CAFR Update

The June 30, 2014 CAFR on New Jersey Pension and OPEB benefits is out and after going through the last six years of income and expense numbers and putting selected believable items into a spreadsheet there are some interesting trends when comparing June 30, 2009 to June 30, 2014.

  • Pension payouts, even with the COLA elimination, have gone up over 36% – from $6.9 billion to $9.4 billion.
  • Over those six years $50 billion has been paid out in pension benefits and $30 billion for OPEBs.  Contributions over that same time have been $12 billion each from members and employers.
  • OPEB payouts have gone up  over 50% – from $3.9 billion to $5.9 billion annually.
  • The amount paid by retirees for OPEB benefits has doubled but the percentage of the cost covered has only risen slightly from 5% to 6.7%.
  • Notwithstanding the brouhaha over fees to Wall Street (another diversion from the core problems) investment expenses increased by only 19% from $12.4 million to $14.8 million even as underlying asset values increased by 27% (if you take seriously those fantasy values placed on alternative investments).
  • Administrative expenses even decreased by 5% going from $50.8 million to $48.1 million

Projecting the Pension and OPEB payouts out another five years to June 30, 2019 assuming the return of COLAs and no change in the rate of growth of OPEB benefits means that those benefits will be costing someone $24 billion annually.  Though by 2019 it may be affordable as President Christie* would have solved the Social Security, Medicare, and Medicaid messes.




* Christie is on Jimmy Fallon tonight and I can’t think of any silly-dance reason for the appearance that would have gotten him booked except that he would be announcing his presidential bid.  It should be taping in a few hours and I have not seen any rumors to that effect.  Any thoughts?

11 responses to this post.

  1. Posted by bpaterson on April 22, 2015 at 3:27 pm

    two items:

    the S&P 500 was up 110% in that same 5 year period,

    and walking dead is on broadcast television tonite, with similar theme.


  2. Posted by Chuck on April 22, 2015 at 3:45 pm

    To continue that theme, “I see dead people, they don’t know that they’re dead”
    Sixth Sense


  3. Posted by skip3house on April 22, 2015 at 5:59 pm

    One starting easy fix…drop OPEB (retired Benefits) and free up $6B/yr. NJ retirees can do as the rest of us, pay their own Medicare, dentist, etc.
    Retired way too early for Medicare? Nothing is free except time not working. Use NJ plans at cost.


    • Posted by Tough Love on April 22, 2015 at 6:16 pm

      The are a lot of FAR FAR better/greater than-Private-Sector pension/benefits that they could “give up”.

      The problem is that they don’t want to give up more than 5%-10% of the amount that they NEED TO … and rightfully SHOULD …. “give up”

      It’s called GREED.


      • Posted by Anonymous on April 22, 2015 at 7:47 pm

        hey TL keep repeating it, it wont help, you taxes are going up once Christie is out. That is a given. so maybe you need to move


  4. Posted by Anonymous on April 22, 2015 at 9:14 pm

    Correct me if I am wrong, but the NJ general fund budget is approximately $30 billion for 2014? So payouts from the pension fund assets, which are declining, are approximately 46%( $14b/ $30b) of the budget once the funds hit zero.

    Good luck.


    • Posted by Tough Love on April 22, 2015 at 10:56 pm

      You seem to be saying “good luck” as if it’s the Taxpayers’ problem.

      It may be (to some extent), but it’s CERTAINLY a bigger problem for those on the receiving end of these grossly excessive, unnecessary, unjust, and unaffordable promises.


      • Posted by Anonymous on April 22, 2015 at 11:54 pm

        Agreed. When the trust assets run out, the payments will have to compete with general fund priorities.

        It’s as if Christie has a 10 pt lead and is running out the clock. At this point, wait till the next election then let Sweeney deal with an exponentially worse situation.


  5. Posted by Anonymous on May 23, 2015 at 7:31 pm

    TL and devout followers; individuals presenting a right wing conservative perspective based on half-truths and lies.

    TL continual posts repetitive misinformation citing sources with extreme ideology. Yet sumarial dismisses other posts with conflicting opinions and sources.

    Specifically, purposely misstated the tax status of public pensions in the following post; When called to task tried to double talk their way out of it. Standard operating procedure for most of their commentary.

    Fair and equal for all is the mantra. Fair enough, but not when I suggest Federal workers and members of our beloved Armed Forces be part of the bigger conversation. The response, they’re different. But why, because they risk their lives like first responders at home. Their DBP are paid with Federal tax dollars as opposed to State or Local. Everyone knew the job risks when they accepted employment. But they also knew what their salary, pension, and benefits were supposed to be.

    To blame and demonize public workers for the current situation is unfair and untrue. Do politicians make “deals” with unions that don’t always have the taxpayers best interest? I think everyone knows the answer to that is yes. But politicians are always making “deals” it’s what they do. Just ask the various segment market corporations; defense spending (lucrative contracts), farming (subsidies) and the list goes on and on.

    Your bully tactics and demeaning attitude only motivate me more to push back your parties ridiculous vision for NJ and America. Yes I’m sure John knows all of our IP address, so you and your business name can be exposed as well.

    The purpose of continually posting this comment is to allow the counterpoint perspective to be heard. I will no longer personally engage your comments tit for tat.


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