Wizards of Lies In New Jersey Too

Watchdog.org had a piece on the Bernie Madoff story as told in the HBO documentary “The Wizard of Lies“:

A strong case can be made that public pensions are eerily similar to a Ponzi scheme, and that a similar collapse in some of the most underfunded systems in the country might be inevitable. That would mean an untold number of new victims that would make the Madoff case seem relatively minor by comparison.

The difference between a Madoff-like Ponzi scheme and the public pension crisis is that government is complicit in the latter, and that dedicated public servants, state retirees and taxpayers are the ones at risk.

I have been making that case for years and I see parallels between this:
.

.
and this.

njspotlight was the only news site I saw covering the July 27 meeting of the NJ Division of Investment and that was primarily to laud some distracting gimmckry and report that:

Pension officials yesterday also lauded the preliminary investment-return estimates for FY2017, which showed gains of around 12.5 percent net of all fees and other expenses. Those returns are well above the system’s 7.65 percent assumed rate of return, and they also mark a big turnaround from FY2016, when returns came in nearly 1 percent in the red.

Here is the asset allocation from the May, 2017 Investment Reporting Package:

57.12% in what is called Global Growth which supposedly has made 17.12% to date this year:

Also in that report is a summary of Alternative Investments with these totals:

and a summary of asset allocations:

Nothing ties in. Is the $42.852 billion amount in the allocation exhibit listed as Total Global Growth related to the $40.647 billion Total Value of Alternative Investment and where does the $18.887 billion listed as Current Market Value for Alternative Investments factor in? The report also shows a breakdown of the Cash Management Fund:

If it is $1.324 that the fund has in US Treasuries then where are the $5.786 billion in UST NOTES and $5.284 billion in UST BILLS? Something is not kosher here.

100 responses to this post.

    • Posted by Anonymous on July 30, 2017 at 12:44 pm

      Oops! Bad link?

      Reply

    • Posted by S Moderation Anonymous on July 30, 2017 at 1:04 pm

       “institutionalization of theft by government bureaucracy” South Carolina

      Curtis Loftis Jr. 

      State Treasurer at South Carolina Office of State Treasurer

      The intentional underfunding of the pension system allowed powerful politicians to spend that money for other purposes.

      It was, effectively, a tax levied upon the taxpayers without notice or vote.

      That tax is quantified by the pension bailout legislation of 2017 to be $827 million per year (the amount of the bailout fully implemented).

      The effects of tax increases to pay for the bailout at the local level, the curbing of services and hikes in fees, etc, will not be known for years. It will be devastating to certain areas and populations and will drastically effect the ability to hire qualified public employees, especially in rural areas.

      It is the largest swindle in SC history and not one person was fired, not one commissioner or director was asked to resign and not one person has been jailed. In fact, many have been rewarded for their part in this swindle, especially if they were active in keeping the watchdogs at bay.

      Reply

      • Posted by Anonymous on July 30, 2017 at 2:11 pm

        Indeed, but the promised pensions “COST” the same whether funded or not-funded.

        The THEFT was justifying EXCESSIVE pensions by VASTLY & PURPOSEFULLY understating the true expected cost of the promises made………… because if the TRUE expected cost were known, the promised pensions would have (and SHOULD have) been VASTLY lower.

        Reply

      • Posted by S Moderation Anonymous on July 31, 2017 at 12:00 am

        This is South Carolina…

        Not all states are the same. In SC, according to Biggs, state workers were paid wages 15% below private sector, and with benefits, total compensation was 3% over the private sector. Biggs called their compensation “market level”, along with twenty other states. Very modest compensation, and still…

        “The intentional underfunding of the pension system allowed powerful politicians to spend that money for other purposes.”

        DON’T PAY THE BILLS, THE DEBT GETS LARGER. 

        Reply

        • Posted by Anonymous on July 31, 2017 at 12:16 am

          SMD,

          LOL……….. when I quite this (AEI) study you bash it as based on stale-data and unreliable, but when it’s results suits YOUR agenda, it’s fine and YOU quote from it.

          Your earlier comment is from the SC State Treasurer, but THIS Blog (hosted by John Bury, an actuary practicing in NJ) focuses on NJ’s pension problems, and the SAME study that you quoted above shows that EXCLUDING SAFETY workers, NJ’s state workers were paid wages only 4% below private sector, and with pension & benefits, total compensation was 23% OVER the private sector.

          And assuredly if the study had not excluded Safety workers (a VERY highly paid and pensioned group), the Public Sector advantage would have been materially greater.

          As I have stated many times …………..

          The ROOT CAUSE of the pension mess (everywhere) is grossly excessive pension “generosity”, with the “lack of full-funding” NOT being the CAUSE of the pension mess, but the CONSEQUENCE of the true root cause ….. grossly excessive pension “generosity”.

          Reply

          • Posted by S Moderation Anonymous on July 31, 2017 at 5:30 am

            That’s why I said “according to Biggs” the wages were lower, instead of just saying wages were lower. And why I said they “were” lower instead of “are” lower.

            Anonymous at 11:36 posted a link to an article about Pension changes in South Carolina. The state treasurer flat out said the underfunding was intentional. Not because pensions were too high, but because they wanted to use the money for something else.

            “institutionalization of theft by government bureaucracy”

            Just like in New Jersey. Except New Jersey is better at it than any other state.
            If NJ did reduce future accruals by 50 percent (75 percent for safety), they would still underfunded the system.

            And blame the state workers.

          • Posted by Anonymous on July 31, 2017 at 11:52 am

            SMD, We’ve discussed THAT before as well………..

            NJ’s Taxpayers have ALREADY funded an amount equal to 100% of the full-funding of a pension EQUAL to that typically granted Private Sector workers.

            That all our Public Sector workers deserve, no matter how much they protest to the contrary, and not withstanding that their Unions have been very successful in BUYING far greater pensions from our Elected Officials with BRIBES disguised as campaign contributions and election support.

            My longer comment ….time-stamped July 30, 2017 at 1:20 pm below ….. lays it out more clearly.

  1. Posted by skip3house on July 30, 2017 at 12:08 pm

    As most recently reminded, https://burypensions.wordpress.com/2017/05/27/census-data-for-public-pension-plans/#comments ,this under-funding of political promises at the expense of future NJ taxpayers /retirees, maybe both groups, must now be corrected – not studied more to death.
    Mr Bury has repeatedly laid out solutions from at once converting all participants to retro pension calculations based on actual total contributions each separate year of service and DC (defined contributions) logic….to acceptable pension amounts to those lowest who would be squeezed to hard. Of course, no action at all…. resulting in no pensions beyond actual employee contributions .
    We at least owe NJ workers a solid footing for their pension plans if political promises are not viable.
    Submit these solutions…..

    Reply

    • Posted by Anonymous on July 30, 2017 at 1:20 pm

      (1) WITH there being very little difference in overall “cash wages” between NJ’s Public and Private Sectors workers (per the NJ-specific data from the AEI study), and

      (2) WITH the very reasonable goal that Public/Private Sector “Total Compensation” (cash wages + pensions + benefits) SHOULD BE very close for all such workers when taken together, and

      (3) WITH earlier Bury Blogs showing that NJ has already funded 40% of the EXCESSIVELY GENEROUS pensions actually promised NJ’s Public Sector workers, and

      (4) WITH NJ’s non-Safety-worker* Public Sector pensions TYPICALLY 2.5+ times MORE generous that those of comparable Private Sector workers …..meaning that Private Sector worker pensions are (1/2.5) =0.40 or 40% as generous as those typically granted NJ’s non-Safety-worker Public Sector workers
      __________________________________________________

      NJ’s Taxpayer have ALREADY funded 100% of the pensions that SHOULD HAVE BEEN ….. and likely WOULD HAVE BEEN ….. granted it’s Public Sector workers in the absence of the collusion between the Public Sector Unions and NJ’s Elected Officials, with the former BUYING the favorable votes of the latter (on Public Sector pay, pensions, and benefits) with BRIBES disguised as campaign contributions and election support.

      As such, NJ’s Taxpayers have every right to reject additional funding and demand that the promised pensions be reset at the amount that can be purchased with CURRENT Plan assets.
      ______________________________________________________

      Now if the Public Sector Unions/workers were to STOP looking at Nj’s Taxpayers as suckers to be abused, I’m sure many of it’s taxpayers would take a more modest approach to addressing this VERY big problem.

      And the NECESSARY step #1 to do so, is to acknowledge that the DB Plan now in place are clearly excessive & unaffordable, and agree to either “freeze” these Plans or reduce the Plan “generosity” …. for the future service of all CURRENT workers …. ALL THE WAY down to the level that can be granted with taxpayer contributions EQUAL TO the retirement security contributions that Private Sector workers typically get from their employers.

      Reply

    • Posted by S Moderation Anonymous on July 30, 2017 at 1:34 pm

      “Mr Bury has repeatedly laid out solutions from at once converting all participants to retro pension calculations based on actual total contributions each separate year of service and DC (defined contributions) logic….to acceptable pension amounts to those lowest who would be squeezed to hard.”

      Do you have a link to one or more of these solutions in more detail? In the most unfunded States this seems almost imperative. If it works there, it would be worth pursuing in more marginal states. Speaking only for myself, as a retiree, I wouldn’t object to a reduction in pension…

      IF…

      It was reasonably equitable to all parties.

      AND…

      Actually began to put all pensions on solid footing.

      Otherwise…

      Reply

      • Posted by skip3house on July 30, 2017 at 1:52 pm

        Just relying on memory impressions over some years, but distinctly recall Bury blog of having a heart for too low pensions of lowest retirees. Mr Bury may dig around for these scattered thoughts?
        Good logical thinking by you and the 1:20pm Anon. Regards

        Reply

      • There are two distinct problems and thus two solutions that I have pushed for through this blog:.

        1) Systemic underfunding as we have politicians making up their own contribution numbers and hiring obeisant actuaries to back them up. Solution: Go to a Defined Contribution arrangement for all future pension benefits. If the older, higher-paid participants want to keep their larger accruals (currently being hidden from general view by the Defined Benefit system) there could even be an age-weighted component as we have in the private sector. But benefits need to be transparent.

        2) Fund the massive shortfall that developed primarily on account of the system of understated contributions per problem (1). In New Jersey it is in the $200 billion range if it is all going to be paid. Because of the size of the deficit benefit cuts (in the spirit of eliminating COLAs) have to be considered. However, the main solution here (and this is pipe-dream stuff from what I have seen at the Union County level) is to clean up the state. We build useless things that always go over-budget (UC family courthouse finished and the Roselle Mind & Body Complex next up), spend money on useless ‘services’ (legal ads in newspapers), and are controlled by industries like insurance companies that write their own rules. All this adds up to what could be $10 billion in savings that might go into the pension fund. I suspect that NJ taxpayers would also feel better if their money was going to public employees to whom they promised benefits rather than a former county manager gaming the system system for a big payday (long story and still ongoing, if interested: https://countywatchers.wordpress.com/2017/07/20/uccf-roselles-folly-and-the-return-of-the-prodigal/)

        Reply

        • Posted by Anonymous on July 30, 2017 at 4:23 pm

          QUOTING …..

          “I suspect that NJ taxpayers would also feel better if their money was going to public employees to whom they promised benefits rather than a former county manager gaming the system system for a big payday”

          Well, I suspect that MOST of NJ Taxpayers would prefer that any savings from the elimination of the waste that you identified, go towards reducing the VERY VERY high Property taxes in NJ, rather than towards additional funding of the ludicrously excessive pensions promised NJ’s Public Sector workers ….. 2.5+ times greater in value upon retirement (than those granted COMPARABLE Private Sector workers) for non-Safety workers, and 4+ times greater in value upon retirement for Safety workers.

          IF Public Sector workers want Taxpayer help, good faith FIRST requires VERY material reduction in Future service pension accruals for all CURRENT workers.

          Reply

        • Posted by S Moderation Anonymous on July 30, 2017 at 7:12 pm

          First, there is absolutely no doubt that a DC system would be more transparent, even if all the DB actuaries and politicians were entirely on the up-and-up and knowledgeable. There are too many variables to accurately predict pension costs and returns on investments.

          Second, I think we should forget about the disadvantages of a 401(k) when talking of public employees. A DC system is not the same thing. A $45,000 a year private employee can opt out entirely (and suffer the consequences when he is 65). A public DC system could be mandatory. A private worker could cash out his 401(k) when changing jobs, or in case of financial emergency (and suffer the consequences when he is 65). Public DC plans could/should have tighter restrictions on withdrawals before retirement age. And public DC plans would hopefully have better investment strategies both during working/contribution years and through annuities during retirement. (In other words, the public system is more paternalistic, whether that is good or bad is a matter of opinion. I think it is a good thing.)

          Third, it is good, in my opinion, that you separate the “older, higher-paid participants”. Most low income private workers have butkus for retirement. The average 401(k) balance for those under $50,000 income would yield less than $2,000… a year. (And, of course, MOST are way below average.

          https://www.fool.com/investing/general/2015/01/05/the-average-american-has-this-much-saved-in-a-401k.aspx

          Especially for lower income public workers, a DC “pension” (NOT 401(k)) would give a much better pension than any private 401(k).* This example is from “Future Forsaken” by John McGinnis, page 24. (available as a free download. McGinnis is member of the Pennsylvania General Assembly.

          “Let me review the previous example. A person whose salary averages growth at 2% a
          year, can, over the course of 36 years of earnings, accumulate an annuity equal to
          66.5% of his or her final salary, assuming 10% salary contributions per year and a 6%
          rate of return on investments. Such a plan would cost the employer 5% of payroll
          (affordable), allowing an equal split in contributions between employer and employee. It
          would require proper funding with each payroll (current), and it would discharge the
          employer of responsibility for uncertainties (predictability) and place them within the
          purview of the employee. In summary, it is a sustainable plan—current, affordable, and
          mostly predictable. I say mostly predictable because there is no assurance of the 6%
          investment rate of return, but that is not out of line with relatively low risk, safe investing
          and would seem highly probable to achieve.”

          If that example seems too good to be true, imagine if that hypothetical worker began his state career in 1970 at age 29, and retired at age 65 (36 years) in the year 2006. Set for life with an annuity worth 66.5% of income, plus Social Security.

          What if he retired in 2008 instead, “after the fall”?
          ………………………………………………….
          *Especially for lower income public workers, a DC “pension” (NOT 401(k)) would give a much better pension than most private 401(k).

          But much smaller pensions, and lower costs than most current DB pensions.

          Reply

          • Posted by Anonymous on July 30, 2017 at 9:43 pm

            Yes, with zero opportunity for retroactive pension increases and the myriad of “provision” changes that create immediate unfunded liabilities, with no “airtime” purchases, with minimal impact of unjustified end-of-career raise, promotions, or loads of pensionable overtime., etc., etc.

            P.S. It WOULD be nice for Public Sector workers to HAVE work the 36 years you mentioned (as do their Private Sector counterparts) to achieve a reasonable payout level in retirement, NOT the 30, or 25, or even 20 that is not that uncommon today.

        • Posted by Anonymous on July 31, 2017 at 10:43 am

          Citing the unlikely and improbable; roll back the 9% increase (pers & tpaf), overhaul health insurance coverage & premium share, freeze the DBP OR cut ALL future accruals by ~50% and cut the waste, etc. BUT you need to dedicate the funding for the unfunded liability b/c politicians vary rarely do the right thing!

          Reply

          • Posted by Anonymous on July 31, 2017 at 11:58 am

            I’m amenable to discussing the latter,AFTER all of the former are implemented.

            And re your suggestion….”overhaul health insurance coverage & premium share” …… that’s too undefined. Taxpayer contributions towards Public Sector retiree healthcare should be EQUAL TO buit no greater that what Private Sector workers typically get from THEIR employers …. which (on average) is very slightly north of NOTHING.

            EQUAL, but not better ….. on the Taxpayers’ dime.

  2. Posted by Anonymous on July 30, 2017 at 12:44 pm

    The biggest problem is getting the incoming taxpayers to pay for past promises of the pensions …when people realize what they might be on the hook for they leave or in the case of the younger generation they refuse to even move into the state and pay for pensions that they will never come close to getting ….

    Reply

    • Posted by skip3house on July 30, 2017 at 12:49 pm

      No ‘stool’, solution ?.!

      Reply

    • Posted by S Moderation Anonymous on July 30, 2017 at 1:20 pm

      Where you gonna go? There are similar problems in almost every state. Of course, the worst states are those that didn’t pay up even the under calculated ARCs. (You know who you are.)

      According to Pew, taxes are a factor in deciding to move, but not usually the major factor.

      Reply

      • Posted by Anonymous on July 30, 2017 at 1:25 pm

        If I was a bit younger and didn’t have local family obligations, I’d move to Sandy Springs Georgia, a city that incorporated SPECIFICALLY to rid itself of insatiably greedy Public Sector workers.

        And it has worked out marvelously !

        Reply

        • Posted by Anonymous on July 30, 2017 at 3:51 pm

          My kids went to school down their ,and loved it so they stayed . Taxes are 50 % plus lower and the quality of life is slower and a lot nicer than the NE …something to be said for no debt or legacy taxes to be paid …

          Reply

        • Posted by S Moderation Anonymous on July 30, 2017 at 3:56 pm

          Lafayette, CA has been doing the same since it was incorporated (1968). Most work contracted out, no DB pensions, etc.

          Butt…

          If you are moving only to save taxes, you may be cutting off your proverbial nose to spite your (proverbial) face. If moving to one of these cities…

          Bring

          Lots

          Of

          Money

          Sandy Springs has a cost of living index of 130 (30% above national average), and Lafayette, CA index of 219.

          Lafayette: “We Limit What We Do”

          ” While other cities may deliver swim centers, water parks, botanical gardens, zoos, tennis facilities, sailing clubs, and the like, Lafayette has largely stayed true to the Four P’s (police, public works, planning and parks) Don’t be surprised, when you call, if we say, “Sorry, we don’t do that.”

          To each his own.

          Reply

          • Posted by Anonymous on July 30, 2017 at 4:45 pm

            Cities DO need to live within their means, which induces wisely spending the taxes collected to fund chosen and needed products and services ….. which does NOT include Public Sector pay, pensions, or benefits greater than what those jobs would be compensated in the Private Sector.

            And OUTSOURCING is often the MOST EFFECTIVE way of getting those services with the best balance of quality and cost. That’s called “value”.

  3. Posted by S Moderation Anonymous on July 31, 2017 at 1:11 am

    DC pensions are on the way. A lot of labor practices in the private sector are copied in the public sector, after a lag time. It has already started. Undoubtedly there will be more in the next decade. Let’s hope some of the DB systems remain and learn the lessons of the last decade. And maybe better federal regulations for public …and… private pensions.

    The country is changing. Old age security will have to change also, especially for the lowest paid. Increasing retirement age won’t cut it.

    Some people will automatically hate this, but there will need to be more “From each according to his ability, to each according to his need.”

    Reply

    • Posted by S Moderation Anonymous on July 31, 2017 at 1:33 am

      “From each according to his ability, to each according to his need.”

      Is one of the things the lack of transparency is hiding. It is in the compressed public wage structure coupled with DB pensions.

      Monique Morrisey…

      “The national pattern that public-sector workers with college degrees are compensated somewhat less and those without college degrees are compensated somewhat more than their private-sector counterparts holds true for Connecticut as well. The more compressed pay structure—with top and bottom pay closer together—reflects the fact that people are drawn to public service for nonpecuniary reasons and that government employers have an interest in setting a higher floor on compensation than private-sector employers, some of whom pay poverty-level wages and pass health care and other costs onto government programs. Because public-sector workers are more likely to have college degrees, public employers—and taxpayers—are getting a bargain while ensuring a decent standard of living for less educated workers.”

      Liberté, égalité, fraternité.

      Reply

      • Posted by Anonymous on July 31, 2017 at 3:22 am

        Monique Morrissey joined the Economic Policy Institute in 2006.

        Googling …”Economic Policy Institute source of funding”…. I got this:

        https://www.activistfacts.com/organizations/516-economic-policy-institute/

        Interesting reading.

        SMD, You would be hard pressed to find a source MORE biased towards Public Sector Union/workers.

        Reply

        • Posted by Anonymous on July 31, 2017 at 3:26 am

          Quoting from the Overview (from my linked reference above):

          “The Economic Policy Institute (EcPI) calls itself a “nonprofit, nonpartisan” think tank. But behind its façade of political balance lays an agenda-driven organization. EcPI has roots in radical leftist politics, and it receives a large portion of its funding from organized labor. EcPI‘s donors have on at least one occasion been allowed to review its research prior to publication.

          Reply

        • Posted by Anonymous on July 31, 2017 at 3:38 am

          SMD, I’m sure you’ll like this one too … another quote from my above link:

          “Blackeye
          “Nonpartisan”?

          Lawrence Mishel, EcPI‘s president, acknowledged in The Huffington Post his prominent status among political liberals. “When we get attacked by the Wall Street Journal editorial page, I tell my people, ‘Be proud.’ I never got listed by Glenn Beck. I felt left out because I feel like I‘m an important person on the left.”

          In 2004, EcPI created a 501(c) (4) political advocacy group called the “EPI Policy Center.” It was most active in 2008, releasing negative reports about “The Bush Legacy” and criticizing then-Presidential candidate John McCain‘s health care proposals. The Center was partially funded by a liberal “Section 527” group called the Coalition to Defend the American Dream.

          EcPI coordinates the Economic Analysis and Research Network (EARN), a nationwide coalition of left-leaning policy organizations. Its members include The Drum Major Institute, the National Employment Law Project, Progressive Majority, the Ballot Initiative Strategy Center, Good Jobs First, and People for the American Way. EARN members also include 57 different state-level left-leaning policy organizations.

          EcPI‘s board of directors includes a number of left-wing partisans, including the former president of Bennett College for Women Julianne Malveaux. In 1994, Malveaux famously said of Supreme Court Justice Clarence Thomas: “You know, I hope his wife feeds him lots of eggs and butter and he dies early like many black men do, of heart disease.””

          ********************************************************************
          ********************************************************************

          SMD,

          You look VERY foolish in choosing to quote those associated with the EPI.

          Reply

          • Posted by S Moderation Anonymous on July 31, 2017 at 5:40 am

            And the Heritage Foundation and American Enterprise Institute, et.al, are totally unbiased?

            Do you factually disagree that lower level state workers earn more than the private sector, or that the higher level state workers earn much less?

  4. Posted by S Moderation Anonymous on July 31, 2017 at 6:23 am

    ROFL

    “Activist Facts”, website of Center for Organizational Research and Education (CORE)… “Experts on non-profit law have questioned the validity of the group’s non-profit status in The Chronicle of Philanthropy and other publications,”

    “In November 2001, the group launched a website, ActivistFacts.com, which selected information gathered from IRS documents and media reports, describing the funding and activities of groups it opposed, listing key activists and celebrity connections.”

    “In a document released by The New York Times on October 30, 2014, from a talk Berman gave to the Western Energy Alliance while he was unaware of being recorded, Berman (founder of CORE and “Activist Facts”) described the approach of his various organizations as one of “Win Ugly or Lose Pretty.” He also reassured potential donors about the concern that they might be discovered as supporters: “We run all of this stuff through nonprofit organizations that are insulated from having to disclose donors. There is total anonymity.”

    The proverbial pot calling the kettle black.

    Reply

    • Posted by S Moderation Anonymous on July 31, 2017 at 11:51 am

      Off topic again… Mea culpa.

      Activist Facts

      I thought this guy sounded familiar. I remembered him from some “studies” years ago on the disadvantages of minimum wage laws. As I recall, he set up a non-profit to “educate” the public on the hazards of minimum wage laws. He also has a PR firm representing mainly tobacco firms and restaurant, fast food, and hotel chains.
      The “non-profit” had it’s own P.O. Box, and a telephone number going straight to Berman’s P.R. firm office.
      Nice work if you can get it. Why pay a PR firm directly, when you can “donate” tax exempt dollars, hide your identity, and give it the “legitimacy” of a think tank or impartial source.

      Interesting side note… While apparently excoriating the EPI (Economic Policy Institute) Berman set up his own Employment Policies Institute (yep, EPI) “The Employment Policies Institute operates from the same office suite as Berman and Co., a public relations firm owned by Richard Berman. This is not an opinion; it’s a fact anyone can verify by viewing EPI and Berman and Co.’s websites.”

      http://www.huffingtonpost.com/ian-reifowitz/minimum-wage-corporate-shills_b_4628592.html
      ……………………………….
      Berman…

      In a secretly-taped speech shared with the New York Times, Berman bragged how he keeps his donor information anonymous:

      “People always ask me one question all the time: ‘How do I know that I won’t be found out as a supporter of what you’re doing?’ ” Berman said. “We run all of this stuff through nonprofit organizations that are insulated from having to disclose donors. There is total anonymity. People don’t know who supports us.” [2]

      Berman on Unions

      “I get up every morning and I try to figure out how to screw with the labor unions — that’s my offense,” Mr. Berman said in his speech to the Western Energy Alliance. “I am just trying to figure out how I am going to reduce their brand.” [2]

      Berman on Science

      “There’s no sense in putting out a 17 page scientific report that nobody will read. So, I put out a 30 second commercial that makes the point,” Berman toldCBSNews. [5]

      https://www.desmogblog.com/center-organizational-research-and-education-core

      *Note… EMPLOYMENT POLICIES INSTITUTE FOUNDATION is a §501(c)(3) organization, (of course) you can make tax free donations, if you want.

      Reply

      • Posted by Anonymous on July 31, 2017 at 12:41 pm

        SMD,

        The Activistfacts site is hardly the only one that has pinned the EPI as a biased liberal/Labor-friendy organization

        Form Sourcewatch(dot)org:

        The Economic Policy Institute states on its website that it was “created in 1986 to broaden the discussion about economic policy to include the interests of low- and middle-income workers.

        Given this pedigree, the EPI is obviously a Democratic labor-union front lobby.
        ****************************************

        From Wikipedia:

        ” It is affiliated with the labor movement,[3] and is usually described as presenting a liberal[4] viewpoint on public policy issues. ”
        *****************************************

        From the Standardweekly:

        “It’s also important to note what sort of organization the innocuously named Economic Policy Institute is. By just taking a look at the EPI board of directors, we find that 10 of the board members are heads or former heads of national unions, including Richard Trumka (AFL-CIO), Randi Weingarten (American Federation of Teachers), Andy Stern and Anna Burger (SEIU), Ron Gettelfinger (United Auto Workers), and Leo Gerard (United Steelworkers of America). Consider also that one of the institute’s former senior economists, Jared Bernstein, is now the chief economist and economic policy advisor to Vice President Joe Biden.”

        Reply

        • Posted by S Moderation Anonymous on July 31, 2017 at 2:03 pm

          “created in 1986 to broaden the discussion about economic policy to include the interests of low- and middle-income workers.”

          The HORROR!!!!

          How DARE they include the interests of low and middle income workers!!!

          Reply

          • Posted by Anonymous on July 31, 2017 at 2:18 pm

            Oh please …………. it’s all about “UNION” workers.

          • Posted by Earth on July 31, 2017 at 3:02 pm

            Earth to T-nonymous:

            Unions are people too.

            Citizens United v. Federal Election Commission 558 U.S. 310 (2010)

          • Posted by Anonymous on July 31, 2017 at 3:24 pm

            (Public Sector) “Unions” and a CANCER inflicted upon civilized society.

  5. Posted by MJ on July 31, 2017 at 7:18 am

    Why can’t public and private employees save for their own retirements…provide them with financial advisors who can help them make decisions about how much to save, invest, etc…..

    Reply

    • Posted by Anonymous on July 31, 2017 at 12:13 pm

      MJ,

      Private Sector workers now mostly DO SO … via 401k Plans.

      It’s Public Sector workers who don’t because:

      (1) they believe (or have been convinced by their Unions) that they are “special” and deserving of a better deal …. MUCH greater retirement security and guaranteed retiree healthcare, and

      (2) because their Unions have very been successful at BUYING the favorable votes (on Public Sector pay, pensions, and benefits) of our elected officials with BRIBES disguised as campaign contributions and election support.

      Reply

    • Posted by Anonymous on July 31, 2017 at 3:23 pm

      Move along folks. Nothing to see here.

      “If there were a crisis, Biggs says, retired people should be complaining. Yet a 2016 Gallup poll found 74 percent of U.S. retirees say they are living comfortably.”

      “A 2017 study by Internal Revenue Service and Investment Company Institute researchers analyzed tax returns and found most people experience no income dropoff after claiming Social Security. In fact, the median household’s income rises after retirement.”

      Reply

      • Posted by Anonymous on July 31, 2017 at 4:43 pm

        I don’t no where you found that quote (a link would be nice), but reading the words carefully, it is patently absurd for “most” Private Sector retirees, except those who are STILL WORKING in retirement.

        Reply

      • Posted by Anonymous on July 31, 2017 at 5:31 pm

        “Reports of a retirement crisis are off the mark: Think tank”

        CNBC.com
        Wednesday, 5 Jul 2017
        ……………………………………………
        There is a similar article linked in today’s Pensiontsunami:

        What Happened to Retirement Security? (op-ed – Mark Sievers / Daily Republic)

        “One of the nation’s leading commentators on personal finance, Jane Bryant Quinn has even said the system has failed. Media articles regularly assert Americans fail to put enough aside for old age because 401(k) plans burden them with the responsibility of saving.”

        “The facts reflect a different situation. Private retirement savings are at record levels, and the savings increase began when 401(k)s began to replace traditional pensions. “

        Reply

      • Posted by S Moderation Anonymous on July 31, 2017 at 5:51 pm

        I would take these with a grain of salt. They are likely “tru-ish”.

        From the context of these and other similar articles, Biggs et. al are trying to head off increases in Social Security and/or MyRAs and state sponsored 401(k) “opt-out” systems.

        Can’t find it, but in one article, I remember Biggs admitting there is a huge increase in average 401 and IRA accounts, but the increases may be skewed by very large savings for the wealthy and very little savings at the lower end.

        I think we should “broaden the discussion about economic policy to include the interests of low- and middle-income workers.”

        Reply

  6. Posted by George on July 31, 2017 at 12:25 pm

    ” Something is not kosher here.”

    You can email the NJ DOI and they will probably answer your questions reasonably promptly.

    https://www.state.nj.us/treas/doinvest/contactus.shtml

    Reply

  7. Posted by Anonymous on July 31, 2017 at 1:33 pm

    SOME people do “get it”.

    REALLY fixing the pension mess that exists in most States, means eliminating Constitutional protections that prevent reduction in FUTURE service pension accruals for CURRENT workers (or increases in the retirement age), and increasing worker-contributions ……. NOT simply throwing more taxpayer money at it.

    https://www.dcourier.com/news/2017/jul/30/prop-443-supporters-opponents-state-their-case-con/

    Reply

    • Posted by PS Drone on July 31, 2017 at 6:08 pm

      No. “Really fixing” the pension mess in most States means:

      1. Reducing amounts to be paid in the future (over expected remaining lives) to existing retirees in order to actuarially adjust the age at retirement to 66 (or 62 with haircuts).
      2. Retroactively make the maximum annual payout (existing or future retirees) to $5k per month including all double and triple dipping.

      Cutting future accrual rates won’t do the job by itself.

      Reply

      • Posted by Anonymous on July 31, 2017 at 8:32 pm

        PS Drone,

        In a pure sense, you are correct. What I suggested above was “prospectively” bringing “fairness” to the level of Public Sector pensions & benefits (by making the FUTURE service pension accruals of all CURRENT workers EQUAL TO but no greater than those typically granted Private Sector workers), but (as I have pointed out in many posts) doing that does NOT make the unfunded liability for PAST service liability go away.

        The ONLY way to reduce this huge and unfair PAST Service pension accrual burden to Taxpayers is ….. as you have suggested above ….. to reduce those level of those promises. CLEARLY they WERE too generous, but doing so will be a monumental battle ….. if done outside of the Bankruptcy Court.

        Reply

        • Posted by PS Drone on July 31, 2017 at 9:12 pm

          I agree; it won’t happen voluntarily. But it seems to me given the fiscal health of the various States that something draconian is going to happen in the relatively near future, so it would seem prudent that cuts be done with some logic instead of just slashing benefits in half or more as was the case with some multi-employer plans or plans defaulting to the PBGC.

          Reply

          • Posted by Anonymous on July 31, 2017 at 10:04 pm

            That “something draconian” will likely be a CITY in great distress, perhaps Chicago, Hartford, Dallas (it ain’t over yet!), a few in CA, that goes into Bankruptcy and chooses to materially reduce PAST service accruals (for both actives and those already retired) as well as regular debt, and the Court accepts the Bankruptcy Plan.

            THAT will send a shiver up the spines of the Unions. That might accelerate negotiations to lower FUTURE service accruals, but I doubt even that will do anything to lower PAST service accruals outside of Bankruptcy………….

            OR, as many well happen, a City (or State) simply cuts pension unilaterally and tell a Court that attempts to force full payment ….. sorry, we simply do NOT have the money.

  8. Posted by S Moderation Anonymous on August 1, 2017 at 12:58 pm

    In the Watchdog article linked in the first sentence…

    McCaleb says…
    “Money set aside to fund pensions – from taxpayers and public employees – is invested to grow the dollar pool. But most pension systems have over-estimated the rate of returns on these investments.”

    What he doesn’t say is that in three of the worst states (Illinois, Pennsylvania, New Jersey), the states haven’t contributed even the Annual Required Contributions based on the over-estimated rate of return. We need another word. “Ponzi” doesn’t cover it.

    What McCaleb describes as “over-estimating the rate of returns on these investments.” Is one factor in what John Bury calls “institutionalization of theft by government bureaucracy”. It is one thing when you calculate, using inflated return projections, a required contribution $500 million, when more realistic ROIs would require twice that. But when you deliberately contribute only half (or less, in some cases) of that $500 million, you have doubled down on your underfunding.

    Don’t even call it “institutionalized theft”. It’s just plain old theft. Worse than a Ponzi.

    The “miracle of compounding” only works if you put in the required funds to begin with. Otherwise you get the “miracle” of negative amortization. A properly funded system, using lower return projections …and… actually contributing based on those, will be cheaper in the long run.

    But that’s OK. If pension costs get too high because of underfunding, you can just blame the increased costs on “exorbitant pensions”.

    Reply

    • Posted by Anonymous on August 1, 2017 at 2:38 pm

      Taxpayers DELIBERATELY contributing less than an ARC based on grossly excessive pension “promises” BOUGHT by their Unions with BRIBES given to our elected officials …….. is eminently justifiable.

      Reply

    • Posted by Anonymous on August 1, 2017 at 3:06 pm

      SMD, You are so 2-faced……..

      You KNOW that the calculated ARC …….. IS A FUNCTION ……..of the Plan’s “generosity”, regardless of the investment return assumption.

      Therefore, the ARC for a Plan 2.5 times MORE GENEROUS (as are NJ’s non-Safety worker Plans vs those granted their Private Sector counterparts) is indeed 2.5 times greater than the ARC would be if the Plan only promised pensions EQUAL to their Private Sector counterparts.

      So to say that the problem isn’t BECAUSE OF “exorbitant pensions”….. is total BS.

      Reply

  9. Posted by S Moderation Anonymous on August 1, 2017 at 4:35 pm

    John recently linked an article

    http://www.actuary.org/content/assessing-pension-plan-health-more-one-right-number-tells-whole-story

    Girard Miller’s “Half truth” number 9 discusses the use of the risk free rate, and improper use.

    The risk free rate has it’s uses, but it has also been misused in many cases. When I say…

    #23%bulls hit…

    I have been implying that Biggs use for determining the “value” of compensation is, at best, very questionable. I am not alone in that opinion.

    In my humble opinion, his 23% advantage for CA and NJ is inflated. As is the 3% advantage for SC. South Carolina, and several other states are probably under-compensated, on average, ergo …not…  “exorbitant pensions”. If SC is, on average, under-compensated, and they are also underfunded, then excessive pensions are…

    Not…

    The “ROOT CAUSE” of their underfunding.

    And, again, in my humble opinion, a 23% (average) public sector advantage for CA, NJ, ILL, etc. is greatly exaggerated. It was exaggerated in 2014, and probably more exaggerated today.

    SMD …NOT 2-faced. Still just that one loveable face.

    Plan 2.5 times MORE GENEROUS… Still GIGO

    Reply

    • Posted by Anonymous on August 1, 2017 at 6:09 pm

      SMD,

      (1) While John may have posted that link as well, it was I (Yes, Tough Love) who posted it in my comment time-stamped July 27, 2017 at 12:41 pm here:

      https://burypensions.wordpress.com/2017/07/25/critical-data-on-multiemployer-plans/#comments

      (2) Quoting SMD …..

      “I have been implying that Biggs use for determining the “value” of compensation is, at best, very questionable. I am not alone in that opinion. ”

      You point out LOTS of things to support YOUR biases. The Biggs approach is clearly LESS QUESTIONABLE that the methodology now used by Public Sector Plans (to intentionally understate the true expected cost of their pension promises) because the Biggs approach is far closer to the methodology REQUIRED by the Us Gov’t in the Valuation of Private Sector pension Plans.

      (3) Quoting ….

      “In my humble opinion, his 23% advantage for CA and NJ is inflated.”

      LOL….. If I stated the opposite, you’d be all over me.

      P.S. Your opinion (humble my ass) doesn’t matter.

      (4) Quoting SMD ……

      “Plan 2.5 times MORE GENEROUS… Still GIGO”

      That’s 2.5 times greater in “value upon retirement” (factoring in not just the MUCH richer per-year-of-service pension “formula factors”, but also the SIGNIFICANT incremental of the value MUCH younger ages at which NJ’s workers can retire without an actuarial reduction in the monthly payout, and the highly-subsidized early retirement factors) for NJ’s non-safety vs COMPARABLE Private Sector workers.

      Ans the 2.5 times is 4+ times greater for NJ’s Safety workers (Police, paid Fire, etc.) with far higher average pay and even richer pensions.

      ***************************

      SMD, Your STILL BSing the readers.

      Reply

      • Posted by Anonymous on August 1, 2017 at 6:45 pm

        Ooophs ……………”Your” s/b “you’re”

        Reply

      • Posted by S Moderation Anonymous on August 1, 2017 at 7:29 pm

        “(1) While John may have posted that link as well, it was I (Yes, Tough Love) who posted it in my comment time-stamped July 27, 2017 at 12:41 pm here:”

        All those Anonymice look alike

        Reply

      • Posted by S Moderation Anonymous on August 2, 2017 at 2:18 am

        Because it ain’t confusing enough already…

        According to the GAO, there are at least five key purposes for which one might determine a discounted value of future benefits:
        (1) determining the required or recommended amount that the plan sponsor should contribute into the plan;
        (2) reporting plan liabilities to shareholders, taxpayers, plan participants, or other stakeholders, such as for financial reporting;
        (3) determining the amount needed to terminate a plan, settle a portion of plan liabilities, or to guarantee or minimize risk on pensions earned to date;
        (4) expressing the value of participants’ benefits (for example, in putting a value on their total compensation); and
        (5) determining optional lump sum amounts payable to participants in lieu of an annuity.

        For (1), I don’t think even Biggs believes we should use a risk free rate to determine contributions. Most think 7.5 is too high, but no one with a working brain believes contributions calculated on the risk free rate makes sense.

        (2), (3), (5) Ok, the risk free rate makes sense. (Also useful for extremists to blame CalPERS for having “two sets of books”.)

        (4) is the point of contention…

        Expressing Value of Benefits
        as Part of Compensation
        (Valuing Benefits)

        “A plan sponsor, or both management and labor in a collective bargaining process, that wants to assess the value of retirement benefits as part of employees’ total compensation must decide how to discount future benefits to today’s dollars, among other assumptions. All proponents of a bond-based approach with whom we spoke advocated that approach for this purpose, so that pension benefits would be valued in a manner consistent with similar future financial promises (i.e., based on bonds with a similar level of risk of nonpayment). In contrast, most proponents of an assumed-return approach with whom we spoke advocate that approach for this purpose so that pension benefits would be valued in a manner consistent with a plan sponsor’s long-term budgeting estimates.”
        …………
        There are “experts” on both sides. Because some believe an assumed-return approach is proper for valuing benefits doesn’t mean they oppose the concept of risk free rate evaluations for reporting purposes or for plan termination.

        You may be “certain” that Biggs approach is valid, but that just puts you on one side of an ongoing disagreement, and in the larger scheme of things, your certainty is irrelevant and impotent.

        (PENSION PLAN VALUATION Views on Using Multiple Measures to Offer a More Complete Financial Picture
        GAO, Sept. 2014)

        Also…2.5 is still a non-starter. It makes no sense on any level.

        Reply

        • Posted by Anonymous on August 2, 2017 at 3:19 am

          Quoting………..

          “In contrast, most proponents of an assumed-return approach with whom we spoke advocate that approach for this purpose so that pension benefits would be valued in a manner consistent with a plan sponsor’s long-term budgeting estimates.””

          Whoever stated THAT is NOT an expert in anything. NEVER, EVER, would an “expert” suggest valuing any financial obligation based on consistency with a “budget”. It’s the cart leading the horse and patently absurd.
          ***********************************

          The US Gov’t requires CONSERVATIVE Private Sector Pension Plan valuations …. far closer to Biggs risk-free assumptions than the ultra-liberal ones now used by State & Local Gov’t in their pension Plan valuations.

          Do you think Private Corporations are stupid and wouldn’t send swarms of lobbyist to Washington DC to have those assumptions changed if they were not reasonable and appropriate? They don’t because Private Sector assumptions ARE reasonable and appropriate.

          It’s the …… lower-the-cost-by-all-means ……. Gov’t Plan assumptions that are NOT appropriate.

          **************************************

          You’re STILL BSing the readers.

          Reply

        • Posted by S Moderation Anonymous on August 2, 2017 at 5:59 am

          Not I, T-nonymous…
          That were the GAO talkin’.

          How very audacious to believe that no expert could possibly disagree with you.

          According to the American Academy of Actuaries…

          “there is more than one right number. The issues facing some retirement programs can be emotionally charged and involve allegations of misdeeds. But despite seemingly contradictory information, it may be that none of the parties involved lack financial literacy or are intentionally misleading with their statements. In fact, they may be viewing the same situation from different perspectives.

          Various actuarial “numbers” exist, each of which conveys different useful information and can lead to different conclusions regarding the financial health of a pension plan.”

          LOL, “emotionally charged”… They should print that in ALL-CAPS!

          “and involve allegations of misdeeds” why, yes, I have seen that happen.

          Sorry, T-nonymous, you are not the final arbiter. You are but one of many “opinions”.

          ………………….
          Also…2.5 is still a non-starter. It makes no sense on any level. Has any “expert” ever come forward to confirm your “math”?

          Ever?

          Reply

          • Posted by Anonymous on August 2, 2017 at 7:38 pm

            SMD, Is this the 3-rd, 5-th, 10-th, perhaps 50-th time that you have asked for (or disparaged) my demonstration that NJ’s non-Safety-worker Public Sector pensions are 2.5 times greater in “value upon retirement” than those granted similarly situated (in wages, age at retirement, and years of service) Private Sector counterparts ….. a demonstration that I have provided numerous times?

            Ok, below is a new mathematical demonstration of the MULTIPLES greater in “value upon retirement” that Public Sector pension are vs those granted similarly situated Private Sector workers.

            Lets consider a NJ PERS employee (or Teacher) that is employed at age 25 and retires 30 years later at age 55.

            (1) The “Formula-Factor” (per year of service in the NJ Plan above) is 1/55 = 1.818% for those employed prior to the 2011 pension changes (for those hired afterwards, the factor is 1/60). While few Single-Employer Corporate-Sponsored Private Sector traditional-style (“Final Average Salary”) DB Plans are still granting accruals for current workers, an average “formula-factor” over that 30 year period in typical Private Sector Plans would be about 1.25% per year of service. Current DC Plans (or Cash Balance DB Plans) now MUCH more common in the Private Sector, would a generate SMALLER Private Sector retirement benefit than the Private Sector DB Plan described above.

            The richer Public Sector pension formula gives a Public Sector “advantage” of 1.818/1.25 = 1.45 (or 45% greater JUST from THIS element).

            (2) While pre-2011-hire NJ Public Sector workers can (under PERS) retire at age 55 with only a 1%-of-pay reduction for each year younger than age 60 or 62 (and with no reduction at age 55 for those hired before 7/01/2007), the Private Sector worker’s pension would TYPICALLY be subject to an early retirement reduction-adjustment of about 5% PER YEAR of retirement age before the Plan’s “Normal Retirement age” (typically age 65). Note that Social Security uses a retirement adjustment factor of just about 6% (per-year-of-age) in such calculations. Hence $1 in PUBLIC Sector pension accruals is reduced to ($1 x (1-(61*-55)(0.01)) = $0.94, and $1 in Private Sector pension accruals is reduced to $1 x (1-(65-55)(0.05)) = $0.50.

            * using 61 for the midpoint of the age 60 and age 62 noted above.

            This richer early-retirement-adjustment gives a Public Sector “advantage” of .0.94/0.50 = 1.88 (or 88% greater JUST from THIS element).

            (3) While COLA increases are now suspended under NJ’s Plans, they may ultimately be reinstated, and those who retired in 2010 or earlier DID get COLA-increases (some for many years) that were not reversed. Some of those currently retired have benefited by as much as 25% of what their pension would otherwise have been (even with the current suspension) w/o a COLA-increase provision……. noting that is it all but unheard-of for Single-Employer Corporate-Sponsored Private Sector pension Plans to included COLA-increase provisions.

            Because NJ’s COLA’s are now suspended I have NOT included any Public Sector pension “advantage” from this element.

            The noted 2 “advantages” are multiplicative (not additive) when all apply to the same Plan. Hence in this example, the overall Public Sector “advantage” is 1.45 x 1.88 = 2.73 ………..or 2.73 times ……. or 173% “greater” ….. than the pension typically granted (the very FEW) Private Sector workers that still receive accruals under Single-Employer Corporate-Sponsored Private Sector pension Plans

            *****************************************************************
            And not even considered is that the 55 year old Private Sector retiree would VERY RARELY be getting ANY employer-sponsored subsidy towards retiree healthcare costs, while the 30-year Public Sector NJ retiree would be getting free or heavily-subsidized retiree healthcare …. likely with a Taxpayer cost for Family Coverage in excess of $250K.

          • Posted by S Moderation Anonymous on August 3, 2017 at 1:06 am

            Disparaged, yes. Asked for? Not likely. I don’t know how many times or how many ways I have tried to point out that the math is irrelevant. It is useless to compare pensions outside the context of total compensation. I thought surely you would see that by now. I only keep pointing it out in the hopes that the occasional reader will see through your mistake.

          • Posted by Anonymous on August 3, 2017 at 1:34 am

            SMD, I expected a response form you just like that * ………..

            Specifically, I DID answer your question/challenge/complaint/whatever that being (and quoting you):

            “2.5 is still a non-starter. It makes no sense on any level.”

            So when I DO address/answer your VERY SPECIFIC question/challenge/complaint ….i.e. demonstrating that non-Safety Public Sector PENSIONS are indeed 2.5 times (2.73 times in my above demonstration) greater in value upon retirement than those of comparable Private Sector workers, you CHANGE the question/challenge/complaint/ to something different….. so you can respond that I didn’t answer it.

            I know that PENSIONS are just one element of TOTAL COMPENSATION. Sometimes I comment on Total Compensation and sometimes I comment on Pensions alone (because that’s the most problematic/controversial component of Total Compensation).

            You know that, just as YOU KNEW that the 2.5 times greater was SPECIFICALLY a comparison of Public to Private Sector Pensions.
            ***************************************

            * Like I stated above, “I expected a response from you just like that”. Not a problem. I didn’t take the time to do so to satisfy you (knowing that doing so would not be possible) but to put it out there for readers who might benefit from some detail on the matter.

          • Posted by S Moderation Anonymous on August 3, 2017 at 3:26 am

            Goll dangit. I did not say 2.5 was incorrect, I said it was irrelevant. I have been saying the same for years. All the math in the world will not change that. We certainly don’t need another “demonstration”.

            You cannot “sometimes” comment on Total Compensation. It is the only valid comparison. Most private sector workers don’t have a DB pension at all. 2.5 is NOT a factor. 2.73 is irellevant. Yet there are many cases where the public worker, even with the value of pension and benefits, earns less in total compensation than an equivalent private sector worker. There are many cases where the public workers total compensation is roughly equal. And, yes, there are many cases where the public worker, mainly because of his pension and benefits, earns much more than his equivalent private sector worker.

            Two point five, schmoo point five.

            Irrelevant.

          • Posted by Anonymous on August 3, 2017 at 3:43 am

            SMD,

            Good, then from here on out, may I expect that you will no long challenge my statement that when comparing Public and Private Sector non-Safety-worker pensions in NJ, that Public Sector PENSIONS (yes PENSIONS) are 2.5+ times greater in value upon retirement than those typically granted their Private Sector counterparts?

            **************************************

            Quoting ….

            “You cannot “sometimes” comment on Total Compensation”.

            Thank you for tell me what I can and cannot comment on. May I have your permission to comment on last night’s dinner?

            As long as I do so w/o the intent to mislead, I should feel free to comment on anything I please.

            It WOULD be nice if YOU did the same.

            For example, above, you stated …

            “there are many cases where the public worker, even with the value of pension and benefits, earns less in total compensation than an equivalent private sector worker.”

            “some” would be reasonable, but “many” is patently misleading (and BS).

          • Posted by S Moderation Anonymous on August 3, 2017 at 4:40 am

            You may expect me to say that “2.5+ times greater in value upon retirement than those typically granted their Private Sector counterparts”

            is irrelevant.

            You may expect me to say that to discuss pensions outside the context of total compensation is irrelevant.

            You might expect me to ask why you exclude multi-employer pensions from your calculations. Which, we have found, are not multiples less than public pensions.

            If you insist on calculating the difference to two decimal points, you might consider providing actual empirical data on private sector pensions beyond what, in your “opinion” is “typical”

            “What can be asserted without evidence can be dismissed without evidence.”

            Or, the reporters credo, “If your mother says she loves you, check it out.”

            You might go to all that work to justify your math, only to find in the end…

            That it is irrelevant.

          • Posted by S Moderation Anonymous on August 3, 2017 at 5:44 am

            AND incorrect.

            Oh! the irony.

          • Posted by Earth on August 3, 2017 at 10:42 am

            Earth to T-nonymous…

            Thank you for tell me, was it a good dinner?

          • Posted by Anonymous on August 3, 2017 at 11:25 am

            SMD, As before, another strong DENIAL ….. and, AS EXPECTED.

          • Posted by Earth on August 3, 2017 at 12:22 pm

            Earth to T-nonymous:

            Seriously, what about the dinner?

            Pics or it didn’t happen.

          • Posted by Anonymous on August 3, 2017 at 7:11 pm

            SMD/Readers,

            Here is a follow-up with relevant detail/explanation to my above demonstration that when comparing Public and Private Sector non-Safety-worker pensions in NJ, Public Sector PENSIONS are 2.5+ times greater in value upon retirement than those typically granted their Private Sector counterparts.

            Let’s address the logic and details behind a pension Plan’s Early retirement adjustment factors and why the early adjustment reduction %s used by NJ PERS are so abusive/unfair to NJ’s Taxpayers …………

            Final Average Salary DB pensions specify an age (called the Normal Retirement Age, or simply the NRA) at which a Plan participant can retire with an unreduced formula-calculated pension.

            For discussion purposes, lets assume that age is 62 (as it is for some of NJ’s PERS Plan participants). Private Sector Plans typically have an NRA of 65, but for this discussion let’s assume that it is also age 62. Also, let’s use age 55 as the early retirement age in the discussion below.

            Plan sponsors realize that for a variety of reasons, an employee may need to (e.g., health reasons) or want to retire (and begin collecting their pension) at an earlier age (say age 55). Corporate-Sponsored Private Sector pension Plans recognize the need to allow such early reductions but LOGICALLY don’t want to pay more (in “value” over the worker’s expected lifetime) in accrued pension benefits to an early retiree than to one who retires at the Plan’s NRA. When you retiree earlier, you start collecting your pension sooner (i.e., age 55), and therefore expect to collect that pension for a greater number of years.

            Corporate-Sponsored Private Sector Plans make an actuarial calculation that answers the question ……. How much should I pay annually starting at age 55 such that if the employee were to survive to their life expectancy (determined from a given mortality table) they would receive …. in present value ….. the SAME amount that they would receive if they were to survive to their life expectancy and if their accrued pension began at the NRA of 62?

            Actually, they do that calculation not just for age 55, but for ALL early retirement age options. For example if the earliest allowable early retirement age is 55, and the Plan’s NRA is 62 they do that calculation assuming early retirement at age 61, 60, 59, 58, 57, 56, and 55, or 1, 2, 3, 4, 5, 6 and 7 years younger than the NRA. For simplicity, they take all of that information and typically translate it into a single level annual percentage reduction in annual pension payout for EACH year of age that you retire before your NRA.

            Social Security does the same thing, but instead of using a published mortality table, they use the actual mortality experience from the huge and statistically credible SS database. Depending on your year of birth, your NRA is age 65, 66 or 67 (or some months in-between), and you can elect to retire as early as age 62. However, if you make such an early retirement election, your Social Security payment will be reduced by 6% (or slightly more depending on your year of birth) for EACH year of age that your retire before YOUR NRA.

            Most Corporate-Sponsored Private Sector pension Plans use a slightly smaller percentage reduction in the calculation of their Plan’s Early retirement pension payout ……. and 5% (vs Social Security’s 6%) for EACH year of age that you retire before YOUR NRA is commonly used. A lower % reduction for Corporate-Sponsored Plans (to achieve the above-described “value-equivalence”) is logical because a LOWER adjustment % would be consistent with longer life-expectancy, and long-employed participants under Corporate DB Pension Plans (generally having access to quality healthcare) have been shown to have longer life expediencies than the general working population covered under Social Security.

            Summarizing…….. Under BOTH Social Security and Corporate-Sponsored Private Sector pension Plans, early retirement reduction percentages (about 6% and 5% per-year-of-age respectively) achieve the equivalence-goal that (for a given amount of pension accruals) early retirees and those who retire at their NRA have an expectation that they will get pensions of equal “value”.

            Now let’s look at NJ’s PERS Public Sector pension Plans (as described in the mathematical demonstration in my earlier comment above). The PERS participant who has an NRA of 62 and who elects early retirement at age 55 gets a reduction of only 1% (vs the 6% used by SS or the 5% commonly used by Corporate Plans) for each of the 7 years between the NRA of 62 and the early retirement age of 55.

            For example. if the formula-calculation were to result in an annual pension of say $50,000 (based on accruals to date) if payable at age 62, the PERS participant who elects to retire and begin collecting at age 55 will get $50,000 x (1-(62-55) x 0.01)) = $46,500 annually (COLA-increase if the current COLA-suspension in NJ ends).

            Now, the Corporate-sponsored Plan participant (IF under a Plan with the SAME formula as the PERS Plan) would get (with the 5% early retirement adjustment factor) an annual early retirement pension starting at age 55 of $50,000 x (1-(62-55) x 0.05)) = $32,500 annually.

            So what’s the “problem”?

            The Corporate-Sponsored Plan Participant IS (yes IS) getting a fair deal BECAUSE (based on pension accruals) an annual pension payout of $32,500 beginning at age 55 has just about the SAME “value” as a $50,000 pension payable beginning at age 62.

            But the PERS worker is who retires at 55 is getting a pension materially greater in “value” than the pension (based on pension accruals) that he/she would get if payable beginning at age 62.

            In fact that $46,500 PERS pension payable at age 55 is EXCESSIVE (from THIS issue alone) by an ANNUAL amount equal to $46,500 – $32,500 = $14,000.

            Corporations don’t give away their money and don’t do such UNNECESSARY things. Public Sector Elected Officials allow such VERY HEAVILY SUBSIDIZED (or “ENHANCED”) early retirements because:

            (a) It’s the Taxpayers’ money, not THEIR money, and

            (b) As with many other benefits provided Public Sector workers, the more they give the rank-and-file, the more THEY get, and they lock-up large blocks of happy/over-compensated Pubic Sector workers who will vote to re-elect them and contribute to their re-election campaigns.

          • Posted by Earth on August 3, 2017 at 8:54 pm

            Earth to T-nonymous:

            Yeah, yeah, yeah what about the dinner?

            You brought it up, what gives?

    • Posted by Anonymous on August 1, 2017 at 6:29 pm

      Hey SMD ………..

      I got a real hoot when I heard that LA Calif. was awarded the 2028 Summer Olympics.

      LA is stone cold broke NOW, and it’s only going to grow far worse …thanks to it’s insatiably greedy Public Sector Union/workers.

      I guess the Olympic Committee members never read International news.

      You’d think that they would be more careful, especially after the financial fiasco re the recent Rio de Janeiro Olympics, with governor even declaring a state of financial emergency ahead of the Olympics.

      Reply

  10. Posted by Anonymous on August 1, 2017 at 10:29 pm

    Paul Ryan just proved he is the 2-nd biggest DUMB-ASS in America, right behind Trump, who’s 1-st:

    https://www.aol.com/article/news/2017/08/01/paul-ryan-its-time-for-the-wall-on-the-us-mexico-border/23060536/

    Reply

  11. Posted by Anonymous on August 3, 2017 at 9:31 pm

    John,

    Not sure if you’ll respond, but with nothing-but-nonsense coming from commentator “EARTH” (and those comments always being tied in someway with back-and-forth comments between myself and S. Moderation Douglas), is Commentator EARTH the same as commentator S. Moderation Douglas…. meaning from the same IP address.

    It appears that when S. Moderation Douglas cannot counter something that I have stated, he comments under EARTH with something brief and nonsensical.

    It would be a good thing for your readers to know if it’s true (or not). If true, It speaks volumes.

    Thanks,
    (Anonymous/Tough Love)

    Reply

    • At this stage I don’t even look at who the commenter is and only focus on the thoughts, if any. A lot I skim over but occasionally some insights come through – which is how I am with the internet in general. I go on nj.com, cnn.com, or facebook and go through about 20 headlines before anything mildly interesting pops up. It’s likely how people view this blog also but I am grateful for the readership and the commenters. So it doesn’t matter whether it is someone commenting under Anonymo0us (you for 35 pages of comments) or Earth and S. Moderation Anonymous and Anonymous (28 pages of comments) I will still read them for the occasional insights.

      Reply

      • Posted by Anonymous on August 3, 2017 at 11:57 pm

        John,

        Thank you for the quick reply.

        For clarity, when you said (in your last sentence) ….. “Earth and S. Moderation Anonymous and Anonymous (28 pages of comments) ” …… were you implying that all were coming from the same IP address?

        Anonymous/Tough Love

        Reply

  12. Posted by Anonymous on August 4, 2017 at 1:16 am

    • Posted by Anonymous on August 4, 2017 at 12:40 pm

      The enemy is Anonymous?

      Reply

      • Posted by Anonymous on August 4, 2017 at 1:31 pm

        The “enemy” is the STRUCTURE that has evolved, that allows Elected Officials whose overwhelming priority (well greater than all others) is to be re-elected, and because of that overwhelming priority, they SELL their favorable votes (on Public Sector pay, pensions, and benefits …… and on Laws/Regs protecting such pension/benefits from reduction even for FUTURE service) for campaign contribution BRIBES from the Public Sector Unions.

        Reply

  13. Posted by S Moderation Anonymous on August 4, 2017 at 2:16 pm

    ” protecting such pension/benefits from reduction”

    Implies the pensions/benefits are excessive to begin with. Which is still debatable.

    Reply

    • Posted by Anonymous on August 4, 2017 at 2:48 pm

      SMD,

      Are you THAT much in denial ?

      While there is SOME debate as to “Total Compensation”, only a idiot, a charlatan, or a liar truly believes that Public Sector “PENSIONS” are nor excessive …. and in most cases LUDICROUSLY excessive.

      Reply

  14. Posted by S Moderation Anonymous on August 4, 2017 at 6:59 pm

    IF*

    These numbers are anywhere near correct…

    An average public sector “professional” earns wages of $97,685 per year.
    And an equivalent private professional earns wages of $155,797 per year.

    And the public professional has benefits (including the annual cost of pension, discounted at near risk free rate) of $73,754.
    While his equivalent private sector peer has total benefits annually worth $51,196.

    The total compensation for the public worker is $171,439. The total compensation of the private worker is $206,993.

    The public sector professional may well have a pension 2.5+ times greater in value upon retirement than the private sector equivalent. The private sector worker may have no pension at all. His annual “benefits” may have been in the form of healthcare, social security, Medicare, and 401(k) contributions.

    I don’t need to know whether the private worker has a pension half the size of the public’s, or whether he has a pension at all. I don’t care if one or the other has an actuarially reduced pension for early retirement or not. These are todays values of wages and benefits computed by perhaps the most conservative pension expert in the country. By definition, the pension of the public sector worker cannot be excessive, because his total compensation is lower. As Michael Genest said… “We could have made a lot more money in the private sector. We are making more money.”

    Some “anonymous” critics (you know who you are) say these “underpaid” professionals and PHDs are only about ten percent of public workers. Fine. The same well known conservative economist calculates that the average Masters degree level public employee has a total compensation about 3% lower than an equivalent private sector worker. I do not need to know if/ or how many of those workers in either sector has an inflation adjusted pension or retiree healthcare. That data has been derived for me from thousands of data points across the country by professional economists. No matter how they divvy up the wage/benefit balance, the pension of the public worker cannot be “excessive”, by definition. The pension is “deferred compensation”. If the pension is higher than the private sector, it is to offset the lower wages. Quid pro quo.

    Ditto with Bachelor degree level public employees nationwide. Their total compensation has been computed as 2% higher than the private sector. Biggs: “Total compensation for bachelor’s degree holders is about even with private sector levels.” If their total compensation is “about even”, their pension is, again, by definition, not excessive. You may wish to reduce their pension, for whatever reason; but to be “fair” (and to attract and retain qualified employees) you should simultaneously increase their wages.

    This is a math free zone. I have let some of the most prominent economic experts do the math for me. Equally prominent (and equally biased, I’m sure) experts have said that Biggs comparison of wages is correct, but his estimation of the value of pensions and benefits is too high. You be the judge.

    Bottom line, nationwide (the only comparison available) about 60 percent of state workers are either underpaid or roughly equal, in total compensation, by the most conservative estimate. Specifically, he says they are on average underpaid in wages by 12 percent, but with the “true” cost of pensions earn 10 percent more than equivalent private workers. Less conservative studies say that considering all public workers, state and local, nationwide public workers earn less in wages but, with benefits, are roughly equal.

    (IF*)
    Caveats, lawd forgive me, a partial list.

    Most of these studies are from data as old as 2008.

    The databases were not designed for public/private comparisons. The economists had to use their own judgement to decide which were more appropriate for each different factor.

    The salary and pension numbers quoted in the first few paragraphs are nationwide data for state workers only. They do not include local governments, nor do they include safety workers. Also, there is a large variation between states. Some states have much lower salaries and much higher pensions than other states. (Or vice versa.)

    Economists are human too. This is very extensive and complicated data. They may make some errors in their comparisons of public/private compensation. Some of those errors may be (somewhat) intentional. Just sayin’.

    Re the rhetorical question: “Are you THAT much in denial ?”

    I can only say what most studies have said…

    At the lower, unskilled, less educated level, public workers do indeed earn much more than in the private sector; primarily because of the higher pensions and benefits.

    At the more highly educated/professional level, public workers, even with the value of their allegedly “excessive” pensions, earn much less than equivalent private sector peers.

    Somewhere, between those extremes, is a large group of public workers who, in general, have higher pensions and offsetting lower wages such that their total compensation is roughly equal.

    By definition, those in the second and third group do not have excessive pensions/benefits. Ergo, no sir (or ma’am)… not delusional. And if you call me “a idiot, a charlatan, or a liar” again, I’m gonna tell my Mama.

    Reply

  15. Posted by Anonymous on August 4, 2017 at 7:56 pm

    Quoting,

    “An average public sector “professional” earns wages of $97,685 per year.
    And an equivalent private professional earns wages of $155,797 per year.”

    Sounds about right for the mean wages when you include the likes Bazos, Gates, Ellison. Bloomberg, Zuckerberg, Cook, Whitman, etc., etc., etc,

    AND, like you’ve stated so many times …….. meaningless.

    Reply

  16. Posted by S Moderation Anonymous on August 4, 2017 at 8:59 pm

    Have to ask Biggs or Munnell about that. They use algorithms and logarithms and such, but anybody could make a bonehead error. We’re all human, more or less. If that’s the case, though, you can pretty much just forget that 23% thingy. These folks just can’t be trusted with anything apparently.

    Reply

    • Posted by Anonymous on August 4, 2017 at 9:46 pm

      SMD, For every “professional” (e.g., lawyer, CPA, Doctor) that ROUTINELY works 60 hrs/wk (and MOST do), the corresponding Public Sector “professional” works 40 hrs/wk (and MOST do).

      If you work 2/3 the hrs. you DESERVE 2/3 the wages………… and can’t (accurately) say you are paid less than your Private Sector counterpart.

      Reply

  17. Posted by S Moderation Anonymous on August 4, 2017 at 10:40 pm

    Déjà pu

    Again, don’t shoot the messenger. When the amateurs (or zealots) compare public/private they come out something like this…

    “Think basic data entry, secretarial, janitorial, prison guard etc. Given the relatively low skill set needed combined with an unemployment rate anywhere above 0.00% suggests there exists more buyers than sellers.

    This is precisely where you see the biggest divergence of wages in public vs private in California. The average pay for an executive assistant for the Los Angeles Department of Water and Power is $204k. That’s salary only. (salaries.latimes.com/)

    By comparison, the average salary for an executive assistant in LA according to salary.com is $44k. http://www.indeed.com/salary/q-Secretary-l-Los-Angeles,-CA.html”

    (Robert Fellner, Calwatchdog.com, 26 Dec. 2014)

    I love that one. I appreciate even the slightest excuse to bring it out of the archives. Thank you.

    But when the pros do a study, they use several different data sources and, so they are actually comparing apples to apples they control for age, education, race, marital status, geography… and typical hours worked per week. Granted, they may not monitor water cooler or web serfing time, but that’s mostly just a trite stereotype anyway.
    …………………………..
    “$204k…vs… $44k” that cracks me up.
    Carl Sagan… “Extraordinary claims require extraordinary evidence.”

    “Are you THAT much in denial ?”

    Reply

  18. Posted by Earth on August 5, 2017 at 12:49 am

    Earth to Anonymous:

    Is it safe to come out yet?

    Reply

    • Posted by Anonymous on August 5, 2017 at 5:47 am

      As pointed out earlier …..

      “…. comments under EARTH with something brief and nonsensical.”

      Reply

  19. Posted by S Moderation Honestly on August 5, 2017 at 11:19 am

     Hear! Hear!

    Were mad as hell, and were not going to take this anymore!

    Anyone with a brain KNOWS posts should LONG and nonsensical.

    Extra points for insulting and rude.

    And repetitive.

    Opinionated.

    If we allow this “EARTH” nonsense to continue, next thing you know, there will be facts! And logic! And actual discussion, instead of RANTS and slurs.

    Nip it in the bud, I say!

    SMH

    Reply

  20. Posted by Anonymous (NOT Earth... the other Anonymous) on August 5, 2017 at 11:33 am

    Anonymous to other Anonymice:

    Think before you post. There is a one hundred post limit for this article. Unwritten rule.

    Ask yourself… Is this post necessary?

    Let your conscience be your guide.

    Reply

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