Scariest Numbers From New Jersey’s 2016 Pension Reports

You might have your own but based on this spreadsheet, created by pulling off pertinent valuation data from each of the July 1, 2016 actuarial reports for the New Jersey retirement system (with tabs for similar data going back to 2015, 2012 and 2000), here are mine:

$96,834,702,863: Value of benefits payable to retirees

$76,924,788,947: Market value of assets

Even considering the:

  • phony assumptions used to value liabilities*,
  • reported asset values down to $71 billion,
  • which includes about $25 billion in self-valued ‘alternative’ investments:

you come up $20 BILLION short of covering the the undervalued benefits for current retirees ALONE.

439,172 public employees have nothing in their pensions but IOUs and their $1.98 billion in annual contributions (and roughly $30 billion in accrued contributions) are going into a black hole that no politician is about to plug.

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* The accrued liabilities are based on an interest rate of 7.65% this year (down from 7.9%) so the annuity factors are slightly higher but far below the honest interest rate that should be used for a fund with this type of massive unfunded liability and liquidity needs. And that $49 billion headline number – that’s only the state portion.  There is another $17 billion that the localities are ‘responsible’ for officially.

4 responses to this post.

  1. Posted by Anonymous on February 28, 2017 at 8:02 pm

    Scarier than state employee pensions are all those employed for years at the county-level in Grant-funded positions that have no pension to look forward to. Work Force Development, antiproverty agency employees, etc. some worked decades and continue to work because no one found it necessary to provide pensions through ACTS or DROP which is available to county elected officials and higher ed adjuncts. We have long-term county-level employees so have no retirement monies, totally scandalous and unfair. These people dedicated their lives to NJ’s most vulnerable, in retirement they become recipients of the social safety net, this should never been allowed to become their reality. This should be investigated and addressed immediately .

    Reply

    • Posted by Anonymous on March 1, 2017 at 9:05 am

      When Grant funded government positions funding is recurring, at some point the governing body must look at the impact on this special class of employees. The normal vesting period in dc retirement plans is immediate to 3 years, so when Grant funded employees remain beyond the normal pension vesting period, the government entity must make allowances for the retirement needs of this class of employees. How do they justify people working years/decades with no pension? Many of those employed and former employees are women and minorities.

      Reply

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