Surge in New Jersey Retirees Coming?

Christie’s new pension reform push could lead to new surge in N.J. retirements
July 27, 2014 page one headline

Is that so and, if so, is that so bad?


According to Department of Treasury figures on retirements there were steady increases over the years with explainable spikes:

2000: 12,337
2001: 11,618
2002: 16,532
2003: 12,482
2004: 13,522
2005: 13,367
2006: 14,360
2007: 15,108
2008: 14,554
2009: 12,656
2010: 20,152
2011: 19,509
2012: 15,038
2013: 15,709
2014 January-July: 11,916

The 2010-2011 spike* would mostly be due to higher employee contributions (both on the pension and health care side) that active participants were forced to pay while an early retirement incentive program explains 2002 which was a period when spikes in retirees were welcome.  Participants close to retirement age accrue far higher benefit values than the younger lower-paid employees who replace them thus saving a lot of money in a properly functioning defined benefit system, which can be argued is what we had in New Jersey in 2002.

However under the dysfunctional pension system that our dysfunctional political system has given us more retirees translate into a run on a ponzi scheme and may be something to be avoided.

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* Assuming there really were spikes.  This blog began with taking valuation data on participant changes in the NJ Teachers plan to put into a spreadsheet which showed fairly steady increments in retirees over the years with the only notable blip in the data being a 6,000 reduction in active participants for the period 7/1/10 – 6/30/11 – Chrsitie’s first full year at the helm.  Perhaps teachers are not as influenced by external factors when deciding when to retire and spreadsheets adding in PERS and Police & Fire participants will approximate Treasury figures but that’s a project for a less sunny day.

8 responses to this post.

  1. Posted by truthnolie on July 27, 2014 at 5:39 pm

    Y’know…I was going to post the other day that if Christie tries to go ahead and further change the pension system, it would lead to more mass retirements causing a further drain on the (supposed) systems in danger.

    But…I am sure that this is either a planned or side benefit by the Fat Man so he then have more ammunition under his massive belt to then use to further whine about the plans being unsustainable.

    Perhaps I give too much credit to him – although he has charisma I don’t believe he is overly intelligent and he makes rash decisions based on emotion vs. deep thinking and whatever plays best to the media/masses.

    Reply

  2. Posted by hondo on July 27, 2014 at 9:13 pm

    You are absolutely right Christie put the fear in everybody thats why I retired. If pension goes bust in 5 years hopefully I am ahead of the game!

    Reply

  3. The numbers just support the fact that there are way too many publics doing way too little for way too much to continue to support on a non-sustainable pension system according to fact posted on this blog. Hopefully, many will retire thus further burdening the sinking pension system. Will be interesting to see what happens all around.

    Reply

  4. Posted by TLbrokendowninsurancehag on July 28, 2014 at 2:18 pm

    More collectors, less contributors. Making a bad situation worse= Chris Christie.

    Reply

    • Posted by truthnolie on July 28, 2014 at 3:15 pm

      Don’t know about less contributors…..towns/state will need to hire new employees to replaced those lost to attrition albeit at a lower salary with less benefits but they will still have to contribute a percentage into pension/healthcare.

      Although there was a lot of talk about mass downsizing a ways back (2010-2011) when there were layoffs/furloughs, from what I’ve seen many towns scrapped talks of that (and shared services) and have hired new employees to replace those that left.

      Reply

    • Posted by Endalimony4ever on July 29, 2014 at 1:30 pm

      The public can no longer afford to fund the overly generous pensions that were sold for votes! The sooner the plans fail the better.

      Reply

  5. As the pension and healtcare payments continue to eat away at the state budget, cuts in aid to towns and municipalities for services, schools, roads, etc will make it increasingly more difficutl for those entities to make full payments. Employees will have to pay more or we can cut services, lay off teachers and cops, etc. as we have already been seeing throughout NJ.

    Reply

  6. Posted by hondo on July 29, 2014 at 2:28 pm

    I keep telling those guys dont stay passed 25 years cause the math makes sense to leave. Some are on the promotion list waiting to move up rank but, time of the essence pension could vanish!

    Reply

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