How a Bill Becomes Pension Law – in New Jersey

It was reported that a hearing was held today on Assembly Bill A4275 which would offer the retirement planning expertise of the stat of New Jersey to private-sector employees modeled on a program Illinois set up.

Yes the same security that public employees in Illinois and New Jersey feel these days could be extended to the private sector.  Anyone seriously considering taking up these states on their offers might also look into getting a haircut from Sweeney Todd. So how did it get on each state’s radar?

It was bought there by investment houses and plan administrators who fantasize about a steady flow of funds and 10% expense ratios.

But aren’t pensions governed by federal law?  How can the states guarantee tax deferral of contributions.  The New Jersey proposed law considers that:

The board must request in writing an opinion or ruling from the appropriate entity with jurisdiction over the federal “Employee Retirement Income Security Act of 1974” (29 U.S.C. s.1001 et seq.) regarding the applicability of that act to the program. The board may not implement the program if the IRA arrangements offered under the program fail to qualify for the favorable federal income tax treatment ordinarily accorded to IRAs under the Internal Revenue Code or if it is determined that the program is an employee benefit plan and State or employer liability is established under the “Employee Retirement Income Security Act of 1974.”
So it will be a multiple-employer plan that will require a massive administration mechanism to provide to participants what they could easily do for themselves by simply opening up an IRA. Basically what the role of government has morphed into in both states.
Though the legislators might argue that the people they are targeting are too ignorant to figure out how to plan for retirement on their own and that might have some validity.  After all, it was those people who elected them.

32 responses to this post.

  1. Posted by skip3house on November 9, 2015 at 6:39 pm

    NJ should just stick to eliminating abuses, not funded pensions/medical, and balance its Retirees funds. Leave private sector be.
    NJ should fully fund schools with just a fair Income Tax, based on ability to pay. NJ now relies on half the funding with property tax, even though the day is long past when land meant money from growing crops. Only a benefit for elitists today, with incomes way above proportional to home value.


    • Posted by Anonymous on November 9, 2015 at 10:39 pm

      Agreed but fat chance getting TL’s 1% to concede on this.


      • Posted by Tough Love on November 9, 2015 at 11:42 pm

        I agree with Skip3house,

        Lower property taxes and raise income taxes (primarily on the wealthy) ….. with ZERO net xchange, and not even $1 going towards funding NJ’s grossly excessive Public Sector pensions. Let them stave and fail until frozen.


        • Posted by dentss dunnigan on November 10, 2015 at 10:49 am

          My town gets 10 cents back on every dollar they send to trenton which equates to about 10% of our school budget …I would happy to get 50% back in taxes instead of sending it to Abbott districts .Income tax as it was intended was supposed to be distributed equally ….until the democrats filled the courts with liberals who would sent that “dedicated” money to their union strongholds ….


          • Posted by Anonymous on November 10, 2015 at 5:07 pm

            Throw the Abbott District kids under the school bus, so much for the greater good!

          • Posted by Tough Love on November 10, 2015 at 5:43 pm

            No, but we should certainly replace (for Future service) the current grossly excessive pensions & benefits of the Abbott district teachers (replacing them …. and all other Public Sector workers ……with Private -Sector-equivalent Plans) freeing up HUGE sums of money.

    • Posted by Anonymous on November 9, 2015 at 11:27 pm

      You’ll remember from your recent previous post on the same topic the rejection, back peddling, and eventually, when pressed, agreement from someone?


      • Posted by Anonymous on November 10, 2015 at 9:41 am

        TL contradictions continue and the alter ego handles can’t even contain them! Time for a Dr. Drew intervention, if it’s not too late?


  2. Posted by Tough Love on November 9, 2015 at 7:26 pm

    I believe this idea (state-administered Plans for Private Sector workers) was thought-up in California. While some (more cynical than I) posed that the State could divert such funds to help support the massively underfunded Public Sector employee Plans, I doubt that was the motive.

    I believe that the Unions support this as a way of diverting attention from the ludicrously rich (taxpayer-supported) PUBLIC Sector Plans by saying … see, “YOU (meaning Private Sector workers) have Plans similar to ours” …. so stop complaining.

    Hardly. One is a Roll-Royce, and the other a Yugo.


    • Posted by ~The Resident Nutcase on November 9, 2015 at 9:32 pm

      Most would Rather drive a yugo ….than walk TL…… But you’d rather continue to attack the public sector rather than help lift the private sector….. It’s so obvious that you are so well off, and beyond anything the public sector is paid and beyond having this new private sector pension security, that you’d rather still strike it down instead of accepting it as forward progress. You are a thorn in the side of progress…. Thus I still cannot take you serious. You are not involved or affected by any of this…. Other than a platform to spread your propaganda!!!!


      • “Attacking” the public sector for ripping off the taxpayer for the past 40 years IS “lifting up” the private sector.


      • Posted by Tough Love on November 9, 2015 at 11:50 pm

        It’s NOT “progress” with the State having ANYTHING to do with it. All THAT will do is create more UNNECESSARY State jobs and an unnecessary ADDITIONAL layer of administrative expenses.

        If you had an open mind, a tad of financial education, and even a wee bit of grey matter between your ears, it would be very easy to see.


    • Posted by ~The Resident Nutcase on November 9, 2015 at 9:36 pm

      And it is apparent by your 20+ posts a day on this and the many many other blogs and forums I see you post on!! No full time employee has the time like you do to do all these posts. Which makes it very clear to me… As it should, the readers… That you are a slug or paid shill, posting all day long. Sorry, you won’t win this fight!!
      Public sector employees deserve their pay!!!!
      Stop subsidizing the corporations and return the money to the middle class!!


      • Maybe she is a fire(wo)man and has plenty of time on her hands whiling away the hours in the firehouse.


      • Posted by Tough Love on November 9, 2015 at 11:52 pm

        Clearly YOU post 3 to 4 for each of my posts …. I just stick to only ONE handle.


        • Posted by Anonymous on November 10, 2015 at 8:00 am

          Clearly not, there’s no way (except for JB) any of us know who is who whether it be an ANNON or a specific handle.


        • Posted by The Resident Nutcase on November 10, 2015 at 1:59 pm

          Still trying to blame the anon posts on me because of your dilution that our numbers are growing.
          If it makes you feel better…. Go right ahead….
          But I’ll bet there will be no reforms that negatively effects the public workers! They’ve been screwed enough! Time for others to pay their share now….


    • Posted by Anonymous on November 9, 2015 at 10:16 pm

      TL one dumb bunny


  3. Posted by Anonymous on November 9, 2015 at 10:15 pm

    Nope BH, TL’s just an over educated underachied working middle class New Jerseyan – LOL! Like you said let the blog readers and voters decide.


  4. Posted by dentss dunnigan on November 10, 2015 at 3:47 pm

    Make NJ a right to work state and let new hirees the option to optout so they can start a Roth an myira …at least they will have something in 20 years or something they can take with them if they change jobs ….


    • Posted by Tough Love on November 10, 2015 at 6:02 pm

      Better yet……. eliminate all collective bargaining with Public Sector Unions (and “Associations”).

      They are nothing but a CANCER inflicted upon civilized society.


  5. Posted by Anonymous on November 10, 2015 at 4:49 pm

    Misleading information? Why not disclaim when posting or better yet revise the data collection so it’s more accurate!


  6. Argue all you want, I think John summed it up nicely in his last paragraph.


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