Blurry Choice to Fix NJ’s Pension Crisis

Thomas Byrne is believable when he starts his nj.com opinion piece with:

I’m watching the state pension fund melt as the stock market drops……The fund balances are declining for two reasons. First, stock markets here and abroad have been bad for nearly a year. Second, our cash flow is negative as over $9 billion in annual benefits dwarf about $3 billion in contributions from the state and its municipalities.

since he is the Chair of the State Investment Council and that fund was officially at $71.69 billion as of 12/31/15 though, considering all the ‘alternative’ investments included and the recent stock drops, is probably closer in real value to $50 billion now while, to cover all the liabilities accrued, it should be at $250 billion.

But Tom Byrne is much less believable when he dons his other hat as shill for (and member of) Chris Christie’s handpicked Pension and Benefit Study Commission where he claims to see only two clear paths to a solution:

  1. Ask taxpayers to continue subsidizing a level of health benefits that even the Obama administration says is too rich.
  2. Put those benefits at or near the highest level specified under Obamacare, and use those savings to fill the hole in the pension funds.

The Obamacare reference is to the level of health benefits that New Jersey public employees and retirees get which the president’s people define as ‘cadillac’ (though they have yet to assign a model of car to public pension benefits) so the idea is to cut those costs by about $3 billion at all levels which would mean that a typical employee who is now paying $2,000 annually for health benefits out-of-pocket (through copayments, deductibles, or premiums) would need to pay about $15,000 annually.  If employees balk then we go back to what always seems to be option one: the taxpayer pays.

But another option exists though those charged with finding solutions don’t see it so clearly.

Clean up New Jersey.

Roughly 20% of all taxes paid to New Jersey are paybacks for campaign contributions, favors for friends, or useless spending that somebody particularly benefits from but nobody in a position of responsibility (assuming such a role exists in the state) has any incentive to curb.

A partial list of alternatives:

  1. eliminate county (or municipal) government
  2. tax out of existence all campaign contributions
  3. put in place ethics laws that bureaucrats chosen for their fealty to the status quo have no role in drafting
  4. enforce those ethics laws

All clear and obvious to anyone seriously looking out for the welfare of the general public.  But to those leeching off the general public – a little blurry.

100 responses to this post.

  1. Posted by Tough Love on February 14, 2016 at 9:52 pm

    John, A few Questions/Thoughts:

    (1) In you middle paragraph, where did the $15,000 come from, and did it’s calculation factor in the Comission’s believe that MOST of the cost savings can come from costs taken-out-of-the-system (i.e., cheaper networks, lower broker fees, lower provider payments), rather than cost shifting from Taxpayers to employees?

    (2) I’m glad to see your first #1 …. “Ask taxpayers to continue subsidizing a level of health benefits that even the Obama administration says is too rich.”…… recognizing that the Commission’s proposals REMAIN too rich …. and as the Commission pointed out, still with premiums significantly lower than what Private Sector workers pay.

    (3) Your list of alternative is excellent but should include a #5 ….. Elected officials (PART or FULL time) should get no Pensions or Healthcare benefits. Such positions should NOT be looked upon as “Careers” from which one deserves retirement benefits.

    (4) As a Local resident concerned about our absurdly high Property Taxes, I remain skeptical of the Localities taking over the State’s financial obligation for the Teachers’ pensions and retiree healthcare. The healthcare savings offsets that the Commission’s claims are there must be STRONGLY guaranteed …… in the year of implementation and in EVERY year thereafter.

    Reply

    • $15,000 was a completely made up number but, unlike those study commission numbers, I put some thought and reason into it. If you are going to save that much money on health benefits and have public employees (though probably not retirees) pay for it all – including OPEB costs, then an extra $13,000 a year should about cover it. Of course, what emerges won’t come anywhere these numbers so there won’t be any real solution, which is what the denouement anticipated by all these people.

      Reply

      • Posted by The Resident Nutcase on February 14, 2016 at 10:57 pm

        So, for those paying $2,000 out of pocket…… It should be $15,000 or $13,000??
        What about those in the PFRS who are already TODAY paying almost $11,000 per year just for the premiums. Forget co-pay’s, deductibles and co-insurance?

        This is why I think most people haven’t a clue on what’s really going on.
        Nothing anyone says paints a real picture. And nobody has the facts.

        It’s simply funny that everyone just skips over that portion of the narrative. We currently have public sector workers paying $11,000 for healthcare and 5 years ago they paid zero!! Regardless if you or anyone thinks it’s enough…. It’s a Pretty significant leap I’d say. Stop acting like its nothing.

        Reply

        • Posted by Tough Love on February 14, 2016 at 11:15 pm

          Nutcase, Here’s the PROPER “fairness” comparison.

          Your $11,000 premiun is the 35% max %-of-premium in NJ (for it’s highest income earners), so the full cost of your coverage is $11,000/0.35 = $31,429.

          $31,429 buys VERY “rich” coverage”, and the TOTAL cost of family coverage in (even the biggest) Private Sector corporations is closer to $20,000 …. with employees also paying about 35% or the total cost.

          The PROPER comparison is that the Taxpayers’ “SUBSIDY” should not be greater than YOUR subsidy …………. MORE being unnecessary, and unfair to Taxpayers.

          Yet the Private Sector Taxpayers’,subsidy is (100%-35%) x $20,000 = $13,000,
          while the Public Sector workers subsidy is (100%-35%) x $31,429 = $ 20,429 a multiple of ($20,429/$13,000) = 1.57 or 57% higher.

          So tell me ….. WHY should LOCAL PFRS workers get a subsidy towards their family healthcare coverage ANY (yes ANY) greater than than subsidy typically granted the workers of Americas largest Corporations …. let alone subsidies 57% greater.

          Again, are you “special” and deserving of a better deal …. on the Taxpayers’ dime?

          Reply

          • Posted by Tough Love on February 14, 2016 at 11:43 pm

            Important follow-up………..

            The 35% -of-premium is ONLY for NJ highest income earners. Te AVERAGE NJ Public Sector worker %-of-premium charge is 17%. while in the PRIVATE Sector that 35%-of-premium (for family coverage) does NOT get lower for mid & lower income workers.

            So a fairer comparison (reflecting not just PFRS, but all of NJ Public Sector workers) is:

            Public Sector Taxpayer healthcare subsidy = (100%-17%) x $31,429 = $ 26,086

            VS

            Private Sector Employer Healthcare subsidy = (100%-35%) x $20,000 = $13,000

            giving a (Public/Private) subsidy multiple of 2.01 or 101% greater.

            _______________

            And to SMD …. yea, more “math”. Suck it up.

          • Posted by PatB on February 15, 2016 at 4:32 pm

            For some context, the Keiser Family Foundation finds that the average NJ family health care premium for 2015 is $19,143, of which the employee pays $4,310 or 23%.
            http://kff.org/other/state-indicator/family-coverage/#notes

            The 2015 family health care cost for NJ state employees calculates to $21,465 per year on the most expensive plan.
            http://www.state.nj.us/treasury/pensions/hb_open_enrollment_2014/state-biweekly-rates.pdf

            How about less guessing and more links to hard data?

          • Posted by Tough Love on February 15, 2016 at 8:33 pm

            PatB,

            With two BA’s and an MS degree, one would thing that you should have known to include premiums for BOTH Actives and Retiree, not just Actives (with FAR lower premiums).

        • Posted by Sean on February 15, 2016 at 3:33 am

          Nutcase, I DO agree with your sentiments, and frankly, I don’t blame anyone, public or private, for being mad as hell. Setting aside my feelings on the pension aspect of this discussion, health care in America is a shameful entity in our culture. (if you want to read a good book on the subject, Getting What We Deserve by Alfred Sommer is very eye opening. Sommer is an MD and a former dean at Jons Hopkins School of Public Health).

          Anyway, no matter what side of the public/private debate you are on, anyone going from zero to nearly a thousand dollars a month for health insurance hurts like hell. I DO agree with TL’s arguments on this, as far as how it compares to what private sector people are putting up with, compared to the public sector, but I also feel the big problem is healthcare itself.

          We are constantly trying to figure out ways to PAY the costs of healthcare, but the bottom line is healthcare is simply too f*cking expensive, for ANYONE. Healthcare in America is a product that virtually NO ONE can afford. Case in point: I had a friend who died from colon cancer last year. He was a medical doctor. His wife was a medical doctor. While he was dying, my wife asked my friend’s wife if she thought about quitting or taking a leave of absence to care for her husband. She said she couldn’t possibly quit, because if she did, they would lose their health insurance (he was a private practitioner, and she was an employee doctor of a medical firm). So, here they were, two doctors, easily in the 1% income bracket, unable to afford their healthcare. And their portion of out of pocket expenses damn near bankrupted them. If they couldn’t afford it, WHO THE HELL CAN?!

          Why is it that advancements in technology have lowered the cost of virtually everything in this world except for 1. healthcare and 2. higher education? Healthcare has risen at 2 1/2 times the rate of inflation, and higher education has risen at 4 1/2 times the rate of inflation. Healthcare gobbles up about 18% of our nation’s GDP. Completely unsustainable.

          Until we fix WHY it is so expensive, we will NEVER be able to find enough ways to PAY for it.

          Reply

          • Posted by Tough Love on February 15, 2016 at 4:24 am

            As for education, it’s not the money going into the classrooms that has gone up substantively, it’s the rapid growth in the funding of the teachers and professors pensions and benefits. End the DB pensions and the better-than-Private-Sector benefits of all CURRENT workers and there would be PLENTY of money for the “classroom”.

            The Doctor-couple with the husband dying of cancer is sad, but not likely not due to “unaffordable” medical coverage. She had insurance, and “professional courtesy” among doctors goes a long way toward eliminating out-of-pocket costs. Some cancers are simply caught too late for treatment to be effective.

            But I agree in principle. Example: The VA “negotiates” with Big Pharm to get the lowest prices for drugs, but when Medicare Part D (Drug Coverage) was introduced about 5 years ago, Medicare was specifically barred from “negotiating” Drug prices with Big Pharm. Why not just state what’s obvious …. Big Pharm bought off Congress.

            But as my mom always said, 2 wrongs don’t make a right, and the misdeeds of Corporate America will never justify the HUGE and decades-long financial “mugging” perpetrated upon Private Sector Taxpayers by the insatiably greed Public Sector Unions/workers and enabled by the Elected Officials that the Public Sector Unions BUY with Campaign contributions and election support.

          • Posted by Anonymous on February 15, 2016 at 11:01 am

            TL to your point on education, specifically private higher education institutions. Does your reasoning hold true for them as well? Are they receiving virtually “free” health benefits and DBP?

          • Posted by Anonymous on February 15, 2016 at 11:08 am

            Tough Love, if the old saying is true, two wrongs don’t make a right. Then why do we spend so much $ on military to fund wars around the world. Partly b/c when you’re attacked you defend yourself and big corporate interests (ie Middle East = OIL). Instead of spending our $ here on alternate energy sources we use taxpayer $ to support the mega billion $ OIL industry. Haliburton, Cheney, Bush just one example not picking on R’s they ALL do it.

          • Posted by The Resident Nutcase on February 16, 2016 at 10:10 am

            Sean,
            Thank you for at least agreeing to disagree. TL posts her opinion as fact. It’s simple BS at this point and one reason why nobody bothers to read her lengthy rants.
            I agree that the root cause is the healthcare premiums allowed to run unchecked. But until government begins to stifle private corporations, we are left with this issue.
            My point is to show that while some may think it’s enough or not enough….. $11,000 per year from zero is a big payout.
            You do know that police and fire were given free healthcare as part of their collective bargaining agreements due to the fact that they deal with the shit of the world all day and injuries and illness are common … right!??
            But even they knew there was a disconnect and problem with healthcare. They wanted to be a part of the solution, but instead got this rammed down their throats.
            It’s unfair on both sides from both points of view.

          • Posted by Tough Love on February 16, 2016 at 1:17 pm

            Nutcase,

            I wouldn’t disagree that $1,000/mo for family coverage is a significant premium, but given the much richer Public Sector healthcare coverage and lower out-of-pocket cost-sharing (via lower deductibles, copays, coinsurance and drug co-pays), that premium is not much out of line with Actives in the Private Sector. And not-to-be dismissed, Police, due to they being higher-earners, pay 35% of the premium while on average for all NJ Public Sector workers, it’s 17%-18% of premium. THAT (not the 35%) is the comparison point that financially impacts Taxpayers overall ….. STILL being MORE generous that average Private Sector healthcare subsidies.

            And what you still will not address is that Police pensions in NJ are 4 times greater in value at retirement (even without reinstatement of the COLAs) than those of Private Sector workers retiring at the SAME age, with the SAME pay, and with he SAME years of service.

            And with cash pay ALONE greater than most in the Private Sector in as risky jobs and with equivalent education, experience, knowledge and skills, there is ZERO justification for ANY (yes ANY) greater pensions or benefits (e.g. subsidized retiree healthcare).

            The Taxpayers DON’T work for YOU, and you are not “special” and deserving of a better deal on the Taxpayers’ dime.

        • Posted by Anonymous on February 15, 2016 at 10:48 am

          CC and company were former federal civil service employees accustom to paying the cost of individual and family healthcare premiums and once elected that program became a reality in NJ.

          Reply

      • Posted by Anonymous on February 15, 2016 at 10:36 am

        CC wants to “fix” this problem, or so he says, so ALL of us need some basic foundation on which to build. If there is no basis for the numbers being put forth from his Commission then what? I say you still need to proceed b/c any significant savings now helps to balance out the funds’ negative cash flow. However, w/o changing pensions’unforgettable right as this will be the next battleground if, orr according to this blog when, the next crisis hits.

        Reply

    • Posted by Fact Checker on February 15, 2016 at 12:49 pm

      You claim to be a resident of New Jersey? Do you have some way to prove it to readers of your posts?

      Reply

      • Posted by Sean on February 15, 2016 at 2:33 pm

        “You claim to be a resident of New Jersey? Do you have some way to prove it to readers of your posts?”

        I’m curious: To whom are you addressing this question?

        Reply

        • Posted by Anonymous on February 15, 2016 at 2:58 pm

          It wasn’t my post but I’m guessing TL?

          Back to health benefits. It’s my understanding that the Horizon plans administered by the State are self funded? The stated “premiums” are a result of actual claims for the various covered pools (ie, active, early & Medicare retiree’s, etc.)?

          Reply

      • Posted by Tough Love on February 15, 2016 at 3:25 pm

        Based on the indentation of comments, I believe that Fact Checker’s comment was addressed to me.

        Since I choose to remain anonymous (posting under Tough Love), no, I have no way to “prove” that I reside in NJ.

        FWIW, I do comment here and elsewhere on Public Sector pension issues that impact States/Cities outside NJ. While the “degree” (of primary blame) varies somewhat from place to place, the ROOT CAUSE of the problem is always traceable to grossly excessive Public Sector pensions & benefits ….. under any reasonable metric.

        Public Sector Unions/workers love to “blame” the lack of full funding as the CAUSE of the financial mess many States/Cities now find themselves, conveniently ignoring the fact that extremely generous pensions/benefits are extremely costly, and hence extremely difficult to fully fund.

        Under close examination, the Union/worker position doesn’t hold up. The ROOT CAUSE is clearly grossly excessive, unnecessary, unfair (to Taxpayers) and unaffordable pension/benefit promises, and the lack of full funding is not the CAUSE of the problem, but the CONSEQUENCE of the real ROOT CAUSE ….. grossly excessive pension/benefit generosity.

        Reply

        • Posted by Sean on February 15, 2016 at 3:53 pm

          Right. Then someone brings up the fact that the democrats have run it into the ground, then the obligatory, “hey, republicans over the years have been just as guilty.” Both arguments are correct, but they fail to see the ONE CONSTANT: public sector unions, “negotiating” on their own behalf, and a politician CAVING in to their demands, all for a short term gain at the expense of future generations.

          Here’s an entertaining example from Chicago, 1981. Democratic mayor Jane Byrne CAVES in to Chicago Public School teacher’s union by giving them an additional 7% “contribution” to their pensions. Teachers were originally making 9% contributions, so, with this gift, teachers in Chicago pay 2 f*cking% towards their lavish benefits. (These are the folks that won’t hesitate to remind the world that they have “faithfully” done “their” part to pay for their pensions!).

          “‘It’s going to give them an absolutely intolerable problem in the future,’ said Finance Authority Chairman Jerome Van Gorkham in 1981.”

          Of course, Van Gorkham was a prophet of gloom and doom, and a hater of teachers, and by extension, a hater of school children.

          Now, 25 years later, the city is stuck with trying to “unscrew” the screwing left by a past politician. When Chicago teachers were asked to pay the full 9% (9%? How laughable!) the union declared it “an act of war.” Imagine that.

          As the CPS swirls down the toilet, I can hear them crying out, “But, but, it’s for the childrennnnnnnnnnnnn.”

          Funny and sad, all at once.

          http://chicago.cbslocal.com/2016/02/14/2-investigators-how-the-cps-pensions-turned-into-a-budget-mess/

          Reply

        • Posted by PatB on February 15, 2016 at 4:05 pm

          Another question you conveniently dodge is that of your qualifications. Im sure you can let us know what degrees and certifications you hold without risking your anonymity, such as BA, MA, CPA, etc.

          Myself, I have two BA’s and an MS.

          Reply

          • Posted by PatB on February 15, 2016 at 4:06 pm

            Comment meant for TL.

          • Posted by Sean on February 15, 2016 at 4:17 pm

            So, in other words, if someone were to tell you not to jump from the roof of a 100 story building because you would die, due to the effects of gravity, you would need to know their “credentials” before you would believe them?

            Statements made should be judged on the merits of the statement itself, not on the messenger. Otherwise, you are simply engaging in an inverted argument ad hominem.

          • Posted by Sean on February 15, 2016 at 4:30 pm

            Will you be asking for EVERYONE’S “credentials” or just those who disagree with you. And are you going to determine which BAs and which MSs are “worthy,” or is it ok to have a BA in oriental studies?

            I’m quite sure there are plenty who read and post here who may not have the requisite degrees. I think if a person is a concerned citizen and a taxpayer, that should be enough “qualification.” Just my opinion.

          • Posted by Tough Love on February 15, 2016 at 4:52 pm

            PatB,

            Because I choose to remain anonymous (while commenting under Tough Love) I choose to keep private a highly professional education, work-history and training.

            Aren’t my background and credentials less important the the accuracy of what I have to say ? If you believe that something I have stated is incorrect, please state what/why and I will respond. I often contribute mathematical demonstrations. When someone questions the accuracy or sources I try respond as fully and accurately as possible.

            Of course not everything is “provable” to one’s satisfaction, given each side migrates to supporting “studies”, MANY of which are themselves biased (and often funded by those with a very clearly desired study-outcome). Way too many “authorities” sell there supposedly honest/unbiased efforts to the highest bidder. And the “bidders” chose those most pliable and in need of such funding.

          • Posted by PatB on February 15, 2016 at 5:04 pm

            And if you were to go to a doctor with a potentially serious diagnosis (as I have recently), would you be looking at their credentials or just trust in that white coat they are wearing?

            If you want to pass yourself off as an expert, then you should be proud of your accomplishments. Otherwise the credibility of your opinion is no different than anyone else who has enough knowledge to post on a blog.

          • Posted by Sean on February 15, 2016 at 5:42 pm

            “And if you were to go to a doctor with a potentially serious diagnosis (as I have recently), would you be looking at their credentials or just trust in that white coat they are wearing?”

            Really?! Come on, this is stupid, and you know it. I would trust the FACT that the doctor had done the procedure successfully many times. Cut the elitist crap, ok? I’m sure you know plenty of PhDs who are dumber than shit; if not, I sure as hell do.

            All I am saying is that if a statement has merit, it does not matter whether it is coming out of the mouth of a PhD or a GED. The “credentials” do NOT make the statement true, the truth in the statement makes it true. Got it?

            Furthermore, I have no problem whatsoever in the challenging or questioning of someone’s statements. THAT is healthy, in my opinion. And yes, people can and do say things that are in error. Believe it or not, we are ALL human.

            What I cannot and will not stand for is your total hypocrisy. When is the last time you ever questioned the credentials of S Moderation? Huh? Please tell me.

            So you have two BAs and an MS. Who gives a shit? I have a BA and an MA. Who gives a shit?

            Cut the elitist crap. Really.

          • Posted by Tough Love on February 15, 2016 at 6:12 pm

            PatB

            When ones goes to an expert for their service, they PAY THEM. This is a Blog where commentators don’t get paid (and hopefully aren’t biasing commentary due to unjust self-interest). Readers must take what they read with appropriate skepticism. You should deal with concern (with me) as I do with others ….. ask pointed questions when comments sound wrong or fishy.

            Sorry, but to keep my anonymity I won’t be sharing personal information that might help identify me. The are quite a few “crazies” on these Blogs (some who carry guns) who would like to tar and feather me … or worse.

          • Posted by PatB on February 16, 2016 at 12:13 am

            My apologies, mentioning the degrees does sound elitist. My intent was to not ask someone their credentials without providing my own. I am proud of my accomplishments, but will say that none of those degrees are in finance. Thats why I follow this blog, to figure out what to do with a failing pension (do I stay or do I go?). That said, if you are going to present yourself as an expert, you better be one. Otherwise you are a liar or a politician.

            BTW, as the old joke goes, what do the call the last in his class in medical school? Doctor! Hope you are never in the position to look for one.

          • Posted by Tough Love on February 16, 2016 at 1:13 am

            And if my memory serves me correctly, what do you call a graduate near the bottom of his Ivy League class?

            President George Bush.

            Well, we all make mistakes.

          • Posted by S Moderation Anonymous on February 18, 2016 at 11:43 pm

            Posted by Tough Love on February 15, 2016 at 4:52 pm
            PatB,
            Because I choose to remain anonymous (while commenting under Tough Love) I choose to keep private a highly professional education, work-history and training.

            Training? Is this you?

        • Posted by Sean on February 16, 2016 at 1:05 am

          “That said, if you are going to present yourself as an expert, you better be one. Otherwise you are a liar or a politician.”

          I don’t know if you are referring to a particular post on this blog, or just saying this as a general principle. As a general principle, I do agree with you. Specific to this blog, I know that both TL and SMD put forth some rather weighty and sometimes math heavy arguments at times, but I don’t necessarily feel that constitutes either one of them presenting themselves as an “expert.” Just a thought.

          As for the dilemma you face of staying or going (with the failing pension), I feel for you. It’s a tough call, and of course, depends on “how far in” you are. I left the public high school system after five years, with full tenure. I have never regretted that decision, not even once, but I knew I needed to make that decision sooner rather than later, because it would not get easier with the passage of time. For me, I have always believed in the idea of finding what I love to do the most, and doing it until I can’t do it any longer, as opposed to maybe staying in a job that I don’t really enjoy, just because of the benefits I get when NOT doing the job. (there were many teachers I knew whose only real joy in the job was their summers off! Sad but true).

          I appreciate and accept your apology. The fact that you offered one speaks very highly of your character, and I respect that in a person, whether we agree or not on an issue. So, thank you!

          Reply

  2. Posted by skip3house on February 14, 2016 at 9:55 pm

    ….’stead of hitting health benefits for all, just stop them for NJ retirees, who would pay as most of us then…Medicare, its ‘gap’, and Rx F….? All effective at age 65…
    Now, NJ even pays back their Medicare Social Security deductions…

    Reply

    • Posted by Tough Love on February 14, 2016 at 10:09 pm

      As you note, the problem is that the “rules” that seem to be in play for PUBLIC Sector workers are always MUCH more generous that those in play for Private Sector workers.

      EVERY pension and benefit considered for PUBLIC Sector workers should ONLY be granted after an affirmative answer to the question ….”Do Private Sector workers typically get that pension/benefit”, and if not, neither should they. And every EXISTING pension/benefit that they NOW get that their Private Sector counterpart does not, should be taken away.

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

      EQUAL …. but NOT better.

      Reply

      • Posted by The Resident Nutcase on February 16, 2016 at 10:21 am

        Problem is TL…… Your equal and better…..fair or not gripe… holds no water simply because this is ..America. Lol. Such a stupid comparison. I could see that you would thrive in North Korea.
        In America…we have choices…freedom.
        Do you hear public workers crying about how much a doctor or lawyer makes?? What about athletes??? (Yes…. We can choose not to pay to see them, but most do). I think this really boils down to your personal choice in life. I really see you as disgruntled and jealous.
        Your numbers in comparison are always off and skewed for the private sector. (I.e. The average healthcare premium share is 27.5% not 17% and tops out at 35%) your data is usually wrong. This is why I and I pray most readers can’t take your angered skewed rants seriously.

        Reply

        • Posted by Tough Love on February 16, 2016 at 1:28 pm

          Quoting …. “Problem is TL…… Your equal and better…..fair or not gripe… holds no water simply because this is ..America. ”

          Talk about self-interest. Isn’t the above the view of someone with a HUGE current financial advantage …. the cost of which is unnecessarily, unfairly, and unaffordablly foisted upon the beleaguered & betrayed Taxpayers ….. and with insatiable greed, refuses to give it up ?

          Reply

          • Posted by S Moderation Anonymous on February 18, 2016 at 11:50 pm

            He just told you.

            Your “opinion” of the alleged ” HUGE current financial advantage …. the cost of which is unnecessarily, unfairly, and unaffordablly foisted upon the beleaguered & betrayed Taxpayers ….. and with insatiable greed, …”

            Is based on spurious data and biased assumptions.

            ” Your numbers in comparison are always off and skewed for the private sector. “

          • Posted by S Moderation Anonymous on February 18, 2016 at 11:51 pm

            GIGO, in other words.

          • Posted by Tough Love on February 19, 2016 at 12:13 am

            And YOU are supposed to be one to look to for accurate financial/economic data, analysis, or conclusions ?

            Common…. you worked repairing CA’s roads.

            Nothing wrong with honest, hard work, but as you often say …. MEH !

    • Posted by Anonymous on February 15, 2016 at 10:18 am

      Problem is, If there’s an accuracy to the Commission’s amended report, early retirees total $ amount is a drop in the bucket when compared to the total unfunded numbers. While they’re the highest per covered individual, apparently the number of early retirees isn’t so great as to make a dent in the State’s total health care cost.

      Reply

      • Posted by skip3house on February 15, 2016 at 12:05 pm

        TL..ANON.. Have a decent idea of Retiree health costs? I thought about $6B by now/yr?
        Meanwhile, give thought to every blog including meaning of all ….’ OPEB. PFRS, DB, DC…..etc’ to help encourage new followers, and old who get easily confused.

        Reply

  3. Posted by Hand,Michael - Investigator on February 14, 2016 at 10:52 pm

    I love reading your stuff.

    I tried negotiating more Health plan choices for my local PBA and wanted to go to SHBP. Town pushed back. Still paying more than fellow cops in SHBP but the town was “willing” to have the private plan match the Direct 15 plan. Unreal – I wanted to give them savings and they balked.

    I was sick of the cops with families paying $12,000 for a $35,000 plan. We got the plan down to 29,800.

    More cops and public workers need to know more about their pensions and start giving a shit.

    Keep on doing a great job with your blog.

    Mike Hand

    Sent from iPhone

    Reply

    • Posted by Anonymous on February 15, 2016 at 10:58 am

      Sound like someone is getting a kickback.

      Reply

    • Posted by The Resident Nutcase on February 16, 2016 at 9:57 pm

      Hand,Michael,
      They opt to not go into the sthb because there’s a “friend” making the commission on the deal. I’m sure if you snoop around, someone knows someone who is getting that fat check. I know most are in the sthb now simply because it was a cost savings to the town since they are still responsible for whatever is left. But this ch78 had put many a million into the municipal coffers from the employee premium share. That will never change. Even with the sunset…. Municipalities will never give up that 35%. Like you did, seeking cheaper coverage can lesson the burden. But if the savings are peanuts… Why switch?

      Reply

  4. Posted by Anonymous on February 15, 2016 at 10:56 am

    Can someone interview Mr.Byrne, Chair of the NJ Investment Council about the fees and bonuses paid to private investment firms as the domestic and international markets drop was it. $600 or 900 million that he signed off for his friends and associates in the investment industry?

    Reply

  5. Posted by S Moderation Anonymous on February 15, 2016 at 3:31 pm

    Thomas Byrne, 2 clear choices to fix N.J.’s pension crisis | Opinion,  February 13, 2016

    “It is the Obama administration, not Republicans, that has said health benefits at the New Jersey level should be subject to a luxury tax.”

    Which health benefits? The average NJ public employee healthcare costs are nowhere near Cadillac status.

    Reply

    • Posted by Tough Love on February 15, 2016 at 3:44 pm

      SMD, Short memory … we alrady discussed this and provided links.

      The total cost of MANY of NJ Family Plan options are $30K-$35K annually?

      But you’re correct. They’re not “Cadillac” level, there “Platinum+” level.

      Reply

    • Posted by S Moderation Anonymous on February 15, 2016 at 4:47 pm

      OMG!!!

      “MANY”?

      How many?

      Average monthly family premium was $1,561 per month.

      The thresholds for high-cost plans are currently $10,200 for individual coverage, and $27,500 for family coverage.

      For pre-65 retirees and individuals in high-risk professions, the threshold amounts are currently $11,850 for individual coverage and $30,950 for family coverage. These amounts will also be indexed before the tax takes effect.

      http://www.njspotlight.com/assets/14/1118/0146

      Reply

      • Posted by Tough Love on February 15, 2016 at 5:50 pm

        SMD,

        I’m surprised that you would link a table that shows just how very low a percentage of the Total Family Coverage premium that is actually paid for by the workers….. and how FOR DECADES they have been getting away with “financial murder” … on the backs of NJ’s taxpayers.

        From your table, here are the percentages (by year) of the Total Family Coverage premium that is actually paid for by the workers:

        2012 = 3.8%
        2013 = 10.5
        2014 = 15.8
        2015 = 21%

        In the Private Sector it is quite common for ACTIVE workers to pay premium 1/3 or more of the total cost of Family healthcare coverage. And for Retirees, it’s most often 100%, there being no subsidy at all for today’s Private Sector retirees.

        And that 1/3 (33%) share for PRIVATE Sector workers has been around for many many years … all while NJ’s Public Sector workers were apparently paying 3.8% (or less in years prior to 2012 ?).

        ———————————————–

        Actually, The thresholds are $10,200 annually for single coverage and $27,500 annually for family coverage…… and they apply beginning in 2018 against healthcare premiums sure to have risen from today’s rates. Forget to mention that? Intentionally ?

        And you only quoted the thresholds for those in “in high-risk professions”. Again, “smoothing” your choices to get to your biased results?

        And from this source of NJ State-worker retiree healthcare premiums:

        http://www.state.nj.us/treasury/pensions/hb_open_enrollment_2014/state-retired-full.pdf

        If we take the 8 non-HMO and non-HD (for High Deductible) options (the HMO and HD options likely undesirable to workers used to premier coverage while active), the annual non-Medicare Family coverage ANNUAL Total Cost ranges from $34,184 to $29,912, with an average of $31,953 …. in 2015. ALL are over the Cadillac Threshold, even based on 2015 rates, and will certainly be FAR in excess of the threshold in 2018 as the premium rate certainly rise between now and 2018.

        Reply

        • Posted by skip3house on February 15, 2016 at 5:59 pm

          SEAN, You are a sharp person. Ignore all the crap here and solve the real trouble….absolutely astonishing the medical coverage for one is $12k, family $35K, yet a lone older person is covered by Medicare at maybe $120 monthly from SS, $300 plan F gap (Horizon, and $32/mo Rx D. Either those rates for workers are made up, the Medicare heavily supported by gov., or younger people have much greater needs…just not so!
          Always interested in remarks by such as you, TL…..Mr Bury of course…..

          Reply

          • Posted by Sean on February 15, 2016 at 7:00 pm

            Thank you. One thing I think we do not see coming is the collapse of Medicare. I know, more gloom and doom, but the average medicare recipient TAKES more than 4 1/2 times more in services than he/she ever contributed into the plan. That’s why, as you alluded, the medicare premiums are more “affordable.” They are affordable because they too, are unrealistic. This isn’t only due to low contribution rates, but also to the skyrocketing cost of healthcare, longer lifespans, and, the big one: demographics. The Boomers are now at the end of the assembly line, retiring at a rate of (I think) around 10,000 per day. The system simply cannot be sustained. So, our great “solution” (just take care of them until we can dump them off into medicare) is also a pipe dream that will get run over by the math, because math NEVER loses. So, somewhere down the road, watch for new calls to “adjust” Medicare benefits, age thresholds, etc.

            Which, on a side note, is another reason why defined benefit plans are unworkable. How in the hell can you tell an employee, “You know what, we will give you free health insurance for the rest of your life”? At the time the promise was made, health insurance might have cost $50 per month. What happens if/when it goes to $4000 per month? How in the world can you possibly plan for that?

            So, politicians are looking for ways to shuffle people out of an expense category, and getting them all into medicare is a great way to do it.

            Healthcare in America is itself, one of the problems. Unless we solve WHY it is too costly, it will always BE too costly.

          • Posted by Anonymous on February 15, 2016 at 7:47 pm

            How about national health care reform, no not ObamaCare. A single payor system with regional third party administrators. Probably only the major insurance companies would be able to compete for such services. Kind of like Medicare for all with a sustainable (tax) funding base. ALL billed services should have two components a fixed fee for service(s) provided and a variable “overhead” cost. The fixed and variable cost should have different (TBD) reimbursable and out-of-pocket rates.

            Add to the mix a special tax on all supplemental insurance policies and nonparticipating providers/facilities.

            This, to me, would be a big first step in getting a handle on cost for any particular service. For example, the cost to remove someone’s appendix shouldn’t vary by region for a participating provider/facility. However, the overhead cost associated with doing business in NYC versus rural America will.

            The status quo is not the answer. Other countries can do it, why can’t America the greatest country in the world! Ok bias opinion.

          • Posted by Sean on February 15, 2016 at 8:51 pm

            Right. Obamacare is not the answer, but at least it has STARTED a discussion. The republicans, for all their complaining, have done absolutely nothing for 30 years to find a solution. Remember when Billary Clinton came to town, and they were going to fix healthcare in the 90s? After all was said and done, nothing changed, and Hillary went on to become the second largest recipient of campaign donations from big pharma. Just shows what a massive undertaking it is…

            But you are right: The status quo is not the answer. And as much as people may dread the whole idea of a single payer system, we may be headed that way anyway, like it or not. A good friend of mine and I were having this discussion a few years ago, when he told me, “You know, during the 5 years I lived in Canada, our youngest son was diagnosed with Lukemia. We got excellent medical care, and it did not cost us one nickel. No one ‘falls through the cracks,’ either. Say all you want about ‘socialized medicine’ but I will never have a bad thing to say about Canada.” Obviously, this is anecdotal, but in the book I mentioned earlier (Getting What We Deserve by Alford Sommer), the author, who is an MD and a former dean at Jons Hopkins School for Public Health, gives a rather scathing indictment of our current system. He makes several good points, one of them being that, for all of the scare tactics being touted as to the horrors of “rationed care,” we are ALREADY rationing care, we just don’t think of it in this way. So many other good points, too numerous to mention here.

            And your point about the variance of costs for procedures is another key element. I just read the other day about a study that showed a certain simple medication for a fairly routine procedure ranging in cost from $10 at the low end to $10,000! Not a typo. I had to reread it more than once to believe it. I’m sure everyone can share similar observations, some accurate, some not, but there is definitely a major problem.

            As big as the problem is, you are right: other countries can do it, so can we. The only thing standing in the way? Special interest groups.

          • Posted by Anonymous on February 15, 2016 at 9:11 pm

            Appreciate your feedback and insights!

            Another point, by moving in this direction, I think, we would be more competitive in the long run. Most, except probably top 1 or 2 %, would all be receiving exactly the same heath benefits. This would eliminate health benefits inequality for 98 to 99 % of us.

            Like most major initiatives there will be push back and transitional pains. For one, I think taxpayers will have to burden the cost of educating future medical professional in return for their commitment to be in network providers at predetermined salaries, etc.

            Of course, there will be some who will opt out deciding to specialize in serving the top 1 to 2 % covered by private insurance. This is my justification for a “special” tax on these type of policies as well as out of network providers and facilities.

            Nice to talk about but unlikely to see the light of day in our dysfunctional governments!

      • Posted by S Moderation Anonymous on February 15, 2016 at 8:25 pm

        1) It’s not “my table”.

        2) According to Mr. Byrne, the Obama administration has said health benefits at the New Jersey level should be subject to a luxury tax.”

        In fact, that would apply to only “some” health benefits. Most NJ premiums do not meet the threshold. The average is well below the threshold.

        3) TL: “And you only quoted the thresholds for those in “in high-risk professions”. Again, “smoothing” your choices to get to your biased results?”

        SMA: February 15, 2016 at 4:47 pm “The thresholds for high-cost plans are currently $10,200 for individual coverage, and $27,500 for family coverage.”

        4) “Total Cost ranges from $34,184 to $29,912, with an average of $31,953 …. ”

        These are not average costs. These are not normal costs. These are not typical costs. Once again, you quote the highest possible premiums as if they are somehow representative of the whole. That’s why we need the smoothing, Love.

        First, about 40% of public workers are not married, so, no family plan. Second, how many retired employees have dependent children?

        You’re doing the whole Bergen County Patrolman pay fraud again. They are not typical.

        Average…$1,561 per month.

        Now that is smooth.

        Reply

        • Posted by Tough Love on February 15, 2016 at 8:40 pm

          Quoting SMD……..

          ““Total Cost ranges from $34,184 to $29,912, with an average of $31,953 …. ”

          These are not average costs. These are not normal costs. These are not typical costs. Once again, you quote the highest possible premiums as if they are somehow representative of the whole. ”

          As I stated in my comment, I excluded HMOs and (HD) High Deductible Plans …. HMO are not well looked upon due to restrictive choices, and HD plans are simply cost-shifting (putting what WOULD BE in the premium into higher up-front out of pocket costs). The Plans aI included are all of the normal “insurance” Plans commonly chosen/favored by both Public and Private Sector workers.

          Reply

  6. Posted by Ralphie on February 15, 2016 at 6:59 pm

    John – Once again I am only disappointed in your blog. The sooner the issue is addressed the better. The constitutional amendment route is mere political delay, foolish at this point in time, and I don’t see how it could pass. Your recommendations are just as “time-wasting” and ridiculous. Eliminate local government???? Ethics reform??? Likely to happen in my life time???? The Reform commission has at least put forward a plan that warrants discussion and consideration. You can “posture” until the cows come home and you’ve accomplished nada. You are no better than our elected representatives.

    Reply

  7. Posted by Tough Love on February 15, 2016 at 8:19 pm

    John called for eliminating

    “County” governments …. not “Local” (i.e., town) governments. A darn GOOD idea.

    Reply

    • Posted by The Resident Nutcase on February 16, 2016 at 10:27 am

      A partial list of alternatives:

      eliminate county (or municipal) government

      Sorry TL…… No he didn’t. It’s right in his initial post to this thread.

      Twisting the truth once again!!!!
      Ugh!! Getting old

      Reply

  8. Posted by Ralphie on February 15, 2016 at 8:50 pm

    And not going to happen.

    Reply

    • Posted by Tough Love on February 15, 2016 at 8:56 pm

      Eliminating “County” gov’ts, no matter how unnecessary, would indeed be difficult. The Unions (particularly Safety) will howl, call in all owed favors (and threats for non-support), and of course one less layer of gov’t means one less place for Elected Officials to put their friends & supporters in cushy jobs.

      Reply

      • Posted by Anonymous on February 15, 2016 at 9:28 pm

        Actually think John got it backwards. Eliminate local governments and consolidate/eliminate local service to the County level. IF local governement, through local referendum, choose to provide additional and/or duplicative services then they would have to implement a local tax to do so.

        Reply

      • Posted by Anonymous on February 15, 2016 at 9:30 pm

        Forgot to add, like any meaningful health care changes, not likely to happen due to (as Sean and others have mentioned) private and public special interests.

        Reply

      • Posted by Anonymous on February 15, 2016 at 9:51 pm

        TL. “Particularly safety (I assume you mean police) will howl….”
        I am a local LEO in bergen county, yes crucify me, paying over $1000 a month for family plan. Yes, HD plans suck and I hope to avoid the .
        But back again to address eliminating county govt….here we had our county pd merge with our sheriff dept. So far, it has run smooth. From a safety aspect, pros office and sheriff are both needed. Jails, etc can’t really be run well by a town and crimes like homicide, fatal acc unit (which I was a part of for years as well, lots of locals take turns on call) that would be extremely inefficient to have a town run them. I also feel in general that towns run things better than both county and state. Eliminating county puts residents further from the flame of govt. I feel that my bosses (the local govt) do far better with taxpayers money than do state govt. Most of these small towns are run for around $3000 or so in local taxes. (Not really bad for police, fire, garbage, dpw etc. ) As we know the schools are what kills us.
        Bigger isn’t always better.

        Reply

        • Posted by Tough Love on February 16, 2016 at 12:54 am

          First let me say that I respect honest, hard working Police and other such Public Sector workers. I just object to the over-compensation.

          If you are beyond 5 to 7 years as a Police Officer I’m guessing your base pay is within the $120K to $135K range (higher if above patrolman). Yes, Police work is unique in that you may encounter those actually looking to hurt/kill you, be hurt/killed responding to a crime, or while assisting a citizen or other officers. But the likelihood of any is very very very remote and BLS statistics clearly show that Police (as an occupation) is never on the list of the most dangerous occupations (a list of occupations that, with the exception of commercial airline pilots, most often make half or less in total compensation than Police). I would agree some “premium” in pay is due, simply given the unique nature of Police work, but nowhere near the premium that now exists.

          There are no Private Sector Police, but there are many Private Sector workers in jobs with comparable risks, and with comparable requirements as to education, experience, knowledge, and skills. I’ll venture to say that the average base pay of such workers (with equal years on the job) is CERTAINLY below $100K. I believe in “wages” alone, NJ Police (especially in northern NJ) are overpaid.

          But Police “wages” are just the tip of the iceberg …. and indeed it IS a financial iceberg….. or as one popular website calls it, a “pensiontsunami”. Your extraordinarily generous (and hence extraordinarily costly) pensions are a far bigger financial problem. You can choose to retire under a Defined Benefit pension with 65% of your final pay after only 25 years …. even at age 50. That translates into a per-year-of-service “formula factor” of 65% / 25 = 2.6%. Did you know that in Private Sector Plans (even in the better of the rapidly diminishing number of DB Pension Plans not “frozen” and still crediting service today) a “formula factor” of 1.25% to 1.5% is common? Using the midpoint of this range, this one difference give Police pensions a greater “value” by a multiple of 2.6%/1.375% = 1.89 (or 89% greater).

          But there is more. The “value” of a pension is based not just on it’s size, but how long you will be collecting that pension, and the younger you start to collect that pension (unless reduced … with a full/proper actuarial reduction ….. for starting to collect that pension at a younger age), the greater it’s “value”. I’ll would estimate that NJ Police retire with full/unreduced pensions 10 years younger than reasonably comparable Private Sector workers. Did you know that Social Security reduces the participant’s annual payout by 6% for EACH year of age that one retires younger than their NRA (Normal Retirement age)? Even if we assumed only 5%/year as the appropriate reduction, Police pensions, by NOT being appropriately reduced by 10 x 5% = 50% gives Polices pension a greater “value” by a multiple of 100% / 50% = 2.00 …. just from this one element.

          So where are we ? Just considering 2 things: the greater formula-factors and the much younger full/unreduced retirement ages, NJ Police pensions are TYPICALLY greater in “value” at retirement than those of reasonably comparable Private Sector workers by a multiple of 1.89 x 2 = 3.78. (or 278% greater). And yes, the adjustments are multiplicative, not additive.

          And historically, there was a 3-rd major enhancement in value, COLA increases. Even at 60% of the CPI (as is my understanding of NJ’s COLA provision) such a COLA increased pension has a “value at retirement” about 25% greater than an otherwise identical Pension Plan without COLA. So the ratio of the “value” of Police pensions to (the better DB) Private Sector DB pensions would not be 3.78 (from above), but 3.78 x 1.25 = 4.725 (or 372.5% greater). And yes, I know that COLA increases have been suspended but are Public Sector workers not now in Court fighting tooth-and nail to get the COLA increases re-instated …..COLA increases virtually unheard of in Private Sector Plans?

          I’d bet that if you asked a group of reasonable Private Sector taxpayers if Police should get pensions with a greater value at retirement than those of similarly situated (in age at retirement, pay at retirement, and years of service) Private Sector workers, many would say yes. And if we extended that question to ask how much greater should Police pensions be ..(a) 25%, (b) 50%, (c) 100, or (d) 200% greater, most would answer (a), a few would answer (b), nobody would answer (c) or (d), and the ACTUAL current multiple (even without COLA being reinstated) of 278% would not being be on anyone’s radar.

          I don’t “blame” Public Sector workers for gladly accepting the extraordinarily generous pensions & benefits that have been offered …. but are they not (to a VERY large extent) the result of your Union’s BUYING of the favorable votes of our self-interested Elected Officials with campaign contributions and election support?
          ————————————-

          Sorry for shifting from your remarks on Healthcare. Yes, $1,000/mo is indeed a high employee premium-share for Family Health Coverage. While Public Sector coverage is far more “Platinum” than that commonly offered Private Sector employees, even adjusted for the richer Public Sector coverage, $1,000/mo is likely on the higher end of Private Sector premium share for Family coverage.

          But Police, due to their higher incomes typically pay (the maximum) 35% of the full premium. However, for all of NJ’s Public Sector workers (at all income levels) the average is 17%-18% of the full premium….. considerably LOWER than the Private Sector worker healthcare premium-share for comparable coverage.
          ————————————

          As to the merger of the Bergen County Police and the Sheriff’s Dep’t………

          Quite a feat considering the HUGE egos of the politicians fighting for control.

          But being a Private Sector businessperson always focusing on the bottom line, one element of the merger stood out like a giant SORE. EVERYONE involved in Private Sector mergers knows that 90% of the savings comes from headcount reductions …. elimination of positions no longer needed once the merger is completed ….. and the sooner the no-longer-need employees are let go, the greater the savings.

          Not surprisingly, the Sheriff/Count Police merger established rules right-up-front that NOBODY would be laid-off and headcount reductions would ONLY come from voluntary terminations and retirements. Isn’t it nice to be nice with OTHER people’s money …. the Taxpayers.
          ————————————

          And yes, because there are so many MORE teachers than other workers School taxes are the Local Property owners’ biggest tax burden. But Police pay & pensions are (by far) the MOST egregious.

          Reply

          • Posted by Anonymous on February 16, 2016 at 8:32 am

            I know this blog is about NJ P&B and I’m not trying to deflect on the above comment only expand. Specifically your public safety workers comments should apply to at ALL levels of government. No exceptions, no excuses, premium pay for danger, ie armed forces, FBI, CIA, etc. Bottom line they’re no different than State & Local LEO. They all choose their profession knowing the risks and rewards so no self interested skewed justification for anyone. Let’s face it they’re not in harms way or on the front line most of their careers. No disrespect to any group/class of worker, just my observation of ALL public pensions in general. Yes I know Federal accruals are significantly less and they’ve been premium sharing for a while.

  9. Posted by George on February 16, 2016 at 8:24 am

    eliminate county (or municipal) government

    If you eliminated county government that would mean all money would flow to Newark. Under the current system much of it goes to Essex county. Is giving all the money to Newark a good idea?

    Reply

  10. Posted by Javagold on February 16, 2016 at 10:16 am

    Put each and every public taker on Obamadontcare. And then send them all the bills. If they don’t like it. They can always get the much better job in the private sector they always tell us they would easily be getting if they weren’t public takers and doing it for the children.

    Reply

  11. Posted by Ralphie on February 16, 2016 at 10:29 am

    Prediction – Following the Governor’s Budget address today, Mr. Bury will post a blog attacking the plan and the Governor. If he could pretend that maybe someone he respects had made the speech, proposed the reforms, he might be able to get beyond his basic prejudice and offer something CONSTRUCTIVE for a change.

    Reply

  12. Posted by Anonymous on February 16, 2016 at 11:29 am

    Dumb question; in a (not so) perfect world P&FRS & PERS LOCAL s/b at very similar funding levels b/c of State legislation requiring Locals to make their payments? I know there have been payment holidays but I would think a Municipality skipped their payments to both funds or not at all?

    Reply

    • Posted by Tough Love on February 16, 2016 at 1:47 pm

      All Municipal pension contributions go ONLY to the Municipal Plans.

      Reply

      • Posted by Tough Love on February 16, 2016 at 1:57 pm

        And don’t believe the BS coming for Public Sector workers on this Blog that the Local Plans are “well funded”.

        They’re not. Even the best-funded Local Plans have “official” (meaning complete BS) funding ratios in the 70s, have new GASB funding ratios in the lower 60s, and if using the IDENTICAL assumptions/methodology that the US Gov’t REQUIRES of Private Sector Pension Plans, have funding ratios in the 40s ……… WELL BELOW the 60% threshold, below which the Gov’t bars plans from crediting further pension accruals.

        The NJ Pension Commission isn’t BS-ing anyone ….. these Plans are all but dead already …… and the Commission is trying to SALVAGE as much as possible.

        Reply

      • Posted by Anonymous on February 16, 2016 at 5:21 pm

        Thanks I got that. What I was wondering is, at least theoretically, if all Local plans should have very similar funded/unfunded percentages?

        Reply

        • Posted by Tough Love on February 16, 2016 at 9:20 pm

          Take a look at the GASB68 Funding table and footnote #2 in this earlier Bury posting:

          https://burypensions.wordpress.com/2015/12/20/gasb68-numbers-for-new-jersey/

          The Local PERS Funding ratio is 52.08% and the Local PFRS funding ratio is 62.41%. Per footnote #2, both are lower than they would have been had (separately for PERS and PFRS) the State & Local Plans used separate rather than blended interest rates. However, while both the PERS and PFRS Local Plan funding ratios are relatively close (30.06% vs 34.70%), the lowering-impact (on the LOCAL Plan funding ratios) of using of blended interest rates is greater for PERS than PFRS because the ratio (State Plan Assets)/(Local+State Plan Assets) is much greater for PERS than for PFRS.

          This probably accounts for about half the difference between the 52.08% and the 62.41%.

          Also contributing to Local PERS vs Local PFRS funding ratio differences would be the extent to which differences in actual vs assumed experience is separately tracked and reflected in the Plans’ assets and liabilities, and how quickly and fully contribution rates are adjusted to reflect developing actual vs assumed experince.

          Reply

          • Posted by Anonymous on February 16, 2016 at 10:50 pm

            Ok thanks, sounds like too many fund specific variables with their own set of timing differences make the funding ratio variances unreconcileable.

  13. Posted by Tough Love on February 16, 2016 at 4:08 pm

    Another of the (rather routine and extraordinarily pro Public Sector Unions) articles in nj.com here:

    http://www.nj.com/opinion/index.ssf/2016/02/njea_we_are_done_with_gov_christies_blame_game_on.html

    It’s a shame (or perhaps they’re lucky) that I cannot comment on their website ( w/o identifying myself) because the biased-BS that gets published certainly DESERVES to be challenged.

    The linked article (preemptively bashing Gov. Christie before today’s Budget address) is (as usual) full of pro-Public-Sector-Union lies, half truths, and material omissions.

    For example, it says, quoting ……….

    “In 2011, he signed a pension and benefit reduction law that made deep cuts to pensions, including stripping away earned cost-of-living adjustments, even for senior citizens who were already retired. He imposed huge new costs on public employees for their pensions and health benefits, totaling thousands of dollars a year in most cases, even as the quality of those benefits decreased.”

    So what ….. were these Public Sector pensions not always WAY too generous (and never necessary to attract and retain a qualified workforce, fair to Taxpayers, or affordable) to begin with ….. and were they not granted by Elected Officials BOUGHT with Public Sector Union campaign contributions and election support? And now STILL (even AFTER the noted changes) 3 times greater in value at retirement than those of Private Sector workers retiring at the SAME age, with the SAME pay, and the SAME years of service ?

    Another example, quoting …..

    “By way of comparison, public employees contributed 100 percent of what the law required each of those years. That’s no surprise. Public employees have never contributed one cent less than that.”

    Yes Public Sector workers have indeed paid 100% of the share of total pension costs allocated to them. But where is that “share” numerically identified for the audience (especially the Taxpayers) to consider if it reasonable?

    The “share” that Public Sector workers actually contribute (INCLUDING all the investment earnings thereon) rarely accumulates to a sum at retirement sufficient to buy more than 10% to 20% of the incredibly generous pensions they have been promised (by NJ’s Union-BOUGHT Elected Officials).
    ———————————————-

    How about some honestly. Very “generous” pensions are very “costly” and hence very difficult to fully fund. And NJ’s lack of full funding is not the CAUSE of the financial mess we are in, but a CONSEQUENCE of the real ROOT CAUSE …. grossly excessive Public Sector pension/benefit “generosity”.

    ———————————————-

    For anyone so inclined, feel free to post the above as a comment on the above-linked article …. and attribute the comment to me.

    Reply

    • Posted by The Resident Nutcase on February 16, 2016 at 10:05 pm

      TL……
      There ya go again!! Asking…. Weren’t these pensions too generous to begin with?
      That’s you’re friggin opinion.
      The article stated facts!!! Yes ch78 did deep cuts to each and every public employee.
      That you think it’s not enough/too much is a moot point because it’s not based on fact. It’s opinion.
      Facts are facts. Sorry.

      Reply

      • Posted by The Resident Nutcase on February 16, 2016 at 10:08 pm

        Decades of the state not funding the pensions caused this issue today!!

        Reply

      • Posted by Tough Love on February 16, 2016 at 10:13 pm

        Ah poor Nutcase has a problem hearing absolute FACTS, not “opinions” ….. that promised Public Sector pensions were and still are MULTIPLES greater in value at retirement than those of comparable Private Sector workers retiring at the SAME age, with the SAME pay, and with the SAME years of service.

        “Deep” cuts ?

        Is “deep” a technical term. I’ll call them “deep” when they bring Public Sector pensions ALL THE WAY down to that typically granted Private Sector workers by their employers.

        Your NOT “special” and deserving of a better deal ….. on the Taxpayers’ dime.

        Reply

        • Posted by The Resident Nutcase on February 16, 2016 at 10:37 pm

          That’s right TL!! Bring em all down. Down down down. Less and less. Lower the bar. You’re amazing. Instead…. Why not lift yourself up?? No? Too hard right?
          No worries….

          Reply

          • Posted by Tough Love on February 16, 2016 at 11:11 pm

            No Nutcase, not “bring em all down” …. just …. put an end to this huge decades-long THEFT of Private Sector Taxpayer wealth by the insatiably greed Public Sector unions/workers.

            Got a problem with EQUAL …. but NOT better ?

          • She can’t Nutcase.. unlike you and your ilk she does not have a crooked union and corrupt politicians working tirelessly to get her (and themselves) money she does not deserve.

          • Posted by Tough Love on February 17, 2016 at 12:01 am

            PSDrone,

            Correct. Nor does AMERICA have sufficient wealth (now or ever) to grant ALL of it’s workers pensions & benefits as generous as those NOW promised Americas Public Sector workers.

        • Posted by S Moderation Anonymous on February 19, 2016 at 12:28 am

          “Specious Posturing”

          Governor Christie:

          ” Take the average government worker who pays $126,000 for their pension and health benefits over 30 years.

          Their return?

          $2.4 Million in benefits.”

          John Bury:

          ” Employee contributions are irrelevant. It all comes form taxpayers anyway. Would it make any difference if employees did pay $2.4 million over their working lifetimes into the systems which they would get from higher negotiated salaries?
          An average government employee might also get $3 million in salary over 30 years with no contributions from them for that salary. Is that too a scandal?”
          _________________________________________________
          Tough Love:

          ” absolute FACTS, not “opinions” ….. that promised Public Sector pensions were and still are MULTIPLES greater in value at retirement than those of comparable Private Sector workers retiring at the SAME age, with the SAME pay, and with the SAME years of service.”

          S Moderation Anonymous:

          SAME, SAME, SAME. is still irrelevant, taken out of context with total compensation. Still specious. Still GIGO.

          Inquiring minds want to know; what does Atlas Van Lines say about public pensions?

          Reply

          • Posted by Tough Love on February 19, 2016 at 12:52 am

            Yes SMD, the relationship that Christie has repeated ……. $126,000 in employee contributions vs $2.4 Million in expected pension payouts is indeed misleading (suggesting that the employee only pay for $126,000/$2,400,000 = 5.25% of their pension) because it ignores the “time value of money”.

            A PROPER comparison requires bringing all cash flows to a common date (with reasonable interest). Which is why I have always stated ……

            “When you accumulate all of the worker’s contributions (including expected investment earnings) to the date of retirement, RARELY would the resultant sum be sufficient be sufficient to buy* more than 10%-20% of the very generous pensions.

            * the cost to “buy” already reflecting the discounting of all expected future pension payments to the date of retirement.
            ——————————–

            Christie is foolish to exaggerate …. his POINT would have been well made if he stated that even after adjusting for investment earnings, employees only pay 10% to 20% of the full cost their VERY VERY VERY generous pensions.
            ——————————–

            SMD,

            With a working history in road repair, I don’t believe you have the education, knowledge, or experience to judge what is …”irrelevant”, “taken out of context”, or “GIGO math” when it comes to financial matters.

            I promise to defer to you when I seek advise on repairing my driveway.

          • Posted by S Moderation Anonymous on February 19, 2016 at 4:41 am

            For all your so called education and “train”ing, I don’t believe you have the common sense G-d gave a goat.

            “Employee contributions are irrelevant. It all comes form taxpayers anyway.”

            What’s the difference if the state paid me $50,000 a year, and I “contributed” $5,000 towards my pension, or the state paid me $45,000 and I contributed nada?

            For the record, I have a BA in economics. San Francisco State University, 1983.

            Not exactly a “roads” scholar, but we all do what we can.

          • Posted by Tough Love on February 19, 2016 at 5:04 am

            Congratulating on the BA. In crazy CA I wouldn’t be surprised if it helped you get that job fixing their roads.

            And based on you work-experience, you likely are a “roads” scholar. I’ll keep that expertise in mind if my driveway needs repair.

          • Posted by S Moderation Anonymous on February 19, 2016 at 5:35 am

            Why do we park on a driveway and drive on a parkway?

            Say goodnight, Gracie.

          • Posted by Tough Love on February 19, 2016 at 5:46 am

            Heck …… tell us, YOU’RE the “roads” expert………………. LOL

  14. Posted by S Moderation Anonymous on February 16, 2016 at 6:16 pm

    Too late!!! This is the interweb. Nothing is private. Nothing is secret. No one is safe. Your comment is already attributed. We are the web. You will be assimilated. Resistance is futile. 

    Reply

  15. […] To make the payments the only options the opportunitynj people (and the rest of the political class) see are “massive tax increases for all New Jersey residents or a cut in important programs.”  There is a better third option. […]

    Reply

  16. Posted by Roxanne Dimacale on May 23, 2016 at 5:09 am

    Fantastic ideas ! Just to add my thoughts , you a IRS 5329 , my boss found a fillable form here https://goo.gl/3pVJm6.

    Reply

  17. I don’t see how they get themselves out of the net negative cash position they have right now, even with cleaning up the state. I used to be a muni bond trader and traded some NJ credits. By my math, they have somewhere between seven to eight years before the largest fund by unfunded liability, the Teachers’ pension, literally hits $0

    http://millennialmoola.com/2016/01/18/new-jersey-teachers-pension-fund/

    Reply

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