If the NJEA wanted to be scarier (and fairer)

The New Jersey Education Association (NJEA) is releasing an ad that appears to be hard hitting:
.

.

But there is no context.  Fortunately, we have 15 years of TPAF valuation reports on the state website and it is fairly easy to make up a spreadsheet to check the numbers.  Projecting out, state and local contributions look to have been closer to $5 billion than $3 billion while member contributions would come in at $9 billion instead of $10 billion over the last 20 years but there is one number conspicuously absent from the NJEA story.

Over $40 billion in payouts with the amounts steadily escalating.  A plan that for the year ended June 30, 2000 had $36 billion in assets and was paying out $1.15 billion annually (3,2% of assets) had as of June 30, 2014 $27.6 billion and was paying out $3.8 billion annually (13.8% of assets).

Consider also that

  • a substantial portion of those remaining assets ($10 billion?) consist of employee contributions that would need to be returned to participants upon plan termination;
  • about 25% of the assets are invested in alternative investments (i.e junk);
  • there is no revenue source willing or able to come up with anywhere near the $7 billion annually that this plan as currently constituted requires now; and

you have a zombie plan.

35 responses to this post.

  1. Posted by Tough Love on May 21, 2015 at 2:49 am

    John, I just rolled your spreadsheet forward with some reasonable assumptions. Even if the “actives” contributions are NOT returned and are paid out to retirees, Plan assets will hit zero between 2025 and 2026.

    And thats if the “junk” assets are worth the stated value.

    Reply

  2. Posted by Anonymous on May 21, 2015 at 3:18 am

    reasonable assumptions! is that same as load of crap? though so!

    Reply

  3. when they say “politicians need to do theirs” they of course mean that taxpayers have been either vastly undertaxed or over -serviced and that needs to be explained to the private sector taxpayer. I would like to see that explained and then all problems would disappear. Nobody can do that of course and theirin lies the problem

    Reply

    • Posted by Tough Love on May 21, 2015 at 10:44 am

      No, what it NEEDS to be shown to the taxpayers are clear demonstrations that (while rarely making less in cash pay, and often MORE), the pensions granted all of NJ’s Public Sector workers are always MULTIPLES greater in value at retirement than those of Private Sector workers making the SAME pay, with the SAME years of service, and retiring at the SAME age …. over 5 TIMES greater in the case of Police, as I demonstrated in my 2 long comments toward the end of the comments shown in Mr. Bury’s recent blog-article titled ……..“It’s embarrassing, and I’m tired of hearing this I want what I was promised”.

      THAT and a side-by-side PUBLIC/PRIVATE Sector comparison (shown separately for “actives” and those already retired) of the coverage, deductibles, coinsurance levels, copays, and cost-sharing of healthcare benefits.

      Show the Taxpayers THOSE 2 things, and it will be VERY clear that the ROOT CAUSE of the financial mess we are is the GROSSLY EXCESSIVE, unnecessary, unjust, unfair (to the Taxpayers) , and unaffordable Public Sector pension & benefit “promises” ……. and the rightful way to “FIX” the problem is NOT to raise taxes (in the State with one of the highest tax levels right now), but to reduced the generosity of those pension & benefit promises for the future service of all CURRENT workers …… ALL THE WAY DOWN to the level typically grant Private Sector workers.

      The financially “mugging” of Private Sector taxpayers by the insatiably greedy Public Sector Unions/workers, and enabled by our elected officials whose favorable votes on Public Sector pay, pensions, and benefits have been BOUGHT with Public Sector Union campaign contributions and election support … MUST END.

      Reply

      • Posted by Anonymous on May 21, 2015 at 1:08 pm

        Hey Bubble Girl, you know what really grinds your gears?! When you other people work hard for their well deserved money. You love to rip off hard working families by charging grossly excessive premiums and then not paying out fair settlements, as well as skyrocketing rates on anyone who makes a claim.
        Sorry Bubble Girl but in your life time at least nothing is going to change, you are going to pay. Sorry its not the Moors, its the Moops! 🙂

        Reply

        • Posted by Tough Love on May 21, 2015 at 1:25 pm

          I don’t sell anything ………….. imbecile.

          Reply

          • Posted by Anonymous on May 21, 2015 at 2:03 pm

            Stop lying you definitely work for a company that rips off, sorry , I mean sells.
            You are so funny with you second grade name calling, but alas you cannot hide your true colors, can ya? You get so angry so easily

          • Posted by Tough Love on May 21, 2015 at 5:34 pm

            Anon,

            And you wonder why I call you an imbecile ……….

          • Posted by Anonymous on May 21, 2015 at 9:21 pm

            No clearly you have time, are in business and have a basic financial understanding. You’re an accountant/financial person no doubt. Interesting that you spend so much time dealing with publicly disclosed information when you hide behind you anonymity. Step up to the plate big guy, tell us who you work for–you don’t have the guts because you know the backlash you would endure and it’s all about you getting yours right?

          • Posted by Tough Love on May 21, 2015 at 9:55 pm

            Quoting …” because you know the backlash you would endure”

            Yes, and all from insatiably greedy (and if like you, low IQ) Public Sector “takers”.

  4. Sorry not too much sympathy for teachers who may “end up in poverty” what a laugh. Most teachers I know are doing very well and are retired well before age 60. All with no worries about how they will pay for healthcare for themselves or spouses. The NJEA has been the greatest detriment to American education in the history of this state and nationally. Maybe the NJEA can reduce the high membership fees for the poor teachers so that they have more money to spend when off for the summer. These adds make teachers look bad and they should be demanding reforms and/or refunds of their contributions. Of course they will cling to the “promise” that they will be paid for the rest of their lives as fed to them by their union.

    Reply

    • Posted by Tough Love on May 21, 2015 at 10:48 am

      The clock is ticking …. by 2025, it’s “game-over” and that long ONLY if all the contributions of “actives” are paid-out to current retirees, leaving nothing for THEM.

      Reply

      • What would be the delay in fund collapse if receipt of vested pensions was delayed for all current workers until age 65 (which should happen anyway in the interest of a partial fix of these insane PS pensions)?

        Reply

        • Posted by Tough Love on May 21, 2015 at 8:59 pm

          I would need lots of details (e.g., would pre-age-65 retirements be with full actuarial reductions of 5%-6% for EACH age before 65, or heavily subsidized as they are now, draining Plan assets) and employee population data/split to make a reasonable estimate.

          That said it would likely “delay” collapse for quite a few years for several reasons:

          (1) not being able to COLLECT (or being subject to a full actuarial reduction if retiring before age 65) until 65 would lessen retirements vary materially for 5 to10 years
          (2) employee contributions would still be coming in (from more higher-paying employees) adding to plan assets

          But ….. it would only be a delay (unless in addition, the pension accrual rate is materially reduced and pension provisions made FAR less generous .. as we would reach a new “stationary population” situation 5-10 years down the road … again with unaffordable pensions.

          Reply

      • Posted by Anonymous on May 21, 2015 at 9:24 pm

        Sure go ahead, take the whole pension system down—and the bonds too. Go for it! I will have to default on my mortgage/car payment of course too. Can you imagine when 200,000 people do that.

        It’s not going to happen. Just as in Detroit, the pensions will be paid. Even if the supreme court doesnt order payment–there’s no doubt they will uphold the contract.

        Reply

  5. Posted by Anonymous on May 21, 2015 at 8:16 am

    The $2B & $1B discrepancies you cited are less than this Gov’s actual and projected miised ARC payments covering only 2 years. Simple solution sell NJ to Asia.

    Reply

  6. Posted by Anonymous on May 21, 2015 at 11:51 am

    Future spin always looks better than reverse spin because it doesn’t become a misstatement (lie) until after the fact.

    Reply

  7. Posted by Javagold on May 21, 2015 at 3:01 pm

    TICK TOCK PUBLIC TAKERS. TICK TOCK.

    Reply

  8. Posted by Anonymous on May 21, 2015 at 5:24 pm

    Recent Detroit bankruptcy didn’t wipe the slat clean, 4% pension reduction for current retirees, no COLA, and a very small stipend for retirees to buy their own healthcare. Either way the pain will be shared due to inaction even if their inept enough to let the funds go to zero.

    Reply

    • Posted by Anonymous on May 21, 2015 at 7:52 pm

      Hmm so maybe bankruptcy isn’t better, let the idiots settle things without the courts?

      Reply

  9. Posted by Anonymous on May 21, 2015 at 6:30 pm

    Hey TL do you realize that John does not agree with you? Or do you take the Bubble Girl stance and think everyone in NJ is loves you.

    Reply

    • Posted by Tough Love on May 21, 2015 at 8:30 pm

      Cut & Pasted …………
      ————————————-
      Anon,

      And you wonder why I call you an imbecile ……….

      Reply

      • Posted by Anonymous on May 21, 2015 at 10:07 pm

        TL aka Bubble Girl, You need to improve you attendance record at the OCD Support Group meetings.

        Reply

        • Posted by Tough Love on May 21, 2015 at 10:09 pm

          Cut & Pasted …………
          ————————————-
          Anon,

          And you wonder why I call you an imbecile ……….

          Reply

          • Posted by Anonymous on May 21, 2015 at 11:35 pm

            Sometimes I wonder if you are a real person or just a broken record.

          • Posted by Tough Love on May 22, 2015 at 12:39 am

            Anon, And I wonder how you could be of any productive value to an employer.

            Oh, I forgot ….. that matters little in the Public Sector.

        • Posted by Anonymous on May 22, 2015 at 7:44 am

          Yeah and we see how important that is in the private sector with those multi millionaire Wall Street & Banker wiz kids that almost brought down are whole economy and started the Great Recession! As I’m sure you know bit refuse to acknowledge hitting pension fund assets with losses thay were “unsustainable” to recover from. Don’t start with your benefitd crap address my point or shut up. Only to be baled out with Federally funded taxpayer dollars and all on a Republican President’s watch.

          Reply

          • Posted by Anonymous on May 22, 2015 at 7:52 am

            Sorry for the typos but this is all to stressful and I’ve been drinking already and yes before I go to my public sector JOB, lol.

  10. Posted by Anonymous on May 22, 2015 at 8:28 am

    What a joke out tax dollars pay for drunken public sector employees, this would never happen in the private sector.

    Reply

    • Posted by Anonymous on May 22, 2015 at 9:49 am

      yeah in the private sector they only fly planes drunk and kills hundreds of people. bwahahahahahah

      Reply

  11. Posted by Anonymous on May 22, 2015 at 11:28 am

    Hey TL, who the heck is ANNON? Some kind of perverted private sector joke against public workers?

    Reply

    • Posted by Tough Love on May 22, 2015 at 1:37 pm

      Was supposed to be “Anon” and short for “Anonymous”, the handle default handle used by 90+% of the “takers” commenting on this Blog..

      Couldn’t figure that out ? A best & brightest Public Sector worker no doubt.

      Reply

  12. Posted by Anonymous on May 23, 2015 at 3:53 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; https://burypensions.wordpress.com/2015/05/22/christie-curses-out-nj-media/#comments 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.

    Reply

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