Indefeasible or Indecipherable

In 1997 Christie Whitman wanted to eliminate pension payments from the budget in order to  pay for an income tax cut and generate phantom property tax reductions so, as a concession to the unions, some “non-forfeitable right” language was included in the law.

This morning the state Assembly Judiciary Committee is looking at ACR109 which seeks to add Section IV to Article VII of state constitution and starts off:

The State shall make its annual required contribution to  each retirement system and pension fund for public employees administered by the State as that contribution is determined by the board of trustees of each system or fund in consultation with the actuary for that system or fund.  The annual normal contribution plus the annual unfunded accrued liability contribution together shall be the annual required contribution.  The actuary for each system or fund shall compute the annual required contribution based on an annual valuation of the assets and liabilities of the system or fund pursuant to consistent and generally accepted actuarial standards.

But then we get more “non-forfeitable right” language:

Vested members of a retirement system or pension fund for public employees administered by the State who were members of a system or fund prior to May 21, 2010 and who attained five years of service credit in the system or fund and were provided pursuant to law with a non-forfeitable right to receive benefits shall have an indefeasible non-forfeitable right to receive benefits as provided under the laws governing the system or fund upon the attainment of five years of service credit in the retirement system or fund. A “non-forfeitable right to receive benefits” shall mean that the benefits program, for any employee for whom the right has attached, cannot be reduced.
Vested members of a retirement system or pension fund for public employees administered by the State for whom the non-forfeitable right was not provided by law who attain ten years of service credit shall have an indefeasible right to receive the benefits earned each year under the laws governing the system or fund. This paragraph shall not be construed to preclude forfeiture,  suspension, or reduction in pension benefits for dishonorable service by a member.
.
So those employees who admittedly “were provided pursuant to law with a non-forfeitable right to receive benefits shall have an indefeasible non-forfeitable right” now.

30 responses to this post.

  1. You did not mention that Whitman also wanted to and had to vastly increase education funding.

    The pension crisis was not the product solely of Whitman’s tax cuts. NJ was on its way to bringing the Abbott districts into the realm of the country’s highest spending districts. By 1997 the Abbotts were spending as much as NJ’s richest districts (eg, Princeton, Millburn), by 2007 22 of the Abbotts would be among the 30 highest spending districts in the COUNTRY.

    http://www.nytimes.com/2007/06/10/nyregion/nyregionspecial2/10mainnj.html

    The worst years of pension underfunding in the early 2000s were, not coincidentally, the biggest years of Abbott spending increases as the NJ Supreme Court’s construction and Pre-K mandates kicked in.

    Reply

    • Posted by dentss dunnigan on June 6, 2016 at 3:10 pm

      So all the next governor has to do is do away with the Abbotts and divert that funding to pensions ….

      Reply

      • Posted by Anonymous on June 6, 2016 at 3:13 pm

        Bwahaha good one dd

        Reply

      • Posted by Anonymous on June 7, 2016 at 10:55 pm

        Silly you there is no Abbott funding in the NJ budget, but poor school age children still exist, by the way these children are poor whites and children of color.

        Reply

  2. Posted by skip3house on June 6, 2016 at 11:55 am

    ‘Liked’ only for bringing to light this very expensive fix to NJ Pensions not paid by taxpayers at the time services were rendered and obligated.

    Reply

    • Unfortunately most that received or got benifit of underpayments have fled the state and it’s going to be very tough if not impossibly of get them to pay up on their skipped out bills …But perhaps it’s worth a try ….mailing list anyone .

      Reply

      • Posted by Jack on June 9, 2016 at 7:59 pm

        Those that “skipped the state” were not the ones who wrote the laws. It’s the ones who realized that their pension was becoming less and less relevant to the cost of living in NJ. The BS that there has been “no inflation in the US” doesn’t add up to my continued property tax increases, groceries and other basic living expenses. I like other State employee contributed out share, every pay day the money was withheld without any ability to say no. We also didn’t have SSA taken out so any offset to the Cancelled Cola’s is not picked up by that program even though I was qualified prior to my state service and now I have had to return to the workforce to cover life’s basics.
        Those that hurt the pension the most, beyond the politicians buying votes were other political hacks that didn’t contribute until their last three year then miraculously were given full time high paying positions (judges, prosecutors, Authorities) and retired at full pension with not real kick in.
        That is where the problem lies, not the employees that did their job, good or bad, went to work everyday and “Contributed Their Share” as required by the one sided law.

        Reply

  3. Posted by Anonymous on June 6, 2016 at 2:49 pm

    Christie to bank, I can’t make my mortgage payment so there is no reason I should make that payment. I don’t have it defense.

    Reply

    • I don’t believe were talking mortgage payments here …..but if you can’t make payments you sell the house and move ….if you overpaid for the house you walk away from the house and the bank owns it’s bad investment ,,,,,

      Reply

    • “I don’t have the money” is exactly why we have bankruptcy laws.

      Entities go bankrupt all the time. Even when a lender acts in good faith and the originally contract is fair to both parties, there are scenarios where the lender cannot recover the money.

      If you don’t have bankruptcy proceedings you have debtors prisons which is what NJ is going to be entering soon.

      Reply

  4. Posted by steve on June 6, 2016 at 4:10 pm

    What you ladies and gentlemen forget that gov. has a bottomless piggy bank-namely the taxpayer—-you can shift funds around all you want–buy, sell, walk away–those do not apply,in the end gov ends up with all the chips—-

    Reply

  5. Posted by George on June 6, 2016 at 10:07 pm

    I skimmed through it. Search on the word ‘vote’, the authors don’t much like people voting.

    Reply

  6. Posted by steve on June 6, 2016 at 11:38 pm

    People have been voting for years–with their feet !!—the east went west the south went north—and over the last 40 years the trend in directions reversed–no place left to go but up——I wonder what new taxes are in store for off the planet living?–an oxygen consumption tax ? and could I off-set it with credit against my carbon foot print levy ?-

    Reply

  7. Posted by steve on June 6, 2016 at 11:42 pm

    not to be fussy but the time stamp on posting is an hour off

    Reply

  8. Posted by Anonymous on June 7, 2016 at 8:07 am

    Because of the language I think I will vote NO for this change to the NJ constitution….and because absolutely nothing has been done to actually fix this enormous problem I see it as another road to destruction of this already corrupt and pathetic state…just MHO

    Reply

    • Posted by dentss dunnigan on June 7, 2016 at 11:36 am

      What ,you don’t want to pledge all your assets to pay for our politicians bribes to the unions all of a sudden .

      Reply

      • Posted by George on June 7, 2016 at 12:38 pm

        If I understand things, the 2017 state budget is $35 billion. The pension shortfall is $8 billion or so. Where does the $8 billion come from? What happens if a governor does not submit a budget that complies, claiming it is against the general welfare, or that the amendment is defective?

        Reply

        • Posted by dentss dunnigan on June 7, 2016 at 12:40 pm

          Abbotts turn to cough up the money …..

          Reply

          • Posted by Anonymous on June 7, 2016 at 10:51 pm

            Abbott district funding was eliminated, a new funding formula has been in place for years unless Abbott is suburban code for poor and minority education funding. Very covert use of language.

  9. Posted by Anonymous on June 7, 2016 at 2:03 pm

    John,

    Any news as to when the COLA case will be decided?

    Thanks,

    Joel

    Reply

  10. Posted by Anonymous on June 7, 2016 at 7:11 pm

    For every action, there is a reaction, constitutional protection of the pension payment obligation by the Governor, legislation to protect employees and retirees rights to the benefits derived from vested contributions. If the games had not been played the problem wouldn’t exist. Let’s examine the investments and fee structure.

    Reply

    • Posted by dentss dunnigan on June 7, 2016 at 7:39 pm

      The courts have already ruled a governor can’t force debts on the next administration ,which this is trying to do . There are no other programs that have a guarantee to be funded not police not schools not snow plowing …A forced payment would leave the state no choice but to cut services to schools or even police take your pick

      Reply

      • Posted by Anonymous on June 7, 2016 at 10:48 pm

        Salaries and benefits are normal expenditures for every level of government. Civil servants remain no matter what changes in elected officials, so I don’t think your example is a blanket, there are other reality factors.

        Reply

        • Posted by dentss dunnigan on June 8, 2016 at 11:04 am

          Yes but salaries can be eliminated by RIF ,where as a constitution amendment to pay X amount of dollars into a broken pension system that will only get worst over time is forcing the next governors to have no say over his budget .this is exactly what is happening in Illinois they can’t cut pension benefits even though the workers have agreed to take a little hit .The passed the pension guarantee years ago and now it’s a ball and chain around their necks

          Reply

          • Posted by Anonymous on June 8, 2016 at 11:43 am

            Your answer lies within the vested status of employee pensions once vested the employee is guaranteed both the employer and their contributions for benefit calculation and payout.

          • Posted by dentss dunnigan on June 8, 2016 at 2:25 pm

            yes any vested employee is guaranteed to receive any monies he contributed into the pension he will get back upon pension going bust .I read somewhere that once the pension goes down to where the only money left in the pension would only cover their contributions said amount will be returned to contributors upon the pension demise .Hence the pension really can never run down to zero .Anybody else know of this ?

  11. Posted by Anonymous on June 7, 2016 at 10:42 pm

    Most of the government employees in NJ and retirees are women, so it’s suspect when male GOP legislators support pension cuts.

    Reply

  12. Posted by Anonymous on June 8, 2016 at 11:51 am

    I would like to see the ratio of female to male. Please post it.

    Reply

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: