Arguments in NJ COLA Case Set

The New Jersey Supreme Court just informed litigants in Berg v. Christie that oral arguments are set for Monday, March 14, 2016 at 10:00 a.m.

Currently, based on a June, 2014 NJ Appeals Court ruling, New Jersey public employees have a right to promised cost-of-living-adjustments (COLAs) to their pensions. The state immediately appealed that ruling on some flimsy grounds and in a few days we will see how persuasive Christie’s people can be.

What do you expect?

43 responses to this post.

  1. Posted by Anonymous on March 3, 2016 at 5:12 pm

    Is it even relevant given the pension funds negative cash flow due to the lack of meaningful P&B reform and consistent State funding.

    Reply

  2. Posted by Tough Love on March 3, 2016 at 5:18 pm

    Reinstatement of the COLAs (with payment for missed COLAs) will simply hasten the Plans demise by several years.

    Reply

    • Posted by Anonymous on March 3, 2016 at 5:26 pm

      If the state can afford over 600 million a year in pension investment fees they can afford Colas

      Reply

      • Posted by Tough Love on March 3, 2016 at 5:52 pm

        Really genius, The addition of COLAs (under NJ’s 60% of CPI COLA-formula) to an otherwise identical Plan w/o COLA increases its “value” by about 25%. Per Mr. Butry, NJ’s Plan (when PROPERLY valued) are $175 Billion in the hole.

        Do the math.

        Reply

  3. Posted by Tough Love on March 3, 2016 at 5:36 pm

    While not on topic …… Assembly speaker, Vincent Prieto is without question the GREATEST danger to the financial well-being of NJ’s Private Sector Taxpayers ….. even MORE SO than Senate Leader Sweeney who himself goes around kissing every Union Butt he can find in his work-up to a run for NJ’s next Governorship.

    Take a look at the linked article (below). There is NOBODY (NOBODY !) more supportive of the undeniably grossly excessive Public Sector pay, pensions, and benefits ………. unnecessarily, unjustly, unfairly and unaffordably granted NJ’s Public Sector workers. And given Atlantic City’s on-death’s-doorstep financial condition, he evidently believes that there is no need for it’s workers (where most of AC’s revenue goes) to be a MATERIAL part of the solution…… noting that MATERIAL givebacks cannot successfully be “negotiated” with these Unions. Such givebacks must be forced upon them by putting-aside AC’s current contracts with it’s employees.

    Taxpayers ….. do ALL you can to have Prieto, BOUGHT with Public Sector Union Campaign contributions and election support, kicked out of office.

    Any “Dirty Laundry”? Bring it on !

    http://www.northjersey.com/news/prieto-says-atlantic-city-should-maintain-collective-bargaining-rights-if-state-takes-control-of-finances-1.1520997

    Reply

    • Posted by Anonymous on March 3, 2016 at 5:56 pm

      No dirty laundry for Christie, he has his done by a Chinese (no ethnic demeaning intended or implied) in the Trump Towers – nothing but the best and for the rest…….

      Reply

    • Posted by Anonymous on March 3, 2016 at 6:04 pm

      Damn voters didn’t they just elect the greatest Democratic majority Assembly in ~37 years. And with all Senate seats up for grabs this November and the Governor next November. Well let’s just say time for all to sit down and do some serious negotiating.

      Reply

    • Posted by Now retired Pat on March 3, 2016 at 7:04 pm

      SWEENEY FOR GOVERNOR!!!

      Reply

      • Posted by Tough Love on March 3, 2016 at 7:10 pm

        And how about a reduction in all PAST service accruals (INCLUDING for those ALREADY retired) that certainly would NEVER have been granted in the absence of the Union/Politician collusion ….. surely AT LEAST 50% of current pensions.

        Reply

        • Posted by Anonymous on March 3, 2016 at 7:32 pm

          GPS offline, back on point please to something more achievable and meaningful.

          Reply

          • Posted by Tough Love on March 3, 2016 at 7:49 pm

            OK, fine.

            Let’s start with eminently justifiable and very material FUTURE Service pension accrual rate reductions for all of NJ’s CURRENT Public Sector workers, along with an increase in the full/unreduced retirement age to 65, and with a 5% reduction in the otherwise calculated pension for EACH age before 65 that one begins to collect a pension ….. just like what is NOW done in Private Sector pensions.

          • Posted by Anonymous on March 3, 2016 at 8:12 pm

            Thank you, now we’re cooking!

          • Posted by Anonymous on March 3, 2016 at 10:57 pm

            Certainly not a “magic bullet” but it’ll make a TINY dent. State could save $ by eliminating the “free” 3/16 (ordinary) or 7/16 (disability) of final average salary (FAS) retiree life insurance. Real rough guesstimate (unsubstaintiated) of future payouts are between $5-$7 billion based on current active and retired TPAF & PERS membership. I believe the plan is administered by Prudential and pay as you go funded by the State. Keep em coming Love…….

        • Posted by Anonymous on March 3, 2016 at 9:12 pm

          it is a guarantee that your taxes will go up substantially before the pension system fails maybe you should move out of New Jersey

          Reply

          • Posted by Tough Love on March 3, 2016 at 9:31 pm

            When (not IF) NJ’s pensions go pay-go, and the pensions/benefits aren’t materially reduced in stead of tax increases, I will indeed move away.

          • Posted by Anonymous on March 3, 2016 at 10:09 pm

            Coming from a place of sincerity and honesty, taxes can’t realistically go up enough to pay for this. Significant P&B reform is needed as well. It’s unfortunate but true.

          • Posted by Tough Love on March 3, 2016 at 11:03 pm

            “Unfortunate” is the wrong word.

            Given the reckless generosity and self-interest/stupidity of the Elected Officials who grant these pensions (AND benefits), the correct word is “expected”.

  4. Posted by Javagold on March 3, 2016 at 8:06 pm

    If it crashes the Pension Ponzi much quicker. Let’s hope they bring back COLA (and even triple them)

    Reply

    • Posted by Anonymous on March 4, 2016 at 3:29 pm

      Sounds good java. I’m just ready to collect. 3x cola increase. Wow!!!!! Where do I sign for that!?!?!??!?

      Reply

  5. Posted by Tough Love on March 3, 2016 at 11:25 pm

    There are indeed reasons to dislike Gov. Christie, not the least of which is his time away from NJ while pursuing the presidency (and now support Donald Trump), but I CHALLENGE all the Christie-haters to identify even one thing* that Christie stated in the linked video that is not RIGHT ON THE MONEY.

    _______________________________________
    * Yes, he SHOULD HAVE adjusted the enumerated teacher contributions vs their pension/benefit takeout for the time-value-of money.

    Reply

  6. Posted by MJ on March 4, 2016 at 9:37 am

    What exactly are Vinnie Prietos qualifications with finance and government budgets? Thought I read somewhere he is a former bodybuilder and plumber by trade?? If he had his own plumbing business surely he must realize that his company would have gone under years ago if he ran it like he does the state.

    Reply

    • Posted by Anonymous on March 4, 2016 at 3:34 pm

      A great first step should be stopping for new hires, with possible exception of police fire. And teachers(maybe a hybrid for them) at least we will how no more participants than we have right now!!!!! Then we can discuss further concessions at a unrushed pace knowing we are losing pensioners every day ( sad but true)

      Reply

      • Posted by Anonymous on March 4, 2016 at 3:45 pm

        Love those exceptions, just so happens they receive the GRETEST benefit – SELF INTERESTS!

        Reply

      • Posted by Anonymous on March 4, 2016 at 3:49 pm

        Oh I forgot to mention, once that NJ Transit bus is running it doesn’t care who gets thrown under it.

        Reply

      • Posted by Tough Love on March 4, 2016 at 4:14 pm

        Police pensions are BY FAR the most generous, hence the most costly, and the most egregious ….. TYPICALLY 4 to 5 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. Their CURRENT pensions are grossly excessive, unnecessary, unfair to taxpayers and unaffordable, and continuing them for even the future service of CURRENT workers is reckless and absurd.

        Teacher pensions are 2 to 3 times greater rather than 4 to 5 times greater, but there are so many teachers, that to exclude them would negate a large share of any potential savings.

        Any why are EITHER groups deserving of pensions ANY (yes ANY) greater than Private Sector workers in jobs with reasonably comparable risks and requirements for education, experience, knowledge, and skill? Police in many NJ towns make $125+K in BASE PAY after only 5 to 7 years. Anyone who argues that their RICH pensions are needed because of low pay is being disingenuous in the extreme. Equally false is the claim that the risk of Police work justifies it is also wrong, Police as an occupation not even being on the US Gov’t BLS list of the most dangerous occupations.

        Private Sector taxpayers have been suckered long enough by the insatiably greedy Public Sector Unions/workers and the Elected Officials who enable this ripoff by trading their favorable votes on Public Sector pay, pensions, and benefits for Public Sector Union campaign contributions and election support.

        Reply

      • Posted by Tough Love on March 4, 2016 at 4:18 pm

        Quoting …. “Then we can discuss further concessions at a unrushed pace knowing we are losing pensioners every day ( sad but true)”

        Yeah, likely being one approaching or already retired, you’d like that. Your comment wreaks of greed and self-interest.

        At a MINIMUM the future service accruals of all CURRENT workers must be VERY materially reduced…….. and Time is of the essence.

        Reply

  7. Posted by Anonymous on March 5, 2016 at 2:41 pm

    John,
    My apologizes if I misstate or not clearly state my point. Under what enabling legislation, as amended, established pension benefits and COLA. We’re they both specifically bestowed with unforfietable rights or as with most legislation was it subject to interpretation. At this point the intent of the legislation is as useless as the lawsuit. The COLA is not part of the pension benefit calculation but an additional benefit granted. I thought some years ago the COLA was funded from GF approps and did not come out of the pension funds? To sum up, in my opinion, the COLA is separate from the pension benefit and not subject to the nonforfietable right. Full disclosure, I’m not a judge or lawyer but I did stay at a Holiday Inn.

    Reply

    • COLAs are definitely part of the pension and only by confusing the judges into thinking otherwise.

      Nevertheless I vote for the NJ Supreme Court to eliminate COLAs (a minority view since of the 89 votes in the poll only 12 went with CIKA elimination) because that would be the convenient thing to do.

      Reply

  8. Posted by Eric on March 7, 2016 at 10:18 am

    John:
    We know that the Justices are politicians, otherwise, they would not be where they are. There is no “judge test” for securing any judiciary position other than raw politics. That being said, I believe that they are certainly smart enough to reach some form of compromise. The many years of both statutory and case law in NJ, and the detailed unanimous Appellate Division decision, cannot be summarily dismissed, since an already battered court would appear as a national joke.
    I know for a fact that the national critics are waiting to pounce.
    Eric

    Reply

    • Agreed and the next blog will look at the NJ Supreme Court and their ‘thinking’. For example when they were looking at the pension payment case last year Judge LeVecchia made the point:
      http://www.politico.com/story/2015/05/chris-christie-state-pension-reform-new-jersey-courts-117704

      But Justice Jaynee LaVecchia suggested to attorney Steve Weissman, who represented public employees, that the state needs to maintain enough flexibility to adjust to changing financial circumstances.
      “You are still arguing for this law to require every legislature for I don’t know how long to put a certain specified amount in the budget for every single year,” she said.

      Probably the most basic aspect of pension funding and this judge can’t grasp it.

      Reply

      • Posted by dentss dunnigan on March 7, 2016 at 11:16 am

        Here is something that will make all pensions implode .In their rush our government will ban cash ,when ? one to five years out ,reason being is when we go to negative rates to force people to buy and spend ,people have said they will horde cash to avoid getting it taken away in drip..drip fashion by neg rates .It would be impossibly for any pension to survive in this environment .http://www.reuters.com/article/markets-saft-idUSL2N16A2BC

        Reply

        • Nah, the NJ pension funds will be successfully managed so as to produce average annual returns of at least 7.5% regardless of whether the Federal Funds rate is negative or not. Just like all of the “contractual” pensions, with COLA and retiree medical benefits will be paid. Hahahahahahahahahahahahahahah!!!!!!!!!

          Reply

  9. Posted by eric blair on March 22, 2016 at 1:01 pm

    A blueprint to nationalize all US private retirement accounts.

    A Comprehensive Plan to Confront

    the Retirement Savings Crisis

    By Teresa Ghilarducci and Hamilton “Tony” James

    Under the Retirement Savings Plan (the “RSP” or “Plan”), all those who don’t have access to a workplace pension plan would be enrolled into a Guaranteed Retirement Account (“GRA”)—and those with 401(k)-type and all other plans would roll their savings over to a more suitable GRA.

    This includes part-time and self-employed workers.

    Page 14

    Can a spouse inherit a deceased partner’s GRA?

    Pre-annuitization GRA accounts would be inheritable by the spouse. After annuitization, which occurs on the household level, the annuity would already reflect longevity assumptions and would not be inheritable.

    Page 21

    Who would be responsible for investing the funds? Is this plan way to get more money for Wall Street to manage?

    This plan will increase competition among retirement investment managers, which will be good for retirement savings. The individual saver will choose their own manager, and there will be many to choose from— including traditional money management firms, mutual fund companies, state agencies that now manage public pension plans, a self-funded, national entity that could potentially be set up by the Federal Government, and maybe even Berkshire Hathaway—all competing for your business.

    This new class of “pension managers” would work like endowment and pension plan administrators. They would focus on asset allocation, risk management, and the selection of individual investment managers and sub-advisors to handle the actual buying and selling of particular investments. These managers would have a fiduciary obligation to the GRA holders and would need to be federally licensed and regulated.

    Individual GRA holders would select their pension manager based on fees and investment performance. They would be able to choose their preferred manager or change from one to another at the beginning of each year. Accounts would be fully portable and the assets would transfer based on the account balance. A national exchange of managers would be the best way to facilitate this process.

    A cottage industry could even arise to advise GRA holders and rate different managers (similar to Morningstar and mutual funds).

    Page 22

    Does the combination of mandating GRAs and ending tax breaks for 401(k)s and IRAs take retirement savings decisions out of the hands of individuals?

    No. Each individual will control their own account. For too long, the American people have been left on their own when it comes to preparing for retirement. That’s why almost no one is prepared for retirement today. The word “mandate” may be politically charged these days, but research and experience make it clear that it’s the only thing that will work.

    Page 23

    http://www.economicpolicyresearch.org/images/Retirement_Project/Retirement_Security_Guaranteed_digital.pdf

    Reply

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