NJ Public Employees Will Lose $170K Each

A new study by S&P Global estimates the median pension debt among all 50 states comes to $806 per resident. Steven Malanga today in the Star Ledger honed in on New Jersey under this headline:

N.J. residents owe $15K per person in pension debt. Compromise is the only fix.

But looking at it another way:

Nine million NJ residents may owe $15K each to pay off a $135 billion pension debt but it could also mean that the almost eight hundred thousand public employees who are owed that $135 billion will not ever get that money, which translates into them losing about $170K each.

The latter scenario is far more likely when you consider:

  • That $135 billion amount is only going up as substantial benefit accruals continue notwithstanding faux reforms
  • Investment returns are no panacea in a plan so severely underfunded with significant liquidity requirements
  • Trump, Bridgegate, Tax Fairness, and whatever else pops up to distract from real work

Nothing will happen until such time (2022 for judges) as there is no money to pay benefits and when we get to that point we will either see:

  1. people with the highest tax burden in the nation getting their taxes raised 30% on average by whatever machinations bubble up from the NJ political cauldron of bad ideas, or
  2. benefits not being paid.



33 responses to this post.

  1. Posted by Anonymous on October 2, 2016 at 4:42 pm

    Anonymous on September 30, 2016 at 10:37 am
    At least the SPRS will still be intact but s/b interesting in 2022 when JRS is burnt out, wonder how the NJSC will rule?


    Yup, pretty much a no brainer. Christie’s too distracted to care and the D’s haven’t done anything for years. IF the idiodic union leadership would come to their senses instead of digging in their heels. Guess some things never change.

    It’s too late for a magic cure but a strong step in the right direction is to implement P&BCommision like reforms ASAP, along with a constitutional amendment on funding tied to a diminishing subsidy for healthcare coverage.


    • Posted by dentss dunnigan on October 2, 2016 at 5:31 pm

      I believe Sweeney saw this report and the numbers scared the hell out him because if he were to put it on the ballot the numbers would also have to be put out their ,hence the reason to cancell the vote ….with this only getting worst if nothing is done the legislature can’t punt on this too much longer …


      • Posted by Anonymous on October 2, 2016 at 5:47 pm

        Punt, it’s fourth and long, hell Mary can’t even help! Time for a new league, this one is defunct!


        • Posted by PS Drone on October 2, 2016 at 6:52 pm

          I think the legislature should try to raise taxes by 30% instead of cutting costs. Then we can see how long it will take the imbeciles that live in this State to recall all of them. Maybe at that point we will have a chance for some sanity in the fiscal management of NJ. After due consideration, good luck with that.


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


    Even the Feds, especially with the R’s Tea Party influence, won’t be able to print enough money to meet their obligations. Then what, gold or ?


  3. Posted by Anonymous on October 2, 2016 at 9:37 pm


    It’s official NJ has its’ next toxic waste site with the garbage coming out of the Spin DR’s mouth – it never ends, not with Bridgegate or the Pearly Gates (assuming I got his eventual correct destination).


  4. Posted by Anonymous on October 2, 2016 at 10:34 pm


    Could Christie’s NJSC strike again, we feel your pain FOX employees (guess they won’t be voting for Trump)!


    • Posted by Bpaterson on October 4, 2016 at 10:07 am

      could be, now is the time more than ever that the status quo needs to be changed. When you don’t say anything, next they come for you.


  5. Posted by George on October 3, 2016 at 7:46 am

    Is it too late to get the pension amendment on the ballot?


  6. Posted by Numeratenj on October 3, 2016 at 2:16 pm

    Thank you John. I have enjoyed your work for years.
    The $170k average loss is interesting. It should be proportionately greater for younger workers. Current retirees, with shorter life expectancies, should lose less.
    But the judges plan will likely collapse before 2022. The odds of a major stock market correction approaching 2008 continue to grow. However measured stock prices are historically high. IMO a bubble exists and the pension funds are vulnerable to major losses, a long recession and no monetary solution.


    • Thank you.

      It struck me as odd that, with all the evidence to the contrary, the scary numbers coming out assume it will be the taxpayers who will pay it when experience (Detroit, Central Falls, Prichard, COLA cuts) tells us that it is public employees who take the hit.


    • Posted by Anonymous on October 3, 2016 at 2:49 pm

      Numeratenj, not debating your conclusion BUT IF NJ had been making their ARC during the Great Recession, thereby increasing the investable asset base at a time of continued negative cash flow, wonder what the positive $ impact would have been. And yes I know, would of, should of, could of!


      • Posted by Bpaterson on October 4, 2016 at 10:03 am

        JB1-is there a site that would list each state’s separate GDP to see if NJ’s economy and tax base could have afforded the pensions payments, I know during the last decade the raises for the public sector got ridiculous with 4-5% raises. A 4% raise translates into a 7% labor cost increase factoring in the salary based pension burden. And then add into that labor cost factor the medical costs benefits, maybe another 1-2% cost burden. And also the growth of the public sector and possible efficiency losses due to politics. Could our states GDP accommodate that? Or is that why the obligations where skipped or diminished all those years?


  7. Posted by Bpaterson on October 4, 2016 at 9:54 am

    I suggested this back 5 years ago, still valid now-they should put a lien on every house in NJ, say around $30,000 to pay for the underfunding. (I think 5 years ago I was saying $15k). Home values are very high in this state, can absorb the ding. Or make it a % of the home’s asset value to be more fair. The downside is that those that use the least services are footing the most of the bill, but isn’t that the system in place now. FWIW.


    • Posted by dentss dunnigan on October 4, 2016 at 10:30 am

      I know of two was to totally destroy the housing market in this state …one go to a flat tax and do away with all exemptions property taxes and mtg interest ,the other is the one you propose putting a lien on any house for past services that were already paid for via property taxes ….Would a state worker accept a job because the guy before him only paid 3% a year into the pension system when it should have been 12% but the new worker had to pay for his low contributions …..


      • Posted by Anonymous on October 4, 2016 at 10:35 am

        Correction, that should have been paid for……


      • Posted by Anonymous on October 4, 2016 at 10:38 am

        And…..the current PW is & will pay even more into the pension


        • Posted by dentss dunnigan on October 4, 2016 at 1:57 pm

          Yea it’s their pension ….They should have upped their contribution in 07 ‘ once the interest rate was almost zero….


          • Posted by Anonymous on October 4, 2016 at 4:16 pm

            And clawbacks against taxpayers who allegedly didn’t pay for services received…..

          • Posted by Bpaterson on October 4, 2016 at 5:11 pm

            clawbacks would be great. Since the majority of taxpayers do not heavily use any of the services, you would need to go after the abbot districts and urban cities. So for once I am likely scot free of the obligation. Good luck in your endeavors when you show up in cities like Newark to demand your money.

          • Posted by Anonymous on October 4, 2016 at 6:29 pm

            Yeah I know, especially for TPAF & PFRS, but DD’s a big fan of clawbacks so I felt the need to put it out there.

    • Posted by MJ on October 4, 2016 at 3:06 pm

      BPatterson,, surely you about putting liens on real estate. We already pay a real estate transfer tax when selling a house thanks to McGreevey and you think a lien should be placed on each individual’s home that got deducted upon sale of that property?


    • Posted by PS Drone on October 4, 2016 at 3:09 pm

      How do “values absorb the ding”? You would have to sell the house to pay off the lien and who would be buying all of these houses in this shit state?

      What an idiot idea, but par for the course for a drone. No consideration that most of the now lien burdened taxpayers did not want or need the “services” that were provided in those past years. Only drones think the state would collapse if half of them were to be terminated as they should be so the state can balance it’s ridiculous budget.


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