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?