Raise Taxes or Short Pension

New Jersey  State Treasurer Elizabeth Maher Muoio took to public TV to press the need for more revenue raisers (ie. taxes) making it clear that the pension payment is in play:

Anyone reconsidering?


22 responses to this post.

  1. Posted by Anonymous on May 25, 2018 at 6:37 pm

    Pot of gold ……Abbotts .


  2. Posted by Tough Love on May 25, 2018 at 7:53 pm

    Third vote, and I’m still voting for ….. “$3.2 billion – 60% of ARC as legislated”.

    As hard as it’s going to be to find the $3.2 Billion, if Murphy puts in less in his FIRST year, his whole administration is “toast”.

    He’ll find the money THIS year, but not NEXT year (with a whole basket of excuses). Can I suggest the TRUTH ……………….. we can’t afford these LUDICROUSLY excessive pensions (AND benefits ) and there are ZERO “solutions” that do not include (as just step 1 of many necessary steps) very material reductions (think 50+%) in the VALUE* of future service pension accruals for all CURRENT workers.

    * 50% reduction in VALUE via a combination of :

    (a) formula-factor reductions
    (b) increases in the minimum age at which a unreduced pension can begin being collected
    (c) implementation of TRUE early retirement reduction factors of about 5% PER-YEAR-OF-AGE.
    (d) ZERO COLAs until funding ratios reach no less than 90% when valued using RPA interest rates (in the 3% to 3.5% range)


    • Posted by PS Drone on May 25, 2018 at 8:24 pm

      I don’t care what you do for a living. A pension plan is supposed to provide resources after your working career is over. Not at age 50. Defer all pension payouts until age 66. Vested (100% after 35 years, not 30) and want to stop doing what you do (Fire, LEO)? Great. Find another source of income until your benefits commence at age 66. And Medicare, not gold plated NJ provided (unfunded) retiree health insurance. Oh, and pension capped at $60K per annum. That solves all funding problems and is fair to the abused citizens who actually pay for the majority of the current ridiculous level of benefits.


      • Posted by Tough Love on May 25, 2018 at 9:30 pm

        El gaupo,

        PS Drone’s proposal is VERY close to what Private Sector workers get (but with past service accruals vesting after no more than 10 years).

        What do you think …………… EQUAL but not better, on the Taxpayers’ dime ??


        • Posted by El gaupo on May 25, 2018 at 11:09 pm

          All funds except Pfrs are now 65 years before collect. Older employees of those funds can leave at 55. Some are 60 and some 62. Those funds presumably will be healthier (if they make it that far) if state keeps ramping up contributions. More actives and less retirees. I have also advocated for a minimum retirement age in Pfrs. Def not at 65. More like 55 or 57. Start there with Pfrs and see how the numbers work. And yes I would make current employees stay as well. However you know what I want restored for that change and the math backs me up. Our fund is much healthier and taxpayers would pay less under my plan than they do now.


          • Posted by El gaupo on May 25, 2018 at 11:32 pm

            On a local taxpayer level, your local Pfrs bill goes up because the state doesn’t pay. Out of 41,000 or so actives, about 5,500 or so are state employees(prison guards and park police, Troopers are seperate, and underfunded as well). Anyway, any amount that the state doesn’t pay (I know it’s not a huge amount relative but…) will require it to be added the next year to the amount due. That amount will be spread out to local taxpayers the next year as well. Meaning that your local taxes are in effect, paying for state employees pensions. As far as equal but not better…..in terms of every other police agency in the country….all of them I beleive are defined benifit plans and nj(while the number is high due to high salaries) has a similiar percentage awarded to other states.
            So I do advocate equal. Just a different form of equal. Lol. Tough noogies…..

          • Posted by Tough Love on May 26, 2018 at 7:20 am

            El gaupo,

            See, there you go BSing again………….

            Quoting … “All funds except Pfrs are now 65 years before collect. Older employees of those funds can leave at 55.”

            No, not “older” employees, but ALL employee who were hired befor the 2011 changes, many of who are still still in their 40s, 30s, and even 20s. The increase to age 65 should have included ALL CURRRENT employees in 2011 ….. including you.

            And MORE BS …………..

            Quoting ……. “More actives and less retirees. ”

            The retiree ranks will GROW (not decline for a long time), with retirees living longer and the big wave of Baby-boomer retirements still in it’s early years.


            Get get THIS one, quoting …………….. “However you know what I want restored for that change and the math backs me up. ”

            Really? I have heard no one “back you up, you don’t have the qualifications to make such a determination, and when I started to look into that calculation, but stopped after realizing that so many questions/decisions needed to be made but were undefined, you blew me off ………… and freaked when I stated that any such trade-off of increased retirement ages for COLA-reinstatement should include a taxpayer fail-safe to automatically lower COLAs if the cost-neutrality did not materialize.


            Quoting ….. “Our fund is much healthier ”

            “Healthier” not “HealthY”. A more accurate description would be that YOUR Plan only has Stage 3 Cancer while the others have Stage 4.

        • “PS Drone’s proposal is VERY close to what Private Sector workers get…”

          ….”What Private Sector workers get…”…

          At one company may be a modest DB pension.
          At another company, the __equivalent__ employee might get a higher salary, but no pension.

          And, in either case, the total compensation of those private sector workers __may__ be equal to or greater than the total compensation of an equivalent public sector worker.

          It happens quite often, and the data confirms it.

          It is invalid to compare pensions outside the context of total compensation.

          What do you think …………… EQUAL?

          Or EQUAL-ish?


          • Posted by Tough Love on May 26, 2018 at 7:29 am

            Stephen Douglas,

            Yes.compensation comparisons should be on a Total Compensation basis, and you know (per the AEI Study) that in BOTH our home sates of CA and NJ there is a 23%-of-pay PUBLIC Sector Total Compensation ADVANTAGE, rising to 33% if the value of the MUCH greater Public Sector job security is included (also per the AEI Study).

            And had the AEI Study INCLUDED (rather than excluding) Public Sector Safety workers (Police & Fire, etc.) who have far greater than average wages and the richest pensions, that 23% (and 33%) would have been even higher ….. perhaps MUCH higher.

          • Posted by El gaupo on May 26, 2018 at 8:35 am

            TL, there is not 1 police or fire pension fund that requires people to work until they are 65. Not one!!! How about equal.
            There will be less retirees as a % in tpaf and Pers because you would no longer see the fifty five year old retirees anymore. That will make the system healthier. Not sure when the age went to 60 (tier 2 for them) but I think it was during 2006 so hard pressed to find a 20 something who still is able to go at 55.
            I see you didn’t rebut my argument about the state shorting it’s share of Pfrs resulting in a higher OVERALL contribution the next year for local taxpayers as well.
            And I gave you all the calculations and numbers I used to get a ROUGH idea how much would be saved by making Pfrs average retirement age go up three years and allowing cola. I never said it was correct to the penny. I stand by those numbers. They were taken right from the valuation report.
            There really is no push at this time for ANY police pension fund to increase age all the way to 65. I have not heard of one anywhere in he country.
            And I never said that I would be opposed to a failsafe if the system got into trouble. Never did I say that!!!! I would be fine with that as long as it was realistic. I.e no pension holidays for employers.

          • Posted by El gaupo on May 26, 2018 at 8:40 am

            Any cmon. No one back me up???? What is there like 6 regular commenters on here??? And none are nj public employees. Who would be backing me up so to speak??? The numbers work. I asked John his thoughts. Never responded. And how am
            I not qualified to do rudimentary arithmetic??
            That’s like me saying you’re not qualified to tell me when a tire is bald.
            Freaked out about the fail safe. Cmon!

          • Posted by Stephen Douglas on May 26, 2018 at 10:40 am

            I don’t think that’s how it works, El guapo…

            Posted by Tough Love on April 17, 2016 at 1:57 pm

            SMD (and John ,,, see request at the bottom) ……..


            John, I sense you prefer to stay out of the VERY differing positions I and SMD have taken on the “value” of Public vs Private Sector pensions.

            But as the actuary-expert as well as host/moderator, how about chiming in. If you think I’m wrong please say so, but if you agree that the value-differences I’ve stated above is essentially correct (obviously noting that specific differences with vary with the specifics of the Plans being compared), please state so as well.

            I’m sure many of your readers don’t know whom to believe ……. you owe it to them to respond, given your expertise and experience.

            Thanks in advance.”

            That was for TL’s infamous “5.2 times greater” fuzzy math.
            Posted by PatB on April 17, 2016 at 11:50 pm

            Of the actuaries and accountants who must read this blog, I can remember no one defending your math. Maybe this is the time for them to come to your rescue, for the sake of truth, which there seems to be so little of in public pensions.

            Still no answer, as far as I’ve heard.

            “…for the sake of truth…”

          • Posted by Tough Love on May 26, 2018 at 1:52 pm

            “Pat B” is another Public Sector “taker” who no longer posts on Bury’s Blog.

            His comment were no surpise ………… the takers (like YOU) are all alike.

            Whenever some who supports material reforms comments it’s always ….”Move along folks ……….. nothing to see here”

          • “His comment were no surpise ”

            Yet his spelling and grammar (and logic) were impeccable.

            “Whenever some who supports material reforms comments…”, he or she should be ready, willing, and able to substantiate their claims.

            CAPS LOCK and “copy, paste, repeat” are irrelevant and counterproductive.

            It’s not ”Move along folks ……….. nothing to see here”

            it is…

          • Posted by Tough Love on May 26, 2018 at 2:58 pm

            I’d take spelling and grammar mistakes (especially in a venue like this, a Blog) ANY DAY rather than spending a career as a light-bulb-changer.

          • Posted by Earth on May 26, 2018 at 4:47 pm

            Earth to TL:

            spelling and grammar (and logic)

          • Posted by El gaupo on May 26, 2018 at 6:51 pm

            Yea sure you would TL. Six figure pension? Of course you would not turn that down. Moocher , light bulb changer its all good, worth it baby. No way you would turn that down.

          • Posted by Tough Love on May 27, 2018 at 4:06 pm

            Stephen Douglas stated that his pensions was about $50K, not $100K …….. but still RIDICULOUSLY excessive for a light-bulb-changer.

  3. Posted by Tough Love on May 26, 2018 at 9:27 am

    El gaupo,

    While I understand that Police (and Fire) work is considerably different than other jobs, we’re talking about COMPENSATION levels and the fact that Police & Fire wages must comes form the Taxpayers, 83% of whom (nationally) work in the PRIVATE Sector.

    You’re trying to hoodwink the readers AGAIN.

    With Police wages typically no less than those of Private Sector workers in jobs with comparable risk and requiring no less education, experience, skills, and knowledge (even though in a different field) there is simply ZERO justification for PLATINUM+ Healthcare benefits, and DB pensions that are ROUTINELY 3 to 6 times greater in value upon retirement that those of comparably situated Private Sector workers who retire at the SAME age, with the SAME wages, and the SAME years of service.

    Sure, with that LUDICROUS advantage in place right now EVERYWHERE, you feel its appropriate to compare your towns’s compensation to the compensation of other Police forces, each with similarly LUDICROUS compensation. We’re NOT fooled by this nonsense. ALL safety-worker compensation is ludicrous and should be VERY materially reduced …. primarily via the pension and healthcare components.

    And as to your looking for backup to your proposal suggesting that raising the minimum age at which a Police Officer can retire by a few years is cost-neutral to reinstating COLA ……………. I’ll repeat (below) my comment to you of a few days ago outlining some undefined issues/questions that would need to be addressed before a reasonable calculation of the cost-neutral age increase.


    Posted by Tough Love on May 20, 2018 at 2:08 pm

    Quoting El gaupo ……………..

    “And btw, you can’t give me the satisfaction of saying my math was correct or near correct on ref to cola/raise of retirement age.”

    Actually, I started to draft a response (in WORD to past here) but stopped when realizing how “incompletely-defined” your proposal was. You cannot make the cost-neutral minimum age-increase determination without ALL elements of the change fully defined……….. and you left far too many elements/considerations undefined.

    To show what I mean, below was the beginning of my “draft-response” before realizing that you left too many things/considerations undetermined, and by going further (by defining all the considerations that you neglected to address) all I would be doing would by calculating a cost-neutral minimum retirement age increases to offset COLA-reinstatement, would be making that determination for a completely DIFFERENT proposal.
    Quoting El Gaupo ……

    “I see that age requirement allowing for cola as it was under the old system and providing for additional monies to be put into the system therefore allowing the taxpayer portion to be reduced. ”

    I “cost out” things all the time, but step 1 is always to VERY specifically identify the change(s) to be “costed out”. If one was to contemplate reinstating COLAs in a COST-Neutral way by determining a LOWEST age at which pensions can begin (w/o actuarial reduction) here are a few questions/considerations that would need to be answered:

    (1) Thoroughly estimate the CHANGE in retirement-choice behavior that would act to negate the otherwise-calculated savings from the implementation of a minimum age before one can begin collecting one’s pension.

    (2) Given that many Police would choose to work for more years (rather than choosing to retire BEFORE they could actually begin collecting their pension), specific “protections” would need to be implemented to prevent late career promotions with the associated raises that would result in the pension growing even greater. Perhaps limiting increases in “pensionable compensation” to 2% per year.

    (3) Is anything done differently for Officers who would need to have service greater than 30 years (for which no additional service credit is currently granted) before they reach the new minimum pension-collection age?

    (4) There would be a need to implement a fail-safe to GUARANTEE cost neutrality. Would we include an AUTOMATICALLY-TRIGGERED reduction in future COLA increases if the anticipated savings are not realized.


  4. Posted by Barbie Jenkins on May 29, 2018 at 3:48 pm

    The pension system should be eliminated – public workers make more than private workers do, get mor vacation and sick time, and their pensions are way more than social security pays out.


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