Pension Surprises in NJ Budget?


.
Though what is not mentioned is….

that ‘full scheduled pension payment‘ would still only be 60% of what is ridiculously called the ‘Annual Required Contribution’ as determined by the actuaries which is still about 40% of what an honest contribution amount should be in a plan so badly funded.

My guess is that the FY18 budget will include a $2.5 billion pension line item but that extra $650 million over FY17 will come from some manipulation of the state’s health benefit payments that will have either public employees or property-tax payers picking up much more of the tab.

9 responses to this post.

  1. Posted by Anonymous on February 14, 2017 at 10:09 am

    truesally home school is the ONLY way going forward children will get a quality education. All of the budget pressures on cutting teachers salary and benefits (P&B) will insure lack of quality educators for public schools. And this will spill over into other sectors as well. I guess the GOP solution is abolish government and let the private sector angels monitor themselves? Oh wait except for the military and self interested defense industry!

    Reply

    • Posted by Anonymous on February 14, 2017 at 1:02 pm

      The private sector is already doing a better job at educating people than the public school system, so the GOP doesn’t need to fix that. Surely you aren’t going to argue that all the public school systems need is more money and more time and everything will work out just fine, are you?

      Reply

      • Posted by Anonymous on February 14, 2017 at 2:10 pm

        If you’re referring to charter schools I’d say the results vary significantly by schools. As far as higher education, public or private, the only thing that’s higher about them is their rising cost similar to healthcare! Fix that…..and I don’t mean shuffle the cost.

        Reply

  2. Posted by boscoe on February 14, 2017 at 10:14 am

    “My guess is that the FY18 budget will include a $2.5 billion pension line item but that extra $650 million over FY17 will come from some manipulation of the state’s health benefit payments that will have either public employees or property-tax payers picking up much more of the tab.”

    My guess is that you are right. Remember that last year when Medicare-eligible PERS retirees were moved into a Medicare Advantage plan, that the same thing did not happen with TPAF retirees because it was never voted on by the School Employees Health Benefits Commission. I’m sure that the new budget will have baked into it an expectation that the same thing will happen with TPAF next fiscal year — although the savings from that shift are not clear because the existing Part D drug plan was left out of that switch and continues to operate (Express Scripts) as before.

    More important, we are likely to see a budget that reflects all or some of the recommendations of the NJ Pension and Health Benefits Study Commission reports in 2015 and 2016 that, in essence, reduce health benefits for teachers and health benefits costs for school districts, and shift state-paid pension contributions to local districts.

    This promises to trigger a major battle in the Legislature, since substantive changes would have to be made not only in the budget itself, but in the statutes governing requirements for making the local employer’s share of pension contributions to the systems. Expect to see the NJEA, School Boards Association and League of Municipalities crank it up to eleven.

    But here’s the thing: if the Governor’s FY 2018 budget is arithmetically (albeit artificially) “balanced” by incorporating and spending the savings projected from these changes, then a refusal by the Legislature to go along with any or all of the proposals requires them to “rebalance” the budget by attempting bump revenues, impose other savings or by reducing the surplus to zero. No legislative body wants to be put in this position, especially in an election year.

    Or….this could all be wrong. We’ll know in a few weeks.

    Reply

    • Posted by Anonymous on February 14, 2017 at 2:11 pm

      In essence start to roll out the B reforms of the P&B commission because, aside from the required legislation you noted, it can be done without significant or at least successful challenge.

      Reply

  3. Is it true that the state pays the Medicare premiums for retired teachers and their spouses? Ii know it is mandatory that retired teachers sign up for Medicare once they turn 65 and then their “lifetime” health benefits become secondary………

    Anybody know what those rules ?

    Reply

    • Per fact sheet 11:

      “The State and certain employers have negotiated to pay all, or some, of the cost of SHBP/SEHBP coverage for retirees who meet specific service credit or retirement criteria — outlined in the following sections. ”

      Details here:
      http://www.state.nj.us/treasury/pensions/pdf/factsheets/fact11.pdf

      Reply

    • Posted by Anonymous on February 14, 2017 at 6:12 pm

      If you’re referring to the Medicare Part B reimbursement the answer is yes but I think the 2011 reforms phased out or eliminated the reimbursement for members who had less 20 years of service as of July 1, 2011. Also there is pending legislation that eliminates it based on a means test for current and future retirees.

      Reply

  4. So basically business as usual

    Reply

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