Christie Running For President and Away from the Pension Issue

I see an announcement in early January of Chris Christie running for president and resigning as governor of New Jersey so his State of the State speech in mid-January can be a goodbye-and-goodluck kissoff to the messes he exacerbated.

My reasons:

Christie’s people have no clue on what to do with the pension and OPEB fiasco

StreetInsider.com reported last week on new pension funding numbers for the New Jersey plans and explained:

The governor has convened a special pension taskforce to propose options for additional pension reform and is expected to make a proposal to the legislature in early 2015.

What was supposed to be “by the end of September” (2014) for proposals to come out when the study commission was established on August 1, 2014 has now turned into ‘early 2015’ (if ever).

Money

I have now read Ruthless Ambition by Louis Manzo and he makes a salient point about Christie’s flirtation with being a vice-presidential candidate in 2012:

Romney still wanted him…but Romney staffers had other means by which not to make this happen, and somehow the decision for Romney to name his running mate was put off until after he returned home from traveling to the London Olympics.  According to [Josh] Margolin and the New York Post, Romney’s advisors imposed a deal-killing ultimatum on Christie – if he wanted the second position on the ticket, he would have to step down as Governor. The Romney camp claimed, “Strict pay-to-play laws would have restricted the nation’s largest banks from donating to the campaign – since those banks do business with New Jersey.” Somebody had to really be working overtime on this one.

The highly efficient Romney aides had diagnosed two Securities and exchange Commission rules that would pose a risk to the campaign’s finances unless Christie resigned as Governor. “One rule, enacted in the mid-1990s, restricts Wall Street executives whose firms underwrite municipal bonds from making personal contributions of more than $250 to a governor running for federal office – or risk being banned from doing business in that state for two years.” That would scratch the moola for Romney’s campaign from banks such as Goldman Sachs, JP Morgan Chase, and Citibank, because they do business with New Jersey. “The second rule, enacted in 2010, limits pension-investment advisers from making campaign donations to a governor running for federal office.” That would clip contributions of financial firms such as Morgan Stanley, Lazard and Wellington Advisors, because they also do business with New Jersey. Suddenly, unless Christie resigned his office, he was the candidate that Romney could not afford. (page 214)

 

 

28 responses to this post.

  1. Posted by Anonymous on December 2, 2014 at 8:48 pm

    TL voted for Christie, she is totally satisfied with the job he has done. He did much better than all previous governors

    Reply

  2. Posted by Anonymous on December 2, 2014 at 9:15 pm

    One can run but cannot hide from issues whether they be personal or political. At least Christie will get to say I told you so at the end of the day in regards to default on pensions and healthcare benefits

    Reply

    • Posted by Tough Love on December 2, 2014 at 9:43 pm

      And he’ll be correct. PAST administrations “caused’ the problem by granting these grossly excessive pensions & benefits, and both more recent PAST and CURRENT legislatures don’t have the stomach to stand up to their financial benefactors … the Public Sector Unions … and MATERIALLY reduce these promises for all CURRENT workers.

      Can’t be done, you say ?

      Than cut retiree healthcare subsidies to ZERO for all current & future retirees immediately. Same money, different leg.

      Reply

  3. Posted by Anonymous on December 2, 2014 at 9:30 pm

    The same rules pay-to-play rules exist today, so see us CC. What’s with the Canada trips. I call the Keystone Pipeline the world’s largest Molotov cocktail. If the US can’t secure its borders, how will they protect the pipeline from terrorist? Canada can keep its nasty sand oil and unhealthy canola oil. How many undocumented Canadians have blended undetected. By the way could Canada please ask Charles Krauthammer to come home for an extended visit, he does still have duel citizenship, doesn’t he? Christie’ s campaign for the White House will not be grassroots, 99%ers, this will be the sho nuff 1% takeover of the US with. CC as puppet, President. The Banana Republic of North America. Soul selling. I wish CC God speed.

    Reply

  4. Posted by Anonymous on December 2, 2014 at 9:32 pm

    So see you CC.

    Reply

  5. Posted by hondo on December 2, 2014 at 10:53 pm

    Good buy CC hello Stephen Sweeney !

    Reply

    • Posted by Anonymous on December 3, 2014 at 9:08 am

      Excuse you, Kim is the LT Governor of NJ if he leaves she steps up, unless there is some unresolved issue that might prevent her moving up to Governor.

      Reply

      • Posted by Tough Love on December 3, 2014 at 11:45 am

        I think he means that the now Union-ass-kissing Sweeney will be “elected” the next Governor.

        God hep NJ if that happens.

        Reply

        • Posted by dentss dunnign on December 3, 2014 at 12:10 pm

          We all know New Jersey had stupid voters but I don’t believe they’ll be ready to be led by a guy who’s highest level of education is a GED …..

          Reply

          • Posted by Anonymous on December 5, 2014 at 10:05 am

            The accrued PERS accumulations plus accumulations under new 401a and 403b contracts will provide a greater retirement payout if lifetime income is effectively combined with other available distribution options plus social security at 66 or 70. Plus the State can’t borrow money, it is for the “the exclusive benefit of the employee and their beneficiaries.

        • Posted by Anonymous on December 4, 2014 at 12:25 pm

          The union executive board are a part of the problem. The receive excessive pay but fail to provide preventive workplace intervention, the scrutiny needs to turn to them. We pay dues for workplace protections not retail discounts. Why weren’t health benefits protected, why did they allow borrowing, why wasn’t the defined benefit pensions turned over to private insurers that would have protected the employees exclusive rights to their vested accumulations. Unions are supposed to be watchdog protectors. They are fat cats, too far removed, blinded by their paycheck, personal abundance. They allow this Administration abuse the members because CC knows their secrets. Where us the ethic report, outcome of the ethics investigation? The members need to start making the union executive committees work for their huge member supported salaries. By the way let’s have a audit of their pensions and benefits. The union officials dropped the ball.

          Reply

          • Posted by Tough Love on December 4, 2014 at 1:00 pm

            Quoting …”why wasn’t the defined benefit pensions turned over to private insurers that would have protected the employees exclusive rights to their vested accumulations.”

            The answer to that one is easy ….. because Private insurers would price your promised benefits APPROPRIATELY based on the value of the benefit promised promised and the risk incurred (and not very materially low-ball them the way Public Sector retirement systems ALWAYS do), and doing so would mean that either (a) the Taxpayers would have to pay just about DOUBLE what the state now says your pensions cost, or (b) if the Taxpayer couldn’t be hoodwinked into paying that 100% increase, then your promised pension benefits would have to be HALVED.

          • Posted by Anonymous on December 4, 2014 at 1:52 pm

            TL, private insurers have been providers of public defined benefit pensioners the 1900’s. The NJABP is basically a hybrid pension system that has been working decades in higher ed. you do not know what you are talking about.

          • Posted by Tough Love on December 4, 2014 at 3:51 pm

            You and I have had this conversation several times before, and you are talking about something different than I am.

            I’m talking about the ACCRUED benefits under the NJ DEFINED BENEFIT (DB) pension Plans (applicable to almost all NJ Public Sector workers, both Local and State), as well as FUTURE benefits that will accrue under THOSE Plans.

            THOSE plans … for PAST or FUTURE accruals will NEVER be transferred to a Private insurer for the reason I mention in my above comment.

            NJ has doomed itself via over-promising and under-costing these Plans … and the ONLY way out is either raising Taxes by about $5 Billion annually to pay for the TRUE cost of these grossly excessive pension promises, or halving the promised pensions …… with either option totally unacceptable to the impacted party.

            No Private Sector insurer will take-on the financial obligation to pay those promised benefits w/o being paid the TRUE expected cost of the promised pension benefits, and that TRUE cost is roughly DOUBLE what the State of NJ has been telling it is for many many years.

          • Posted by Anonymous on December 4, 2014 at 5:27 pm

            Public employees can make an irrevocable transfer to NJABP.

          • Posted by Tough Love on December 4, 2014 at 5:53 pm

            Anon, I’m not sure what you mean by that … i.e., exactly WHAT is being transferred?

            What I’m certain of is the that a worker’s promised PAST-Service accrued pension under their DB Plan (not some other side DC or hybrid Plan) cannot have that full guaranteed obligation transferred to a Private Sector Insurance company ….. under which the worker’s pension would be protected from reduction (by that Insurance Company) even if the STATE when broke.

          • Posted by Anonymous on December 4, 2014 at 11:29 pm

            The employees are allowed to transfer accrued accumulations from PERS to one of the private providers under NJABP, it’s the law.

          • Posted by Anonymous on December 4, 2014 at 11:37 pm

            If the unions had been doing their jobs, all local, county and state employees would understand they have an option to transfer from PERS to NJABP. NJABP is a hybrid plan which is a defined contribution plan during the accumulation period but becomes a defined benefit plan if lifetime income is chosen in the payout phase. The union’s are failing the membership while raking in big salaries and paid benefits.

          • Posted by Tough Love on December 5, 2014 at 12:43 am

            John, Not that I need to win a debate with the above “Anonymous”, but unless Anon is intentionally being deceiving, he believes and has stated the following ……………”The employees are allowed to transfer accrued accumulations from PERS to one of the private providers under NJABP” …………..that I interpret to mean that a worker’s promised PAST-Service accrued pension under their DB Plan can be transferred to a Private Sector Insurance company (presumably for the SAME pension benefit level already accrued).

            I know that States do strange and very stupid things quite often, but a Public Sector DB Plan allowing such a transfer (with the high associated cost that the Private Sector insurer would likely charge to assume that financial obligation), ESPECIALLY under a Plan that is as underfunded as are NJ’s Plans, would be incredibly irresponsible, and exacerbate (by lowering) the funding ratio for Plan participants that do NOT elect to make that transfer.

            Are you at all familiar with any “transfers” allowed under NJ’s Plans, and if so, is it the Past Service accrued DB Plan accruals that can be transferred as Anon seems to be implying ?
            ——————————————–
            I DO understand that if Anon is talking about transferring an accumulation in a side-fund “associated” with a DB Plan, that this is a non-issue (as the insurance company would simply provide an annuity with a payout amount consistent with it’s own pricing), but Anon seems to be implying that the actual main DB Plan accruals are being transferred.

          • NJABP handbook is here:
            http://www.state.nj.us/treasury/pensions/pdf/handbook/abpbook.pdf

            Here is the Fact Sheet comparing PERS to the ABP:
            http://www.state.nj.us/treasury/pensions/epbam/exhibits/pdf/ea0235.pdf

            which includes this paragraph:

            If you are currently in the PERS, you can continue that participation or transfer to the ABP. If you are currently in the TPAF or PFRS, you must
            transfer to either the PERS or ABP. These are one time decisions which are irrevocable for the balance of your employment with your current employer.
            Accordingly, you are urged to consider this choice carefully and to discuss it with your financial advisor.

          • Posted by Tough Love on December 5, 2014 at 3:36 am

            Looks like I’ll have to read through those sources (quite a bit there) …….. but for the short answer (if you know it now), what do the words …”If you are currently in the PERS, you can continue that participation or transfer to the ABP.” mean?

            Anon seems to believe that it means that the PAST service accrued monthly pension benefit obligation (irrespective of what the State would have to pay the Private Sector insurer to assume that financial obligation) can be moved to the Private insurer.

            I’m sure you understand why this seems financially absurd……….. the State would have to fork over to the insurer almost double what it has been saying all-along that the pension benefit to the transferring individual costs.

            Do you know if this is what that quote above allows and if PERS is really transferring the high amount of assets the Private insurer is certainly demanding to accept that obligation?

            If so, PERS is completely nuts, it’s Trustees are violating their fiduciary obligation to ALL Plan participants, and this transfer option should be shut down immediately.
            ————————————————————————
            Being a logical person, and somewhat knowledgeable on pension issues, I suspect that the above quote may simply mean that ONCE YOU TRANSFER from PERS to the ABP the participant’s FUTURE Service retirement accruals fall under the ABP provision, but PAST Service accruals earned under PERS remain untouched. This scenario is certainly more reasonable.

          • Posted by Anonymous on December 5, 2014 at 8:36 am

            Thanks John, TL for years PERS members voluntarily or because of job changes have moved their service related accumulations from PERS to NJABP. The transferred accumulations are frozen in fixed accounts, the participants under 401a and 403b accumulate retirement benefits under the dc options at retirement the old PERS monies can be distributed under one of the plan options, this has been available for decades. The employees need to have a clear understanding of this option, I blame the union executive boards for the information void. Again NJABP is a hybrid retirement plan, it is a defined contribution plan during the accumulation phase, once vested the entire accumulation belongs to the employee. At retirement if the employee chooses lifetime income for all or a portion of their accumulation the annuities work like a defined contribution pension with lifetime monetary perks, the choice is the employee. Union membership should insure protections it’s not retail discounts and political pacs. The membership must be educated about the contract and the benefits provided. Union executives have dropped the ball, the are blinded by member sponsored fat salaries and benefits. They fail to do their jobs and the members suffer.

          • Posted by Anonymous on December 5, 2014 at 8:40 am

            John, NJABP is a group/pooled resource plan contracted to private insurers that have decades of experience with insurance based retirement products.

          • Posted by Anonymous on December 5, 2014 at 10:17 am

            defined benefits payout plan.

  6. Posted by hondo on December 3, 2014 at 11:48 am

    Only time will tell!

    Reply

  7. Posted by Javagold on December 3, 2014 at 9:46 pm

    A high school dropout as governor of NJ. That just about sums up Jerseys future.

    Reply

    • Posted by Anonymous on December 4, 2014 at 12:08 pm

      Most high school graduates couldn’t pass the GED test. Obviously, his GED didn’t hinder his rise to Senate President. The fact that he received a GED ends the dropout reference, people stumble and rise using available. alternatives.

      Reply

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