Selling Out Your Future Brothers

The costs of retiree health benefits for public employees are massive and the values placed on these benefits is still understated even after GASB 45.

Union County just got their 2013 OPEB valuation report and, for a government entity with a half-billion annual budget, it showed unfunded liabilities of $667 million.  Much more on the numbers in this report later but, for now, one of the charts provided within that report gave a clear indication of where the unions are heading in bargaining these numbers down:


opeb val union

Whether future hires will get any post-retirement benefits is unclear from the report which notes only:

Additionally, on June 28, 2011 P.L. 2011 c. 78 (Chapter 78) was enacted. Chapter 78 contained many changes to the retirement and heaalthcare plans offered to employees and retirees of New Jersey State and Local government. Among these changes is the requirement for certain retirees to pay a varying portion of postretirement healthcare costs.  Most future retirees will receive 100% County paid healthcare benefits, which were bargained for in lieu of future salary increases for one of two years depending on the collective bargaining unit. County management believes that these foregone salary increases produce a contribution requirement that, on average, equals or exceeds the Chapter 78 contribution change.  Therefore, no provision for Chapter 78 has been reflected in this valuation.

The takeaway is that benefits already accrued will remain but it’s open season on anyone not now at the bargaining table.

16 responses to this post.

  1. Posted by Anonymous on October 23, 2014 at 1:34 pm

    all politician sell out on the people after they gain office.

    Reply

  2. Posted by Javagold on October 23, 2014 at 2:29 pm

    The baby boomers have taken it all. What a disgusting bunch of pigs.

    As for the rest of the public takers go. Put them all on Obamadontcare and be done with them.

    Reply

  3. Posted by dentss dunnigan on October 23, 2014 at 5:58 pm

    More proof that the state needs to become a right to work state …..

    Reply

  4. Posted by Tough Love on October 23, 2014 at 7:14 pm

    Hopefully…… in fairness to taxpayer …. ALL of these promises will fall by the wayside (meaning NOT be honored).

    There never was, isn’t now, and never will be ANY justification for any of this give-away by self-interested taxpayer-betraying elected officials BOUGHT-OFF with Public Sector Union campaign contributions and election support..

    Reply

  5. Posted by truthnolie on October 24, 2014 at 1:44 am

    “Most future retirees will receive 100% County paid healthcare benefits, WHICH WERE BARGAINED FOR IN LIEU OF FUTURE SALARY INCREASES”

    See….some things were given up in order to get other things…..that’s how negotiations work.

    So…..instead of getting more in higher salaries, the PE’s were willing to take no raises in order to obtain healthcare benefits. As said in “Indiana Jones & The Last Crusade”……the towns have “chose poorly” while the unions “chose wisely”.

    That’s why is is NOT FAIR (like “in fairness to the taxpayer” it should be read “in fairness to the employee”) and probably ILLEGAL to strip away previously bargained and agreed to contract benefits.

    And I don’t care about any of you morons saying that the politicians signed off on all this against your desires…..too bad…..all four of you should have shown up at town council meetings to demand otherwise (as the politicians calculated in their heads…”let me see…4 or 5 malcontents here protesting what we’re giving the PE’s vs. the hundreds of PE’s and their families….gee….what should I do here” ) LOL!

    Reply

    • Posted by Tough Love on October 24, 2014 at 3:09 am

      Truthnolie, When the “Commission” Report come out shortly, dollars-to-donuts, the #1 recommended take-back is your retiree healthcare … “promises” notwithstanding. You have little “Legal” protection. While it likely won’t disappear completely, I’d bet there will be benefit cuts, deductible and copay increases, fewer choices, and a HUGE premium increase.

      New hires will certainly go into DC or Hybrid (DB + DC) Pension Plans (with only a 1% DB component ala Federal Plans).

      For the FUTURE service of CURRENT workers, it’s a bit trickier what they’ll recommend NOW …. although for the material savings (desperately needed) that too must include a shift to a DC or a Hybrid Plan for their FUTURE Service. Without that change, the Commission has wasted everybody’s time.

      For Retirees ….. who knows, but they too don’t deserve all that was “promised”.
      ————————————————————————————————
      Lastly, to repeat what John Bury stated in his recent Plog Post entitled “Too Late For The Truth”:

      “There is absolutely no possibility that the state of New Jersey will come up with any meaningful contributions ever again to even maintain the current level of benefits, much less to pay for the sins of the past. If it is any consolation, the retirees in the plans that the state is not responsible for funding might get 25 cents of what they were promised instead of 15 cents….”

      Reply

      • Posted by truthnolie on October 24, 2014 at 12:54 pm

        Again….throwing everyone together in one basket. Many retirees have retired from affluent towns that have no major budgetary problems.

        Many have retired from the LOCAL part (i.e.; municipalities) all of which have their own contract language and agreements stating the terms of at the time of retirement – the majority of these contracts provide for non-contributory healthcare at least for the member/spouse after retirement. Can they change this going forward? Yes….when a contract is up for renewal, but if they try to go after those already retired under an “old” contract that provided it they will have lawsuits up the wazoo for violating the terms specified at separation (and these “already retired” may have been so for 20+ years).

        Also, many are not covered by the State Health Benefits Plan but are part of private healthcare exchanges.

        Reply

        • Posted by Tough Love on October 24, 2014 at 10:53 pm

          It will certainly be interesting to see if the lifetime healthcare promises made to those already retired can be reduced or eliminated

          I certainly hope so as promises made by one administration should not financially bind the hands of future administrations. It’s UN-American and subjects Taxpayers to the extraordinary risk of incompetent/crooked/bought-off elected officials …. take your pick.

          Reply

  6. This is a broad social trend, that goes beyond unions and public employee pensions. It’s about Generation Greed. And it has been going on for decades.

    http://larrylittlefield.wordpress.com/2014/08/10/generational-equity-and-the-legacy-of-todays-politicians-update/

    With regard to the unions, I call it the “screw the newbie, flee to Florida” cycle. In New York it has gone on and on and on. Those cashing in and moving out take more, agree to lower pay and benefits when it can’t be paid for, and then point to underpaid new hires and say “we” can’t be expected to do a decent job because “we” are underpaid.

    Reply

  7. Posted by Javagold on October 24, 2014 at 10:56 am

    How do the public takers get paid , if the private sector taxpayers just refuse to pay anymore extortion ???
    I never have a public taker, answer that. Take the house ??? Stand in line, the banks already bubbled the equity right out if them all..and property taxes are more than most mortgages. ……. when the homeowners finally stop living in fear and realize if they just stop paying in mass, at once, they can live rent free for years and years and years and finally enjoy life.
    And public takers are taxpayers too……yet I never hear them complain about the property tax bills !!!

    Reply

    • Posted by truthnolie on October 24, 2014 at 1:13 pm

      “if the private sector taxpayers just refuse to pay anymore extortion ???”

      Really?….Care to state how you’d go about “refusing” to pay…I’d like to know since I don’t feel like paying federal taxes, contributing to welfare, disability, medicare, etc.

      Unless you’re totally clueless….if & when (read: when) NJ increases taxes it will be just more added to what is taken out of your pay…..that’s how it works (what?….you thought it was on the honor system).

      You do have one recourse though…..you can stomp around your inevitable downsized McMansion screaming “I’m as mad as hell and I’m not going to take this anymore!!!!”

      Reply

  8. Posted by george on October 24, 2014 at 6:10 pm

    What’s the Garden State Parkway worth? What if the GSP were run for maximum profit, allowing only the most profitable commercial traffic busses and trucks but excluding early retirement types on their Harleys with their chubby ladies on the back? How about libraries, those are basically useless, what are they worth? The state has plenty of off the books assets.

    Reply

    • Posted by Tough Love on October 24, 2014 at 10:56 pm

      But those assets belong to ALL of NJ’s citizens, NOT just the insatiably greedy 15% of all workers who happen to worker in the PUBLIC Sector.

      Reply

      • Posted by george on October 25, 2014 at 10:45 am

        “But those assets belong to ALL of NJ’s citizens,” And they will be used to pay ALL of NJ’s citizens’ debts.

        Reply

        • Posted by Tough Love on October 25, 2014 at 12:37 pm

          Actually very few if any will ever be sold.

          I seriously suggest you develop a “Plan B” if heavily dependent on a NJ Public Sector pension, as material reductions are VERY likely.

          Reply

  9. Posted by MJ on October 24, 2014 at 6:46 pm

    I think the desperate comments on here both on the public end and the private end reflect the true situation—-there is no more money to dump into the black hole or the politicians would ahve been forced into doing it by the union slum lords. Its only of matter of time until we find out which publics get screwed and the magnitude of it all. Please publics explain to me if this was such a big legal obligation and the politician were so on your side, why not just pay into the pension system??My theory is that as dumb as they are they are just smart enough to realize that there is no benefit to throwing good money after bad. Just my thought. Personally, could care less just sold our house for top dollar in Sept and ironically a public taker bought it for more than full asking price. Really can’t complain at this point. Good riddance.

    Reply

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