Breaking News: S5 Signed

The New Jersey State PBA is telling its members to celebrate:

as the Office of the Governor just announced:

 

“It is critical that those who have paid into the pension system are comfortable that they will be able to retire with dignity,” said Governor Murphy. “Labor is the backbone of many New Jersey families. The state must move forward with stable, reliable pension payments and this bill is a good first step toward making sure that our retiring police officers and firefighters feel secure as they move toward retirement, while also protecting the financial interests of taxpayers.”

Those guys may now be “comfortable” and “feel secure” but only to the extent that they accept the lies of politicians.

Among Murphy’s adopted recommendations were (1) to keep the fund’s $26 billion in assets with the Department of Treasury rather than requiring the state to immediately divest and deposit those funds with the board of trustees and (2) to continue using the same assumed rate of return for investments as the rest of the pension system.

This bill was amended to maintain the status quo, however dysfunctional, while providing the appearance of transferring control to PFRS without actually allowing them to do anything with it. And that part about ‘requiring actuarial certifications’ for any benefit changes (including COLA reinstatements) means that it will be the state’s actuaries who will have to give the go-ahead and what public plan actuary in New Jersey (or anywhere else for that matter) has EVER gotten to “act independent of their client paymasters”?

24 responses to this post.

  1. Posted by MJ on July 3, 2018 at 3:21 pm

    so what’s the point??

    Reply

    • Posted by geo8rge on July 5, 2018 at 7:28 am

      They can appoint experts of their own choosing who would have the authority to ‘Ask the big questions’.

      For example: What exactly do the hedge funds do? Do they borrow money to boost returns? What is the combined debt of the hedge funds? Do the hedge funds use derivatives and how? Can the hedge fund assets be sold or reduced?

      They could come up with their own liability estimates or just make the data public so others could analyze it.

      Reply

  2. Posted by El gaupo on July 3, 2018 at 3:28 pm

    As a PFRS member approaching retirement in the next 2-7 years, I think the pba/fop we’re smart to work with Sweeney on this as opposed to spending 5 million to unseat him. I think there will be more reform coming at least for new hires and this was a way to exempt our members from it. I predict that the first change will be some modified plan for pERs members. Or no pension for new hires. They don’t want a teacher shortage(colleges in N.J. say it already exists). I think that TPAF will get more money from the savings as years go by. Anyone with less than 8 years does not enjoy the non forfeitable right to benifits. That will be the only changes during the Murphy administration and that may not even happen until his second term(if there is one).
    We also know that after protecting what we have from further reform, the other reason for this whole thing was return of cola. With 8 votes needed, you will need to give something to get something. Increasing retirement age to 55 or 57 will free up enough $$ to give cola for at least the amount of pension that is equal to the social security max.
    Guys at our union meeting stressed that any of that is still a few years away and will first be reinstated for retirees below a certain amount or those who retired prior to 1990. There is an honest attempt to help retirees in their 80s who didn’t retire with big pensions and don’t get Ss and haven’t had a cola in 10 years.

    Reply

    • Posted by Tough Love on July 3, 2018 at 6:46 pm

      Quoting …………….. ” I think there will be more reform coming at least for new hires and this was a way to exempt our members from it.”

      Yup, MORE of that “self-interest”.

      I really think Retiree Healthcare for all current & future retirees should end ……….. not just because it’s necessary and “just” (because Private Sector Taxpayers VERY rarely get such from their employers), but because current/near retirees (who have already likely “locked-in” their grossly excessive pensions) would be forced to materially participate in the give-backs, and not have it all fall upon just NEW workers.

      Reply

  3. Posted by NJ2AZ on July 3, 2018 at 3:53 pm

    the look on Murphy’s face in that photo…looks like the smile i’d give if i were on the Titantic. lolz

    Reply

  4. Posted by dentss dunigan .... on July 3, 2018 at 4:07 pm

    Murphy’s slick …he got his millionaires tax after all ..According to a source in Trenton, the fine print Murphy presented the legislature today set the millionaires tax to be triggered at $5 million, but for the 10.75% to be applied on the taxable income over $1 million. Sweeney and Coughlin made a deal that would require a wealthy taxpayer with $6 million in taxable income to pay New Jersey $107,500 in tax on the million earned above the threshold. The legislation Murphy presented would require that taxpayer to pay $537,500.

    Reply

    • Posted by boscoe on July 4, 2018 at 1:24 am

      Your source is full of it. The 10.75% rate applies to INCOME over $5 million.

      Reply

      • Posted by dentss dunnigan ... on July 4, 2018 at 12:38 pm

        I hope you’re right ,,,,like I said ” A source” …..I would believe Sweeney would blow a gasket if true …..

        Reply

      • Posted by geo8rge on July 5, 2018 at 7:53 am

        If I understand this right, if you have in excess of $1M of income you have to pay a 9% tax on dividends. It looks to me (there is no reason to take tax advice from me) like the law is targeting S corporations as a tax dodge by declaring ‘earned’ income as dividend income. Years ago when the W was in charge the Rs reduced the tax rate on dividends of US companies and made sure that the S corporations got the reduced tax rate. If you for example had a law firm and you took in $1.5 million of salary pre Bush, you could recharacterize your business as an S corp and pay a dividend instead of salary. Many of the people doing this are for example lobbyists and others dependent on doing business in, with or on behalf of NJ, so they can’t really leave NJ. It will be interesting to see anyone flees NJ.

        https://legiscan.com/NJ/bill/A4202/2018

        For tax years beginning on or after January 1, 2017 and ending before December 31, 2018, in addition to the tax paid by a taxpayer pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5), a taxpayer shall pay a tax equal to a rate of 9% applied to all of the taxpayer’s dividends included in the taxpayer’s income for federal income tax purposes pursuant to the Internal Revenue Code without any deduction, exemption, or credit allowed under the Internal Revenue Code or any credits, grants, or net operating losses allowed under the laws of the State of New Jersey

        c. A taxpayer shall not be liable for the tax imposed by this section, if so prohibited by any federal law, or if the total amount of dividends which were included in computing such taxable income for federal income tax purposes, paid to the taxpayer by one or more subsidiaries owned by the taxpayer, are in aggregate less than $1,000,000 for the tax year.

        Reply

  5. Posted by Anonymous on July 3, 2018 at 6:33 pm

    They all look like they are 9 cents short of a dime and Murphy honestly looks cra cra…… oh and most are severely overweight…. all those prime rib dinners and cocktails at the expense of the rank and file….just sayin

    Reply

  6. Posted by Tough Love on July 5, 2018 at 3:37 pm

    Karma comes in many forms, this being one:

    https://www.aol.com/article/news/2018/07/05/group-of-poachers-killed-by-lions-after-sneaking-onto-south-african-game-reserve/23475436/

    Karma will also be coming to many Public Sector workers in the form of materially reduced pensions & benefits.

    Insatiable greed and a taxpayer-be-damned attitude HAS consequences.

    Reply

    • Posted by Anonymous on July 5, 2018 at 5:45 pm

      Will safety workers be exempted, as they usually are?

      Reply

      • Posted by Tough Love on July 5, 2018 at 6:38 pm

        Hopefully not, their pensions being the MOST excessive and hence the most egregious.

        Reply

        • Posted by El gaupo on July 5, 2018 at 8:52 pm

          They will be exempted. S5 being signed into law will exempt Pfrs members from reform. As well it should. Our pension fund is in much better health.
          Police and fire across the country enjoy early retirement. Why should N.J. be any different? I think we can tweak the number up to 55 but….it really doesn’t matter what TL or I think 🤔
          It is what it is.

          Reply

          • Posted by El gaupo on July 5, 2018 at 8:54 pm

            As a side note….it warmed my heart to see the poachers killed. I also beleive that police can shoot them on sight in some of those countries.
            Kinda low to compare to a poacher TL. Cmon now….moocher maybe. 😉

          • Posted by Tough Love on July 6, 2018 at 9:50 am

            Quoting ……………

            “They will be exempted. S5 being signed into law will exempt Pfrs members from reform. As well it should. Our pension fund is in much better health.”

            “Much Better” doesn’t mean good or even fair. When compared to the accepted standards used for evaluating how well funded Private Sector Plans are, the NJ PFRS Plan is clearly “in the toilet”. In fact, it’s funding % would be below the 60% cutoff (using Private Sector funding assumptions/methodology) below which the crediting of further pension accruals would NOT be allowed.

            Quoting …………..

            “Police and fire across the country enjoy early retirement. Why should N.J. be any different? ”

            Such early retirement shouldn’t be allowed in ANY of these Plans.

            Why ? Because the PRICE of that early retirement DOUBLES (yes DOUBLES) the cost of a pension which (because of the VERY high per-year-of-service formula-factors) is ALREADY grossly excessive when compared to what a Private Sector DB Plan typically provides.

            ——————————————-

            P.S. El gaupo, It’s a bit extreme too go as far as saying it “warms your heart”.

          • Posted by El gaupo on July 6, 2018 at 2:58 pm

            Drop dead date in the 2050s. There has not been anyone suggesting that Pfrs is going to go belly up anytime soon. I think you’ll just have to live with this and we will need to respectfully agree to disagree. Outside of a few snarky remarks here and there to spice things up I think we handle ourselves pretty well on this blog.
            Maybe warming my heart is too extreme, but these poachers had it coming. It is a big problem over there. Tigers especially. My kid did a whole paper on it in high school. I prefer to be called a moocher hopefully with tongue in cheek. I’m a good man TL. The world needs more El Guapos. Trust me. Lol.

          • Posted by Tough Love on July 6, 2018 at 4:09 pm

            El gaupo,

            We should all refrain from using the expression “Trust me”.

            It’s to reminiscence of the idiot now residing in the White house.

          • young, vigorous, and efficient

            (and expensive)

            “Theoretically, a retirement system’s distinctive purpose is to induce personnel to separate voluntarily, and on good terms, when it is in the best interest of the services that they do so. The 1948 Hook Commission stated this purpose well [5, p. 40]:

            …a sound retirement system is essential to solving the superannuation problem. The services must be kept young, vigorous, and efficient: a sound retirement plan with a proper compulsory retirement age will permit youth and brains to rise to the top in time to be effective…. Other concepts of retirement for those taking up the profession of arms are also important and have been taken into consideration but the Commission does not consider them to be controlling.

            “This quotation makes clear that the role of the retirement system is to induce voluntary separations at the “right time.” If the right time is a period well before full withdrawal from the labor force, the retirement system is likely to need adequate transition benefits to induce voluntary separations.”

            https://www.cna.org/CNA_files/PDF/D0017798.A1.pdf
            —————————————-

            Quoting TL…

            “Such early retirement shouldn’t be allowed in ANY of these Plans.”

            Your opinion, but these decisions were made well above your paygrade.

            We can all agree now that early retirements are not because of shorter life expectancy for safety workers.

            Or even comparative “risks”. (Maybe.)

            Andrew Biggs…
            “We exclude public safety employees because their work conditions, which may include both threats to life and limb, differ from other government workers and from private-sector employees in general.”
            ———————————————
            Early retirement for safety has been around a long time, not just “across the country”, but around the world. They didn’t just spring out of nowhere, they have been evolving and adapting for years, and will continue to do so.

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