Archive for the ‘New Jersesy Pension’ Category

The Triangulations of Christopher James Christie

Triangulation: (in politics) the action or process of positioning oneself in such a way as to appeal to or appease both left-wing and right-wing standpoints.

If you add the words “at different times, as required” it applies here:

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No Pension Panel For the Present

The New Jersey League of Municipalities convention this week featured panels discussing the pension crisis in New  Jersey from the perspective of past governors who in turns either initiated, exacerbated, or ignored the plan collapse:

nj past

and wannabe governors who have no clue on how to handle it:

nj future

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How a Bill Becomes Pension Law – in New Jersey

It was reported that a hearing was held today on Assembly Bill A4275 which would offer the retirement planning expertise of the stat of New Jersey to private-sector employees modeled on a program Illinois set up.

Yes the same security that public employees in Illinois and New Jersey feel these days could be extended to the private sector.  Anyone seriously considering taking up these states on their offers might also look into getting a haircut from Sweeney Todd. So how did it get on each state’s radar?

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Can’t Elect Money Into Existence

The New Jersey Education Association is holding their convention this week and, according to an njspolight story, they are partying it up:

Gov. Chris Christie may claim in places like New Hampshire and Iowa that he has tamed New Jersey’s public employee unions, but you wouldn’t have known it from the smile on the face of one union’s leader.

“We had a terrific week,” said Wendell Steinhauer, president of the New Jersey Education Association, as his union gathered yesterday for its annual convention in Atlantic City. “Nobody can ruin this week for me.”


The NJEA was all in for the Democrats this year. For the first time in recent memory, the union did not endorse a single Republican. But the union also insisted that it wasn’t party affiliation that mattered. “We would have liked to endorse a Republican,” said Ginger Gold Schnitzer, the NJEA’s head of government relations and director of the NJEA’s PAC.

“The reason the Republicans weren’t endorsed was that none of them stood up and voted for the five-seventh pension payment,” she said, referring to the proposed $3.1 billion payment of five-seventh of the state’s obligation. “The rubber met the road on the pension payment. This election for the NJEA was very much about one thing: It was about candidates keeping promises.”

There might be one thing that could ruin this week for union leaders:

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The Great Cash Balance Hoax

In an attempt to calm public employees in New Jersey over reforms proposed by a Study Commission one of the commission’s members, Larry Sher, wrote an opinion piece on asserting:

Some public employees have expressed concerns with the New Jersey Pension and Health Benefit Study Commission‘s proposal to provide future retirement benefits through “cash balance” plans because “a 401(k) cannot fund retirement for an average worker.” The cash balance plans recommended by the commission, however, are not 401(k) plans. While the two plan types have some similarities, the distinguishing characteristics of the proposed cash balance plans address many of the public employees’ concerns with 401(k) plans.

Yes the 401(k) has a bad name as it was never intended as a primary retirement vehicle.  Books like The Great 401(k) Hoax debunk their myth:

The American public was hoodwinked: 401(k)s were established to satisfy corporations, not the interests of working Americans. Portrayed as a perpetual wealth machine, the 401(k) was meant to satisfy the needs of every employee. Yet, it was an impossible promise to fulfill: It was the great 401(k) hoax. According to William Wolman and Anne Colamosca, this was the latest act in the gradual erosion of the nation’s retirement system.

Yet in the public sector 401(k) plans with a pre-defined match or employer contribution are much preferable for public employees concerned with security to Cash Balance plans for one simple reason:

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New Jersey’s Nutty Cola Case

New Jersey does not want to pay cost-of-living-adjustments (COLAs) to their retirees any longer and their latest brief in Berg v. Christie dreams up some rationalizations that would be laughable to independent observers but, since they only need to persuade judges handpicked by politicians for the NJ Supreme Court, could well prevail.

Most of the meanderings you have heard before but among the more specious:

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State COLA-Theft Defense Raises More Questions

Defined Cost-of-living-adjustments were always a part of a public retiree’s pension in New Jersey (holding a prominent place in the handbook-definition of the pension a retiree could expect) but now that the state pension will be going broke shortly COLAs are a target that the state’s lawyers are aiming at as they argue in the kick-off to their latest brief:


No one disputes that the retirees in these consolidated cases have a non-forfeitable right to their base pensions. The State reiterates that it is not walking away from this obligation and will continue to pay these benefits when due. These cases deal with the entirely distinct question of whether retirees have a non-forfeitable right to a cost-of- living adjustment (“COLA”) to those base pensions. They do not. Plaintiffs are demanding that the State keep a promise it never made.

They go on for scores of pages defending this position while raising some disturbing questions:

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