Archive for the ‘Actuarial Math’ Category

One Last Otiose Christie Pension Reform

The New Jersey Pension and Health Benefit Study Commission just issued their final report and it basically paints the Christie years, as diplomatically as appropriate, a waste on the pension reform side.

While since 2010 a start has been made on benefits reform, much more remains to be done. Intransigence, inaction, apathy and denial are habits the State can no longer afford when it is at risk of losing the budget flexibility necessary to respond to emerging challenges and crises. This is dangerous for every one. As events in both Flint, Michigan and Puerto Rico show, financial stress can lead governments to make bad decisions with unexpected, catastrophic consequences. New Jersey is not at that point yet, but should do everything in its power to ensure it does not get there.
New Jersey is certainly not Puerto Rico (which is beyond pay-go as they are using debt to pay retirees) yet. You don’t get to be the worst funded state retirement system in a nation of badly funded state retirement systems by chance. A vital component is coming up with reforms that wind up doing  nothing of any significance while providing the illusion of action. The last piece of this type of legislation that Chris Christie is likely to sign as governor came out of a Senate Committee this week:

It calls for stress testing and a disclosure of fees though in a njspotlight article on the legislation:

Continue reading

Pensions – Don’t Panic!

Timothy Alexander’s first blog here elicited 80 comments. Here is his second and the start of a series:

Continue reading

Lottery Mentality for New Jersey Actuaries

Twenty of the thirty-two pages in a presentation to investors for a $350 million bond sale last month by the New Jersey Economic Development Authority was devoted to the Lottery Enterprise Contribution Act starting off with these points:

This is a scam where items 2, 4, and 5 are only true if the Retirement System’s actuaries go along with the fraud. On the next page of the presentation:

Continue reading

Why Aren’t 100% ARC-Payers 100% Funded?

A good question that meep asks in a recent blog piece.

Having pulled together pension data on Union County participants in the the New Jersey Police and Fire (PFRS) and Public Employee (PERS) Retirement Systems where the local governments do have to put in 100% of their Annual Required Contribution (ARC) an answer emerges.

Continue reading

No Good News on NJ Pension Cash Flow

Some view as good news that New Jersey has deigned to put in 50% of the calculated ‘required’ contribution this fiscal year for the portion of the retirement system the state is ‘responsible’ for funding. Aside from the fact that (1) the state can still renege on this ‘commitment’ whenever they want and (2) putting in 50% of what you owe means, by definition, that you are incurring additional debt there is the overarching issue that happens to be the primary focus of this blog: the political/actuarial cabal willfully understates contributions for public plans.

This becomes obvious when examining the portion of the New Jersey system for which the localities are ‘responsible’ (PFRS and PERS) to which they are supposed to be making 100% of ‘required’ contributions.

For the twenty-one municipalities in Union County and the county itself those bills for 2017 total $68,141,807 for PFRS and $27,701,995 for PERS. In addition, based on active participant information,  the employee contribution rate of 10% of salary for PFRS would generate $24,868,388 while 7.34% of salary for PERS would generate $14,397,484. That comes to about $135 million coming in for 2017 to fund benefits for Union County pension participants.

So how much is going out?

Continue reading

Critical Data On Multiemployer Plans

Pensions & Investments covered it but no other media outlet seems to take the institutionalization of theft by government bureaucracy as newsworthy. The sad part is that the participants in the United Furniture Workers Pension Fund A are hardly alone. According to a spreadsheet created from 1,234 Schedule MB filings for 2015 there are 333 other multiemployer (union) plans with larger deficits.

The Pension Benefit Benefit Guaranty Corporation (PBGC) keeps track of troubled multiemployer plans and form 5500 filings have these MB actuarial certifications but you have to know what to look for. Here it is….

Continue reading

Lottery Asset Lie

Governing calls it creative:

In New Jersey, the state is pledging its lottery — which an outside analysis determined was valued at $13.5 billion — as an asset to state pension funds. The action would reduce the pension system’s $49 billion unfunded liability and improve its funded ratio from 45 percent to about 60 percent, according to State Treasurer Ford Scudder.

It is also a gimmick testing the limits of stakeholder credulity.
Continue reading