No Pension Panel For the Present

The New Jersey League of Municipalities convention this week featured panels discussing the pension crisis in New  Jersey from the perspective of past governors who in turns either initiated, exacerbated, or ignored the plan collapse:

nj past

and wannabe governors who have no clue on how to handle it:

nj future

From the past:

Then there’s the state pension system, which faces a $40 billion shortfall.

“I’m at a loss to even conjure up something that’s reasonable because the numbers are beyond comprehension,” Florio said. “I wouldn’t want to be in the position to give a State of the State in January. Because the state of the state is deplorable.”

From the future:

As for pensions? New Jersey’s public-worker retirement system faces a $40 billion shortfall.

Christie said the state simply didn’t have enough money in the last two state budgets to make full payments to the fund. But Democrats say the governor broke a 2011 law he signed promising to increase payments over time.

The state Supreme Court agreed with Christie, ruling against a group of unions who sued to force him to make the full payment.

Now, the question is what to do next. A bipartisan panel appointed by Christie has suggested making changes to workers’ health benefits.

During the panel Wednesday, the legislative leaders recycled arguments they’ve made repeatedly over time.

“We’re not finished,” Bramnick said of pension reform, noting that the state pays $3.2 billion a year on health benefits. “Things change all the time. We cannot afford to go on for next time years paying that kind of money. We need to change that platinum plan.

“It’s not that I want to do it,” he said. “It’s not great politics. But we will not avoid it forever.”

State Senate Minority Leader Tom Kean Jr. (R-Union) agreed.

“The cost of doing nothing over time is staggering,” he said.

Sweeney said the state is “really out of time” and that two of the state’s pension funds — for teachers and state workers — could soon be unable to cover their debt.

“If we don’t come up with a solution in the next two years,” he said, “we’re risking bankruptcy in the pension system.”

What was noticeably missing in the discussions among those who were in charge prior to Christie and those hoping to be in charge after him was any:

 

86 responses to this post.

  1. Posted by The Resident Greedy Nutcase on November 19, 2015 at 1:58 pm

    The states FAILURE to fully FUND the pension system over “decades”, has caused this problem of unsustainability. That is the Root cause of the problem!!
    Meanwhile corporate tax subsidies and tax payer tax breaks, given on the backs of the public workers, has enabled the pensions to become overburdened!!!
    Time for every tax payer to pay back the money that was stolen from the public sector pension funds!! Time for our elected officials to be brought to justice for the systematic brutalizations of the public sector workers and their livelihoods, all while making themselves and their friends rich!

    Reply

    • Posted by Anonymous on November 19, 2015 at 3:34 pm

      Bottom line it’s a bad situation all the way around and unfortunately we can’t “fund” our way out the of it.

      If incremental P&B reforms and consistent funding occurred over the past decades we’d be in a lot better place, exactly where we’d be who knows. Too may variables and assumptions to know for sure.

      So here we are and something has to chage, sooner than later. P&B Commission reforms with an option to retain the DBP with a significant (~35-40%) benefit accrual reduction going forward.

      No magic bullet just common sense solutions based factual data and reasonable compromise.

      Reply

    • Posted by Tough Love on November 19, 2015 at 3:53 pm

      Quoting ….

      “The states FAILURE to fully FUND the pension system over “decades”, has caused this problem of unsustainability. That is the Root cause of the problem!!”

      Wrong. “Funding” requirements are A FUNCTION OF (and in direct proportion to) the “generosity” of the pension Plans. Extremely generous promises will be VERY costly, and hence VERY difficult to fully fund.

      NJ’s Lack of full funding is not the CAUSE of the pension mess we are in, but rather the CONSEQUENCE of the real ROOT CAUSE …. grossly excessive pension “generosity”.
      ______________________

      The ease of which your “logic” (“just fund the Plans”) fall flat is easily seen by example.
      If NJ’s current Plans were 2x, 5x, even 10x MORE generous than they are right now, your answer would STILL be the SAME ….. just fund the Plans .

      How absurd.

      ———————————————-

      The only thing we agree on is …… “Time for our elected officials to be brought to justice”

      But NOT for ….”the systematic brutalizations of the public sector workers and their livelihoods” ….. but because they traded their favorable votes on Public Sector pay, pensions, and benefits in exchange for Public Sector Union Campaign contributions and election support.

      Prosecution on bribery and racketeering is clearly warranted.

      Reply

    • Posted by Lukeu on November 19, 2015 at 7:07 pm

      Absolutely true nutcase.

      Reply

  2. Posted by Tough Love on November 19, 2015 at 3:44 pm

    John,

    Interesting that the are still using NJ’s “official” #s, knowing the the GASB changes are now in place.

    From your linked “real unfunded number” the Official NJ Plan “Liability” = $137.4B, which rises to the “Bury Liability” of $210B.

    Assuming the $137.4B was calculated using NJ’s official 7.9% rate assumption, my calculations back into a 3.3% rate to get to your $210B.

    Is that near the rate you used in your calculations, as it seems a bit conservative?

    Reply

    • I think the underlying rate I was using was about 4% but it’s all immaterial since these plans are going to be pay-go before long.

      I doubt anybody on those panels has any understanding of GASB rules which is why these panel ‘discussions’ are such a sham.

      Reply

  3. John, Is it that these panels and officials simply do not understand the whole picture or are their experts explaining it to them in every detail and the implications and they realize that these pensions can never be funded? If the state had the ability to fully fund the pensions based on current “promises” why would the state not fully fund to keep their “promise” to public workers?

    Reply

    • Posted by Anonymous on November 20, 2015 at 8:36 am

      Of course the hole that’s been dug with DECADES of UNDERFUNDING can’t be funded now OR there’s TL’s version. Politics as usually, kick the can down the road and let the next administration deal with it!

      Reply

    • Interesting question that we can only speculate on but, based on the results, it looks like we have politicians without enough working knowledge to make decisions or even be scared of the situation and actuaries who pander to them for the easy money.

      Politicians at the levels where you get to run pension systems are good at event planning and raising money through extortion. Financial matters are an aspect of the job where they rely on others to tell them what to do.

      Actuaries for their part recognize their role (make the plans appear to do whatever everybody wants) and so they invent mechanisms to that end. Where did those charts that split funded ratios by category (ie 100% funded for retirees, then going into vested actives, and then nonvested) come from? The necessity to sprinkle a few 100%s into those actuarial reports.

      Reply

      • Posted by Anonymous on November 20, 2015 at 10:24 am

        Then let’s be fair in using extortion and not just apply the label to politicians but EVERYBODY that benefits from their actions here (ie actuaries) and elsewhere (ie “corporate welfare”). As TL would say, got a problem with fair and equal?

        Reply

      • Posted by Tough Love on November 20, 2015 at 10:27 am

        We did note that another Panel (the NJ Pension Commission) IS staffed with experts who DO understand the problem.

        And what did THEY (knowledgeable experts) do? Propose the only thing that can indeed address the problem …. FREEZE the Pensions and materially reduce the “Platinum” Healthcare coverage.

        It’s now time for NJ’s Legislature to climb out of the Public Sector Unions’ pocket and do what necessary.

        Reply

        • Posted by Anonymous on November 20, 2015 at 10:36 am

          TL/John, “we did note”?

          Reply

        • Posted by The Resident Greedy Nutcase on November 20, 2015 at 1:45 pm

          Perhaps they know they (the politicians and tax payers who benefited from robbing the pensions over decades)….are guilty. Maybe they realize they did drop the ball on public sector pensions. They know what they did was wrong and now they are out of options on how to fix it. They know they’ve already put this on the workers.. Unjustly. And now the only way to fix the wrongs that were done is by sizeable tax increases across the board.
          Meanwhile people like TL and her ilk, claim they seek equal and fair, but in reality they are petrified that the money they stole from the pensions now have to be made whole. Attempting to deflect and blame this on the very people who were robbed “public workers”, is a clever way to save their hides. But ultimately in the end…. The pensions will be paid. As they rightfully should.

          Reply

          • Posted by Tough Love on November 20, 2015 at 2:01 pm

            Quoting … “Maybe they realize they did drop the ball on public sector pensions. ”

            They SURE DID …….”drop the ball” ….. by granting these GROSSLY EXCESSIVE pensions & benefits IN THE FIRST PLACE.
            ————————————————————
            They indeed have a good option to “fix it” …. by freezing these Plans and materially reducing the “Platinum+” healthcare coverage …. as proposed by the NJ pension Commission.
            ————————————————————–

            Public Sector workers are NOT “special” and deserving of greater pensions and better benefits than those typically granted Private Sector Taxpayers who they want to pay for THEIRS.

          • @RNC I don’t think that anyone can possible believe that the private taxpayers benefited from “robbing” the pensions. We have the highest real estate taxes in the country, highest business taxes and dead last business climate, highest income taxes, and the list goes on so I’m wondering why you would say the taxpayers robbed the pensions. We are taxed to death and it still is not enough and never will be

          • Posted by Tough Love on November 20, 2015 at 8:46 pm

            His claim is that we (the Taxpayers) haven’t fully funded all but the (10-20% of the total cost) share assigned to the workers.

            Of course he ignores the Root Cause of the problem ….. that their pensions were ALWAYS far too generous and made much MORE generous over the years. That level of “generosity’ was never necessary to attract and retain a qualified workforce, and was never just, fair, or affordable to taxpayers.

            Of course he maintains a blind eye to those inconvenient FACTS.

          • Posted by Anonymous on November 20, 2015 at 10:55 pm

            MJ @RNC if this doesn’t reek of 1% BS, yeah right TL it’s all about the middle class taxpayer – LOL!

  4. Posted by Anonymous on November 20, 2015 at 10:49 am

    I’ve read other postings citing TL to be a female, etc. but after John’s & TL’s most recent posts one might assume they’re one in the same.

    Reply

    • Posted by Anonymous on November 20, 2015 at 10:50 am

      Of course they’ll (?) deny it but I guess it’s “let the reader beware”!

      Reply

    • Posted by Tough Love on November 20, 2015 at 12:31 pm

      John,

      The “takers” get more amusing (and desperate) every day.

      Reply

      • Posted by Anonymous on November 20, 2015 at 1:45 pm

        Conversing with yourself, now that’s amusing – LOL!!!

        Reply

      • Posted by The Resident Greedy Nutcase on November 20, 2015 at 1:53 pm

        TL…..seeking friendship wherever she can get it.
        I bet you agree with all the protests at our prestigious universities around the state too.
        I bet you call it the passing lane and not the fast lane, as you drive in it, under the speed limit, because you have a right to. Lol.
        When asked for identification…. You scowl!!” Why do I have to show you my id”??
        You always think… Why me? Why do I have to do that??
        You believe everyone deserves a trophy because we should all win.
        You feel everyone should be equal and no one should be better.

        You diminish competition and the acts that ultimately making people better. You are making America weak. You lower the bar!!! You are ALL that is wrong with this country. I despise your ideals and your entitlement attitude. I pray that smarter and cooler heads prevail in securing the future for all public workers in this state. You should be ashamed when you look in the mirror to blow your upwardly pointed noise!!!!

        Reply

        • Posted by Tough Love on November 20, 2015 at 2:03 pm

          Off your Meds again ?

          Reply

        • Posted by Anonymous on November 20, 2015 at 2:04 pm

          aka BH don’t you know that’s the way the 1% rolls – KOCH BROS!!!

          Reply

          • Posted by Sean on November 25, 2015 at 12:07 am

            Ding Ding Ding Ding Ding!!! Ring the bell! After reading the usual mindless bs from the Anonymous Brothers, I was thinking, “Geez, at any point, one of these geniuses is going to blame the Koch brothers! I knew I would not be dissapointed.

            As for your “If only they had funded our pensions we wouldn’t be in this mess” drivel: If my mom and dad had only put a billion dollars into my savings account…why, I would be a billionaire! If only they had FUNDED my account. No, genius. The ridiculous PROMISES ARE THE PROBLEM. WAKE UP!

        • Posted by Tough Love on November 20, 2015 at 2:18 pm

          Quoting …” I despise your ideals and your entitlement attitude.”

          Are you kidding me?

          Public Sector Unions/Workers are the DEFINITION of the “entitlement mindset” mentality.

          Reply

        • What “competition” exists in the public sector? It’s all about who you know (except firemen then it’s who are you related to) to get these BS jobs. High salaries and ridiculous pensions and benefits comes from successful decades of collusion between greedy unions and corrupt politicians. There is no competition involved.

          Reply

          • Posted by Tough Love on November 20, 2015 at 8:23 pm

            Forgive him …….. he is so scared/angry/desperate that he speaks without first turning on his brain.

          • Posted by Anonymous on November 20, 2015 at 9:32 pm

            Ah I see the drone is on full charge and undocked – fire when ready!

          • Posted by The Resident Greedy Nutcase on November 22, 2015 at 6:25 pm

            You’re an idiot if you think that!!! Civil Service exists to prevent the very thing you idiotically described. Again, yet another reason to take what you say with a grain of salt because it’s filled with misdirection, lies and hate. Probably a sprinkle of jealousy and envy as well. But no reason to post lies!!!!

      • Posted by Anonymous on November 20, 2015 at 2:16 pm

        Unlike the “PRIVATE sector goons” free market facade fueled by corruption and collusion to benefit the wealthy at the expense of the majority.

        Reply

      • Posted by Anonymous on November 20, 2015 at 7:41 pm

        “The “takers” get more amusing (and desperate) every day.”

        And what do you “make” except more money for you and your rich clients?

        Reply

  5. Posted by Anonymous on November 20, 2015 at 6:48 pm

    Investigative reporters want to know if KOCH BROS are funding this blog aka TL.

    Reply

    • Posted by Tough Love on November 20, 2015 at 8:05 pm

      This blog’s focus is the grossly excessive/generous (as the root cause of) NJ Public Sector pension Plans …. which are THEREFORE very costly and very hard to fully fund.

      It is not about the misdeeds of the 1%. If that’s your thing, be my guest and start your own blog. The misdeeds of the 1% will never justify the enormous financial “mugging” of Private Sector middle class taxpayers by the insatiably greedy Public Sector Unions/workers/retirees.

      Reply

    • Posted by Sean on November 25, 2015 at 12:23 am

      “Investigative reporters want to know if KOCH BROS are funding this blog aka TL.”

      The collective guilty conscience of the public sector and/or their fear that the public is catching on to their extortion is causing all this desperate Koch brothers/wall street/one percenters rhetoric.

      Public sector workers, you only need to know three things:

      1. Your defined benefits are a bubble.
      2. ALL bubbles implode – no exceptions.
      3. Those benefiting from the bubble refuse to see any evidence contrary to their fantasy, even after it is too late.

      Stay delusional, my friends. Who cares that we are taking in water at a rapid rate. The orchestra sounds great!

      Reply

  6. Posted by Anonymous on November 21, 2015 at 9:20 am

    RECAP: The focus of this blog echoes the GOP State and National platform; tax cuts for the wealthiest Americans, more failed trickle down economics, and screw the rest of us (especially publics) b/c we should be grateful for the crumbs.

    Now for YOUR deflection response referencing misleading information from bias data sources.

    Reply

  7. Posted by Anonymous on November 21, 2015 at 9:26 pm

    Wake up publics the writing is on the (bathroom) wall and it reads; “vote 4 me & you’ll be drinking tai chi tea”, signed Sweeney 4 Governor – LOL!

    Reply

  8. Posted by Javagold on November 22, 2015 at 12:40 am

    Put the public takers on Obamadontcare, where they belong and save $3 billion a year. And that goes for every scumbag R and D politician in this cesspool of a state.

    Reply

    • Posted by Tough Love on November 22, 2015 at 1:21 am

      Then freeze their grossly excessive, unnecessary, unjust, unfair, and unaffordable DB pensions and replace them with a DC Plan with a 3%-4% of pay employer “match” …… just like Private Sector Taxpayers typically get from their employers.

      Public Sector workers are NOT “special” and deserving of a better deal than those they supposedly work for (the Taxpayers).

      Reply

      • Posted by Anonymous on November 22, 2015 at 3:26 pm

        Your reference to “public workers” means Federal including military right, no special cases or situations deserving of anything but equal?

        Reply

        • Posted by Tough Love on November 22, 2015 at 3:56 pm

          No, our military are a special case and deserve what they get.

          Reply

          • Posted by Anonymous on November 22, 2015 at 4:10 pm

            Really changing your story, again.

            It would take me a while to find your (one of many) blog posts where you stated the opposite. There’s no draft, individuals sing up willing, knowing the risk/reward – hmm what’s the difference. Of the total enlisted force only a small percentage are in harms way, why should non combat support staff military be deserving of better.

            Sounds like you have a self interest situation you allege of other posters here.

          • Posted by Tough Love on November 22, 2015 at 4:50 pm

            Ass. Show me where I said the opposite.

          • Posted by The Resident Greedy Nutcase on November 22, 2015 at 6:26 pm

            Oh you have….

          • Posted by The Resident Greedy Nutcase on November 22, 2015 at 6:28 pm

            Can’t take you idiots seriously anyway.
            One says ” put them in….. They they are cattle!!
            Another speaks about the public workers as if they work for him. Lol.
            Egotistical, ironic hypocrites on this blog.
            Pay the pensions. Raise taxes. Cut subsidies.

    • Posted by Anonymous on November 22, 2015 at 9:45 am

      And abolish Medidontcare as it’s obamadontcare for seniors – got a problem with equal?

      Reply

    • Posted by Anonymous on November 22, 2015 at 10:42 am

      Wonder how many R’s that whine and complain about ObamaCare are on it?

      Reply

  9. Posted by Anonymous on November 22, 2015 at 3:47 pm

    Now come on all you big strong men
    TL’s got a real special plan
    Fight undeserving any way he can
    Taking what was promised
    At home and in a foreign land
    And it’s one, two, three
    What is TL fighting for (the 1% man)
    Don’t ask the 99% cause we don’t give a damn
    ……………………………………………………………………

    Reply

    • Posted by Tough Love on November 22, 2015 at 4:48 pm

      All BS, and by continuously referring to the misdeed of the 1%, your attempt to divert the reader’s attention from the insatiable greed of Public Sector Unions/workers, and their demand to keep ….. even for FUTURE service not yet workers …. pensions and benefits ROUTINELY 3x-4x (4x-6x for safety workers) greater in value at retirement than those typically granted Private Sector workers retiring a the SAME age, with the SAME pay, and the SAME years of service.

      Sorry buddy, but you not fooling anyone.

      Reply

      • Posted by Anonymous on November 22, 2015 at 5:04 pm

        Neither are you double talking say whatever’s right to push your agenda like waffleing on the military’s P&B. With homegrown terrorism our State and Local first responders are in harms way more than support staff military.

        Fair and equal is your BS motto!

        Reply

        • Posted by Tough Love on November 22, 2015 at 5:36 pm

          The compensation of Safety workers at the State and especially the Local level in NJ is patently absurd….. with base pay TYPICALLY $125K+ (with just 5 years of service) and pensions & benefits increasing total compensation to over $200K.

          Patently absurd. They would be over-compensated even if their pension & all benefits were 100% eliminated.

          Reply

          • Posted by Anonymous on November 22, 2015 at 5:47 pm

            Well lower them to military standards – got a problem with equal?

          • Posted by Tough Love on November 22, 2015 at 5:53 pm

            No, lower their compensation to what the same job risks, education, experience, and skills would pay in the Private Sector.

            Got a problem with equal?

          • Posted by The Resident Greedy Nutcase on November 22, 2015 at 6:31 pm

            Inflated lies.
            There is no comparable private sect jobs that relate.
            Stop the lies. Stop spinning the facts to fit your demented reality.
            Pay the pensions. Raise taxes. Stope corporate subsidies. End welfare.

          • Posted by Anonymous on November 22, 2015 at 6:40 pm

            No lower than private sector, military exceptions, first responders facing home grown terrorism!

            It’s fair to say you’re the one that’s got a problem with equal

  10. Posted by Anonymous on November 22, 2015 at 4:35 pm

    A special shout out to SMD. It seems you keep track of TL’s contradictory posts. Do you recall an exchange with an ANNON, TL, and I believe MJ on this subject.

    Just for the record, I appreciate everything the military, and for that matter all publics do for us here and abroad.

    Reply

    • Posted by Tough Love on November 22, 2015 at 5:56 pm

      One public Sector worker kissing another Public Sector retiree’s ass. Meaningless.

      Reply

      • Posted by Anonymous on November 22, 2015 at 6:38 pm

        Yeah especially when they call you out on your lies.

        Reply

      • Posted by Anonymous on November 22, 2015 at 6:42 pm

        Just like you private sector goons responding in kind, your so steeped in shit flies don’t want to hitch a ride. Crawl back under your bank roll, Walker indeed!

        Reply

        • Posted by Tough Love on November 22, 2015 at 8:01 pm

          Through ALL of your comments, I have seem MANY accusations and complaints about the 1%, but NOTHING of substance addressing the undeniably grossly excessive (and failing DUE TO that gross excess) pensions & benefits granted all of NJ Public Sector workers, which is the subject of this blog …………. not the 1%.

          I suggest you get working on a “Plan B” for your retirement needs, as you’ll be LUCKY if you get 50% of your promised pension, and likely near-nothing in retiree healthcare benefits.

          The taxpayers have wised-up, and won’t be paying for this organized & orchestrated thievery perpetrated upon them by the insatiably greedy Public Sector workers and our self-serving, taxpayer-betraying elected officials that are BOUGHT with Public Sector Union campaign contributions and election support..

          Greed HAS consequences, and your future is looking pretty grim.

          Reply

          • Posted by Anonymous on November 22, 2015 at 9:23 pm

            Were you watching 60 Minutes? Just missed a good story on NYC cops and counter terrorism training. Fair and equal no special cases, except for…..

          • Posted by Tough Love on November 22, 2015 at 10:00 pm

            NYC police …. 20 years and out with a COLA-increased 50% of pay pension, often in their 40’s.

            NOBODY (except those with a “legitimate” total-and-permanent disability and unable to work in any other job) should be able to retire and begin COLLECTING a taxpayer-funded pension before a Normal Retirement Age (NRA) age of 65 (62 for police) without a full 6% reduction (just a Social Security uses for early retirements) in the formula benefit for EACH year of age that you begin to collect before your NRA.

            Public Sector workers are NOT “special” and deserving of a better deal …. on the Taxpayers’ dime.

          • Posted by Tough Love on November 22, 2015 at 10:26 pm

            Quoting form THIS article … http://www.silive.com/news/index.ssf/2015/08/fdny_nypd_pension.html … dated 8/03/2015:

            “More than 75 percent of FDNY retirees and between 33 and 50 percent of NYPD retirees collect disability payouts.”

            Patently absurd …… the entire system is structured to UNJUSTLY enrich Public Sector workers and screw the Taxpayers.

            Taxpayers …. REFUSE to fund it.

          • Posted by Anonymous on November 22, 2015 at 10:55 pm

            Don’t give us your I’m a working poor middle class CRAP and we’ll see after the next to elections!

          • Posted by S Moderation Douglas on November 23, 2015 at 1:42 am

            “NYC police …. 20 years and out with a COLA-increased 50% of pay pension, often in their 40’s.”

            Once again, just like the military, 85+ % of whom never see combat.
            Often in their late 30 ‘ s.

          • Posted by Tough Love on November 23, 2015 at 3:35 am

            SMD,

            I respond to what I see. I suppose (and suspect) that there is great financial waste in the military (perhaps including military pensions/benefits). But I directly see none of this.

            To the contrary, in my sleepy little town I see Public Sector workers (especially our local Police) who do VERY little and question whether they are worth (and would be paid in the Private Sector) even HALF of their grossly excessive compensation.

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