AFPP for NJ Pension Reform

per nj.com:

501(c)(4) organizations can engage in unlimited lobbying so long as it pertains to the organization’s mission. 501(c)(3) organizations are not permitted to engage in political activity, endorse or oppose political candidates, or donate money or time to political campaigns, but 501(c)(4) organizations can do all of the above. In regards to supporting these organizations, donations made to 501(c)(3) organizations are deductible to the full extent of the law as charitable contributions. Donations made to 501(c)(4) organizations are not deductible, though some businesses who make these contributions often write them off as advertising or business expenses.

Americans for Prosperity (AFP), per their latest 990, is 501(c)(4) and takes in over $80 million in contributions and grants. Americans for Prosperity Foundation (AFPF),  per their latest 990, is 501(c)(3) and takes in over $20 million in contributions and grants.

I bring this up since AFPF (the ones who can’t engage in political activity) announced on their website today that they are investing six-figures in a pension reform effort in New Jersey.

“New Jersey’s pension crisis threatens the future of families, entrepreneurs, retirees, and government workers. The lack of sustainable funding keeps our tax burden oppressive, crowds out needed services, undermines economic growth, and leaves workers without a secure retirement. Pension reform is a moral imperative and an economic necessity. The longer we wait to shed light on this issue, the more New Jerseyans will suffer from higher taxes, budget cuts to essential services, and defaulting pensions.

“For too long the pension crisis has been ignored because the public did not know the facts. Safeguard New Jersey’s Future will change that by explaining the problem and the commonsense reforms that can safeguard our state’s future for all residents. Pension reform will restore our state’s fiscal health, reverse the perpetual tax hikes, protect essential services, and ensure government workers and retirees’ retirement plans remain secure.”

It would seem as if “higher taxes, budget cuts to essential services, and defaulting pensions” would be the choices before us yet the AFPF link lays out this three-step program:

  1. Understand the problem
  2. No higher taxes
  3. Go to a 401(k) plan

All commendable notions but the problem (in this case a $235 billion problem) persists and it WILL take political activity to address it.

10 responses to this post.

  1. Posted by Anonymous on April 18, 2017 at 2:55 pm

    Yes, but the 1-st step in digging yourself out of a deep financial hole is to STOP digging.

    Freezing NJ’s DB pensions for the future service of all CURRENT workers will do that …. as long as the replacement Plan for future service (whether Cash Balance, 401k, etc.) has a taxpayer contribution very close to what Private Sector taxpayers typically get from their employers.

    1-st STOP digging. Then explore what possible to address the PAST service under-funding.

    Reply

  2. Posted by Anonymous on April 18, 2017 at 5:28 pm

    Hey TL the guard dogs won’t let the foxes near the hen house until the eggs already laid are protected.

    Reply

  3. Posted by Eric on April 18, 2017 at 5:57 pm

    TL
    The “digging” has stopped for several years now. Your concern is moot.
    Eric

    Reply

    • Posted by Anonymous on April 18, 2017 at 6:04 pm

      How so, for NJ Public Sector workers hired before the last changes will continue to accrue pension benefits based on the older formula for the balance of their careers….. for some another 30 years?

      And the newer formula REMAINS multiples greater in value upon retirement than what comparable Private Sector workers get in retirement benefits from their employers.

      Clearly the foxes are still in charge of the hen-house.

      Reply

      • Posted by Anonymous on April 18, 2017 at 7:53 pm

        You realize the employees pay for the pensions as the state can’t come up with the cash. Under your scenario, the state would have to pay the full tab in year 1. Yeah that might happen.

        Reply

        • Posted by Anonymous on April 18, 2017 at 11:09 pm

          Wrong,

          I approach this by first determining what TOTAL level annual % of pay is necessary to fully fund the promised pensions over the working career of the employees (using the assumptions & methodology comparable to what is required by the US Gov’t for Private Sector Plans).

          The Taxpayer cost is the Total Level annual %-of-pay less the employee %-of-pay contribution.

          Historically the employee contribution is in the 10% to 20% of the total cost, with the taxpayer being “responsible” for the 80%-90% balance (even if they are ACTUALLY contributing less).

          Bottom Line…..

          The employees only pay for 10%-20% of their pensions . What Taxpayers ACTUALLY “pay” varies widely from place to place, but typically from 10% to 50% of the cost of the pensions. Almost EVERYWHERE at least 1/3 of the (PROPERLY computed) cost simply goes unpaid ….. hence the ever-growing unfunded liabilities.

          Reply

    • Posted by Anonymous on April 19, 2017 at 10:20 am

      Keep digging, there’s not a hole large enough to bury them…..

      Reply

  4. Posted by Now Retired Pat on April 20, 2017 at 6:16 pm

    why not attempt to secure a federal guaranteed loan in the 1% range, then invest that money with an expected 5% return. The feds will always be able to recoup their money via fewer federal assistance, if necessary. Let’s start with a $200B loan at 1%. We can handle that over 50 years, no problem. No alternative investments at all. All funds go into indexed funds, so no outrageous management fees either! We can use our federal assistance as collateral on a debt we can not default upon. Issues?

    Reply

    • Posted by Anonymous on April 20, 2017 at 6:26 pm

      Why? Why should Taxpayers honor pension promises that were BOUGHT from our Elected Officials with BRIBES disguised as campaign contributions and election support?

      Nobody at ANY negotiation of such pensions (AND benefits) represented the interests of NJ’s Taxpayers.

      Reply

    • Posted by Anonymous on April 20, 2017 at 8:55 pm

      Yeah Pat, besides don’t you know if TL says NO then the answer is YES! Welcome back indeed Koter your SweatHogs missed you so…..

      Reply

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