Christie’s Pension Study Commission Hardly Working

A couple of weeks ago Chris Christie gave us an an update on where the New Jersey Pension and Benefits Study Commission he set up last August was:
.

.
But yesterday, according to an njspotlight.com story, a member of that commission seemed to feel his work was over:

Byrne is a member of a Pension and Health Benefits Study Commission established by Christie last August to write a report recommending solutions to the pension crisis. Byrne did not know when the report will be released and declined to say what the commission would recommend.

“I’m surprised it’s not out yet. The commission is basically done with its work,” he said. Byrne said he was comfortable with the report’s “general direction,” but would put out a statement when it is released indicating where he “might have come out just a little bit differently.”

“This is such a huge problem,” he said. “We took some of the smartest actuaries in the country, and there are really only limited options for dealing with this. It’s not like we have a menu of, ‘Hey, here’s 10 different ways to close a gap of at least $37 billion, and maybe considerably more.’”

Who’s to believe?

18 responses to this post.

  1. Posted by Eric on January 30, 2015 at 11:01 am

    John:
    I thought that the $37 billion figure went the way of the dodo bird. Are we still to believe that asset smoothing techniques can resurrect the failures of a Lucent Technology or a Global Crossing or even an Enron and turn them into the next Apple with the waive of a magic wand? This guy sounds delusional.
    Eric

    Reply

  2. Posted by Anonymous on January 30, 2015 at 1:49 pm

    John, do you ever see NJ selling the turnpike or any of its assets to reduce the debt? And I dont mean for pensions only.

    Reply

    • Posted by Tough Love on January 30, 2015 at 2:27 pm

      Assuming the current TPK toll fees exactly cover all costs, a sale to an investor will simply ADD to those fees a reasonable return on their investment (likely 5-8% annually).

      If being done to raise revenue to pay for debt or the excessive Public Sector worker pension/benefit promises, does that really accomplish anything, or just shift needed incremental revenue from (a) higher taxes, to (b) higher toll-road fees?. But, perhaps slightly better for NJ’s Taxpayers as out-of-State TPK users would now be sharing in NJ’s debt and pension/benefit costs.

      Of course the much better (but politically difficult) choice is to reduce the pension accrual rate (for the FUTURE service of all CURRENT workers) by the 50+% share that is now greater than necessary, just, fair to Taxpayers, or affordable.

      And. to completely eliminate retiree healthcare subsidies …. noting that employer-sponsored retiree healthcare benefits are all but gone in the PRIVATE Sector.

      Reply

    • I don’t know enough about the mechanics behind how that would work but I presume, as with most sales of government property, that the idea would be to get a lot of money up front. That’s not the need of the pension which already has a lump of money (though not nearly enough) in a trust and the problem is that it is going to evaporate unless they come up with a plan to lower future payouts which is where I see their efforts focusing.

      Reply

      • Posted by Tough Love on January 30, 2015 at 7:59 pm

        I agree with the “focus” of the Commission’s efforts …. “a plan to lower future payouts”.

        From this blog article, it sounds like the Commission’s Report is actually DONE, but not released.

        Not surprising. If the Commission took their job seriously, the Unions/workers will go ape-sh** when they see the Report recommendations.

        Reply

        • Posted by Anonymous on February 2, 2015 at 10:21 am

          Health benefits will be sacrificed, workers will pay full cost, NJ needs to setup the ACA exchanges. Spouses and children will need unemployed supported health insurance. Note: I believe CC is planning a municipal bankruptcy for AC, sad the rippling effect of this move could devastate bonding in NJ at all levels.

          Reply

  3. Posted by Titon7 on January 30, 2015 at 7:42 pm

    The report will come out with the budget address. He will say again he has the solution. Whatever he touches turns to crap. It’s over. Christie has squandered any trust with anyone interested with real pension reform.

    Reply

    • Posted by Tough Love on January 30, 2015 at 8:02 pm

      Well, the Report WILL have a solution …. you (clearly a Public Sector worker/retiree) just doesn’t want to hear it.

      What’s unfair about reducing what YOU guys get to what comparable Private Sector workers typically get … ESPECIALLY for your FUTURE service?

      Got a problem with EQUAL ?

      Reply

  4. Posted by George on January 30, 2015 at 9:15 pm

    Since Atlantic City is going to go bust in the next few years, I wonder if that is going to be used as a test case? Supposedly Christie is interviewing emergency managers.

    Reply

  5. Posted by George on January 31, 2015 at 8:24 pm

    Comparing public and private pension disclosures:

    Comparing CalPERS and CalSTRS with AT&T retirement
    http://calwatchdog.com/2015/01/27/comparing-calpers-and-calstrs-with-att-retirement/

    Reply

    • Posted by Tough Love on January 31, 2015 at 11:19 pm

      The author of your linked article is usually on the ball, but this time he blew-it. Why just state and discuss valuation differences ? Why not show something that rings home with your readers ?

      HE COULD have and SHOULD have shown how an AT&T pension (one of the best and last remaining Private Sector Traditional-style Defined Benefit Plans) compares to the TYPICAL pension of a similarly situated Public Sector worker ….. say someone retiring at age 55, with 30 years of service, and with a final average annual salary of $100K.

      Had he done so …… noting that not only are Public Sector pension “formula factors” (per year of service) much greater, but Public Sector Plan “provisions” are much more generous (such as very young full/unreduced early retirements and annual COLA increases, virtually unheard of in Private Sector Plans) ……… he would have easily demonstrated that Public Sector pensions are TYPICALLY 3x-4x greater in value at retirement than those of their Private Sector counterparts, and with that 3x-4x rising to 4x-6x for safety workers with the most egregious pensions.

      And if he took it a step further and looked into the worker/taxpayer split of the total cost of these very rich Public Sector pensions, he could have quite easily demonstrated that all of the worker’s actual contributions (INCLUDING expected investment earnings thereon) RARELY accumulates to a sum at retirement sufficient to buy more than 10%-20% of their VERY rich promised pension ….. with the taxpayers on the hook for the 80%-90% balance*.

      * And don’t fall for the Public Sector Union BS that investment income pays for most of the pension costs. ALL investment income derives from (and in proportion to) the actual principal contributions of the workers and taxpayers, and, in the absence of the need for the Taxpayers to make such exorbitant contributions, that investment income would have stayed in THEIR pockets (perhaps to help fund their MUCH SMALLER retirements.

      Reply

  6. Posted by Javagold on January 31, 2015 at 10:02 pm

    Read it Public Takers ……

    Quietly, and with essentially no coverage from the mainstream media, an obscure resolution (No. 41) was introduced in the US House of Representatives this week. The entire point of the resolution (The Federal Government should not bail out State and local government employee pension plans or other plans that provide post-employment benefits to State and local government retirees) is to say that the federal government is broke. It can’t pay its own bills, and therefore is shouldn’t be responsible to pay anyone else’s either. This Resolution is a pretty scary dose of honesty.

    Reply

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: