Actuaries a Footnote in NJ Benefits Study

The “Non-Partisan Study Commission Asked To Think Big And Be Bold” according to their website boldly came out with their Supplemental Report on Health Benefits the day after it would make no difference to anyone not running for president.

Two of the original Commission members did not sign off on this report:

  • Carl Hess, Managing Director of The Americas for Towers Watson and former Managing Director of Towers Watson Investment business
  • Margaret Berger, Mercer, consulting actuary and Principal for the Retirement Practice of a global consulting leader in talent, health, retirement, and investments, with specific expertise in defined benefit plans, nonqualified plans and retiree medical and life insurance plans

And the only two other actuaries had nothing to do with this report according to End Note 1 on page 25:

 1 Commission Members Ethan Kra and Lawrence Sher are pension actuaries serving on the Commission as concerned citizens. They were not involved in preparing and are not responsible as actuaries for the health benefits-related cost projections set forth in this Report.

Based on the numbers included in the report and this disclaimer what these actuaries seem most concerned about is lawsuits.

From what I could make of the changes it seems as if for 2016 the State cost of health benefits would drop from $3.53 to $2.37 billion dollars by changing colors on the insurance plan and then down to $1.45 by having localities pay for the teacher part.  These savings would then go into the pension system to pay off the underfunding. How the new color scheme creates all these savings (which would also be extended to the health benefit costs of localities) is never explained in detail (ie. will the insurance people backing politicians throughout the state be taking a hit?) which leads me to believe that a random number generator could have been used (something that ASOPs are not currently endorsing).

Notable excerpts from this new report follow:

These are not new issues.  The Commission considered them a year ago when, reluctantly, it concluded full funding of all the benefits claimed under the current pension plans was no longer within the State’s means.  This is not only because of the dollar amount of funding required, but also because a State budget so burdened by employee benefits would not be able to weather a recession or permit the State to do what is necessary to promote the general welfare of its citizens.  Nothing has occurred since our 2015 Report to change this conclusion.  Instead, a year of inaction has simply made the problem worse.  (page ii)

It is possible, with modest impact to subscribers, to reallocate to pension funding over $2 billion a year currently spent by the State on employee and retiree health benefits. (page 5)

The 2016 average total cost for family health benefits coverage for a State employee has been estimated to be $30,322. “Actuarial value” is the percentage of average total cost covered by the policy. A bronze level plan under the ACA with an actuarial value of 60% would cover 60% of average total costs. State employees are covered by policies with an average actuarial value of 96%, meaning the policies cover 96% of estimated total costs which, for family coverage in 2016, is $29,109. (pages 5-6)

The total health benefits costs for New Jersey public employees for plan year (PY) 2016 are expected to be ~$ 11.8 billion, of which ~$3.7 billion would be spent by the State and ~$8.1 billion by local governments. (page 9)

Just as the proposed reforms would result in over a 30% reduction in the State’s average cost to provide coverage to active employees, employees would see the same reduction in their premium contributions. (page 12)

To make the most efficient use of available resources and take full advantage of opportunities to access federal funds, the Commission proposes that early retirees receive coverage through a private exchange. The State would provide funding through a RRA. (page 14)

Similar to the approach proposed for early retirees, coverage for Medicare-eligible retirees would be provided through a private exchange with Medicare retirees receiving funding through an RRA and having the option to purchase more extensive coverage at additional cost. (page 15)

Our 2015 Report concluded the State cannot continue to fund all of what has become a $4.6 billion annual obligation for teachers’ pension and health benefits. As shown in Exhibit 12, this results in the State funding health benefits for over 150,000 retirees who do not make premium contributions, compared to only 93,000 employees who do. No other public employer in the State has this kind of an upside-down contribution ratio. (page 17)

All that is necessary for the shift to work is for the school districts and municipalities to implement the necessary health benefit reforms. (page 18)

New Jersey has 565 municipalities and ∼600 school districts. Despite this diversity, the data suggests the proposed shift would be cost-neutral absent extraordinary circumstances in a particular community. Moreover, if such extraordinary circumstances do exist in a community, under the Commission’s proposal, the State would be limited to shifting only those expenses which could be offset by local savings, with the State retaining responsibility for any excess. (page 24)

The Supreme Court of New Jersey has never held that the existing “non-forfeitable rights” statute is constitutional, or that it grants such broad and absolute protection to benefits, particularly to benefits not yet earned. The sole purpose of section b of the proposed amendment is to concede this point to public employees prior to judicial resolution and take away any right the State might have to adjust pension benefits for employees hired before mid-2010. (page 25 End Note 6)

Only seven states, Alaska, Arizona, Hawaii, Illinois, Louisiana, Michigan and New York, extend constitutional protection to pension benefits. (page 27 End Note 18)

Contrary to the mandate of Chapter 78, some employers also may not be collecting required employee premium contributions. (page 36 End Note 81)

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Summing it up, an njspolight story inlcudes this telling quote:

Reached later in the day, officials from the New Jersey League of Municipalities, which released its own study of the commission’s initial findings last year, praised the panel for keeping lines of communication open. But they said more data is needed before a full evaluation can be conducted.

“We have been for some time trying to get the data that shows how those savings are generated,” said Michael Darcy, the organization’s executive director.

Without data actuaries can be no more than a footnote in this process.

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Finally for those of you who have read this far there is a good chance you are an actuary.  Without knowing exactly what went on with the commission I am conflicted as to whether the actuaries on the commission acted honorably by distancing themselves (to varying degrees) from this new study.  Please take the poll:

114 responses to this post.

  1. Posted by Anonymous on February 12, 2016 at 11:14 am

    There is a problem for the State in regard to employee benefits, the State of NJ as the employer of record, cannot alter teacher’s health benefits and not all of their employees benefits, to do so would violate the non discrimination clause in the pension legislation and probably the federal IRS codes governing employee compensation which includes benefits.

    Reply

    • Posted by Tough Love on February 12, 2016 at 1:08 pm

      And in WHICH Court were YOU the judge and jury ?

      Reply

      • Posted by Anonymous on February 12, 2016 at 1:24 pm

        NJ unionized public employees are governed by state employment laws and group/individual employment contracts/agreements are based on laws and contracts. It is the responsibility of each employee to read and understand their agreements. The freedoms outlined in legal documents support my rights to judge and serve on juries both formal and informal. My freedom is the same as yours.

        Reply

        • Posted by Tough Love on February 12, 2016 at 1:27 pm

          Are you a robot ?

          Reply

          • Posted by Anonymous on February 12, 2016 at 1:44 pm

            This from a shrew that repeats the same rant about “equaling better for comparable jobs”, robot, no realistic based on existing laws’. It what it is until it’s revised, consistency.

          • Posted by Tough Love on February 12, 2016 at 1:55 pm

            Anon, What does you common practice of throwing in stuff like THIS (below) add to the discussion ?

            “It is the responsibility of each employee to read and understand their agreements. The freedoms outlined in legal documents support my rights to judge and serve on juries both formal and informal. “

          • Posted by Anonymous on February 12, 2016 at 2:28 pm

            The discussion is about public pensions, benefits, unions, laws, contracts and agreements. John presents public policy issues and practices. There are misinterpretations/ misrepresentations, we look at practice, we look at laws and in the discussion/examination we look for real solutions. And your issue is?

          • Posted by Tall Talk on February 12, 2016 at 2:32 pm

            “What does you common practice of throwing in stuff like THIS (below) add to the discussion ?” – by Tough Love

            i have this exact question for you, regarding almost all of your comments…..

          • Posted by Tough Love on February 12, 2016 at 5:09 pm

            Tall Talk,

            Getting even for me for my earlier comment (which evidently you PERCEIVED as) suggesting that you left the actuarial profession not by choice, but due to the inability (or unwillingness to study sufficiently) to pass the actuarial examinations ?

          • Posted by Tall Talk on February 12, 2016 at 5:11 pm

            oh, is that what you thought, that i was getting even with you? haha. that’s funny. the same ad hominem attack from you about tests….its totally irrelevant and you wouldn’t believe me if i told you how many 10s i got, so i will say, again, is ad hominem attack the only trick up your sleeve?

        • Posted by Sean on February 12, 2016 at 2:36 pm

          Anonymous: “contracts/agreements are based on laws and contracts.”

          Ahh yes. Contracts. And what, oh wise one, do you suppose happens to “contracts” in bankruptcy court?

          From the above post: “The Commission considered them a year ago when, reluctantly, it concluded full funding of all the benefits claimed under the current pension plans was no longer within the State’s means.”

          “Nothing has occurred since our 2015 Report to change this conclusion. Instead, a year of inaction has simply made the problem worse. (page ii)”

          That’s interesting…

          “All that is necessary for the shift to work is for the school districts and municipalities to implement the necessary health benefit reforms. (page 18)”

          Yeah right.

          Can’t you see what’s coming?

          Reply

          • Posted by truthnolie on February 12, 2016 at 3:17 pm

            Time to school you again oh non-knowing one……states cannot declare bankruptcy so you’ll have to change your wishful delusions that it could ever happen.

            So….your fantasy of public workers winding up in bankruptcy court vs. NJ is a fantasy…..kind of like you ever having a morsel of an intelligent thought.

          • Posted by Anonymous on February 12, 2016 at 3:17 pm

            Sean, the State of NJ can’t use the bankruptcy laws for relief from the pension mess. So, now where are you going? The shifting of pension and benefits back to local, county government and school board can happen, probably will happen in NJ, I’m not sure about Hooville.

          • Posted by Tall Talk on February 12, 2016 at 3:22 pm

            “Sean, the State of NJ can’t use the bankruptcy laws for relief from the pension mess. So, now where are you going? The shifting of pension and benefits back to local, county government and school board can happen, probably will happen in NJ, I’m not sure about Hooville.”

            yes, and until last year, pensions could not cut benefits. then magically, they pass a bill and its ok.

            all states are corporations. corporations use bankruptcy. there is reality, then there is wishful thinking.

          • Posted by Anonymous on February 12, 2016 at 3:53 pm

            The State of NJ did not pass a law to cut pensions, can you provide the citation no.

          • Posted by Tall Talk on February 12, 2016 at 4:18 pm

            its so frustrating when people don’t actually know how to read…oh well, i will clarify for the not so smart….

            the u.s. congress passed a bill to allow pension cuts to multi employer plans that are in trouble….you didn’t hear about that?

            the u.s. also is a corporation, just as the states are.

            a corporation is a corporation is a corporation. i care not what dress it has on. they might say benefits are granted but if that interferes with the corporation making a profit, it will not continue. a corporation’s charter is to make money for the shareholders. that is why there are budgets that the public never sees. the money is taken off the top.

            there are owners of all corporations, all of them. and you would be surprised who they are. its not “the people”.

          • Posted by Anonymous on February 12, 2016 at 4:53 pm

            The federal law cutting pensions was for private multiplayer plans, that qualify also for relief under the Pension Guaranty Fund. Public pensions do not qualify for either.

          • Posted by Tall Talk on February 12, 2016 at 4:59 pm

            sure, keep telling yourself that, lets see if all these pensions actually get paid….right, public pensions are safe, ok sure……

          • Posted by Tough Love on February 12, 2016 at 5:23 pm

            Truthnolie, If the pensions and retiree healthcare benefits of Nj’s teachers become a legal obligation of NJ’s MUNICIPALITIES, they can indeed be reduced in a MUNICIPAL Bankruptcy should the locality be so financially squeezed that doing o becomes the best of it’s bad options.

          • Posted by Tough Love on February 12, 2016 at 5:30 pm

            Quoting Tall Talk …. “the u.s. congress passed a bill to allow pension cuts to multi employer plans that are in trouble…”

            The (ERISA-Covered) multi-emloyer plans have absolutely NOTHING in common with Public Sector pensions ….. nor are the 2 governed by the same entities or rules.
            —————————————————————-
            Quoting Tall Talk …..”the u.s. also is a corporation, just as the states are.”

            Really ? Please cite evidence (a link ?) to that effect.

          • Posted by Tall Talk on February 12, 2016 at 5:39 pm

            THE ORGANIC ACT of 1871

            from Wiki:

            “Formally An Act to provide a Government for the District of Columbia, is an Act of Congress that repealed the individual charters of the cities of Washington and Georgetown and established a new territorial government for the whole District of Columbia. Though Congress repealed the territorial government in 1874, the legislation was the first to create a single municipal government for the federal district”

            The new government consisted of an appointed governor and 11-member council, a locally elected 22-member assembly, and a board of public works charged with modernizing the city.[7] The Seal of the District of Columbia features the date 1871, recognizing the year the District’s government was incorporated

            ….that created the (All Capital Letters) “UNITED STATES OF AMERICA” thereby creating a private U.S. corporation which is its own city-state of its own country with its:

            Own mayor, police force, constitution, post office pays no taxes and is not beholden to any other country. Just like the City of London and the Vatican
            The UNITED STATES OF AMERICA, in all capitals, represents a fictitious corporation. Your birth certificate, drivers license, SSN, bank statements, are all written in capital letters, which means you have registered, submitted and/or applied to be a part of the UNITED STATES OF AMERICA, corporation as a fictitious character.
            The UNITED STATES OF AMERICA is located in the District of Columbia. What is the District of Columbia and what are the other Districts? (Vatican, City of London)
            The Owners of the private corporation, THE UNITED STATES OF AMERICA, are the City of London and the Vatican.
            When we pay taxes we “voluntarily” submit our tax returns to Washington, D.C. yet pay our taxes to the UNITED STATES TREASURY; A private corporation registered in Puerto Rico! (Source)
            Henry Paulson, Timothy Geithner, and every treasury secretary since 1913 are appointed but not as cabinet members. The Secretary of the Treasury is as a corporate “governor” of what is known as “The Fund” or “The Bank” and several other international organizations. The U.S. Secretary of the Treasury is not sworn in and speaks no oath of loyalty or defense of the United States. The obligation of this secretary (governor) is to the International Monetary Fund, and World Bank. All employees of the IMF governor are paid by the Fund directly, or out of funds supplied to the Governor of the Fund specifically for that purpose. The IMF governor is not paid by the US government as he/she is not employed by that government.
            The current President is the CEO of the foreign corporation, THE UNITED STATES OF AMERICA, named Barrack Hussein Obama.
            The United States of America is written in small cap letters and represents the original constitution of America. One must not “join” the U.S. corporation if they wish to have the rights of “Free” people but by registering, submitting or applying, we are unwittingly joining the U.S corporation, which for most of us starts at our birth (see below).

          • However, the state can repudiate the unlawful debt

          • Posted by Sean on February 12, 2016 at 7:43 pm

            It’s funny having the likes of TruthNolie and Anonymous “schooling” anyone. I was wondering if they would connect the dots. Obviously not. But it looks like TruthNolie is back to his pretending to be the big stick again (yeah, I remember the BIG sh*t you used to talk when you were posting on the other blogs…)

            I am well aware about STATES and bankruptcy, you half wits. Read the end of my post: “All that is necessary for the shift to work is for the school districts and municipalities to implement the necessary health benefit reforms. (page 18)”

            On top of that, the state can, as MJ put it, REPUDIATE unlawful debt. Besides, do you really truly believe that when the squeeze gets tighter, that these “friends” of yours in office won’t just make new laws to satisfy their needs (as Tall Talk referred to earlier)? And you talk about us being on Fantasy Island.
            Until the money hits YOUR bank account, it ain’t yours. Good

            It’s going to be fun watching you dimwits “adjust” to the changing rhetoric of the “friends” you’ve been counting on.

          • Posted by truthnolie on February 13, 2016 at 2:22 am

            Hahaha……another jealous private sector slug full of rage & envy…..

            Yeah….I’m so dim witted that I retired at 50 with a better than excellent pension & free benefits (AND got my full vacation/sick time payout (non-capped)) while you’ll probably be working until you’re old and gray, fighting traffic, weather and trudging off to slave at a job everyday and wasting away in a cubicle…..who’s the dim wit?? LMFAO!!!!

            What’s make you even further down the gene pool is that you believe that judges, politicians, etc. who also all benefit from the system would cut their own throats……that and the fact that with a election coming up for the next Gov. you are too obtuse to get that democrat politicians (Sweeney, et al) would not do anything to piss off public workers (and their VOTING family members) who are already pissed off even further and jeopardize not getting voted in or getting voted out….in fact…they’re gonna be looking to get back into the good graces of the unions and looking for support…….don’t hate the players…hate the game.

            LOL

          • Posted by Tough Love on February 13, 2016 at 2:39 am

            Truthnolie,

            There is no denying that your Plans are currently woefully short of assets sufficient to pay for anywhere near all you have been “promised”, and one recession away from collapse.

            Your confidence is based on a wish and a prayer.

          • Posted by truthnolie on February 13, 2016 at 3:55 am

            Not really…..I retired from a very affluent municipality in the LOCAL part of the system (not the STATE part). Health benefits are also via them (JIF plan) and NOT through the SHBP.

            So…..if they do go under it’ll be after pretty much after everywhere else in the state does….can’t see the feds allowing it ever get to that point.

          • Posted by Sean on February 13, 2016 at 11:52 am

            Awww, did I hit a nerve, Truthnolie? Poor little man, desperately waiving your arms in the air, trying to let the world know how “well off” you are. Maybe if you say it loud enough, long enough, you can drown out all that’s going on around you. Yeah, because the judges and politicians will never be able to protect themselves without also protecting you. That could never happen. And keep telling yourself that any of us who oppose people like you are just poor, jealous little haters. It will help you to avoid the realization that your legacy in life is that you jumped on a gravy train and spent your life gaming the system, all the while, stealing from the poor to do so. Unfortunately for you, judgement day is coming.
            You can flex your little beer muscles all day long, amigo, but the fact that you are on this blog tells me a different story.

          • Posted by Tough Love on February 13, 2016 at 1:04 pm

            Truthnolie,

            Referencing something WORSE (the State Plan funding ratios) does not make the LOCAL Plans better ….. and the LOCAL PFRS is indeed in VERY poor condition.

            https://burypensions.wordpress.com/2015/12/23/gasb68-vs-politicians-pension-numbers-in-nj/

            While NJ’s “official” funding ratio (i.e., on the super-rosy “official” assumption/methodology basis) is 76.54%, under the new GASB68 basis it’s 62.41% and even that is based on the assumption that Local PFRS assets will continue to earn 7.9% forever.

            Do you think that’s a reasonable assumption today? In fact, if your Plan were valued using TODAY’s market value, it’s funding ratio would certainly be in the 50s. And, if valued using the IDENTICAL assumptions/methodology that the US Gov’t REQUIRES of Private Sector Plans, it would likely be in the mid 40s.

            To put that in perspective, for Private Sector Plans (where YOUR Plan’s funding ration is likely in the mid40s) a funding ratio below 60% s considered SO POOR that the Plan is barred from granting further pension accruals.

            Yea, you’ve got the taxpayers as a backstop (at least conceptually), but everything has limitations, and the Taxpayers’ patience for the insatiable greed of Public Sector workers is rapidly coming to an end. Given the option, there is no doubt that they would let your grossly excessive pension fail with material reductions to participants rather than back-fill the asset shortfall.

          • Posted by truthnolie on February 13, 2016 at 9:11 pm

            @ Sean

            Yeah….it sounds like YOU’RE the one who touched a nerve……..hahaha.

            I’m so deeply wounded that I may have to challenge you to an internet duel…..don’t worry, you can do it right from that comfortable spot in your parent’s basement. You can choose either the keyboard or voice to text for the battle….LMAO!

            Oh…and if you’re up to it let’s plan it soon…..spring is coming and I’ll be out on that boat you and other NJ taxpayers bought for me.

            I promise to think of you and your scathing retorts while I’m out enjoying myself doing whatever I want while you’re stuck in that cubicle chewing pencils and watching the clock regretting your life……NOT!!!

          • Posted by Sean on February 13, 2016 at 10:26 pm

            Oh! Ba Ba BOOM! Truthnolie hits the canvas! Jim, I don’t know if he’s going to recover. Well Bob, looks like Truthnolie will beat the count, but he is out on his feet. He’s in bad shape. Yeah Jim, he sure is. He’s pulling out his best defense: the boat story, but will it work? I don’t know Bob, we’ll have to wait it out. I think he’s still groggy; he just tried the “I’ll be on my boat that you and other NJ taxpayers bought for me” attack, but Sean doesn’t even live in New Jersey! Oh man, he is really hanging by a thread, Bob. Yeah Jim, he really is, and Sean smells blood. Whenever he gets the boat defense, he knows Nolie is in trouble. Oh, smack. Nolie just hit Sean right upside the head with the parent’s basement attack! Oh! And he’s pouring it on now Jim. He’s got Sean on the ropes with the cubicle chewing pencils and watching the clock combination!

          • Posted by Tough Love on February 13, 2016 at 11:31 pm

            Sean …. that was hilarious !

            Truthnolie …. how come you didn’t go for the big-bucks Gold Ring … the tax-free Disability Retirement (phoneying it up seems pretty easy in NJ)?

          • Posted by Sean on February 13, 2016 at 11:58 pm

            Ha ha. Thanks! You know, I remember reading some of his posts a few months back on some other blogs (don’t remember where), and he and this other guy (another one stricken with two inch penis syndrome) would always try that crap. It got to the point where I would read someone’s post and think, “Well, any time now, this Truthnolie clown will be coming onboard to tell us all about his boat.” Sure enough, just like clockwork, he would. Some of his recent posts seemed to be toned down quite a bit (I guess someone else must have smacked him down), but either you or I, or someone else tripped his trigger, and he had to pull his little boat out again (pun intended). : )

          • Posted by truthnolie on February 14, 2016 at 12:46 pm

            Wait…..you don’t even live in NJ and you’re on here day after day bitching and moaning about NJ pensions……ROFLMAO!!…..that’s some interesting life you got there champ (and I can see why you and Tough Love get along)…..hahaha.

            Ahh…jealousy, such a subject that touches the nerves of the simple minded who can’t stand the fact that someone made better life choices than them and is benefiting handsomely for it….such is life.

            BTW….none of the females in your life you’ve had intimate relationships with (and that’s probably only your mother & sister(s)) would be more than happy with the extra inch more than they got from you. HAHAHAHA!!!

          • Posted by Anonymous on February 14, 2016 at 3:21 pm

            LOL Truth!!!

            Sean – you really need to give up and admit defeat at this point. He has beaten you at every turn and gotten you back with better zingers than you can overcome. By the way, you boxing description was stupid and a non starter, only someone dour and humorless would think it was witty – see ToughLove

            Best to remain silent and leave with your tail between your legs. Perhaps you and ToughLove can get together and toast youre hatred of public workers while massaging each others egos and telling each other how right you both are and how you two will inherit the earth- having a searing hot poker in the eye while having a root canal performed by a blind drunk third world part time dentist sounds more entertaining than litsening to both of you.

          • Posted by Sean on February 14, 2016 at 6:34 pm

            Ahhhh. It’s like feeding the little birds. Just put a little feed out for them and watch them come flying in. Just too easy…

  2. Posted by dentss dunnigan on February 12, 2016 at 11:20 am

    Am I assuming that 96% of medical cost are covered in employes health benefits …I pay more that 50% as do most I’m sure asking taxpayers to pay for more than even they receive is a bit much ……..”State employees are covered by policies with an average actuarial value of 96%, meaning the policies cover 96% of estimated total costs which, for family coverage in 2016, is $29,109. (pages 5

    Reply

    • Posted by Tough Love on February 12, 2016 at 1:12 pm

      Yup, you didn’t misread that. And the Commission (which still lacks to stomach to truly EQUALIZE Private/Public Sector health benefit subsidies) clearly staets such …. that the proposed health benefits will remain less costly to Public Sector workers.

      There is ZERO justification for this….. ZERO.

      Reply

      • Posted by Anonymous on February 12, 2016 at 1:27 pm

        Collective bargaining in public sector is the reason public employees have benefits.

        Reply

        • Posted by Tough Love on February 12, 2016 at 2:01 pm

          And the BUYING of those (our Elected Officials …. with campaign contributions and election support) who grant such benefits is the REASON why PUBLIC Sector Benefits are so much greater than those typically granted by Private Sector workers to THEIR employees.

          Being granted benefits IS NOT the problem. Being granted unnecessarily and unfairly high benefits with the cost being foisted upon taxpayers, IS the problem.

          And evidently, the Commission still hasn’t gotten the message ….. that such benefits SHOULD BE and NEED TO BE no greater than those typically granted comparable Private Sector workers.

          Reply

          • Posted by Tall Talk on February 12, 2016 at 2:11 pm

            when did the word “granted” replace the word “vested”? these are 2 very different concepts.

          • Posted by Anonymous on February 12, 2016 at 2:30 pm

            Collectively bargained benefits.

          • Posted by Tough Love on February 12, 2016 at 5:38 pm

            Tall Talk, Not sure what you mean.

            When I stated that NJ’s Elected Official “grant” the pension/benefits that NJ’s workers receive, I meant that they choose the level of pension/benefit generosity ……. which I believe to be grossly excessive (relative to what is typically “granted” comparable Private Sector workers by their employers). I wasn’t addressing “vesting” issues.

          • Posted by Tall Talk on February 12, 2016 at 5:45 pm

            i am trying to give you insight into the language, how it is relevant…the level of generousity that is fought over is irrelevent if the benefits are granted….i would not be worried about the level of generousity. i would be worried about the word grant. ok, do you understand?

        • Posted by Tall Talk on February 12, 2016 at 2:34 pm

          the fact that granted has replaced vested should be extremely alarming. granted means they can be ungranted. vesting is permanent.

          Reply

  3. Posted by Anonymous on February 12, 2016 at 11:26 am

    Interesting that CC’ s pension commission finds relief for the State of NJ healthcare woes through the Affordable Care Act, aka, Obamacare, say what. The State has group plan contracts for healthcare with insurers, the question is why for decades they haven’t been able to negotiate a more affordable group premium cost, I suspect the political contributions and other perk eliminated that whole greater good, in the best interest of taxpayers and employees. Things get messy and mottled when campaigns need to be financed and relatives need jobs.

    Reply

  4. Posted by Anonymous on February 12, 2016 at 11:39 am

    The report also proposes to enroll early retirees and Medicare eligible retires under the Affordable Care Act, aka Obamacare expanded Medicare provisions through the exchanges, which CC for political reasons refuse to setup,which direction did that shot off foot land oh I know “foot in mouth”. So now our own wounded political warrior returns to request disaster and relief from the Obama Administration, irony. Hat in hand, tail dragging humility for CC and company.

    Reply

  5. Posted by Anonymous on February 12, 2016 at 11:55 am

    In regard to benefits for public employees under collective bargaining agreements the State of NJ is the employer of record for group health and life insurance policies, the State pays the largest portion of the group premium, so I am nit clear how this clear employer action does nit show intent on the States part to uphold ” unforfeitabiliy”protections for health benefits under the State Constitution, The Constutiontn may not state health benefits, but the labor agreements and group premium payments support intent and set precedent for decades. The best interest of the employee prevails because the State as the employer chose to provide health insurance through a state sponsored group plan for eligible public employees.

    Reply

    • Posted by Tough Love on February 12, 2016 at 1:17 pm

      Quoting ,,,,, “The Constutiontn may not state health benefits, but the labor agreements and group premium payments support intent and set precedent for decades. ”

      And the Courts and the forum to sorts …UNCLEAR THING … such as this out.
      ——————-

      Quoting …. “The best interest of the employee prevails because the State as the employer chose to provide health insurance through a state sponsored group plan for eligible public employees.”

      Why…. because YOU say so ?

      Reply

      • Posted by Anonymous on February 12, 2016 at 1:38 pm

        Every stakeholder has a right and responsibility to raise questions about “intent” and the impact of past practice. The State of NJ is the employer, they are responsible for benefits. The judges are employees they benefit from group benefits sponsored by the State of NJ. The State of NJ negotiates the group health insurance policies and pays the premiums. It’s group thing TL, its in the best interest of the group, for the greater good. The State of NJ is an employer and as such must abide by state and federal laws governing employment. Not because I say so, it’s what the laws support.

        Reply

        • Posted by Tough Love on February 12, 2016 at 2:04 pm

          Quoting …. “The judges are employees they benefit from group benefits sponsored by the State of NJ. ”

          Yup, and being participants in such Plans, certainly presents a HUGE conflict of interest in truly fixing this injustice.

          Reply

          • Posted by Anonymous on February 12, 2016 at 2:43 pm

            Where a conflict exist at the state level the matter can be transferred to the federal court. The State of NJ still be the employer of record.

          • Posted by Tough Love on February 12, 2016 at 5:41 pm

            That’s what I thought, but it appears (from discussion of such conflicts last year) that when there is no other higher STATE court, and it is a STATE issue, the STATE judges can indeed adjudicate maters which impact THEM financially.

        • Posted by Tall Talk on February 12, 2016 at 5:49 pm

          look up whats been happening in san bernardino california for the last 5 or 6 years….its all coming down to these hugh fights between pension funds (100% paid) and hedge funds (10 cents on the dollar) in the bankruptcies. so far, in california, the hedge funds are losing. but there was a recent reversal of some small thing, which might lead to a more “fair” settlement (the hedge funds’ language). its facinating and scary all at the same time.

          Reply

          • Posted by Sean on February 12, 2016 at 9:13 pm

            Yes, and I would also point out that SB, in caving into the unions (and thus, screwing over investors), was very short-sighted (imagine that: politicians being short-sighted and taking the path of least resistance). SO, in the future, how easily do you think they’ll be able to borrow money from the people they already burned once? I also watch Detroit, SB, and others who have been through bankruptcy, and they STILL have not made enough financial progress to make anyone believe that they won’t wind up going down the toilet again. NONE of them are on solid footing.

          • Posted by Sean on February 12, 2016 at 9:21 pm

            Also, with the door open, and a federal judge openly declaring that CalPERS was a “bully with a glass jaw,” all that has to happen is for ONE city to gather the cajones to say “no” to unuion demands. SB chickened out, but what are the odds that ALL of them will chicken out? And once ONE of them does it, it will be like an empty dance floor when someone finally goes to the center and starts dancing. Before you know it, everyone is out there.

            Public workers are counting on SO many things staying in place that are dangling by a thread. They just keep believing that words on paper are going to solve all the problems.

  6. i left the actuarial profession in the early 1990s when i was told by the managing pension actuary that we were “prostitutes”, we do what they pay us to do.

    uh, no that’s not me. i left that lucrative, high paying career immediately after that, without a net. it ruined my temporal life. but i’m way better off being a poor, honest person than a high paid whore.

    email me if you would like a guest blogger. i have a lot of insight as i worked on the enron debacle, which i called as a pump and dump, at the time. my observation is what provoked the comment that “actuaries are prostitutes” the managing partner at the time.

    Reply

    • Posted by Anonymous on February 12, 2016 at 12:43 pm

      Love to hear more, but how? Quick question, was the managing partner Tough Love or Skanky Woman?

      Reply

      • Posted by Tall Talk on February 12, 2016 at 2:04 pm

        the managing partner that informed me that actuaries are prostitutes, this is true. i want to name names at some point without incurring risk to others, such as the owner of this blog.

        Reply

    • Posted by Tough Love on February 12, 2016 at 1:23 pm

      Might your inability (or willingness to put in the substantial effort) to pass the actuarial exams (to be fully credentialed) contributed to your decision to leave the actuarial profession ?

      Reply

      • Posted by Anonymous on February 12, 2016 at 1:41 pm

        TL you write with such knowledge about everything state your credentials and test scores, silly you!!!!

        Reply

      • Posted by Tall Talk on February 12, 2016 at 2:02 pm

        lol, personal attacks, huh? pretty low.

        Reply

        • Posted by Tough Love on February 12, 2016 at 2:09 pm

          Wasn’t intended as such. Just a question based on observed experience as to why those who choose to leave the actuarial profession typically do so..

          Reply

          • Posted by Tall Talk on February 12, 2016 at 2:12 pm

            maybe you should think things through prior to stating personal attacks.

          • Posted by Tall Talk on February 12, 2016 at 2:17 pm

            ad hominem attacks are used by those who have no ability to reason. its a logical fallacy, the ad hominem attack.

            regardless of whether or not i passed exams, what i said is the truth. you are trying to discredit me by personally attacking me over something that has nothing to do with my comment.

            this is how people without reasoning abilty “win” debates. its pathetic really.

          • Posted by Tough Love on February 12, 2016 at 5:45 pm

            People w/o reasoning ability don’t win debates….. in the minds of readers who matter.

        • Posted by Anonymous on February 12, 2016 at 2:31 pm

          Low like your test scores?

          Reply

    • Posted by Sean on February 12, 2016 at 9:30 pm

      I think there’s a lot to be learned from Enron, Allied Capital, Lehman Brothers, etc. No one here thinks so, because they will stubbornly hold to the belief that “we got the law on our side, nuttin’ can happen to us.” But they are wrong. These companies had shady balance sheets, and used “complexity” as a ruse to hide the simple truth: They did not have the money they claimed to have. Sooner or later, as the pressure kept mounting, the truth came out, and every one of these pretenders started to unravel. IT IS NO DIFFERENT WITH PUBLIC SECTOR PENSIONS. Their “protections” are simply hurdles that will be altered, cleared, or simply ignored as the pressure of NOT HAVING THE MONEY gets stronger and stronger.

      Reply

      • Posted by Anonymous on February 12, 2016 at 9:39 pm

        Oh you mean like the Federal bailout (ie taxpayer $) of the so called “to big to fail” financial institutions for the greater good (LOL). More of the same old Wall Street 1% BS!

        Reply

        • Posted by Sean on February 12, 2016 at 10:00 pm

          uh huh. Right.

          “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

  7. Posted by Tough Love on February 12, 2016 at 12:28 pm

    Quoting from this blog-article ….

    “How the new color scheme creates all these savings (which would also be extended to the health benefit costs of localities) is never explained in detail (ie. will the insurance people backing politicians throughout the state be taking a hit?)”

    I too wondered if the substantial savings NOT coming from a cost shift (from employer-taxpayers to the employees) was really achievable.

    If achievable, it will likely come from 3 sources …. from reduction broker commissions (MINOR), from the insurance companies via lower priced & profitable products (MODEST), and via lower provider payments (MAJOR) via new and cheaper “network” arrangements.

    Reply

    • Posted by Anonymous on February 12, 2016 at 1:50 pm

      You would think that an employer with 700k employees and retirees could negotiate an excellent health premium payment from multiply providers for group plans, the premium payments being long-term.

      Reply

      • Posted by Tough Love on February 12, 2016 at 2:17 pm

        Long term ?

        With VERY few exceptions (and those from many years ago) Medical premiums are (as far as I know) ALWAYS reviewed and (if necessary) adjusted annually based on developing claims experience and changing employee demographics.

        Reply

        • Posted by Tall Talk on February 12, 2016 at 2:21 pm

          for 30 years, the problem with medical benefits promises are 1) the costs are escalating more than everything else 2) they are not covered by the pbgc (not insured) 3) people live sicker for longer

          this discussion is more akin to moving broccoli around a plate. lol the problems are huge, much larger than the pension problem.

          Reply

          • Posted by Tough Love on February 12, 2016 at 6:01 pm

            Quoting Tall Talk …..

            “the problem with medical benefits promises are …………. 2) they are not covered by the pbgc (not insured) ”

            Private Sector Pension Plan sponsors are already overwhelmed with funding pensions …… whose costs are MUCH more stable and predictable than what Medical Care costs might be 5, 10, 20, 30 years from today (given the unknown advances/costs of medical care treatment options, or the advent of new diseases ala AIDS).

            The US gov’t walks a fine line in ENCOURAGING voluntary creation of pensions in the Private Sector and adding to pension costs encourages Private Firms to end them (or not introduce them at all). Even suggesting the added cost to private Sector firms of insuring Medical Care benefits (via a PBGC-like arrangement) would like make MANY firms drop coverage COMPLETELY and shift to Health Savings Accounts with a modest employer contribution ….. a far less valuable benefit to their employees (especially the those with pre-existing conditions).

            Definite NOT a good idea.

          • Posted by Tall Talk on February 12, 2016 at 7:27 pm

            was anyone proposing something or was it just an observation of the inherent risks of future medical obligations?

            i usually am making a conceptual point rather than arguing….just fyi….

        • Posted by Anonymous on February 12, 2016 at 2:35 pm

          But it’s still a 700k+ group customer base, that should result in an excellent package of group health insurance.

          Reply

  8. “This is not only because of the dollar amount of funding required, but also because a State budget so burdened by employee benefits would not be able to weather a recession or permit the State to do what is necessary to promote the general welfare of its citizens.”

    I wonder what the standard for this is. What NYC went through in the 1970s, while paying its debts and pensions even as the infrastructure collapsed, 1 million people and half a million jobs fled, and the poor were left to die in the streets?

    Most of New Jersey is a long way from that.

    Reply

    • Posted by Tough Love on February 12, 2016 at 2:19 pm

      “Bad” is relative and fungible concept.

      Reply

      • Posted by Tall Talk on February 12, 2016 at 2:25 pm

        are you trying to make a relevant point? if so, please explain further how your response pertains to the comment by larry littlefield. i’m not getting it. please do tell.

        Reply

        • Posted by Tough Love on February 12, 2016 at 6:09 pm

          What I meant was that ……….” poor were left to die in NYC streets” is much “bader” than NJ’s problems……….. and what constitutes “bad” differs over time and from place to place. E,g., I’m certain there are 3-rd world cities where the conditions in which even the wealthiest residents live are far worst (“bad”) than the worst crime-ridden slums in the US. E.g., It’s all “relative and fungible”.

          Reply

  9. Posted by dentss dunnigan on February 12, 2016 at 3:04 pm

    the more that leave the higher our taxes will go …..More than two million people left New Jersey between 2005 and 2014, taking billions of dollars in income and economic activity with them, according to a state business group that blames high taxes for the exodus.

    The Business and Industry Association’s new report said so-called outmigration over a 10-year span cost the state $18 billion in net adjusted gross income, 75,000 jobs, $11.4 billion in economic activity, $4.2 billion in labor income and $8.4 billion in household spending.

    “This outmigration of New Jersey residents has had a substantial and continuing negative impact on the state’s economy,” the report said. “When New Jerseyans leave the state they not only take their income with them, but they take income taxes, sales taxes, property taxes and purchasing power with them as well.”

    Reply

    • Posted by Tall Talk on February 12, 2016 at 3:11 pm

      harry dent has a book called the demographic cliff that is really good.

      Reply

    • Posted by Anonymous on February 12, 2016 at 3:30 pm

      ” People rarely move to lower their state income taxes. Other factors, such as job opportunities, family considerations, climate, and housing costs, are much more decisive.”

      ” Income migration analyses ignore that the vast majority of people can’t take their income with them to a new state because they work for someone else. When people leave a state, they usually also leave their job. The income they made in that job then typically goes to the person who gets that job next; it does not leave the state.”

      http://www.cbpp.org/files/5-8-14sfp.pdf

      Reply

    • @dentss Not only are people physically leaving NJ but those who are still here and can afford to are investing money outside of NJ into other states with better business and real estate opportunities and way lower taxes and way less burdensome and expensive regulations……for example myself and two other purchased investment properties at the SC beach. Bought 500Kk houses on beach block, 5 bedrooms, pool, taxes?? 2500.00 per year Try that in NJ No thanks

      Reply

      • Posted by Anonymous on February 12, 2016 at 7:42 pm

        Yup showing your economic colors hey!

        Reply

        • Yup I am showing my economic colors,, it all comes down to economics silly!
          Anyone who has money to invest is not doing so in NJ unless one is part of the political insider group of which I have no desire to do business with corrupt, immoral, short sighted and inept people. Would love to invest in NJ but way way too risky especially with being held hostage by real estate taxes. No thanks

          Reply

      • Posted by dentss dunnigan on February 13, 2016 at 3:55 pm

        I’ve been looking in Rehoboth Beach …housing is pricy but taxes are so low I just shake my head ..on a million dollar home beachfront taxes $1,100 jersey that would be over 30K easy ….but then again NJ has a great gov …..LOL

        Reply

        • Posted by Tough Love on February 13, 2016 at 4:16 pm

          Rehoboth Beach is beautiful …. have spent some summer weeks there.

          ALL of Delaware’s taxes are very low, guessing they make up for it via just about every Us Corp. being technically “headquartered” there.

          If you’re a visitor, just watch out for overstaying the parking meters. The metered parking is expensive, the fines are higher, and they’ll get you within 1 minute of overstaying your meter.

          Reply

    • Posted by PatB on February 12, 2016 at 6:56 pm

      No coincidence that both the outmigration and health care cost reports were released at the same time. Look for lots of references to them in CC’s budget speech aimed at scaring the populace.

      Reply

  10. The health insurance companies will not loose money, the public employees will be required to pay more of their own money into a step down plan with higher co pays, etc. It seems the health care costs will be addressed first and then the pensions if it is not already too late to reform anything

    Reply

    • Posted by Anonymous on February 12, 2016 at 7:44 pm

      No of course they won’t, too strong ($$$) of a lobbyist group for that to happen. It’s one big racket, providers, facilities, and insurers are all in bed together with the politicians…..

      Reply

      • Posted by Sean on February 12, 2016 at 11:47 pm

        “No of course they won’t, too strong ($$$) of a lobbyist group for that to happen. It’s one big racket, providers, facilities, and insurers are all in bed together with the politicians…”

        Kinda like public sector unions, aren’t they?

        Reply

        • Posted by Anonymous on February 13, 2016 at 3:02 pm

          Yes and most if not all major private sectors, health care, insurance, banking, investment, labor etc. The list goes on and on, so are you saying we should blow up (figuratively speaking) our current system, reset and start over? Or just pick and choose depending on respective self interests?

          Reply

          • Posted by Sean on February 13, 2016 at 4:14 pm

            I agree with you 100%, Anonymous. While this particular blog is devoted to the subject of public sector pensions, and therefore I limit my comments to such, I think you hit the nail on the head about special interests. Yes, I think blowing them all up (figuratively speaking) and resetting to zero would be wonderful. Won’t happen, of course, but it would be wonderful. One of the distasteful things about forums like this one is that, if you are in opposition, you are a wall street guy, a 1%er, and a hater of working people. I get it, but it is 100% false, at least for me personally. I think special interest groups, ALL of them, are bankrupting us as a nation, both morally and financially. Tell people that ethanol is a waste, and that we shouldn’t plow any more money into it, and you piss off the farmers. Try to dump the tax code (which, as one senator put it, is nothing more than a book of favors to insiders), and you will have the accounting industry shut down the idea. That’s another group: the big 4 accounting firms. They are not accountants, they are accomplices. It used to be the big 6, but two of them got caught, and crashed and burned. Good riddance. Ernst and Young aided and abetted Lehman Brothers in perpetrating the largest fraud upon working people in history (so far), just as Arthur Anderson did with Enron a decade earlier. So, for what it’s worth, I am against any and all special interest groups that obtain an inside lane to scoop money away from taxpayers and enrich themselves beyond what is fair, rational, and reasonable. I am not against pensions at all. I just see the excesses and abuses piling up at such a rate that, without some very real, and yes, painful changes, collapse will be imminent. The irony of all of this, is that the very thing that prohibits the meaningful change that could ultimately save the pensions, is the “protections” the unions have systematically put in place. With no one willing to budge (in a truly meaningful way), it doesn’t look good, and all the “legislation” in the world won’t save them.

          • Posted by dentss dunnigan on February 14, 2016 at 12:06 pm

            Well said Sean …..

          • Posted by Anonymous on February 14, 2016 at 12:29 pm

            As the ANNON Sean’s post replied to I to agree.

            Here’s the fly in the ointment;
            Public’s have their position cemented with the Unions/Politicians – by default, it’s the way the system’s set up.

            Question is which of the “anti-publics” posting here fall into the other “special interest” groups each with its on justified (real or perceived) existence.

            In space change knows no boundaries. On earth gravity pulls us all into our own self interested corners!

          • Posted by Sean on February 14, 2016 at 6:55 pm

            You are very accurate in your assessment of special interest groups. If there were blogs for them, how many of us on this blog would end up on the “other” side, for or against? Interesting thought. I know, for me, I have no affiliation’s with any group, nor do I want any.

      • It is all a racket and that’s why the insurance companies don’t care who pays the premiums. Step down plans, higher co-pays, higher co-insurance, higher deductibles, more denied services, etc……lots more for the insurance companies to keep as no one believes that the insurance companies will take a hit………..

        Reply

  11. Posted by Anonymous on February 12, 2016 at 6:21 pm

    So Tall Talk does the “Organic Act of 1871 support a democratic socialist as commander and chief in Washington DC, New World Order/Illuminate Red Fig from Canada transformation?

    Reply

    • Posted by Anonymous on February 12, 2016 at 7:11 pm

      “red fog”.or a 2014 renounce your Canadian citizenship Texas, Cuban Republican might be preferred. Things like this “appear” normal when history, government and civics is deminished in the curriculum. Isn’t Canada some kinda democratic socialist government?

      Reply

    • Posted by Tall Talk on February 12, 2016 at 7:25 pm

      are you mocking me? ok, whatever.

      Reply

      • Posted by Anonymous on February 12, 2016 at 7:52 pm

        Get use to it, not much honest factual substance here – except from the chosen few who THINK they’re more knowledgeable then the rest!

        Reply

      • Posted by Anonymous on February 13, 2016 at 11:10 am

        No Tall Talk, the campaign to the White House has two democratic socialists seeking to be the US Commander and Chief one homegrown from Vermont by way of Brooklyn running as a Democrat and the other democratic socialist who renounced his Canadian citizenship in 2014 running as a Republican. I was just wondering if the Organic Act of 1871 that establishes the United State’s of America Corp. supports this curious political scenario currently unfolding in presidential politics. Socialist/communist, New world order, one world government, illuminati pursuit jumps from books to the American political scene. Without a challenge from no place, silence.

        Reply

        • Posted by Tough Love on February 13, 2016 at 1:09 pm

          FYI, it’s ….. Commander In Chief

          Reply

          • Posted by Anonymous on February 13, 2016 at 3:09 pm

            Ok so Commander in Chief of the new Democratic Socialist Tea Party Democracy, that supports the Canadian Keystone Pipeline. When Ted Cruz’ s Cuban Castro supporter dad left Cuba for Canada did he join the columnist party or the socialist party? I wonder what those family discussions were like, just thinking about a Cruz Administration, back to the matter at hand pensions.

  12. Posted by Anonymous on February 12, 2016 at 8:07 pm

    Just another useless opinion on where some common ground might result in compromise reforms:

    Health benefits remains self administered by the State with a switch to a baseline gold HMO.

    Retiree health benefits premium share to mirror amounts negotiated for active members.

    Future pension accrual reduced significantly (~40%) with one time choice to switch to cash balance plan.

    No one, here and elsewhere, will like it because the conservatives say it doesn’t go far enough and the liberals say it goes too far,. That to me, being middle of the road, says it’s a reasonable compromise.

    No reason to a agree or disagree, as I started off by saying, just another useless opinion.

    Reply

    • Posted by Anonymous on February 14, 2016 at 2:39 pm

      “If you can’t eat their food, drink their booze, screw their women, take their money and then vote against them you’ve got no business being up here.”

      “Big Daddy” Jesse Unruh

      “The broadest classification of political donors separates them into business, labor, or ideological interests. Whatever slice you look at, business interests dominate, with an overall advantage over organized labor of about 15-to-1.”

      opensecrets.org

      Reply

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