CF4: COLAs A Footnote

A decision in Berg v. Christie might be moot if the entire Christie-Freeze plan gets enacted.  Page 9 of the Roadmap describes the freeze:

Freezing existing pension plans at the State and local levels means that the plans would be closed to new members and that existing members would no longer accrue additional benefits under those plans. Existing plan assets and future State contributions would be used fund the benefits of existing retirees and the benefits accrued by employees through the date of the freeze. The plan-funded 46 pension benefits of existing retirees would not be affected, and no one would lose a benefit credit for service before the freeze.

But what about the cost-of-lving-adjustments on pensions that were eliminated in 2011 and have been the subject of court action ever since?  As commenter truthnolie noticed when you follow that 46 next to the word ‘plan-funded’ to its footnote:

46 The cost of living adjustments (COLAs) at issue in Berg v. Christie, 436 N.J. Super. 220, 241 (App. Div. 2014) are not funded by the existing plan and would not be preserved or restored under the Commission’s proposal.

 

38 responses to this post.

  1. Posted by Tough Love on February 26, 2015 at 1:32 am

    Perhaps I’m digging a bit too deep, but the choice of works “plan-funded” (in the given context) is particularly odd, and I would have expected the single word “accrued” in lieu of those two word.

    Note that using the word “accrued” would be very clear (meaning all past-service accruals), but the words “plan-funded” could be interpreted to mean that accrued benefits would not be impacted TO THE EXTENT THAT THERE EXISTS ASSETS TO COVER THOSE ACCRUED BENEFITS ….. and as John has pointed out, there ISN’T sufficient plan assets to do so.

    Reply

  2. Without cola where will those who are unable to work because of disabilities,
    real and documented, not a staple in the trigger finger type, be in 10 years ?
    Example, myself a truly disabled person who is partially paralyzed from being
    struck with a pipe to the back of the head and neck ?
    With a current yearly allowance of under $25,000.00 dollars, in 10 years would
    amount to what with inflation ? Perhaps $10,000, is this fair or just for those of us
    who placed are life on the line to protect our citizens and are still to young to be
    dead in 10 years ? Or perhaps we will be by starvation.

    Reply

    • I agree with you, even Detroit that went bankrupt left a COLA in place (reduced) for Police and Fire.

      It should also be noted that the COLA was never 100% of the cost of living but 60% of the CPI-W.

      Also there are no Social Security benefits for Police and Fire, it is not an option as it was not an option to fund ones own retirement but workers were forced into PFRS with the promise of a secure retirement. This security was stolen by the politicians over the years to fund various programs.

      Oh the humanity of it if Obama ever proposed to eliminate the COLA for Social Security.

      Christie is trying to make himself look good, he could not care less about public employees pensions. Yes reform and proper payments are necessary but not all of the commissions proposals will be adopted, remember they must be legislated. His proposed constitutional amendment does not adopt anything it just requires proper payments by the state.

      The local PFRS and PERS are an example of what proper funding accomplishes. Yes payments were skipped but both are on much better footing than the state plans and should not be combined with the state. That would only steal money the locals contributed which is the plan.

      The commission report does nothing to eliminate double dipping, in fact it sees it as a non issue that just looks bad. They feel it has little or no impact on the pensions, so much for their credibility.

      Reply

      • Posted by Tough Love on February 26, 2015 at 3:49 pm

        Quoting ….”Oh the humanity of it if Obama ever proposed to eliminate the COLA for Social Security. ”

        Hardly a fair comparison when police pensions in NJ are likely 4-5 times the “DOLLAR” amount of TYPICAL SS benefits, and 10+ times the “VALUE” of SS benefits when the MUCH MUCH younger police retirement ages (with full/unreduced pensions) are factored in.

        In fact, since VERY RARELY are any Private Sector pensions COLA-increased, EQUAL Public/Private Sector treatment would call for COLA adjusting no more than 10-20% of Police pensions.
        ——————————————–

        And LOCAL NJ police pensions Plans are just about 65% funded under the new GASB rules …. a VERY POOR funding level …. and no matter how many times those with vested interests (in keeping those Plans untouched) repeat it, it’s hardly an example of what “proper funding accomplishes”.

        Reply

        • As usual you are like a broken record.

          Reply

          • Posted by Tough Love on February 26, 2015 at 4:08 pm

            Coming from you, likely a LOCAL police officer driven by nothing but self-interest (i.e. I “REFUSE” to be part of the “solution”, and lying about the TRUE funding of Local Plans). I’ll consider that a compliment.

          • Only a self absorbed A hole like yourself would consider that a compliment. LMFAO

          • Posted by Tough Love on February 26, 2015 at 5:22 pm

            And only a self-interested boor would repeatedly lie to UNJUSTLY protect their own greedy interests (LOCAL Plan pensions) at the expense of others in the SAME profession (STATE police).

          • I have never LIED unlike you and our esteemed Governor on any post I have made here or anywhere. I challenge you find one lie in any of my posts. Now go slither away.

          • Posted by Tough Love on February 26, 2015 at 5:53 pm

            JM, Just above you stated …”The local PFRS and PERS are an example of what proper funding accomplishes.”

            That’s a LIE. A mid-60s funding ratio is, under the new GASB accounting standards, VERY VERY POOR. and if just a bit lower (<60%) and a Private Sector Plan governed by ERISA, further Plan accruals would be frozen by Gov't regulation.

        • Posted by Anonymous on February 26, 2015 at 6:35 pm

          The police and firefighter could also die in the line of duty. Stop hating TL, with ISIS recruiting in Brooklyn law enforcement and firefighters are first liners in the fight against domestic terrorism, no one agrees with your foolish rants, they earn their salaries and pensions.

          Reply

          • Posted by Tough Love on February 26, 2015 at 6:51 pm

            Salaries. perhaps in NYC, but not the $115K-$125K BASE pay in NJ’s “bedroom” communities.

            And Certainly NOT their grossly excessive pension and benefits …. ROUTINELY 4X-5X times greater in value at requirement than those of similarly situated (in wages, age age at retirement, and years of service) Private Sector Taxpayers.

          • Posted by Tom on February 27, 2015 at 1:50 am

            Terrorism is an excuse routinely trotted out to explain anything. We used to say “Think of the children!” When you resort to blaming terrorism, then you have no more arguments that make sense.

            Life insurance already covers the risk of being killed on the job. The pension has nothing to do with it.

            Policemen actually have a very low rate of death on the job. It’s not even in the top ten most dangerous occupations in the US. Farming, mining, logging, construction, these all have a higher fatality rate than police officer. Yet these other workers don’t get these lavish benefits.

        • TL.No lie there local funds are in much better than the state plans.

          Funny how you went from very poor to very very poor. I guess you don’t like to be called out to prove what you say.

          BTW my exact posting was “Yes payments were skipped but both are on much better footing than the state plan” A truthful statement.

          It is easy to call someone a liar while hiding behind a keyboard no chance of getting your ass kicked like you deserve for all the berating of others you do here and on all the other blogs and articles you post on.

          The End

          Reply

          • Posted by Tough Love on February 26, 2015 at 7:44 pm

            Quoting ….. “TL.No lie there local funds are in much better than the state plans.”

            No JM you didn’t say that above, you said …… “The local PFRS and PERS are an example of what proper funding accomplishes.”

            And THAT was a LIE….. and as you said …”The End”.

          • TL proper funding accomplishes having a plan in much better shape than the state plans…again not a lie.

          • Posted by Tough Love on February 27, 2015 at 3:18 pm

            No JM, proper funding means a Plan ALWAYS near 100% funded. The LOCAL Plans in NJ have funding ratios (under the new GASB accounting rules) in the mid-60s, much WORSE the often quoted MYTH that an 80% funding ratio is “healthy”

            The MOST Authoritative source on the subject can be found below:

            http://www.actuary.org/files/80_Percent_Funding_IB_071912.pdf
            —————————–

            Your above-quoted statement was a lie….. period.

          • Posted by Tough Love on February 27, 2015 at 3:26 pm

            Quoting JM …”TL proper funding accomplishes having a plan in much better shape than the state plans…again not a lie.”

            Give some thought to how ridiculous that statement is …..

            E.g. your statement would imply that LOCAL Plans would be “properly funded” if (for example) the STATE Plans were 10% funded but Local Plans were 30% funded (BOTH being incredibly hoeendous)….. and I’m sure (with your self-interested mindset) you would focus on, and likely ONLY report that the LOCAL Plans were 300% better funded than the STATE Plans.

      • You are correct cola is only 60% and yes, no S.S. which 98 % of the
        public are unaware, it is ashamed that those truly busted up have to suffer
        because of the frauds out there, and the double dippers.

        Reply

        • Posted by Tough Love on February 27, 2015 at 2:24 am

          It’s not just the legal “frauds”. It’s the “LEGAL” 90-95% of Public Sector approved “disabilities” that would NEVER have been approved (and remain approved to continue to collect LTD) in Corporate LTD Plans.

          The Taxpayers are being suckered … period.

          The definition of, and requirements for initial approval (and continuation in a disabled-life status) should be NO LESS STRINGENT than those applied in Corporate Plans.

          Reply

  3. Posted by Anonymous on February 26, 2015 at 1:15 pm

    I guess this is the part where the publics get to through each other under the bus and grab whatever they can as the gravy train comes to a halt. Why weren’t you all complaining about double dippers and phony disabilities when you could have done something to end it. This will not end well all around

    Reply

    • Posted by Anonymous on February 26, 2015 at 1:40 pm

      Exactly to whom would the average public employee complain to. The one yes one investigator assigned to investigate disability pensions?

      The politicians who are double dipping?

      Got any ideas?

      Reply

      • Posted by Anonymous on February 26, 2015 at 7:37 pm

        Maybe your unions to start and then you and your unions might have organized something to petition Trenton to stop the double dipping, phony disability claims and all the other nonsense. Of course as long as the money was flowing non if the publics questioned much mainly how will these very generous benefits be paid. You all made your bed and now will have to deal with the reforms and reductions that are surely headed your way. Fight it out among yourselves for whatever is left over in the funds

        Reply

    • Posted by Tough Love on February 26, 2015 at 3:55 pm

      Haven’t the older/longer service workers been doing that to their younger brethren for AT LEAST the past decade? Their decades-long refusal to APPROPRIATELY reduce the pension accrual rate years ago, has resulted in far greater ACCRUED benefits now associated with these older. The younger workers lose, to the extent those unjust PAST service accruals are not ALSO reduced.

      Reply

      • Regarding the older workers who you refer to, statistically policeman usually
        die at a much younger age than the average population, especially the
        disabled. So perhaps with us dying young,we will be not to be a burden to the
        taxpayers very long, it may solve your complaint.

        Reply

        • Statistically, in California’s massive public employee system, police & firemen live slightly longer, on average, than the other public employees in California. Interesting.

          Reply

        • Posted by Tough Love on February 27, 2015 at 3:09 pm

          The disabled do (on average as a group …. as would be expected), but NOT the non-disabled safety (police & fire) retirees per a study by CalPERS retired chief actuary Ron Seeling.

          Reply

  4. Posted by truthnolie on February 26, 2015 at 1:18 pm

    JB,

    Thanks for the acknowledgement on the footnote – what I find absurd & comical is that this “Blue Ribbon” commission decided to hide the information in a footnote instead of stating it in the main body of the report. It like they hoped no one would ever notice it and burying it in a footnote would cover their tracks.

    It’s obvious why they did this but laughable to imagine them all sitting around a conference table thinking “where can we hide this info from the other side” (and in case anyone was in doubt, they are in no way non-partisan).

    Even more comical is them imagining the agreement being signed with this condition…..it brings to mind a scene out of M*A*S*H* when Radar brings paperwork to Col. Henry Blake telling him to sign here, here & here which Blake does blindly without ever reading what he’s signing. LOL

    Reply

    • Thank you for finding it. I don’t think I would have gone through the footnotes to find it.

      And when you search through the whole report the word ‘plan-funded’ only appears in that one line with footnote 46
      The plan-funded 46 pension benefits of existing retirees would not be affected, and no one would lose a benefit credit for service before the freeze.

      So someone on that commission brought up the issue of COLAs and this is how they decided to handle it.

      Reply

    • Posted by Tough Love on February 26, 2015 at 4:03 pm

      Bravo, a welcome improvement …… a comment w/o the distracting and unnecessary basking of Gov. Christie.

      Reply

      • Posted by truthnolie on February 26, 2015 at 5:53 pm

        “basking of Gov. Christie”

        Freudian slip?

        You probably meant to type “bashing” but typed “basking” but it fits for you much as you like basking in the glow of him (but don’t be fooled….that glow off him you see like an enlightenment is just a combination of sweat, grease, donut powder and gravy overspray).

        Reply

  5. John; another question please. Why would the state want to transfer control of the frozen plan to the NJEA while maintaining full control over the new Cash Balance plan?

    Thanks,
    Joel

    Reply

    • The politicians probably don’t since they lose some pay-to-play opportunities but that’s something they would trade to be able to stop reporting those massive deficits on their bond statements (assuming GASB allows them).

      And my reading of the roadmap led me to believe that new plan assets would be union-controlled too.

      Reply

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