New Jersey’s pension plan costs too much

That is how nj.com titled the opinion piece of Tony Howley, the state director of Americans for Prosperity- New Jersey, that started off with:

This legislative session, our state senators will have the opportunity to vote on Senate Bill 861, which provides a solution to the pension fiasco that many never thought would be resolved.

The piece included some useful perspective but these S861 tweaks are not the solution to a $200 billion problem:

  • All the changes in the bill apply only to public employees who become members of the PERS or TPAF on or after July 1, 2020 or who have been members of the PERS or TPAF for less than five years as of that date.
  • Under the bill, these employees will not be eligible for service retirement until they are at least 67 years of age.  An employee will be required to have at least 30 years of service credit to be eligible to retire before 67 years of age, but the employee’s pension will be reduced by 3 percent per year for each year that the employee is under 67 years of age.
  •      The bill also changes the amortization period for the unfunded liability of the PERS and the TPAF, beginning July 1, 2023. 
  •      In addition, these employees will be members of the new cash balance plans to be established, one in the PERS and one in the TPAF.  When the annual salary of these employees exceeds $40,000, the employee will be enrolled in the cash balance plan and the employee’s mandatory contribution as a percentage of the salary amount that exceeds $40,000 will be deposited into the employee’s account in the cash balance plan. 
  •      An annual minimum interest credit of 4 percent annually will be added to the account.  Also, a separate alternate interest credit will also be added to the account of each employee annually.  The alternate interest credit will be 75 percent of the rate of return on the asset investments for a fiscal year, as that rate of return is certified by the actuary in the actuarial valuation when the valuation is adopted by the board of trustees of the system or fund, as appropriate.  Upon a member’ retirement or a distribution of the accumulated account balance, the member or beneficiary will receive the accumulated member contribution with the minimum interest credit or the accumulated member contribution with the alternate interest credit, whichever is greater. 
  •      If a member terminates employment after less than 10 years of service and requests a distribution, there will be no interest paid on the member contributions to the account for the first two years.  For the third and each subsequent year of plan membership, distribution of the accumulated account balance at the request of the member will only include a portion of the interest for each year of plan membership commencing with 30 percent in the third year of plan membership and increasing by 10 percent for each year thereafter.
  •      There will be no employer contributions added to an employee’s account in the cash balance plan.
  •      The bill contains provisions for distribution of accumulated account balances in the cash balance plans when an employee terminates employment, retires, or dies, and for the enrollment retroactively of employees who have less than five years of service credit in the PERS or TPAF as of July 1, 2020.
  •      The board of trustees of the PERS and TPAF will be responsible for the operation of the cash balance plans, in compliance with State law, the federal Internal Revenue Code, regulations of the U.S. Treasury Department, and other guidance of the federal Internal Revenue Service. 
  •      The bill requires the savings realized by a local unit or a school district as a result of this bill to be used solely and exclusively for the purpose of reducing the amount that is required to be raised by the local property tax levy for the local unit or school district.

105 responses to this post.

  1. Posted by Tough Love on October 11, 2020 at 11:06 am

    The linked opinion piece from Tony Howley included the following ……….

    “S861 would protect the benefits of longtime government employees and current retirees, ”

    Did he say “longtime” ?

    The Bill’s proposed changes excludes (from change) anyone with at least FIVE years of service. That’s certainly NOT “longtime”. When Private Sector pension Plan sponsors make such changes, they too often grandfather longtime employees, but under THEIR definitions, it usually means being at least age 55 (or 60) or having at least 20 (or 25) years of service.

    ONLY including new workers and those who now have less than 5 years of service in the changed Plan, means that the vast majority of current workers will continue to accrue pensions credits under a formula and provisions that is clearly excessive and unaffordable.

    While no change reduces the shortfall for unfunded PAST service accruals (they will be what they will turn out to be), if we are to make financially MEANINGFUL changes, those changes MUST include VERY material accrual reductions for the FUTURE service of almost ALL CURRENT workers.

    AND …….. (not listed) it should include ALL of NJ’s DB pension Plans, including the Police/Fire Plan which by being the most generous, is also the most egregious.
    ————————-

    And of course, how about addressing the other HUGE issue, the unfunded Retiree healthcare benefits………. a benefit that VERY FEW in the Private Sector get any longer.

    Reply

    • Key word being *almost all*. Present company excluded right, bestie?

      S5 sure comes in handy….and no way GOP gonna go against the police now in NJ (nor will the dems).
      Teachers? Different story.

      Reply

      • Posted by Tough Love on October 11, 2020 at 10:07 pm

        LOL … have a beer ……. You get the Golden ticket (like in Charlie the Chocolate Factory).
        —————————————————–

        And FWIW……….

        S5 is just a “law” (NOT a Constitutional amendment) and CAN (given a Legislature willing to do so) be reversed/changed/overridden with another “law”. Nothing else required.

        S5 really did nothing new …….. the Legislature wasn’t willing reduce Police pensions BEFORE or AFTER it’s enactment. And if it changes it’s mind, it will simply override S5.

        Reply

        • Thank you for the kind words. 👍 I’ll enjoy that beer.

          You’d have to admit though at this point, there is NO desire at the state level on either side to repeal S5. Maybe when Antifa comes.
          I mean really, when the fuck are they going to stop that shit on the west coast.
          More riots and destruction (of course, it’s Columbus weekend and he was bad so let’s blame all white people today and destroy more shit). Portland, Seattle, who on earth would want to live there. LA cause ya know the lakers win a title let’s riot. The problem is if you don’t extinguish this it WILL get worse. A whole generation now is being taught to hate this country.
          Biden will NOT help this long term. The democrats will need to have a law and order wing of their party. This will destroy our country. After we have been divided for so long, a foreign enemy will come in and finish the job.
          Either way at that point S5 will have long been moot, would it not?

          Reply

  2. Posted by MJF on October 11, 2020 at 12:54 pm

    You should separate health care from wages. The health care system is a murdering monster. If it doesn’t kill you physically it will destroy you financially. If you closed that slaughterhouse you would not need too worry about it. Granted pouring unlimited taxpayer funds into this forge just feeds it but it why not focus your attention on fixing it.

    Reply

    • Posted by Tough Love on October 11, 2020 at 1:01 pm

      MFJ,

      Indeed we should, with those in the Public and Private Sectors getting the SAME level of benefits & subsidies ……….. BOTH while active and in retirement.

      Right now, Private Sector taxpayers ALWAYS get materially less than their Public Sector counterparts, yet are forced to pay for most of those MUCH more generous (and hence MUCH more costly) Public Sector healthcare benefits. There is ZERO justification for this.

      Reply

  3. Posted by MJF on October 11, 2020 at 1:24 pm

    Anecdotally everyone I knew in private industry that had family coverage lost it because the costs skyrocketed with Ocare. The employers reduced it to employees only. And post employment.. you gotta be kidding me. It was crippling to most small companies. It was truly sickening, but the public sector just sent out bigger bills to the suckers who lost their coverage.

    Reply

    • Posted by Tough Love on October 11, 2020 at 2:15 pm

      Not sure I understand your comment or point, but to make my position clear, there is simply ZERO justification for Private Sector Taxpayers to contribute more towards the cost of healthcare coverage for Public Sector workers than what THEY get in subsidies from their Private Sector employers…….. and that comparison should be done separately for active and retired workers becuase in the Private Sector, it is VERY rare to get employer-sponsored retiree healthccare benefits today.

      Reply

      • Don’t worry, over time it will be rare to non existent in the public sector as well to have medical after retirement. Who will need it with retirement ages (except for police) at 67 etc…..

        Reply

    • Posted by NJ2AZ on October 11, 2020 at 2:52 pm

      “The employers reduced it to employees only”. I don’t think this got enough attention

      i wish these jackasses could realize you can eliminate the link between employers and health insurance without having .gov completely take it over either.

      Reply

  4. Posted by boscoe on October 11, 2020 at 2:13 pm

    That bill is going nowhere. It was part of Senator Sweeney’s one-time love affair with the Path to Progress, or whatever it was called. Sweeney now wants to be governor, and he is no longer out to antagonize public sector workers. Remember how he worked out a deal with the teachers’ union to “save money” on health benefits and avoid anything approaching a real fiscal remedy for school districts. So apart from the fact that any pension legislation that essentially indemnifies all vested public employees will do next to nothing to address current unfunded liabilities in the retirement systems, we can expect Sweeney to back away from S-861 and other similar proposals.

    Reply

    • Posted by Tough Love on October 11, 2020 at 2:24 pm

      I agree with you, and have not seen even one proposal that addresses NJ’s desperately needed Public Sector pension/healthcare reforms in any financially MEANINGFUL way.

      Why? Because our Elected Officials are to scared of and too beholden to the Public Sector Unions/worker/retirees.

      Little can/will change until they are voted out of Office, and I don’t see that coming anytime soon because NJ’s Private Sector Taxpayers are too stupid/uninformed/uninvolved to make that happen.

      Reply

      • Posted by MJF on October 11, 2020 at 3:55 pm

        OPEBS (healthcare) would not be a problem if they were not insanely overpriced and enforced at gunpoint by the government (cause and effect). As to wage based benefits they should not be paid at a rate higher than the amount the employee/employer put into the retirement fund plus demonstrable increases in value earned by the fund.

        Reply

        • Posted by Tough Love on October 11, 2020 at 8:34 pm

          Quoting ………

          “OPEBS (healthcare) would not be a problem if they were not insanely overpriced and enforced at gunpoint by the government (cause and effect). ”

          OPEB is Primarily Retiree healthcare benefits. What makes you think (or evidence can you share) that they are “insanely overpriced” ? Do you think that older people (the retired) do not have significant medical needs and usage ?

          And did you also know that most of the figures we read for PUBLIC Sector retiree healthcare costs are materially UNDERSTATED. Why? Because unlike in most Private Sector Plans, Gov’t agencies most often do not base Plan premiums on the actual claim experience of the Active and Retiree worker groups studied SEPARATELY.

          The unfairness problem is that (a) PUBLIC Sector Retirees routinely get heavily-subsidized or free TAXPAYER-FUNDED healthcare while comparable Private Sector retirees rarely get ANY (yes ANY) employer-sponsored subsidy towards retire healthcare costs today, and (b) the generosity of Public Sector Retiree Healthcare Plans is typically MUCH greater than that of even ACTIVE Private Sector workers.

          ——————

          Quoting ……….

          “As to wage based benefits they should not be paid at a rate higher than the amount the employee/employer put into the retirement fund plus demonstrable increases in value earned by the fund.”

          I agree, essentially, what you are saying is the SAME as what I have Stated in the past………….. the pension benefits promises should be no greater than what can be FULLY paid for by contributions ALREADY MADE (ee + er) plus any earning on the invested funds.

          Reply

      • Are you the first one…cause you are informed and involved (to some degree)?
        Just kidding my amiga. We buddies now. No more F U pay me or epitome of greed etc. mutual respect.

        Reply

        • Posted by Tough Love on October 11, 2020 at 10:20 pm

          I’m not stupid, uninformed, or uninvolved wrt voting. But I simply cannot put my family through the abuse/blowback that would surely come our way if I singularly started protesting local pensions & benefits.

          The Unions COUNT on that fear/concern …. and like it that way.

          But remember, fear won’t fund your pensions.

          Reply

          • I was just kidding TL. You’re far from stupid. We both know that.
            But the fear that you speak of can also and more appropriately at this time, is spread out among many law abiding citizens who fear the far left socialists. Far right is not exempt either. Jesus Christ, you were gonna kidnap and assassinate the gov of MI? And kill police at their homes and take over the capital? All should get life in prison. And all left wing freaks should get punished severely as well. It is destroying this country.
            Maybe A is right ——-we have met the enemy, and He IS us.

          • Posted by Rex the Wonder Dog! 🐶🐶🐶🦴🦴🦴 on October 14, 2020 at 10:59 am

            I was just kidding TL. You’re far from stupid. We both know that.
            That’s not what President Trump SAID! 😎

  5. Posted by MJF on October 11, 2020 at 4:43 pm

    And another thing….as I rant on. Please stop calling these things pensions, they are are not. They are post separation full wage payment continuation programs. These programs have precisely nothing to do with concepts embodied in the framework of the pension structure. zippo.

    Reply

    • Posted by Tough Love on October 11, 2020 at 8:40 pm

      Quoting ……… “They are post separation full wage payment continuation programs.”

      Some Public Sector Plans are so generous, or include overtime, or allow late career “spiking” (of pensionable compensation) that the pension can indeed be greater than wages while working.

      The rip-off of Private Sector Taxpayers by Public Sector Unions/workers/retirees, and enabled by Union-beholden/Union-BOUGHT Elected Officials is indefensible.

      Taxpayers should find a way to NOT PAY the ludicrously excessive, unjustifiable, and unaffordable Pension/Benefit amounts that have been promised..

      Reply

      • Cast your gaze at the fdny where many have $200,000 plus pensions.

        Reply

        • Posted by Tough Love on October 11, 2020 at 10:14 pm

          AND …………. over 75% are tax-free “disability” pension.

          My opinion ……….. The Financial Sector will abandon NYC and w/o the Tax revenue from those highly paid workers NYC is doomed within 10 years..

          ———————

          Port Authority Police are even worse and load their final year’s pay with overtime (included in pensionable compensation).

          Reply

          • It won’t take nearly 10 years. Those companies have already started abandoning ship. Our commuter lots are 5% full at most. Half the restaurants won’t reopen. Broadway shut for almost another year. It’s over. NO ONE feels safe there. The exodus has begun 6 months ago for good.
            I give it 3 years.

          • Posted by Tough Love on October 12, 2020 at 11:30 am

            A reluctant modest Federal “loan” (meaning bailout) will buy NYC some additional time, but it will eventually turn into Detroit.

      • Posted by Rex the Wonder Dog! 🐶🐶🐶🦴🦴🦴 on October 12, 2020 at 11:29 am

        Some Public Sector Plans are so generous, or include overtime, or allow late career “spiking” (of pensionable compensation) that the pension can indeed be greater than wages while working.
        Virtually ALL public pensions that allows one to retire at age 50 will exceed base salaries while working. You get a 2-3% COLA every year for 30-50 years and you will be making 200% of base salary.

        Reply

    • Posted by PS Drone on October 12, 2020 at 2:06 pm

      That is why these “salary continuation” programs need to be capped (max annual payout) @ $60k and not paid out until attainment of age 66. Anything paid out in prior years exceeding that should be clawed back from current payments. These plans are broke, the promises were made by crooked politicians in league with corrupt and greedy unions and without the specific approval of non-benefited taxpayers. Thus, serious and necessary plan modifications must be made now.

      Reply

  6. Posted by Tough Love on October 11, 2020 at 9:13 pm

    The opinions of Former GOP-Appointed Wisconsin Supreme Court Justice Janine P. Geske re President Trump mirror my own……………

    https://lawandcrime.com/high-profile/former-gop-appointed-wisconsin-supreme-court-justice-excoriates-trump-in-her-first-political-endorsement-in-more-than-40-years/

    Quoting ………….

    “Donald Trump has no respect for our constitutional values and has mocked our democratic institutions. He is rude and an obnoxious bully who does not respect anyone who disagrees with him,” the former justice wrote. “I’ve watched in horror as President Trump lied and downplayed the coronavirus to the American people, and now, he still does not have a plan to protect families and beat the virus as it surges across Wisconsin. Even as Wisconsinites are being infected and hospitalized at record rates, Donald Trump is asking the U.S. Supreme Court to strike down the Affordable Care Act and protections for pre-existing conditions. It’s truly unconscionable.”

    and

    “I want a president our children and grandchildren can look up to. A president who is an ethical and respectful role model and leader — not a bully like President Trump. I want a president who respects the rule of law. A leader with empathy who cares about the people he serves,” she wrote, before closing with a call to action. “The future of our republic — and our democratic institutions — is at stake in this election. It’s up to all of us to turn out and vote accordingly.”

    Reply

    • Posted by PS Drone on October 12, 2020 at 2:16 pm

      So which candidate is “ethical and someone to look up to”? Biden? Harris? Or maybe Pelosi? Adam Schiff? Cut me some major slack. George Washington is long dead. This is The USA in the 20th century and these are the ethic less, lying, self serving candidates we now deserve.

      Reply

      • Which century is it PS?

        Reply

        • Posted by PS Drone on October 12, 2020 at 5:43 pm

          Ya got me. Too old to remember what decade we are in.

          Reply

          • Decade? You’re off by at least 2. 😉
            Get it together my friend. Lol.

          • Posted by Rex the Wonder Dog! 🐶🐶🐶🦴🦴🦴 on October 14, 2020 at 11:02 am

            Decade? You’re off by at least 2. 😉
            Think of it as our structural US budget, in the red for 40+ straight years. A billion here, a billion there, pretty soon you’re talking about real $$$$

      • Posted by Tough Love on October 12, 2020 at 4:16 pm

        PS Drone,

        Correct …….. other than the “we deserve” part. We “deserve” better ……… MUCH better.

        Yes, better than Biden would be nice, but NOBODY is WORSE or more UNFIT/DANGEROUS to Democracy than Trump.

        Reply

        • How about Ted wheeler or Jenny Durkin? Kwasha Sawant? Maybe one of them would do better? DiBlasio?
          We do deserve who we vote in 🤷‍♂️
          Plain and simple. Who else would we deserve? Politics is disgusting. No one does it for the good of society. Look at the Supreme Court nominee. She had to very seriously think about whether she wanted the job or not because of the disgusting politics involved. Both sides. Right and left.

          Reply

  7. “The state portion of the pension fund remains much weaker than the local portion, as the state has for decades contributed less than is recommended by actuaries while local employers were required to make full payments.”

    Samantha Marcus, nj.com, May 12, 2020

    There it is in a nutshell, except the “full payments” by local employers were also insufficient.

    New Jersey pensions are roughly average for the nation as a whole, and yes, that is a valid comparison. Normal costs should be affordable, even using conservative assumptions.

    Failing a bailout, or appropriate euphemism, there will be cuts, even to long term employees. And perhaps even to current retirees.

    Reply

    • Posted by Tough Love on October 12, 2020 at 11:44 am

      Quoting ……….. “. Normal costs should be affordable, even using conservative assumptions. ”

      The are communities that can “afford” and fully fund the normal cost associated with a pension benefit level and age at retirement MUCH more generous (and cost multiples MORE) than what comparable Private Sector workers typically get from their employers in retirement security contributions.

      Is there justification for this ? Unless higher pensions are intended to make up for lower wages, and then only by the incremental amount necessary to offset such a wage shortfall, are such pension FAIR to Taxpayers. Do such communities not have more appropriate uses for tax collections ? If the community’s residents understood the excessive amount in place today (everywhere) and had a REAL say in the level of such pensions, I have no doubt that they would be a great deal smaller … even in the communities than CAN “afford” to pay more.

      Reply

  8. Contrary to popular belief, public pensions (and/or salaries) are not constantly ratcheting upwards. Pension formulas in most states are lower now than pre 1999 levels. Private sector salaries have grown faster than public salaries in the last two decades. Public compensation and private compensation are subject to different forces and do not change at the same rate, or even in the same direction. Some are more equal than others. (Have I mentioned the year my bargaining unit received a 17 percent raise? Not in one contract… In one year.) Or the years of 15 percent reductions?

    “Powerful Public Employee Unions” is an oxymoron.

    Viva pension reform! May be, the canaries in the coal mine (New Jersey, Illinois, Kentucky, etc.), will shock others into action. Hopefully, the inevitable pain can be shared equitably.

    Reply

    • Posted by PS Drone on October 12, 2020 at 2:25 pm

      Yes, equitably amongst all of the beneficiaries of the flagrant corruption between greedy, self-serving unions and cretinous, self-serving politicians that resulted in these ridiculous salary continuation schemes.

      Reply

    • “That is why these “salary continuation” programs need to be capped (max annual payout) @ $60k…”

      A nice, round number. That is about the average private sector salary in either New Jersey or California.

      And the average public pension in California is about $30k. New Jersey is lower. ($20k something?)

      But…

      “Those pensions include workers who retired years ago with lower salaries, and for those who worked less than a full career, etc.”

      Those pensions are –also– typical of the full career lower-educated state workers that Biggs describes.

      Biggs and others recommend about a 70 something percent pension replacement value of FAS. Another good place to debate on actual reform (as opposed to “reduction”)

      70 percent for a worker earning $50k or less, may be logical. But 70 percent for a $150,000 worker, I would call excessive. A reasonable compromise… ” When the annual salary of these employees exceeds $40,000, the employee will be enrolled in the cash balance plan and the employee’s mandatory contribution as a percentage of the salary amount that exceeds $40,000 will be deposited into the employee’s account in the cash balance plan.”

      Edward Ring…
      “Impose a ceiling on pension benefits to retirees, based on the principle that pensions are supposed to ensure retirement security, not lavish affluence. Similarly, establish a floor for pension benefits to retirees, based on the principle that employees at the low end of the pay scale are nonetheless entitled to retire with an income sufficient to live with dignity.”

      TMI… I will never see $60k annually unless I live to 85. Not statistically likely.

      Reply

      • Posted by Tough Love on October 12, 2020 at 4:09 pm

        Quoting ………. “Biggs and others recommend about a 70 something percent pension replacement value of FAS. Another good place to debate on actual reform (as opposed to “reduction”)”

        When we read figures like 70% replacement ratio, it’s usually one’s TOTAL income in retirement FROM ALL SOURCES. (often, a pension/401k, SS, and personal savings outside or retirement Plans). I doubt that he meant (or stated specifically) that one’s Taxpayer-funded DB pension should, by itself replace 70% of one’s final salary.
        ————————————————
        Quoting (Ed Ring) ………… “Similarly, establish a floor for pension benefits to retirees, based on the principle that employees at the low end of the pay scale are nonetheless entitled to retire with an income sufficient to live with dignity.””

        As I have stated in other comments, I disagree with this statement because lower income PUBLIC Sector workers are NOT deserving of such a “floor” that is not available and similarly protect lower income PRIVATE Sector workers via EMPLOYMENT-BASED compensation. Private and Public Sector workers with insufficient income to meet life’s basic needs (food, clothing, shelter, medical care needs) should EQUALLY be obligated to seek support through the Social Services system.

        Reply

      • “…70 something percent pension replacement value of FAS.”

        1. Agreed, 70 percent should include SS, and –all– public employees should be on SS. Pension reform.

        2. 70 percent depends on the income level. For the $50k worker, that’s tight. For the $150k worker, really no need to replace 70 percent. That’s where “…When the annual salary of these employees exceeds $40,000, the employee will be enrolled in the cash balance plan…” comes in, or PSDrone’s $60k cap.

        3. “…personal savings outside or retirement Plans…”. Meh, again, good for the $100k and up crowd… “to ensure retirement security, not lavish affluence.” For the under $50k worker, personal savings for retirement may be contraindicated. No real tax advantages, and …math. Paycheck to paycheck income isn’t compatible with retirement savings for, literally millions. For these, replacement above 70 percent may be in order. You are correct, at least in California, a “full career” employee may get near 100 percent, with SS. But very few public workers are full career.

        Reply

        • Posted by Tough Love on October 12, 2020 at 9:01 pm

          Quoting …………..

          “But very few public workers are full career.”

          Not sure about CA where you live, but in NJ almost all Police work for full careers. VERY generous pension and free retiree healthcare benefits starting at around age 50 makes it CRAZY not to.

          Reply

          • No more free health care except in few cases. Hell, our new guys don’t get any of it covered. And yes. Because of the pension (much more so than the salary) officers have a tendency to finish what they start. Fuck with that and guys will leave. It’s not a fun, fulfilling, rewarding job anymore. It pays the bills. That’s it.
            The very first day of the police academy I remember walking in to the classroom and seeing the phrase “a policeman’s lot is not a happy one.” I felt like leaving. Very depressing. The phrase was written to the side of the whiteboard and left there for weeks.
            Not everyone mentally can handle this job. Misery at work is often brought home to the family.
            Higher suicide rates, divorce rates, at least similar dv rates etc. this is brought on by the job as opposed to people being predisposed to it.
            I thank God I work in a surburban setting and even more thanks that I married a great woman who has stuck by me forever.

          • When I use my veteran’s discount at Lowe’s, they always say “thank you for your service.” So, thank you. I for sure couldn’t handle it, even in a small town.

            TL was referring to my statement that most public workers are not “full career”. In CalPERS, the average retirement age is 60, with 20 years service, and about half of workers don’t even stay long enough (5 years) to vest. Clerks, laborers, or lawyers; they pass in and out of state service. Law enforcement (and teachers) are different, mainly I think, because of the unique nature of their work.
            A state plumber can easily transit to a private employer if a good job opportunity opens up. We have had electricians take state jobs during a recession when construction is slow. Sometimes they stay, sometimes they don’t. Gardeners, janitors, truck drivers, can often find better wages in the private sector. Worse benefits? Sure, but that is twenty years away. If a truck driver making $5k a month (and “contributing” 10 percent) sees a job opportunity paying $5,500 a month, that’s $1,000 a month more. A bird in the hand.

            Teachers and police, from the articles I have read, are more likely to stick it out (yeah, pensions help) —if— they make it through the first five years.

          • In California, healthcare (public) doesn’t seem to be a problem, yet. In the Stockton bankruptcy, pensions were saved, but retiree healthcare was, as I recall, replaced with a one time lump sum buyout. Could be more of that in the future.
            I think they could save pensions and OPEBs here —if— they got serious about reforms now. What are the odds?

          • Posted by Tough Love on October 13, 2020 at 8:23 pm

            Quoting E ………… “No more free health care except in few cases. Hell, our new guys don’t get any of it covered. ”

            E, we have our differences (re pension/benefit generosity), but to date you haven’t been in the category of the intentionally misleading, the liars, and those who omit material facts (aka you know who I mean).

            So why the above ? In YOUR town new workers won’t get retiree healthcare benefits when they retire (unless they get it reinstated …. which wouldn’t surprise me as they approach retirement and start screaming about how they’re screwed),

            Very few towns have followed suit, and for the few that have, the change has been quite recent, which means that inmost towns and for MANY YEARS TO COME, MOST Police retirees will indeed continue to get FREE Taxpayer funded retiree healthcare benefits. Bottom lone ……… your use of “few” is BS.

          • Not really TL. Most towns now have taken it away from employees without contracts. My town did for anyone (except the Pd, cause they couldn’t just do it) with less than 25 years on back in 2014. The PD gave it up for new hires in 2018. In 2011, anyone with less than 20 years on paid or will pay 35% of premium into retirement. Unless like me, they were able to make a deal. Lots of towns have. Newer(less than 10 years on) employees outside of PD must stay till 65. Many others it is 62. Rates go down “bigly” when employee goes on medicAre. So when you say that cops get free health care after retirement, In terms of active officers, you are probably looking At less than 20% at most anymore. At this point, active cops must have 29 years or more of service, (2011 law) again unless like me they have negotiated it out to have the extra 35% covered into retirement. So, it isn’t BS TL, every year the pool of active employees that get medical after retirement decreases.

    • Posted by Tough Love on October 12, 2020 at 3:55 pm

      Stephen , A few corrects to your comment are appropriate………

      (1) you stated………. “Pension formulas in most states are lower now than pre 1999 levels. ”

      A more complete statement would be ………. “Pension formulas in most states are lower now than pre 1999 levels, but remain many times more generous (and hence more costly) than the retirement security contributions granted comparable Private Sector workers by their employers.”

      (2) you stated ……….. “Private sector salaries have grown faster than public salaries in the last two decades.”

      A more complete statement would be ………. “Private sector salaries have grown faster than public salaries in the last two decades, but no where near the amount that would be necessary to eliminate the HUGE Public Sector Total Compensation ADVANTAGE due to the STILL extraordinarily generous Public Sector pensions & benefits.

      (3) you stated ………… “Public compensation and private compensation are subject to different forces and do not change at the same rate, or even in the same direction. Some are more equal than others. ”

      Completely meaning and included as an attempt (but a very poor one) to justify the unjustifiable ………. the materially greater Public Sector Total Compensation.

      Reply

      • Posted by Tough Love on October 12, 2020 at 3:57 pm

        lol …………… “corrects” ? I need to slow down when typing so my fingers keep up with my thoughts..

        Reply

      • Posted by Tough Love on October 12, 2020 at 4:12 pm

        lol ………… and similarly, “meaning” s/b “meaningless”.

        Reply

      • So predictable.

        Wait, what?

        1. Standing by for “that only applies to new employees, etc.”
        Instead… “but remain many times more generous (and hence more costly)…” There is absolutely no reason why the –proportion– of compensation applied to benefits vs wages should be equal. And compared to what, exactly? It is neither unusual nor nefarious for one private sector employer to offer more geonerous pensions/401(k)s than another employer; typically accompanied by offsetting lower wages. Most private employees provide no retirement option at all. Lower wages offset by higher pensions. Deferred compensation. It’s a personal choice.

        2. “Private sector salaries have grown faster than public salaries in the last two decades.”

        And…

        “Pension formulas in most states are lower now than pre 1999 levels.”

        A. The combination has decreased the “average” public sector advantage.
        B. The public sector advantage is different in different states and, more importantly, at different compensation levels. It is not irrelevant that the average advantage is driven by the lowest paid cohort of workers.
        Quoting TL… “I disagree with this statement (Edward Ring) because lower income PUBLIC Sector workers are NOT deserving of such a “floor” that is not available and similarly protect lower income PRIVATE Sector workers via EMPLOYMENT-BASED compensation.”

        I agree to disagree. I want to be the fly on the wall when you petition your city council or state legislature to reduce/eliminate the benefits of the lowest paid public workers, leaving them to rely on the Social Services system to meet life’s basic needs (food, clothing, shelter, medical care needs). Let them eat cake?

        https://patcegan.files.wordpress.com/2014/10/double-dog-dare.jpg?w=640&h=569

        At the very least, one should at least attempt to calculate whether public employment based benefits are more cost effective than Social Services.

        Reply

        • Posted by Tough Love on October 12, 2020 at 9:17 pm

          Re your #1 ………. Ok I’ll make it clearer. It’s not an issue of the split of Total Compensation between wages, pensions and benefit. It’s That Public Sector Total Compensation remains MUCH higher that that of comparable Private Sector workers ….as a group (obviously not for everyone in the group individually … who knows, maybe we have a Albert Einstein working in the Public Sector).

          Re your #2 ………. BS and unsupportable. Insisting that lower income Public Sector workers DESERVE more than their Private Sector counterparts simply because “they need it” is absurd.

          Quoting ………. “At the very least, one should at least attempt to calculate whether public employment based benefits are more cost effective than Social Services.”

          Obviously, you believe that to be true. if so, then wouldn’t it be financially beneficial to America if we then raised the compensation of all lower income PRIVATE Sector workers to equal that of comparable PUBLIC Sector workers?
          We don’t, or more accurately, their employers don’t because they don’t need to because they ARE now paid “market rate” compensation. It’s their Public Sector counterparts that are Over-compensated because Public Sector compensation is not free-market driven, but materially encumbered by the underhanded deal-making between the Public Sector Unions and our self-serving, contribution-soliciting, vote-selling, Taxpayer-betraying Elected Officials

          Reply

        • “Obviously, you believe that to be true.”

          Not obvious a tall.

          First logical step when considering a major policy change: cost/benefit analysis.

          Unintended consequences can be a bear.

          “The low wages paid by businesses, including some of the largest and most profitable companies in the U.S. – like McDonald’s and Wal-Mart – are costing taxpayers nearly $153 billion a year.”

          “After decades of wage cuts and health benefit rollbacks, more than half of all state and federal spending on public assistance programs goes to working families who need food stamps, Medicaid, or other support to meet basic needs. Let that sink in — American taxpayers are subsidizing people who work — most of them full-time  (in some case more than full-time) because businesses do not pay a living wage.”

          https://www.washingtonpost.com/posteverything/wp/2015/04/15/we-are-spending-153-billion-a-year-to-subsidize-mcdonalds-and-walmarts-low-wage-workers/

          But wait!

          There are debates, of course, not just on the numbers, but on the economic cost as well as the semantics.
          Are taxpayers subsidizing Wal-Mart? Mostly Forbes, among others say no. Its complicated.

          “Apologies, But Welfare Payments To Employees Are Not Subsidies To WalMart And McDonalds”
          Forbes, Nov 13, 2013

          Apparently it is simple for you… to claim. Proving or convincing government will prove more difficult. I guarantee it.

          “Ok I’ll make it clearer.”
          LOL, teacher, educate thyself.

          Reply

          • Posted by Tough Love on October 13, 2020 at 1:51 am

            I have no problem raising the compensation of lower income Private Sector workers.

            A proposal ………… let’s figure out what that figure would be if all lower income Public AND Private Sector sector works were grouped TOGETHER and compensate them all the SAME.

            Got a problem with EQUAL ?
            —————-

            So what’s your next gig? Oh, I know, back to ….it’s a “policy decision”.

          • Why didn’t I think of that? Maybe by executive order?

            Say good night, Gracie.

          • Posted by Rex the Wonder Dog! 🐶🐶🐶🦴🦴🦴 on October 13, 2020 at 11:57 am

            Any IDIOT that cites a WaPo article for authority has rocks for brains. But we all know that about Dougie already

  9. Posted by Marine1 on October 12, 2020 at 5:58 pm

    Off Topic- I don’t think Biden is assured PA by any means. I was at Knoebles amusement park this weekend in Elysburg PA. The ride up was nothing,but Trump signs,in addition there were over 9000 people there Saturday. The majority of the people there had Trump hats or covid masks. In addition Biden wouldn’t be going back there if he had PA locked up. Just my recon from the ground.

    Reply

    • Posted by Tough Love on October 12, 2020 at 6:08 pm

      That’s because the Trump supporters go out of there way to show their support ….. i,e, they are more VISIBLE.

      But hat doesn’t mean the quieter remainder (mostly Biden supporters) are not a larger group.

      Reply

    • Posted by Rex the Wonder Dog! 🐶🐶🐶🦴🦴🦴 on October 13, 2020 at 11:55 am

      The ride up was nothing, but Trump signs, in addition there were over 9000 people there Saturday.
      The SAME in CA. I ee them everywhere, out number Sleepy Joe signs 10-1. I have made this point repeatedly.

      Reply

  10. One of the more brilliant comments…

    “If Trump loses, you know it’s rigged. Because everybody I know is voting for Trump.”!

    Reply

    • Posted by Tough Love on October 13, 2020 at 9:06 pm

      Stephen,

      (1) Your picture is not the one in your link

      (2) Your picture sure DOES “paint a thousand words” ………….

      Given how unjustifiable and ludicrously excessive and NJ’s promised Public Sector DB pensions are (when compared to the MUCH MUCH lower retirement security granted comparable Private Sector workers by their employers) and that there is ZERO justification for Taxpayers to be forced to fund such excessive promises, all your picture shows is that Taxpayers have been VERY SUCCESSFUL so far in NOT (yes NOT) funding most of those absurdly excessive pensions. GOOD, we should continue to “fund” as little as possible until all such ludicrously excessive Plans are FROZEN (ZERO future accruals) for all CURRENT workers.

      Unlike in your home State of CA, where your State’s Taxpayers have been raked over the coals (with outrageously high taxes and fees) by being force to actually fund a much higher percentage ………. of even MORE ludicrously excessive pensions .

      Reply

    • I hoped the two would come up together. Nevertheless, the contributions and arcs from 2000 to 2015 are shown in the left side of the linked graph.

      A vivid picture of what happens when you DON’T PAY THE BILLS

      New Jersey, you ain’t seen nothin yet.

      Reply

      • Posted by Tough Love on October 14, 2020 at 12:37 am

        Sure hope NJ’s Taxpayers aren’t “raked over the coals” Tax-wise as have been those in CA.

        And for what ? Too massively over-compensated Public Sector workers. It’s CRAZY !

        Between the high taxes, horrible business climate, worsening wild fires, and growing exit of CA’s biggest Taxpayers, CA is in for some deep deep financial trouble …….. a financial death spiral.

        Reply

      • Actually, it appears California and New Jersey are pretty close here. Total state plus local taxes per capita…
        California… $6,077 (eighth highest)
        New Jersey… $6,709 (third highest)

        Fiscal year 2016. But, big data changes very slowly, y’know.

        Also, both are very progressive tax states, the “rich” pay much more than other states.

        I smile when I hear or read someone say they are leaving California because of “the taxes”.
        The middle income groups here ($39k-113k) pay less than 9 percent of income in total state plus local taxes. That is lower than the national average.

        Of course, each individual will be different, but generally, there are –much– better reasons for moving.

        Reply

    • If you don’t like those charts, try these. You should guess which curve is New Jersey (spoiler… it’s not blue)
      New Jersey and Wisconsin have nearly equal benefits. One wonders what could account for the –huge– difference in employer cost increases and funding level decreases.

      “But ultimately the reason the pensions are so little funded is because the state didn’t put in enough funds.

      And they knew it.

      They knew it for years.

      It’s not because of investment fees, though those should be more transparent. It’s not because of part-time board directors who get a lifetime pension for very little work, though that doesn’t help. (I’ll address why these aren’t significant problems in a later post.)”

      (Added, it is not because the employees are overpaid!)

      You know the rest.

      https://www.pewtrusts.org/-/media/post-launch-images/2019/07/statepensionv2/fig3_650px.png?mw=1820&hash=140F27A318BB50E181B33C1928AC8A26

      New Jersey isn’t special. Normal costs are about average for the nation.

      DON’T PAY THE BILLS, THE DEBT GETS LARGER

      Reply

      • Posted by Tough Love on October 14, 2020 at 1:08 am

        Comprehension problem ?

        NJ’s Taxpayers have been WELL-SERVED by (so far) actually “paying” very little towards the absurdly generous pension promises made to it’s Public Sector workers (by self-serving/Union-owned Elected Officials). …….. because such generosity was never necessary, justifiable, fair to Taxpayers, or affordable.

        And given pressure to actually fund them, we (NJ’s Taxpayers) can simply move out of state with our middle finger raised as to our $56K share of that under-funding that NJ won’t be collecting from us.

        Down the road, I suspect that NJ’s Public Sector retirees (as well as those not yet retired) are in for a rude awakening re those huge but massively unfunded pension/benefit “promises”.
        ———————

        P.S. DON’T OVER-PROMISE AND THE BILLS ARE A LOT SMALLER.

        Reply

      • They say Wisconsin is nice.

        Dress in layers, ay?

        Reply

      • Comprehension problem ?

        Did you not see the charts? Wisconsin is paying 7 percent of payroll, year in, year out, for the last twenty years, and for the foreseeable future. New Jersey pays 30 percent and rising. All going down an ever growing rathole.

        You have already paid out multiple times what Wisconsin has, with nothing to show for it. It’s water under the bridge, and moving out won’t bring it back. Looks like you outsmarted yourself.

        I suspect that NJ’s Public Sector retirees will largely be bailed out, losing very little, if any, of their promised pensions.

        Reply

        • Posted by Tough Love on October 14, 2020 at 12:54 pm

          Quoting ………….

          “. It’s water under the bridge, and moving out won’t bring it back. Looks like you outsmarted yourself. ”

          ? ? ? ? ?

          “Moving out” means that not only haven’t I paid for those excessive promises so far, but I wouldn’t EVER be paying for them.

          Reply

        • Posted by A on October 14, 2020 at 1:33 pm

          “…Of course, each individual will be different, but generally, there are –much– better reasons (than taxes) for moving.”

          Like spite? As in cutting of your nose to spite your face?

          Research carefully, or you might end up paying higher taxes, and supporting a whole new set of moochers.

          Reply

          • Posted by Tough Love on October 14, 2020 at 3:44 pm

            Indeed………. anyone moving into NJ, Ill, KY, Ct and a few others are nuts unless they won’t have much income (or property) subject to Taxation.

            Golden rule ……….. stay away from the “moochers”.

          • It depends…

            “IN THE 10 STATES WITH THE MOST REGRESSIVE TAX STRUCTURES (THE TERRIBLE 10), THE LOWEST-INCOME 20 PERCENT PAY UP TO SIX TIMES AS MUCH OF THEIR INCOME IN TAXES AS THEIR WEALTHY COUNTERPARTS.”

            “STATES COMMENDED AS “LOW-TAX” ARE OFTEN HIGH-TAX FOR LOW- AND MIDDLE-INCOME FAMILIES.”

            The 10 states with the highest taxes on the poor are Arizona, Florida, Hawaii, Illinois, Indiana, Iowa, Oklahoma, Pennsylvania, Texas, and Washington. Six of these are also among the “Terrible 10” because they are not only high-tax for the poorest, they are also low-tax for their richest residents.

            https://itep.org/whopays/

            Golden rule ……….. stay away from the “moochers”.?

  11. Hey hey😡buddy of mine. You better correct the last sentence of paragraph #3. You know what I’m talking about…..show some respect 😉

    Reply

    • Posted by Tough Love on October 14, 2020 at 12:30 am

      E,

      Given that this appears to be a reply to a comment, but isn’t attached to any comment, I’m going to guess that is is directed to me and that is has to do with my (again) stating ……….”we should continue to “fund” as little as possible until all such ludicrously excessive Plans are FROZEN (ZERO future accruals) for all CURRENT workers.”

      Ok, so you don’t have to ask and I don’t have to repeat it every time, it does seem SOMEWHAT reasonable to exclude from future service changes those who have ALREADY reached the age and service requirement to retire immediately. But to be clear, I DON’T really like even that concession for Police because Police in NJ can retire at WAY too young an age (w/o an appropriate actuarial reduction in payout for being able to begin collecting that pension so young).
      ———————–

      But geez ……………… keep in mind that I’m only giving my opinions here (as to what is appropriate, reasonable, and fair), and clearly have no say in what (if any) reforms may take place or look like.

      I.e., I’m mostly just “venting”.

      Reply

      • I know you are…..I’m being sarcastic. Lol. However, it does make sense to allow those already eligible to retire to continue to accrue as to keep them on the job. (Cheaper).

        Reply

        • Posted by Tough Love on October 14, 2020 at 1:05 pm

          NJ’s Taxpayers would be MUCH better off financially if pension accruals ended at 20 years for the Officer who stays to 25 years.

          Quite a bit less for the Officer with 25 years who stays to 30 years.

          I understand the pension plan and the math underlying pension value.
          —————————–

          Hard to make an overall judgement if the extra cost is “worth it” to keep an experienced Officer on the force. As in most other occupations, USUALLY a small percentage are VERY valuable, many are productive but questionable if the higher pay justifies keeping them, and assuredly there are some who are definitely NOT worth keeping. Unfortunately, in the Public Sector (unlike in the Private Sector where most employment is “at will”) it’s near impossible to get rid of that latter group.

          Reply

          • For the local taxpayer? No. In many cases it is not in terms of salary alone. However, if a thousand or so guys left at 25 instead of 30 that would raise the pension payments sent out right?
            Being that the pension formula that the town has to pay is a percentage that changes based on how much the state needs, it would be better to have the older officers staying a couple extra years, even if they are still accruing. (In your example of passing a law today and exempting those who qualify for retirement now)
            In other words if the state says the pension contribution from taxpayers into Pfrs is 15%, then 15% off the aggregate salary base pay will be sent to the state along with my 10%. The cheaper and smaller the dept the smaller the total bill. However, if the bigger urban depts experience an exodus, the pension % would be greater and borne equally by all towns.

          • Posted by Tough Love on October 14, 2020 at 6:39 pm

            Quoting ……….

            “For the local taxpayer? No.”

            Don’t know what you mean.

            Quoting …………..

            “In many cases it is not in terms of salary alone. However, if a thousand or so guys left at 25 instead of 30 that would raise the pension payments sent out right?”

            Of course the total pension payouts would increase SOONER if more Officer retired earlier at 25 vs 30 years, BUT those higher (long service) wages will be replaced with lower wages AND there would be no further accruals during years 26-30. Financially, Taxpayer costs go DOWN if more leave at 25 vs 30 years.

            But (as I stated in my earlier comment), that savings to Taxpayers is quite a bit smaller from 25 to 30 years vs 20 to 25 years (because your pension goes from 50% to 65% of final pay from 20 to 25 years, but only from 65% to 70% from 25 to 30 years). Hence Taxpayers are WAY WAY better off (financially) if Officers leave at 20 years.

            Quoting ………

            “Being that the pension formula that the town has to pay is a percentage that changes based on how much the state needs, it would be better to have the older officers staying a couple extra years, even if they are still accruing. ”

            Contributions are only ESTIMATES. Regardless of what contribution amount is put in, ALL such ESTIMATES eventually have to get to the amount need to actually pay the formula benefits ………. so this contributions-focus is misunderstood and is simply “timing” but but of not real financial consequence.

            Quoting ………

            “In other words if the state says the pension contribution from taxpayers into Pfrs is 15%, then 15% off the aggregate salary base pay will be sent to the state along with my 10%. The cheaper and smaller the dept the smaller the total bill. However, if the bigger urban depts experience an exodus, the pension % would be greater and borne equally by all towns.”

            If the Contribution rate is the SAME for all towns (I’m not sure if it is or is not), perhaps the State comes up with a single contribution rate for all towns for expediency (or because their studies show that it would not materially differ by town if calculated on a town-specific basis), but you raise an interesting point. From an actuarial point, one town’s pension costs (as a % of pay) based on that town’s own Officer population demographics could be VERY different than another …….. for example one town with mostly newish Officers, and another with mostly older officers. So, if in fact a single % contribution exists, do the towns that really SHOULD be paying less ever recover that excess ? Or stated differently, is Town-specific experience and demographic implication calculated and used in some form of true-up by Town?

  12. It’s called whinging.

    Reply

  13. Donald wants to hug you. Don’t fall for it. It’s a trap!

    “When you’re with airmen, when you’re with Marines, and I’m with—and the police officers. I’m with them so much. And when they come over here, it’s very hard to say, stay back, stay back. It’s a tough kind of a situation. It’s very, very hard when you are with people from the military or from law enforcement, and they come over to you, and they want to hug you, and they want to kiss you, because we really have done a good job for them. And you get close, and things happen.”

    He added, “I don’t even wait. And when you’re a star, they let you do it. You can do anything…”

    LOL, it is what it is…

    “… they want to hug you, and they want to kiss you,…” “… It’s very, very hard…”

    “…And you get close, and things happen.”

    Reply

    • Posted by Tough Love on October 14, 2020 at 2:09 am

      Quoting (from Trump) …………

      “And when you’re a star, they let you do it.”

      lol ……. we should heard something just like that in the taped conversation between Trump and Billy Bush.
      ———————

      Trump is a sick sick sick man.

      Reply

    • UPDATE !!!

      He’s a tease…

      “And when he was done, with his new exit song, The Village People’s “YMCA,” blaring over the loudspeakers, the president did what has become his trademark dance, pumping his fists somewhat in time to the beat as the crowd roared.

      But he kept his distance from the audience.”

      ” somewhat in time to the beat ” ??
      Orange man can’t dance?

      Reply

      • Posted by Rex the Wonder Dog! 🐶🐶🐶🦴🦴🦴 on October 14, 2020 at 11:09 am

        You ROCK Mr. President (@0:21)
        .

        Young man, there’s no need to feel down
        I said, young man, pick yourself off the ground
        I said, young man, ’cause you’re in a new town
        There’s no need to be unhappy
        Young man, there’s a place you can go
        I said, young man, when you’re short on your dough
        You can stay there, and I’m sure you will find
        Many ways to have a good time
        .
        It’s fun to stay at the YMCA
        It’s fun to stay at the YMCA

        Reply

        • Posted by Tough Love on October 14, 2020 at 1:08 pm

          We should blast that on loudspeakers WHEN (not IF) he escorted out of the White House on 1/20/21 after he refuses to accept his defeat.

          Along with interspersed …….”You’re FIRED !”

          Reply

          • Posted by Rex the Wonder Dog! 🐶🐶🐶🦴🦴🦴 on October 14, 2020 at 6:20 pm

            Just say it right now, to SLEEPY JOE!!!!! “You’re FIRED Sleepy Jon, and your silly son Hunter too !”

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