Archive for the ‘New Jersesy Pension’ Category

Judging Criminal Characters

As reported on nj1015.com, Gov. Chris Christie will nominate Labor & Workforce Development Commissioner Harold Wirths as a member of the State Parole Board, prompting questions about his qualifications from State Senator Raymond Lesniak, D-Union, who said he’ll vote against Wirths’ nomination explaining:

“It’s just another example of more waste of taxpayer dollars. We have a Parole Board that is a dumping ground for political appointees…..[T]his looks like another pension-padding scheme by Gov. Christie on behalf of the commissioner of labor.”

Is it? The story goes on to name the board members for us to judge:

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Another Alternative Bust

Whenever news of a hedge fund blowing up comes out, like it did today, I wonder if the New Jersey Retirement System had a stake.

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Duller Heads Prevailing

In another propaganda assault against a question likely to be on the November ballot that, in part, would require state pension contributions to be deposited quarterly former New Jersey state treasurer Andrew Sidamon-Eristoff had a piece in njspotlight offering an alternative:

One possibility would be to withdraw SCR-184 and instead adopt a law that commits the state to making its annual normal contribution at the beginning of the state’s fiscal year in July. This would obviate the most serious objections to SCR-184 yet deliver a substantive and not entirely inappropriate victory to the unions.

Going on to explain:

The normal contribution is generally the amount that independent actuaries determine is sufficient to fund pension obligations that arose or “accrued” in the most recent valuation year, based upon a wide range of assumptions with respect to benefit levels, headcount, investment earnings, mortality, and so on. In simplistic terms, this is the amount due in relation to active employees’ service. Currently about $700 million a year for New Jersey, this amount is expected to remain fairly stable going forward.

What Mr. Sidamon-Eristoff proposes as a compromise is to make that $700 million Normal Cost contribution at the beginning of the plan year.  He fails to mention three flaws in his reasoning as if he were preaching, not to the cognoscenti, but to the ignorati:

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Stalling NJ Pension investment Plan

njspotlight reported:

It looks like New Jersey’s public-employee pension system will enter the next fiscal year without a new investment plan in place thanks to a lingering disagreement over how heavily to rely on hedge funds. The deadlock on the hedge-fund issue won’t bring investment activity for the $71 billion pension system to a halt when the new fiscal year begins July 1, but it will prevent in-house fund managers from enacting the fine-tuning they’ve recommended to keep up with changing financial markets over the next 12 months.

Based on past practice this may be for the best.  For example:

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The Real Issue In N.J.s Pension Crisis – Ignorance

The latest edition of TheBackgrounder podcast delved into two sides of what to do about the pension crisis.

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First, N.J.State Assemblyman Declan O’Scanlon (R-Little Silver) explained his recently unveiled 3-point plan to solve the pension crisis and, later in the podcast, New Jersey Education Association (NJEA) President Wendell Steinhauer and NJEA Executive Director Ed Richardson make their point that state payments to the pension liabilities should be a top priority in the budget, tantamount to paying debt services.

The scary (as in ‘these guys are really supposed to be solving this problem when they know so little about it’) excerpts from the podcast follow:

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Alternative Visium

As of June 30, 2015 the New Jersey Division of Investment reported having $79 billion in assets of which $22 billion was in Alternative Investments. Tracking from August 31, 2012 the performance of those Alternative Investments in general and one investment in particular we see:

visium

Visium Balanced Offshore Fund, Ltd appeared on the books in August, 2012 for its $100 million purchase price and, assuming the standard 2/20 fee structure for hedge fund investments, would have cost the fund almost $17 million in fees.

What has New Jersey gotten for their $117 million?  For valuation purposes they got to say the trust had over $145 million in assets as of the last valuation date.  In reality…..

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Out of the Spotlight

Public employee unions in New Jersey, through NJ Spotlight, will in three weeks hold a roundtable to discuss:

How do you reform a system that’s at least $44 billion in debt and saddled with retiree healthcare costs that are spiraling out of sight?

Due to years of underfunding, New Jersey’s public-employee pension system is at least $44 billion in debt . The retiree healthcare system is an even bigger hot spot, as costs spiral out of control. With baby boomers retiring and the costs of the system threatening to strangle all discretionary spending, officials are searching for a way to solve these problems. Democrats are looking to bolster the system with guaranteed payments. Republicans are hoping to transform the system using 401(k)s. Both parties are looking at ways to create lower costs through efficiencies in the health system.

Join NJ Spotlight July 8th when state and regional leaders  gather to discuss the problem and possible solutions. Learn how this issue can affect the retirement of public employees and impact taxpayers and services.

It should be cathartic at least………….but productive?

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