Faux Reform (S5) Moving Forward in NJ

A bill (S5) turning over management of the New Jersey Police and Firemen’s Retirement System to the members could be the first pension reform* of the Murphy regime. Yesterday it got moving (unanimously):

S5 Sca (1R) Transfers management of PFRS to Board of Trustees of PFRS.
Budget and Appropriations

 

Last Session Bill Number: S3040   (1R) A99

Sweeney, Stephen M.   as Primary Sponsor
Kean, Thomas H., Jr.   as Primary Sponsor
Bucco, Anthony R.   as Co-Sponsor
Oroho, Steven V.   as Co-Sponsor


1/9/2018 Introduced in the Senate, Referred to Senate State Government, Wagering, Tourism & Historic Preservation Committee
2/1/2018 Reported from Senate Committee with Amendments, 2nd Reading
2/1/2018 Referred to Senate Budget and Appropriations Committee

Introduced – – 51 pages PDF Format    HTML Format


Committee Voting:
SSG  2/1/2018  –  r/Sca  –  Yes {5}  No {0}  Not Voting {0}  Abstains {0}  –  Roll Call

northjersey.com reported:

The bipartisan measure, which is supported by the four unions representing police officers and firefighters but opposed by representatives of municipal and county associations, was approved unanimously by the Senate state government committee on Thursday.

It still requires several more approvals in both the Senate and Assembly before it can be sent to the governor’s desk for a final endorsement or veto. Unlike last year, when Christie, a Republican, conditionally vetoed the measure, Phil Murphy, a Democrat swept into office with the support of organized labor, now occupies the governor’s office.

A Murphy spokesman declined to comment on the legislation Thursday.

…..

The bill will next be considered by the Senate Budget and Appropriations Committee on Monday.

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* By reform I mean politicians doing something that has the appearance of action but takes little, if anything, more from anyone other than those not hired yet.

10 responses to this post.

  1. Posted by NJ2AZ on February 2, 2018 at 3:53 pm

    this is the “fix” that transfers management of the pensions to the union but not any of the risk, right?

    hoooraaaaaaay

    Reply

    • Posted by geo8rge on February 3, 2018 at 8:38 am

      If the police/fire pension scheme is separate:

      It can be bailed out separately, from the teachers. The lottery being given to the teacher’s pension, by Gov Christie, is probably their bail out.

      It can have its own actuary and management who will probably have an incentive to misrepresent on the side of being overfunded not underfunded. It will be interesting to see what happens if they try to sell or close out hedge fund assets.

      Off Topic: With the downdraft in the stock and maybe the bond markets, it will be interesting to see if the hedge funds are actually hedged.

      Reply

  2. Posted by Tough Love on February 2, 2018 at 4:36 pm

    If this bill includes those in the prior proposals ……….. that give the Unions the right to set their pension levels (i.e., determine formulas & provisions), and set employee contribution levels……….. boy are NJ’s taxpayers screwed.

    Reply

    • Posted by Anonymous on February 6, 2018 at 4:56 pm

      I think your screwed already. You’ve done nothing but complain for a decade at least on these blogs. Think of all the time you wasted

      Reply

  3. Posted by Tough Love on February 2, 2018 at 4:51 pm

    Quoting form the linked bill S5, P16:

    “The board may, in its discretion and at such time and in such manner as the board determines, enhance any benefit set forth in P.L.1944, c.255 (C.43:16A-
    et seq.) as the board determines to be reasonable and appropriate or modify any such benefit as an alternative to an increase in the member contribution
    rate, which increase the board determines to be reasonable, necessary, and appropriate, or reinstate, when appropriate, such reduced benefit to the statutory level without an additional contribution by the member. The board shall act exclusively on behalf of the contributing employers, active members of the retirement system, and retired members as the fiduciary of the system. ”

    With that “BOARD” being primarily Police Union Officials, giving them the above authority is akin to giving the EMPLOYEES in a Private Corporation (owned NOT by those employees, but by it’s SHAREHOLDERS) the right to set their own pensions.

    How patently absurd !

    Reply

    • Posted by Anonymous on February 6, 2018 at 4:43 pm

      As a retiring police officer, obviously I want this to pass. If you notice, normal benefits enhancements/reductions require 8 votes to pass. However, COLA reinstatements only need 7. Meaning I expect that to return within a couple years. How would it not if that’s what the board wants. And I think it is justified due to the fact that police do not (in the majority of instances) get SS and when they do it is curtailed by as much as 90%. Hence the reason for the COLA. However, I think that there should be givebacks too. I think current employees should not get a pension until 55. You can retire earlier if you have the time but no payouts until 55. Future employees should be 57. And no COLA until age 60. After that use the SS formula that was in effect before the suspension. That was 60% of the increase for SS recepiants.

      Reply

      • Posted by Anonymous on February 6, 2018 at 4:53 pm

        The problem with a DC plan moving forward is that unless you remove the 2% cap on salaries there is no question that you will have your best and brightest leaving the profession. If there is no pension to keep them in the profession and a cap on salaries, there is no doubt folks will quit. They’ll go to school for another career while in the taxpayer dime and then quit. The state had to remove the cap on superintendents and had to raise the judges salaries this past week(without the disgusting Christie book deal attached to it). Face it TL this is a state where you make your money then retire to another state. My sis in law has a masters and makes $38000 as a 20 yr teacher in rural VA. Her daughter is a teachers aide and makes $12000. She is getting her masters at night. The school systems suck. There is no question they are better here. Does that make it worth it? If you have kids, probably. If not, then no it doesn’t. I’ll twke my $110000 pension and live better in DE. And your money will go further too. But you also made it here, and got paid more than if you worked in humble fuck no where.

        Reply

      • Posted by Tough Love on February 6, 2018 at 10:06 pm

        Anon,

        Remember, you don’t get SS, but also don’t contribute toward it, and at the high average wages of NJ Police, the SS “return on investment” is quite low ………….. so you BENEFIT by not participating.

        As for COLAS, Private Sector pensions don’t include COLA-increases. Yes SS benefits are COLA-increased, but since the maximum SS benefit (for recent retirees) is only about $32K, even IF COLAS are reinstated, only the amount of your pensions UP TO to SS maximum (now $32K) should be COLA-increased.

        Certainly fair, but I bet your Union/members would scream bloody murder if that were put in place.

        _______________________________

        Private Sector pensions typically have age 65 as the Normal Retirement Age (NRA) with a 5% reduction in pension payout for EACH year of age that they begin collecting their pension before their Plan’s NRA. So NO, you should NOT be able to begin collecting unreduced pensions at age 55. Collecting an otherwise IDENTICAL pension at age 55 vs 65 DOUBLESit’s cost. (it’s WAY too expensive). It should be 65 as it is for NJ Private Sector Taxpayers (OK perhaps 62 ………. the “old” cops chasing crooks argument).
        _________________________________

        As for Police getting a Masters on the Taxpayers’ dime in another field and then quitting, that’s easily solvable. Taxpayers should ONLY pay for it in Police Science (or a VERY closely related field) and include a payback provision that grades-off over no less than 5 years of additional service.
        ==========================================
        It’s not hard to come up with effective ways to address Union practices that are abusive to Taxpayers, it’s just that NJ’s Elected Officials won’t do so ……….. being beholden to the Unions for their campaign contributions and election support.

        Reply

        • Posted by Anonymous on February 13, 2018 at 1:23 pm

          No. I’m talking about officers going to school on their own dime. And then leaving 7 or 8 years into their career. (With no pension) because the very low raises aren’t cutting it. I concur with you that continuing education should be encouraged in law enforcement. Again though why go through the trouble if the tiny increases in salary are the only reward.
          In case you haven’t looked the job market is pretty damn good for college grads now.
          Answer me honestly, would you if you were picking a field to go into, choose nj law enforcement with no pension and a cap on salaries?
          And with me at 57 and you at 62 for collecting pensions we are not far off there.

          Reply

          • Posted by Tough Love on February 14, 2018 at 1:14 am

            One of the BIGGEST reasons FOR THE CAP is the DB pensions, WITHOUT the DB Plans wages can go up (to reasonable and affordable levels) because there isn’t that ridiculous multiplier effect of DB pensions.

            Example: Most Police in NJ retire after 25 years with 65% of final pay. So ………. if we give a Police officer with 24 years of service an extra $5K raise it costs the taxpayers 65% x $5,000 for EVERY year in retirement, which (using an annuity table) comes out to about $60,000 (just for getting that ONE single raise).

            You CAN’T have it both ways. If you want more cash while working you CANNOT keep your ludicrous excessive DB Plans.

            ———————————————

            And your comment about the very low raises is to a large extend due to the fact that MOST NJ Police earn FAR MORE that comparably experienced, educated, skilled and knowledgeable Private Sector workers VERY early in their careers, with BASE PAY for a patrolman often $135+K annually after only 5 years of service. That is WAY more than the typical Private Sector college graduate with just 5 years of experience.

            ——————————————–

            And you’re wrong. From a financial/cost standpoint, there is a HUGH difference between being able to begin collecting an unreduced pension at 57 vs 62. Using the same early retirement adjustment factors that Social Security uses, if 62 was the Normal Retirement Age, a pension that begins 5 years earlier would be reduce by about 30%……………. YUP 30% !

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