Where Are Their Members’ Pensions?

Where are their clients’ yachts?

William R. Travers

This was to be a followup to the Think Tank blog checking out 990 and 5500 information on public worker unions in New Jersey to see what type of plans these union people had for themselves. I still may put together that spreadsheet but, as it turned out, the first union I looked at made the point.

The New Jersey Education Association (NJEA), according to their latest available 990 filing, takes in $130 million annually – $115 million from union dues which according to a 2012 article breaks down this way:

The highest dues is $791 for full-time professional staff, including teachers and administrators. More than 60 percent of the union’s roughly 195,000 members pay the maximum amount, while other members pay lesser amounts, according to NJEA spokesman Steve Wollmer.

Wollmer told us 2,041 employees are paying a representation fee in lieu of joining the union. The union conducts an annual audit to determine the expenses chargeable to nonmembers, and the current fee stands at 81.8 percent of NJEA dues, Wollmer said in an e-mail.

So, a full-time teacher who has decided against joining the teachers union must still pay $647 in the current school year to the NJEA.

“The reasoning is that everyone benefits from the terms of the collective bargaining agreement, which includes salaries and benefits among other things,” Wollmer said. “The statute spells out what items are ‘chargeable’ – or needed to negotiate, enforce, and adjudicate legal disputes around the contract – and those charges cannot exceed 85% of NJEA dues.”

Now about those benefits. The Teachers Pension and Annuity Fund (TPAF) is the second worst funded plan (after the much smaller Judicial Retirement System) in the state with the worst funded pension system even after cost-of-living-adjustments for all retirees were eliminated arbitrarily. The ugly official numbers:

But it is a different story when we look at how the NJEA is benefiting their own employees – starting with compensation at the top:

According to the 990 instructions that Other Compensation column (F) amount could be:

compensation other than reportable compensation, including deferred compensation not currently reportable on Form W-2, box 1 or 5 or Form 1099-MISC, box 7, and certain nontaxable benefits, as discussed in detail in the instructions for Schedule J, (Form 990), Part II. See the instructions for other compensation reported in column (F), later, which includes a table to show where and how to report certain types of compensation in Part VII, Section A, and Schedule J (Form 990).

More detail from Schedule J:

My guess is that the Deferred Compensation column (C) includes the value of benefit accruals under the Defined Benefit Plan and contributions under the 401(k) Plan that the NJEA maintains for its employees.

The NJEA Defined Benefit plan happens to be very well funded:

with benefits better than the TPAF plan with its 1/55 top accrual:

and cost-of-living-adjustments intact: