RFP for RIP Pension System

Now that politicians in New Jersey have run out of their own stupid ideas to (not) deal with the massively underfunded state pension system, according to njspotlight, they have turned to soliciting other people’s stupid ideas*.  This time, according to a Request for Proposals sent out on December 9, 2016, from investment bankers.

Based upon a review of the response to this RFP, the State will select one or a number of firms to serve as an investment bank (“Investment Banker”) to the State in connection with the State’s pension plans, other post-employment benefit obligations, and/or its existing bonds including but not limited to the N.J. Economic Development Authority’s (“EDA”) Pension Obligation Bonds 1997 Series A & B (the “EDA Pension Bonds”). The Investment Banker(s) will assist the State in the development and implementation of financial concepts, structures and/or transactions that will have the effect of reducing the budgetary burden on the State caused by its responsibility to satisfy the obligations mentioned above. Please note that the State does not intend to issue new money Pension Obligation Bonds or any other indebtedness to fund its Pension Plans or Other Post-Employment Benefit Obligations.

To keep out the riffraff:

The Investment Bank(s) will be expected to have a thorough understanding of the State’s statutes, rules and regulations, covenants and contracts pertaining to the State’s Pension Plans, Other Post-Employment Benefit Obligations, and the EDA Pension Bonds. The Investment Bank(s) must also have a thorough understanding of the State’s accounting and budgetary practices.

Though anyone with a “thorough understanding of the state’s accounting and budgetary practices” (i.e. we pay what we want when we want if we want) is unlikely to bid and per njspotlight:

It’s unclear how many firms have responded to the request for proposals, and when the state is planning to move forward. Responses were due by December 21, and Treasury has yet to issue a formal selection notice.

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*  As those are the only ones likely to be accepted as making honest contributions or cutting benefits substantially are off the table.

6 responses to this post.

  1. Posted by dentss dunnigan on January 10, 2017 at 10:39 am

    Here’s an Idea for the state to clawback some of the tax money fleeing the state via state retirees leaving to tax free states …Connecticut Supreme Court Upholds Tax Grab On Nevada Retiree’s $53 Million Stock Options Income.The unions claim that pensions are deferred compensation ,which means it’s earned in the state .The Connecticut Supreme Court ruled in Allen v. Commissioner that the state could tax all of the income from the exercise of $53 million in non-qualified stock options by a non-resident because they were granted as compensation for working in Connecticut….I understand that 30% of retirement checks are sent out of state ….that could be used to fund the pensions if done right

    Reply

  2. Posted by skip3house on January 10, 2017 at 10:50 am

    Only person qualified is John Bury, or his ‘twin’. You cannot make a dollar out of fifteen cents,……

    Reply

  3. Posted by Anonymous on January 10, 2017 at 12:48 pm

    I guess they kicked the can as far as it could go, they ran out of road, the only thing left is to change the game to pass the blame (if some is stupid or greedy enough to take it)

    Reply

  4. Posted by boscoe on January 10, 2017 at 5:17 pm

    Pension income received by a non-resident is not taxable in New Jersey under New Jersey law. So there is nothing for a court to interpret and it’s irrelevant whether it is considered deferred income or not. And since the Governor recently signed legislation that will raise the retirement income exclusion to $100,000 in a few years, it wouldn’t bring any sizeable amount of money into the state treasury anyway.

    Reply

  5. Posted by Eric on January 10, 2017 at 5:28 pm

    John:
    I agree with you. Who would bid to do any work for the state, when the corrupt NJ Supreme Court stated that obligations it, meaning the state, incurs need not be repaid? Only idiots, which does not narrow the field in any meaningful way.
    Perhaps, the only exception to bidding, would be that all funds must be paid, to a given company, by the state “upfront” and checks cleared, as a condition precedent to any work at all, being performed including billable time spent in generating ideas.
    I know that states are not allowed to declare bankruptcy, however, NJ is insolvent, and any payment made may be viewed as a “voidable preference” under some vestige of bankruptcy law that may be wrongfully applied, and would be demanded by a trustee.
    Best to stay away from the insolvent, corrupt NJ. Nothing good could ever come of it.
    NJ is like having a drunk brother-in-law that is forever going to “hit it big” if he could just get you to pay for one more drink. Come on, just one!
    Eric

    Reply

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