NJ Policy Group (2) Pension Suggestions

The Economic and Fiscal Policy Working Group in a draft document included these suggestions related to the New Jersey Public Pension System:

  • 8. Move from defined benefit pension system to defined contribution.
  • 9. Create a hybrid defined benefit (up to certain dollar amount) and defined contribution system for new and unvested employees.
  • 11. Employ pension “de-risking” strategies including early lump sum buyouts.
  • 14. Expedite full funding of the PERS pension system quicker than other pension systems to maximize federal fringe benefit reimbursement.
  • 15. Increase Public Employee Retirement System retirement age to be consistent with Social Security age.
  • 16. Change PFRS formula to factor average of three highest years rather than last year.
  • 17. Cap pensionable salary at __________ for all government employees except Supreme Court Appellate Division and Superior Court judges.
  • 18. Eliminate ability to qualify for multiple public pensions.
  • 19. Limit entry and membership in the defined benefit system to those earnings a minimum of $25,000 or working 30 or more hours a week, and convert part-time employees to a defined contribution pension plan.

My reaction by point:

  • 8. Too late.
  • 9. Too late.
  • 11. Too little.
  • 14. Too little.
  • 16. Too little.
  • 17. Too little.
  • 18. Too late and too little.
  • 19. Too late and too little.

The politician/actuary cabal is incapable of maintaining a defined benefit system without independent oversight, for which the federal government has no appetite. At this stage switching new employees to a Defined Contribution plan would withdraw needed dollar-inputs from what is devolving into a ponzi scheme.

Next: Municipal Mergers

7 responses to this post.

  1. I like your analysis, John.

    Reply

  2. Posted by Tom on June 21, 2018 at 1:57 pm

    Is this over and above what Sweeney wants to do

    Reply

  3. Posted by Retired police on June 21, 2018 at 5:00 pm

    Some great ideas, hope they implement them, however, no way do we except Supreme Court Appellate Division and Superior Court judges. What the hack is special about them? They above all work the least and are paid the most. NO WAY..

    Reply

    • Posted by Tough Love on June 21, 2018 at 5:06 pm

      I noticed that ridiculous exception as well…………. but perhaps it’s there so THEY can screw everyone else w/o screwing themselves.

      Reply

  4. Posted by Tough Love on June 21, 2018 at 5:12 pm

    John,

    I agree with you that virtually ALL of the pension reform proposals are too little and/or too late.

    However, there is no question that not honoring pension accruals for PAST service will be a great deal harder to do than getting rid of additional new (Future service) accruals. With that in mind, ANYTHING we now do (even thought it won’t address the massive underfunding associated with PAST service accruals) to STOP digging the hole even deeper ….. with ADDITIONAL accruals added to the “PAST” service pile ….. is a good thing.

    Reply

  5. Posted by Anonymous on June 21, 2018 at 10:00 pm

    Johnny skip 15 you must be getting old

    Reply

  6. Posted by Stanley on June 22, 2018 at 10:31 am

    Unfortunately, you couldn’t be more correct.

    Reply

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