Real Reason for NJ Constitutional Amendment on Pension Payments

It came from likely 2017 gubernatorial candidate Raymond Lesniak who, in a podcast, made two things clear (or as clear as a politician can make them):

  1. No negotiations are possible when at least one side is undeniably represented by a liar
  2. There will be cuts to public pensions in New Jersey


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And to drive home the point about Christie:
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69 responses to this post.

  1. Posted by Anonymous on March 7, 2016 at 4:44 pm

    The constitutional amendment should be expanded to specifically exclude COLAs (rendering the courts powerless) as well as clearly and specifically detailing the agreed upon P&B reforms necessary to sustain the system’s – ie Commission recommendations, etc.

    Reply

  2. Posted by Anonymous on March 7, 2016 at 5:14 pm

    Unfortunately negotiating with this liar has become, well just read and watch……

    http://www.nj.com/politics/index.ssf/2016/03/watch_snl_lampoon_christie-trump_news_conference.html#incart_river_mobile_index

    Reply

    • Posted by Tough Love on March 7, 2016 at 7:44 pm

      Why not be honest……

      Public Sector workers don’t want to give back anything of material value, and little would change even if the “negotiations” were with a Saint.

      Reply

      • Posted by Anonymous on March 7, 2016 at 9:12 pm

        Only because they’re being misguided by their Unions. Remember rank and file members are a subset of the NJ population Eric describes below.

        Reply

      • Posted by The Resident Nutcase on March 8, 2016 at 8:25 am

        You’re an idiot TL. Public sector workers already gave back significantly. 35% of the healthcare. 1.5% pension increase…. Older retiring age…. With final average of last 3 years instead of last year. And many more caps and give backs at the local level. So please stop spreading your lies!!!!
        The truth is—
        The state caused this problem by skipping the payments over decades…
        Then to make matters worse…. Like a lying thief… The state made a deal… Called ch78…. In which they never intended to honor their end of the deal while enforcing the public workers positions.
        That’s just old fashion lies, deceit and thievery!!!!
        So now they want to ensure they state puts the money for their pensions into the fund. Nothing more. Nothing less. Fair is fair!!!!

        Reply

        • Posted by Anonymous on March 8, 2016 at 11:30 am

          W/O getting into the why and how we got here; how can “fully” funding the current level of P&B realistically happen with revenue increases and growth?

          Reply

        • Posted by Tough Love on March 8, 2016 at 12:55 pm

          Yes NUTCASE, NJ’s workers have given back …. but with the exception of the COLA freeze, the workforce hired prior to CH 78 are still accruing grossly excessive, unnecessary, unjust, unfair (to taxpayers) and unaffordable pensions, digging the financial hole we are in deeper every day..

          What matters is NOT how much you have given back, but WHEN will you give back the additional 50+% of your current pension accruals that REMAIN far above those of your Private Sector counterparts …. and with 80%-90% of the total Plan costs NOT paid for by the workers, but foisted upon NJ’s beleaguered and betrayed the Taxpayers.?

          Reply

          • Posted by The Resident Nutcase on March 8, 2016 at 4:36 pm

            You make no sense TL. In one breath you claim public workers don’t want to give anything up…. Then in the next exhale you say, well yes they have given up much through ch78. Christ!! What is it with you????
            You’re not happy until you bring everyone down to your level. Until you make everyone broke!!!
            You’re completely insane!!!

          • Posted by Tough Love on March 8, 2016 at 5:17 pm

            NUTCASE,

            I’m correct when I say that Public Sector workers don’t want to give up anything of material value (even when vastly greater than what their Private Sector counterparts get).

            Are they not suing to get back the SINGULAR give-back of any material value (the COLAs)?

            And was that not FORCED upon them, not given voluntarily ?

            ——————-

            Quoting …. “You’re not happy until you bring everyone down to your level.”

            Re-stating more accurately …….

            “I’ll be satisfied when Public Sector workers get EQUAL, but not greater pensions and benefits. Aand right now, Public Sector pensions and benefits are MULTIPLES greater in value, and THAT needs to end, and for all CURRENT (not just NEW) workers.”
            ____________________________

            As for making people “broke”, the insatiable greed of NJ’s PUBLIC Sector workers is contributing to the “going broke” of NJ’s PRIVATE Sector workers who are called upon to pay for almost all of it.

  3. Posted by Vote it Down on March 7, 2016 at 5:16 pm

    I disagree. Any idiot can see this will be voted down, ask a senior if they want to see their taxes go up or their services cut and watch them rush to the polls to kill this. So why put it up for a vote?

    In my opinion the amendment is a stunt by Sweeney to regain full throated union support for the Gubernatorial elections. Currently the unions feel betrayed by Sweeney on the last pension deal. So he offers up an amendment which he’ll campaign with the unions on and in doing so rebuilt relationships and trust. When the Amendment fails he’ll turn to the unions and say their only chance now is electing someone as Governor who will pass legislation to protect pensions, that someone being Sweeney.

    Regardless of who wins the next Gubernatorial election there will be pension cuts but Sweeney needs the unions to fight on the lie that he can protect them.

    Reply

    • Posted by dentss dunnigan on March 7, 2016 at 5:42 pm

      Not only seniors will reject this but any family with kids in school ,which are no longer first in line to receive money .The line would form behind payments into the pension which won’t kill the state the first year but going forward it will consume more and more of the budget squeezing out services . Me I don’t think this has a chance in hell of passing ,but it will weaken the unions bargining power .And if it gets crushed as I suspect any politician would be crazy to recomend a tax hike knowing he’s getting voted out of office

      Reply

      • Posted by Vote it Down on March 7, 2016 at 5:54 pm

        No one who wants to be Governor would want this to pass, it would maim the State’s finances and prevent any meaningful new policies. Sweeney knows this. He’s proposing it knowing it will fail and wanting it to fail.

        The purpose of the Amendment is to fail and in doing so bring the Unions closer to Sweeney.

        This Amendment is a Phantom Menace. Designed not succeed but to fail while yielding political opportunities.

        Reply

        • Posted by Anonymous on March 7, 2016 at 6:13 pm

          Curious what Municipality employs you? Good, bad, or indifferent this amendment only impacts “State” funded pensions. Which, at the local level, only includes teachers.

          Reply

  4. I believe HL Mencken had it right when he said “Nobody ever went broke underestimating the intelligence of the American public.” Substitute NJ for “public” (it is, after all, the only state George McClellan carried against Lincoln in 1864), and you have your answer. The measure will be approved and those of us who have already left NJ will be laughing even harder than we do now at the idiots who keep returning spendthrift legislators (a supermajority in the Assembly, right?) to Trenton.

    Good luck on it failing. Pass the popcorn….

    Reply

    • Posted by Anonymous on March 7, 2016 at 6:29 pm

      Who really knows? Instead of the R’s fighting it they should be pushing for the P&B reforms to be included. It’s like Trump’s position on issues, firm and unrelently but always room to negotiate. That’s show business (politics).

      Reply

  5. Posted by Eric on March 7, 2016 at 7:27 pm

    I agree with bdnicola that the proposed constitutional amendment will pass. I doubt that more than 5% of NJ residents can read past the 4th grade level. This is a state full of imbeciles. Just recount your day today dealing with people in NJ. It is far different from Europeans, although they are screwed as well being vassals to the US. war machine.
    I watched Hillary debate, and her lies can only be detected by those who have an IQ greater than 80 points, meaning that she will beat Bernie Sanders.
    I agree that Sweeney does not want this to pass as well. He will get burned having no money to play with to feed Georgie Porgie when the amendment is enacted.
    Eric

    Reply

    • Posted by Observer on March 7, 2016 at 8:39 pm

      I believe Tough Love claims she/he lives in N.J. Wonder if he/she is in the 5% or the 95%?

      Reply

      • Posted by The Resident Nutcase on March 8, 2016 at 8:29 am

        TL clearly leans towards the 95% with her bring everyone down instead of lifting them up. She is all that is wrong with this country and ultimately it’s doom. Lower the bar to me…. Because I’m lazy and dumb. Breed out competition. Give everyone a trophy.
        We all lose in the end.

        Reply

        • Posted by Tough Love on March 8, 2016 at 12:44 pm

          By “everyone”, do you mean the 10% of NJ’s population ….. it’s PUBLIC Sector workers ….. with DB pensions multiples greater than their Private Sector counterparts and with “Platinum+” benefits Private Sector workers/retirees can only dream of?

          And while making comparable cash pay, thereby NOT justifying ANY greater pensions and better benefits ?

          It THAT who you mean by “everyone” ?

          If so, what make them so “special” that they deserve a better deal (a FAR FAR better deal) on the Taxpayers’ dime ?

          Reply

          • Posted by Smooth Moderation Anonymous on March 8, 2016 at 2:59 pm

            Still relying on (questionable) data as much as seven years old?

            A lot of factors have changed. Costs have increased for public sector workers and benefits have decreased.

            Comparative public/private wages are always in flux.

            Your alleged “23% advantage” was suspect even when first written. More so today

            The only thing that hasn’t changed is your “opinion”.

          • Posted by Tough Love on March 8, 2016 at 3:43 pm

            SMD, The Nutcase (or immediate family members) is a Safety worker with the MOST generous, costly, and egregious pensions ….. with cash pay ALONE grossly excessive (based on risks, education, knowledge, and skills ….. vis Private Sector counterparts) ….. and with truly outrageous pensions & benefits layered ON TOP OF that excessive cash pay.
            ————————————–

            SMD, always “smoothing” …. nothing to see here folks (i.e., Taxpayers), we’re only ripping you off a little bit.

          • Posted by The Resident Nutcase on March 8, 2016 at 6:43 pm

            Having family in the public sector makes no difference TL.
            We are all tax payers. I just believe that what’s right is right. These people were promised a contractual right. No one should be able to change that mid game. Perhaps for people not hired…. Yet…. As they can make a choice on not to take the job. But to do this to people with 20,30,40 years on the job is straight highway robbery.
            Should have made the payments. But now since you are nothing but meat with eyes… You have allowed the rich to pit the citizens against each other while they fleece us all blind. It’s genius actually. While you and I fight….. The rich laugh at us both as they slip the money right out of our pockets. So, good job keeping up TL. You should be out there screaming about how come…
            The healthcare industry monopolizes and kidnaps the workers
            Lazy welfare recipients stay home and pop out babies because that’s $800 more per month per kid…. Can’t line up for a job…. But they can line up at 6am at footlocker waiting to buy a $300 pair of Jordan’s.
            Giant tax breaks are given out to corporations only to make the owners richer
            The list goes on and on.
            Yet you choose to go after the public worker. The guy who actually gets up to go to work, pays taxes and just wants his/her little pension like they were promised.

          • Posted by Tough Love on March 8, 2016 at 7:22 pm

            Quoting the NUTCASE …..

            “Having family in the public sector makes no difference TL.
            We are all tax payers. I just believe that what’s right is right. ”

            BS and more BS.

            It self-interest and GREED … plain & simple.

            Public Sector workers are NOT “special” and deserving of a better deal (a MUCH MUCH MUCH better deal) … on the Taxpayers’ dime.

    • Posted by Anonymous on March 7, 2016 at 8:43 pm

      Guess Trump will carry NJ in a landslide! “He loves the poorly educated.”

      Reply

  6. Posted by MJ on March 8, 2016 at 8:12 am

    Ok so amendment passing or not passing, will the pensions be reformed significantly to make any real difference?

    Reply

    • MJ, to your question about significant reform, I think the answer is no that whether or not the amendment passes, there will be no reform “significant” in the sense that it would have a real prospect of restoring solvency to the public worker pension systems. At best, spending priorities will be realigned by cutting expenditures in other areas (like building “infrastructure”, providing food, housing, and health care to the poor, local property tax reduction, and higher education spending) so that more, but not enough, spending can be reallocated to the pensions. The exodus of rational, tax paying citizens will accelerate, though an equally rational response for those who want to stay near family is to just quit the workforce and claim disability benefits. Seems to be the American way nowadays.

      Reply

  7. Posted by Smooth Moderation Anonymous on March 8, 2016 at 2:24 pm

    “I’ll give it away at the beginning: they’re in trouble because they’re not making the “required” contributions to the pensions.

    Yes, there are all sorts of other reasons as well, such as spiking, early retirements, sluggish payroll growth, optimistic valuation assumptions, etc.

    But ultimately the reason the pensions are so little funded is because the state didn’t put in enough funds.

    And they knew it.

    They knew it for years.”

    Reply

    • Posted by Tough Love on March 8, 2016 at 3:45 pm

      Wrong, and as expected, more “smoothing”.

      The ROOT CAUSE of the pension mess EVERYWHERE is grossly excessive Public Sector pension promises, always multiples greater than those of comparable and similarly situated Private Sector workers.

      Reply

      • Posted by The Resident Nutcase on March 8, 2016 at 6:35 pm

        Wrong again TL. How in the world ….can not paying a bill …for decades …not be the root cause… For the pensions being underfunded??? Lol
        Regardless of how rich or poor the benefits are…… By not paying into them… They will eventually become underfunded. This is very simple math TL.
        But since that doesn’t fit your “bring everyone down to me” mentality… You blame it on something else. Very misleading…. You are.

        Reply

        • Posted by Tough Love on March 8, 2016 at 8:02 pm

          Quoting ,,,, “Regardless of how rich or poor the benefits are”

          Really ??? If your benefits were 10 times MORE generous than the ALREADY grossly excessive level they are right now, you would STILL be saying the same thing ….. “Taxpayer, we were “promised” and it’s a contract, so pay up”.

          Grossly excessive unnecessary, unjust, unfair, and clearly unaffordable pension/benefit “promises” BOUGHT from out elected officials with Public Sector Union campaign contributions and election support should NOT be honored.

          Greedy little man.

          Reply

    • Posted by Smooth Moderation Anonymous on March 8, 2016 at 6:03 pm

      Not I, Love. Moderation is just the messenger. That was Mary Pat Campbell, 24 February 2016.

      “It’s not because of investment fees, though those should be more transparent. It’s not because of part-time board directors who get a lifetime pension for very little work, though that doesn’t help. (I’ll address why these aren’t significant problems in a later post.)

      DON’T PAY THE BILLS, THE DEBT GETS LARGER”

      And it was Illinois, is New Jersey any different?

      Reply

      • Posted by Tough Love on March 8, 2016 at 8:07 pm

        I encourage all of Mr. Bury’s readers and all those interested in an unbiased critique of the Public Sector pension mess spreading across America to read the many Blog articles of Mary Pat Campbell, an actuary well versed on the subject.

        Here blog can be found here:

        http://stump.marypat.org/

        Reply

      • Posted by Sean on March 8, 2016 at 10:16 pm

        Speaking of Mary Pat Campbell, she summed it up nicely in one of her other posts:

        Yes, they should have been fully funding the pension for the past two decades.

        No, Gov. Whitman shouldn’t have had pension obligation bonds issued in lieu of real pension contributions.

        No, there never should have been any years with zero contributions from the state.

        Yes, this could have been manageable if the “required” contributions were actually required.

        Yes, if that had happened, people would have noticed how expensive the pensions were earlier and tried reform well before Christie came on the scene.

        But shoulda, coulda, woulda doesn’t help New Jersey now.

        And saying “Just make the contributions already!” isn’t really helpful in dealing with the problem.

        Reply

        • Posted by Tough Love on March 8, 2016 at 10:33 pm

          The “key” points …. with the latter being the more important (and with “reform”, by necessity applying to the future service of all CURRENT workers):
          —————————-

          Yes, this could have been manageable if the “required” contributions were actually required.

          Yes, if that had happened, people would have noticed how expensive the pensions were earlier and tried reform well before Christie came on the scene.

          Reply

        • Posted by The Resident Nutcase on March 9, 2016 at 8:23 am

          So basically Sean…. You’re saying what I’ve been saying all along.
          It’s the states fault….. These people deserve their money because they did nothing wrong. So stop putting public workers on the spike.
          The state caused this…..
          And saying oh well. Too bad. So sorry is not right, ethical, legal or moral. Make the payments. MAKE THE GOD DAM PAYMENTS!!!!
          Simple as that.

          Reply

    • Posted by Sean on March 8, 2016 at 10:44 pm

      Quoting SMD:

      ““I’ll give it away at the beginning: they’re in trouble because they’re not making the “required” contributions to the pensions.

      Yes, there are all sorts of other reasons as well, such as spiking, early retirements, sluggish payroll growth, optimistic valuation assumptions, etc.”

      Douglas, I’d like to know your opinion of funding ratios in your state of California.

      1. In 1999, prior to the passage of SB400, what was the funding ratio of the pension plans?

      2. After the passage of SB400, what was the funding ratio?

      3. Assuming the funding ratio went down after SB400 was passed, what was the cause of that lowering of the funding ratio?
      A. Not making required contributions to the fund?
      B. Added benefits and retroactive increases adding huge expenses to the fund?

      4. After the market tanked in 2000, what hurt the funding ratios then?

      ALL of these questions COULD be answered with “not making the required contributions.” After all, if one simply pays in enough money, one can pay for a given benefit, right?

      While that is true, it is not the whole truth. YES, payments should have been made. No debate from me. But what if benefits were not affordable or sustainable to begin with? And, to some degree, I agree with Nutcase in this sense: Any person, public or private, who is promised something (whether fair, unfair, affordable, extravagant, or not) is not unreasonable to assume that he should be able to expect that benefit, especially if he did what was required of him in the deal. (The debate over the fairness of those promises is a separate, albeit legitimate, argument).

      To me, it seems to come down to two basic arguments as to the blame game:

      Camp 1: The reason we’re in this mess is too many years of not paying the bill.

      Camp 2: The reason we’re in this mess is the bill was not affordable from the beginning, and should never have been agreed upon to begin with.

      Realistically, it is a blend of the two. Neither answer is exclusively correct.

      Reply

      • Posted by Tough Love on March 9, 2016 at 12:13 am

        And (looking past the huge existing asset shortfall associated with PAST service accruals) the biggest problem is ….. those now working and accruing these clearly unaffordable pensions believe that they should REMAIN unreduced for the remaining years of their careers.

        I will never be convinced that that is appropriate fair, or reasonable.

        Reply

      • Posted by Tough Love on March 9, 2016 at 2:20 pm

        Sean, You and I agree on most, but not all issues …..

        For example, above you said ….

        “And, to some degree, I agree with Nutcase in this sense: Any person, public or private, who is promised something (whether fair, unfair, affordable, extravagant, or not) is not unreasonable to assume that he should be able to expect that benefit, especially if he did what was required of him in the deal. ”

        That seems to be the Public Sector workers’ …..”but I earned it” argument …. an argument I believe to be full of holes …..

        I don’t doubt that Public Sector workers “worked according to the rules” and going further, that individually they had nothing to with choosing/granting the formulas for their pension and the generosity of their benefits.

        However please don’t call them “earned”, as it implies that their promised pension & benefits were necessary, (to attract and retain a qualified workforce), justified, fair (to Taxpayers who pay for 80%-90% of the total costs), or affordable. They never were and aren’t today, simply having been BOUGHT By the Public Sector unions from self-interested taxpayer-betraying Elected Officials with Public Sector Union campaign contributions and election support.

        Promises so fraudulently obtained, even though “promised” should not be honored to the extent they exceed what would have likely been promised in the ABSENCE of that fraud.
        ——————————————————–

        To be fair, you did add ….

        “The debate over the fairness of those promises is a separate, albeit legitimate, argument”

        Yes, but the 2 issues are NOT separable.

        Reply

        • Posted by Sean on March 9, 2016 at 3:37 pm

          Right. I Do think, from a psychological point of view, that a person, once promised something, would be pissed off if that promise was reneged on, if the person “did what was required of him in the deal.” I DO feel for that person, and I understand the sentiment.

          However…

          What frustrates me JUST AS MUCH, is that no one on the public side of this debate, will EVER, EVER, bring themselves to admit that, just like not paying into the funds creates a huge problem, the PROMISES THEMSELVES are also a HUGE part of the problem. I get particularly frustrated with SMD, who, having a degree in economics, and with all his ability to average things into reasonableness, does not ever (at least to my recollection), ever, expand on the damage that has been done by promises that were never affordable, never reasonable, and more importantly, never necessary to begin with.

          Simple: If I offer someone 1.2 million dollars per year to do some yard work for me, all I have to do is put $100,000 per month into his account. If I do not do that, OF COURSE it is a problem, and OF COURSE, it’s true: “DON’T PAY THE BILLS, THE DEBT GETS LARGER.” Correct. But let’s not kid ourselves, ok? The BIGGER problem, is that I had no business agreeing to pay 1.2 million dollars for the work. AND THAT is HOW TAXPAYERS GOT SCREWED. Will ANYONE on the public side of this EVER, EVER, OWN UP TO THIS???!!!

          It would almost have been better if we had had mandates to fully fund these pensions, right from day one. Why? Because everyone could have seen, very clearly, right from the beginning, that most of the promises made were not affordable. Maybe knowing the promises had to be funded right away would’ve kept politicians from making the promises in the first place. We would all be much better off at this point in time. Just a thought…

          Reply

          • Posted by Smooth Moderation Anonymous on March 9, 2016 at 6:22 pm

            The biggest outcry (by design) in the recent (since about 2008) pension controversy has been about the “$100,000 club. An almost clever ploy by the pension “reformers” (AKA “reducers”) They may have shot themselves in the figurative foot, when people eventually realized that, a) these were only about one percent of retirees (now going on two percent, due to inflation) and b) many of these largest pensions were for employees who were actually underpaid, both in wages and in total compensation. Doctors, lawyers, city managers, high level management, etc.

            A brief aside, one of my all time favorite stories. Mike Genest, director of the Department of
            Finance under Gov. Schwarzenegger. When he left state employment, he started his own consulting business, Capitol Matrix Consulting. One of his company’s first projects was a comparison of public vs private compensation. Conclusion: public workers earn thirty percent more in total compensation than the private sector. When asked about his own very high pay and $100,000 + pension, he replied:  “We could have made a lot more money in the private sector. We are making more money.”

            http://capitolweekly.net/pension-reform-is-lucrative-for-former-capitol-insiders/

            (Please note the ironic title of that article.)

            Doctors, lawyers, MBAs, and career executives aside, the other members of the $100,000 club are largely police and firefighters. I don’t know how much a policeman is worth.

            Quoting Sean:
            “I get particularly frustrated with SMD, who, having a degree in economics, and with all his ability to average things into reasonableness, does not ever (at least to my recollection), ever, expand on the damage that has been done by promises that were never affordable, never reasonable, and more importantly, never necessary to begin with.”

            Sorry, once, a long time ago, I commented in a blog that I had looked at the San Jose city police and fire salaries and was surprised by the number of employees and the size of their salaries.

            The response I got (paraphrasing) was “Bwahaha, look, the public employees are throwing each other under the bus. They’re eating their own. The greedy bastards know they are overpaid so they go after “the other guy” to protect their own benefits.” That’s actually mild compared to some of the comments I have read. I don’t know how much a policeman is worth. I do think there has been a gross exaggeration of compensation of the typical street cop by averaging his pay in with all the Sheriff’s, chiefs, and upper management. And concentration on the salaries in the largest cities. In California, a cop in the central valley can increase his pay by up to fifty percent by moving (or commuting to) the Bay Area. (As can a nurse or a plumber.)

            TL apparently lives in an area where a cop (with 5 to 7 years experience) can average $125,000 a year (when the average includes the chief and all upper and middle management.) That is not typical or average in the state as a whole. In my area, a street cop averages about $80 grand a year salary. And I have no problem with him retiring at 55. Particularly when 55 is the mandatory retirement age (it isn’t everywhere.)

            How much IS a cop worth?

          • Posted by Tough Love on March 9, 2016 at 7:27 pm

            Sean, Well said …….

            You couldn’t have better-described the REAL problem, and the basis for my strong advocacy for pension level REDUCTION (rather than ramping up funding to actually pay for these absurd promises).

            Well done.

          • Posted by Tough Love on March 9, 2016 at 7:41 pm

            Quoting SMD …….

            “TL apparently lives in an area where a cop (with 5 to 7 years experience) can average $125,000 a year (when the average includes the chief and all upper and middle management.) ”

            Actually it’s $125K in base pay JUST for those (with 5 to 7 years experience) with the PATROLMAN rank, and in almost all of the dozens of smallish (middle, and a few upper-middle Class) towns surrounding the town in which I live.
            ——————————————

            As for rest, just more of the same BS and “smoothing”………

            Nobody who understand the math focuses on the $100K pensions, It is specifically the VERY RICH “formulas” and very generous “provisions” (e.g., COLA increases and very young full/unreduced pensions) that combine to produce pensions that are AT ALL INCOME LEVELS multiples greater than those of their Private Sector counterparts.

            Such pensions are not necessary, just, fair, or affordable.

          • Posted by Sean on March 9, 2016 at 9:28 pm

            Quoting SMD:

            “Sorry, once, a long time ago, I commented in a blog that I had looked at the San Jose city police and fire salaries and was surprised by the number of employees and the size of their salaries.

            The response I got (paraphrasing) was “Bwahaha, look, the public employees are throwing each other under the bus. They’re eating their own. The greedy bastards know they are overpaid so they go after “the other guy” to protect their own benefits.” That’s actually mild compared to some of the comments I have read.”

            I can definitely relate to that, and I believe it to be part of the reason that real dialogue CAN take place, but probably won’t. And I do see the fallacy of things like the 100k club, “it’s the fees paid to hedge funds that are killing us” etc etc. It’s like when politicians roll out the waste, fraud, and abuse line. Yes, I do believe that spending $20,000 on pamphlets explaining the mating habits of shrimp is a waste of money, and yes, it should be stopped, but things like this are a penny on a $10,000 bar tab.

            Going forward, I had read something that I think Now Retired Pat (?) had said about making cuts, but starting with double dippers, 100k club, and making smaller cuts to those with more modest pensions, etc. I don’t know who else said it, but something to the effect of the rank and file union members want to do this, but the union leaders don’t. I think these types of things would be a good step in the right direction. Cuts are coming to every pensioner. How deep they will be will depend on a multitude of things, but the rank and file union members almost need to form a “union within the union” to get something done if they’re going to have any chance at all. And health care? The cost of health care will eat us all up, sooner or later.

          • Posted by Tough Love on March 9, 2016 at 9:40 pm

            Quoting Sean …….. “How deep they will be will depend on a multitude of things, but the rank and file union members almost need to form a “union within the union” to get something done if they’re going to have any chance at all. ”

            As well should teachers with short service. It should be a crime (when layoffs are necessary) to base such layoff SOLELY on seniority and not effective teaching ability.

            Most know teachers with 5 to 10 years to go before retirement, who are burnt out, can’t stand teaching, would rather be doing anything else but hang in there solely for the big pension tied to LONG service, and are totally ineffective.

            But it’s ALL FOR THE KIDS.

            Really ?

          • Posted by Sean on March 9, 2016 at 11:18 pm

            TL: “But it’s ALL FOR THE KIDS. Really ?”

            Amen. And anyone who doubts it, look no further than the current goings on in Chicago. Their “contribution” to retirement is 9%, but the district started “picking up” 7% of that, leaving the teachers to pay 2%, since 1981.

            NOW, CPS is asking the teachers to pay the full 9% and take 3 unpaid days off during the school year this year.

            The teachers see this as “an act of war,” and there’s little doubt they will strike. They are eligible to strike, I think, in early May. Of course, they could wait until July to strike…

            (back in 2012, they were “very disappointed” in getting a 17% pay raise over four years, while their neighbors everywhere were losing their jobs, taking pay cuts, unpaid days off, anything just to KEEP a job).

            I DO believe that stuff like this is part of the reason there is such vitriol in the public pension debate,

          • Posted by Tough Love on March 10, 2016 at 12:56 am

            Here is a very interesting article on the financial mess with the Chicago Public Schools and the possible strike:

            http://stump.marypat.org/article/411/public-pensions-watch-a-look-at-feeswhich-aren-t-killing-pensions

            I’m quite sure the Union knows that no money is available, but being “privileged” Public Sector workers, that matter little ……. must get more, more, and more.

            Not sure if it is a legal option, but I would LOVE to see all of them fired as Ronald Regan dd with the striking Air Traffic Controllers 30 years ago.

  8. Posted by Smooth Moderation Anonymous on March 9, 2016 at 12:45 am

    Quote:
    “Many public pension systems have become bloated-but-underfed beasts that need to be tamed. That is not an impossible task in most states. With a few exceptions, state and local governments and their pension funds will slowly pull out of the current financial crisis. It may take a decade, but they will disprove the doomsday pronouncements of those whose primary objective is to roll back what they see as lavish benefits for public employees.”

    ————————–
    1) “With a few exceptions” might well mean New Jersey, Illinois, and others who, as MP said :

    “didn’t put in enough funds.

    And they knew it.

    They knew it for years.”

    2) “the doomsday pronouncements of those whose primary objective is to roll back…..” means clearly that pension “reform” is a euphemism for “reduction”.

    3) And “……primary objective is to roll back what they see as lavish benefits for public employees.” means that “lavish benefits” is subjective; in other words, what they …”see”… as lavish benefits.
    —————————–

    The quote is from Girard Miller (before he was hired by Orange County Retirement Systems) far from being a rosy article, though, he is emphasizing the larger problem:

    “Misplaced Pension Hysteria”

    or

    “The real monster is OPEB, not pensions”

    (GOVERNING , FEBRUARY 3, 2011)

    Reply

    • Posted by Tough Love on March 9, 2016 at 1:00 am

      SMD, Couldn’t find more ammunition for your “smoothing”, so you’ve moved on from Mary Pat Campbell to Girard Miller ? And 2011 ?

      Since this is a Blog about NJ’s pension mess, perhaps you missed Mary Pat’s commentary on NJ’s Plans, here:

      http://stump.marypat.org/article/17/welcome-to-the-public-pension-watch-hurray-for-new-jersey

      Quoting ……………

      “New Jersey pensions are going under, even after the multiple rounds of “reform”. The amount of money to make them whole is not going to come from NJ taxpayers, and there will not be a federal bailout. Mainly because the feds can’t bail them out. The hole is just too big.”

      Reply

    • Posted by Smooth Moderation Anonymous on March 9, 2016 at 2:12 am

      Now you’re just talking in circles, Love.

      Mary Pat’s quote ties right in with Miller’s statement: “With a few exceptions, state and local governments and their pension funds will slowly pull out of the current financial crisis.”

      New Jersey, Illinois, and others can’t pull out of the financial crisis because when you:

      “DON’T PAY THE BILLS, THE DEBT GETS LARGER”

      Not holding California up as a paragon, but they are one of the States which “will slowly pull out of the current financial crisis.” and as far as I have noticed, pension formulas in California are more generous than those in New Jersey. How many New Jersey retirees get 2%@55, or 3%@50?

      But California has, for the most part, kept up with actuarially required contributions. Which belies the idea that generous benefits are the “root problem”. And California is doing what Miller said in reducing benefits and increasing contributions.

      Reply

      • Posted by Tough Love on March 9, 2016 at 2:40 am

        SMD, Miller’s Statement was from 2011, based on data from what year …. 2010, 2009?

        You rail when I quote the AEI Study with newer data, but feel that when YOU use even OLDER data, it’s OK ?

        Have not these plans worsened over the past 6 years …. setting ablaze the budgets of the Cities and Sates that foolishly promised such undeniably grossly excessive DB pensions?

        NJ is simply a front-runner, with WAY more to follow.

        And BRAVO to Gov. Christie for refusing to fund this THEFT of Private Sector taxpayer wealth.

        NJ’s pension BENEFIT LEVEL must be materially reduced for all CURRENT workers, and if bringing these Plans to their knees by starving them of funds is necessary to do so, then so be it. In this case the end DOES justify the means.

        Reply

      • Posted by Smooth Moderation Anonymous on March 9, 2016 at 4:22 am

        Chill, Love. Moderation does not rail. Not that it’s relevant, but the AEI study was published in 2014, based on data from 2009 to 2012.

        Mr. Miller wasn’t citing data from a study, he was expressing an opinion based on broad knowledge of public pensions. Agree or disagree. It’s an opinion. Like this one:

        “But ultimately the reason the pensions are so little funded is because the state didn’t put in enough funds.
        And they knew it.
        They knew it for years.”

        New Jersey is not a front runner. It’s a good example of bad government. It gives me no pleasure to say that, but there is an important difference between states which funded their full actuarially required contributions and those who didn’t.

        Reply

        • Posted by Tough Love on March 9, 2016 at 12:26 pm

          Quoting SMD ….. (NJ), ” It’s a good example of bad government.”

          Indeed it is, by our self-interested Elected Officials granting pensions & benefits FAR FAR greater than necessary, just, fair (to Taxpayers) or affordable, and all in exchange for Public Sector Union campaign contributions and election support.
          ———————————
          Quoting SMD ………… “It gives me no pleasure to say that, but there is an important difference between states which funded their full actuarially required contributions and those who didn’t.”

          Given that Fully Funding that (grossly excessive pension promises) which is fraudulently obtained is a theft of Taxpayer wealth, the difference lies in the ALSO fraudulently concocted (by those benefiting from it) legal structure (e.g., CA’s California rule) that (a) mandates full funding of such unjust promises, and (b) make reducing such grossly excessive promises (even for FUTURE service not yet worked) all but impossible.

          And now (via the Constitutional Amendment), the slugs in NJ’s Union-controlled Legislature are taking NJ down the same hopeless path to financial ruin.

          Reply

      • Posted by Smooth Moderation Anonymous on March 9, 2016 at 8:11 am

        Quoting ……………
        “New Jersey pensions are going under, even after the multiple rounds of “reform”. The amount of money to make them whole is not going to come from NJ taxpayers, and there will not be a federal bailout. Mainly because the feds can’t bail them out. The hole is just too big.”

        Like Leo Durocher said, “You’ve got third base so screwed up nobody can play it!”

        “The hole is just too big.”

        “DON’T PAY THE BILLS, THE DEBT GETS LARGER”
        ___________________________________________________

        And don’t too quickly rule out federal intervention.

        Josh Rauh said:
        “While citizens of states that are particularly hard hit by the pension crisis may be able to escape to other states, an acceleration of this demographic phenomenon would leave a dwindling taxpayer base behind in the states facing the largest liabilities.
        This would increase the likelihood of a federal taxpayer bailout in which taxpayers in all states would bear the burden of the states in default. The problem of state and local pension liabilities is therefore a problem for all U.S. taxpayers, not just those in the states with the largest deficits.”

        Too big to fail.

        Imagine the irony; me, bailing you out!

        Reply

        • Posted by dentss dunnigan on March 9, 2016 at 11:54 am

          Whoever thinks the pensions will not go under ,think of in the terms of a credit card with a balance that you owe of 10K (I’ll keep it small ) the min payment is $36.00 yep you can make that but your interest on that 10K is $236.00 every month without ever using that card again you’ll never pay off the balance by making the min required payment .But if you use it which is like new retirees digging into the pension you will be broke in no time with no place to go …same as pensions 101.I believe we have a drawdown of close to 4 or 5 billion yearly .And who knows what the stock market will do ,who really expects the taxpayers to guarantee the stock market ?

          Reply

          • Posted by Smooth Moderation Anonymous on March 9, 2016 at 3:52 pm

            Apparently, New Jersey, as well as some other states have not been paying even the $36 “interest”.

            “DON’T PAY THE BILLS, THE DEBT GETS LARGER”

            In California 2013 the total employer cost for miscellaneous employees is about 24% of payroll. $9 is normal costs and $15 is amortization of unfunded liability. (Employee contributions are another 7% of payroll.)

            For Highway Patrol, total employer costs are 42%. Normal cost of 16% plus unfunded liability of 26%. (Employee share: 10%)

            Some states are paying more than the “interest”.

            More than 45% of CalPERS portfolio value lost in Great Recession

            Previous loss in dot-com bust was 33%

            It may take a while to catch up.

            And yes, these rates are mandated by CalPERS plenary authority. The legislature (or city council) cannot “decide” not to fund them. The Governor cannot veto them.

          • Posted by Tough Love on March 9, 2016 at 9:27 pm

            Quoting SMD ………… “For Highway Patrol, total employer costs are 42%. Normal cost of 16% plus unfunded liability of 26%. (Employee share: 10%)”

            THAT is a PERFECT example of the gross malfeasance of ALL of California’s contributors to this largess.

            The math can be complicated, but the 3%@50 pensions granted CA’s Highway Patrol have a TRUE level annual NORMAL COST (ALONE) approaching 60% of pay for those who retire after 30 years at age 55 when the Plans are valued, NOT with the intentionally cost-lowering methodology and “rosy” assumptions commonly used in CalPERS “official” valuations, but with the IDENTICAL (far more conservative) methodology and assumptions that the US Gov’t REQUIRES of Private Sector Plans.

            Do you think the assumptions/methodology REQUIRED of Private Sector Plans is punitive ? Of course not. Private Sector Pans are simply required to RECOGNIZE the very substantial investment risks associated with pension funding…… and not simply IGNORE THEM, set Plan “generosity” ASSUMING rosy investment returns will indeed materialize, and if not, simply stick the betrayed and beleaguered Taxpayers with the bill. Outrageous, is putting it mildly.

            That 60% level annual NORMAL COST is for those who retire with full 30 year careers and retire at 55, As a group, some retire with less service and some retire at later ages, bringing the Normal Cost for the Group as a whole down somewhat, but given the VERY low “quit-rate” and the very high proportion of Police who work FULL careers and retire at very early ages, it’s doesn’t come down very much, and certainly not below a level annual 50% of pay (for the group of all officers taken together).

            Your figures suggest a Total (EE + ER) Normal cost of 10% + 16% = 26%.

            The 26% is a what is being CONTRIBUTED as a direct result of low-balling TRUE Plan costs, and why no matter how much the Plan contributions go up, and even when they hit their investment assumption bogey, these Plans always seem to lose ground.

            The 26% is a GROSS betrayal of the taxpayers and there to enable these grossly excessive pension “promises” to UNJUSTLY remain in place.

          • Posted by Smooth Moderation Anonymous on March 9, 2016 at 10:17 pm

            “Your figures suggest a Total (EE + ER) Normal cost of 10% + 16% = 26%.”

            The normal costs according to this source are actually 9% from the employer and 7% from the employee, for a total normal cost of 16%. Then the employer pays an additional 15% toward the unfunded liability, for a total of 24% (9 + 15) from the employer.

            No need to get too picky and mathy about the numbers. These are three years old and constantly changing.

            In spite of all the CAPS LOCK and excessive use of adjectives, I believe you are exaggerating to support your own bias. Ita fiat, esto. Moderation is always watching.

          • Posted by Tough Love on March 9, 2016 at 10:27 pm

            SMD, I was using YOUR #s …. assuming you quoted them accurately, that being (from YOUR above comment):

            “For Highway Patrol, total employer costs are 42%. Normal cost of 16% plus unfunded liability of 26%. (Employee share: 10%)”.

            I assumed your quoted 10% for employee costs was incremental Normal Cost to be added to the stated 16%.

            Based on what your NOW saying …. that CalPERS assumes Highway patrol pension Plan Normal Costs are only 9% + 7% =16% of pay, it is even MORE outrageous …. because my 50% is a very realistic estimate of the Total Plan NORMAL COST using APPROPRIATE assumptions/methodology.

          • Posted by Smooth Moderation Anonymous on March 9, 2016 at 11:02 pm

            No, I was referring to miscellaneous employees. Either way, I say your Total Plan NORMAL COST using APPROPRIATE assumptions/methodology is gross exaggeration.

          • Posted by Tough Love on March 10, 2016 at 12:47 am

            Quoting SMD ….. “Either way, I say your Total Plan NORMAL COST using APPROPRIATE assumptions/methodology is gross exaggeration.”

            “Interesting, coming from the man who admittedly has little to no math or spreadsheet abilities.

            Not “perhaps”, not “may be”,but “is” (yes “is”) gross exaggeration.

            Please share your mathematical demonstration that brought you to that conclusion.

          • Posted by Smooth Moderation Anonymous on March 10, 2016 at 1:11 am

            Based on your penchant for exaggeration.

          • Posted by Tough Love on March 10, 2016 at 1:12 am

            We’re waiting SMD….

            Please share your mathematical demonstration that brought you to that conclusion.

    • Posted by Tough Love on March 9, 2016 at 8:12 pm

      SMD, per your newest idol (Girard Millar)….. “the real monster is OPEB” ….. which is essentially Retiree healthcare promises.

      So tell me, SMD what percentage of Private Sector workers are TODAY actively accruing anything (beyond a VERY modest few Hundred Dollars annually into a retiree HSA) towards Private Sector employer-sponsored retiree healthcare benefits.

      Anecdotal, yes, but what’s a reasonable guess 2%. 5%, MAYBE 10%. And what is that percentage for Public Sector workers (again anecdotal) 90%, 95%, 98% ?

      YES OPEB is indeed a monster …. that should END (because Private Sector taxpayers should not be called upon to fund something for Public Sector workers that THEY do not get) ….. but Public Sector pensions are INDEED as “monster” as well.

      Reply

      • Posted by Smooth Moderation Anonymous on March 9, 2016 at 9:44 pm

        Random quotes:

        “Forty-five percent of all retirees ages 55 to 64 have retiree health coverage, 2012”

        “According to the aforementioned Mercer survey, pre-65 retirees paid the full premium in 39 percent of the large employer plans (500 or more employees) offering retiree health benefits; employers paid the full amount in 12 percent of large employer plans. Among the remaining 49 percent of firms where the cost was shared, the average retiree contribution was 37 percent for pre-65 retirees. The results were similar among employers offering benefits to Medicare-eligible retirees.”

        “Nearly one in three Medicare Beneficiaries has a retiree health plan that supplements Medicare.”

        “Beneficiaries with retiree health coverage are disproportionately white, in better health, and have higher incomes than other Medicare beneficiaries.”

        Probably more than 2%. MAYBE more than 10%. You do the math. Not literally, of course.

        http://kff.org/report-section/retiree-health-benefits-at-the-crossroads-overview-of-health-benefits-for-pre-65-and-medicare-eligible-retirees/

        Anecdotally, my 85 year old mother in law has had health insurance paid by IBEW since her electrician husband passed away when she was 50.

        My daughters 77 year old father in law is living quite well on an IBEW pension with healthcare.How “well”? I don’t know. My daddy told me it’s not polite to get too nosy, but from his lifestyle, he is doing much better than I am.

        In general, employees of larger companies compare very favorably to public sector workers in terms of wages and benefits.

        According to EBRI, in 2010, 70% of state governments offered health insurance to early retires, and 63% offered health insurance to MediCare eligible retirees.(down from 95% and 88% respectively in 2005) Lawd knows what is today. All this old data.

        Reply

        • Posted by Tough Love on March 9, 2016 at 10:32 pm

          Quoting SMD ……

          “In general, employees of larger companies compare very favorably to public sector workers in terms of wages and benefits.”

          Baloney………. pretty much in “wages”, but MUCH GREATER for the Public Sector in BOTH pensions & benefits.

          Reply

        • Posted by Tough Love on March 10, 2016 at 1:10 am

          SMD, Is General Electric a “big enough” company for you? From today’s news…..

          “General Electric (GE – Get Report) expects to save $1 billion on retiree pension and benefit costs this year after shaving them by about 17% since 2013, according to a regulatory filing.

          Total costs, which include the value of benefits earned by employees during a given period, interest expenses and changes to estimates of future charges, were $5 billion last year, according to the Fairfield, Conn.-based company’s yearly financial statements. The savings were achieved at the same time the company cut off traditional healthcare plans for retired employees, sending them to a private exchange with a $1,000-a-year subsidy.”
          ——————————————–

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

          Reply

  9. Posted by Javagold on March 9, 2016 at 12:45 am

    Give them all their money they put into the Ponzi and let them invest for their own retirements. Then put all the public takers on Obamacare and finally be done with the parasites once and for all. This state is cooked either way. Game Over.

    Reply

  10. Posted by MJ on March 9, 2016 at 7:48 pm

    Better yet, give them back all of the money they put in so far and have the state match it then provide financial planning seminars and let the publics decide where to roll it all over into a retirement account. They most likely will have to work way longer than they initially thought but oh well that’s life. Phase the pensions out little by little and let’s get this state back on track. It seems to me that every scheme imaginable has been hatched to try and keep the ship afloat but those deck chairs continue to be shuffled as the ship is going down. It is the fair and just thing to make the significant reforms now so that public workers can adequately plan.

    Reply

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