Now He Tells Us

A few weeks before he starts whatever gig Fox has available:

This was at the rollout of the New Jersey Pension and Health Benefit Study Commission’s final report which, in part, enabled this delusion-of-competence addict with lines like:

An additional positive development has been the dedication of the State lottery to the pension plans. This has reduced the unfunded liability by $13.5 billion and will generate over $1billion annually to pension funding. This, in turn, has improved the State’s overall reported statutory funded ratio from 45% to 59%. (pages 1-2)

That any credentialed actuary would sign on to these lies (the line above and Christie’s assertion that the funding ratio is much better now than when he came in) without fear of censure speaks only to the ineffectuality of the ABCD process. They are belied in both the footnotes to the Commission’s report and what New Jersey is telling bond investors.

Footnote 2: This figure, $89.6 billion as of June 2017, after the liabilities of local PERS and PFRS are removed, reflects both the lottery dedication, id. at I-53, and an adjustment in the State’s GASB 67 calculation. Without the lottery dedication and calculation adjustment, the GASB 67 figure would be $117.9 billion. Id. at I-61.

Footnote 5: See Bond Disclosure at I-58. The annual required contribution to the pension funds (ARC) is not determined by GASB, but by a State statute which defines a separate statutory ARC, funded ratio and unfunded liability. Due to different assumptions, the statutory figures make the plans look healthier than GASB figures. For example, as of July 2016, TPAF, the teachers’ pension fund, has a 47% statutory funded ratio and $30.7 billion statutory unfunded liability, but a 22.3% funded ratio and $79 billion unfunded liability under GASB.

From 9/27/17 Bond Issue Official Statement:

Page I-58:

Page I-63:

Page I-51:

16 responses to this post.

  1. Posted by dentss dunnigan on December 7, 2017 at 6:34 pm

    “Almost A Given It Will End Badly”: Vanguard Founder Jack Bogle Says U.S. Pensions Are Doomed…..


  2. Posted by readslikeamafiabook on December 7, 2017 at 7:12 pm

    So now that the NJ lottery, surely a NJ asset, is being given to public pension plans, does the money that went to education and other worthy institutions evaporate? Talk about highway robbery. What happened to “it’s for the children?” Not so much now.


  3. Posted by Tough Love on December 7, 2017 at 7:24 pm

    I played that video twice………… seems dead on the money to me.

    And I too was VERY surprised when I saw that recognition was given in the final Commission Report to the Lottery Revenue ……. specifically counting the $13.5 Billion as a current Plan asset.

    Let’s compare the Lottery arrangement with say a portcullis of Office Buildings worth $13.5 billion today.

    The latter will generate income (rent, less taxes, expenses, etc.) annually, and at the end of 30 years will likely be worth WAY more than $13.5 Billion (I.e., well maintained real estate in good areas INCREASES in value over time). The former (the Lottery “asset”) will be worth ZERO at the end of 30 years because those are the specific terms of the arrangement.

    To count the Lottery deal as a Plan assets is absurd and such an arrangement in a Corporate entity would NEVER pass muster either with their own Accountants, their outside auditors, or Gov’t regulators.

    Question ……….. will the PHONY Lottery assets be included in the calculations that determine if COLAs can be reinstated ? If they try to do so, who has legal “standing” to challenge that?


    • Posted by readslikeamafiabook on December 7, 2017 at 7:55 pm

      I too believe phony lottery assets are being calculated into the pension equation … my question is why is the lottery being GIVEN to public pension plans and taking the revenue from education, STARS, etc.

      NJEA not complaining about taking from the children? No other unions complaining about taking away from the children, veterans, etc.



      • Posted by Tough Love on December 7, 2017 at 8:41 pm

        Don’t worry, the serviced supported by the Lottery will continue to get the same money (for at least the next 5 years). While the Lottery proceeds will now go INTO the pension Plans, the funds that the State would OTHERWISE have contributed to the pension Plans is being REDUICED by an amount just about equal to the expected Lottery proceeds. The net BENEFIT to the pensions is NOTHING… NADA….. which is why the Bonds rating agencies are calling it all but meaningless.


  4. Posted by George on December 7, 2017 at 10:33 pm

    Schumer backs proposal to help troubled Teamsters pensions

    George Harrigan, president of Teamsters Local 449, said he believes the legislation has a good chance of passing if it is attached to a spending bill, rather than voted on as standalone legislation


    • Posted by PS Drone on December 8, 2017 at 2:50 pm

      Govt. spending has outstripped revenue for at least the last 50 years. Attaching more spending to a “spending” bill does not solve this problem. Eventually, a rise in interest rates will disenable the Feds from increasing any spending including for pension bailouts. So you can forget about Schumer and any spending bill he is supporting.


      • Posted by Anonymous on December 8, 2017 at 5:40 pm

        No the only answer is a tax break for the rich which has the same net effect as increased spending. Guess it depends on where your self interests lie!


  5. Posted by Chacka on December 8, 2017 at 7:37 pm

    Haven’t looked here in about two years. Amazing this board is still operational. 5 same guys respond to the same topics over and over. Doomsday is coming for the last 10 years,yet somehow the checks continue to be mailed. I’ll check back in two more years.


    • Posted by Tough Love on December 8, 2017 at 8:03 pm

      The pattern of a failing Public Sector pension Plans is like the first hill of a roller-coaster. Little happens (and what’s coming is not obvious) until you crest that first hill.

      Than hold on for dear life ……….


    • Posted by Anonymous on December 12, 2017 at 5:41 am


      Same things being rehashed over and over by the same few people


  6. […] Jersey Pension and Health Benefit Study Commission’s final report this week we got Chris Christie sounding the alarm. Today we got the Star Ledger Editorial Board chiming […]


  7. […] $140 billion underfunding is the number that New Jersey is telling bond investors. […]


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