Not Goetting It

Louis C. Goetting makes $140,000 per year working as an aide to Governor Christie.  Today is his last day since he may not be much of an aid to Governor Christie in the philosophical battle over pension reform in New Jersey.

You see Louis C. Goetting is also a retiree in the New Jersey Pension system getting $88,860 annually and he received $1.1 million from two severance payouts and an early retirement deal.  Mark Lakerqvist at watchdog.org headlines his blog today:

Christie’s biggest double-dipper quits on cusp of NJ pension debate

I do not see double-dippers as the problem but I do see how others would and how this resignation ties into what the Pension Study Commission might come out with.

At his age and salary Louis Goetting would have been accruing massive additional benefits had he been allowed to suspend his pension during the course of his reemployment with the state.  Assuming four extra years of service applied to his maximum average base salary his additional annual benefit would have come to $12,247 ($168,398 x 4 / 55) and that would have been payable to him over the rest of his life in addition to his prior accrual of $88,860.  The $355,440 (4 x $88,860) pension that he got over his four years of reemployment would come to him anyway in the form of that additional accrual if he lives another 29 years.  There are issues of time value of money and tax matters (retirees and lower incomes generally pay less in taxes) that would offset each other leaving Mr. Goetting  essentially in the same place under both scenarios.

The problem is that the public sees double-dipping as the problem.  It’s not even in the top ten but when the Study Commission comes out with their feel-good proposal to bar the practice it will be seen as a panacea rather than another in a string of distractions from effective reform.

29 responses to this post.

  1. Posted by Anonymous on October 3, 2014 at 1:39 pm

    John it is hard to believe that double dipping is not much of a problem. its like having to pay two employees instead of only one.

    Reply

    • 3 points:

      1) In any functional funding mechanism the $88,860 should have been already paid for at the time of retirement. That it wasn’t is the real scandal and what has to be reformed – one way or the other.

      2) Deferred income should not be penalized. If you bought a piece of property or a stock years ago and it was returned rents and dividends now should you be precluded from earning a salary? They’re investments which deferred pensions are to public retirees.

      3) Be wary of government employees coming up with solutions in areas they either don’t understand or understand all too well. You could get pensions being suspended but actuarial adjustments to those suspended benefits and continued accruals that could be a boondoggle of benefits for those you believe you are controlling.

      Reply

      • Posted by Tough Love on October 4, 2014 at 12:27 am

        Double dipping isn’t common in the Private Sector for 2 reasons:

        (1) the IRS code limits working to no more than 1000 hours for an employer that is also paying out a pension to that worker, and (2) pension generosity is such that few can afford to retire before are 65 when early retirement age penalties end and (given a full 35+ year career with one employer) if your LUCKY, you might get 40-50% of your final 3 or 5 year average pay. Bottom line is that pensions are not generous enough to allow workers to retire early, come back an “double -dip”.

        PUBLIC Sector pensions are WAY WAY different, both in having MUCH higher per-year-of-service factors (typically 50-100% greater than those granted Private Sector workers) and with full (unreduced) pensions at age 60, 55, and even 50 for safety workers. It is that extreme generosity and MUCH younger full (unreduced) retirement ages that leads to young retirements and to double-dipping.
        ——————————————————-
        AsI have said many times before, with Public Sector “cash pay” rarely less than that of their Private Sector counterparts, and with EQUAL PUBLIC/PRIVATE Sector “Total; Compensation” (cash pay + pensions + benefits) the appropriate goal, there is ZERO justification for ANY (yes ANY) greater Public Sector pensions (or better retiree healthcare benefits) let alone the current structure under which Public Sector pensions are ROUTINELY 3 to 4 times greater in value at retirement.

        Reply

      • Posted by MJ on October 6, 2014 at 11:48 am

        John, I think that owning property or investing in stocks is not a fair comparison as to the generosity of public pensions. If the stock market takes a dive or housing prices plummet as we’ve seen in recent years, so does the investment value. Just as many private retirees are having to adjust to low interest rate returns on CDs and money markets that they may have been counting on, this has not been the case at all with public pensions, salaries or health benefits. There have been minimal if any reductions to reflect current economic realities and things have moved along as though everything is just fine. According to your blogs, we all know better but still nothing has changed in the cocoon of the public sector salaries and benefits other than they are sucking most communities dry as funds continue to run out.

        Reply

  2. Posted by LGreene on October 3, 2014 at 3:49 pm

    Double Dipping is not really a problem. Someone ” retires” and gets their pension. Instead of a new hire, same person gets rehired and then gets paid and earns benefits from that moment forward.
    SPIKING may be a problem. Calling it double dipping is part of the problem. I agree with you that it may sound bad until someone analyzes it properly.Thanks for trying to offer unbiased and analytical view on subject.

    Reply

  3. Posted by Javagold on October 3, 2014 at 6:21 pm

    ‘It is difficult to get a man to understand something, when his salary depends on his not understanding it.’

    Reply

    • Posted by truthnolie on October 4, 2014 at 12:21 am

      “Capitalism and communism stand at opposite poles. Their essential difference is this: The communist, seeing the rich man and his fine home, says: ‘No man should have so much.’ The capitalist, seeing the same thing, says: ‘All men should have so much.’”

      Try to keep up……Comrade

      Reply

      • Posted by Tough Love on October 4, 2014 at 12:39 am

        Ah, repeating your identical comment from Mr. Bury’s 8/19 post entitled “Who To Believe”. So I’ll paste my reply to you then, which still applies:
        ———————————–

        And the Public Sector workers say …. let’s get our Unions to BUY the Legislator’s votes needed for bigger pensions and better benefits with campaign contributions and election support.

        Reply

        • Posted by Anonymous on October 4, 2014 at 4:58 pm

          You mean like the kochs buying Christie?

          Reply

          • Posted by Anonymous on October 4, 2014 at 5:12 pm

            Is there a clause in the oath of office that covers appropriate activities during work time? Does he get paid as Governor while candidate stomping? These out of state events are excessive for a Governor. When does he have time to address the Transportation Trust Fund, Unemployment Trust Fund, jobs, tax issues etc. Under any other circumstance this would be viewed as stealing time both an ethical and criminal offense.

          • Posted by Tough Love on October 4, 2014 at 6:27 pm

            Quoting Anon …”Is there a clause……..”

            I agree with what you said …… but those misdeeds doesn’t offset your grossly excessive pensions and benefits ……… nor will repeatedly bringing up such misdeeds distract pension/benefit reforms from aggressively pursuing such reform.

          • Posted by Anonymous on October 4, 2014 at 9:39 pm

            Tough Love the pension crisis will not be addressed by CC, he will leave office early to pursue his Koch funded dream of being the next POTUS. The employment terms for public employees covers the Chief Executive you must work for your pay and obey the rules of the position.

          • Posted by Tough Love on October 5, 2014 at 9:28 pm

            Anon, While it is indeed unlikely that Gov. Christie will “solve” NJ’s pension problems …. he certainly IS “addressing” it. Haven’t heard of his “Comission” ?

            Hopefully, they will put forth such forceful EVIDENCE that NJ’s Public Sector Pension Plans are BOTH unsustainable AND grossly excessive … with the latter being the primary cause of the former…. that EVERY “solution” with even a remote possibility of “solving” this problem MUST include very material (50+%) reductions in the pension accrual rate for the future service of all CURRENT workers,

            AND, an aggressive timetable of grading all Taxpayer subsidies towards retiree healthcare to ZERO in no more than 5 years.

            —————————————————————–

            And if BOTH of the above were fully implemented the resultant retirement packages afforded NJ’s PUBLIC Sector workers would STILL BE materially better than those of comparable PRIVATE Sector workers.

            Dear Taxpayers …. aren’t you tried of being ripped-off by the insatiable greed Public Sector Unions/workers and out Union-bought-off elected official who have enable this ?

            Demand change ! Get in your elected official’s face and ask them ….

            How much are you getting in campaign contributions from the Unions?

            Why do you support FAR FAR better pensions and benefits for THEM, while Private Sector taxpayers typically get so much less?

      • Posted by Anonymous on October 4, 2014 at 4:21 pm

        In America I have never heard a rich man say, all men should have as much as I do, quite the opposite

        Reply

        • Posted by dentss dunnigan on October 4, 2014 at 4:39 pm

          It’s called with “work hard” ….

          Reply

          • Posted by Anonymous on October 4, 2014 at 7:07 pm

            The rich man will say, I will do whatever I can to get richer including ripping off my neighbor, the american way.

          • Posted by Tough Love on October 4, 2014 at 7:40 pm

            Responding to Anonymous …..

            And the Public Sector Union/worker will say …. I will have my Public Sector Union BUY (via Union campaign contributions and election support) pensions & benefits FAR FAR in excess of what is necessary (to attract and retain a qualified workforce), just (in terms of its cost to Taxpayers), or sustainable.,

  4. Posted by Javagold on October 3, 2014 at 6:22 pm

    The greedy corrupt Baby Boomers have ruined the pension Ponzi ….and yes, double dipping is a part of the problem……Someone should sue WEBSTER’S as the definition of RETIRED is a fraud !!!!!

    Reply

  5. Posted by truthnolie on October 4, 2014 at 7:26 pm

    http://www.nj.com/politics/index.ssf/2014/10/despite_christie_commissions_report_njs_local_county_pension_system_is_on_solid_ground_groups_say.html

    Of course this will be attacked by the Christie sycophants and Kool Aid drinkers here but as I’ve pointed out all along…..the pension bashers love to lump all systems/employees together and refuse to acknowledge the problems exist mostly at the State funding levels.

    You can lead a blind man to water but you can’t make him drink (but Christie sure can make the believers of his B.S. slurp the Kool Aid!)

    Reply

    • Posted by Tough Love on October 4, 2014 at 8:10 pm

      Quoting from your linked report …

      “The groups said the local public employees retirement system is currently funded at 74 percent and the local police and fire retirement system is at 77 percent. ”

      Gee Truthnolie, you raised that same phony claim that 74% and 77% funded ratios imply a healthy Plan in a comment a week or so ago, and I shot it down. I’m sure you haven’t forgotten that exchange, but continue in your efforts to distort, omit, mislead, and lie.

      You choose to ignore that those percentages are NJ’s “official” figures that use in their calculation a 7.9% rate assumption to discount Plan liabilities while just about every financial economist believes that 7.9% is WAY to high for that purpose.

      In fact, in the identical calculation, the US Gov’t REQUIRES Private Sector pension Plans to use a liability discount rate of about 4.5%, and similarly, Moody’s now uses a liability discount rate of about 4.5% in evaluating a City’s credit worthiness. You can’t argue that the US Gov’t and Moody’s are biased against Public Sector Plans. No, they are simply desirous are accurate appropriate, and best estimate results …… not inflated BS.

      And …. NJ’s LOCAL Plans’ “official” funding ratios of 74% and 77% would drop to just about 50% using a 4.5% liability discount rate ….. accurately classifying NJ’s LOCAL pension Plans funding ratios as HORRIFIC.
      —————————————————————————

      Readers ….. keep an eye out …. as I’m sure Truthnolie will repeat this BS as soon as he thinks he can get away with it.

      Reply

      • Posted by Anonymous on October 5, 2014 at 12:40 am

        Stats can be made up to prove anything – 97.845 % of people know that

        Reply

        • Posted by Tough Love on October 5, 2014 at 1:04 am

          Yeah, like the lies than NJ’s Public Sector pensions & benefits are affordable……….

          Reply

        • Posted by truthnolie on October 5, 2014 at 1:16 am

          Haha….you sure it’s not 98.985%? I did my own study and that’s what I came up with (kind of how the gov’t comes up with the jobless reports, inflation, etc……i.e.; I just made it up)

          Yes….I much as I hate to feed the troll it is important to note that the position put forth in the news story was not by public workers/unions but county & local officials:

          “But officials from the New Jersey Association of Counties and the New Jersey League of Municipalities said today that the problem is at the state level. They argued the pension systems funded by counties and municipalities are sound because — unlike the state — local governments have made the full contributions required by law for more than a decade.”

          “You can’t argue that the US Gov’t and Moody’s are biased against Public Sector Plans.”

          but I guess the League of Municipalities & Assoc. of Counties are biased on behalf of public workers/unions….HAHAHA…right – they were the ones pushing and sucking at Christie’s teat to get the reforms through and screw the PE’s. So now they’re lying FOR the unions/pe’s???

          Oh, wait…I know….the troll is the only one who knows all about this and has it all figured out. I guess now Christie can do away with his pension committee and just use TL……wouldn’t make a difference – just one stooge in the place of the bunch of ’em there now.

          Oh….and BTW….the hero of the stupid isn’t fairing too well in the latest poll on NJ.com:

          http://www.nj.com/politics/index.ssf/2014/10/poll_do_you_approve_of_chris_christies_job_performance.html

          Currently trending at 84% in the NEGATIVE…..but I’m sure TL can spin this too (after trying to vote YES several hundred times to get her boy at least back to 50/50) – using the “4.5% liability discount rate” applied to this poll I guess Christie’s negative rating isn’t really 84% but more like 60% …LOL!

          Reply

          • Posted by Tough Love on October 5, 2014 at 2:05 am

            There are numerous reasons why City/Town officials would call local pension funding ratios of 74% and 77% (using 7.9% liability discount rates) healthy:

            (1) they have no money to increase contributions if the truth were known and increasing local taxes would piss-off local residents, jeopardizing their jobs
            (2) the Local Unions (Police, Teachers, etc. …who block-vote for these officials) would be pissed- off, fearing Public Pressure to freeze or reduce their pensions and benefits
            (3) These officials often get the SAME pensions and don’t want them reduced
            (4) when the SH** hits the fan, they’ll be long gone
            (5) they’re incompetent, pension-illiterate, simply charlatans…. most like, all three.

            John, What your take on Truthnolie’s linked article ?

          • I voted in that poll – all three ways. nj.com is looking to bump up its viewership numbers so it looks like their polls allow unlimited voting.

            Pols like this are suspect as well as subjective so they are pretty useless except as propaganda.

          • It’s obvious that they want no recommendations of benefit cuts coming out of the commission though adopting the foolish position that the plans are ‘healthy’ is unfortunate.

          • Posted by Tough Love on October 5, 2014 at 12:48 pm

            I guess it’s “easier” for Local officials to call their Pension Plans “healthy” ……even thought they are more accurately described as in “terrible” shape, and would be barred from granting future service accruals under US Gov’t Regs. if they were Private Sector Plans and valued under Private Sector accounting rules ….. when looking at NJ’s State Plans, which are in far worse shape (perhaps 35-40% funded using appropriate assumptions, ala what the Private Sector and Moody’s currently uses in Plan valuations).

            If I were a Local Plan participant (and knowing what I do), I’d be far from happy with the Plan’s funding level and VERY concerned about my pension eventually being reduced.

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