Another Stupid Idea From New Jersey Pension Reformers

William Dressel may know very little about the technicalities of pension funding but he is a Trenton insider and he gave us a major hint as to the direction pension reform in New Jersey may be taking.  According to an article on nj1015.com:

According to Bill Dressel, executive director of the New Jersey State League of Municipalities, there are behind the scenes discussions in Trenton about merging the state’s cash-strapped pension fund with the healthy municipal pension fund  as a possible solution to getting it out of the red.

“The state pension system is a ticking time bomb,” warned Dressel at the monthly meeting of the Ocean County Mayors on Jan. 20 in Toms River. “Our system is in the black. It’s about 74 percent funded. The state’s system is not in the black,” he said.

Coming from someone who defines 74% funded* as ‘in the black’ one would normally dismiss his comments as the ravings of a loon.  However, we are in New Jersey where loon ravings get enacted fairly regularly.   For what it’s worth, here is the rest of the article:

Dressel accused both sides of the political aisle of diverting dollars from the state pension system, and using that money to fund their own projects.

“We’re concerned that what they’re going to do is blend the two systems,” Dressel said. “To make their system look a little bit better and put it on solid ground is to blend the two together, and that would be a big mistake.”

Dressel told the mayors that municipalities should not be penalized for mismanagement of the state’s pension system. “You have bitten the bullet. You have paid your pension bills. They have not.”

Dressel said he feels merging the two pension fund systems would be a mistake because it would translate into more costs for municipalities.  “Your contributions would go up considerably. You taxes would go up considerably. You would have to reduce more services.”

The proposal could surface soon, according to Dressel, and he encouraged mayors to be loud on the issue when it does.

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* Using absurdly inappropriate assumptions designed to lower contributions.  An honest funded percentage for the municipality plans would be around 40% (and that includes employee contributions and POBs).

21 responses to this post.

  1. Posted by Tough Love on January 23, 2015 at 2:12 am

    The L*O*N*G Delay in the Commission’s pension reform proposals speaks volumes about the total lack of any REAL solutions that don’t include HUGE financial pain for the workers/retirees, the Taxpayers or both.

    Reply

  2. Posted by Tough Love on January 23, 2015 at 2:56 am

    Exactly what does William Dressel do as executive director of the NJ STATE LEAGUE OF MUNICIPALITIES to warrant a 2013 taxpayer-funded base salary of $199,288 (per your link) …………. and, with pension system participation since 1975, likely looking at a $150K annual pension when he retires ?

    Reply

    • Posted by Anonymous on January 23, 2015 at 3:27 pm

      He is a schill for the towns., He has been a strong supporter of reigning in public salaries(except his own). A huge supporter of arbitration reform. He is supporting this because while he is right that towns would pay more….the real reason is that SO MANY of the local politicains/boro adminstrators/part time political hacks et al….are still in the PERS municipal system. As a paid lobbyist(not unlike a union head), he despite not being a public employee, is in fact a member of the PERS system. (you know, the one where a councilman/part time pool manager/website maintainer etc. can serve for two decades plus- part time, then have their cronies give them a high paying full time job for 3 or so years then they can ride off into the sunset with a full pension that is more than DPW workers who contributed 100 times more into the system.) New LOM hires after 2010 are not. He will be long gone before the newbies have any true say.

      Reply

      • Posted by Tough Love on January 23, 2015 at 3:33 pm

        Quoting … “He is supporting this because while he is right that towns would pay more….the real reason is that SO MANY of the local politicains/boro adminstrators/part time political hacks et al….are still in the PERS municipal system. ”

        That makes no sense. If they are in the “municipal” system, a State/Local “merger” WEAKENS the municipal system

        Reply

  3. Once again, the inept politicians grasping at straws to retain the status quo. One stupid idea after the next is what got us into this mess. AC is about to go down as the town is now under the Christie appointee and Kevyn Orr–ring a bell? Coming soon to a town or city near you.

    Reply

  4. Posted by marbs on January 23, 2015 at 9:26 am

    Merging the pension plans would just be another example of politicians not being able to keep their hands off the money and stealing it. The local plans are in better shape than the state plans because the state dictated that the cities and counties make contributions much closer to those required. A case of do as I say not as I do by the state. If this is the plan it must be fought aggressively. Maybe better to totally separate the plans.

    Reply

    • Posted by Anonymous on January 23, 2015 at 12:56 pm

      10 bucks says municipalities will be forced to merge. No real reform just re-shuffling the deck chairs on the Titanic.

      Reply

  5. Posted by javagold on January 23, 2015 at 11:05 am

    KEVYN ORR IS IN THE HOUSE….AND THAT ONLY MEANS ONE THING. …… BANKRUPTCY

    Reply

    • Possibly but what’s for sure is tens of millions of dollars in fees. Detroit was $178 million. Atlantic City? Maybe you can odds on the over-under of $100 million.

      Reply

    • Posted by Tough Love on January 23, 2015 at 3:28 pm

      What NJ’s Taxpayers could REALLY use is a sizable City (like AC) going Bankrupt AND resulting in a material reduction in promised Public Sector pensions & benefits …. with NOBODY coming to the rescue.

      Perhaps THEN, when ALL of NJ’s insatiably greedy Public Sector Unions/workers see than it might happen to THEM, they will start agreeing to MATERIAL givebacks of their ALWAYS grossly excessive pensions & benefits.

      Reply

  6. Posted by Mickey on January 23, 2015 at 12:47 pm

    YIKES! WHAT CRAZINESS! The municipalities should NEVER allow their fund be merged with the state’s! The state’s fund is on life-support… it mails pension checks under the “Send and Pretend” there’s enough money theory. Let it implode! Municipalities are not the source of welfare money for state pension fund mismanagement and incompetence!!! DON’T LET IT HAPPEN!!!

    Reply

  7. Posted by javagold on January 23, 2015 at 12:50 pm

    What pension fund is William Dressel in ??? (A non public taking employee, yet so.show will get a taxpayer paying pension…always follow the $$$$$$)

    Reply

  8. Posted by javagold on January 23, 2015 at 12:51 pm

    What pension fund is William Dressel in ??? (A non public taking employee, yet somehow he will get a taxpayer paying pension…always follow the $$$$$$)

    Reply

  9. Why not for the municipalities to blend their funds? After all, they receive a great deal of state-taxpayer funded municipal aid every year (some much more than others). Any bandaid solution that will keep it all together for say, another 40 years, sounds good to me!

    Reply

    • Posted by Tough Love on January 23, 2015 at 3:11 pm

      What are you smoking ?

      With the State Pension Plans likely to run out of money in 5 (not 10) years, and with the LOCAL Plans likely failing 5-10 years later (having a funding ratio in the mid 60s under new GASB rules), how would combining the State & Local Plans make them last for 40 years?

      My guess …. you are a “STATE” Plan participant and looking for any way to help shore up YOUR pension system … even to the detriment of LOCAL Plan participants. I suggest you make your suggestion to your local town Police and see how they respond.

      Reply

  10. Posted by dentss dunnigan on January 24, 2015 at 1:43 pm

    Seems to me that if people really start to understand what’s going on here ,property seizure could be next it will just hasten the exit out of the state …if they can find anyone foolish to buy overtaxed homes …..

    Reply

    • Posted by Anonymous on January 24, 2015 at 2:36 pm

      Thankfully we found someone foolish enough to buy our over taxed home. Ironically it was a public taker. Prices since the sale 6 months ago have stopped but the taxes went up around 600.00. Remember they have to live here to work here. I agree get out sooner than later. Rent if you have to

      Reply

  11. Posted by Eric on January 24, 2015 at 1:55 pm

    dentss:
    Yes, my old gift cards, given to me by my secretary, are now worthless because I did not use them immediately. I would get out now if I were single.
    Eric

    Reply

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