Archive for the ‘New Jersesy Pension’ Category

Ramblin’ Guvs

New Jersey has a pension funding crisis and the local media is providing venues for discussion. In the last week outgoing governor Christie and incoming governor Murphy got a chance to weigh in on the issue though they most obviously were not asked about the numbers or anything that would give context to the the conversation.

Watch these video excertps and see if you can make out any trace of a cogent strategy in any of them.
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Lame Pension Legislation in NJ

S3620 is being fast-tracked in the New Jersey legislature:

Identical Bill Number: A5322

Cunningham, Sandra B.   as Primary Sponsor

12/11/2017 Introduced in the Senate, Referred to Senate Budget and Appropriations Committee
12/14/2017 Reported from Senate Committee with Amendments, 2nd ReadingIntroduced – – 11 pages PDF Format    HTML Format
Committee Voting:
SBA  12/14/2017  –  r/Sca  –  Yes {9}  No {2}  Not Voting {1}  Abstains {1}  –  Roll Call

Sarlo, Paul A. (C) – Yes Stack, Brian P. (V) – Yes Beck, Jennifer – No
Bell, Colin – Yes Bucco, Anthony R. – Yes Corrado, Kristin M. – No
Cunningham, Sandra B. – Yes Diegnan, Patrick J., Jr. – Yes Greenstein, Linda R. – Yes
Madden, Fred H., Jr. – Yes Oroho, Steven V. – Not Voting Thompson, Samuel D. – Abstain
Van Drew, Jeff – Yes

According to nj.com:

The bill comes as New Jersey’s public-worker pension system faces nearly $90 billion in unfunded liabilities, according to a report released by a state commission this month. It is one of the worst-funded in the U.S.

But Democratic leaders told reporters Thursday that the fiscal impact of the bill will be minimal because it benefits so few people.

Those few people who would benefit:

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Now He Tells Us II

Do not rely on influencing a paper’s editorial board. They will be cautious at best to support anything that challenges those who benefit from the status quo.

Becoming a Citizen Activist – page 92

The Star Ledger received its last Pulitzer Prize in 2005 for their coverage of the resignation of then-governor James McGreevey in the wake of a sordid scandal. That coverage might never have occurred had there been a little investigative journalism practiced regarding those sordid acts at the time.

Perhaps the next Pulitzer lies in chronicling the implosion of the retirement system for public employees after years of mindlessly printing consolatory official pronouncements on the health of the plans (either now or by 2047). With the rollout of the New Jersey Pension and Health Benefit Study Commission’s final report this week we got Chris Christie sounding the alarm. Today we got the Star Ledger Editorial Board chiming in:

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Now He Tells Us

A few weeks before he starts whatever gig Fox has available:
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This was at the rollout of the New Jersey Pension and Health Benefit Study Commission’s final report which, in part, enabled this delusion-of-competence addict with lines like:

An additional positive development has been the dedication of the State lottery to the pension plans. This has reduced the unfunded liability by $13.5 billion and will generate over $1billion annually to pension funding. This, in turn, has improved the State’s overall reported statutory funded ratio from 45% to 59%. (pages 1-2)

That any credentialed actuary would sign on to these lies (the line above and Christie’s assertion that the funding ratio is much better now than when he came in) without fear of censure speaks only to the ineffectuality of the ABCD process. They are belied in both the footnotes to the Commission’s report and what New Jersey is telling bond investors.

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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:

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NJ Medicaid Fraud and the Pension Cost Conundrum

When you see a headline about Medicaid fraud it usually involves prison time for some medical provider. But when it’s a government committing the fraud….

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Good News for NJ Pension System – If You Ignore the Big Numbers

There was a meeting of the New Jersey State Investment Council yesterday and the story on it was mostly celebratory:

There was a bit of bright news Wednesday for New Jersey’s troubled public employee pension fund.

State officials disclosed the fund held $76.3 billion in assets at the end of the October, its highest value in over two years.

Robust returns, including 13 percent in the last fiscal year, helped boost the health of the fund, which pays out benefits to hundreds of thousands of retired government workers and has obligations to hundreds of thousands of active workers.

Christopher McDonough, director of the state’s Division of Investment, said the fund, which saw challenging investment years chip away at its assets, has reached its highest total value since July 2015.

Not only was there no consideration that:

  1. assets in Defined Benefit plans where benefits are still accruing SHOULD be going up as more benefits accrue,
  2. values placed on alternative investments are questionable, and
  3. had the Plan been fully funded, 13% asset growth would have resulted in about $30 billion of earnings instead of $9 billion.

But the big numbers, as well as their trajectories, were ignored.

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