CF1 – Christie Freeze: The Obvious Critics

A Roadmap to Resolution of New Jersey’s pension and benefit problems deserves its own series so here it is: my assessment of Christie-Freeze  (since I could not think of an apt acronym I went with a combination of the major proponent and major feature) .

donut christie

The next few blogs will examine aspects of the CF plan and we kick off with those who will be the biggest losers under it.

Al Mirabella has been a Union County Freeholder since 1991 earning about $30,000 per year for that part-time position that includes membership in the New Jersey Public Employees Retirement System (PERS).

Last month he was appointed the new township administrator for Scotch Plains.  Had Mirabella stayed in his freeholder position only (he has said he will hold both jobs) his annual pension on 1/1/18 after 27 years of service would have been about $14,727 ($30,000 / 55 x 27).  With his second job added that annual pension jumps to $73,636 ($150,000 / 55 x 27).  That $58,909 annual difference for a relatively young retiree with COLA adjustments is conservatively worth about a million dollars.

Who will pay that extra million dollars? Not the township of Scotch Plains which according to the PERS contribution schedule will only need to pay 11.92% of his salary (about $43,000 over 3 years). But under CF if Al Mirabella wanted to accrue $300,000 in pension benefits annually Scotch Plains taxpayers would have to pay it to him.  They are not going to do that so if CF passes Al Mirabella loses a million dollars.

This happens often in Union County (and I suspect to some extent all over the state).  Older politicians who cash in with sinecures that boost their pensionable salaries as they approach retirement:

It is these people, many with public forums, who will be bellowing loudest against these reforms.

11 responses to this post.

  1. Posted by javagold on February 24, 2015 at 11:29 pm

    Fuck them all. I’m sick of the lowlifes sucking the life out of the rest of the taxpayers.


  2. Posted by Eric on February 25, 2015 at 10:18 am

    Rather than “getting down into the dirt”, and seeing who may be affected by what, the question remains of the bigger picture and is this something that may work or is it merely a “pipe dream” done for political reasons?


    • Eric,

      This is THE solution. It will work but it will cost a lot people a lot of money (which I will get into in these next blogs) and will be very tough to get done. Initial reaction is that it doesn’t have a chance of passing since the vast majority will get nothing more and have to pay much more. Fooling them into it is the problem and I don’t think Christie can do it. 5 years ago maybe. Now? Not with his track record (or lack on one) for integrity.


      • Posted by Tough Love on February 25, 2015 at 12:02 pm


        Why did you say “fooling them into it” ? Isn’t the financial problem “real”, with material benefit pension/benefit reductions a “necessary” part of the solution?

        Wouldn’t saying something like …. while these reductions are a necessary part of any solution, convincing the workers to accept them will be a huge challenge …. be much more accurate ?…..


        • No, I meant ‘fooling them into it’ much like private sector employees were fooled into 401(k) plans starting in the 1980s.


          • Posted by dentss dunnigan on February 25, 2015 at 3:14 pm

            401K’s worked great …our company started one in 1983 gave us 7 mutual funds from fidelity I got money taken out of my paycheck every pay period have never sold any fund to this day I’m not about to say how much is there but even at today’s low interest rate I would see over 150K in interest alone . 401K work if you have a plan and a goal …and stick with it and just keep shoveling money into it .

  3. Posted by Anonymous on February 25, 2015 at 10:20 am

    Christie will run for president and he may very well win as he will lie profusely and majority may believe most of what he says.


  4. So will New Jersey’s younger and future public employees have to contribute more than 100 percent of the cost of their pensions, as in Illinois, and have their wages cut as well to make up for Generation Greed?


    • Posted by Tom on February 26, 2015 at 2:38 pm

      They will be on a new pension system that is firewalled from the frozen pension system. In that sense, they will no longer be on the hook for their elders’ benefits.

      However, the State of New Jersey will still continue to pay into the frozen pension system to restore it to a fully-funded state. This money would otherwise have gone into the new pension system, so it is still a cross-subsidy from younger workers to older workers.

      Eventually, after a couple of decades, death and inflation will eliminate the liability on frozen pensions. At that point, the cross-subsidy goes away.


      • Posted by Tough Love on February 26, 2015 at 4:18 pm

        It’s quite a stretch to call the reduced taxpayer contributions to the new retirement Plan a “subsidy” (of the old Plan responsible for all already accrued pension benefits).

        More appropriately the taxpayer contribution to the new Plan are just about EQUAL to what Private Sector employers contribute to their workers’ retirements (via 401K Plans).

        That EQUALITY is the appropriate level of contribution. The much greater contribution level still needed to fund the old Plan, while UNJUST to Taxpayers, is likely a legal problem Taxpayers will have to accept.


  5. Posted by Mike on February 26, 2015 at 2:47 pm

    Except for pretty recent hires, the plans provide very young “normal retirement ages” and very generous earlier retirement benefits. If a teacher (say) believed that being hired into the same or a nearby school district was pretty likely, there may have always been an incentive to double dip.

    I wonder how a “freeze” would affect this decision ? And I wonder if the pension fund or the State could afford a sudden flood of retirees.


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