NJPP4 – Reasonable and Necessary Impairment

In his argument in the pension payment case (now online) Steven Weissman, an attorney for the state branches of Communications Workers of America and the AFL-CIO, may have given the state a lifeline to avoid making their contributions.

My feeling is that if the unions prevail in this case and New Jersey is forced to obey the 2011 law and put in that extra $1.6 billion next month then it will mean that contributions in the future would also be unavoidable and the action would shift to the actuaries and how they come up with those contribution amounts.  But that’s not what Mr. Weissman argued:

The question is if (as Justice Rabner posed the question at 7:20 of the video) we are in 2018 and the state is unable to come up with $5 billion in contributions but it can prove that putting in a lower amount is ‘reasonable and necessary’ then would they be able to get away with putting in that lower amount? Mr. Weissman answered ‘yes’ but, if that is so, then why can’t the state argue similarly when the amount is $2.3 billion and the year is 2015?

29 responses to this post.

  1. Posted by Anonymous on May 13, 2015 at 12:45 pm

    Reasonable & necessary payment and compromise. Reign in corporate welfare and greed first. Exponential executive and upper level management salary increases far outpacing average percentage increase in real wages – let’s be fair and equal.


    • Posted by skip3house on May 13, 2015 at 2:20 pm

      Extend this logic to country’s infrastructure messes……money is ‘there’, just not taxed enough


    • Posted by Tough Love on May 13, 2015 at 7:18 pm

      Dude, We’ve got a PUBLIC Sector “pension/benefit” problem …… and all you (as a Public Sector “taker”) repeatedly attempt to do is CHANGE THE SUBJECT to “Corporate Greed”.

      Enough already.


      • Posted by Anonymous on May 14, 2015 at 7:47 pm

        It’s clear after your hundreds of post that you don’t grasp the problem. The problem is that the employees are the only one funding the pensions and the state has walked away from it’s obligation for 20 years. You’ve seen what happened in Illinois. Why should bond holders get paid every month and employees be relegated to second tier payees for 20 years?

        This is a slam dunk 100% guarantee win, no doubt. Take the 5 billion given to corporations under christie. Paying $80,000 per job created–far above public job pay.


        • Posted by Tough Love on May 15, 2015 at 12:35 am

          Oh I “grasp the problem” perfectly.

          First, lets be clear …. PUBLIC Sector pensions are TYPICALLY 3x-4x greater in value at retirement than those of Private Sector workers retiring at the SAME age, with the SAME years of service, and with the SAME pay.

          Second, the annual ARC to fully fund these pensions is calculated to be able to pay the promised level of benefits …. so it’s “calculated” to fully fund 3x-4x GREATER pensions than what Private Sector workers typically get in pensions from their employers. No wonder it’s hard to find sufficient money to “fund” such grossly excessive “promises”.

          And yes, NJ’s taxpayers have been contributing no where near those calculated ARCs for many years (thank goodness … considering how unnecessary, unfair, unjust, and unaffordable the promised pensions are). BUT … that hasn’t stopped YOU, the workers & retirees from demanding that the full amount of those absurd promises be met ….. by the TAXPAYERS. So please, don’t tell me how little we (the Taxpayers) have “paid” in, until you STOP telling us (the Taxpayers) that we are responsible for the HUGE underfunding, the ROOT CAUSE of which is the grossly excessive promises in the first place.


  2. Posted by Anonymous on May 13, 2015 at 1:18 pm

    It ain’t over til the Justices rule, compelling and contrasting considerations.


  3. Posted by Anonymous on May 13, 2015 at 3:26 pm

    The middle class is the economic grease that keeps our economy running. The middle and lower class put most if not all of their disposable income back into the economy. Corporate welfare, including run away executive and upper management compensation must be reined in.


    • Posted by dentss dunnigan on May 13, 2015 at 3:37 pm

      I’m no proponent of Corporate welfair but the states brought this on themselves ,and now it has gone nucular ,Corporations know this and take full advantage of this ,what we won’t or can’t offer to corporation X ,another state will do so gladly .It’s why the south is now gaining manufacturing jobs they have a low tax base to begin with and now can almost always win .Sadly the only NJ is to grow is to be competitive but I’m not sure we can anymore .


      • Posted by Anonymous on May 13, 2015 at 3:53 pm

        Federal legislation outlawing it but I’m sure States would challenge it in the courts and win.


    • Posted by Tough Love on May 13, 2015 at 7:20 pm

      Again, nothing but trying to CHANGE THE SUBJECT from the once at hand …. grossly excessive Public Sector pension & benefits and the immediate need for materials reforms.


  4. Posted by Anonymous on May 13, 2015 at 4:55 pm

    Corporate welfare & greed, dividing this country into two classes – rich & poor!


    • Posted by Tough Love on May 13, 2015 at 7:22 pm

      Again (3-rd time), nothing but trying to CHANGE THE SUBJECT from the once at hand …. grossly excessive Public Sector pension & benefits and the immediate need for materials reforms.


  5. Posted by MJ on May 13, 2015 at 6:07 pm

    Illinois was downgraded today to junk bond status mainly due to their pension debacle. Wonder how far behind NJ will be?


  6. Posted by Anonymous on May 13, 2015 at 7:45 pm

    Maybe your subject but not mine & others, taxpayer funded corporate welfare must stop now!


    • Posted by Tough Love on May 13, 2015 at 8:53 pm

      Sorry buddy but THIS blog’s primary focus is Public Sector Pensions (and benefits), the current huge shortfall in Public Sector Plan assets … and what reforms are necessary, reasonable, and what might help.

      It’s CERTAINLY not “corporate greed”. Perhaps you need to find another forum for your soapbox.


  7. Posted by Anonymous on May 13, 2015 at 8:50 pm

    We must stop greedy corporate welfare for our taxpayers!


  8. Posted by Anonymous on May 13, 2015 at 8:55 pm

    Our taxpayers are crying out for a conversation on greedy corporate welfare, it needs to stop now, we can’t afford it anymore and our taxpayers deserve better.


    • Posted by Tough Love on May 13, 2015 at 9:45 pm

      What our Taxpayers “deserve” and NEED is to OUTSOURCE all but Police. And to freeze Police wages for AT LEAST 10 years.


  9. Posted by Anonymous on May 14, 2015 at 8:08 am

    Corporate America’s need for GREEDY taxpayer funded welfare, must STOP!


  10. Posted by Anonymous on May 14, 2015 at 8:12 am

    When you open up a can of worms you never know what will come out, like all of our taxpayer dollars being spent on GREEDY corporate welfare – when you’re deciding how money is spent in a budget everything is on the table as the SC ruling will hint around.


    • Posted by Anonymous on May 14, 2015 at 8:15 am

      Nothing compares to your P&B soapbox, so engage or disengage but taxpayer funded GREEDY Corporate welfare is going to get larger than life.


  11. Posted by Anonymous on May 14, 2015 at 8:45 am

    The reality is an issue has two or more conflicting viewpoints. Yours is it’s strictly a benefit problem my counter viewpoint is it’s a budgetary choice, ie spending taxpayer dollars on GREEDY Corporate welfare instead on properly funding the ARC for the past ~27 years. I’m not unreasonable to necessary changes going forward but budgetary choices will be part of the conversation.


    • Posted by Tough Love on May 14, 2015 at 12:44 pm


      Your position is basically that if we can find the money to pay the promised Public Sector pensions & benefits …. for example, by eliminating what you call “Corporate Welfare” …. we should do so and use that “savings” to pay for those pension/benefit “promises”..

      There are 2 VERY big problem with that position:

      (1) That “Corporate Welfare” has as it’s goal, keeping current businesses from moving OUT of NJ and attracting businesses to move INTO NJ. Whether the money so spent achieves that goal is debatable, but the money so spent is certainly NOT “Corporate Welfare”. Keep in mind, that it’s the taxes paid by productive PRIVATE Sector employers and the income taxes paid by PRIVATE Sector employees, that pays for ALL Public Sector compensation.

      (2) Your position completely ignores the UNDENIABLE “fact” the Public Sector pensions & benefits are always MULTIPLES more generous than those granted Private Sector counterparts, when factoring in BOTH the MUCH greater pension “formulas” AND the MUCH more generous “provisions” …… easily demonstrated to be 3 to 4 TIMES greater in value at retirement. These FAR greater pensions & benefits are unnecessary to attract and retain a qualified workforce, are unfair to taxpayers burdened today with the responsibility to pay for 80-90% of total plan costs, and are very clearly unaffordable. The upshot is EVEN IF WE HAD THE MONEY to fund these grossly excessive promises (the direct result of your Unions’ BUYING the favorable votes of our elected officials) we should NOT do so. Not only should “promises” so clearly the result of underhanded deal-making NOT be honored, but NJ has FAR FAR more important needs than unnecessarily OVERCOMPENSATING it’s employees, not the least of which include:

      * infrastructure repairs and Capital improvements (Transportation Trust fund)
      * assistance for the poor-elderly and infirm
      * affordable housing
      * education support, especially for the less financially fortunate


      • Posted by skip3house on May 14, 2015 at 2:34 pm

        Today, we worry about our schools and the future of learning, yet we really are a smarter public today. We have much more background knowledge.
        The Internet has become a kind of external drive for our brains – a fact that’s put all of education into chaos. Teaching can no longer be about imparting knowledge. All knowledge is there at the press of a button. The focus of education has to shift from imparting information, to processing it, spend more time seeing what it means. The process is more fun for all of us .



  12. Posted by Anonymous on May 14, 2015 at 9:41 am

    It’s upsetting when our version of reality is questioned!


  13. Posted by Anonymous on May 14, 2015 at 12:38 pm

    Pardon the interruption but silly me I thought the purpose of this blog was to have an educated conversation on P&B funding, which includes all budgetary decision not limited to GREEDY Corporate welfare.

    Moderator your guidance and feedback is appreciated?


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