Pensions-Reboot? (Continued)

Sherrod Brown introduced a bill calling for loans to pensions.  While I applaud the effort, this bill just reinforces the reason I went into economics initially, laughter.  The proposed bill suggests a loan of about three percent while the eligible investments have a return of about two and a half percent. The funds start the loans with a loss of half a percent.  Simple interest calculations would suggest the NJ PERS fund lost $7.5B upon signing the loan documents.  Further, since the retirees do not contribute, the loan is repaid from the contributions of the active members further diluting their retirement.  Do the active NJ PERS members understand they reduce their retirement by $7.5B?  Gentle reader, this is a kinder-care proposal to a big-boy problem.

I just met with five retirees.  They say; I do not care, just give me my check for the next ten or so years.  What these ignorant fools do not see, gentle reader, is they will not last to 2020.  They further ignore that active members are paying their shortfall, to their own detriment.

If the new New Jersey Governor were in CA, we would have a bus ready with his name on it.  Imagine how I laughed at the idea of declaring taxes as charitable contributions.  If I lived in your state I may raise a Kickstarter campaign asking for $0.50 per person to file a class action suit.  If an entity claims to be, but is not, a charity, that is fraud on a huge scale.  You could also argue that charitable contributions are voluntary. You opt not to contribute and file for a refund.

We have a proposal to lend money to funds that are brokish and going bust.  They cannot afford the loan and will just go broke faster.  Then the Treasury will begin liquidating pensions, starting with NJ PERS?  See what I mean about humor.

I used to say that CA is the dumbest state in the nation, but NJ is impressive, even by CA standards.

Gentle reader, please do not despair, every problem has a solution.  This is no different.  Both LPMan and my father would not like to see pension investments in securities.  But this is the only possible solution that is non-taxpayer based and can help with ever increasing costs of labor.

Mr. Bury writes in such items as “Funded Status of Local Pensions per CSLGE” about problems with reporting.  Do we accuse a man of cheating when he follows bad rules?  I won’t.  I will work to change rules.

2018 is an election year.  We know reporting rules are bad and need change.  We know there are other reforms necessary.  We know there is money available.  Not taxpayer bailouts and not loans.

Gentle reader, my name is Tim Alexander.  I am an economist.  I solve problems and the pension crisis has a solution.  I will not complain, I will change my nation and I am looking for a few good men to help.

Please let me know.

Tim Alexander

Managing Director




11 responses to this post.

  1. We have crushing pension obligations, too long ignored. The state must find a way to deal with them without taxing the stuffing out of the rich. That is not a guaranteed way to increase income as proved by our last millionaires tax ..
    Thing is, the pensions really are extremely underfunded. If they’re not going to tax the stuffing out of everybody to fill that hole, that hole has to be made smaller.My last guess would be by whacking benefits.


  2. Oh, gentle reader please understand this one small fact. This is a societal problem and can only be addressed and fixed by the society. In fact, we must raise the sales tax by
    1% (yes, disproportionately affects the poor) and dedicate the proceeds to my pension fund. We must also raise the gas tax 2% and again, dedicate this to the pension crisis. Gentle reader, we must dig a bit deeper in our collective wallets in order to make things right and just. Lastly, all government offices should reduce costs by 10% without losing any employees (yes, cut services and entitlements); get a loan from the federal government at 3% over 20 years and pay back with the returns earned from investments (surely, over 3% and more like 5%). These things, gentle reader, may help alleviate the catastrophe and impending financial implosion.


  3. The outstanding retirement obligations will be “met” in one of the following two ways:

    -In reduced amounts
    -In full with dollars that have considerably less value

    i don’t see any possible alternatives 😐


  4. Posted by Triune on January 10, 2018 at 7:30 pm

    Thank you for your comments all. I laugh at the only possibility of a solution being taxes. Look at my prior posts for a non tax based solution. May I ask why a public pension is more valuable than a private? What makes a department of motor vehicles or trash collector more valuable than a Teamster? If Teamsters and other pensions are not eligible for a tax based solution, why should the public pension be eligible for one? This is a vast form of discrimination! Public officials should not promise a pension they cannot deliver.
    Tim Alexander


    • Posted by geo8rge on January 12, 2018 at 10:45 am

      “I laugh at the only possibility of a solution being taxes. ”

      If you mean the money from the proposed Fed asset sales (which may never happen), that and more is already committed to the Trump tax cuts, foreign policy, and then maybe social security. Fed assets are the property of either the member banks or the federal government, either way I do not see aging retirees as having a call on those, except maybe social security.

      There is a tendency in one topic forums to direct available resources to solve that one problem. But in congress there are hoards of people demanding money for schools, roads, high speed rail, airports, art in the public schools, not to mention anything involving veterans. How about Puerto Rico, or for that matter Afghanistan. So the fed assets sales and more are already pledged elsewhere.

      Supposedly the Chinese threatened to reduce central bank purchases of US assets, that if true would change the fed asset sale dynamic, for lack of a better term.

      If it is a loan program it might help the Western Teamsters that still attracts new members.

      Costco Teamsters in the East Join Western Conference Pension Plan for First Time


      • Posted by Anonymous on January 16, 2018 at 12:52 pm

        Thank you for your comments, please keep them coming.
        I agree there are more demands for money than available resources. However, I believe I can also demonstrate that pension relief and reform are the best use of funds.
        You cite Teamsters, are you affiliated? I would like very much to speak with Teamsters, if you are affiliated, please feel free to call or email.
        Tim Alexander
        Managing Director


  5. geo8rge,

    Correct, pensions are just one of many needs. Also…

    “If Teamsters and other pensions are not eligible for a tax based solution, why should the public pension be eligible for one?”


    “What makes a department of motor vehicles or trash collector more valuable than a Teamster?”

    They are not more “valuable”, but public pensions are already a legal obligation of the state.


  6. Guaranteed…

    When public pensions and benefits are reduced, workers and pensioners will not be alone in their plight.

    The effects will be felt in every facet of New Jersey politics and economy.

    Ask not for whom the bell tolls.


    • Posted by Tough Love on January 15, 2018 at 3:10 pm

      When the financial sh** hits the wall (and it certainly WILL in NJ within a few years) hopefully (and rightfully) NJ’s Public Sector workers will be hit from BOTH ends ….. increased taxes AND reduced pensions & benefits.


    • Posted by Anonymous on January 16, 2018 at 12:54 pm

      Well said!
      Tim Alexander
      Managing Director


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