Creating a lawless society

Charles Ouslander, one of the plaintiffs, called the New Jersey Supreme Court’s majority 6-1 decision against him in the COLA case “disingenuous and intellectually dishonest.”

He is right but he fails to appreciate the damage which extends far beyond the few billion dollars that retirees in the New Jersey pension system are being cheated out of. I made my point in a letter to the editor that appeared in the Star-Ledger today but I want to expand on it here.


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As in the deep south of prior generations Tom Robinson was not going to be acquitted because his judges were prejudiced against the possibility of his innocence, regardless of the preponderance of evidence.

So it is with the absurd ruling yesterday that COLAs are forfeitable because the legislators in 1997 who made them a non-forfeitable right did not understand or intend what they did (unlike in 2011 when they took away those COLAs). No reasonable person can justify such an opinion but those six people who made that judgment were playing to their real constituency.* When a system rewards obeisance over integrity this is what you get………. and deserve.

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* And it is not  only Christie, who makes the appointments, but also the Democrat-controlled legislature which was just as happy to see this outcome since money is freed up to continue to pay their campaign donors.  The proof of this is that the legislature could easily pass a law (with language included this time that they understood and intended what they are enacting) to restore COLAs as they were in 2011 but no Democrat seems to have thought of doing this.

40 responses to this post.

  1. Posted by dentss dunnigan on June 10, 2016 at 8:50 pm

    When you elect stupidcrats, you get moroncrats on the supreme court!

    Reply

    • The Court’s decision is (for once) in accord with the State Constitution. All they did was hold that under the New Jersey Constitution, the legislature lacked the power to create a binding contractually enforceable pension right — taking on state debt and committing itself to the needed appropriations to fund that debt — WITHOUT voter approval. Since that did not occur when the pension right was passed, it was not a binding promise when the legislature enacted it. End of story, and neither controversial nor theft. I think the same logic applies to the pensions themselves, unless the voters pull an Illinois boner and pass the referendum put forth by Sweeney.

      Reply

      • Posted by Anonymous on June 16, 2016 at 12:01 pm

        Wrong. The two cases the state has recently “won” are completely different. The first did involve not binding future legislatures, still a joke since christie and the legislators passed the very laws!!!! The COLA decision however, was pure politics. Nothing more. Bury is dead on. A 3rd grader could have interpreted that decision correctly. The attorney arguing for the state was awful. Ask bury what he thi ks if her lerformance. How sir, is a cola not part of a benifits program when it was given every year and the formula used for it was in the handbooks given out to members? Answer: because the bought and paid for njsc said so…..
        What was incorrect about the appellate courts decision? Answer: it is not the decision christie and sweeney wanted.
        See the difference, fool: funding case- law is unconstitutional (even though signed into law by the very man who says it is inconstitional)
        Cola case- 1997 law is interpreted to not include cola. Even thought it is listed in the handbook as a benifit received.
        So spare me the bullshit and admit that pw’s got fucked hard on this one. No matter what you think about pensions.
        To argue that this was in some way a correct decision based on law, is disingenuous. You wanna say, can’t afford it, Fine. But please don’t for ne minute think that this kangaroo court was in any way objective.

        Reply

  2. Posted by S Moderation Douglas on June 10, 2016 at 11:05 pm

    My impression was not that the 1997 legislature didn’t understand, but that they didn’t make the language crystal clear. They might have said pensions, INCLUDING COLAs were a non-forfeitable right:

     “In this instance, proof of unequivocal intent to create a non-forfeitable right to yet-unreceived COLAs is lacking.”

    The dissenting judge claimed it was enough that the legislature didn’t explicitly exclude COLAs, therefore one could assume they were included as non-forfeitable.

    For what it’s worth, I agree with the dissenting judge, but that’s why attorneys get the big bucks. You don’t need a loophole large enough to drive a truck through, you just need room enough for the camel to get his nose under the tent.

    Reply

    • Posted by Anonymous on June 12, 2016 at 12:19 pm

      From 1997-2010 retirees received colas, the intent of the legislation was enacted and enforced.

      Reply

  3. Posted by Anonymous on June 10, 2016 at 11:19 pm

    Can each employee sue individually for their Cola

    Reply

    • It’s about the only thing they can do. I would sue under employment law – maybe go to the Department of Labor. There have a handbook defining pension benefits due them and this cabal of the governor, legislators, and judges screwed them out a part of what their employment contracts promised them.

      Reply

      • Posted by Anonymous on June 13, 2016 at 10:29 am

        John;

        It’s elementary that state and local government pension systems are exempt from the Employees Retirement Income Security Act. (ERISA)

        Reply

        • Government plans are exempt from the 412/430 funding rules but they are still covered under some parts of ERISA.

          But that’s not the point here. If I were advising the union people where to go I would look at DOL rules about employment practices. You work for a gov’t entity that, as part of your compensation for employment, defines the pension you would get if you met certain criteria. If they renege on a portion of that pension you go to DOL or sue them and then it’s up to the gov’t entity to work it out with the state which they contracted to provide those benefits.

          Reply

          • Posted by Anonymous on June 13, 2016 at 10:54 am

            Again, it will be rejected because of a lack of jurisdiction (not on the merits). The Department of Labor in the State if NJ is the place to start—this too is a lost cause because they will tell you the State’s highest court has ruled on the merits of your complaint. The decision gets everyone off the hook.

            With that said, we we have to wait until a new Governor takes over. Has any candidate for Governor disclosed his/her pension fix?

  4. Posted by MJ on June 11, 2016 at 8:15 am

    John, Apart from your opinion that this ruling is lawless and the implications of such, doesn’t the ruling actually help the pensions to stay afloat longer? Couldnt it then be argued that when 9% raises were given across the board and hefty promises that were were made without any designated monies to pay for them that the legislators who promised all of these things did not fully understand what these contracts and laws really meant in terms of a balanced budget?? and the fall out that would ensue down the road such as we are seeing now?

    Reply

    • Considering how small the COLA increases would have been over the last few years the dollar amounts that won’t be paid are too small to matter. The real impact of this ruling is that:

      1) runaway inflation can now solve the problem as devalued money can be put into the plan and benefit liabilities won’t be increased; and

      2) there is judicial precedent for benefit cuts so they can go after the base pensions staring with that 9% increase in 2001 on the principle that those legislators also did not understand or intend what they did.

      Reply

      • Posted by Anonymous on June 11, 2016 at 9:16 am

        John,
        Why don’t all other states rule the way NJ supreme Court has?

        Reply

        • Can’t say since I don’t know the political climate for judicial systems in other states but here, from allowing these important cases to fester for years until delay turns into a tactic to generating decisions to favor those who selected you, we have, where it can be said to exist, ad hoc law.

          Reply

    • Posted by Anonymous on June 11, 2016 at 9:14 am

      It could also argue that missing billions of dollars in contributions that the state was responsible for has damaged the system irreversibly. How does that sound? Let’s address that as well, why don’t we?

      Reply

      • Posted by bpaterson on June 14, 2016 at 5:52 pm

        maybe the politicians made big promises to the unions but then put just the right amount of money they figured was supposed to be put in to get the public employee base to vote for them..figuring it was not going to be a large obligation downstream. Possibly the pension fund could be considered fully funded when adjusted properly downward. That excess that is now claimed sounds like some RICO issue the taxpaying citizenry should look into.

        Reply

  5. Posted by dentss dunnigan on June 11, 2016 at 12:53 pm

    I knew we were becoming lawless when Obama stole GM from the stockholders and bond holders . to make matters for the first time in History made the GM debt holders (bonds) which are the safest investment Obama made them worthless ,people who bought them in good faith now owned zero ,even when the Railroads went bankrupt and if you held the bonds you eventually (15years ) got all your money back plus interest .Obama changed all that he gave the company to the unions and kept 1/2 for the government …there is no rule on law anymore once the government get it’s hooks into anything it destroys it ….

    Reply

    • Posted by Anonymous on June 16, 2016 at 12:14 pm

      Dead on. And as a police officer who doesn’t get social security, after the way the public feels about my “social security” by not letting my pension increase even a fucking dime over 20 yrs or more, I could give a rat’s ass about these seniors who bitch that their ss didn’t go up last year cause of no inflation. As the saying goes “fuck me? No, fuck you”
      You have 80 yr old retired cops who retired early 90s or so before salaries got better. Due to low salaries, they perhaps didn’t fund 401k type plans, thin king the govt wouldn’t fuck them over. How wrong they were!!!!
      Lawless is the correct word my friend. 4 years to go then out of nj with the others who can’t take the high taxes. I’m leaving too albeit for different reasons— my pension will go farther, and I hate the state govt here. They lie and make me appear as a fuckin welfare case. If ya can’t best em, move…..lol.

      Reply

  6. Posted by MJ on June 11, 2016 at 1:15 pm

    Can’t remember the source, but I recall reading awhile back that even with the bailout which screwed all non-union members but bc GM still has to pay so much for legacy retirees, current union employees’ pensions, healthcare and retirement perks that there isn’t much left for product develpoment, factory upgrades, new innovation. Sounded the same to me as the pension debacle in NJ and elsewhere….not a whole lot left over for much else

    Reply

  7. Posted by S Moderation Douglas on June 11, 2016 at 2:41 pm

    “Many public employees may not have retired or may have deferred their retirement had COLAs not been guaranteed as part of their pension benefits program. Although the Legislature had the right to suspend COLAs for those public employees whose pension benefits had not vested and who had yet to retire, it did not have the right to do so for those public employees who retired expecting that the State would keep its word. The Legislature did here precisely what the United States and New Jersey Constitutions prohibit: it passed a law impairing the obligation of its own contract.”

    Justice Barry Albin, in his dissent

    I don’t know wether this is a legal argument, or a moral one. If one is near retirement and knows his COLA is not guaranteed, he can work longer and increase his savings to compensate for the lack of COLA. If he is younger when he learns a COLA is not guaranteed, he may choose to find another job with better wages in the present instead of deferred compensation. But if he learns AFTER retiring that he can lose his COLA, he is scrod.

    He has no recourse, no leverage. If you’re not working, you can’t quit. That’s why pensions should be sacrosanct.

    Reply

    • Posted by Anonymous on June 13, 2016 at 10:41 am

      Douglas:

      I wonder what the level of discourse was with Justice Albin and the majority of 6 that disagreed with him. Was their first vote the final vote. Who twisted whose arm? Was the discussion contentious?

      Joel

      Reply

    • Posted by bpaterson on June 14, 2016 at 5:56 pm

      if not already, base the COLAs on the same calcs the social security COLAs are base on. That should be the simple acceptable answer.

      Reply

      • Posted by Anonymous on June 16, 2016 at 1:08 pm

        The formula was even stingier for pw’s.
        60% of the ss cola raise. Fine for publics who get ss or even well paid cops/fire who don’t. Not so much for the cops living on $35k a year and no SS.
        The powers that be did not think this through…..we shouldn’t have old cops not able to afford a modest apartment in Thier old age. Christ….we always have $ to help welfare cases, disability etc. And the rich always do fine….
        A fair “comprimise” ( i.e. more lube for the cops and fIre) would be that if you don’t get ss, when you reach 67 you begin to get a cola. Very few taxpayers would argue that (just your Americans for prosperity types, who be beleive in trickle dwn economics) Not enough for christie thought. Doesn’t care abut anyone but himself. Ask bret Schundler how he feels about christie. Trickle down economics— giving a steak to a dog and thinking, he’ll go back and share with the other dogs. Lol. A joke…..
        A union worker, a non union worker and a ceo order a pizza. The ceo takes 7 slices and turns to the non union worker and says..”watch it, he’s trying to take your pizza”

        Reply

  8. Posted by MJ on June 11, 2016 at 4:25 pm

    SMD How about all of us private schmucks who lost some of our retirement monies in the great recession when the stock market crashed and the housing bubble burst….did anyone make that up to us whether still working or already retired? How about when private employers and small businesses had to lay off or down grade health plans to stay afloat, did anyone in the public domain really care about that? If the pensions had been managed properly and promises made that any reasonable actuary would find sustainable and if the pension “promises” went up and down like everybody else’s retirement investments there wouldn’t be any problems. If health plans where on the same level as what most in the private sector pay there wouldn’t be any problems. What about all of us taxpaying, honest, law abiding citizens who dutifully pay their mortgage and real estate taxes (ours literally doubled in 10 years) do those people have any recourse? When one depends on the government for their survival that is where the problems begin. It is very easy to make promises but extremely difficult to claw back what clearly will not be paid….unfortunately, this is only the beginning. I don’t begrudge anyone making an honest living for honest pay but not at the expense of all others living in the state of NJ

    Reply

    • Posted by S Moderation Douglas on June 11, 2016 at 6:16 pm

      Touché

      To quote Justice Albin:

      “Although the Legislature had the right to suspend COLAs for those public employees whose pension benefits had not vested and who had yet to retire, it did not have the right to do so for those public employees who retired expecting that the State would keep its word.”

      To quote S Moderation Douglas:

      “I don’t know wether this is a legal argument, or a moral one.”
      ___________________________________________
      Actually, a lot of public sector schmucks in California did file bankruptcy and many lost their homes to foreclosure. Many lost some of their retirement money when the market crashed. I know I did. Most public employees are also “taxpaying, honest, law abiding citizens who dutifully pay their mortgage and real estate taxes”.

      There were few layoffs of public employees, most of their losses were due to furloughs, typically fifteen percent. And there were concessions in medical insurance. But the state is not a business. While furloughing all state employees three days a month, they were still refilling all positions vacated by retirement or other attrition. The state actually increased the number of employees during the worst of the recession. Guess who those new employees were…. yup, hardworking, taxpaying, honest, law abiding citizens. I don’t know if they had to hold their nose when they became public’s, but most were happy to have a job, any job. The man who replaced me (in 2010) easily passed probation, but after eight months with the state decided to go back on the book with his union. Said he could make more in IBEW working eight months a year than he could working twelve months with the state.

      Like it or not, a pension, private or public, is not the same thing as retirement savings. It is an enforceable contract. The biggest difference is that private pensions can change terms for future work. Many public pensions cannot. If you work 30 years and earn a pension with a COLA, a private company can freeze that pension and for all future work contribute only 3% (or less) 401(k) match. But they still owe that pension and COLA. Whether they can afford to pay or not is another story.
      _______________________
      To quote MJ:
      “If the pensions had been managed properly and promises made that any reasonable actuary would find sustainable and if the pension “promises” went up and down like everybody else’s retirement investments there wouldn’t be any problems.”

      I certainly won’t hold California up as a paragon. We have more generous pension formulas than most states (though now reduced to below 1999 levels) and a huge unfunded liability. Many local budgets are straining to pay that down. I won’t be shocked if, at some point in the future, my own pension is affected.

      But, when “If the pensions had been managed properly” means means not contributing even a fraction of the ARC, like NJ, ILL, PA, CT, etc. that’s a problem.

      As far as public sector workers go, as I have said before, most aren’t. Most public workers are just hardworking, taxpaying, honest, law abiding, PRIVATE sector schmucks who happen to spend some part of their career working for some government. Only about twenty percent are “full career” employees. The average length of service for retirees is about twenty years, the other twenty years they were private sector. And about half of government workers don’t even stay long enough to vest in retirement (usually five years.)

      You can’t tell the players without a scorecard.

      Reply

      • Posted by dentss dunnigan on June 12, 2016 at 4:26 pm

        I bet Jim Mcgreevey approves your message of protecting his pension that he recently acquired for doing 4 months work ….it’s a tough job but somebody has to do it and somebody has to pay it ..http://www.northjersey.com/news/former-governor-mcgreevey-gets-lifetime-benefits-for-4-months-of-work-1.1411066

        Reply

        • Posted by S Moderation Douglas on June 14, 2016 at 1:19 pm

          “lifetime benefits for 4 months of work”

          No wonder folks is teed off. A quick web search brings up that headline dozens of times. I didn’t read them all, of course, but none that I saw explained the procedure very well.

          It’s clear as mud. In the first place, his actual pension is based on 27 years service. The lifetime benefits, though not always clearly explained, refers to healthcare only. Which will be paid by the county with which he was last employed.

          There was a kerfuffle, years ago in Stockton, CA following the headline “Stockton: work month, get lifetime health care?”

          Technically, that is a true statement. Many local governments in CalPERS have reciprocity agreements. Years of service in one local city may be carried over to another city or county, and years required for vesting in retiree healthcare are transferred also. The state requires 20 years service for full retiree healthcare.
          If an employee works for Alameda County for ten years, then takes a state job for ten years, he can retire with healthcare from the state. Technically, he can work for nineteen years, eleven months at some city, then retire with healthcare from the state after working there just one month.

          I call the “lifetime benefits for 4 months of work”, headline misleading at best.

          Reply

  9. Posted by MJ on June 11, 2016 at 4:27 pm

    ……oh and btw no one is leaving their cushy, no accountability, public service job, nobody, not until they retire on their lifetime pension and h health plan and move onto something else where it starts all over again.

    Reply

    • Posted by S Moderation Douglas on June 11, 2016 at 7:36 pm

      You have bad information sir, or madam.

      When comparing public sector to all private sector jobs, yes, there is more turnover in the private sector. This is similar to “apples and oranges” comparison of public and private wages.

      A nineteen year old fast food worker much more likely to leave for greener pastures than is a thirty year old married engineer.

      btw

      Reply

  10. Posted by dentss dunnigan on June 11, 2016 at 6:29 pm

    Before any fix gets put out there the state should tell the taxpayers exactly how much is owed ,you can’t try to fix something if you don’t know the extent to which it is broken Pension funds, which have been issuing over-optimistic revenue forecasts for years, aren’t going to earn nearly enough money to pay the benefits recipients expect .Taxpayers are at least owed an answer to how much is owed the taxpayers should know how bad is it dollar figures which makes me believe the biggest challenge facing government bureaucrats and fund administrators has nothing to do with paying back pensioners. They have known for some time that would not be possible.The biggest challenge facing government bureaucrats and pension fund administrators has nothing to do with paying back pensioners. They have known for some time that would not be possible.Their key challenge will be to ensure that shortfalls occur on someone else’s watch,the music will stop someday and the scramble for the last chair will be very ugly .

    Reply

  11. Posted by Javagold on June 11, 2016 at 8:45 pm

    I would assume all the public takers are smart enough to stack physical GOLD ….
    LOL

    Reply

    • No……stacking up on ammo…..how about we meet up, can use some target practice on low IQ cadaver like morons.

      Reply

      • Posted by bpaterson on June 14, 2016 at 6:02 pm

        and the escalation begins.

        Reply

      • Posted by Anonymous on June 16, 2016 at 11:36 pm

        That would involve him actually leaving his mommy’s basement. Right Java? Me thinks you are a little selfish mommy’s boy. A little napoleon syndrome hiding behind a keyboard trying to look smart.
        Amen, bullet tooth. Gold won’t mean shit when Java’s doomsday scenario cones true. (Sarcasm)
        He would be in the corner peeing his pants.

        Reply

  12. Posted by MJ on June 12, 2016 at 7:44 am

    Sorry SMD, any publics in CA, NJ or anywhere else who had “losses” still had a job with health benefits, pensions and generous vacation and sick time……..and all the taxes that those hard working publics pay benefit themselves more than any one else. In other words, they are getting a bigger bang for their buck. Furloughs?? Most that I know welcomed the furloughs as time off and in some cases were reimbursed and lets not forget the raises every year regardless of the economy. I can not understand the mentality that public workers feel they should not have to experience the ups and downs of a bad economy yet expect their neighbors to pay for it.

    Reply

    • Posted by S Moderation Douglas on June 12, 2016 at 12:47 pm

      “raises every year regardless of the economy.”

      1). Sounds like the ghost of Tough Love. No. California state workers do not get automatic COLAs. There were no raises between 2007 and 2012. In 2012, Brown negotiated a 5% raise tied to a 5% increase in employee contributions to pensions. The pension contribution began Jan 2012. The raise began June 2013.

      2). I didn’t know anyone who welcomed the furloughs. When one makes $40,000 a year and income drops instantly by fifteen percent, most people do not have a cushion to absorb that. Cars were lost, houses were foreclosed, bankruptcies were filed. As collateral damage, even private businesses were destroyed, especially in cities like Sacramento with a high percentage of state workers. First to be hurt were restaurants in the downtown area. Several closed outright and others just laid off staff.

      3). “Paid leave encompasses sick time, vacation days, paid holidays, and personal leave. On average, paid leave is almost precisely the same in the private sector as in state government, with values of 11.11 percent and 11.06 percent of wages respectively.”
      “It is unusual for the value of state and private paid leave to differ by more than 1 percent of wages.”

      “Overpaid or Underpaid? A State-by-State Ranking of Public Employee Compensation”
      American Enterprise Institute, 2014

      4).  I can not understand the mentality that some people BELIEVE public workers are immune from the ups and downs of a bad economy. It affects everyone, to varying degrees, in either sector. My house dropped almost fifty percent in value. I don’t know how much my IRA lost, it has largely recovered. I was very fortunate in one regard; my wife’s private sector job is nearly recession proof. The company she worked for was continually growing (wholesale produce) and she received COLAs and merit raises and bonuses throughout the recession.

      Reply

  13. Posted by George on June 12, 2016 at 11:44 am

    The rule of law is the legal principle that law should govern a nation, as opposed to being governed by arbitrary decisions of individual government officials. from Wikipedia

    Undeclared wars, no congressional oversight of trillions that disappeared into Iraqistan, illegal aliens living openly, asset forfeiture, war on drugs, student loan debts that cannot be discharged in bankruptcy court blah blah blah. While you might agree with any or all of those policies, they were not conducted under rule of law.

    Under a republic system the legislature must vote all expenditures. What you think the legislature owes you, even if you can get the courts to agree, is irrelevant. Paying certain bonds or other obligations might be good policy and as important customary. As more and more spending stops being discretionary the whole point of democracy, that the legislature controls spending becomes irrelevant.

    Reply

  14. Posted by Anonymous on June 13, 2016 at 7:39 am

    Did the ruling hint at a distinction between State and Local plans?

    Reply

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