New Jersey Retirees Under Christie

New Jersey has updated their listing of retirees in  the state pension system. As of March, 2017 there were 325,937 retirees getting annualized benefits of $10,465,934,978. As of June, 2017 there were 328,932 retirees getting annualized benefits of $10,562,840,926.

Breaking down these retirements by year* we see an interesting pattern:

 

This charts the number of retirements and the benefits currently being paid by period of retirement (from June to May each year) so there is understatement in the numbers from deaths and overstatement from the days when benefits included cost-of-living adjustments but a story emerges.

The massive increase in retirements in 2011 and 2012 in response to pension and health benefit reforms tailed off in 2012 and 2013 and then resumed the climb through 2016. In 2017 the number of retirements dropped to the lowest level since Christie’s first full year in office, before the reforms. Is this a return to normalcy in anticipation of a Democrat governor?

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For those interested (and since I have them) here are the spreadsheets by year from which the numbers in the chart above were taken:

YE17

YE16

YE15

YE14

YE13

YE12

YE11

YE10

YE09

YE08

YE07

15 responses to this post.

  1. Posted by Anonymous on August 1, 2017 at 11:35 pm

    John,

    The #s in your chart don’t seem logical. If you divide the Amount paid by the # retirees in each period, your get roughly $35K in all of the periods except the 2 periods with the much lower # of retirees. In THOSE 2 periods the average payout doubles to over $70K. That does not seem reasonable..

    Reply

  2. Posted by Analyst on August 2, 2017 at 7:03 am

    I am a little confused. Is the number of retirees the total number , or the number of new retirees from that year ? This looks like the number of new retirees per year.

    Is the annual payments for all retirees or just the new ones ?

    How do you explain that dividing payments by number of retirees was steady at about $35000 except for 2015 and 2016 when it approaches 70,000?

    Without your clarification , I will assume that I am misreading the numbers
    Somehow . I just read the comments by anonymous and we seem to have the same level of confusion .

    Reply

  3. Posted by Anonymous on August 2, 2017 at 1:08 pm

    The retirement trend by year MIGHT be related to the graduated increase in active members premium share for health insurance? I think the premium share gradually increased over a 3-_ year period beginning in 2011.

    Reply

  4. Posted by Anonymous on August 2, 2017 at 2:11 pm

    With the correct numbers for 2015-2016, the chart is less interesting.

    Reply

  5. Posted by Anonymous on August 2, 2017 at 5:40 pm

    Forget the apples to oranges public to private comparison I wonder how NJ’s average annual pension stacks up against other State, Local, and even the Federal government?

    I know equal not better than and why shouldn’t the taxpayers money go elsewhere. In the case of the latter, apparently it has!

    Reply

    • Posted by Anonymous on August 2, 2017 at 7:43 pm

      Quoting …

      “Forget the apples to oranges public to private comparison ”

      Why should we?

      Are Taxpayers in OTHER States paying for the grossly excessive (by every reasonable metric) Pensions (AND benefits) granted NJ’s Public Sector workers, or is it NJ’s State & Local Taxpayers?

      Reply

  6. Posted by Analyst on August 2, 2017 at 9:45 pm

    This seems to show that there wasn’t a particular spike in benefits since the average payment has been fairly steady .also perhaps the reductions in the numbers since the uptick in retirees shows the return to normalcy that youemtioned . But on question is has the underlying employment base expanded or contracted ? This will impact the future payments . A second question is whether or not the reports show annual benefit payment projections ? If so , let’s promote those . If not , then let’s ask Why Not ? That gives a better idea of any worsening of the status of the pension fund . I do n’t understand why taxpayers and their representatives don’t DEMAND to see what future payments might be and future employee contributions , this will help project future employer contributions and What kinda of returns the portfolio needs to return .

    Reply

    • Posted by Anonymous on August 2, 2017 at 10:36 pm

      What you’re describing (especially projections) is standard operating procedure in Corporate America. You ALWAYS need to have a firm grip on not only mean expectations, but on the impact of deviations from the mean, and doing so increases when RISK is a major element of those projections.

      In the PUBLIC Sector, it’s rarely done because,

      (a) why bother when they won’t act (anyway) to avert bad possible outcomes when doing so is contrary to the desires of their financial masters (the Unions), and

      (b) they can offload the consequences of that RISK (should they come to pass ….. as they now indeed HAVE) to Taxpayers.

      Reply

      • Posted by Analyst on August 2, 2017 at 11:13 pm

        Right, but I think even the SOA and their blue ribbon commission suggested that disclosure so that analysts can do their own calculations .
        Usually disclosure is something that government entities and bureaucracies ( especially when easy ) is willing to do . Legislators can say ” we didn’t solve the problem but we made it easier to find a solution ”
        Maybe you can start pushing for more disclosure and transparency , then consensus on reforms might be easier .

        How does Moody’s restate the future liabilities of they don’t have this info ?

        Reply

  7. Posted by Anonymous on August 6, 2017 at 10:27 am

    Some thoughts on a few factors that would affect your chart, feel free to comment:

    1. The number of public employees during CC’s reign has been reduced by about 10,000. This results in a greater percentage of employees retiring.
    2. The early retirement buyouts explain some spikes.
    3. The end of COLAs has frozen the payouts.
    4. With an average state employee salary of about $60K, the $35K payout is in line with a half-salary retirement?

    Reply

    • Posted by Anonymous on August 6, 2017 at 10:43 am

      While it won’t really DOESN’T in the long term anyway, NJ uses the contributions from CURRENT workers to support the pensions of CURRENT retirees ……. with NONE of the contributions from CURRENT employees saved and invested for their retirements.

      Therefore, with fewer current workers, the contributions to support CURRENT retirees are dwindling FASTER…….. hastening the Plans’ collapse.

      Reply

    • Posted by Anonymous on August 6, 2017 at 11:04 am

      Oops, my bad. Your chart is for all public employees, my comments are for the executive branch employees.

      Reply

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