So What’s the Plan?

The Wall Street Journal just posted their article on today’s court hearing and included  a helpful chart:

nj pension contributions
.
and reported this most informative exchange between the judge and the state’s lawyer:

Seven months ago, Judge Jacobson made an emergency ruling to allow Mr. Christie to cut last year’s pension payment, saying an unforeseen revenue gap made it challenging. But she didn’t rule on future years.

On Thursday, she seemed tougher on the state, saying she could find it had made no legitimate effort since then to make this year’s payment.

Speaking from the bench, she said the state had been “empty of any initiative to address this problem, other than founding a commission.”

She indicated the administration should be more worried about the problem and suggest solutions: “Our bond rating may be dependent on it. We promised these workers when we increased their contributions.”

Jean Reilly, an administration lawyer, said movement was likely happening behind the scenes and Mr. Christie would outline his plans in a speech next month.

If anything is being planned behind the scenes it is an exit strategy for Christie away from this problem he has exacerbated and is intellectually and philosophically incapable of managing.

38 responses to this post.

  1. Posted by Anonymous on January 16, 2015 at 2:08 am

    Hey John, if the recommend contributions would have been made during the Whitman and Mcgreevey years where would we stand today??

    Reply

  2. Posted by Anonymous on January 16, 2015 at 2:10 am

    Hey John could you also let TL know that John Corzine put more money in percentage wise than Christie by far.

    Reply

  3. Posted by Tough Love on January 16, 2015 at 3:00 am

    I’m starting to worry that the judge hearing this case, by not even considering (or inquiring about) whether these Plans are more generous than necessary, just, fair, or affordable, ….. and THEREBY bringing the possibility of pension reductions into the discussion ….. that she may be conflicted in not wanting her own pension reduced.

    While I await the Pension Commission’s recommendations, I too believe that Christie is planning an exit strategy for Christie away from this INSOLVABLE (w/o great pain to the Taxpayers and/or the workers/retirees) problem.

    Reply

  4. Posted by Anonymous on January 16, 2015 at 6:28 am

    Hey TL, duh! wake up! Dont you think that idea has entered the heads of every politician as well! Oh boy, what a genius we have here

    Reply

  5. Posted by Anonymous on January 16, 2015 at 6:37 am

    Since pension reform is in the air there is a group of county employees statewide that have been shafted for decades. Rank and file employees in county sponsored federal supported “Workforce Development and anti-property programs”, work for years and decades in these renewable grant funded jobs. The executive directors might be included in the State pension sponsored ACTS defined contribution program but other program employees are not, where are the unions in this matter? How can county leaders justify not providing long-term employees pensions enjoyed by the long-term employees? The counties renew the grants for these programs for years, politically connected people are hired as management. This is academic, people work up to 45 years in workforce and antiproverty programs and have noretirement benefits most are women and minorities, the managers are mostly white males. This is wrong on many levels and must be corrected now.

    Reply

  6. Posted by Mike on January 16, 2015 at 10:27 am

    One comment on the chart, which also appeared a few months ago in the first report of the Pension and Benefit Study Commission, noting the same source. The numbers might correctly reflect NJ payments out of the NJ budget, but golly – the Pension Obligation Bonds of 1997 added $2.2 billion to the funds, and it really seems like that money should be counted somewhere in the chart.

    Reply

  7. Posted by javagold on January 16, 2015 at 11:53 am

    Summary. $2 billion good money was thrown in after bad money the past 3 years. This is what happens to all ponzi scams.

    Reply

  8. Posted by PatB on January 16, 2015 at 2:40 pm

    The word from the unions is that the administration has been reaching out to some of the smaller unions for feedback, that the pension commission will recommend a freeze on the pensions and an immediate start of a new, unspecified plan.

    Reply

    • Posted by Tough Love on January 16, 2015 at 3:07 pm

      WONDERFUL recommendation and EXACTLY what NJ’s Taxpayers need and deserve. Hopefully they’ll do it right with ALL (yes ALL…. including all Safety workers with the MOST egregious pensions) CURRENT worker’s DB Plans hard frozen (ZERO future growth… no salary, no service, no NOTHING !)). .

      What’s fair & reasonable for all parties (the workers & the Taxpayers) is to get exactly the same as what Private Sector Taxpayers get … Social Security plus a 3%-4% contribution “match” into a 401kPlan.

      That’s called EQUAL !
      ———————————————————————-
      That said, my guess is that the Commission will be recommending something along the lines of the retirement Plan for Federal workers … a 1% per-year-of-service DB Plan plus a modest Defined contribution Plan layered on top. While still (UNJUSTIFIABLY) greater than what Private Sector workers get (Earth to the Commission members … NJ doesn’t have printing press like the Feds do) and very likely still unaffordable for NJ, it would be a lowering of the current financial “mugging” of NJ’s Taxpayers via the current (even MORE generous) DB Plans.

      Politically that’s a “SAFE” recommendation for the Commission because it’s REAL REAL difficult for NJ’s insatiably greedy Public Sector Unions and workers to argue that it’s not adequate and not fair.

      Reply

      • Posted by Tough Love on January 16, 2015 at 3:11 pm

        Should have added ……….. If the Commission members chicken out and make that recommendation only for NEW workers (or almost as bad …. leave Safety worker out), they will have sealed the fate of NJ’s Plan (guaranteed failure), and the Commission members should be tarred and feathered.

        Reply

        • Posted by George on January 16, 2015 at 9:40 pm

          leave Safety worker out – If the number of union members declines beyond a certain point they will not be able to manipulate elections. Public safety needs the other unions for electorial support .

          On the other hand public safety got raises in the Vallejo bankruptcy, while other workers got screwed. But Vallejo will probably go bankrupt again, that is when the police will get cuts.

          Reply

      • Posted by Anonymous on January 16, 2015 at 5:22 pm

        Oh TL you are so naive. The smaller unions! bwahahahhaah, being a member of the smaller unions, I know for a fact they have absolutely no power and on say in anything that goes on. CWA and NJEA will have absolute power. Good Luck with that!!!!!

        Reply

        • Posted by Tough Love on January 16, 2015 at 8:16 pm

          Lets be blunt …… you’ve an idiot.

          Reply

          • Posted by Anonymous on January 18, 2015 at 10:50 pm

            “you’ve an idiot” = you have an idiot

            Unless he has you in his basement, he isn’t harboring an idiot. Since you like to point out whenever anyone else improperly spells or makes a typo…..pot meet kettle LMAO!

      • Posted by Tough Love for Tough Love on January 16, 2015 at 9:57 pm

        Ah yes, a judge come out and calls the state on its ‘bluff’ and regardless of what the guvs ‘hand picked’ 401k commission comes back with, it will be LAW. Of course things like laws don’t matter to TL or promises for that matter. Which, is why TL’s promise from the FED gov not to take his tax sheltered 401k, 403b, social security….whatever is null and void as well. TL…how about your ‘right’ to private property…yeah, you know what, that promise can be abrogated too. So what don’t you volunteer to give up your home because your ‘rights’ are just as flexible as those that are applicable to others. I still laugh outloud everytime I log in to see you justify theft of ‘other people’s money’ because you didn’t object to the contracts that were made in the past by your elected reps. Object, why didn’t you object then? Because you were okay with them. You could have protested or run for office. Private employees struggle more for less, so in your race to the bottom, everyone must suffer. Good god. That thinking has us all in chains with you arguingover who gets locked up first. Way to go.same question..propose a solution that honors contarcts and is generationally fair. I’ve been waiting, you seem unable to proffer a solution.

        Reply

        • Posted by Tough Love on January 16, 2015 at 10:21 pm

          Lots of hot air in your comment, but what it gets down to …………….

          I had nobody COLLUDING to give me “more” than necessary, reasonable, fair, or affordable …… unlike Public Sector workers. It’s that COLLUSION, (between your Unions and our Elected Officials) with Private Sector Taxpayers stuck with the bill for the grossly excessive pensions & benefits that are the product of that collusion ….. that justifies Taxpayers reneging on the absurd Public Sector pension & benefit promises.

          Reply

  9. Posted by Titon7 on January 16, 2015 at 9:32 pm

    Line of the year.. You’ve an idiot.

    Reply

    • Posted by Anonymous on January 16, 2015 at 9:51 pm

      Yes sir, speaks volumes about the poster. She is incapable of proofreading even six words.

      Reply

      • Posted by Anonymous on January 18, 2015 at 10:54 pm

        “you’ve an idiot” = you have an idiot

        Unless he has you in his basement, he isn’t harboring an idiot. Since you like to point out whenever anyone else improperly spells or makes a typo…..pot meet kettle LMAO!

        Reply

    • Posted by Tough Love on January 16, 2015 at 10:23 pm

      “v” ——-> “r”

      Reply

      • Posted by Anonymous on January 18, 2015 at 10:52 pm

        As I posted above but so good I have to repost here:

        “you’ve an idiot” = you have an idiot
        Unless he has you in his basement, he isn’t harboring an idiot. Since you like to point out whenever anyone else improperly spells or makes a typo…..pot meet kettle LMAO!

        Reply

      • Posted by Anonymous on January 18, 2015 at 10:53 pm

        As I posted above but so good I have to repost here:

        “you’ve an idiot” = you have an idiot

        Unless he has you in his basement, he isn’t harboring an idiot. Since you like to point out whenever anyone else improperly spells or makes a typo…..pot meet kettle LMAO!

        Reply

  10. Posted by Anonymous on January 17, 2015 at 9:26 pm

    I think she meant to say: “You’ve an idiot in me.”

    Reply

  11. Posted by truthnolie on January 19, 2015 at 1:46 pm

    I know I’m urinating into the wind when I consistently post (and unlike others I have limited posting to when i have something interesting and on point to say instead of regurgitating the same thing over & over & over & over….you know who they are)….I also know some here only want to focus on grouping all the pensions together and railing against pensions in general but:

    http://www.nj.com/politics/index.ssf/2015/01/how_did_nj_get_into_this_pension_mess.html

    From the article:

    “What about the municipalities?

    Local government portions of the pension plans are much better funded than the state’s. Moody’s Investors Service said late last year that these local governments “currently are not affected by the state’s severe pension underfunding problem.”

    Local funding for the Public Employees’ Retirement System is 73.9 percent, and it’s 77 percent for the Police and Firemen’s Retirement System — the two state and local government shared plans. The state government portions are funded at 46 percent and 48.6 percent, respectively.

    “Cities and counties have historically contributed to PERS and PFRS at much higher rates than the state,” Moody’s said. “These local governments’ annual rates determined contributions., determined by state statute, have ranged from 84 percent to 92 percent of (annual required contribution) in recent years, versus the state’s very low 4 percent to 28 percent.”

    So…as I’ve said, the STATE pension is separate and distinct from the LOCAL part. Although the STATE has not contributed the specified amounts over the years the municipalities (most) have contributed the required amounts to the LOCAL systems and I don’t believe the municipalities can just stop paying into the plan like the state has chosen not to do.

    Reply

    • Posted by Tough Love on January 19, 2015 at 3:03 pm

      It’s really is a shame I don’t comment on nj(dot)com (they require identifying sign-in) because your linked article as well as most others are FULL of errors, distortions, misstatements, and material omissions of fact, and clearly biased in favor of Public Sector workers. It would be nice for readers really looking for the WHOLE STORY to read (via comments) challenges to a great deal of the misinformation presented. Others do so, but I’m much further along the learning curve.

      And you pass it along the misinformation ….

      For example that article says that for STATE Plans …”An actuarial rule change that assumes less optimistic investment returns ” (which more accurately should say; new GASB rules have changed the interest rates used in discounting Plan liabilities) … and describes the impact on STATE plans as doubling the UAAL to $83 Billion, (the result of which drops their funding ratio from 49% to 33%), but with NO MENTION of the impact of the new GASB rules on LOCAL Plans. In fact the ONLY funding statistics included on LOCAL Plan funding is this statement …

      “Local funding for the Public Employees’ Retirement System is 73.9 percent, and it’s 77 percent for the Police and Firemen’s Retirement System ……”.

      But that’s based on the old GASB rules. Under the new GASB rules, the LOCAL funding ratios drop to 65.81% for PERS, and 67.6% for PFRS ….. source: http://www.bondbuyer.com/legalnotices/NJ_StateofNewJersey_Supplement_POS.php

      Why was that omitted, and a better question is why did you NOT clarify this material “omission of facts” ….. given that you claim to be so well-informed on the subject and comment under the handle “truthnolie” ?

      Reply

    • Posted by S Moderation Douglas on January 22, 2015 at 2:56 pm

      ” I also know some here only want to focus on grouping all the pensions together and railing against pensions in general but:”

      Absolutely correct. I have not followed NJ, but,

      “Two-thirds of states contributed at least 90 percent of full funding in fiscal year 2013, according to Moody’s. New Jersey contributed 28 percent.”

      explains a lot. And that’s just 2013, not counting a decade of previous unfunding.

      Also, it appears most NJ local systems contributed most of required funding. Meaning NJ state is the delinquent, and trying to blame it’s workers.

      ‘ “some” here only want to focus on grouping all the pensions together’

      “Some” also group all public employees together as overpaid and overcompensated. In actuality, those employees whom economic statistics have determined earn more than the private sector, are not nearly as “egregiously” overcompensated as “some” imply.

      I have no idea how a commission can pull a rabbit out of this hat. Best of luck to New Jersey, it’s taxpayers, and employees.

      Reply

      • Posted by Tough Love on January 22, 2015 at 4:24 pm

        Nonsense as usual …. ignores that “full funding” means that taxpayers implicitly accept the promised pensions as reasonable …………. and CLEARLY (by any and every reasonable measure) when compared to what Private Sector workers get in employer-sponsored retirement benefits (mostly via DC, not DB Plans), they are NOT reasonable.

        And if they are NOT reasonable, then the taxpayers should fund ONLY the reasonable share ….. which I define as pensions costing EQUAL to (as a % of pay) what Private Sector workers get, but NOT more.
        ——————————————-

        NJ is out of rabbits. Either one or both of the workers/retirees or the Taxpayers is going to get royally screwed.

        Reply

  12. Those recommended contributions before 2004. Basically, they double counted the stock market bubble and a high rate of return from that peak, which was fraud, and failed to fully adjust for the benefit increases and early retirement.

    I’m pretty sure that if one were to take the entire period from 1990 to today, New Jersey’s investment earnings beat any reasonable long term expectation.

    And yet even if the “recommended” contribution had been made through 2003, the state would probably be deep in the hole. That is fraud by Generation Greed.

    Reply

  13. Posted by I Wonder on January 22, 2015 at 12:30 pm

    With a pattern of failure to adequately contribute starting in 1997, I have to wonder where were the Trustees of the the Pension Fund(s) and their fiduciary responsibilities? As I have understood things trustees have a duty to provide the promised pension benefits and that includes assuring that all parties make their required fund contributions, and failure to do so makes a fiduciary personally liable, does it not? A given Governor and Legislature can be blamed for a shortfall in any given year, but the Trustees are supposed to be the whistle blowers for faillure of any party to fund their annual share and take legal action if necessary. Has there been a conspiracy at work here that has victimized both the taxpayers and the employees?

    Reply

    • Posted by Tough Love on January 22, 2015 at 1:05 pm

      Actually NEITHER has been victimized much so far, but the pot (the HUGE UAAL) is about to explode, and the ONLY recipients of that explosion are the Taxpayers and/or the workers/retirees.

      Since (a) the promised pensions & benefits are grossly excessive by any and every reasonable measure, unnecessary (to attract and retain a qualified workforce), unjust, unfair (to Taxpayers) , and clearly unaffordable, and
      (b) I’m not a Public Sector worker/retiree riding this gravy train

      I vote for make the worker/retirees pick up 90+% of the fallout.

      Reply

  14. Posted by Mickey on January 22, 2015 at 1:42 pm

    The plan and practice NOW… Continue to dramatically underfund, wait for the system to implode, negotiate with the Unions to reduce pension to a reasonable level. the IMPLOSION will make enough noise to get everybody’s attention and bring all to a sense of reality. GOOD PLAN!!!! GO CHRIS!!!!

    Reply

    • Posted by Tough Love on January 22, 2015 at 4:32 pm

      The Unions won’t give in initially. Even when they are stone-cold sure NJ simply CANNOT pay up, they will (a) demand full pension payments on a pay-as-you-go basis from general account revenue, and (b) Plead with the Fed. Gov’t for a bailout

      Neither (a) nor (b) will work …. (a) won’t work because doing so would require $5+ Billion annually of additional revenue, and Christie can’t even find $1B today.. (b) won’t work because not only would “financially responsible” States revolt, but with a Republican-controlled Congress, no chance AT ALL.

      Reply

      • Posted by Mickey on January 22, 2015 at 8:04 pm

        I agree! No need to attempt to negotiate now.
        When money runs out, the Implosion will be heard all the way to Cape May!
        Then change can be made.

        Reply

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