New Jersey Actuarial Reports – The Believable Numbers

The June 30, 2015 actuarial reports for the New Jersey Retirement System are out* and there are a few numbers therein that can be taken seriously (none involving liabilities or even the market value of assets considering all those self-valued alternative investments) since there is very little prettying-up actuaries can do with these ugly numbers:

NJP-2015

Spreadsheets show a predictable change in these figures going back to 6/30/11 (the predictable part being outflow always going up – even without COLAs – while inflow varies with political whims).

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* The real number update blog will come after the New Jersey Supreme Court rules on whether retirees get COLAs again as it may save a step.

25 responses to this post.

  1. Posted by Anonymous on April 1, 2016 at 8:34 pm

    Wow (UN)believable. Interesting the “State” plans, even with the lack of “mandated” funding bestowed upon the Local plans, still require a significantly lower taxpayer contribution. And the “State” plans have a significantly higher member to taxpayer contribution ratio. John how can that be, on the surface it doesn’t seem logical?

    Reply

    • There are more State people in the PERS and (especially) PFRS plans and the state is putting in some fraction of the ARC.

      Reply

      • Posted by Anonymous on April 1, 2016 at 11:30 pm

        Not sure I follow you, I thought the Local employers were making their ARC more consistently than the State over the past couple of decades?

        Reply

        • Actually the comment was wrong. I meant there are more Local people especially in the PFRS. Future blogs will have more comparisons as there will be spreadsheets of participant counts, salaries, and relative averages. These actuarial reports are pure fiction when it comes to valuing liabilities and developing contribution but the data that can’t be manipulated yields some good information.

          Reply

          • Posted by Anonymous on April 2, 2016 at 12:55 pm

            Regardless ALL plans are using similar, apparently totally unrealistic, assumptions/projections. How can, for example, based on the above chart can the Local PERS project to run out later the State PERS? It doesn’t make sense looking at member to taxpayer funding ratios? Are the PERS Local v State using significantly different assumptions/projections? If not, something else is missing?

  2. Posted by The Resident Nutcase on April 2, 2016 at 8:27 am

    The only thing clear on this blog is….. Regardless what the actuaries say, what the workers say, what the facts say……
    This here blog will always go against the unions, the public employees and the pensions.
    There has been indisputable proof given that backs up my sentiment that the local plans are better off than the state …. And as such should be treated different and used as a guide as what works!!
    But instead…. TL and her minions deflect and continue down the same ol’ “equal to- not better” mantra…. Which clearly they are not.
    So seriously….. And I mean this from the bottom of my heart….Whatever!!!!
    Wash…Rinse….Repeat!!!

    Reply

    • Posted by Anonymous on April 2, 2016 at 5:57 pm

      I think JB is in our corner, nutcase

      Reply

    • Posted by Tough Love on April 2, 2016 at 11:47 pm

      Earth to Nutcase…………

      Having a “terrible” funding ratio” (which Mr. Bury estimated to be 50% for the LOCAL Plans in a video a few days ago), but better than some OTHER Plans with even MORE terrible funding ratios, does NOT make the LOCAL Plans “in good shape ” and CERTAINLY not ones that represent …….. a guide as to what works.

      They too are failing ….. but at a slightly slower pace than the STATE Plans.

      Reply

      • Posted by Ralphie on April 3, 2016 at 8:02 am

        The numbers also help to explain why property taxes are so high and so difficult to rein in.

        Reply

  3. Posted by Anonymous on April 2, 2016 at 6:47 pm

    This was meant for the previous post. Not this one.
    I’m sorry, but I do not see it that way.

    Reply

    • Posted by Anonymous on April 3, 2016 at 12:35 pm

      Ok so what’s missing is a projection for taxpayer contribution with and with out future reforms?

      Reply

      • Posted by dentss dunnigan on April 3, 2016 at 1:27 pm

        That would revealing the source of funding ,and our politicians just have no clue where the dollars will be coming from ….

        Reply

        • Posted by Tough Love on April 3, 2016 at 1:55 pm

          The $$$ to actually “pay” pension benefits will keep coming out of the (declining balance) Plan assets…. until they hit zero.

          And even though the workers/retirees THINK payouts will continue on a pay-as-you-go basis out of annual budget revenue once Plan assets are run down to zero, they won’t, because even though in-the-Union’s-pocket, NJ’s Legislators don’t have the nerve to raise taxes (by about $8 Billion) to keep paying those pensions.

          THAT’s when they will be materially cut ………….. assuming NJ’s Public Sector “actives” don’t freak-out FIRST, as they watch THEIR own contributions go out the door to pay CURRENT retirees, leaving nothing for them.

          Reply

          • Posted by Anonymous on April 3, 2016 at 3:33 pm

            Tough sell for those actives’ now. Nothing to legislatively justify any claim to their contributions beyond a return of their contributions upon employment termination. Assuming they’re not vested and choose to “annuitize” (why would they, the lifetime payout on nothing ain’t much) – LOL!

  4. Posted by Anonymous on April 3, 2016 at 3:28 pm

  5. Posted by dentss dunnigan on April 3, 2016 at 6:10 pm

    John ,what do you know of the POB’s pension obligation bonds .Is the state still making the payments on them .And if this Puerto Rico bailout comes about ,it will then lets states go bankrupt ….should be a interesting next 2-3 years

    Reply

    • Posted by Anonymous on April 3, 2016 at 6:41 pm

      Yup NJ’s still paying on them, via EDA (conduit debt) – “subject to annual appropriations. But what’s that got to do with PR – why specifically POB and not ALL debt? Bankruptcy doesn’t discriminate, just ask Trump’s workers/contractors from the good old days!

      Reply

    • Posted by Tough Love on April 3, 2016 at 7:21 pm

      The bailout legislation under consideration for Puerto Rico (possibly allowing a Bankruptcy) is SPECIFIC to Puerto Rico ….. an not applicable to other “States”.

      ANY way NJ can get out from under the 50+% UNJUST share of promised Public Sector pensions and benefits is fine with me.

      Reply

      • Posted by Now retired Pat on April 3, 2016 at 8:34 pm

        how about we raise the regressive sales tax to 10% across the board, no exclusions. Then we give those making less than $25K per year a state tax credit at the end of the year equal to the additional taxes they paid during the previous year. That takes the sting out of it being regressive, allows all people to determine how much they want to “consume” and definitely puts the burden on those who can afford luxury items. I don’t think sales will “flee” to neighboring states. It is just as bad in NY.

        Reply

        • Posted by Tough Love on April 3, 2016 at 9:15 pm

          Now retired Pat ,

          You retired and began collecting at age 53.

          A Private Sector worker retiring with the SAME pay, the SAME years of service, and the SAME age (53) would get an employer-funded pension (IF they were one of the “lucky” few who still have DB pensions) with a “value” upon retirement between 1/3 and 1/4 of yours ….. and LESS if your COLA increases are restored (since his pension assuredly would NOT include them).

          BEFORE NJ’s taxpayer pay more in taxes, YOUR pension should be reduced to what you would have received in pension* & retiree healthcare benefits if a Private Sector retiree …… noting that the latter (the Retiree healthcare benefits) would in most cases be NOTHING.

          * plus the roughly 15% of your current total pension paid-for with your own contributions and investment earnings thereon..

          Reply

        • Posted by Anonymous on April 4, 2016 at 8:43 am

          DE is tax free and is right next door to NJ. Areas in South Jersey are 3% sales tax as they are considered rehab zones, online shopping can be tax free, consumers will buy less………keep raising taxes and people will find a way around it or cut back significantly on what they are willing to purchase.

          Reply

      • Posted by Anonymous on April 4, 2016 at 8:40 am

        Repudiate the debt that was not approved by taxpayers is one way to get out from under it all……..

        Reply

    • POBs are in the state debt report and Paul Mulshine put a number on it a few years ago:
      http://blog.nj.com/njv_paul_mulshine/2011/01/whats_wrong_with_this_picture_2.html

      Reply

  6. Posted by Anonymous on April 4, 2016 at 8:48 am

    Why is the only solution that publics give is to raise taxes? Taxes have consistently gone up across the board year after year and the problem continues to grow…….isn’t obvious by now that raising taxes is not the answer? Highest real estate taxes in the country, highest business taxes and next to last in economic growth, one of the highest sales taxes, highest utilities plus taxes, highest insurance rates, AC crumbling, businesses leaving………

    Reply

    • Posted by Tough Love on April 4, 2016 at 3:15 pm

      Because they are GREEDY and won’t give up (even for FUTURE Service not yet worked) the HUGE advantage they have today.

      And the ONLY choice are more taxes, material cutbacks in ESSENTIAL services, or VERY material pension & benefit reductions for all CURRENT workers.

      Reply

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