Diverting With Wall Street Fees

So what’s the problem with the New Jersey public pension system?  Senate Democrats think they found a scapegoat:

Christie’s philosophy in trying to wade through this financial crisis has been to cast the middle class as villains; their benefits have been too generous and they’re too stubborn to make the necessary sacrifices to make the system solvent. Taxpayers continue to suffer as a result.

But there’s another important component to this problem that the governor and his allies don’t want to talk about. That’s because it goes directly to the heart of the administration’s own dubious financial decisions that have taken a big problem and made it even bigger. In short, state officials may be investing pension funds poorly.

That was the subject of a Senate Legislative Oversight Committee hearing on Thursday amid rising concerns that the state is spending too much for too little return. New Jersey has paid about $600 million in fees to money managers over the past year, compared to $140 million in 2010. That increase has been fueled largely by a growing reliance on alternative investments — real estate and hedge funds, for instance — which require more active management than traditional stocks and bonds.

And that difference is explainable.  More money in investment vehicles that charges fees based on the value of those investments* means higher fees.

The argument crops up in Rhode Island where a crowdfunded study found:

Likewise, this forensic investigation into the Employee Retirement System of Rhode Island (“ERSRI”) reveals that investment decisions that were obviously wrong from inception— reckless piloting of public retirement assets into secretive high-risk investments and leakage related to lavishing ever-greater investment fees on Wall Street—are the greatest factors undermining the solvency of the state pension today.

That’s possible but are they really the ‘greatest factors’?  Then I read of the next line of the Executive Summary and it all became clear.

Mismanagement and “politicization” of pension investments—not excessive benefits promised to workers—are the chief culprits.

So that’s the shot and the general public is the mark.  Excessive benefits are not the problem.  Don’t eliminate COLAs.  Don’t raise retirement ages.  Don’t go 401(k).  Don’t make governments put in the real cost of the benefits they are promising. Just rein in Wall Street fees and public pensions will be solvent.  That $10 billion annually being paid to New Jersey retirees will be affordable if Wall Street agrees to take $50 million less on the junk they are peddling.

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* Since fees on alternative investments are based on asset values and the people who get those fees set the values then what should be under investigation is the accuracy of the values being reported but that would not suit the agenda of politicians who desperately what to believe those assets really exist at those stratospheric levels and their participation in funding these plans can be limited.

67 responses to this post.

  1. Posted by Tough Love on June 7, 2015 at 12:07 pm

    Quoting John …….. “So that’s the shot and the general public is the mark. Excessive benefits are not the problem. Don’t eliminate COLAs. Don’t raise retirement ages. Don’t go 401(k). Don’t make governments put in the real cost of the benefits they are promising. Just rein in Wall Street fees and public pensions will be solvent. That $10 billion annually being paid to New Jersey retirees will be affordable if Wall Street agrees to take $50 million less on the junk they are peddling.”

    Now you are talking ,,,,, and just LOVE the sarcasm.

    How many times have I identified the “tactics” (of those supporting the status quo of grossly excessive pensions & benefits),….. diversion, misstatements, omission of material facts, and outright lies ?.
    ——————————————————–
    And commentator “BH” is clearly now the king of the BS.

    Reply

    • Posted by skip3house on June 7, 2015 at 12:32 pm

      I did think we had heard all of this before, perhaps in pieces…..

      Reply

    • Posted by BH on June 7, 2015 at 1:01 pm

      Ugh….. Thought for a second you decided to retire spewing venom!!! But nope!! Here you are…. I do love that you add me to your response before I even comment about the new post. I’m flattered, really!
      But my two cents say that this is going to be the new approach. Take back all these misc. fees, subsidies, give backs, double dippers, tax relief..etc and rightfully use that money to shore up the pensions. Of course it’s not enough, but it’s a start. If the state put in its required payments all those years and the pension funds were not raped of money…. These funds would be fine.

      Reply

      • Posted by BH on June 7, 2015 at 1:13 pm

        And you can call me the king of BS. But let’s not forget…… I told you long ago nothing significant would be done to harm the workers of the state, especially the public safety sector. I was right. The state knows it dropped the ball. The state realizes this is entirely their fault, but won’t own up to it. So we will watch all the smoke and mirrors, blaming and finger pointing, but nothing will be done except maybe a decrease in healthcare and increased taxes. Chris Chrispy has left the building and he could care less about you or the state of affairs in NJ. TL, it’ll be you and a few of your minions left here on this blog, pushing for fair and equal… But your socialist war cry is simply trapped here. Sorry, NJ will never vote to harm the workers, because 3/4 of us are all in the same boat…. The Middle class.

        Reply

        • Posted by Tough Love on June 7, 2015 at 1:32 pm

          Yes, perhaps 75% of ALL workers ARE in the “Middle Class”.

          And the biggest problem of the 80% of that group that are PRIVATE sector Middle Class are the vastly over-pensioned and over-benefited PUBLIC Sector Middle Class….. they THEY (the PRIVATE Sector Middle Class) are told that THEY must pay for.

          It’s NOT the “Middle Class” vs everyone else. It’s the PUBLIC Sector Middle Class ripping-off everyone else.

          Reply

          • Posted by Anonymous on June 7, 2015 at 2:33 pm

            Nice try, the real middle class knows better than to fall for this rhetoric!

          • Posted by Anonymous on June 7, 2015 at 6:23 pm

            Agree TL…..just move out and watch them eat each other from a safe distance. Really entertaining

          • Posted by S Moderation Douglas on June 8, 2015 at 12:45 am

            diversion, misstatements, omission of material facts, and outright lies.

    • Posted by Anonymous on June 7, 2015 at 9:15 pm

      oh no, you are the undesputeable queen of BS. Dont slight yourself. Where have you been drinking all weekend hopefully and not in and out of the rehab.

      Reply

  2. Posted by Anonymous on June 7, 2015 at 12:24 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.

    UPDATE: TL and supporters recant their support for Armed Forces and reiterate their disdain for first responders at home and abroad. Basically anyone receiving a public sector DBP. Another example of their double talk further diminishing their credibility. Don’t take my word, click on the blog link and confirm for yourself;
    https://burypensions.wordpress.com/2015/05/26/phonying-up-numbers-to-suit-your-client/#comments

    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

    • Posted by Tough Love on June 7, 2015 at 12:43 pm

      STILL………. an idiot.

      Reply

      • Posted by BH on June 7, 2015 at 1:16 pm

        He’s an idiot because he has a different view than you? Who appointed you the person that calls the shots? You swear you are so right, it’s laughable. I’ve been told that you have been preaching this crap for many many years….. Where’s that got ya? Nowhere!! Still here calling people names when they have a different view from you…… Ugh!!! It’s sooooo old already!!!!

        Reply

        • Posted by Anonymous on June 7, 2015 at 6:25 pm

          He is a greedy idiot which doesn’t say much for you BH since you agree with him

          Reply

          • Posted by BH on June 7, 2015 at 6:47 pm

            Say what you will behind your keyboard, just know that I’m usually always right.

          • Posted by Anonymous on June 7, 2015 at 7:00 pm

            Really calling TL a greedy idiot is a bit harsh and unproductive. Can you stay on point?

      • Posted by Anonymous on June 7, 2015 at 2:29 pm

        Really TL you shouldn’t get down on yourself like that. There’s only so much you can do which is nothing.

        BTW, maybe it’s not their fault they can’t afford their meds due to healthcare cutbacks – lol.

        Stop living in your 1% fantasy land. Face reality, it’ll play out more like BH indicated than your opinion of “fair and equal”.

        Reply

        • Posted by skip3house on June 7, 2015 at 3:25 pm

          Really nice. You all are distracted from the Real NJ problem, and fight among yourselves for scraps.
          NJ is basically a ‘Flat Tax’ State due to the cruel regressive school property tax offsetting any fair progressive NJ State Income Tax effect.
          This collusion pension trouble is solved with common sense 8th grade arithmetic, but how about that cruel property tax ‘hidden’ for the most part in rents/mortgages? Why are necessary and proper NJ Tax Systems not based on ability to pay.?
          The more wealthy do owe much of their success to security, education, lawful obedience,…on and on…..,Supplied By All of us, especially the 95% not described as wealthy.!,

          Reply

          • Posted by Anonymous on June 7, 2015 at 3:48 pm

            OK let’s take school tax out of local property taxes and have PTRF “dedicated” for that purpose (as originally intended). Phase out the already disappearing SAVER and phase in the new GIT rates necessary for education funding. Property owners & renters will pay their fair share of the State’s education cost. Property taxes and rents will do down accordingly. This would require a new Education funding formula. The legislation would have to allow for a one time GIT assessment in any year the PTRF ended the year in deficit.

      • Posted by Anonymous on June 7, 2015 at 9:17 pm

        She will always resort to name calling, and it really suits her!

        Reply

  3. Posted by skip3house on June 7, 2015 at 4:02 pm

    No school prop tax means no need for Rebates, even step forward and rid us of Assessment systems, as property is no indication of ability to pay, just the yearly income taxed is.
    Oh, keep in mind I’m on your side in all of this, so KISS. Regards

    Reply

    • Posted by Anonymous on June 7, 2015 at 4:12 pm

      It’s all good no worries, the power brokers will “work it out”.

      Reply

      • Posted by skip3house on June 7, 2015 at 4:25 pm

        Viable solution ‘hint’, lacking so far here. Why repeat problems? Allow facts to point to a solution…….
        About now, both sources of school funding are ‘equal’. Get rid of one, double the other, or better yet, cut down Abbotts,, many other NJ excesses, etc if we cannot bring ourselves to tax fairly.
        Other States do it, why not NJ? ( Correct systems for Taxing out of state incomes, yet raising families in NJ, etc.)

        Reply

        • Posted by Anonymous on June 7, 2015 at 4:47 pm

          OK so what are your thoughts on “fair” taxation? Flat tax? Something else?

          Reply

          • Posted by skip3house on June 7, 2015 at 5:09 pm

            ‘Hint’ above suggest double revenue from fair NJ Income Tax in place of any school property tax.
            Examples show regular families will ‘net’ $3K, as 60% of property tax is for schools ( $8K, 60%=$5K school tax), and regular families pay close to $2K NJ Income Tax now. Arithmetic 2 times Income tax minus $5K school property tax leaves net credit to the good of $3k.
            But, wealthy income taxes will rise well beyond their school property tax savings.
            Question is how does NJ lower all costs, or convince wealthy it is affordable so middle class does better? (We all must pay the same for a loaf of bread, etc..).
            $3K means lots more to regular folks than $3K less ‘discretionary’ spending by wealthy. (use some old L.Helmsley,1920-2007, utterances)

          • Posted by Anonymous on June 7, 2015 at 5:32 pm

            So it’s education cost shift from property taxes to income taxes with a tax and spending formula TBD?

          • Posted by skip3house on June 7, 2015 at 5:36 pm

            Good, you used fewer words !

          • Posted by Anonymous on June 7, 2015 at 5:55 pm

            Here’s a cost savings thought, “shared services” on steroids! It would be a monumental (maybe impossible) task. Baseline all education and public safety services at the county level to save on redundant “administrative” positions and maximize cost efficiencies.

            Local municipalities will fight this. Consolidating their school & public safety debt at the county level may be insurmountable. However, after a rough transition period, the savings would be significant. Local governments, through voter referendum, can choose to pay for add on services funded soley by local property taxes.

            It’s not totally fair and equal. Some might suggest “affluent” municipalities will have the resources to implement add on services. Accordingly. less affluent districts would challenge it in the courts.

  4. If you actually figure out the investment fees on a basis point amount (you know, the way your mutual funds charge fees), you’ll see the amounts are on a par with other institutional investments.

    It’s nice to blame it on the fees, but it’s more that maybe they shouldn’t be involved in these assets to begin with.

    Reply

    • Posted by Anonymous on June 7, 2015 at 6:27 pm

      Not exactly, all pension fund assets are invested in hedge funds. Besides do you pay a your mutual fund a bonus if they beat their benchmark?

      Reply

    • Posted by Anonymous on June 7, 2015 at 6:38 pm

      Actually CFP fee structure decreases as investable assets increase. Given the dollar amount investment the % being charged (paid) should be significantly less than MOST of us are paying for mutual fund’s, etc.

      Reply

  5. Posted by MJ on June 7, 2015 at 7:38 pm

    John are you saying that the assets don’t really exist and the powers that be are grasping at straws to believe that these pensions will be fully funded and all ride away into the sunset?? Sounds like another scam where they are grasping at straws to maintain the status quo and avoid the tough decisions of reform that must be made sooner than later???

    Reply

    • Yes, that’s what I’m saying and in exchange for telling the world that their asset values are really high those purveyors of alternative investments make out for themselves as well.

      Reply

      • Posted by Tough Love on June 7, 2015 at 8:43 pm

        Catch that BH ?

        Reply

      • Posted by Anonymous on June 7, 2015 at 9:18 pm

        So the filthy rich get richer, in this case Christie’s super PAC donors.

        The 1% broke private sector unions stripping them of their P&B protections. Now the 1% want to use the disenchanted private sector workers who were shafted to help them do the same to the public sector workers.

        Good luck on what the new America looks like when the 99% are all indentured servants to the 1%. If history repeats, we’ll be leaving the next generation a “social revolution” as our legacy.

        But so what we’ll be gone so who cares!

        Reply

        • Posted by Tough Love on June 7, 2015 at 10:16 pm

          Yup, this comment belongs in the “diversion”. “misstatement”, AND “lies” column.

          You see, while the 1% is certainly doing their part to rip-off those below them, the PUBLIC Sector Middle Class is ripping-off EVERYONE (albeit with insignificant financial impact on the rich).

          But keep tying, as I’m sure SOME readers are falling for your BS.

          Reply

          • Posted by Anonymous on June 7, 2015 at 10:36 pm

            Well there’s certainly plenty of BS to go around and you’re not stingy in that regard. It’s fact the 1% broke private sectors unions. It’s also fact the conservative 1%’s want to break public sector unions a la your favorite Scott Walker. Now you’re either in the above category OR you’re one that got “screwed” by someone in the above category. BS or just TL in reverse, guess it depends on your perspective.

          • Posted by Tough Love on June 7, 2015 at 10:58 pm

            Well Anon, the readers should keep in mind that while Private Sector pensions were reasonably generous AND putting a strain on the Corporate bottom line, PUBLIC Sector pensions are ROUTINELY 3x to 4x * GREATER in value at retirement than the retirement packages granted their Private Sector counterparts …. and they are paid for by the Taxpayers, not corporate shareholders.

            * 4x to 6x for Safety workers with the MOST egregious pensions.

          • Posted by S Moderation Douglas on June 8, 2015 at 12:40 am

            It’s not rocket surgery. If the total compensation of any two people is roughly equal, but one of those persons has “3x to 4x” more of his compensation diverted toward pension, that person will have a pension 3x to 4x * GREATER in value at retirement.

            Nothing sinister going on here. It’s called deferred compensation.

            * 4x to 6x for Safety workers, of course.

          • Posted by Tough Love on June 8, 2015 at 12:56 am

            Responding to S. Moderation Douglas….

            But “Total Compensation” is Not equal … AS YOU WELL KNOW … since you are aware from the AEI study* (that you quote so often) that Public Sector Total Compensation in NJ is (on average for all occupations combined) 23 % greater than that of their Private Sector counterparts (and 34% if the added value of greater Public Sector Job Security is included).

            Readers …. thing abut how much better YOUR retirement would be if YOU had 23% of your pay to save and invest EVERY YEAR over your entire working life …….WELL that’s the PUBLIC Sector compensation advantage RIGHT NOW.
            ————————————————————–

            * From Figures 6 and 13 of this source:

            https://www.aei.org/wp-content/uploads/2014/04/-biggs-overpaid-or-underpaid-a-statebystate-ranking-of-public-employee-compensation_112536583046.pdf

            In addition, this study, by excluding NJ highest-paid Public Sector workers …. that being Safety Workers …. it considerably UNDERSTATES the Public Sector compensation advantage.

            ______________________________________

            So I classify YOUR comment as misstatements, omissions of material facts, and lies.

          • Posted by Tough Love on June 8, 2015 at 1:02 am

            Responding to S. Moderation Douglas….

            But “Total Compensation” is Not equal … AS YOU WELL KNOW … since you are aware from the AEI study* (that you quote so often) that Public Sector Total Compensation in NJ is (on average for all occupations combined) 23 % greater than that of their Private counterparts (and 34% if the added value of greater Public Sector Job Security is included).

            Readers …. thing abut how much better YOUR retirement would be if YOU had 23% of your pay to save and invest EVERY YEAR over your entire working life …….WELL that’s the PUBLIC Sector compensation advantage RIGHT NOW.

            —————————————————————

            * From Figures 6 and 13 of this source:

            https://www.aei.org/wp-content/uploads/2014/04/-biggs-overpaid-or-underpaid-a-statebystate-ranking-of-public-employee-compensation_112536583046.pdf

            In addition this study, by excluding NJ highest-paid Public Sector workers …. that being Safety Workers …. it considerably UNDERSTATES the Public Sector compensation advantage.

            ———————————————–
            So I classify YOUR comment as misstatements, omissions of material facts, and lies.

          • Posted by S Moderation Douglas on June 8, 2015 at 2:34 am

            “Conclusion: Are New Jersey public employees overpaid? No

            The earnings equation estimates indicate that New Jersey public employees, both state and local government employees, are not overpaid, but neither are they under compensated. When we make comparisons controlling for education, experience, hours of work, organizational size, gender, race, ethnicity, and disability, there is no sig- nificant difference between private and public employee compensation costs.”

            https://www.google.com/url?sa=t&source=web&rct=j&ei=ZyZ1VeTGL5GuogTd44GoCw&url=http://50.87.169.168/OJS/ojs-2.4.4-1/index.php/EPRN/article/view/1854&ved=0CDQQFjAG&usg=AFQjCNGz2nbLzpb6_LrVOVGwuS3VGiZshQ&sig2=OEnRxKZip1HnBHBIIpGLog
            ………………………………

          • Posted by Tough Love on June 8, 2015 at 2:48 am

            You couldn’t possible have found a more liberal leaning Organization (the EPI) and the author of this …VERY BIASED Study … (Rutgers professor JEFFREY H. KEEFE) if you searched for years.

            In fact, his faulty positions and poor quality work was thoroughly trashed by PHD’s here:

            http://www.heritage.org/research/reports/2011/03/public-sector-compensation-correcting-the-economic-policy-institute-again

          • Posted by Anonymous on June 8, 2015 at 7:43 am

            Usual stuff, different sources (conservative v liberal) different results. Depends what spin you want to put on it and where you want to end up.

          • Posted by S Moderation Douglas on June 8, 2015 at 10:59 am

            You couldn’t have found “a more liberal leaning Organization”?

            “his faulty positions and poor quality work was thoroughly trashed by”.

            …….wait for it……….the most conservative leaning organization.

            I agree. The “truth” is most likely somewhere in the middle.

            But they all agree that public workers earn less in cash wages than the private sector.

            They all agree that at the lowest end of the scale, public sector benefits bring their total compensation higher than the private sector:
            As
            a
            percentage
            of
            wages.

            Largely due to healthcare benefits.

            And they all agree that at the higher educated level, public sector workers earn much less than the private sector, even with the added value of pensions and benefits.

            To focus on two charts in the appendix of an 87 page study and ignore the rest is…….”diversion, misstatements, omission of material facts, and outright lies.”

            Andrew Biggs:

            “Nevertheless, a significant total compensation penalty remains for both professional and doctoral degree holders. It is worth considering how government may continue to attract better-educated employees despite a seeming compensation penalty.”

          • Posted by Tough Love on June 8, 2015 at 12:48 pm

            Quoting ….”But they all agree that public workers earn less in cash wages than the private sector. ”

            Yes, and per the study only 4% less in “CASH” pay in NJ …. but even AFTER that slightly lower “CASH” pay, NJ’s Public Sector workers earn 23% MORE in “Total Compensation” (34% with the added value of “job security”) than their Private Sector counterparts.

            And because it is so HUGELY important, I repeat …

            “Readers …. thing abut how much better YOUR retirement would be if YOU had 23% of your pay to save and invest EVERY YEAR over your entire working life …….WELL that’s the PUBLIC Sector compensation advantage RIGHT NOW.”

          • Posted by S Moderation Douglas on June 8, 2015 at 5:26 pm

            “diversion, misstatements, omission of material facts, and outright lies” :

            “Readers …. thing abut how much better YOUR retirement would be if YOU had 23% of your pay to save and invest EVERY YEAR over your entire working life …….WELL that’s the PUBLIC Sector compensation advantage RIGHT NOW.”
            _________________________
            Read……………..the……………study.

            1). It’s not “right now”. The data is 3 to 8 years old. All before chapter 78 changes.

            2). Much of the “23% of your pay” is not available to “save and invest”. It is the theoretical future value of retiree healthcare. You can’t save it. You can’t invest it. You literally cannot “take it to the bank”. It’s what my dear wife refers to as “ifcome”. Especially in New Jersey.

            3). And, of course much of the alleged 23% is from the “proper” discounting of liabilities. We could debate that, but it’s already been debated by the “experts”. Suffice it to say, there is not unanimous agreement.

            “thing abut” it!!!

            Lol

          • Posted by Tough Love on June 8, 2015 at 8:35 pm

            Responding to S .Moderation Douglas ….

            Ah, MORE mus-statements, omission of facts, and perhaps, lies….

            Re # (1) other than the COLA suspension, the Ch 78 changes have VERY minimal impact only from “NEWLY HIRED” workers … meaning those changes save near nothing until these new employees begin to retire 20-30 years in the future.

            Re # (2) yes, the 23% IS available to save and invest. Example … if you get such VERY VERY rich healthcare that the deductibles, co-pays, coinsurance are VERY small, it frees up OTHER money that you normally be put- of- pocket.

            Re # (3) Discounting Plan liabilities at the Investment Earnings Rate assumption (7.9% in NJ) when the TAXPAYERS (not the WORKERS) are responsible for investment earnings shortfalls is EQUIVALENT TO the workers being given, not just the taxpayer “contributions”, but a GUARANTEE that both the employee AND employer contributions will earn 7.9% EVERY YEAR. In an investment environment where “guaranteed” investments pay around 2%, this is patently ludicrous and simply another of the MANY taxpayer “rip-offs”.

  6. Tick Tock Public Takers. Tick Tock. The Bond Bubble is about to Pop Your Ponzi Pyramid Scam.

    Reply

  7. Posted by Anonymous on June 7, 2015 at 9:21 pm

    We already now the Supreme Court’s “punted” on an opinion. The question is are they going to throw in the towel?

    Reply

  8. Unfortunately we need to both fix management and change the pensions fundamentally

    Reply

  9. Posted by Anonymous on June 8, 2015 at 8:00 am

    TL citing right wing conservative “think tank” studies and opinions. So why not the other (left wing liberal) perspective. Because it’s contrary to your perspective and doesn’t fit your reality.

    Reply

    • Posted by Tough Love on June 8, 2015 at 10:42 am

      No, you “listen” to the expert’s arguments and then “think” carefully about what they have stated. The omissions by Prof. Keefe are clearly unreasonable and lead to incorrect conclusions.

      Reply

      • Posted by Anonymous on June 8, 2015 at 10:55 am

        TL ever the expert on their narrow minded right wing conservative opinion.

        Reply

        • Posted by Tough Love on June 8, 2015 at 2:59 pm

          No, It’s “fundamental errors” in Keefe’s methodology. As just one example, in his studies, HE considers the “cost” of pensions to be what the gov’t entity “PAID” in contributions in the year.

          Everyone and anyone with any financial common sense know that the year’s true “cost” is …. the VALUE of that years pension benefit ACCRUALS ….. AND that nothing to do with what the gov’t chooses to contribution the year (most often a “political” decision). Some Gov’t entities are known to take pension “holidays” and contribute NOTHING in a year. It’s would be patently absurd to assume that the pensions cost NOTHING in that year …. which is exactly what Keefe does.

          Reply

          • Posted by S Moderation Douglas on June 8, 2015 at 6:00 pm

            Thing abut it. “cost” and “value” are not the same thing. Sure, Biggs says the value of a DB pension is much higher than the ARC. And the “cost” of employers social security contributions for the employee is 6.2% of wages, but the “value” to the employee is only 2.4%, which is the number Biggs uses when comparing public and private compensation.

            It sounds very much like the Texas Sharpshooter method.

            http://m.pionline.com/article/20150429/ONLINE/150429853/estimating-future-costs-at-public-pension-plans-setting-the-discount-rate

          • Posted by Tough Love on June 8, 2015 at 9:06 pm

            There you go again with “diversion” and “misstatements”………

            It’s NOT simply … “Biggs says the value of a DB pension is much higher than the ARC. ”

            It’s that Keefe says the pensions “cost” is determined by what in PAID-IN in a given year. There isn’t a trained economist in the world that would agree with that statement …. instead, defining the pension annual “cost” as the “value” of a year’s pension benefit “accruals”… While there may be some disagreement as the the “value” of those “accruals” …. a pension’s “cost” is NEVER determined by what is “contributed” in a given year …… and THAT is what Keffe does.

          • Posted by S Moderation Douglas on June 8, 2015 at 9:46 pm

            LOL

            “There you go again!!”

            Admit it, TL, you’re full of it.

        • Posted by Tough Love on June 8, 2015 at 11:12 pm

          Yes S Moderation Douglas, when you can’t logically argue (to the incorrect conclusion that YOU desire) your answer is ………………….. LOL. .

          Reply

          • Posted by S Moderation Douglas on June 9, 2015 at 12:34 am

            I assume we can agree on this:

            “Nevertheless, a significant total compensation penalty remains for both professional and doctoral degree holders. It is worth considering how government may continue to attract better-educated employees despite a seeming compensation penalty.”

          • Posted by Tough Love on June 9, 2015 at 1:04 am

            Yes we can …. with the MAJOR qualification that Professional and Doctoral degree holders comprise only (2% and 1% respectively) 3% of the Private Sector workforce ….. from Table ! of the AEI Study ……….. https://www.aei.org/wp-content/uploads/2014/04/-biggs-overpaid-or-underpaid-a-statebystate-ranking-of-public-employee-compensation_112536583046.pdf

            Big Woop.

            ——————————

            So I’d classify your last comment as one with ……. material “omission of facts”.

          • Posted by S Moderation Douglas on June 9, 2015 at 1:40 am

            That’s a start. It’s like we’re brothers.
            Tit for tat.

          • Posted by Tough Love on June 9, 2015 at 1:56 am

            Or ….. perhaps brother and sister ????

          • Posted by S Moderation Douglas on June 9, 2015 at 11:27 am

            Also, conversely, we must agree that Professional and Doctoral degree holders comprise 10% of state workers (6% and 4% respectively). 10% of state workers who undeniably earn much less than their private sector counterparts. That’s a very substantial whoop.

            (By “earn much less”, we mean that private sector professionals earn 59% more in wages than those in state jobs.) Now there’s a whoop !!
            After factoring in pensions and benefits, the private sector advantage falls to only 20%. Whoop, whoop.

            Those are nationwide numbers. Your mileage may vary in New Jersey.

            Brother Moderation

  10. Posted by Anonymous on June 8, 2015 at 10:53 am

    This is how corporate America w/o unions rewards its workers to benefit the 1% and now they think it’s ok to do it to public sector workers? http://www.nj.com/opinion/index.ssf/2015/06/new_theme_at_disneyland_fire_the_american_worker_e.html#incart_river_mobile

    Reply

  11. Posted by Anonymous on June 8, 2015 at 10:59 am

    Tomorrow the big (rather meaningless) day!
    https://www.judiciary.state.nj.us/opinions/jun15.html

    Reply

  12. Posted by Anonymous on June 8, 2015 at 11:08 am

    John sharpen your keyboard could be a lot more of nothing to talk about with tomorrow’s NJ SC opinion; https://www.judiciary.state.nj.us/opinions/jun15.html

    Reply

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