Archive for the ‘New Jersesy Pension’ Category

JRS Experience Study

The Judicial Retirement System (JRS) is projected to be the first of New Jersey’s public pension plans to run out of money on paper. Yet, we have a law requiring the preparation of an  Actuarial Experience Study for July 1, 2014 through June 30, 2018 for the plan which was dated January 17, 2020 but just hit the state website yesterday.

Here is what I got out of it:

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Bonds for NJ Pensions

Will balancing New Jersey’s budget with bonds leave a negative impact for years? Former NJ budget director and comptroller Richard F. Keevey thinks so, in part because:

Selling bonds for operating purposes must be avoided — not only because it has been deemed unconstitutional by the New Jersey Supreme Court — but much more importantly, because it is very bad public policy. By definition, the amount is a one-time revenue source. What does the state do the following year? This would create a double negative impact, since any federal aid will likely be one-time.

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If I were looking at the budget I would recommend the following….Defer most of the proposed pension contributions.

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The wild card is the pension fund. At the end of this virus-induced-disaster, pension funds will be in worse condition than before the pandemic and may be in their worse condition ever. However, to borrow is even worse. It is far better to defer pension payments, then slowly put the funding back on track. Just as important, seriously consider leveraging and/or securitizing several state-owned assets and transferring the assets to the pension fund.

Though, if you check out EMMA, the borrowing to make pension payments has already started:

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Future of NJ State Pension Contributions

Back on May 14, 2020:
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On page 110 of A3 we have:

7.    Section 87 of P.L.2019, c.150, the annual appropriations act for Fiscal Year 2019, is amended to read as follows:

87. Payments to the various State defined pension systems from amounts appropriated herein shall be made on a quarterly basis on the following schedule: at least 25 percent by September 30, 2019 at least 50 percent by December 31, 2019 at least 75 percent by March 31, 2020 and at least 100 percent by June 30, 2020 and shall be reduced by any increase in the interest on tax and revenue anticipation notes attributable to the need to borrow more for the purpose of making such quarterly installments for transfer to the Interest on Short Term Notes account in the Interdepartmental Accounts.

On page 267 of P.L. 2019 we had:

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Help Wanted: Actuary for PFRSNJ

Cheiron has only been on the job for two valuation cycles yet the Police and Firemen’s Retirement System of New Jersey (PFRSNJ) has issued a Request for Qualifications and Request for Actuary Firm. Among the things they are looking for in a new actuary:

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Real Scandals of Pension Spiking – 2

It’s not that a connected politician will get an extra $1 million in pension benefits for working five years in his new job as county counsel for Union County but that Union County will only have to pay $122,500 to ‘fund’ that extra benefit.  Here are the details:

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NJ Pension Payment Defaults

The New Jersey State Investment Council met yesterday and the headlines were on lottery losses that will never be made up,  investment losses that will never be made up,  and quarterly contributions to be made (for now). However it was the upbeat conclusion of the njspotlight story that is the real news.

[M]ost local governments have been making their pension contributions even as they’ve begun to deal with their own revenue losses caused by the pandemic, [assistant state Treasurer Dini Ajmani] said.

“The good news there, is almost all local governments have paid their bills,” Ajmani said.

‘Almost all’?

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Gambling on NJ Pension Contribution

The Treasury Department will provide updated forecasts on Friday as part of the budget report required by the law extending the fiscal year but today P&I reported on how much less the New Jersey retirement system can expect from the state lottery.

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NJ GASB Games – 2019

Service cost under GASB 67 rules for government plans is defined as the value of benefits earned during a reporting period. In a retirement system like New Jersey’s with a stable workforce and no changes in the terms of the plan you would expect this cost to be steadily increasing. However, in order to generate ‘good’ news on the funded status of the system, the actuaries took some liberties with the cost calculations that showed the system’s funded ratio rising from 38.41% to 39.73%. Here is how they did it.

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Scariest Numbers from New Jersey’s 2019 Pension Reports

You might have your own but based on this spreadsheet, created by pulling off pertinent valuation data from each of the July 1, 2019 actuarial reports for the New Jersey retirement system with tabs for similar data going back to 2015, 2012, and 2000, here are mine:

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Will NJ Make Pension Payments?

The question was posed today:
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Eliciting this response (check out the stutter and head bob):

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