NJPP2- What New Jersey Thinks It Can Do

When you want to remain consistent in an argument occasionally you wind up in some silly positions.  So it is with the state of New Jersey in their arguments in the pension payment case (now online) when they claim that the state can make employees contribute unlimited amounts to fund their own pensions and that union contracts can be ignored:


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If this is true then the New Jersey Public Pension System can be saved by raising the employees’ contributions into the plan to somewhere around 50% of compensation.  That would get us to the $10 billion or so needed to fund these benefits though after withholding for taxes, pensions, and health-care there might be only a few public employees who see payroll checks in the four digits.

Then we come to this stunning assertion:
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Thoughts?

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PS: Interesting story came out today in the Daily Beast on Chris Christie’s sputtering presidential bid.  Most interesting part was that it was originally titled ‘Christie the Ultimate Political Cockroach’ until a few minutes ago.

26 responses to this post.

  1. Posted by Anonymous on May 11, 2015 at 2:43 pm

    In essence, the lynch pin of the State’s argument is that no contract with them is legally binding, unless the Legislature appropriates monies for that purpose. In other words, the State cannot be legally bound to a contract, unless it wants to be bound – notwithstanding any court order.

    If our Supreme Court adopts this reasoning as law, NJ will never be loaned any money and no vendor, corporation or other entity will ever do business with the State again. Modern States cannot operate this way. The bankrupt pension funds will be the least of our problems.

    Reply

    • Posted by bpaterson on May 11, 2015 at 3:05 pm

      if you’ve lived here for the past 20 years, you should have realized by now that NJ govts on all levels could care less about laws, statues, policies, rules, ethics and integrity…. and shouldn’t have expected otherwise.

      Reply

    • Posted by Tough Love on May 11, 2015 at 3:50 pm

      You’d be singing a different tune re the sanctity of “contracts” if somehow State’s Taxpayers (including Public Sector workers/retirees) were bound by contracts that somehow gave PRIVATE Sector taxpayers an advantage.

      The upshot …. all of your arguments are driven by GREED.

      Why is EQUAL, but not better (than what your Private Sector counterparts get) not enough ?

      Reply

      • Why EQUAL. Try using LESS. Much less.

        Reply

        • Posted by Tough Love on May 11, 2015 at 4:02 pm

          With, when factoring in BOTH the MUCH richer “formulas” AND the MUCH more generous “provisions” such as very young full/unreduced retirement ages and COLA increase (now suspended in NJ), Public Sector pensions & benefits are TYPICALLY 3x-4x greater in value at retirement than those of their Private Sector counterparts …. RIGHT NOW, and digging the hole we are in deeper every day that pension/benefit accruals continue under those same terms.

          That being the case, I would be tickled-pink just to get ALL the way down to EQUAL . I don’t need to go further.

          Besides, by NOT agreeing that EQUAL is reasonable, fair, and appropriate, it’s REAL difficult for them to argue that they are not GREEDY.

          Reply

          • Posted by BH on May 11, 2015 at 5:34 pm

            Why should a firefighter make equal to this private sector salary you speak??

          • Posted by Anonymous on May 11, 2015 at 5:46 pm

            Hey TL there;s a bus coming in 20 minutes get under it! lololol

          • Posted by Tough Love on May 11, 2015 at 7:13 pm

            BH, Because that what is “fair” to Taxpayers (who pay for 80-90% of the total cost of Public Sector pensions) …. AND to the workers.

            The is zero justification to “over-compensate” Public Sector workers, be it in cash pay, pensions, benefits while workers, or benefits once retired.
            —————————————————————-
            EQUAL …. but not better.

          • Posted by Tough Love on May 11, 2015 at 7:14 pm

            Anonymous,

            I you wonder why I call you an imbecile ……

  2. Posted by Javagold on May 11, 2015 at 3:51 pm

    Thoughts ? Stop throwing good money after bad money on a Ponzi scam. Simple.

    Reply

  3. Posted by Anonymous on May 11, 2015 at 4:51 pm

    Political and financial stop gap compromise solution, switch health benefits coverage to “gold” and extend UAL amortization period to 40 years. Then back to the table, again.

    Reply

    • Posted by Tough Love on May 11, 2015 at 5:27 pm

      To get to EQUAL, “actives” healthcare needs to go to SILVER level, and “retiree” healthcare subsidies have to go to ……… well, ZERO.

      And, the DB pensions must be frozen for “future service” of all current workers, replaced with a plan no greater in Taxpayer contributions than what THEY get from their employers (typically 3-4% of pay).

      Then, we can see if we ALSO need to reduce the VERY clearly unjust (and vastly excessive) PAST service pension accruals.

      Reply

      • Posted by Anonymous on May 11, 2015 at 9:03 pm

        TL her main issue with life it that her parents never taught her that life isnt fair! She keeps harping on fair. She already knows this as she isnt fond if men

        Reply

        • Posted by Tough Love on May 12, 2015 at 12:16 am

          And the main issue in YOUR life seems to be whatever I’ve advocated for today.

          So how satisfying is THAT ?

          Reply

  4. Posted by Anonymous on May 11, 2015 at 8:00 pm

    SC court either baiting lawyers or looking for hint of reasonable and necessary compromise funding solution, I say put it out there and give them one. Switch everyone to gold health benefits, dedicating all savings towards the ARC in addition to the corresponding State appropriation. Also amend c.78, extending the UAL amortization to 40 Years.

    Reply

    • Posted by Tough Love on May 11, 2015 at 11:22 pm

      Anonymous,

      Yeah, you can repeat your position ….. and I can repeat mine:
      ——————————————————————————

      To get to EQUAL, “actives” healthcare needs to go to SILVER level, and “retiree” healthcare subsidies have to go to ……… well, ZERO.

      And, the DB pensions must be frozen for “future service” of all current workers, replaced with a plan no greater in Taxpayer contributions than what THEY get from their employers (typically 3-4% of pay).

      Then, we can see if we ALSO need to reduce the VERY clearly unjust (and vastly excessive) PAST service pension accruals.

      And UAL amortization should be for no more than 25 years ….. future generation must not be paying for today’s services. If it will require untenable annual payments to amortize the UAL in 25 years, then cuts the pensions further.
      ———————————————————————————
      Greed HAS consequences

      Reply

  5. Posted by Anonymous on May 11, 2015 at 8:06 pm

    twitter #fundnjpension

    Reply

  6. Posted by Anonymous on May 11, 2015 at 10:32 pm

    John when will they reinstate COLAs?

    Reply

    • Probably never since even if they win in court, which may take a couple more years, there might be another deal worked out with COLA elimination traded for the state making contributions (which will probably come through Pension Obligation Bonds).

      Reply

      • Posted by Tough Love on May 12, 2015 at 12:12 am

        That would be a VERY poor trade for taxpayers.

        POBs are such a horrible option (and it’s hard to call it a option at all) that to even consider them (to payoff the UAAL for past service pension accruals), the STATE should demand a hard freeze to the current DB Plans for all CURRENT workers (ZERO future growth) as well a replacement of the current retiree healthcare system with a flat annual payment to each retiree of no more than $500 (keeping in mind that Private Sector workers typically get NOTHING in employer-sponsored retiree healthcare benefits).

        Reply

  7. Posted by george on May 11, 2015 at 10:41 pm

    UPDATE 1-San Bernardino bondholders lose out versus Calpers, judge rules

    http://mobile.reuters.com/article/idUSL1N0Y231320150511?irpc=932

    Why can’t NJ stop paying state and local debt and put the money into the pension?

    Reply

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

      SB’s retirees lost their retiree healthcare …. just about ALL of it.

      So much for retiring in your 50s and suckering the Taxpayers to pay for your your incredibly expensive pre-Medicare-age Family healthcare coverage … certainly $25+K annually.

      ————————————————————————————

      Quoting …. “Why can’t NJ stop paying state and local debt and put the money into the pension?”

      Because gov’t entities can’t function w/o borrowing, and lenders don’t like deadbeats. Besides the Bond-buyers aren’t greedy …. like virtually all Public Sector Unions/workers.

      Reply

  8. Posted by Jim on May 12, 2015 at 5:15 pm

    The whole problem can be solved by New Jersey raising the state income tax rate to 100% for any income derived from a New Jersey pension plan.

    Reply

  9. The solution to all these ridiculous public sector pension plans is to max the annual payment @ $60k and defer any payment until age 65. “Early” retirement would be at 62 with a 24% haircut, just like SS. Current vesting schedule would stay the same, but no more receiving benefits at 46, 48, 52, 55 etc. LE can retire from active duty and man the 911 desk, collect tolls or shuffle papers in the office until they are able to collect their pension at 62 or 65. Right now we pay three people to perform one job; one that has been retired for 25 or 30 years, one who just retired (probably the son of the first) and one who just started (the grandson).

    Reply

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