NFL Pension A Headache?

Pensions & Investments sees the funded status of the National Football League (NFL) Players retirement plan as not a worry while the Wall Street Journal sees it is a worry.

So who do you believe?

The plan is called the Bert Bell/Pete Rozelle NFL Player Retirement Plan and the latest 5500 fling (all 212 pages) is interesting reading for those who want to know about benefit terms (accountant’s opinion) or salaries of NFL employees being paid out of the plan (Schedule C) but it is these pages that tell the funding story:

  • Active Participants: 2,169
  • Retirees: 4,087
  • Separated: 6,018
  • Total Participants: 12,274
  • Assets as of 3/31/15: $1,807,975,368
  • Contributions for year: $305,538,737
  • Payouts for year: $180,901,334
  • Assets as of 4/1/14 (AV): $1,606,565,990
  • Liabilities at 7.25%: $2,945,728,870
  • Official funded percentage: $54.5%
  • Assets as of 4/1/14 (MV): $1,617,169,656
  • Liabilities as of 4/1/14 (RPA 3.62% rates): $5,541,013,794
  • RPA funded percentage: 29.19%

Now putting six years of available asset history into a spreadsheet gives us an idea of why P&I and the WSJ might both be right in their assessments.

nfl asset history

At 29.19% the plan is indeed woefully funded and would be in a distress situation had not the NFL been able to double their contributions for the 3/31/14 and 3/31/15 plan years.  This distinguishes the NFL situation from that of the vast majority of other multiemployer plans and ALL public pension plans who cannot afford to double their contributions so they must seek other solutions.

In the case of those other multiemployer plans it’s getting a law passed that allows benefit cuts.

For public pension plans – still waiting.

 

70 responses to this post.

  1. Posted by Anonymous on February 5, 2016 at 3:58 pm

    Ok TL what’s that chant, rant, cheer you’ve been serving about private sector pension?

    Reply

    • Posted by Tough Love on February 5, 2016 at 4:41 pm

      Rant ?

      I rarely comment about PRIVATE Sector pensions other to say that when 2 COMPARABLE workers (one Public and one Private) both retire with the SAME pay, with the SAME years of service, and at the SAME age, the Public Sector DB Pension will ROUTINELY be 3 to 4 times (4 to 6 times for safety workers) greater in value at retirement ….. when BOTH the much richer pension “formulas” AND the much more generous “provisions” (such as very young full/unreduced retirement ages and COLA increases… now suspended in NJ) are properly reflected.

      Got a problem with the truth ?

      Reply

      • Posted by Anonymous on February 5, 2016 at 6:45 pm

        No problem with the truth, problem with what you communicate as truth, their are too many variables to attribute value to most of your conclusions, thus “rants”.

        Reply

  2. Posted by S Moderation Anonymous on February 5, 2016 at 5:53 pm

    “Rant ?”

    “truth ?”

    “ROUTINELY” ?

    Bulls hit

    Still irrelevant.

    Still illogical.

    Still GIGO.

    A spreadsheet is a tool. If you use it incorrectly, it will do more harm than good.

    I see you have now specified your two hypothetical workers are “COMPARABLE”.

    Nice try. Still no cigar. If two comparable workers have the same pay, but one has a higher percentage of pay allocated to pension, and/or one pension is entirely paid by the employer, while the other is paid by employer plus employee contributions, one can be assured their pensions will be unequal.

    “3 to 4 times” ? Meh.
    “ROUTINELY” ? Nah.

    Even more incredible (literally, not credible) when you compare a hypothetical policeman to an imaginary brain surgeon (really) and somehow arrive at a multiple computed to two decimal places.

    When are you going to show your work to a fifth grade teacher and have her explain the proper way to solve a word problem? Of course, sometimes you may come up with the right answer for the wrong reason, but that does not validate your process.

    Now, as always, there are some public workers who have a higher total compensation than “comparable” private sector workers, and some who earn much less. No such thing as “ROUTINELY”.

    Reply

    • Posted by Tough Love on February 5, 2016 at 7:50 pm

      He’s BACK ….. Mr. “Smoothing” himself. …… Just move along people, nothing to see hear, pay no attention, we not ripping off taxpayers …… TOO MUCH.

      ——————

      Saved this just for you, another “Slug of the Month” Candidate.

      Enjoy…..

      http://www.cleveland.com/court-justice/index.ssf/2016/01/westlake_cop_accused_of_punchi.html

      Reply

      • Posted by S Moderation Anonymous on February 5, 2016 at 8:08 pm

        Diversion

        Reply

        • Posted by Tough Love on February 5, 2016 at 8:44 pm

          Crawl back under your rock.

          Reply

        • Posted by S Moderation Anonymous on February 5, 2016 at 11:20 pm

          1) Illogical post.

          2) Attempted diversion.

          3) Puerile pejorative.

          Another internet hat trick.

          Say goodnight, Gracie.

          Reply

          • Posted by Tough Love on February 5, 2016 at 11:35 pm

            It YOUR ilk that is responsible for tragedies like this:

            http://www.dcba.org/page/vol280216art1

            Hopefully payback will be just ……. but swift and meaningful.

          • Posted by Sean on February 6, 2016 at 12:00 am

            SMD:

            “1) Illogical post.

            2) Attempted diversion.

            3) Puerile pejorative.

            Another internet hat trick.

            Say goodnight, Gracie.”

            Says the pot to the kettle.

            1) Illogical rebuttal

            2) Attempted smoothing

            3) Dubious foray into obfuscation

            Another trifecta.

            Say goodnight, Dougie

          • Posted by Rex the Wonder Dog! on February 6, 2016 at 12:03 am

            TL, stop picking on Dougie- he cannot help himself 🙂

          • Posted by Rex the Wonder Dog! on February 6, 2016 at 12:13 am

            It YOUR ilk that is responsible for tragedies like this:
            http://www.dcba.org/page/vol280216art1
            Hopefully payback will be just

            WOW!!!!!………..Edward N. Tiesenga SPANKED the hell out of firewhiners and GED Cops with some serious math!

          • Posted by S Moderation Anonymous on February 6, 2016 at 12:44 am

            ” It YOUR ilk”

            “WOW!!!!!……”

            ” Edward N. Tiesenga (B.A. cum laude, Hope College, 1981; J.D. American University, 1984), …………………..Any views contained in this article are his alone, and not to be attributed as those of the Village of Oak Brook.”

          • Posted by Sean on February 6, 2016 at 1:21 am

            Speaking of that article I linked, remember, this article focuses on police and fire, but says nothing about the damage done by TEACHERS and the public education system. They have done as much, if not more damage. Here’s an Amazon link to a great book on the subject of teachers in Illinois. I encourage you to click the link and “look inside” the book at the table of contents. I own the book. It is excellent, and completely DOCUMENTED, as the previous article was. It also completely debunks the standard union garbage that is always spewed about the issue. No amount of “smoothing” can dispute this stuff. It is bankrupting municipalities everywhere.

            http://www.amazon.com/Illinois-Pension-Scam-Bill-Zettler/dp/0615627749/ref=sr_1_1?ie=UTF8&qid=1454731811&sr=8-1&keywords=illinois+pension+scam

          • Posted by Sean on February 6, 2016 at 1:25 am

            SMD:

            ““WOW!!!!!……”

            ” Edward N. Tiesenga (B.A. cum laude, Hope College, 1981; J.D. American University, 1984), …………………..Any views contained in this article are his alone, and not to be attributed as those of the Village of Oak Brook.”

            What exactly, is your point, Doug? The views expressed are solely his own?

    • Posted by Sean on February 5, 2016 at 11:26 pm

      SMD: “Now, as always, there are SOME public workers who have a higher total compensation than “comparable” private sector workers, and SOME who earn much less. No such thing as “ROUTINELY”.

      Maybe no such thing as ROUTINELY, but the idea that “SOME make more, and SOME make less,” thus implying that, in the end, it all kind of EVENS OUT? No.

      Reply

      • Posted by Tough Love on February 5, 2016 at 11:57 pm

        This Blog focuses on NJ’s Pension mess.

        The AEI study noted here before shows that (excluding Safety workers* … Police Fire, etc.) PRIVATE sector “wages” (i.e., “cash pay alone) are indeed 4%-of-pay higher than the wages of comparable PUBLIC Sector workers. However, when the comparison is on a “Total Compensation” basis (wages + pensions + benefits) PUBLIC Sector workers have a 23%-of-pay advantage.

        Taxpayers ……..think about how much greater YOUR retirement would be if YOU had an 23% extra pay (tax-deferred …. as are Public Sector pensions) to save and invest in every year of your career. How much would that accumulate to upon retirement ? An extra $500K, $1 Million, $2 Million ?

        This financial “mugging” of Private Sector Taxpayers must end.
        —————————————————–

        * The AEI Study Excludes Safety workers. Being (by far) the highest paid group of Public Sector workers (perhaps with the exception of far smaller #s of Judges) excluding them LOWERS average Public Sector wages and total compensation. HAd they been included; (a) the 4% Private Sector wage advabtage would have bee smaller, or perhaps swung to a PUBLIC Sector wage advantage, and (b) the 23% Public Sector “Total Compensation” ADVANTAGE would have been even GREATER.

        Reply

      • Posted by Rex the Wonder Dog! on February 6, 2016 at 12:15 am

        “Now, as always, there are SOME public workers who have a higher total compensation than “comparable” private sector workers, and SOME who earn much less.
        Not true. Even at the higher end, professionals like doctor, dentist and especially lawyer, make far more in the gov sector, on average. Many gov lawyers could not be hired in the private sector. And at the lower end, the GED jobs, well all you have to say is GED cop and firehwiner = $200K-$350K with OT!

        Reply

        • Posted by Tough Love on February 6, 2016 at 1:03 am

          SMDs like to point out studies that suggest that the most highly educated Public Sector workers (PHDs and “Professionals” …. which make up only 10% of Public Sector State workers and 3% of Private Sector workers) make less in total compensation than their Private Sector counterparts because while their pension & benefits may be greater their lower cash pay offset their pension/benefit advantage.

          I understand this point and it is valid IF we are really comparing Public/Private Sector (say) Professionals with the same experience, education, knowledge, skills, AND MEASURABLE WORK OUTPUT.

          I know I will be subject to SMD’s wrath because my “evidence” is anecdotal, but:

          (a) Knowing many CPA’s and other “professionals”, many ROUTINELY work 60+/hrs wk and few work less than 50 hrs/wk. Should the PUBLIC Sector CPA who works 40 hrs/wk (if that) be paid EQUAL wages, or 2/3 of the PRIVATE Sector CPA who works 60 hrs/wk….. even if equally productive in each hour?

          (b) While not all Lawyers/CPAs work for Law/Accounting firms, anyone who has ever worked at a Law/Accounting firm knows that VERY few hours are “wasted” (at the water-cooler, on the internet, just BS-ing, etc.) because your compensation is based on the number of your hours billed to clients. I REALLY doubt that is the situation in Public Sector employment.

          (c) Many PRIVATE Sector professionals who earn the BIG salaries were hear about at the Big 8 Accounting Firms and the Premier Legal Firms were in the top-of-their-class at Ivy League Schools (the Princeton, Harvard, Stamford, Wharton, Stern School). Such top students DO NOT seek employment in the Public Sector. Should Public Sector workers (on average) be equally paid?

          Yes, it’s anecdotal ….. but not likely far form the truth.

          Reply

          • Posted by S Moderation Anonymous on February 6, 2016 at 1:28 am

            Moderation has no wrath. That would be counterproductive.

            As a percentage, those public workers who make the most compared to the private sector?

            Still the janitors.

            AND,

            They get reserved parking.

            “Who says life is fair, where is that written?”
            William Goldman,

          • Posted by Sean on February 6, 2016 at 2:18 am

            Glad you brought this up. I have a few issues as well. I think SMD makes a good point in summarizing (and correct me if I am wrong, Doug, because I don’t want to misquote you) the compensations, overall. To paraphrase, SMD made the point that public sector workers at the lower skill levels have a higher compensation “floor” than in the private sector, and therefore earn more, while those at the highest levels in the public sector have a lower “ceiling” when it comes to their compensation, compared to the private sector (he made some interesting points about the mid-level, and safety workers, but I’ll skip that for now). I tend to agree with that basic assessment.

            But I wonder: Just how well representative is the data when you consider that the high skill level public employees are a very small (I THINK) number when compared to that skill level in the private sector? I mean, there is a HUGE disparity in incomes in those fields in the private sector. (kind of like the standard, “college graduates will earn, on average, one million dollars more in their lives than non college graduates.” Well, yes, and I am all for getting a college degree, but that statistic is flawed when you think of the Warren Buffets of the world. Yes, they are college grads, but they are not billionaires BECAUSE they went to college. They are billionaires who also happen to have graduated college). Anyway, I just can’t help but think the extremely high earners at the high skill level in the private sector skew the data, especially when considered against the relatively stable income levels in the public sector (high skill level public sector income levels don’t have huge variance, I imagine).

            Also, what about the expenses that the public sector doctors, lawyers, CPAs, etc, do NOT have to pay. Errors and Omissions insurance, malpractice insurance, advertising and marketing, rent/mortgage, staffing, etc. A public sector, high skill level employee has ZERO overhead, great hours, and total job security, and doesn’t have to worry about being sued. Private sector overhead can be HUGE. How are those considerations factored in? Are they factored in at all? Maybe they are, but I would seriously question how you would arrive at an accurate comparison.

            Finally, I would contend that it isn’t the upper and lower extreme that’s killing us financially, it’s that giant middle section: police, fire, teachers, and other safety personnel. At this level, there is NO argument, No smoothing, No finessing your way out of this one: This group is positively bankrupting every municipality across this nation. End of story. And, no, there may not be a comparable job to being a cop, but, so what? Do we therefore need to pay the lottery to each and every one of them? And even if we COULD justify it, morally, we still cannot afford it. So here we are.

          • If you want to gag on at least one public/private compensation comparison, check out the average CA prison psychiatrist (while “working” and after going on the scam pension). I am sure Mr. Moderation knows whereof I speak.

            If I recall ,the larger prisons pay these drones $300 to $400k each. Well more than the average private practice shrink makes. And you can imagine how much their BS pensions are for servicing a “captive” population…”help me Doc, I’m depressed, I’m being held prisoner!”

          • And don’t even ask about lifeguards in Newport Beach CA. A summer job for college swimmers now populated by permanent drones making $170K and more (plus of course the BS multi-million $ pension).

            The private sector would fire them all and just put up signs to “swim at your own risk”.

  3. Posted by Javagold on February 5, 2016 at 6:28 pm

    7.25% !!!!!! LOL. Fools.

    When NIRP hits these shores all of the pension ponzi may want to learn how to compute with a minus- infront of these made up IOU numbers.

    Reply

    • Posted by dentss dunnigan on February 5, 2016 at 8:10 pm

      they’ll never get it. People want to believe the lie bescause their lives depend on it. It’s all they know.

      Their job, their marraige, everything. Their car, their house, all their earthly belongings.

      Reply

      • Posted by Sean on February 6, 2016 at 12:12 am

        “It is difficult to get a man to understand something, when his salary depends on his not understanding it.” Upton Sinclair

        I’ve always found it funny to listen to the public sector people rant about all the money being swindled by Wall Street, or illegals getting government benefits, or corporations getting tax breaks and not paying their fair share, etc, and I AGREE with the outrage.

        What’s comical/tragic is, they are doing the EXACT SAME THING…only worse.

        When they piss and moan about the fat cats on Wall Street getting bailouts they didn’t deserve, I AGREE. But I cannot help but wonder: When you have a guarantee that, no matter what the market does, no matter what the economy does, and no matter what the investment returns on your retirement plans are…taxpayers will be forced to make up the difference…

        Please explain to me how that is not a F*CKING BAIL OUT. And NO, it is NOT “deferred compensation.” It is racketeering, morons.

        Reply

        • Posted by Tough Love on February 6, 2016 at 1:15 am

          Last Sentence ….. Well Said indeed !

          Reply

          • Posted by The Resident Nutcase on February 6, 2016 at 12:32 pm

            Historically speaking….. Doesn’t the market (up/down) make up more than 60% of the local pensions? Then add in the employee portion of 10% and then the employers portion anywhere from 15-20%…… And we are nearly there!!?? Why all the fuss?? It’s not like the friggin state pulls this money from the air. IT COMES OUT OF THE PENSION FUNDS!!!!!!
            You people act as if YOURE PAYING 100%??!!!!!!!!
            I’m sure you’ll bring up all this crap about bull markets and such. But all these funds and their liability, funded or not…do not have to be paid today!!!
            Just like your mortgage….. I bet nobody here is on the good side. Most owe. But you pay it down over many many years. Yes…. If it were called in today…. Many of us would be screwed!!!! But We’re Amortized baby. Just like the pensions. Over time….chapter 78 will work.
            You people want to create panic!!!!! But there’s no need!!!!!
            Instead if spreading propaganda, why not just sit back. Property taxes in NJ went up on average 2.4%!!!!! Not bad…. Considering the cost of everything always goes up. Christ!!! I remember a time when the pensions were funded over 100%!!! But that only created the ability for states to not put the required money in. Rob Peter to pay Paul….. But one day Peter is gonna want his money!!!
            It’s pretty basic. You robbed the pensions. Created a shortfall. Blamed the public workers. Pitted them against us. And now the government is robbing us all blind laughing while we fight each other.
            Stop the doomsday fear mongering.

          • Posted by Sean on February 6, 2016 at 1:09 pm

            Nutcase, I think you have some valid points, but I am not sure the amortization will work at these levels. Assets are dwindling at a faster rate than income, and I cannot agree with you that property taxes are “not bad.” I do not think the reason the pensions are underfunded is because the past funding (“over 100%) caused them to not pay into them, and that we “robbed the pensions” and “created a shortfall.” I do not believe it is that simple. So many of the “added benefits” with retroactive increases, have sent unfunded levels into runaway freight train mode. I would be interested to hear your thoughts on that article I linked earlier, if you care to read it.

            http://www.dcba.org/page/vol280216art1

          • Posted by The Resident Nutcase on February 6, 2016 at 1:24 pm

            Sean-
            Ch78 changed a lot of the benefits and reworked who gets what.
            I’m an advocate for the local pensions because I see them as very different than the state plans. Notwithstanding how anyone feels about the amount of salary..I’m concerned with the actual funding parts of it.
            PFRS is well funded. Is not in the dire straights as the state plans because employees and employers have been paying in.
            Ch78 has brought the zero premium of healthcare to 35% for most. That’s no chump change. That’s millions upon millions into the municipal coffers.
            The ages are set longer… For retirement….. The amount has decreased. There have been many changes. Let these things work. Because I feel they will.
            And to your other points….
            How can the state NOT paying in not be considered as theft?? The Dems gave Christie a balanced budget with the FULL pension payment!!! He vetoed it!!!
            Why??? The money was there! It’s vindictive and bully politics.

            http://www.nj.com/politics/index.ssf/2015/06/christie_slashes_democrats_pension_payment.html

          • Posted by The Resident Nutcase on February 6, 2016 at 1:54 pm

            Sean-
            Yeah. I read it. But it’s not what’s happening in NJ. If anything…. Police and fire are going backwards with regards to salary and benefits.
            Chp78 required them to go from 8.5% to 10% salary deduction into the pensions. That extra money… Instead of going into the pensions…. Went into the states coffers. Read below!!!!
            http://www.nj.com/opinion/index.ssf/2015/07/christies_sleight_of_hand_on_pension_payments_opin.html

            Fair?? I think not!!!

            Ch78 required many cuts to police and fire. With one simple requirement of the state…they need to make the ARC. They did not.

            Fair?? I think not!!!

            Constantly bringing up the unfunded liability is always gonna create panic among the masses. To look at the funding levels as static is not accurate. They are dynamic and need to be looked at as long term. Can you tell me back when these funds were funded over 100% things were good? Why then can we complain now that they are 50% funded due to market negativity and…AND… Decades of skipped payments!!!!! Those missed payments created a giant trench where perhaps the market created a crack.

            It’s so easy to move the assumption rate from 7-8% to 3-4% and create panic!!! GASB this GASB that. What’s the trend over decades????

            “””” The National Association of State Retirement Administrators researched the median annualized rate of return for public pensions for the 1-, 3-, 5-, 10-, 20- and 25-year periods ending in 2013 and found it was 7.9 percent over the 20-year period, and exceeded 8 percent for the 1-, 3- and 25-year periods.”””
            https://ballotpedia.org/Public_pensions_in_New_Jersey

            To me, that’s bs!! Using a lower rate of return to predict investment earnings, increases the current plan liabilities. Duh!!! Creating yet more drama.

            So go ahead and create panic. Heck…. If they overnight said my mortgage rate went from 2% to 6%…… That would be something.. Huh??? But in fact…. It’s not. That’s just an arbitrary figure we can use to scare up some more drama.
            I don’t buy it!!

          • Posted by Tough Love on February 6, 2016 at 4:25 pm

            Sean,

            You seem to have a good understanding of finance/economics, so how could you let the Nutcase simply “get a pass” when saying …….

            “Doesn’t the market (up/down) make up more than 60% of the local pensions? Then add in the employee portion of 10% and then the employers portion anywhere from 15-20%…… And we are nearly there!!?? ”

            Beside the obvious fact that 60% + 10% + (15% or 20%) = 85% to 90% and 100% is the correct goal (NOT 85% to 90%) with the remainder is the responsibility of Taxpayers, NOT the workers …….. assuming Taxpayer & Public Sector workers could invest and earn the same return as money invested by NJ’s pension Plans, is not each $1 of earnings attributable to the pension Plans $1 LESS in earnings now not earned by the Taxpayers/Employees because they transferred THEIR money to these Plans ?

            The whole concept of investment earnings as a “SOURCE” of funds to pay for Public Sector Plans is phony in-the-extreme. There are ONLY 2 REAL source of pension funding …. the Taxpayers and the workers …. and, as I have stated before, if you were to accumulate all of the workers’ contributions (including investment income) to the date of retirement, RARELY would the accumulated sum be sufficient to buy more than 10%-20% of the cost (i.e, the lump sum present value) of the extremely rich pensions that they have been promised.

            FYI ….. a correct way to look at Plan investment earnings is to allocate these earnings BACK to the original sources from which they were derived (the Taxpayers and the workers) in proportion to the amount (and timing) of such contributions. Those allocated investment income dollars become and ARE INDEED part of the Taxpayers and workers true cost of their own Plan contributions.
            ——————————————

            Of course just about everything else the Nutcase stated in his last few comments is equally flawed …. but I grow weary of repeatedly correcting the SAME false statements. ….. and I believe most readers now recognize them as false.

          • Posted by Anonymous on February 6, 2016 at 4:43 pm

            lol !!!

            It’s all taxpayer moolah!

            Parkerchandler:

            “They are paid with taxes, and the government merely keeps a portion of what they give to the tax leeches.”

            “All public employees are nothing but tax leeches. Every single one of them. They are paid with taxes, and the government merely keeps a portion of what they give to the tax leeches. Even in a partially funded pension, the money is derived from taxes. The public employee is a modern form of noble.
            They even get reserved parking. The taxpayer must find a meter or a garage to pay and walk. Not the nobles… This crap really has to stop.”

            Most private pension plans are entirely employer paid.

            The government pays the employee, then takes back some of that pay to contribute to the pension fund. It all comes from the taxpayer.

            Even the reserved parking is paid by the taxpayer.

            ” This crap really has to stop.”

          • Posted by Anonymous on February 6, 2016 at 4:44 pm

            ” …. but I grow weary ”

            You ain’t the only one, Love.

          • Posted by Sean on February 6, 2016 at 5:29 pm

            TL:
            “Sean,
            You seem to have a good understanding of finance/economics, so how could you let the Nutcase simply “get a pass” when saying …….”

            My problem is time. I’m swamped today with stuff I have to get done.

            I’m not as up to speed with NJ politics as I am with Illinois, but one thing I take issue with is the whole “decades of skipping payments” argument. I think it’s too easy to just lump all the years of “under funding” into this hazy vision of municipalities just partying like it’s 1999, and just wasting the money away. No, I think years of so called under funding were mostly due to the fact that there simply wasn’t enough revenue to actually pay the REAL cost of all these promises. Furthermore, and with the passage of time it becomes SO easy to forget, there were SO MANY times the under funding took place WITH FULL SUPPORT of the unions that are now complaining about it, which is easy to do now that the memory of it fades.

          • Posted by Tough Love on February 6, 2016 at 5:40 pm

            Quoting Sean ………. “No, I think years of so called under funding were mostly due to the fact that there simply wasn’t enough revenue to actually pay the REAL cost of all these promises. ”

            Exactly …. as I have stated many times, The ROOT CAUSE of the financial mess we are in is grossly excessive Pension/Benefit Plan “generosity”, and the lack of full funding is not the CAUSE of the problem, but a CONSEQUENCE of the real root cause …. grossly excessive “generosity’.
            ————————————–

            And saying that Investment Earnings actually PAYS FOR part of these absurdly generous pensions is patently false (see my previous comment),

          • Posted by The Resident Nutcase on February 6, 2016 at 6:00 pm

            TL…..NEGATIVE!! FALSE!!!! LIES!!!

            How than do you explain years of democrats putting forth a balanced budget including full pension payments!!!!!! And then getting vetoed????????
            The money is there!!!!!!! They would rather not pay it!!!

            Years of skipped payments will impact any financial entity negatively…..including the pensions which unfortunately dooms people’s lives as well!!!!

            Pay these people their promised money!!!
            Make the payments!!!

            TL…… You are once again wrong!!! The readers know though.

          • Posted by The Resident Nutcase on February 6, 2016 at 6:03 pm

            And WOW!!! Sean!!!! I was statring to think you were your own individual able to make you’re own desicions until I witnessed TL Just whip you into line!!!!
            Holy Cow batman. TL is a paid blogger!!! Don’t listen to her lies!!
            Proof is right there!!!!

          • Posted by Tough Love on February 6, 2016 at 6:35 pm

            When you have ZERO reasonable counter-arguments, you yell, scream,use many “!!!”, and call those who advocate from pension reform …”paid bloggers”.

            And just to give you a FIRM answer, no, nobody pays me. I am simply a well-informed, well-educated NJ Taxpayer who is fed-up with the decades long financial “mugging” being perpetrated upon us by NJ’s “PUBLIC” Sector, and who does NOT want to help fill (with my tax dollars) the HUGE financial hole that exists do to the grossly excessive Public Sector pension/benefit promises that were NEVER necessary, just, fair, or affordable.

          • Posted by Sean on February 6, 2016 at 6:47 pm

            To me, the problem is rooted in human nature. Remember 1999? California SB400. One of the longest, if not THE longest bull market runs in history (started in August 1982). (This run caused much of the belief in “buy and hold” investing strategies, and the belief that markets always go up. Over the long, long, LONG run, they do, but not without vicious corrections and bear markets).

            California pension funds were fairly well funded. Put extra money in to provide a cushion, to prepare for the inevitable rainy day? Oh hell no. Instead, let’s give out a whole lot of goodies. And hey, while we’re at it, let’s make all these goodies RETROACTIVE. These things create HUGE expenses, right out of the gate, and put a severe strain on budgets. Not to worry though, none of this will cost taxpayers a dime. The markets will do the heavy lifting, and markets only go up. What could possibly go wrong? All in time for the crash. After the crash, did they consider clawing back some of Santa’s goodies? You know, “Hey guys, maybe we were reaching with these promises. Present economic conditions require that we get more realistic.” Hell no. A promise is a promise. Kinda like Wall Street, isn’t it? “We take ridiculous risk. We win, the profit is ours. We lose? Well, we’re going to need the taxpayers to bail us out.

            The problem, once again, is that when people make promises or take risks when THEY THEMSELVES are not responsible for the outcome, BAD things happen. It is foolish for ANYONE to believe that certain payouts and promises of payouts cannot possibly fluctuate to reflect economic reality. The laws of nature simply do not allow for it.

            This is why, no matter who does not like it, the ONLY way to be FAIR, and to protect ALL parties from inherent abuses, is defined contribution plans. EVERYONE contributes, EVERYONE shares the risk. EVERYONE has “skin in the game.” And NO, putting in 2% to 10% of your income towards lavish, guaranteed payouts is NOT skin in the game.

  4. Posted by S Moderation Anonymous on February 6, 2016 at 12:56 am

    “They even get reserved parking. The taxpayer must find a meter or a garage to pay and walk. Not the nobles… This crap really has to stop.”
    Parkerchandler

    Take my pension. Take my healthcare. But do NOT mess with my parking. It’s what sets us apart from the common man.

    Reply

  5. Posted by Tough Love on February 7, 2016 at 12:57 am

    With all the news today about how underfunded Public Sector pensions are, and how contributory to that problem has been RETROACTIVE pension increases, you’d think EVEN Legislators beholden to the Unions would stay clear … but evidently not everyone has gotten the message….

    http://www.oregonlive.com/opinion/index.ssf/2016/02/public_pension_grasping_contin.html#incart_2box_opinion

    Rep. Brian Clem, D-Salem, is the chief legislative backer of a bill that would treat Oregon State Hospital employees like police officers for pension purposes, thus allowing them to retire early with enhanced payments.

    The article notes that Oregon’s pensions are now $20 Billion underfunded. Does he have ANY idea what his bill will ADD to that under-funding … INSTANTLY upon affirmation ?

    Lets make an educated guess ……

    The formula factors for Police pensions are often 50% greater than those of non-safety workers, so this ALONE increases the pensions “value” upon retirement by by a multiplier of 1.5.

    Next, Police TYPICALLY retire AT LEAST 5 years younger than Miscellaneous workers with full/unreduced pensions. This ALONE increases the pension’s “value” upon retirement by a multiplier of just about 1.30 (about 6% per-year-of-age….. similar to Social Security’s adjustments for early retirement).

    The above adjustments have a “multiplicative” (not “additive”) impact on the pension’s value, and with many NON-safety full-career pensions having a value at retirement of $1 Million, this Bill increases that RETROACTIVELY to pensions with a value at retirement of $1 Million x 1.50 x 1.30 = $ 1.95 Million.

    And (per the article) with 2,300 workers eligible for such reclassification, this bill, if approved, would INCREASE the Oregon Plan’s under-funding by $0.95 Million x 2,300 = $2,185,000,000.

    And ALL of it an added responsibility of Oregon’s taxpayers.
    —————————-

    How outrageous !

    Reply

    • Posted by Sean on February 7, 2016 at 3:02 am

      Right. It cannot be paid for. It is not affordable, starting right now, AND IT WILL NEVER BE AFFORDABLE. BUT, as time passes, and this politician has moved on, and it LATER becomes quite clear that there is no money, what do you think we’ll hear? Will we hear that this was a DUMB idea, that this promise was a disaster waiting to happen? Of course not. What we will hear is the same old song we always hear: “They didn’t fund the pensions. They stole the money. If they had just funded it, we would be ok by now.” Wrong. It’s the promises, stupid. The PROMISES ARE the PROBLEM.

      Reply

    • Posted by Anonymous on February 7, 2016 at 3:13 pm

      Less guessing………

      Oregon general service member: Normal retirement age for general service members is age 65, or age 58 with 30 years of retirement credit. 

      Final average salary: $45,000 
      Retirement credit: 30 years as an OPSRP member 
      30 (years) x 1.5 percent = 45 percent 
      45 percent x $3,750 (final average monthly salary) = $1,687.50 
      Single Life Option monthly benefit = $1,687.50 ($20,250 annual benefit) 
      _________________________________________

      Police and firefighter (P&F): 1.8 percent x years of retirement credit x final average salary. Normal retirement age for P&F members is age 60, or age 53 with 25 years of retirement credit. 

      Final average salary: $45,000 
      Retirement credit: 25 years as an OPSRP member 
      25 (years) x 1.8 percent = 45 percent 
      45 percent of $3,750 (final average monthly salary) = $1,687.50 
      Single Life Option monthly benefit = $1,687.50 ($20,250 annual benefit) 

      Reply

      • Posted by Tough Love on February 7, 2016 at 4:27 pm

        (1) I REALLY doubt that the average pensionable compensation for a 2015 non-safety retiree with 30 years service in Oregon is $45,000. I’d guess it’s north of $75K ….. and likely Higher (perhaps even $100K) for the Oregon Hospital workers under consideration.

        (2) $45K for Safety workers is completely ridiculous
        ———————————————————-

        You would be making one valid point if non-safety workers have a 1.5% per-year-of-service formula factor and Safety workers have a 1.8% per-year-of-service formula factor.

        The relationship 1.8/1.5 = 1.2 is only 20% higher (rather than the 50% I assumed)….. and FAR less than the typical Safety/Non-Safety relationship.

        Can anyone verify if Anon’s 1.5% and 1.8% are correct ?

        FYI …… for 2 (safety & non-safety) workers retiring after 25 years in NJ that relationship would be 2.6/1.82 = 1.43 or 43% higher.

        The other 30% increment I assumed for the 5 year younger Safety retirements still holds.

        So where are we …………….

        Assuming Oregon’s Plans are COLA-increased, the lump sum value at retirement at age 55 (typical for police) is about 18 time the annual (single life) pension amount. That means the annual pension would need to be $1,000,000/18 = $55,555 for the pension’s lump sum value to be $1,000,000 (the figure I used in my example in my earlier comment).

        For the non-safety worker to get a $55,555 annual pension ….. and ASSUMING your 1.5% per-year-of-service formula factor is correct ….. the pensionable compensation at retirement after 30 years would need to be $55,555/(30×0.015)= $123,455 which I would agree is likely higher than the final compensation of the Hospital workers in question…..probably by about 25%.

        So …… ASSUMING your 1.5% AND 1.8% factors are correct ……… a re-work of my (earlier comment) estimate of the cost of this Bill would be ….

        $750,000 x 1.20 x 1.30 = $ 1.17 Million.

        And (per the article) with 2,300 workers eligible for such reclassification, this bill, if approved, would INCREASE the Oregon Plan’s under-funding by ($1,170,000-$750,000) x 2,300 = $966,000,000.

        Reply

      • Posted by S Moderation Anonymous on February 7, 2016 at 5:55 pm

        “Can anyone verify if Anon’s 1.5% and 1.8% are correct ?”

        Doubtful. I am sure that information is not available on the interweb. Anonymous probably just made it up. That’s why he’s anonymous.

        Can anyone verify the “2,300 workers eligible for such reclassification” ?

        Reply

        • Posted by Tough Love on February 7, 2016 at 7:48 pm

          While I DIDN’T find the per-year-of-service formula factors for Non-Safety workers Oregon, I DID find it for Safety workers here (scroll down to Oregon):

          http://www.ncsl.org/documents/employ/PENSION-PUBLIC-SAFETY-TABLE-8-6-12.pdf

          The 1.8% per-year-of-service is correct, but Anon (conveniently ?) failed to mention that that is only one part (the DB part) of a Hybrid Plan which also includes a DC component where 6% of pay is contributed by the employees or picked-up by the employer. I’m guessing the the employer-pick-up (meaning the Taxpayers) is commonplace. In addition, Oregon Police DO participate in Social Security … whereas Police in many other states/Cities do not.

          The Bottom line is that the retirement security package offered Oregon’s Police is indeed VERY VERY generous, what I would describe as …. “grossly excessive”.

          Reply

      • Posted by S Moderation Anonymous on February 7, 2016 at 6:02 pm

        “The other 30% increment I assumed for the 5 year younger Safety retirements still holds.”

        Meh

        I’m a nurse making $8,000 a month , age 53, with 25 years service.

        The law changes, I …can… now retire with 45% of $8,000 ($3,600) per month

        OR

        I can work another 5 years (making twice as much as I would retired) and retire at 58 with 30 years service … With normal COLAs, I should be making $8,800 … three year average .. $8,600 times 1.8% times 30 = $4,644 month.

        That’s $1,000 a month more, for the rest of my life (plus COLAs {Don’t get me started!!!})*

        What to do? What to do?

        Does your 30% increment depend on how many *actually* retire five years early? Average age at retirement for Oregon public workers is 62 (with 22 years service)
        ____________________________________________
        “Assuming Oregon’s Plans are COLA-increased,”

        Using what value for COLAs ?

        *COLAs: Oregon pension law, like many other states, is a mare’s nest of changes, mostly reductions in benefits in the last ten years. Pension COLAs once were CPI up to 2% max.

        “COLA in 2014 and beyond is 1.25% on the first $60,000 of an annual benefit; 0.15% on amounts above $60,000”

        2015 “Annual COLA of up to 2% restored for service time accrued before October 1, 2013. COLA for service time after that date uses a lower rate. Service time accrued in both periods is “blended.”

        You almost have to be an actuary to calculate this stuff. Just stick with the $2,185,000,000. Audacity trumps accuracy any given day.

        “Math is HARD!!!”

        (Barbie)

        ___________________________________________________
        http://www.oregon.gov/pers/docs/general_information/pers_by_the_numbers.pdf

        Reply

        • Posted by Tough Love on February 7, 2016 at 8:36 pm

          SMD, Math is only hard for you.

          And your attempt attempt at a work-up (with the nurse) is all wrong. The added cost of this bill is the excess of the lump sum value at retirement of the nurse’s pension after it is changed to the Police pension (with the higher formula factor and younger age for full/unreduced retirement) over the lump sum value at retirement of the nurse’s pension w/o the pension upgrade.

          You’d likely do better commenting on trains (as you said you did for a living). As they say ……… this is “above your pay grade”.

          Reply

      • Posted by S Moderation Anonymous on February 7, 2016 at 6:05 pm

        These were just rhetorical questions, by the way. NOBODY really wants to see any more math. It’s not like Oregon pensions are coming out of New Jersey taxpayer pockets. Yet.

        Reply

        • Posted by Tough Love on February 7, 2016 at 7:34 pm

          SMD, when did you become the spokesman for this Blog’s readers ?

          The “point” of my comment was that it’s truly outrageous that Elected Officials have so much power to unnecessarily/unjustly WASTE Taxpayer money (& wealth) …. especially when it is driven by self-interest …. solidifying their own supporter-base.

          And it’s not an “Oregon”-thing ….. It happens EVERYWHERE.

          Reply

        • Posted by S Moderation Anonymous on February 7, 2016 at 8:36 pm

          “The “point” of my comment was”

          You just dove headfirst into the math thing based entirely on assumptions, again.

          (“Lets make an educated guess ……”)

          When it turns out, again, you don’t know jack.

          Yeah, yeah, yeah; Moderation is smoothin’. Diversions.

          Love has the big pitcher.

          But the big picture is made up of a mosaic of smaller pictures. Which are more “educated guesses.”

          Again
          ______________________________________________

          The big picture:

          Reply

          • Posted by Tough Love on February 7, 2016 at 8:50 pm

            Well, sorry, but I nether have the time, data, or inclination to do work-ups that consultants get paid 10s of thousands of dollars to do. Reasonable estimates (using reasonable assumptions) are a necessary evil to put a reasonable COST of this thievery out there.

            The real problem is that Bills such as that being proposed in Oregon are pushed by self-interested (in-the-Unions’ pocket) Elected Officials without a clue (or often a care) as to the cost ….. and sometimes simply ignoring or hiding known costs.

            Isn’t THAT the back-story of the universally-agreed as DISASTROUS CA SB400 where Safety worker pensions were RETROACTIVELY increased to 3%@50 …. instantly creating many $billions in increased unfunded liability ?
            ——————–

            When you have no substantive (and ACCURATE) rebuttal, you just fall-back on your standard ….. “you don’t know jack.”

            I call it more of your ……. “smoothing”.

          • Posted by Sean on February 7, 2016 at 9:22 pm

            This is why, Defined Benefit plans are an unworkable, flawed at the outset, idea. There is just too much room for shenanigans, and too much motivation to pile on the giveaways.

            Any time ANY group of people can “negotiate” their pay and benefits without the PAYER present…BAD THINGS HAPPEN. The ONLY people who think this is all fair and “reasonable” are the RECIPIENTS (yet they will cry foul as quickly as the rest of us over Wall Street, benefits for illegals and big corporations, etc). See the pattern?

            Defined Contribution plans are the ONLY way the taxpayer has any hope of protection from the racketeering. THAT reality is staring us all right in the face, whether we want to see it or not.

          • Posted by Tough Love on February 7, 2016 at 9:58 pm

            Sean,

            To add ……..ANY Pension Plan (DB or DC) can be designed to be of low, medium, of high generosity. DC Plans CAN be designed to be even MORE generous than the MOST generous DB Plans in existence.

            So why do the Public Sector Unions fight DC Plans so ferociously?

            (a) because DC Plan are inherently “transparent”, and with almost all Private Sector retirement Plans being of the DC variety (i.e., 401K Plans), the “generosity” of PUBLIC Sector DC plans can very easily compared to those typically granted Private Sector taxpayers. Easy comparability is not a DESIRABLE goal of Public Sector Unions/workers who don’t want “equal”, but MORE, MUCH MORE.

            (b) Because the basic operation of a DC Plan mandates that what is “promised” TODAY is “paid-for” TODAY …. not tomorrow, or over 1, 10, 30 years, …. or never……… and paid-for by future generations of Taxpayers who derived no benefits from the services rendered.

            (c) Because (and closely tied to #2 above) by paying for today’s promises today, there is less budget money available for other things …. like giving workers raises.

            (d) And perhaps MOST IMPORTANTLY …. because there is VERY limited opportunity for our Elected Officials to trade retirement security/benefit increases for Campaign contributions and election support, because any such increases …. being of the DC variety….. must be PAID FOR in the year granted, reducing money available IN THAT YEAR for other services, and thereby pissing-off some OTHER voter-constituency.

          • Posted by S Moderation Anonymous on February 8, 2016 at 12:02 am

            $2,185,000,000

            LOL !!!

            “Reasonable estimates (using reasonable assumptions) are a necessary evil to put a reasonable COST of this thievery out there.”

            Or just pull numbers out of the ether and assume the worst.

            Nice try, no cigar.

          • Posted by Tough Love on February 8, 2016 at 1:01 am

            SMD,

            Do even try to figure it out.

            As I said before ….”It’s above your grade level”.

          • Posted by S Moderation Anonymous on February 8, 2016 at 1:41 am

            You “assumed” facts that were not even close, then mathed them up !!!

            Again!!!

            Do even try to figure it out yer own self.

            Say goodnight, Grace.

          • Posted by Tough Love on February 8, 2016 at 1:56 am

            SMD, I used assumptions based on TYPICAL non-Safety and Safety Public Sector pension formulas.

            Turns out that Oregon is atypical … because it has a Hybrid Plan (part DB and part DC) that Anon conveniently failed to disclose ……….as well as that Police participate in Social Security (also quite unusual).

            Sorry, but trying to put numbers to this Public Sector THEVIERY is VERY important …. if for no other reason than to counter the endless misstatements, gross omissions of fact, and outright lies coming from the Public Sector Unions/workers….. and since I DON’T get paid for this (and have limited time) making reasonable assumptions in estimating that theviery is a necessary evil.
            ——————

            Again, give up trying to understand the math, and stick to commenting on your field of expertise ………… “trains”.

          • Posted by S Moderation Anonymous on February 8, 2016 at 2:13 am

            Among other things, in the past you have “assumed” (vehemently) that private sector road construction workers did not receive DB pensions. You swore that NO doctor had DB pensions. You did not believe that some full career public workers had pensions below $30,000.

            Wrong.
            Wrong.
            Wrong.

            How many incorrect “educated guesses” does it take before you admit you are not the expert you claim to be?

            saepe in errore versans, numquam animi pendens

          • Posted by S Moderation Anonymous on February 8, 2016 at 2:17 am

            Goodnight

  6. Why is SMD so obsessed with NJ pensions, doesn’t CA have enough of their own pension mess for him to talk about….really

    Reply

  7. ….and in regard to the statements made that the money has always been there to fully fund the pensions under the present system….I again and again will ask, why didn’t the politicians fund it fully? Why didn’t they?? and if they chose not to fund it one must ask the reasons why it was not fully funded year after year. Why screw the very publics that are your voting block? Why not fully fund it and be done with it?

    Reply

  8. […] 29.19% the NFL plan is indeed a headache and would be severely distressed were not the NFL able to double their contributions beginning with […]

    Reply

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