Phooey on Pew Numbers

The Pew Charitable Trusts (Pew) released their 2013 update* on the funding gap of 238 selected state pension plans, pegging it at $968 billion, based on those quaint numbers they claim to have taken  from official actuarial reports and CAFRs.  A lot of people are going to accept Pew’s figures as fact, but are they? I looked at the reports from which New Jersey’s numbers were supposed to have been taken as well as checking over the numbers for all the states for reasonableness and found several troubling inconsistencies.

As of June 30, 2013 Pew said the New Jersey plans had $137.147 billion in Liabilities and $86.122 billion in Actuarial Assets resulting in Unfunded Liabilities of $51.025 billion.  But go to the tables in the actuarial reports that list these numbers, put them in a spreadsheet, and you find that the real official numbers are $135.868 billion in Liabilities and $86.643 billion in Actuarial Assets resulting in Unfunded Liabilities of $49.225 billion.

On the ARC payment for 2013 Pew had New Jersey’s ‘required’ contribution at $5.669 billion of which 47% (2.664 billion) was made.  But go to the tables in the actuarial reports, put them in a spreadsheet, and the ARC comes to $5.135 billion of which 50% ($2.566 billion) was made.

Granted the differences are relatively minor but the point is there are differences.  Where did Pew get their numbers if not from these reports?

However the most disturbing aspect of this summary requires some common sense and two bits of actuarial knowledge:

  • The ARC is made up of a Normal Cost (value of benefits accrued during that year); and
  • An amortization of the Unfunded Liabilities usually over 30 years

Now let’s look at Pew’s liability and ARC numbers and see if we can estimate what part of the ARC is the Normal Cost and what part is the amortization of the Unfunded Liabilities.

New Jersey uses a 7.9% interest rate which means the 30-year amortization factor is 11.365.  Divide New Jersey’s Unfunded Liability ($51.025 billion) by that 11.365 factor and you come up with an annual payment of $4.490 billion and when you subtract that from the total ARC ($5.669 billion) you get  a Normal Cost of $1.179 billion which is suspiciously low on a per capita basis ($2,358 assuming 500,000 accruing participants) but not ridiculous.

You get to ridiculous when you look at all the states combined where the total Unfunded Liabilities come to $968.385 billion but the ARC is only $91.941 billion.  If you use the same procedure we used for New Jersey for all the states with the same 11.365 amortization factor  that spreadsheet has the total Normal Cost coming to $6.733 billion (about $540 per participant assuming 12.5 million participants) with 24 states even making money (negative Normal Costs) off of their public workers accruing benefits.

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* Which may also be the final one with GASB rules coming in for 2014 which do not require calculation of the ARC and force lower interest rates to be used thus throwing off any year-to-year comparisons.

73 responses to this post.

    • Posted by BH on July 16, 2015 at 9:01 am

      This is the Dems chance to make things right for public workers….. Public Sector deserves to have their pensions funded.
      Sweeney and Prieto are going to tell them prepare for war……we got your back as does the majority of voters.
      Then after the other unions leave….. A wink goes out to the public safety unions… They stay behind. It’s then they are told how valued they are and that they will be carved out of this mess. Since they’ve paid the most, risk the most and are well funded!!
      TL….. Watch and see!!! God I wish I can see the look on your face. I’d pay. Just like you will…. Shortly in increased taxes. Which is really just a payback anyway.

      Reply

    • Posted by Anonymous on July 16, 2015 at 9:33 am

      Maybe we can catch it on reruns of Fantasy Island – the plane truth boss.

      Reply

    • Posted by Anonymous on July 16, 2015 at 9:45 am

      Honestly, funding numbers aside, do you really think either party can alienate themselves from the public non safety worker base? A sliding scale reform – yes, public safety workers totally excluded – no.

      Reply

      • Posted by BH on July 16, 2015 at 9:56 am

        They (NJEA) alienated themselves when they attempted to broker a deal for themselves in the backdoor meetings!!
        Are you kidding me?? They are the worst funded and pay the least into the funds….. They tried to screw everyone else…. Even their own members!!! In order to shore up their end!!!
        So yeah….. I think the public safety unions should be carved out and can handle this wave of BS!!! They’ve been paying the most. Their pensions are better funded!!!!

        Reply

        • Posted by Tough Love on July 16, 2015 at 10:22 am

          Actually for NJ “State” Plans, PFRS is the WORST funded of all the STATE Plans, and for the 2 LOCAL Plans (PERS and PFRS), PERS is funded at 65.81% and PFRS is funded at 67.6%……. per the linked “Supplement” in Mr. Bury’s Blog article….. https://burypensions.wordpress.com/2014/11/28/explaining-the-gasb-funding-ratio-drop/

          BOTH are VERY VERY poor and in desperate need or major benefit level reductions for the future service of all CURRENT workers ….. a change I am confident that the VAST majority of NJ voters NOT in Public Sector Union families would choose at the first opportunity.

          Reply

      • Posted by BH on July 16, 2015 at 10:02 am

        And if you mean they… As in Reps or Dems…. The reps already alienated the public safety unions years ago when christie lied to get votes.
        But, even so….. The bottom line is regardless of party affiliation…. They all pander for votes to save their own hide. Whichever way the wind blows…, they go. Either party!!!!
        So, I happen to know a few pollers…. And they tell me…. Of the 20% of people who vote , most actually stand behind the workers. Even if taxes must go up. And even more stand behind public safety. So, if it were ever to be put to a ballot…. They would win in a landslide. The politicians know this. They are going toward that cool breeze. Their votes!! The constituents!!!!

        Reply

        • Posted by BH on July 16, 2015 at 10:09 am

          TL always speaks of collusion between unions and elected officials. She sees it as a symbiotic relationship. But honestly, it’s all about the politicians remaining in office and achieving higher office. Bottom line…. Votes!!!!
          Perhaps the state unions are different…. But the local unions have absolutely no contact with any state entity. Every contract is negotiated individually with the municipal executive boards. It’s all about give and take. Lately the unions are just giving!!!! And now that the state is interfering even with the local plans…. They are getting screwed even more!!!!
          TL and her minions are trying to skew the playing field not level it. They give BS info that means nothing on a local level.
          This is why I advocate for the local plans to be carved out… And let them control their fate!!!!
          Not lump the good funds(local) with the bad (state) just so once again the state can screw around on someone else’s buck!!!!!
          That’s resonable and that’s fair!!!!

          Reply

          • Posted by Anonymous on July 16, 2015 at 10:30 am

            It’s all speculation but hopefully sooner than later we’ll know. I can see scaled back reforms but not total exclusion for public safety. As far as the State getting involved in local plans, that’s about property taxes and votes (as you indicated).

          • Posted by Tough Love on July 16, 2015 at 10:40 am

            Quoting BH ……. “TL always speaks of collusion between unions and elected officials. She sees it as a symbiotic relationship. But honestly, it’s all about the politicians remaining in office and achieving higher office. Bottom line…. Votes!!!!”

            FINALLY, BH and I agree on something.

            Now readers ….. read BH’s above statement a few times, and ask yourself …. how has that (the trading of campaign contributions and election support for our elected officials’ favorable votes on Public Sector pay, pensions, and benefits) worked our for NJ’s taxpayers ?

          • Posted by Anonymous on July 16, 2015 at 11:53 am

            The only reason local P&FRS is better funded, mandated local contributions. The increased member contribution is more than offset by better retirement formula including spousal survivor benefits without base allowance reduction.

        • Posted by Tough Love on July 16, 2015 at 10:33 am

          Quoting BH …. “The reps already alienated the public safety unions years ago when christie lied to get votes.”

          Christie’s “lied to get votes” doesn’t hold a candle to the decades-long Public Sector Union practice of BUYING the favorable votes of our elected officials with campaign contributions and election support.

          And no BH, what “reasonable and fair” is for Public Sector “Total Compensation” to be very close to those in the Private Sector in jobs with reasonably comparable risks, education and experience requirements, knowledge needed, and skill sets. And right now, due to the MULTIPLES GREATER Public Sector pensions and benefits, PUBLIC Sector workers (ESPECIALLY POLICE) have a HUGE “Total Compensation” advantage ……. an advantage that unnecessarily steals wealth from the Private Sector middle class via forever-increasing taxes that will be needed to fund that UNJUST pension (& benefit) excess.

          Reply

          • Posted by Anonymous on July 16, 2015 at 10:56 am

            True but not to mince words or take sides. It’s true for countless “special interest” groups which includes unions.

  1. Posted by Anonymous on July 16, 2015 at 8:35 am

    This doesn’t help with a multi year comparison but isn’t GASB requiring at least a prior year restatement for F/S comparison purposes.

    Reply

  2. Here is why Pew stinks.

    Here in New York, the state pension funds are relatively well funded.

    But New York City has its own pension plans for its local government employees, including New York City Transit, and they are as bad off as NJ.

    But every time Pew releases a report saying the NY State plans are well funded, NYC’s public employee unions demand more pension increases. “See? New York’s plans are well funded!”

    Reply

  3. Posted by Tough Love on July 16, 2015 at 12:29 pm

    The Pew report commentary (linked in this blog-article’s first line) is educational and would be very helpful to readers looking to increase their (high-level) understanding of financial reporting of Public Sector pensions. Unfortunately, the report concludes without ever addressing Public Sector pension “generosity” (which I believe to be the ROOT CAUSE of the pension mess many States and Cities find themselves in today), simply addressing process/methodology improvements to fully fund pensions, as promised. Specifically, it concludes with …..

    “New reporting standards will provide policymakers with additional information to evaluate the effectiveness of their policies and ensure that plans can achieve full funding and that pension promises are kept over time.“

    Given the true (very high) cost to fully fund Public Sector pensions (as currently structured) over the careers of the workers earning those pensions, it is not surprising that gov’ts have great difficulty finding sufficient revenue to properly fund them. Due to Public Sector Union pressure for very generous (and ever-increasing) pensions, and the desire of our elected officials to please their employees (and of course generate campaign contributions in return), all the involved-parties seek ways to provide the maximum possible benefits at the least cost.

    The problem is that when it come to the funding of Defined Benefit (DB) Pension Plans (of the Final-Average-Salary type granted Public Sector workers), the “cost” SOUGHT-OUT FOR ANNUAL REPORTING PURPOSES (by those “involved parties”) is NOT what the annual value of the annually accruing benefits would be if valued by standards commonly used in the Capital Markets, but by contrived methodology that minimizes the “cost” so calculated.

    It’s not hard to understand WHY those “involved-parties” seek this LOWEST cost figure for reporting purposes:

    (1) Since the “affordable” level of benefits is a function of the Plan’s “cost”, understating the TRUE COST mistakenly allows for the granting of greater pensions than are truly “affordable”.
    (2) Annually contributing less than the Plan’s true cost frees up annual budget revenue for other uses, uses which ingratiate our elected officials with the voters for their next re-election campaign.
    (3) The complexity of DB pension Plan accounting and actuarial matters (and the volatility of funding levels due to investment return volatility) can hide (or at least minimize) growing and problematic underfunding for long periods …… long periods where the politicians who granted the excessive pensions are no longer in Office to pay for the consequences of their bad judgment. And worse, with many of our Elected Officials (or their family members) working in the Public Sector and thereby being participants in these same DB Plans, they personally benefit from these poor decisions via unnecessarily/unjustly high and unaffordable pensions (AND benefits).
    (4) DB Plans have (in total) open-ended funding requirements, unlike Defined Contribution Plans (e.g., 401K Plans) in which the employer has no financial obligation beyond the year’s annual (known in advance) contribution. With the WORKER’S contribution level specified (via statue or negotiation), the Plan sponsor, meaning the employer, which in the Public Sector means the Taxpayers are the “balancing item” for all Plan costs (and developing asset shortfalls) beyond those coming from the employees. This structure combined with the problems noted in (1), (2), and (3) above puts the Taxpayers in a very tenuous position …. with the Unions have no downside to endless demands for greater and greater pensions, and our Elected Officials certainly having a more immediate upside (than downside) to accommodating such requests …. and leaving the taxpayers holding the bag. In addition, cost-controls that function (reasonably well) in Private Sector pension Plan negotiations (even when Private Sector Unions are involved) don’t exist or function well when dealing with Public Sector pension Plan negotiations. The Smart Private Sector Union knows that demanding (and getting) more than the employer can afford (or striking to do so) is counterproductive and may kill the Company, resulting in lost jobs (think GM). In the Public Sector, the Unions look at their employer (i.e., the State, or City, or town) as one that cannot “go-out-of-business”, and at taxpayers as an unlimited source of revenue to fund such excessive pension demands.

    All of this is a betrayal of our Elected Official’s responsibility to fairly represent ALL of the City’s or Town’s Taxpayers, and NOT just their Public Sector workers.

    While understandably, PEW’s focus needed to be on pension Plan “Funding” and “Reporting”, given the underlying reasons for how we got into the financial mess many States and Cities now find themselves, PEW’s silence on the contribution to the problem coming from unnecessary, unjust, unfair (to the Taxpayers), and unaffordable pension Plan “generosity” leaves us with a woefully incomplete analysis.

    Reply

    • Posted by BH on July 16, 2015 at 1:25 pm

      ROOT CAUSE= not properly funding the pensions at 100% of the ARC. Period. Hands down. Bottom line!!!!

      Reply

      • Posted by BH on July 16, 2015 at 1:26 pm

        Whether you think it’s equal or fair. That is without a doubt the ROOT CAUSE!!!

        Reply

      • Posted by Tough Love on July 16, 2015 at 1:46 pm

        BH, It’s astonishing the level of tunnel-vision you show …….

        Is it not clear that the calculated ARCS are …. A FUNCTION OF …. the plan’s “generosity”, and that IF a Plan is excessive in it’s level of “generosity” (which I claim Public Sector plans to be), THEN the RESULTANT ARCs are ALSO excessive (and equally unjustifiable) ?

        It is patently illogical to say that not paying an ARC (that is Excessive because the underlying Plan “generosity” is excessive) is the “cause” of the problem. The fallacy of your logic is so obvious ……. e.g., IF the Plans were ten times MORE generous, under your logic, you would still be saying that any underfunding is BECAUSE the Taxpayers (being the balancing item for all funding /asset shortfalls) are not now willing to pay 10 times GREATER ARCs as before.

        The FOCUS should be on ….. ARE THESE PLANS EXCESSIVELY GENEROUS ….. and if so, to reduce the generosity going forward (for the FUTURE Service of all CURRENT workers) all the way down to the generosity level typically granted similarly situated Private Sector workers.

        Reply

        • Posted by S Moderation Douglas on July 16, 2015 at 2:01 pm

          An argument is circular if its conclusion is among its premises, if it assumes (either explicitly or not) what it is trying to prove. Such arguments are said to beg the question. A circular argument fails as a proof because it will only be judged to be sound by those who already accept its conclusion.

          Reply

          • Posted by Tough Love on July 16, 2015 at 3:13 pm

            S. Moderation Douglas,

            It’s very interesting that you mentioned “Circular Reasoning” because in the comment to which you are responding, I was considering raising the same issue …. but you are looking at it in the wrong way.

            You need to look at what comes FIRST. Clearly the ARC is a FUNCTION OF the Plan’s “generosity”, and can’t be calculated w/o knowing the SPECIFIC level of benefits promised (i.e., it’s level of “generosity”).

            That being the case, IF a Plan IS INDEED excessively generous .. THEN …. the resultant ARC will ALSO be excessive high. I know that you disagree on the “generosity” of Public Sector pensions, but that disagreement is irrelevant to what is being discussed here.

            The conclusion is what I said before …… ARE these Plans’ too generous. I believe they are WAY too generous and have demonstrated that on this blog many times, the last demonstrations being in #s 95 and 96 (of the 99 comments) attached to Mr. Bury’s earlier post, and found here:

            https://burypensions.wordpress.com/2015/05/14/its-embarsaing-and-im-tired-of-hearing-this-i-want-what-i-was-promised/#comments

        • Posted by BH on July 16, 2015 at 2:16 pm

          No. You’re wrong in your reasoning. If the required or “suggested” payments where in fact made since the plans inception… The plans would all be well funded. We would not have an issue. And you would not be spewing your venom about equal and fair because the pensions wouldn’t even be a blip on the radar!!!!

          Reply

          • Posted by BH on July 16, 2015 at 2:17 pm

            ^^^^^^^
            For TL….no SMD

          • Posted by BH on July 16, 2015 at 2:29 pm

            The ARC is determined by the actuary during the valuation of the plan and equals the amount that would need to be paid during the current fiscal year to fund state contributes and/or is legally liable for benefits.
            If the plans were properly funded since inception the ARC would be minimal at best.
            The state stopped paying into the funds for more than a decade!!!!! Are you kidding me right now??????
            Talk about tunnel vision and illogical thought…..
            Take a peek in the mirror.

          • Posted by Tough Love on July 16, 2015 at 3:21 pm

            BH,

            By that response, clearly you are either a charlatan, playing dumb, or really dumb.

          • Posted by Tough Love on July 16, 2015 at 3:31 pm

            Quoting from BH’s post time-stamped2:29 Pm … “If the plans were properly funded since inception the ARC would be minimal at best.”

            Incorrect.

            EVEN IF the (excessive) ARCs WERE paid on schedule, only the share of the ARC intended for amortization of unfunded liabilities would be minimal. The “Normal Cost” portion of the ARC represents the value of benefits accrued in the current year, and if the Plan’s “generosity” is very high, that excessive generosity WILL be reflected in an appropriately* calculated Normal Cost.

            * via a methodology to appropriately (and not minimally) fund the year’s pension accruals

        • Posted by PatB on July 16, 2015 at 2:37 pm

          TL, as a pension expert, do you recommend to your clients NOT to pay an arc that they feel is excessive? What do you recommend when the payment is so high that it may tip a company into bankruptcy? And what are your legal responsibilities, could you be held personally libel for your advice?

          Reply

          • Posted by BH on July 16, 2015 at 2:40 pm

            Expert???? Pa….leeease!!

          • Posted by Tough Love on July 16, 2015 at 3:47 pm

            I do not advise clients on pension matters …. other than (with no fee) when friends/relatives ask for help understanding options with respect to their (usually frozen, or about to be frozen) pension Plans.

            I do not value pensions for a living and would not consider myself an expert in doing such valuations (as there are an awful lot of IRS, Treasury Dep’t, Statutory, and Regulatory minutia that you need to stay on top of if you do this for a living) ….. although I am quite well versed in the process and mathematics involved.

            For what it’s worth, Valuation actuaries would never RECOMMEND that their clients NOT pay the calculated ARC, but unfortunately many Public Sector Plan actuaries choose a combination of assumptions specifically to MINIMIZE the annual contribution …….. assumptions that individually (and ESPECIALLY when taken together) would NOT be their “best estimate” of expected experience.

          • Posted by PatB on July 16, 2015 at 5:18 pm

            Then your posts have implicitly, if not explicitly, misrepresented you as a practitioner of the profession. Which is a good thing, since your remarks are so far skewed against public employees that someone (probably the unions) would be filing ethical complaints against you. Maybe that is why you are so secretive about your identify…

          • Posted by Tough Love on July 16, 2015 at 5:40 pm

            PatB, Excuse me, but while I’m sure I have stated that I work in the Financial Service Industry and am well versed in pension design and funding, I have NEVER claimed to be a “practitioner” in the pension field or made my living in that field.

            If you believe that I have stated otherwise, please provide a link to such statement(s).

            And my remarks are (in my opinion) correct and justifiable …. often accompanied by demonstrations that those whom disagree can challenged.

            Ethical complaints against me …. on internet commentary no less …. LOL. I’m guessing that you are not an attorney.

        • Posted by BH on July 16, 2015 at 2:38 pm

          You say…..The FOCUS should be on ….. ARE THESE PLANS EXCESSIVELY GENEROUS …..
          By what standard? Your old 23%??
          That’s honestly a moot point and deserves to part in the conversation.
          Instead… The focus should be on….
          This is what happens when the state fails to make it’s required payments into the pensions and instead dishes out tax breaks, tax incentives, corporate subsidies and letting your friends make millions while the public sector middle class is rapped and called scum!!!!

          Reply

          • Posted by Tough Love on July 16, 2015 at 3:57 pm

            Quoting ….. “You say…..The FOCUS should be on ….. ARE THESE PLANS EXCESSIVELY GENEROUS ….. By what standard?”

            By comparison to the Total Compensation” (cash pay +pensions + benefits) of similarly situated Private Sector workers. As I stated above …..

            Public Sector “Total Compensation” should be very close to those in the Private Sector in jobs with reasonably comparable risks, education and experience requirements, knowledge needed, and skill sets.

            ————————————

            And then you fall back onto ….. “focus should be on …. This is what happens when the state fails to make it’s required payments into the pensions”

            Which takes me back to ……. “clearly you are either a charlatan, playing dumb, or really dumb.”

      • Posted by MJ on July 16, 2015 at 6:59 pm

        BH. The plans can’t be fully funded bc too much was promised without any reasonable way to pay for it. Don’t you think the politicians and unions would made sure they were fully funded if there was any way to do so? Come on……matter of time

        Reply

  4. Posted by Tough Love on July 16, 2015 at 3:59 pm

    John,

    Looks like I’ve shaken-things-up today ….

    I certainly wouldn’t mind hearing your thoughts on the issues being discussed.

    Reply

    • Posted by S Moderation Douglas on July 16, 2015 at 4:51 pm

      No more than normal, compadre.

      SOS

      Reply

      • Posted by Tough Love on July 16, 2015 at 5:24 pm

        “Shaking-things-up” is a GOOD thing because the currently-in-place pension formulas and provisions (digging the financial hole we are in deeper every day that they stay in place) are simply too generous, unjust, unfair, and unaffordable. The NJ pension Commission recognized this and proposed changes consistent with those that I say are needed.

        These pensions MUST (AT A MINIMUM *) be very materially reduced for the FUTURE Service of all CURRENT workers….. a process that (while not easy) will be easier (and eventually come to pass in NJ due to no other viable alternatives) than in your home State of California where the “inmates are truly running the insane asylum”.

        * Even WITH the recommended FUTURE Service pension freeze or accrual rate reductions, NJ will STILL need to deal with the HUGE ($166 Billion per Mr. Bury’s estimates) unfunded liability for PAST Service accruals. Only time and the ability to lower the current Platinum+ Healthcare benefits and Taxpayer-provided subsidies (and using realized savings to help amortize these PAST Service unfunded liabilities) will tell us whether PAST Service Pension accruals must ALSO be reduced.
        —————————————————————-

        And as to BH’s argument that the better (but still terribly) funded “LOCAL” Plans should be left alone, is a red herring. With funding ratios in the mid-60’s, they are in horrible shape, and even IF (yes even IF) we could find the revenue to salvage these plans ……. in the sense of paying all that has been promised …. Taxpayers should think heartily if doing so is justified. Funding is simply an accounting mechanism to determine when and who pays for the promised pensions and in what proportions. Funding does not address AT ALL (even if 125% funded) whether these Plans are unnecessarily generous and THEREBY unfair and harmful to Taxpayers.

        If so, FUTURE Service pension accruals should be reduced to those of comparable Private Sector workers, as we have FAR better uses for available tax revenue than to unnecessarily over-compensate our Public Sector workers.

        Reply

        • Posted by Anonymous on July 16, 2015 at 10:52 pm

          This is why ALL aspects of P&B reforms, including funding, must be included in a constitutional amendment. No more subject to executive/legislative interpretation and ultimately judicial opinion.

          Reply

    • Posted by Anonymous on July 16, 2015 at 5:02 pm

      Ok so I’m not John but honestly being a public and a taxpayer clearly something has to change. The P&B Commission is a good template for reform with one caviate, allow members to choose a new DCP or a reduced DBP for future service accruals. Dial back health coverage from top platinum to a solid gold plan. All reasonable and necessary given the cumulative neglect to date, a combination of P&B levels and lack of adequate funding.

      All of these changes must be memorialized in a constitutional amendment that includes a dedicated ARC funding ding source with a realistic ROR.

      Regardless of how or why we got to this point we need a plan that works for eveyone going forward.

      Just one person’s perspective in an ocean of opinions.

      Reply

      • Posted by BH on July 16, 2015 at 6:11 pm

        Yes. You’re correct. Something does indeed have to change. And being a “public”.. And asking for change.. You are clearly a state employee. Probably a teacher. But in either case,… Yes. You want reforms because your ship is sinking my friend. You can thank the state and your well compensated executive board.
        But please… Refrain from thinking all the publics need reforms done to their pensions. Notwithstanding TLs claim that they all need a material reduction in pension and salary Blah blah blah… The locals are doing ok. Allow ch78 to show the changes and stick to worrying about the state plans.

        Reply

        • Posted by BH on July 16, 2015 at 6:14 pm

          Nothing infuriates me more… Other than TL…. When a public employee stands there saying all pensions need reforms!!!!! When they are standing knee deep in the waters watching their ship sink.
          The local ships are all floating and saling away!!! Too little too late.

          Reply

          • Posted by Anonymous on July 16, 2015 at 6:29 pm

            Yup, local doing well due to legally mandated employer contributions funded by property taxes. So your answer is get ready for the bus because you and yours are not in the path. How do you think that’ll play out at the polls with TPAF, PERS, SPRS, and JRS (remember SPRS & JRS are State funded, relatively small liability numbers but large individual benefits). You really think everyone else is going to come running to support a select group who thinks they’re so special and should be excluded from shared sacrifice? Really doesn’t matter what you, I, or anyone else on this blog thinks because we’re not the power brokers consummating potential reforms.

          • Posted by Anonymous on July 16, 2015 at 6:57 pm

            Bottom line logic and human nature will dictate the reform path, whatever that means we shall see.

          • Posted by BH on July 16, 2015 at 8:43 pm

            So you’re saying the state didn’t have an opportunity to pay?? And you’re also saying the municipalities were not given the option to forgo pension payments during the boom years??? I guess you need more education because they were given that very option except most elected to continue to make the payments because they knew this very thing would happen. So stop trying to throw the anchor from your sinking ship into theirs!!! You all played your hand!! Made your bed. Nighty night!!!!

          • Posted by BH on July 16, 2015 at 8:50 pm

            You said….””You really think everyone else is going to come running to support a select group who thinks they’re so special and should be excluded from shared sacrifice?””

            Not only do I think that…. I’d be willing to bet tons that’s exactly what will happen!! And mark my words here today. It is what will happen.

          • Posted by Anonymous on July 16, 2015 at 8:54 pm

            Right good luck with that, do you realize what local property taxes would be if local teachers were locally funded as they should be? Anchors away. I can swim.

          • Posted by Tough Love on July 16, 2015 at 8:56 pm

            BH,

            Just about all of Greece’s HUGE Public Sector worker-population thinks as you do. How’s that working out for them ?

            Unfortunately, they are bringing down the Private Sector with them.

          • Posted by Anonymous on July 16, 2015 at 9:41 pm

            Bad logic, here’s why. Your counting on the politicians who created the problem to have an ah ha moment. Furthermore both R’s & D’s are always preaching about property tax relief. How’s that working out? Lastly Greece is bad example for private and public sector as you’ve indicated, are their public safety workers untouched through it all?

          • Posted by Tough Love on July 16, 2015 at 9:49 pm

            You missed the point. America is following the path they’ve forged.

          • Posted by Anonymous on July 16, 2015 at 10:00 pm

            Didn’t want to go there and open up another can of worms.

            My point is more specific as to the audacity of the public safety workers to think they should be above it all for what ever the reason.

            But we can count on them to be there when we need them so long as the bill is paid as invoiced.

            Whatever, I’m done. It really doesn’t matter, as I said before, presumably those of us blogging are not the decision makers.

    • Posted by BH on July 16, 2015 at 6:07 pm

      John!! Help!!! Lol
      Stick to your guns TL. Be a woman and stand beside your venomous spewing hatred.

      Reply

      • Posted by BH on July 16, 2015 at 6:08 pm

        Relax TL. There’s like 5 of us posting on this blog. It’s not a conspiracy. It’s just a blog.

        Reply

    • Posted by BH on July 16, 2015 at 8:40 pm

      Yes, and this is because Prieto knows there will be no deal unless he gets backing from both sides. The unions understand there are problems that on a sliding scale vary from broken to needs looking into. The unions are not greedy monsters as TL and her minions would have you believe. The local unions have been asking for a seat at the table for years. They want to be a part of the solution. Prieto knows that calling them scum and a cancer will get him nowhere. Better off showing some companion… Understanding!! Negotiating. It’s the only way to get this done.

      Reply

  5. Posted by BH on July 16, 2015 at 10:26 pm

    And I’ll call you a concerned taxpayer if you stop spewing venom.
    It’s not that I don’t get your side at times, TL…it’s your approach, your demeanor, your vigor to bring others down, your name calling and hate that lose me. You may even have a valid point somewhere there,… buried in all your useless data and jealousy. You may gain more allegiance if you tempered your tone, got off your high horse and opened your eyes a bit…wider.
    Like another anonymous poster claimed…. We are not the decision makers. Just bloggers…. The whole 5 of us.

    Reply

    • Posted by S Moderation Douglas on July 16, 2015 at 10:52 pm

      Nice try. Good luck.

      Reply

    • Posted by Tough Love on July 16, 2015 at 11:01 pm

      What you call venom, I call accurate, necessary, just, and fair.

      Years of history shows that Public Sector Unions rarely give up anything of material value, and “negotiation” of such changes is nothing but attempts to delay and stall.

      In the 2011 legislative changes the ONLY change resulting in material near-term savings was the COLA suspension … and even THAT “suspension” (not elimination”) was immediately challenged by the Unions.

      Ronald Reagan did it right in his treatment of the Air Traffic Controllers who went on strike …. fired all of them.

      Reply

      • Posted by BH on July 17, 2015 at 9:35 am

        You’re a tyrant TL. You’re also way off base. But it’s just so obvious that most, if not all, of your hatred is derived from jealousy. Nothing will change you.

        “The jealous are troublesome to others, but a torment to themselves.”
        ~William Penn

        Reply

        • Posted by Tough Love on July 17, 2015 at 11:30 am

          Sorry BH, your very obvious self-interest and greed is what drives you.

          As I have stated many times , I strongly advocate for near EQUAL Public/Private Sector “Total Compensation” (pay, pensions, and benefits) in in jobs with reasonably comparable risks, education and experience requirements, knowledge needed, and skill sets.

          There is no justification for Taxpayers to pay MORE for Public Sector workers doing comparable work in comparable jobs …. no matter how many time you demand such, claiming that you are “special”. Sorry buddy, you are not “special”. You are just greedy.

          Reply

          • Posted by S Moderation Douglas on July 17, 2015 at 2:26 pm

            大声で笑います

          • Posted by Tough Love on July 17, 2015 at 2:47 pm

            Yes, because that’s the only way Taxpayers will be SUCCESSFUL in dealing with the insatiably greedy Public Sector Unions. The financial hole NJ now finds itself is WAY too big to be pussy-footing around. Attempts at “negotiating” with the Unions to “voluntarily” give back all that justifiably SHOULD be given back would go on for a decade …. and STILL be unsuccessful.

            The NJ pension Commission’s recommendations are effectively no different than mine.

          • Posted by Tough Love on July 17, 2015 at 3:09 pm

            Follow-up to my above comment and an example of the insatiable Public Sector Union “greed” ……

            I have no forgotten how about 5 years ago the Allentown PA Police Union hoodwinked the town’s Mayor and ROYALLY screwed the town’s Taxpayers …. and likely, once back in the Union hall, high-5-ed each other at their “accomplishment”.

            While the Police Unions were undoubtedly well versed (and professionally advised) on the “important” and “valuable” drivers of it’s pension Plan, clearly the town’s mayor knew VERY little about such drivers, and was WAY outclassed to be undertaking such negotiations on behalf of the town. The major agreed (in an MOU) to an early retirement package that allowed the town’s Police Officers to determine their “pensionable compensation” by annualizing (i.e., multiplying by 12) the SINGLE highest one-month’s wages in a forward-looking window of about 6 months.

            Now this wouldn’t be a big problem IF the town’s methodology did NOT include overtime in “pensionable compensation” … but it did. The result was that all eligible Officers (about 1/3 of the entire Police force) worked as many hours as possible in a single month and then retired, with most getting pensions DOUBLE what they would have been in the absence of that deal, and with many of those pensions far above their annual salaries.

            Extreme in it’s consequences ………. only.

          • Posted by Anonymous on July 17, 2015 at 3:55 pm

            Somewhat off topic I guess? What is the ethical, moral, and legal responsibility of a financial sector professional as it relates to their clients financial goals and risks.

            Let’s say a public worker anticipating retirement with a nice next egg and presumably a defined benefit pension. If the financial professional (advisor) has knowledge and expertise as to pension’s future security. Should/must they convey this information to allow their client to adjust their financial future accordingly?

          • Posted by Tough Love on July 17, 2015 at 4:59 pm

            The financial professional’s “client” is the Plan Sponsor, not Plan participants (who would likely have no “standing” to sue).

            In any event, using actuaries for example, they rarely push the envelop beyond the point where they believe they are at risk, and when a Plan Sponsor decides to contribute less then what is likely already a low-balled ARC, doing so is NOT the actuary’s problem or responsibility.

            And nowadays, professional services contracts usually include strongly-worded low-ish and financially”manageable” limits to their liability should they be sued and found guilty of negligence … often eliminating the incentive for attorneys to take on such cases on a contingency-fee basis.

          • Posted by Anonymous on July 17, 2015 at 7:35 pm

            Interesting, maybe the TAXPAYERS need similar protections offered to the private sector you’ve referred to in your response.

          • Posted by Tough Love on July 17, 2015 at 7:48 pm

            The “premium” to insure the Taxpayers from their own stupidity …. the electing and re-electing those who betray them by granting grossly excessive pensions & benefits to their workers …. would be near infinite.

          • Posted by Anonymous on July 18, 2015 at 8:03 am

            Any remedy provided by a change in political power can be temporary and uncertain. Remedy provided by the courts, upon exhausting appeals, is known and permanent.

      • Posted by Tough Love on July 18, 2015 at 4:10 pm

        Follow-up to my above comment …. for readers who think the Public Sector Unions are amenable to REAL negotiation (which RESULTS in justifiable givebacks):

        Quoting from a recent article on the worst pension mess in the country, Illinois …

        “The Illinois government is at war with public unions over their overly generous pension plans, and the two are currently in court fighting for the right to change the plans. Even with Illinois bond rating at junk status, the unions refuse to give in, thus doubling the cost of funding the pensions. This sucks money away from law enforcement, education, roads, and other vital spending priorities.

        If Illinois is having this much trouble reforming pensions despite them being in the worst shape in the country, you can imagine how difficult it will be to turn this situation around and get public pensions under control.”

        Reply

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