Lame Pension Legislation in NJ

S3620 is being fast-tracked in the New Jersey legislature:

Identical Bill Number: A5322

Cunningham, Sandra B.   as Primary Sponsor

12/11/2017 Introduced in the Senate, Referred to Senate Budget and Appropriations Committee
12/14/2017 Reported from Senate Committee with Amendments, 2nd ReadingIntroduced – – 11 pages PDF Format    HTML Format
Committee Voting:
SBA  12/14/2017  –  r/Sca  –  Yes {9}  No {2}  Not Voting {1}  Abstains {1}  –  Roll Call

Sarlo, Paul A. (C) – Yes Stack, Brian P. (V) – Yes Beck, Jennifer – No
Bell, Colin – Yes Bucco, Anthony R. – Yes Corrado, Kristin M. – No
Cunningham, Sandra B. – Yes Diegnan, Patrick J., Jr. – Yes Greenstein, Linda R. – Yes
Madden, Fred H., Jr. – Yes Oroho, Steven V. – Not Voting Thompson, Samuel D. – Abstain
Van Drew, Jeff – Yes

According to nj.com:

The bill comes as New Jersey’s public-worker pension system faces nearly $90 billion in unfunded liabilities, according to a report released by a state commission this month. It is one of the worst-funded in the U.S.

But Democratic leaders told reporters Thursday that the fiscal impact of the bill will be minimal because it benefits so few people.

Those few people who would benefit:

If signed into law, the Democratic-sponsored bill would permit certain politicians — such as Camden Mayor Dana Redd, a Democrat who is allied with both top Democratic leaders and Republican Gov. Chris Christie — to re-enroll in the Public Employees Retirement System after being kicked out because they switched elected positions.

……..

The crux of the issue is a 2007 law that stipulated all newly elected officials be placed in a less generous “defined contribution” pension plan similar to a (401)k. Incumbent elected officials at the time were allowed to remain in the traditional pension system, as long as they kept the same office, with the exception of legislators who moved between the state Senate and Assembly.

As a result, when Redd, then a state senator and Camden councilwoman, was elected mayor in 2010, the pension she had been collecting since 1990 was frozen.

The new measure…would allow those who held office continuously since July 1, 2007 to re-enroll in the system as long as they have served at least 15 years in elected office with no break in time between switching positions.

They also would be allowed to make their enrollment retroactive to the date they first took elected office.

 

29 responses to this post.

  1. Posted by Tough Love on December 14, 2017 at 11:51 pm

    It never ceases to amaze what taxpayer-betraying di**heads NJ Elected Officials can be.

    Reply

    • Posted by Anonymous on December 15, 2017 at 9:39 am

      In one of the op-ed’s this week in the SL one writer that made a absolutely brilliant suggestion.
      Before Christie leaves office, he should make the full pension contribution.
      Delivering on Murphy’s campaign promise.
      This is absolute genius. Would blow a $2 billion+ hole in the budget, nearly impossible to resolve. Pretty sure Murphy would cry bloody murder, exposing his nonsensical campaign promises to all ….Please CC do it for the kids ….

      Reply

      • Posted by bruce paterson on December 15, 2017 at 1:41 pm

        the state may have something up their sleeve in increasing revenues for next years new governor budget: shenanigans with the state income tax: my wife legally extended her filing from april to October and sent in by april 15th what she thought would be the amount she owed. Then in october after finishing her state taxe forms, added some more payment that she owed. In a recent return letter, the state recalculated her filing found an error and found they owed her some money back. But in that same letter then claimed the extension is denied (and for no reason listed at all) so kept the money they owed her and hit her up with a failure to file in april fee of $650. Anyone else experience this scam if they extended and filed in october?

        Reply

  2. Posted by skip3house on December 15, 2017 at 11:07 am

    Right now, CANCEL all free retiree health care benefits. Allow only Medicare at age 65, paid for by individuals…as rest of us have. Those retired before age 65 can be allowed to purchase NJ plan at cost until age 65. Including all those early NJ retirees in Colorado,……
    Refer to Sxxxx Bxxx xxxxn as an example of NJ free medical coverage temptation abused by many in positions to make deals

    Reply

  3. Posted by skip3house on December 15, 2017 at 11:56 am

    Refer to page 199 of ‘The Soprano State: New Jersey’s Culture of Corruption’ by Bob Ingle, Sandy McClure for details

    Reply

      • Posted by SMH on December 15, 2017 at 1:51 pm

        The last line of the article:

        “News Flash You can take it away! Do it before we wind up like California and New York State. We are close.”

        This article was written in 2010. I don’t know what the conditions of the pension plans were in these three states at that time, but today, doesn’t NJ wish they could wind up like California and New York State?

        Pew 2015 funding ratios

        California………74%
        New York………98%
        New Jersey….. 37%

        Reply

        • Posted by skip3house on December 15, 2017 at 2:37 pm

          Right ! That last line is a trivial matter now/today, as NJ is still using a backwards system, full of abuses, needs switch to DC from DC, and no retiree medical – use own Medicare as rest of us.

          Reply

  4. Posted by SMH on December 15, 2017 at 1:40 pm

    In no way am I condoning this type of deal.

    “But Democratic leaders told reporters Thursday that the fiscal impact of the bill will be minimal because it benefits so few people.”

    Sad, but true, this lines up with Mary Pat Campbell’s quote:

    “Yes, there are all sorts of other reasons as well, such as spiking, early retirements, sluggish payroll growth, optimistic valuation assumptions, etc.

    But ultimately the reason the pensions are so little funded is because the state didn’t put in enough funds.

    And they knew it.

    They knew it for years.

    It’s not because of investment fees, though those should be more transparent. It’s not because of part-time board directors who get a lifetime pension for very little work, though that doesn’t help. (I’ll address why these aren’t significant problems in a later post.)

    DON’T PAY THE BILLS, THE DEBT GETS LARGER”
    …………………………………………

    The irony here is that with NJ pension plans so near collapse anyway, will any of these people actually reap the rewards of this legislation?

    SMH

    Reply

    • Posted by bruce paterson on December 15, 2017 at 1:50 pm

      SMH-certainly agree its a fact about the underfunding. However, the state instead of paying the pension payments were giving out 4-5% raises all last decade to continue a voting base. It was politically one or the other. If the state was going to give the suspect large raises while funding full pensions, they would have seen it was unsustainable to the budget. In 2010 then came gov CC and he got that budget cap in place to tamp down on this abuse. IMO, looks like you got most of your money up front, yes?

      Reply

    • Posted by skip3house on December 15, 2017 at 1:54 pm

      Jails are crowded with people who were/are not a ‘significant problem’ until we all decide to do the same….

      Reply

  5. Posted by Patrick Whalin on December 15, 2017 at 7:34 pm

    Can’t really understand why the market has increased 89% over the last five years and over 18% during 2016, but NJ’s Pension fund has been unable to show up. If they had simply invested in Index Funds (no brainer), we might be fully funded just on the rise of the market alone! Hedge funds and alternative investments do not belong in a pension fund!

    Reply

    • Posted by Anonymous on December 15, 2017 at 7:48 pm

      Few things; declining cash balance in funds especially after the great recession and the State wasn’t paying in when the market was low consequently missing out on potentially bigger gains.

      The P&B Commission reforms, if implemented, addresses the unfunded liability but expedites the funds cash flow demise. A dedicated funding source, in addition to the health benefit savings being redirected, to fund the accrued benefits must be part of any future reforms.

      Reply

      • Posted by Tough Love on December 15, 2017 at 8:18 pm

        Nothing should be “dedicated”, at least not Constitutionally, as it eliminates the financially flexibility that must remain with our Elected Officials.

        PAST service accruals are no less grossly excessive than would be a continuation of FUTURE service accrual under these ludicrously excessive Plans.

        FUTURE service pension accruals should end and (active and retiree) healthcare benefits should be materially reduced (per the NJ pension & benefits Study Commission).

        And if we do freeze them and it turns out lowering healthcare benefits provides insufficient funds to support the excessive PAST service accruals, then they should be reduced. Raising Taxes to fund these grossly excessive promises should NOT be an option.

        Reply

        • Posted by Anonymous on December 15, 2017 at 8:30 pm

          And that’s why there will be no reforms.

          Reply

          • Posted by Tough Love on December 15, 2017 at 9:40 pm

            Which if true, mean that these Plan will run out of assets. And if you think NJ can/will pay anywhere near the promised pensions at that point, I’ve got a bridge to sell you.

            Insatiable GREED (and stupidity) …. HAS consequences.

          • Posted by Anonymous on December 16, 2017 at 1:11 pm

            Clearly you have your own version of the final report; http://www.state.nj.us/treasury/pensionandbenefitcommission.shtml on the final report; b/c page 6 items 1-5 differ from what you’ve stated above?

          • Posted by Anonymous on December 16, 2017 at 1:22 pm

            Also forgot to mention page 7 last bullet point.

          • Posted by Tough Love on December 16, 2017 at 11:27 pm

            Anon,

            The Comission’s Final Report clearly call for a material reduction in (active and retiree) healthcare benefits along with a freeze of the current DB Plans for both new and current workers. Yes, the Report includes the words …….. “with supplemental transition funding for existing mid-career employees. ”

            They didn’t go into detail on that last point so for the moment we don’t know to whom it will apply and the extent of supplemental funding.

          • Posted by Anonymous on December 17, 2017 at 7:44 am

            You’re an idiot. You stated no constitutional amendment and a possibly reduction for current retirees. Show me where they state that b/c they don’t. I fact they call for funding/honoring current accrued benefits and in exchange for the reforms a constitutional amendment for funding them.

          • Posted by Tough Love on December 17, 2017 at 12:32 pm

            Anon,

            The reduction that I stated was included in the Final Commission’s Report applicable to retirees was Healthcare benefits ………. and such reduction IS in the Report (noting that they now receive what has been referred to as “Platinum+” coverage). The following are the 2 Bullet Points:

            * Early retirees would purchase coverage through a private exchange funded through Retirement Reimbursement Accounts (RRAs) covering the cost of a gold-level plan. This mechanism would increase flexibility and insur
            er choice while avoiding potential ACA “Cadillac Tax” issues.

            * Medicare-eligible retirees would continue to receive their current level of coverage without additional costs to them, but at lower cost to employers through a Medicare Advantage Prescription Drug program paid through em
            ployer-funded RRAs.

          • Posted by Anonymous on December 17, 2017 at 2:43 pm

            This a copy and paste from your previous post above; And if we do freeze them and it turns out lowering healthcare benefits provides insufficient funds to support the excessive PAST service accruals, then they should be reduced. Raising Taxes to fund these grossly excessive promises should NOT be an option.

            Ok master of distraction & BS show me where this is the P&B Commission report. Now for another twist……

          • Posted by Tough Love on December 17, 2017 at 3:50 pm

            Anon,

            Re-read my original comment……….

            That was my opinion of the Report proposal and it’s effectiveness…… i.e., what I thought should be done if the healthcare saving are insufficient to pay-off the unfunded past service accruals.

            I never stated that what you quoted (and I said) was actually IN the Report.

            Looks like you have a reading-comprehension problem.

          • Posted by Anonymous on December 17, 2017 at 4:46 pm

            You didn’t clearly state anything but more BS and double talk every time your called on it – what a joke.

          • Posted by Tough Love on December 17, 2017 at 6:20 pm

            Care to be specific …. very specific ?

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