Missing Links on NJ Pension

NJspotlight reported:

Although local-government pension bills will essentially hold flat in the current fiscal year, that good news has been tempered by the release of yet another report labeling the overall state pension system the worst-funded in the nation.

Without making the obvious link:

The main reason that New Jersey has about 30% of the money that should be in the retirement system is that the politician/actuary cabal has conspired to keep contributions down without challenge since the media/public rabble is generally innumerate.

Even if the trust did make 13% for the year ended June 30, 2018, that is 13% on the $75 billion asset value that is supposedly there (including all those private equity investments that the state gets to put their own values on) which would come to about $10 billion in earnings while applying the 7.5% funding rate to the $225 billion that should be in the plan would generate $17 billion. That is a $7 billion actuarial loss on the assets alone.

Were the gains on the liability side (even without lower salaries or fewer participants) so great as to more than offset that loss? Yes they were as the new actuaries for the system did the job they were hired for.

44 responses to this post.

  1. The local side is In much better shape!! That’s why our PBA pushed hard to separate from the other funds. And our elected officials overwhelmingly voted to pass S5 into law. Hands off police pensions is the new order of the day.
    Co-mingle the funds? Not a god damn chance in hell. A relic from the Christie era. Let the state funds do as they wish. Keep your fucking hands off my retirement fund. Thank you very much!!!
    Sorry TL. No cuts a cmon this way. NJ Spotlights no less….no bias there right?

    Reply

    • Is S5 a “trigger” word for you?🤣🤣🤣🤣

      Reply

    • Posted by Tough Love on September 30, 2019 at 10:25 am

      Yes, El gaupo, your Local PRFS Plan is in “better”, but still terrible shape, in fact so poor, that if it were a Private Sector Plan, the funding ratio would now be well below the 60% cut-off below which US Treasury/IRS Rules would not allow any further pension accruals. Even a modest recession might throw your Plan over-the-cliff.

      Reply

  2. Posted by Tough Love on September 30, 2019 at 10:20 am

    Quoting Mr. Bury ………………. ”

    The main reason that New Jersey has about 30% of the money that should be in the retirement system is that the politician/actuary cabal has conspired to keep contributions down without challenge since the media/public rabble is generally innumerate.”

    Yes, but “down” from what, THAT being the ROOT CAUSE of the pension mess?

    The “THAT” is a level of generosity far far in excess of that typically promised Private Sector workers in retirement security.

    I’d guess that NJ’s actual pension contributions to date would be sufficient to FULLY FUND Public Sector worker pensions with a value EQUAL TO but no greater than the value of the retirement security that Private Sector employers have provided to their workers over the same period..

    PUBLIC Sector workers do deserve that EQUAL amount, but no more.

    Reply

  3. Politically over-promised by half-assed NJ Legislators/donors. @DSteinhardtEsq (NJ Repub Chair)
    Here is what we will do to solve this NJ Pension/Rx problem…. if you cannot finish this sentence, please stop wasting your energy! Regards.
    Quote Tweet
    Douglas Steinhardt
    @DSteinhardtEsq
    · 14h
    The list of #NJ worsts keeps growing, but you can’t fix pensions, transit, school funding or infrastructure & slow the exodus of jobs & residents if all you’re good for is progressive platitudes. We can do better. #NJGOP #LeadRight #HonestAnswers https://nj.com/politics/2019/

    Reply

    • Posted by stanley on September 30, 2019 at 11:08 am

      Matt, I would like to agree with you, but I cannot. To do better would require a revolution in thinking and I don’t see that happening anytime soon.

      Reply

      • Posted by skip3house on September 30, 2019 at 11:23 am

        We do agree. Perhaps it is @DSteinhardtEsq “… progressive platitudes. We can do better…. ” that is disagreeable?

        Reply

        • Posted by stanley on September 30, 2019 at 12:19 pm

          I don’t agree that more of the same ol same ol will solve anything. The good news is that many lefties are going to be left sucking the hind one (along with others, of course.) The others know that there is a problem and are making adjustments on their own. The solution is to stand by and let the mess go belly up on its own.

          Reply

  4. Posted by skip3house on September 30, 2019 at 11:02 am

    xxx test

    Reply

  5. Posted by stanley on September 30, 2019 at 11:06 am

    The fascinating aspect of this situation is that world-wide assets are in a historical bubble, a bubble which will come to an end. Hell! You would need a functioning crystal ball to sort through this mess and understand promises and the challenges of keeping them.

    Coming out of WWII America had little competition for the world’s supply of work to be done and union labor drove wage and benefits to unsustainable levels. After wrecking American industry, it moved on to leech the public sector. To think that adjustments won’t be made to public employee compensation has to be the height of optimism. I doubt that it will be just a case of sticking it to the younger people.

    What’s S5? Just a scrap of paper! Doesn’t mean jack diddly.

    Reply

    • Wrong. It’s the law that will make my $125k pension untouchable.
      Unions were not really the issue either. Automation, Reaganomics, the tax rate was almost 90% on rich folk after the war. And I’m a law and order conservative. Those are the facts. Trickle down has been proven to not work.
      Trump has us moving in the right direction Stanley. Stop with the doom and gloom already. Christ. You’d think you were a jets fan. Lol.

      Reply

      • Posted by Rex the Wonder Dog! on September 30, 2019 at 2:22 pm

        Wrong. It’s the law that will make my $125k pension untouchable.
        Yes, I hear yeah EG! The “law” will save you, it saved the public safety pensions in Prichard Alabama, Central Falls Rhode Island and Detroit MI too, you’re 100% SAFE!… Oh…wait….NOT!!!
        Hahahaha!
        🐶🐶🐶🦴🦴🦴

        Reply

        • Posted by Marine1 on September 30, 2019 at 5:12 pm

          Rex- Please share with us under the bankruptcy laws currently in place how a state may file for bankruptcy ? I’ll wait.

          Reply

          • Posted by Marine1 on September 30, 2019 at 5:14 pm

            Rex- more pictures. You really are weird.

          • Marine1. Exactly. The state can’t declare bankruptcy. They just can’t. And he uses 2 hick towns and a shithole city to compare PFRS to. They wish they had the retirement bennies we do. Plus in general they just don’t like our authority over them. Lol.
            Pathetic. Rex still lives in mommy’s basement. The best sexual encounter he ever experienced was hearing his big brother banging some broad through the floorboards of his moms basement. 😃😃

          • Posted by stanley on September 30, 2019 at 7:21 pm

            Constable: ” The state can’t declare bankruptcy. They just can’t…”

            Maybe so, but they also can’t turn water into wine and they can’t feed the multitude with 7 loaves of bread and a few fishes. The fact remains that late life benefits are grossly over promised and adjustments will have to be made. OK buddy? OK.

          • Posted by Tough Love on September 30, 2019 at 8:22 pm

            El gaupo/Marine1 ……………

            Declaring Bankruptcy and simply NOT cutting checks (because there is no money to cover those checks) are 2 VERY different things.

            When push comes to shove, and there is ONLY enough money to pay active cops or retired cops, who do you think they will choose to pay ? Given NJ’s HUGE debts (of all kinds) and possibly being on the brink of a recession, that’s not as unlikely a scenario as your might think.

          • Posted by Rex the Wonder Dog! on September 30, 2019 at 9:17 pm

            “Rex- Please share with us under the bankruptcy laws currently in place how a state may file for bankruptcy ?”
            Marine1, have you ever heard of the 11th Amendment? Or how it applies to states rights? States, including NJ, are IMMUNE from lawsuits. In BOTH state and federal court. States, including NJ, are “sovereign”. Do you know what that word means? States can simply default, “repudiate” all of their debts, including pension debt. And guess what? And guess what AGAIN? There is not a THING you or EG can do about it. States don’t NEED to file BK, they can simply “repudiate” all their pension debt. Start fresh. Game over 🙂 Now, refresh my memory, what was your BK question ???
            🐶🐶🐶🦴🦴🦴

            See Above ^^^ EG.
            Posted by E on September 30, 2019 at 5:32 pm

            Marine1. Exactly. The state can’t declare bankruptcy.

      • Posted by stanley on September 30, 2019 at 6:00 pm

        Constable: “…the tax rate was almost 90% on rich folk after the war…”

        True, but there were many more loopholes then. Oil depletion allowance for example. I’m not wanting to be correct about troubles ahead, but a party like the one we’re having with massive debt every where you look has to cause one hell of a hangover. We haven’t grown productive business that much, just the paper pushing financial sector that doesn’t add much to production. You might get the $125K per year but it won’t buy much, Might keep the light bill paid. I look for NYC to have troubles like the 70s when President Ford said, “New York City, drop dead” The troubles will probably be much worse than the 70s. The financial sector has grown so much bigger. Keep your pollyanna hat on, no problem.

        Reply

        • Posted by NJ2AZ on September 30, 2019 at 8:16 pm

          NYC not helping itself with their absurd school policies like saying every school has to eventually have the exact same demographics as the city at large or whatever it was they are currently toying with

          all the wishful thinking in the world isn’t going to change reality that by and large people with means do not want their kids mingled with the kids of people without means

          Reply

          • Posted by Tough Love on September 30, 2019 at 8:26 pm

            I would put it differently ……………

            Parents who expend great effort to encourage and support learning want their kids to go to schools with children of like-minded parents.

          • TL and AZ. You’re both right. Although I don’t think that most parents of kids in great schools begrudge a kid without means a spot there IF he deserves it based on his merit. I know I don’t. It is the liberal policy of free college for ALL even if they don’t care that bothers me. I would never turn away a smart kid who had shitbag parents or one whose folks fell on hard times. It is the concept that I have to lay out for Susie’s social justice degree when she finished in the bottom 10% of her class that is not right.

          • Posted by NJ2AZ on October 1, 2019 at 4:21 pm

            TL – i actually agree with how you phrased it, i was just in a grim mood at the time and it got the better of me

            I would rather send my kids to school with poor kids who have parents pushing them to learn than a bunch of rich brats whose parents don’t care either

        • Posted by Rex the Wonder Dog! on September 30, 2019 at 10:28 pm

          Constable… Keep your pollyanna hat on, no problem.
          No, do NOT take that Pollyanna hat off EG, you look F-A-B-U-L-O-U-S in it

          Reply

          • I look fabulous in everything.
            The screen name is completely accurate. All these great road jobs give me a chance to upgrade my wardrobe. 😎

    • Posted by Tough Love on September 30, 2019 at 8:16 pm

      Indeed, S5 is “just a piece of paper” … a “law” (not a Constitutional provision that’s difficult to change).

      A “law” can be override or reversed/undone simply by another “law”, and just because today’s (Union-bought) Legislature/Governor isn’t so inclined, doesn’t mean that tomorrow’s won’t be.

      Reply

      • Posted by Marine1 on September 30, 2019 at 9:37 pm

        TL- Can you reign in your dog rex. The guy wackier then I thought. You’re sane compared to rex. 11th amendment,repudiating debt ?! Scary thing is he believes all that nonsense. I agree with you TL if the money isn’t there and it comes down to active police being paid or retirees cuts will be made to pensions. That is commen sense. Rex is clueless. You should unfriend him.

        Reply

        • Posted by Rex the Wonder Dog! on September 30, 2019 at 10:34 pm

          Rex is clueless.

          Rex, clueless??? Don’t EVER say that to my face EG, or I will take a BITE out of crime (And your comments qualify as a “crime” because they’re felony stupid 🙂 )
          🐶🐶🐶🦴🦴🦴
          Rex is also the most handsome K-9 around … 😍😍😍

          Reply

          • Posted by Marine1 on October 1, 2019 at 10:18 am

            Rex- EG didn’t say you were clueless. I did. I stand by that assessment. I’ve seen a shitload of retarded civilians and you may be at the top.

          • I say it too. More so is jealousy. Fact is Marine1, that every single poster on here would like to have the pension we do. Some like MJ, don’t let it bother them and they go about their lives and see us as the good guys and the mutual respect is there and he knows that we aren’t gonna be millionaires for God’s sake. He has lots more do with his life than rag on the police. Lol.
            The other two that rag on us? Pure jealousy. Nothing more. They actually wish for a horrific economy at their own expense in the hope that our pensions get cut. That’s pathetic. Lol.
            TL argument used to be no way you get paid. Now it’s if there is a recession you might not. Whatev, baby cakes. Marine1, enjoy those checks. You earned every one of them. May you live a long and happy life and enjoy your retirement.

        • Posted by Tough Love on September 30, 2019 at 11:18 pm

          Why do you think I share any association with Rex?

          Reply

          • Posted by Rex the Wonder Dog! on October 1, 2019 at 1:47 am

            Why do you think I share any association with Rex?
            EG thinks we are unfairly tag-teaming him. But the fact is EG and Marine1 are unfairly tag-teaming Rex (and TL) ! Finally, Marine1 does not seem to like the pictures I posted of him, but they were very flattering to him! He should be THANKING me…..!
            🐶🐶🐶🦴🦴🦴

          • He can’t even thank you for your pension contributions since by your account you live in Cali.
            And TL, the political will won’t be there to specifically go after police by repealing S5. It passed what 118-0 or something like that.
            And we are still so far removed from the towns being able to pay into pensions. In fact, Nj spotlight even said local pensions are not the problem. They are the mouthpiece for the mayors. Lol.
            What you are suggesting will only happen if the economy completely collapses. Then your problems will be WAY worse that the $100 or less you pay into your local cops pension fund a year. (About $80 we figured).
            House won’t be worth shit. Schools will suck and crime will be out of control.
            I don’t understand you. Stanley is a doomsday preppier. I get him. I don’t agree witb him but I get him.
            You appear to be more realistic in your assessment of what is likely in the future. I don’t think you think that we will get to that level unless we are in a long protracted war or something on US soil.
            Otherwise the conditions you speak of more likely would indicate the underclass going after the ultra rich. We will see how that works out in 2020.
            You’re argument isn’t that we can’t afford cops pensions. It is that we don’t deserve them (we do) and that’s if the economy shits the bed it will be hard to pay them. Well, no shit. But why wish for your own pain and that of your neighbors to try to get at me? Jealousy.

          • Posted by Marine1 on October 1, 2019 at 10:11 am

            TL- I completely understand the embarrassment and wanting to distance yourself. The guy is a weirdo for sure.

          • Posted by stanley on October 1, 2019 at 10:51 am

            Constable, you are concerned about Global Warming caused storms that you believe are on the way. The real storms are economic and they most likely won’t devastate you, but there are a great many, perhaps the majority, who are presently just scraping by at the height of a historical financial mania.

            Financial manias have ended in collapse and ruin for four hundred years. This time is different is a refrain that doesn’t play very well when the party stops.

            You telling me to stop with the doom and gloom sounds like Sheriff Woody telling Buzz to stop the space ranger crap. LOL

          • Posted by Tough Love on October 1, 2019 at 11:35 am

            El gaupo,

            To be clear, I don’t recall (in those recent discussions) separating out the annual Taxpayer household cost of JUST police pensions. I did come up with an estimate (for a typical NJ town) of $1,082 for the Taxpayer cost per household per year including police wages, pensions, and benefits.

            Given your high wages, I wonder if your REALLY believe that you deserve a pension, the Taxpayer cost of which is 5 to 10 times what Private Sector employers typically contribute towards their employees’ retirement security,

            Wouldn’t you say that believing such makes you awfully greedy?

            FWIW, I’m not looking for a economic collapse to fix that, just a Taxpayer-encouraged change in Legislative thinking.

          • TL, one last time. I firmly and unequivocally believe that I am free, like you, to get the best financial package from my employer. You state collusion….the burden of proof is on you!!!!
            It is what it is.
            Why shouldn’t I, as a LEO have the same right that you do to negotiate with your employer?
            Many many private sector employers and their workers also use their lobbying efforts to better their lot. You curse the PBA. Without it, I’m sure many of the benifits I have would be in jeopardy. No one, and I mean no one in my town gets paid like the cops do.
            How is the PBA any different than the American Bar Association? Or the NJ builders Association. Or IBEW? Or the screen actors guild? Or any of the lobbying groups that protect the insurance and finance industries? It’s not. Either we have the same rights you do or we don’t.
            And again by your own admission that $1000 number includes everything. Towns that have more commercial ratables, that number will be lower. With the town pension contribution at 20-25%, you might be looking at $200 a year with your numbers. Less if you live in a town with malls etc. either way not a budget buster by any stretch. Which means that it isn’t a ? Of being able to afford it. It is pure jealousy, oh well. Are you jealous of the plumber that charges $400 to fix your broken pipe in the middle of the night?

          • Still comes out to three bucks a day for 24/7 protection and services. Not a bad deal if you ask me. You should turn elsewhere in your quest to make NJ more affordable.

          • Posted by Tough Love on October 1, 2019 at 8:37 pm

            El gaupo,

            As you said …… “one last time” ……

            We BOTH know that compensation “negotiations” are VERY VERY different in the Public and Private Sectors.

            In PRIVATE Sector negotiations, someone on one side of the bargaining table is TRULY looking out for the best interests of the Corporate Plan sponsor, because it’s that Corporation that will indeed pay for all promises made.

            In PUBLIC Sector negotiations NOBODY is looking out for the Taxpayers’ best interests, and it’s the Taxpayers who get stuck with the bill. Neither the Elected Officials or their surrogates give a damn, BOTH participating in similar pension and benefit Plans and having ZERO desire to control costs via controlling the level of pensions/benefits promised. Elected Officials care ONLY about one thing, getting re-elected. Doing so requires campaign contributions, and pleasing the Union assures the campaign contributions and block voting needed to get re-elected. Taxpayers get nothing but repeatedly betrayed.
            ———————————————————–

            And yes, I DID notice that you skirted directly answering my questions (below) instead ONLY addressing your right to “negotiate” for the best deal possible.

            (1) I wonder if your REALLY believe that you deserve a pension, the Taxpayer cost of which is 5 to 10 times what Private Sector employers typically contribute towards their employees’ retirement security, and

            (2) Wouldn’t you say that believing such makes you awfully greedy?

        • Posted by Rex the Wonder Dog! on October 1, 2019 at 6:28 pm

          Rex- EG didn’t say you were clueless. I did.
          Sorry EG, Rex misread that post… Marine1, that was for YOU!
          🐶🐶🐶🦴🦴🦴

          Reply

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