Politicians Making Up Their Own Numbers

There was an amendment to the pension funding constitutional question to be on next year’s election ballot and, as njspotlight reports, it was all about political gamesmanship:

The original constitutional amendment proposed last week by Sweeney (D-Gloucester) called for starting the ramp-up to full payments with an estimated $3 billion payment during the 2018 fiscal year. That’s more than double the payment that Christie has budgeted for the current fiscal year.

But after the last-minute amendment yesterday, the payments would start with $2.4 billion during the 2018 fiscal year before accelerating up to a $5.5 billion payment in the 2022 fiscal year.

The change doesn’t impact the long-term actuarial calculations in a meaningful way. But from a political perspective, the adjustment gives Sweeney and other Democrats a stronger political argument to make against Christie and others who oppose the constitutional amendment. That’s because the payment that would now be required in the first year of the ramp-up is the same amount as the payment Christie’s administration has proposed in a long-term pension-funding schedule that was included in the state’s current budget.

The obvious question then being how do these politicians know what the necessary contribution will be in 2018 and future years since valuation reports opining on those required contributions are years from being released?  What if the remaining trust assets or underlying census changes drastically? If politicians can make up their own contribution amounts then what do they need actuaries for?

The answer, in New Jersey anyway:

Cover.

 

57 responses to this post.

  1. Posted by Anonymous on December 18, 2015 at 10:36 am

    Something NEVER done by private sector individuals and corporations? REALLY!

    Reply

    • Posted by Anonymous on December 18, 2015 at 10:59 am

      Yeah unheard of, LOL.

      Reply

      • You do realize I can see IP addresses, right?

        Reply

        • Posted by Anonymous on December 18, 2015 at 11:19 am

          Of course, my spouse and I share devices and your point?

          Reply

        • Posted by Anonymous on December 18, 2015 at 11:23 am

          Oh forgot to mention a post eons ago by TL cited exact same response with a sort of threatening undertones…….

          Reply

          • Posted by Tough Love on December 18, 2015 at 2:47 pm

            Excuse me …………. .threatening undertones ?????

          • Me thinks the spouses protest too much! Stick to comments regarding the topic and stop trying to divert attention away from you being caught to TL

        • Posted by Tough Love on December 18, 2015 at 2:45 pm

          John,

          That’s funny ….. you caught the clown responding to his own comment.

          Reply

          • Posted by Anonymous on December 18, 2015 at 3:00 pm

            No excuse for you!

            A**hole you and your buddy didn’t read ALL the posts. I have a spouse who shares my sentiment on this topic and yes we share devices too.

            What I find interesting is John doesn’t EVER call you and coherts to task. But then again you ALL have the same self interested opinions!!!

          • Posted by Anonymous on December 18, 2015 at 3:06 pm

            BTW this is the better half posting as ANNON from the same device (IP address) and you and yours won’t intimidate us from continuing to post.

            Love you all anyway!

          • Posted by Tough Love on December 18, 2015 at 3:23 pm

            Quoting Anonymous ….. “A**hole you and your buddy didn’t read ALL the posts. I have a spouse who shares my sentiment on this topic and yes we share devices too.”

            I read your “response” and DON’T believe for a minute that it was your spouse who responded (23 minutes later) to YOUR initial comment.
            ——————————————

            And John and I do not always agree, certainly having a different focus …. mine being the Ludicrous generosity of ALL Public Sector pensions & benefits as the ROOT CAUSE of the problem and where reform efforts MUST be directed, and John’s being the complicity of the actuarial profession in enabling this horrible situation to develop.

          • Posted by Anonymous on December 18, 2015 at 3:28 pm

            TL I think you’re a liar to but that doesn’t mean it’s true?

          • Posted by Anonymous on December 18, 2015 at 3:40 pm

            BTW this is the better half, again, same device, same IP address; you, John, and whomever just get over it!

            If you read the post sequence, John’s first post never implied the two previous posts came from the same IP address. Having been the respondent to my spouse’s initial post we both knew what he was implying.

            We could have easily responded generically w/o stating the real situation.

            TL you’re a MORON as well as an A**HOLE!

          • Posted by Tough Love on December 18, 2015 at 3:48 pm

            Quoting Anon ….”TL I think you’re a liar to but that doesn’t mean it’s true?”

            Please tell me what I stated that you believe to be untrue.

            If you are correct, It certainly would not have been intentional, but i”ll admit to it being incorrect.

            More likely, you just don’t believe what I’ve stated (perhaps because the truth is just too difficult to swallow), but that wouldn’t make it untrue.

          • Posted by S Moderation Douglas on December 18, 2015 at 7:18 pm

            “Please tell me what I stated that you believe to be untrue.”

            Do you mean today? Or in the last decade?

            We can start with “Yes, perhaps for the first 12 years of your 32 year career, but in the last 20, most Public Sector wages have caught up to the Private Sector.”

            Or “No, Police routinely retire 10 years earlier than the typical Private Sector worker.”

            And ” those PRIVATE-Firm-workers that build our roads and firetrucks most definitely do NOT get Defined Benefit Pensions (of ANY type, let alone the grossly excessive ones routinely granted ALL “PUBLIC” Sector workers),”

            ” Being well versed in employee benefits, while I can say that it would not be unusual for the doctor to have a 401K Plan, there is a near-ZERO probability that the doctor gets subsidized employer-sponsored retiree healthcare benefits beyond a modest $300-$500 deposited annually into a retiree HSA …. worth about 10% of the value of the retiree healthcare benefits”

          • Posted by Tough Love on December 19, 2015 at 1:25 am

            SMD,

            I believe that BOTH the of my (below) statement (that you quoted above) are true:

            (1) “Yes, perhaps for the first 12 years of your 32 year career, but in the last 20, most Public Sector wages have caught up to the Private Sector.”

            (2) “No, Police routinely retire 10 years earlier than the typical Private Sector worker.”
            —————————————————————-
            Here (below) is another of mine (that you also quoted above). In this case I stated that thinking that Private Sector single-employer firms doing these tasks certainly would NOT be providing their workers DB pensions (which I still believe to be true). I did not consider that SOME who work in such fields, while employed by individual firms, belong to Unions and participate in Union-sponsored Multi-employer Defined Benefit Plans. IF/WHEN such is the case, I was wrong. But for completeness we should add that the “generosity” level of Multi-employer DB pension is FAR lower than that of typical Public Sector DB plans.

            ”those PRIVATE-Firm-workers that build our roads and firetrucks most definitely do NOT get Defined Benefit Pensions (of ANY type, let alone the grossly excessive ones routinely granted ALL “PUBLIC” Sector workers),”
            —————————————————

            And lastly, YES, I believe the following (below) to be true. The typical Private Sector doctor is an employee of a facility (e.g, hospital, etc.) or part a a private-practice group. I can’t fathom such employees getting more in retiree medical care benefits than a modest annual HSA contribution, as noted.

            ” Being well versed in employee benefits, while I can say that it would not be unusual for the doctor to have a 401K Plan, there is a near-ZERO probability that the doctor gets subsidized employer-sponsored retiree healthcare benefits beyond a modest $300-$500 deposited annually into a retiree HSA …. worth about 10% of the value of the retiree healthcare benefits”
            ==========================================

            Sorry to disappoint you ………..

          • Posted by S Moderation Douglas on December 19, 2015 at 10:20 am

            I don’t think you really believe that. But your committed and can’t admit you’re wrong.

            Pathetic.

          • Posted by S Moderation Douglas on December 19, 2015 at 10:57 am

            Police *can* retire at 50 (or even younger) and *some* private sector workers retire at 70 or later. My private sector sister retired at 55, compared to SAWZ, who retired at about 70 in the public sector.

            But.

            The average age for police retirements is somewhere between 53 and 57. The average age for both private and public sector retirement has been about 60 for the last decade. Now beginning to increase toward 62 for both, due to the economy.

            Sorry, “10 to 15 years early” is just inflammatory bee ess. You can’t justify the ten, and don’t even try the fifteen any longer.

            Multiemployer plans:

            TL: “I was wrong. But for completeness we should add that the “generosity” level of Multi-employer DB pension is FAR lower ……”

            For completeness you should also add that the private sector workers building the roads make much more than the public sector with similar jobs.

            I believe I posted a link for Kaiser Hospital, which does have a defined benefit and 401(k) They not only provide retiree healthcare, they provide healthcare for the wife, children AND parents. Kaiser is a non profit that is considered one of the lower paid in the area.

            It isn’t what we don’t know that gives us trouble, it’s what we know that ain’t so.

            Will Rogers

            You know a lot of things that ain’t so.

          • Posted by Tough Love on December 19, 2015 at 11:35 pm

            Quoting SMD ………

            “The average age for police retirements is somewhere between 53 and 57. The average age for both private and public sector retirement has been about 60 for the last decade. ”

            I don’t believe that (on a apples-to-apples basis) for one moment.

            When Police LEAVE THE WORKPLACE at 53-57, (or other Public Sector workers at 60) they indeed “RETIRE” with a VERY generous pension and often FREE retiree healthcare.

            MOST Private Sector workers who LEAVE THE WORKPLACE at 60 have simply given up on finding continued employment, and few “RETIRE” with a pension & benefits in the SAME sense that Police do.

            To be very blunt, if you ACTUALLY believe otherwise …. you’re an idiot.
            ———————————–

            Quoting SMD …..

            “TL: “I was wrong. But for completeness we should add that the “generosity” level of Multi-employer DB pension is FAR lower ……””

            Actually, I said….. “IF/WHEN such is the case, I was wrong” (referring the Multi-employer pension situations) …. but hey, why shouldn’t you take advantage of another chance to exaggerate when the opportunity arises ?

          • Posted by S Moderation Douglas on December 20, 2015 at 12:50 am

            “To be very blunt,” ? 

            Gallup 2015

            “The average age retired Americans report actually retiring has always been lower than nonretirees’ expected age of retirement, and is 60 in this year’s survey, matching the average generally found since 2004. Prior to that, the average reported age of retirement was always below age 60.”

            You believe “MOST Private Sector workers who LEAVE THE WORKPLACE at 60 have simply given up on finding continued employment,”

            Consistently? For over a decade? Through two recessions and three recoveries? And before that the retirement age was below 60?

            And Moderation is the idiot?

            ““IF/WHEN such is the case, I was wrong” 

            No, Love, you were consistently running off at the mouth with opinions on something you knew virtually nothing about. Now you’re trying to cover your mistakes with feeble excuses. You apparently have no shame. Live with it.

          • Posted by Tough Love on December 20, 2015 at 1:41 am

            SMD …… you’re an ass.

          • Posted by S Moderation Douglas on December 20, 2015 at 2:13 am

          • Posted by Tough Love on December 20, 2015 at 8:58 pm

            SMD, Just though you’d be interested ….

            http://www.aol.com/article/2015/12/02/the-top-5-dangerous-jobs-in-the-us/21276990/?icid=maing-grid7|main5|dl33|sec3_lnk4%26pLid%3D-493569291

            Gee, Safey workers are nowhere to be found ….. and the jobs ON this list (with the exception of long-service, Major Commercial Airline Pilots/Engineers) assuredly earn well below HALF the Total Compensation of Public Sector Safety workers.

        • Posted by Anonymous on December 18, 2015 at 6:20 pm

          John what exactly were you accusing the poster of or did you change your mind on the accusation. Thanks for your prompt reply

          Reply

          • Posted by Tough Love on December 19, 2015 at 1:30 am

            Hmm, and the saga continues ……….

            I wonder if THIS “Anonymous” commentator has the SAME IP address as that of the FIRST 2 commentators to this Blog-post?

            If so, shouldn’t the (above) words ……. “the poster”……. really be …… “me” ?

          • Posted by S Moderation Douglas on December 19, 2015 at 1:40 am

            Then who is MJ. He of the same avatar?

          • Posted by The Resident Nutcase on December 19, 2015 at 11:46 am

            There have been times when the name section of the post isn’t filled in while I pressed post comment. It comes up as anon…. But that’s accidental.
            I think TL wants to believe that all the anons are a single person along with an actual name…. It makes her feel like her minions are more numbered!!!
            I am the former BH….. I changed because TL calls me the resident nutcase!! Seems fine by me.

          • Posted by Anonymous on December 19, 2015 at 11:57 pm

            Wrong again A**HOLE!

        • Posted by Anonymous on December 19, 2015 at 11:47 am

          Will we ever find out exactly what John’s point was or will it always be something that was insinuated and that we have to guess at?

          Reply

  2. Posted by Equal Time on December 18, 2015 at 11:46 am

    The article correctly questions how anyone can predict required pension fund contributions years ahead when every 3 years or so a new actuarial study is done to determine required contribution rates for the next few years and, of course, such studies have not been done yet. This is the same issue that applies to the reformer crowd when they claim future contribution requirements will be unaffordable. It works both ways and is all speculation.

    Reply

    • Posted by Tough Love on December 18, 2015 at 2:57 pm

      Valuations are done annually, not every 3 years or so.

      It’s not rocket science for reformers (or anyone with a modicum of math abilities) to see that future contributions needed to fully fund these ludicrously generous PUBLIC Sector pension/benefit promises will be HUGE (and increasing for many years), and that there is no reasonable way (w/o massive tax increases that would encourage NJ’s highest tax-paying residents & businesses to move away) for NJ to raise the revenue needed to do so.

      THAT seems to meet the definition of unaffordable.

      Reply

      • Posted by Soon to retire Pat on December 18, 2015 at 4:01 pm

        I don’t necessarily agree with the posit that higher taxes on the rich will result in their exodus from NJ. If you were making $10M a year, would you sell your house, leave your children/family/friends and move to Florida just because you now make “only” $9M? Not likely. Also, (with 7 working days to go before I retire), I definitely feel my pension is both deserved and reasonable. Take the money from State Aid and Abbott Districts, stop corporate welfare and raise the sales tax (and the gas tax) and sell the turnpike! I want my pension!!

        Reply

        • Posted by Tough Love on December 18, 2015 at 4:15 pm

          Past experience with tax increases (as well as the VERY high taxes in NJ compared to almost all other States) suggests that you are wrong.

          —————————————————
          Quoting …… “Also, (with 7 working days to go before I retire), I definitely feel my pension is both deserved and reasonable. ”

          I’m sure virtually all Public Sector worker-families …. but VERY few NJ’s PRIVATE Sector worker-families (who understand the HUGE Taxpayer cost of current pension/benefit promises) ….. would agree that your pension (AND benefits) are “deserved and reasonable”.

          Reply

        • Posted by S Moderation Douglas on December 18, 2015 at 8:01 pm

          Actually, the message is mixed. Just like the one that claims we can raise total revenue by lowering the tax rate.

          “Millionaire Migration in California:
          The Impact of Top Tax Rates”

          http://www.stanford.edu/group/scspi/_media/working_papers/Varner-Young_Millionaire_Migration_in_CA.pdf

          Reply

  3. Posted by Anonymous on December 18, 2015 at 6:24 pm

    I think this blog has now lost all credibility

    Reply

  4. Posted by Anonymous on December 18, 2015 at 11:05 pm

    New Flash: You Do Know John sees IP addresses?

    Reply

  5. John, is there any data that quantifies the ratio of working publics to retired publics. I have read various articles where the retirees are beginning to outnumber the working publics and I can’t help but wonder how this will affect the amounts needed to continue along the same path.

    Reply

  6. I don’t know why my avatar came up same as these anonymous ones but I trust John can see my ISP address.

    Reply

  7. Never mind, if I include my email with my name, the correct avatar comes up so I can only guess that anonymous et al is not including an email address

    Reply

  8. Posted by Anonymous on December 19, 2015 at 9:55 am

    Maybe you’re getting your avatars mixed up b/c you’re posting under different handles and from different devices. The IP address locations can be tracked for verification.

    Reply

  9. Posted by Anonymous on December 19, 2015 at 11:40 am

    Why don’t people just make their accusations instead of beating around the bush?

    Reply

  10. Posted by Still a Fan on December 19, 2015 at 1:01 pm

    John,
    I read your blog religiously.

    Your “GOTCHA” of Anonymous is disappointing. You are off topic and dealing with a petty observation of one of your Blog fans. Yes, someone who responds every time to your Blog is a fan – although not necessarily of your opinion. Because the pension issue is controversial, your Blog is important. You present your views objectively and should let the facts and your skill as a writer speak for themselves, not belittle your audience. (Now as I write this, I’m conscious that you “Can see [my] IP address.” My gut reaction when I first read your response was: “That’s like saying, ‘I know where you live.’” Not meaning to overstate, but kinda like a threat. Just sayin’, that was my feeling.

    Just because you feel you have a GOTCHA does not make Anonymous wrong. Who cares how many times someone / people respond to your Blog? If a response is generated, you “done good.”

    Let us responders battle it out among ourselves. And to Anonymous…we need ALL feedback and thoughts, whether we agree or disagree.

    Having said that, John, THANK YOU for all your hard work in keeping us apprised of the pension situation.

    Reply

    • Posted by Anonymous on December 19, 2015 at 1:59 pm

      fyi: Got my own device fixed so we’ll make every resaonable effort not to share them for posting but no guaranteed promises! Kind of like the Gov and c.78 ARC payments.

      Reply

    • Posted by S Moderation Douglas on December 19, 2015 at 2:08 pm

      Still a fan,

      Agreed, thank you John for the articles and the forum. I didn’t really see a “gotcha”. It’s always good when a moderator steps in to set the tone and direct the posters to stay relevant and civil.

      Kudos, another year is almost passed and a lot of good information. Just curious, how many years has it been?

      And thanks again, from “not a liar”.

      Reply

      • Counting nj.com it’s about 7 years and it’s been an interesting ride. Initially I started to get my own thoughts together but a lot of other people came along to add to them and I’m grateful.

        Reply

  11. Can everyone stop your big long boring explanations about posting and answering one’s own posts, etc. and please stop the name calling it not very credible on either end.

    Reply

  12. John, another question, how does the fact that many, many public employees have taken out loans against their pensions…does that play into the mix at all?

    Reply

    • Not much at ll. They still have to pay back the loans. Only becomes a calculation nuisance if the plans terminate and these loans have to be accounted for is the final benefit values.

      Reply

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