm

    Class warfare? Christie’s only real strategy in five has been to divide the state into public verses private. The real problem is that he sees himself and his staff (27% raises) as a separate class. Shared sacrifice? Please. The indictments can’t come soon enough. Love the captions.

    Reply

    • Posted by Tough Love on July 2, 2014 at 2:12 pm

      Class warfare my ass……we simply need to very MATERIALLY reduced the GROSSLY EXCESSIVE pensions and benefits promised all CURRENT NJ Public Sector workers, and provide ONLY such retiree healthcare subsidies that are comparable to employer-sponsored PRIVATE Sector retiree healthcare subsidies …. which is just about NOTHING !

      It’s call EQUAL … not “warfare”, another of the many “distractions” from the issue at hand (these grossly excessive pension & benefit promises) put forth by Public Sector workers riding this gravy train.

      Reply

      • Posted by Anonymous on July 2, 2014 at 7:03 pm

        TL,
        How do you justify the 23% raises given to his staff? Why do you think the average public worker with a $38,000 or so pension has it so good? Is there anything else going on in your life or is this the only issue you care about? CHristie is dirty and you know it.

        Reply

        • Posted by Tough Love on July 2, 2014 at 8:16 pm

          I can’t and I don’t justify the 23% raises Christie gave his staff. It was unnecessary and stupid considering what he MUST demand in givebacks from Public Sector workers.

          But don;t think the $100K-$200 in raises in total (vs easily hundreds of Millions in unnecessary and excessive Public Sector pensions in benefits) will “distract” me … or should distract anyone else (NOT riding this Public Sector pension & benefit gravy train) from the very MATERIAL reductions that are JUST and NECESSARY.

          And for the readers swayed by the BS, that $38K average is FAR FAR lower than what the TYPICAL full career Public Sector workers retiring TODAY get as a pensions. It is low because is includes:
          (a) short career workers
          (b) part time workers
          (c) those who retired LONG AGO on lower salaries and lower pension formulas (d) 50% share beneficiaries of deceased workers.

          But Anonymous KNEW it was a low-ball figure … presently to slyly sway readers away from the fact than when you compare apples-to-apples, a Public and a Private Sector worker retiring at the SAME age, with the SAME service, and the SAME pay, the pension granted the PUBLIC Sector worker will always be AT LEAST 2X greater in value at retirement than that of the Private Sector worker, MOST OFTEN 3x-4x greater, and for police Officers, TYPICALLY 4x-6x greater.

          You want “dirt”, look to our Democratic Legislators who betrayed their obligation to the Taxpayers by gladly accepting your Unions campaign contributions and election support in exchange for their favorable votes on Public Sector pay, pensions, and benefits.

          Reply

      • Posted by Anonymous on July 2, 2014 at 9:34 pm

        Head in the sand.

        Reply

  3. The publix are the only so called middle class left, with risk free retirement benefits valued in the millions. Meanwhile, without the ability to coin its own money, NJ will eventually have nothing left to spend on any thing else. Since the spendthrifts in Trenton will so their level best to spend spend spend anyone with a lick of sense will bail before the SHTF

    Reply

  4. Posted by Anonymous on July 2, 2014 at 8:42 pm

    The state needs to pay up. Waiting for the lawsuit to require full pension payment next. Then the Gov will turn to health benefits, only to find his 15 minutes of fame are done!

    Reply

    • Posted by Tough Love on July 2, 2014 at 9:06 pm

      Taxpayers …DEMAND that there should be ZERO additional funding until the pension accrual rate for the FUTURE service of all CURRENT workers (State, County, City, municipal) are AT LEAST halved.

      Reply

      • Posted by Anonymous on July 4, 2014 at 10:28 am

        Based on what? The taxpayers haven’t made a full payment in 20 years.

        Reply

        • Posted by Tough Love on July 4, 2014 at 11:07 am

          Based on the BENEFIT level (the generosity) being Grossly Excessive.

          Taxpayers should fund nothing more than what THEY get in employer-sponsored pensions & benefits from their employers ….. and THAT is TYPICALLY 1/4-1/3 of the value at retirement of the absurdly generous promises you and your Unions have extracted from our elected officials BOUGHT-OFF with your Unions’ campaign contributions and election support.

          You are NOT “special” … on the Taxpayers’ dime !

          Reply

  5. Posted by Anonymous on July 3, 2014 at 12:09 am

    Taxpayers, vote for Christie who put in more money than any other governor. He saved you alot of money so far! bwahahahhahahahaahahha

    Reply

  6. Posted by Anonymous on July 3, 2014 at 7:31 am

    Christie took more of your tax money than any other governor and did not use it on you, the taxpayer, unless you are a government worker. Boy did he fool you people, especially, Tough Turkey. He took away from plenty away from you and meanwhile the infrastructure is crumbling, yet he does nothing to repair dangerous bridges etc, since he doesnt have the money. Any yet you applaud him. Who voted for this guy, Dumb and dumber thats who!

    Reply

    • Posted by Anonymous on July 3, 2014 at 12:10 pm

      The feeble minded will never get it…..like those who blindly followed Hitler, Stalin, Mussolini, Idi Amin, etc. they are too influenced by this whale & his cult of personality

      Reply

  7. Posted by Metaphysical on July 4, 2014 at 11:50 am

    I am curious as to why “Anonymous” seems to focus only on feeble emotional arguments and continuously ignores facts.

    NJ’s public pensions are so far beyond what the private sector has as to boggle the mind. They must be substantially cut back. There is not now, will not be and never was enough money for such union inspired financial ruin. Cops, teachers & firemen are not better or more important than the rest of us. Public service is not a ticket to wealth–or at least it shouldn’t be.

    Reply

    • Posted by jim buettner on July 4, 2014 at 3:20 pm

      Amen.

      Reply

    • Posted by Tough Love on July 4, 2014 at 8:09 pm

      Metaphysical, Welcome to John Bury’s blog that focuses on NJ Public Sector pension problems.

      I’m not sure I have seen your comments here before, but I would welcome you as a daily reader. I’m a NJ resident and sure have my hands full countering the nonsense put forth by the half-dozen “Anonymous” commentators (mostly police officers by their own admission) doing their best to protect their grossly excessive pensions & benefits with via gross distortions, material omissions, and outright lies.

      Welcome aboard !

      Reply

  8. The class struggle? Christie only real strategy for five years has been to divide the verses public and private sectors in the state. The real problem is that he and his staff (27% increase) and see it as a separate category. Shared sacrifice? Please. The charges can not come soon enough. I love legends.

    Reply

    • Posted by Tough Love on July 6, 2014 at 8:03 pm

      All Nonsense and inconsequential.

      What can’t come SOON ENOUGH are VERY material pension & benefit reductions for the future service of all CURRENT Public Sector workers …………… as well as virtually ELIMINATING all retiree healthcare subsidies.

      Private Sector retirees get no employer-sponsored retiree healthcare subsidies any longer, and Public Sector workers are not “special” on the Taxpayers’ dime.

      Reply

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