Thomas Byrne, the son of former Gov. Brendan Byrne, is a member of Gov. Chris Christie’s Pension and Benefit Study Commission, a private investment manager and former chair of the state Democratic Party. This morning he had a guest opinion column in the Times of Trenton asking us to consider:
The State’s 2015 budget was approximately $33 billion; its pension plans paid out $7 billion in benefits. That money came [from] the $79 billion of pension plan assets. Let’s fast-forward a decade or so and imagine what will happen if pension plans run dry.
He then proceeds to outline why changes have to be made, specifically those proposed by his commission which he claims “would fully fund the $40 billion hole in the pension funds”, and ends with:
This is all avoidable, but not without leadership and political courage. Over-simplification of this problem will do no favors for public servants who have done nothing wrong and who deserve the pensions they have earned. Let’s not dither and let the hourglass run out.
He is wrong on a number of points.
- Based on raw data provided by the state showing retiree monthly payouts in 2014 there was $9.65 billion paid out to retirees up from $8.71 billion in 2012. CAFR numbers show $9.44 billion billion being paid out for the year ended June 30, 2014 with payouts only being at $7 billion back in 2009.
- $79 billion may be what the Division of Investment claims to have but that is aspirational since so much is tied up in ‘alternative’ investments where values are pegged by those who make higher fees from inflating those values.
- Again with the $40 billion unfunded number – try $166 billion.
- This is now NOT avoidable because even if we had people with “leadership and political courage” they would still lack honest information on the scope of the problem.*
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* Due in large part to a compromised actuarial profession which is getting some focus today.
Burypensions Blog 
Posted by dentss dunnigan on July 9, 2015 at 11:43 am
This tells the story of how actuaries have overstated funds returns so as to over promise pensions to retirees Bad Math and a Coming Public Pension Crisis…http://www.nytimes.com/2015/07/09/business/bad-math-and-a-coming-public-pension-crisis.html?_r=0
Posted by Anonymous on July 9, 2015 at 12:17 pm
http://m.juneauempire.com/stories/061310/sta_653072396.shtml#.VZ6QlCPD_qA
Posted by Anonymous on July 9, 2015 at 12:20 pm
http://www.ibtimes.com/chris-christie-administration-give-180m-tax-break-jpmorgan-chase-he-sells-himself-2000583
Posted by dentss dunnigan on July 9, 2015 at 1:05 pm
Without tax breaks companies move out ,Mercedes just left for NC because of a better break ,while I’m not a supporter of tax breaks our state has the worst record for business in the country ,something must be done to lure business here .
Posted by bpaterson on July 9, 2015 at 3:34 pm
what can be done?-less onerous corp tax structure, and stopping the politicians from targeting corporations as the bottomless pockets since corporations don’t use services yet pay high taxes. And the only way to ameliorate any tax structure in this state is to scrap the corrupted system in place rewarding those by political favors, voting base and designated party boss system. Who will stand up and do that?…actually its who would be able to get a foothold in politics to stand up and do it since we go back to the corrupted political boss system in place.
Posted by Ralphie on July 9, 2015 at 2:13 pm
Well John, aren’t you helpful. Let’s throw up our hands and say woe is me. It’s easy to be a critic, and to poke holes in the plans of those who offer solutions.
Posted by BH on July 9, 2015 at 3:03 pm
Oh boy!! Don’t let TL read this statement from above..”public servants who have done nothing wrong and who deserve the pensions they have earned”!!!!
Posted by bpaterson on July 9, 2015 at 3:42 pm
BH-i’ll take a shot then at better wording since byrne is just another clueless partisan fop: its public servants and their unions who have done actions to earn them the system to provide them with pensions. TL would probably say “provide them with outrageous pensions” but we will leave it at that.
Public sector unions and whether they should exist or not are just starting to be addressed in congressional committees as they appear more detrimental than beneficial to our nations fiscal health.
Posted by PSDrone on July 9, 2015 at 5:22 pm
You’re correct: they haven’t “earned” them and as a result do not deserve them. No more than they:
– “earn” 15 sick days per year which they can carryover if not used – it is the rare, and soon to be former, employee who would ever call out sick 15 times in one year (and remain employed) so that “liability” adds up year after year after year (usually paid out in the form of a very large “boat” check so as to fully enjoy retirement at taxpayer expense).
– “earn” vesting 100% after 30 years when SS requires 35 for a benefit one half or one third the size.
– “earn” the right to receive pension benefits before age 65, e.g. 52, 55, 58 etc. particularly when the average life span is in the high 70’s now.
– “earn” 14 paid holidays when the private sector is lucky to get 10. They even get holidays that are not holidays e.g., election day (?!), Flag Day?
Just keep thinking Greece, Greece, Greece to fully comprehend how this is going to end up.
Posted by Anonymous on July 9, 2015 at 5:31 pm
But really the BS about corporations/businesses only giving and not taking. Infrastructure usage, toxic sites, executive pay at an all time high – let’s be realistic! I guess it is if your a Tea Party radical?
Posted by Anonymous on July 9, 2015 at 6:30 pm
Oh you mean bondholder default and economic collapse for public/private sector?
Posted by BH on July 9, 2015 at 7:49 pm
You’re trying to speak about oranges and bananas like they are the same?!?!?
Who gives a rats ass about social security???
You’re also wrong on many of your assumptions above!!
They can’t cash in all the sick days….. There is currently a cap at $15,000 before taxes. So boat check?? Doubt that. Perhaps a canoe maybe.
Most are vested after 10 years. Not 30….
Earn a pension before 65??? Why?? No one in the private sector does???? My company allows it. You want a 65 year old cop chasing you thugs down the street??? Sounds pretty smart!!!
Earn 14 holidays???? While the private sector earns 10??? Big Fn deal….. Grow up!!!!
My god you people are so dense and jealous it’s obvious and sad!!!
Posted by PSDrone on July 9, 2015 at 9:53 pm
Don’t earn and don’t deserve. Keep attacking until the checks stop instead of trying to foster a compromise that is FAIR. Real good strategy.
Posted by BH on July 9, 2015 at 7:42 pm
Yeah…. Good luck with that. Lol
Posted by Tough Love on July 9, 2015 at 6:02 pm
Quoting Thomas Byrne ….”Over-simplification of this problem will do no favors for public servants who have done nothing wrong and who deserve the pensions they have earned. ”
Considering the underhanded COLLUSION between the Public Sector Unions and NJ’s Elected Officials, with the former BUYING from the latter (with campaign contributions and election support) the votes necessary to approve such grossly excessive pensions, and with NOBODY at ANY “bargaining table” rightfully looking out for TAXPAYER-interests ….. these overstuffed, unnecessary, unjust, unfair (to the Taxpayers), and unaffordable pension promises …. are ANYTHING but “deserved” or “earned” !
Posted by Tough Love on July 9, 2015 at 6:24 pm
And yes BH, even though the workers indeed “did nothing wrong”, they are ARE in fact the “financial beneficiaries” of this Union/Politician COLLUSION and enormous/unjustified THEFT of Private Sector wealth …. so THAT’s where Taxpayer must look to right this wrong…. by materially reducing these promised GROSSLY EXCESSIVE Public Sector pensions & benefits.
Posted by BH on July 9, 2015 at 7:52 pm
Blah blah blah….. You still never answer my questions. Post after post…. All you do is add your same “keywords”…. Don’t worry….. You’re gathering plenty of Internet traffic spewing the same crap over and over and over!!!!!!
Lol…. God I feel sorry for you and your minions!!!! Wasting all your time here. Trust me!!!
Posted by Tough Love on July 9, 2015 at 10:24 pm
BH,
What “question”…. perhaps I missed one squirreled in-between all the exclamation points?
Posted by Anonymous on July 11, 2015 at 7:19 pm
Name, dates, places and people, TL your just a one tune cauldren tender. Get a hobby, join CC’ s on the campaign trail. Give us a break you web troll.
Posted by Tough Love on July 11, 2015 at 8:15 pm
“us” …. Don’t (by “us”) you mean ……..STOP pressing for (the justifiable) pension reductions for the future service of all CURRENT workers.
The “us” certainly can’t include NJ’s Taxpayers, who you want to pay almost the full cost of your grossly excessive pension & benefit “promises”.
Posted by Anonymous on July 12, 2015 at 9:04 am
Please get help, the pension financing matters will be settled. The union executives and their legal staffs should understand the contracts they sign. Their should be no surprise legal moves coming from the CC administration regarding contract extensions. I blame the unions for the chaos they allowed to happen against their memberships.
Posted by Tough Love on July 12, 2015 at 9:58 am
You seem to be putting primary “blame” on the Unions. While a serious incendiary party to this mess, NONE of it would have happened if our Elected Officials weren’t so self-interested and singularly-focused upon getting re-elected (and CONTINUING to get the Public Sector Union campaign contributions and election support they needed to make that happen). Such horse-trading of Campaign contributions and election support for favorable votes on Public Sector pay, pensions, and benefits would, in any other venue (but politics) been considered criminal bribe giving & accepting and a likely violation of RICO statutes.
But Taxpayers must keep in mind that even though individually, the workers/retirees “did nothing wrong”, THEY are indeed the beneficiaries of the financial collusion between their Unions and our elected officials, and taxpayers must right this wrong by AT A MINIMUM very materially reducing their future service pensions accruals and retiree healthcare benefits ALL THE WAY DOWN to what Private Sector workers typically get from their employers.
It’s VERY clear that PAST Service accruals were ALSO grossly excessive and the result of this collusion. While certainly justifiable to be reduced as well, I don’t advocate for that (now or yet), having a wait and see attitude as to the magnitude of the financial calamity awaiting taxpayers. But be assured, the longer pension reform is delayed, the more excessive and unaffordable accruals add to the already unaffordable and exiting PAST service accruals, and the LESS likely we are are to honor PAST as well as Future service accruals.
Greed HAS consequences.
Posted by Javagold on July 10, 2015 at 1:05 am
So much wasted time, money and breath. Just let the pension ponzi Pyramid collapse. And enjoy the front row seats. The public takers deserve everything coming their way. I’m actually looking forward to when they turn on each other.
Posted by Tough Love on July 10, 2015 at 1:29 am
I too expect them to ……. “turn on each other”.
The higher the percentage of PAST service accruals (which is of course 100% for those already retired) that is actually paid, the MORE the younger, lesser-service “actives” get screwed. Given how unequivocally “excessive” those PAST Service accruals are, those younger, lesser-service “actives” are gonna get real pissed off with getting so much less than their older retired “brothers”.
There’s only so much money to be spread around.
Posted by Anonymous on July 10, 2015 at 9:39 am
Indeed to both previous posts and as the old adage goes “he who hesitates has lost”. Let’s not waste anymore time in moving forward with the P&B Commission template to reform. For the TAXPAYERS and the public workers (active & retired).
Posted by pat on July 10, 2015 at 11:16 am
30 years ago when I was deciding between working on wall street 80 hours a week for a few extra bucks or taking this cushy state job where I can work 35 hours a week for a little less money….what would you do?
Posted by Anonymous on July 10, 2015 at 11:44 am
Really depends, impossible to say what might have been if…..? But to answer your question, some individuals did have that choice and choose differently for various reasons.
Posted by Tough Love on July 10, 2015 at 12:29 pm
It’s incredulous to believe anyone anyone who is capable of landing and being productive in a high-end trader position on Wall Street would opt to work in the Public Sector ……. it’s a WHOLE different mind-set.
Posted by Anonymous on July 10, 2015 at 12:41 pm
AGREED for highly recruited graduates public sector is worst case scenario. Private sector is the choice for anyone who’s aiming high to POTENTIAL excel in their career.
Posted by Anonymous on July 10, 2015 at 1:01 pm
Interesting perspective and conclusion. So why would our best and brightest choose the over worked, under compensated private sector over the generously compensated over promised public sector?
Posted by Tough Love on July 10, 2015 at 1:13 pm
The “Private Sector”, which represents 80%-85% of all workers sets the “market rate” for compensation via competition for talent among employers WITHOUT the distorting influence of the WORKERS essentially choosing (i.e., Electing) their bosses (who then return the favor with excessive compensation …. mostly in the form of grossly excessive, unnecessary, unjust, unfair, and unaffordable pensions & benefits).
Bottom line ……. the Private Sector isn’t “under compensated”, it’s the Public Sector that is grossly “over compensated”.
Posted by Anonymous on July 10, 2015 at 1:39 pm
Ok so our brightest and best choose the private sector, versus the public sector, with what financial goal in mind? Understanding financial considetation is just one factor but statistically the most important.
Posted by S Moderation Douglas on July 10, 2015 at 3:25 pm
Think outside the box. This is why it’s misleading to use “averages”.
The alleged “grossly excessive, unnecessary, unjust, unfair, and unaffordable pensions & benefits” in the public sector are not the engineers, lawyers, doctors, accountants, and high level managers.
Public employees with the huge relative compensation advantage over the private sector are janitors, clerks, laborers, and assorted minions.
A highway maintenance worker making $3,200 a month makes more in pension and benefits than he does in salary. Yes, the guy or gal who, if they work 40 years, will receive the “average” pension of $26 -$28K per year, and state paid healthcare instead of Medicaid. He is the one driving up the averages.
The $200,000 police chief or city manager are hard working, intelligent, executives who, like Mike Genest said of himself: “could have made more in the private sector.”
Posted by Tough Love on July 10, 2015 at 3:49 pm
S Moderation Douglas,
What you stated is “somewhat” true, but adding that a rather LARGE proportion of the Public Sector “middle of the road” (and upper “middle of the road”) workers/managers (not just the …”janitors, clerks, laborers, and assorted minions”) fall into the materially “over-compensated” group.
What is certainly NOT accurate is your last paragraph. VERY few of those well-overpaid could have made more in the Private Sector, and most FAR less on a “Total Compensation” basis (which includes not only their cash pay, but their grossly excessive Public pensions & benefits).
—————————————————————————
For Mr. Bury’s readers to enjoy ………
S. Moderation Douglas and I just had rather spirited exchange of comments on a recent article titled … “Can California Find a Way Out of Its Pension Calamity?”, which can be found here:
http://www.governing.com/blogs/bfc/col-california-pension-reform-voter-empowerment-act.html
His BS flies where he lives (in California) as fervently as it does here.
Posted by S Moderation Douglas on July 10, 2015 at 4:25 pm
It apparently worked for Mr. Genest. The full quote:
“We could have made a lot more money in the private sector. We are making more money.”
Posted by Anonymous on July 10, 2015 at 4:26 pm
You two are all over this stuff! Well that’s good news I guess, at least it’s not just the minions breaking us down!!
Posted by S Moderation Douglas on July 10, 2015 at 5:18 pm
TL quote:
“What you stated is “somewhat” true, but adding that a rather LARGE proportion of the Public Sector “middle of the road” (and upper “middle of the road”) workers/managers (not just the …”janitors, clerks, laborers, and assorted minions”) fall into the materially “over-compensated” group.”
“Somewhat” true; Granted. Not being omniscient, the best we can do is find the best sources available, then contrast and compare them using our own common sense and logic.
I don’t know where you got the data to support:
“rather LARGE proportion…..(and upper “middle of the road”) workers/managers….fall into the materially “over-compensated” group.”
At the risk of having to endure that “distortions, misstatements, yadda, yadda, yadda” polemic again, my data comes from, again, AEI.
Nationwide* Biggs and Richwine say that, on average, those public employees with a Bachelor’s degree earn 2% more than their private sector equivalents. That is what Biggs calls statistically insignificant, or “roughly equal”. Those with a Masters degree earn 3% less than the private sector. S Moderation Douglas says we should call that “roughly equal” also. Above that level, Private sector workers earn significantly (or, as you say, “materially”) more (like 59% more) in wages. And substantially more even when the costs of pensions and benefits are factored in.
All these comparisons are using the healthcare, retiree healthcare, and pensions calculated at the risk free rate.
These categories, BA and above, account for 60% of public workers. About 50% MAs and BAs “roughly equal” and 10% PhD and professional “materially” underpaid.
That is 60% of state workers either “roughly equal” or “materially” undercompensated.
——————————————
* Nationwide data
Because they do not do similar break-outs for the individual states. In wages alone, most states pay less for the gamut of public workers, but states like California, New Jersey, Illinois, Connecticut, Pennsylvania, etc. have much higher than average pension/OPEBs, so the total compensation in those states will be higher than the national averages.
Posted by S Moderation Douglas on July 10, 2015 at 5:45 pm
@Anonymous (July 10, 2015 at 4:26 pm)
Sorry, I get carried away.
There is in anecdote about a captured ragged Confederate who obviously didn’t own any slaves.’ When asked by a group of Yankee soldiers why he was fighting, the Rebel replied, “I’m fighting because you’re down here,”
TL seems to think that anyone who disagrees with him/her is sucking at the public teat or has some other nefarious motive, and/or is a pathological liar.
I have no slaves. I have no dog in this hunt. I do live on a state pension, under $50,000, after 48 years of private and public working (37 at state of California). Whatever Gov. Christie or Gov. Brown manages to “reform” in pensions will probably have absolutely no effect on me. I personally would probably be more secure in my own pension if every state and county went to Defined Contributions tomorrow.
Some of what TL says is true. There is a lot of misinformation and exaggeration mixed in, echoed and magnified across the world wide web. I have seen some other posters counter this information more succinctly, but I just do the best I can.
Civil, logical discussions are OK, but keep serving up those lies and I will keep batting them down.
Posted by Tough Love on July 10, 2015 at 6:21 pm
S.Moderation Douglas,
You like to focus on the highest educated groups of Public Sector workers (often singling out PHDs and “Professionals”) as both making less in wages and less in Total Compensation”.
Putting aside earlier arguments I have presented that such high-educational-category groups may not be apples-to-apples in the Public and Private Sectors and distort a direct compensation comparison …….. e.g., ONLY the Private Sector group likely includes very highly paid Plastic Surgeons and MD’s now earning tens of $ Millions because they founded successful pharmaceutical companies …… the fact remains that the “AVERAGE” Public Sector “Total Compensation” advantage from ALL educational groups combined CANNOT be ignored (and pushed aside as you are trying to do), because the financial cost to taxpayers is INDEED reflected BY THAT average Public Sector Total Compensation “advantage”.
Let’s take the case of California (your home State), for which the AEI study shows a 12% of pay Public Sector “wage” (i.e., cash pay) DISADVANTAGE that swings to a 23% of pay Public Sector ADVANTAGE on a “Total Compensation” basis (with that 23% of pay advantage rising to 33% with the incremental value of the much greater Public Sector job security included).
I do not disagree that there likely ARE professionals and PHDs (and those with lesser education) that earn less than their Private Sector counterparts ….. and for those that ARE, we should INCREASE their compensation. But by the same token, those that are now over-compensated should have their compensation DECREASED ……. with the NET IMPACT in California being a 23% of pay reduction in “Total Compensation” for all educational groups combined.
And please ….. skip the intentional “confusion” you like to interject on how the overcompensation in the lower-educated groups is due to not to “wages”, but due to the rich pensions and healthcare benefits that they get. It DOESN’T matter…. compensation is compensation, and the “cost” to Taxpayers is the SAME no matter how it’s divvied-up. And you can also skip reminding us that some who get lower healthcare benefits might wind up on Medicaid. Again, that is a “social” issue that should be addressed for Public Sector workers in the SAME way for which it is addressed for lower-earning Private Sector workers, whose employers do NOT simply pay them move than what is necessary and appropriate simply because they “need” good healthcare benefits.
And it’s NOT “a race to the bottom”, it’s being EQUAL and “FAIR”.
Posted by S Moderation Douglas on July 10, 2015 at 6:28 pm
Whew!
Is it OK if I just read the capitalized words and skip the rest? The sun just came out, the pool is clear and cool, and I’m in the middle of a good book.
Maybe later.
Posted by Tough Love on July 10, 2015 at 6:52 pm
S. Moderation Douglas,
Well, when you have no effective rebuttal, I guess THAT’S how you respond.
Fell free to respond later …. with something substantive.
Posted by Anonymous on July 10, 2015 at 7:12 pm
Yeah don’t stop now keep killing it, “Friday night at the fights”.
Posted by Tough Love on July 10, 2015 at 7:42 pm
Anon,
The Public Sector Union/workers/retirees fight vigorously (to KEEP the unnecessary, unjust, unfair, unaffordable, and grossly excessive pension & benefits they have now) with a “take-no-prisoners” attitude and an inexcusable disdain for the beleaguered and betrayed Taxpayers who pay for almost all of it.
Anyone who thinks that the Taxpayers can right this wrong without an equally vigorous “take-no-prisoners” level of determination, is a fool.
Posted by Anonymous on July 10, 2015 at 7:48 pm
Ding ding ding, round 2.
Posted by Anonymous on July 10, 2015 at 7:58 pm
I got it.
In this corner the (current) champion weighing it with grossly excessive pension and benefits “The Public Sector,”.
The challenger severely defeated to date but favored to win in a landslide the “Taxpayers/Private Sector”.
May both win or lose, and no hitting above the belt.
Posted by Tough Love on July 10, 2015 at 8:13 pm
Anon, It really is a “David and Goliath” kind of battle.
Unfortunately, the Taxpayers are David ….. but recall, David DOES win in the end.
Posted by Anonymous on July 10, 2015 at 8:37 pm
TRUE, I’m ordering my slingshot from Amazon (best price but probably China) now!
Posted by Tough Love on July 10, 2015 at 8:44 pm
Anon,
As you can see, I use MY (written) slingshot quite often … but only when/where I deem necessary and appropriate …. with the most recent targets being S. Moderation Douglas, and the ever-present BH, who cringes every time I call for “Fair and Equal”.
Posted by BH on July 10, 2015 at 10:29 pm
Like I said TL…. Make the Public safety jobs as safe as your Cush private sector job and we can begin a dialogue about equal. Until then….. Carve them out and continue to your endless rants where they belong.
Posted by Tough Love on July 10, 2015 at 10:53 pm
BH,
And like I’VE said (repeatedly), the US Gov’t BLS list of the 10 most dangerous occupations include:
10. Construction Laborers
9. Electrical Power-Line Installers And Repairers
8. Farmers, Ranchers, And Other Agricultural Managers
7. Driver/Sales Workers and Truck Drivers
6. Mining Machine Operators
5. Refuse And Recyclable Material Collectors
4. Roofers
3. Aircraft Pilots And Flight Engineers
2. Fishers And Related Fishing Workers
1. Logging Workers
I don’t see “Safety workers” (Police Officers or Firefighters) on this list. Do you ?
———————————————-
It’s just “greed”, insatiable greed.
Posted by BH on July 11, 2015 at 7:32 am
Again you provide your list….. But that still doesn’t answer my question. You seriously cannot deny the inherent danger found within these careers I speak of. I’m not asking nor am I looking for some stupid list from you so you can hide behind it because it suits you.
I’m telling you…. Make their jobs as safe as yours….
But you simply throw up some list and think you’re the sh*t!!! I’m not like the normal “meat with eyes” poster here…. I see threw your BS!!!!
Posted by Tough Love on July 11, 2015 at 10:15 am
Of course there is a “danger” in the work of Police work but AS THE BLS LIST SHOWS, it all adds up to far far LESS danger than many other FAR LOWER PAID occupations.
The “perceived” (but not real) higher level of danger is exploited to justify unnecessary, unfair, unjust, and unaffordably high compensation.
Posted by S Moderation Douglas on July 10, 2015 at 11:22 pm
TL; David? or Don Quixote?
Delusions of grandeur AND paranoia?
https://en.m.wikipedia.org/wiki/Grandiose_delusions
“Grandiose delusions (GD) or delusions of grandeur are principally a subtype of ….delusions are frequently found predominantly in paranoid schizophrenia, …”
Posted by Tough Love on July 10, 2015 at 11:33 pm
Perhaps ……… you do not even realize the inherent greed and arrogance in your position. The Taxpayers are not your ( i.e., the Public Sector’s) financial plaything to be toyed with and abused.
Posted by BH on July 11, 2015 at 7:37 am
Arrogance???? Lol
TL.. You are the most arrogant poster I’ve seen in my life…. You’ve got a lot of nerve.
You claim to have more knowledge than 99% of the people on this blog….. You simply copy and paste the same crap over and over. Call unions a cancer and blame these hard workers…..and you call other people arrogant.
You simply are dillusional.
Tax payers are toyed with and abused….. Ummmmm gross!!! TL. Easy now, will ya. This is a clean show here.
Posted by Tough Love on July 11, 2015 at 10:19 am
BH,
Coming from YOU ….. the most in-your-face greedy and to-hell-with-the-Taxpayers person I have even encountered …… I consider that a badge of honor.
Posted by Anonymous on July 11, 2015 at 7:43 am
I wonder if “first responders” are moonlighlighting for NJTransit as bus drivers leaving tire tracks on the public’s backs.
Maybe you’re overlooking the dangers of spilling hot coffee or playing crossing guard at the State House.
Maybe “first responders” should be carved out of implementing the P&B Commission reforms. No constitutional amendment for funding and amend the law requiring locals to make their ARC.
That would result in property tax relief.
Then let the fund’s cash flow dictate.
Posted by BH on July 11, 2015 at 8:04 am
And give them their pensions to manage?? How about that.
You do realize the local plans have a very very very small stake in all this don’t you?? The PFRS system is stable at almost 77% and the only thing holding it back from operating at an almost 90% funding level is the governor’s broken promise.
Posted by BH on July 11, 2015 at 8:10 am
Just to preempt TL with her counter made up numbers.
Local PFRS 76.3%
Click to access gasb-67-statutory-funded-ratio-comparison-2014-2013.pdf
Posted by BH on July 11, 2015 at 8:17 am
So you can blog all you want about fair or equal….. Salaries and healthcare. The bulk of the local PFRS is well funded …due to nonstop payments by both employers and employees!! They pay the most in contributions and healthcare. Their pensions are solvent…. Even more so now after chapt 78 stole even more money from them.
Post all your charts but deep inside you know these are brave men and women who sacrifice more than most. Their compensation is negotiated in good faith with their municipality having nothing to do with you or the state. So keep your meddling creepy jealous fingers pointed in the right direction.
Posted by Anonymous on July 11, 2015 at 8:17 am
True but with clarification. PORS members are State funded and skewing P&FRS percentage for the reason you’ve indicated. But that’s supported by local property taxes not subject to the 2% cap.
Also what about SPRS should they be “carved out” even though they’re State funded.
The exceptions and reasonings get convoluted.
Look I’m not taking sides just trying to take an unbiased perspective.
Posted by BH on July 11, 2015 at 8:33 am
Yes. But doesn’t it stand to reason…. If the employee is paying 10%. The municipality paying 10-15% based on actuaries…..
Then that goes into a pot. It gains interest. And the pensions are paid!!!
I understand the taxpayer is on the hook for that. But What’s wrong with that. It’s a service. Police and fire is a service. Should it be free???
I’m missing something here with all the hate.
Their pensions in the PFRS are well funded.
The state funds are where the issues lie.
That’s my entire point
Posted by Anonymous on July 11, 2015 at 8:40 am
Sounds plausible but….
If it’s true for P&FRS, with increased contributions, it should be true for other pension funds. Not sure of the appropriate terminology, at least for the normal contributions going forward.
Other point is the actuaries are, to but it mildly, fudging the numbers.
Posted by BH on July 11, 2015 at 8:42 am
And by the same reasoning… Should we take the flourishing local funds that were maintained throughout the years by proper funding and throw them into the same pot with the states funds? Ya know… The ones that are 40-50% funded due to the states lack of payments? Due to the contribution rates floating around 4-5% for decades??
You seriously think, beyond being fair and reasonable, that’s a sound business model?? Throw good money at bad money?? See what sticks???
Why should the people who’s funds suffer because of others entities problems?? It’s pure BS!!!!!
And the TLs of the world can spin it all they want. Some will say…. Too bad. It is what it is!!! We are in a hole. Everyone pays!!! Well, why can’t the local public safety unions say exactly the same??
Posted by Anonymous on July 11, 2015 at 8:53 am
Point taken, so you’re saying “carve out” just P&FRS?
Under your scenario if the State, which pays for local teachers, had the same legal requirement as locals that State taxes would have been significantly higher over the years. Also do you think local property taxes could sustain footing the bill for P&FRS and TPAF?
Posted by BH on July 11, 2015 at 8:57 am
http://firefighterfactsnj.org
As an example. Put in your zip code.
You’ll see the amount equates to a cup of coffee.
I’d gladly pay for a cup of coffee for that level of protection.
Posted by BH on July 11, 2015 at 8:59 am
Carve them all up. Give them all their funds to manage. If it fails on their watch. Ok
Posted by Anonymous on July 11, 2015 at 9:07 am
Interesting link but you do realize if the unions take over the funds w/o a guaranteed funding source and/or reforms they’re all destined to fail?
Does the SS exclusion apply to current P&FRS? Maybe the same restrictions should apply for all publics. Might save State and locals SS tax as well as help SS fund?
Posted by BH on July 11, 2015 at 9:17 am
I failed to mention…..
Fully pay the current unfounded liabilities…..
Posted by Tough Love on July 11, 2015 at 10:35 am
Quoting BH …… “Just to preempt TL with her counter made up numbers.
Local PFRS 76.3%”
You simply can’t stop with the misstatements and distortions …..
In a Prior Post of Mr. Bury found here:
and via the linked “Supplement”,under the new GASB Accounting rules, the Local PERS is 65.81% funded and the LOCAL PFRS is 67.6% funded, and …… per the 5 bullet points in Mr. Bury’s post, THOSE (already very low funding ratios) are (in Mr. Bury’s words) ….
“The Situation Is Worse Than Even These New GASB Numbers Lead You To Believe”
Posted by Anonymous on July 11, 2015 at 10:41 am
Wow, not sure how that’s going to happen!
Posted by BH on July 11, 2015 at 11:17 am
Ohhhh!! Ok
The “new” rules!! Lol. As opposed to the old ones!?? Lol. Silly people.
I guess that is more in line with your line of BS!!!
Let’s not give the post I used any value being its from nj.gov!!! Lol
Click to access gasb-67-statutory-funded-ratio-comparison-2014-2013.pdf
Posted by Tough Love on July 11, 2015 at 12:21 pm
BH,
You’re so clueless. The “new” rules are promulgated by the Government Accounting Standards Board (GASB) for Public Sector Financial Reporting. The REASON that Supplement was reported using the new (PROPER RULES … not the “old” phoney rules that very materially overstate the true position NJ’s pension Plans are in) is because the SEC would have found that NJ misled potential investors in that Bond Offering if it used the “old” reporting methodology..
Posted by BH on July 11, 2015 at 2:00 pm
Yeah. Ok. Read my link. It is the GASB
Lol
Posted by Anonymous on July 11, 2015 at 2:05 pm
FYI, not as up on the reporting requirements and time line implementations but I think the new GASB requirements might not have been in effect yet. Furthermore, I don’t think DBP are required to use the new calculations for ARC funding but must, at least, footnote disclose the financial exposure under the new guidelines. Probably off or missed some of the details.
Posted by Tough Love on July 11, 2015 at 2:39 pm
Part of the new (now in place) GASB changes include moving the disclosure from obscure footnotes to the balance sheet (where it can’t be hidden or ignored). But astounding as it may be, Gov’t entities still aren’t REQUIRED to follow GABS’s new methodology for funding calculations.
If a Private Sector Plan accountant/actuary did that she’d be brought up on charges pronto … and be unemployed even sooner..
Posted by Anonymous on July 11, 2015 at 3:00 pm
So without reforms and stable funding most governmental entities liabilities will continue to grow exponentially. Why wouldn’t everyone want to move forward with the P&B Commission recommendations? Why continue with current promises that will ultimately be broken? Insure accrued pension benefits earned and provide certainty with a significantly reduced DBP or a new DCP?
Posted by Tough Love on July 11, 2015 at 3:02 pm
Hey BH ….. got an answer to that ?
Posted by BH on July 11, 2015 at 4:19 pm
That’s fine for the State plans!!!! Jesus? What’s so hard for you to understand?
The Local plans are and will be fine. Due to current past and future payments being made to the plans by the employee and employer.
The state failed to make payments into the state plans, therefore they are in trouble. But holding steady at nearly 76%…the local plans are far from trouble. Why don’t you see that??? Jeesh!!!
Posted by BH on July 11, 2015 at 4:26 pm
Christie said it himself….
Maybe this will help TL having heard it directly from her Master and not BH, the evil truth teller!!!
Posted by BH on July 11, 2015 at 4:30 pm
The governor doesn’t feel the local police and fire plans are at issue here…. And yet people like TL simply can’t let it be. It’s the jealousy that consumes her and her minions!!!!
It won’t matter in the end. I’ll say it here again….. The local plans will be carved out of any reforms as they should be.
Posted by Anonymous on July 11, 2015 at 5:33 pm
So much for property tax disbelief when teachers get carved out of State to Local, then we’ll see how well funded P&FRS remains at current benefit accrual levels.
Posted by Tough Love on July 11, 2015 at 5:54 pm
BH,
STILL claiming a Local Plan funding ratio of 76%, and not ….. when “under the new GASB Accounting rules, the Local PERS is 65.81% funded and the LOCAL PFRS is 67.6% funded” ?
Got a problem with “Government Accounting Standards Board” Rules ? Who is smarter, YOU or the SEC, whose governance demanded the new GASB rules be used in that NJ Bond disclosure ?
And even those mid-60’s funding ratios are bogus for the reasons listed in Mr. Bury’s bullet points (in my above link), AND because the new GASB rules are STILL too liberal in allowing the discounting of a portion of Plan liabilities at the WAY-TOO-AGGRESSIVE 7.9% long-term investment assumption that NJ now uses in it’s pension Plan valuations.
When Private Sector Pension Plan funding ratios (calculated on a MORE conservative basis than the new GASB rules) hit 60% (not much above the current Local Public Sector Plan funding ratios), Gov’t Regulations MANDATE that no future pension accruals be granted. As such, to say that these Plans “will be fine” is a load of bull.
And really ……. EVEN IF (a big IF) the Local Plans COULD be salvaged, there is ZERO justification for digging the financial hole we are in even deeper by continuing to grant FUTURE Service accruals based on Plan formulas & provisions that are ROUTINELY result in pension 3x-4x (4x-5x greater for safety workers) greater in value at retirement than what their Private Sector counterparts typically get.
It’s not necessary, just, fair, or affordable ….. and we have FAR better uses for our Tax dollars than unnecessarily over-compensating Public Sector workers.
————————————————————————–
Gov Chrisite isn’t focusing on the LOCAL PERS and PFRS Plans simply because they are not the “State’s” financial obligation (as he stated in that video). That doesn’t mean that they are not ALSO in deep sh** (just a bit less deep than the STATE Plans) and that overcompensating LOCAL workers is justifiable.