Dave and Cyndi Epstein were on a trip to Israel and decided to rent a car so that they could drive around and see the sites. As Dave pulled into a crowded Tel Aviv parking lot, he asked a police officer standing there, “Excuse me officer, is it all right to park here?”
“No,” said the cop. “Can’t you see that No Parking sign?”
“What about all those other cars in there?” Dave asked.
The cop shrugged. “They didn’t ask.”
In 2010 ‘reformer’ Christie took aim at curbing excessive benefits for public employees:
Gov. Chris Christie and lawmakers of both parties will unveil a series of sweeping pension and benefit reforms Monday that could affect every public employee in New Jersey while saving the state billions of dollars, according to four officials with direct knowledge of the plan.
The proposals would require workers and retirees at all levels of government and local school districts to contribute to their own health care costs, ban part-time workers at the state and local levels from participating in the underfunded state pension system, cap sick leave payouts for all public employees and constitutionally require the state to fully fund its pension obligations each year.
That state funding requirement turned out to be a joke and, after looking through the state database of active pension members, that ban on part-time workers does not seem to have completely taken in Union County.
New Jersey politicians are about to ram through a bill calling for quarterly contributions into the state retirement system that will actually REDUCE the amount of money that the state has to put into the plans in two ways:
Extending our example from the Quarterly Quackery blog, a total contribution of $700 million would reduce to $680 million on account of the interest adjustment in the valuation and then be further reduced to maybe $670 million to take into account the borrowing costs of the state with the second worst (and still dropping) credit rating in the nation.
More silliness from yesterday’s Ask the Governor:
s2810, introduced on November 14 and to be voted on today, would require New Jersey to pay its pension contributions on a quarterly basis by September 30, December 31, March 31, and June 30 of each year, beginning July 1, 2017.
The bill’s sponsor, State Senate President Steve Sweeney, had an opinion piece in njspotlight today claiming:
Making pension payments every three months — rather than at the end of the year — will ensure that the requisite contributions are made, not skipped. Today, New Jersey legislators will vote on bipartisan legislation to commit the state government to a schedule of quarterly pension payments that will provide fiscal stability to our underfunded pension system and save billions of dollars in future costs for state taxpayers.
Either Sweeney is willfully ignorant of pension funding or he believes his intended audience is since this bill will actually REDUCE the State’s pension contribution.
Is the Pension Benefit Guaranty Corporation (PBGC) deficit really $58.8 billion for their Multiemployer Plan (MEP) program?
According to a summary page from the FY16 PBGC Annual Report as of 9/30/16 there was $2.2 billion in assets and $61 billion in liabilities.
Putting the asset history from those reports into a spreadsheet (in millions):
PBGC MEP premiums jumped in 2015 from a flat $12 per participant to $26 per participant which was the primary reason for the increase in total assets.
Putting a present value on pension liabilities is always tricky but especially so for the MEP program which covers 10 million participants in 1,400 plans with the key to valuing PBGC liabilities being guesswork as to which of those plans will need financial assistance and when and for what portion of benefits. In 2014 two major plans (Central States & ???) were added to the list of probable insolvents ushering in the era of 4% funded ratios:
In case anyone is curious:
Treasury Conference Call with Participants in the Ironworkers Local 17 Pension Plan
The Ironworkers Local 17 Pension Fund has filed an application to suspend benefits under the Kline-Miller Multiemployer Pension Reform Act of 2014. The application proposes a reduction in benefits to prevent the future insolvency of the Fund. In addition to the written comments already received, Treasury is providing an opportunity for all plan participants to provide feedback on the application. Special Master Kenneth R. Feinberg and Treasury staff are hosting a conference call for any Ironworkers 17 participants and beneficiaries who wish to call and provide comments on the application. The teleconference will be:
Wednesday, November 30, 2016 at Noon Eastern Time.
Conference call-in number: 888-455-9653
When prompted, dial the conference participant code: 6342
Pertinent data from latest 5500 filing:
Even before the latest S&P debt downgrade (with Fitch and Moody’s likely to follow any day) it was clear that Chris Christie had virtually checked out of his job as New Jersey governor. A Trump win allows his body to rejoin full-time his heart and mind. The question is where?
With Christie dropped as head of the transition team and a move away from business-as-usual governance at this point what type of position is Chris Christie slotted for in a Trump administration? Because we know he’s going to take whatever is offered?
As hundreds of thousands of participants in the Central States Pension Fund brace for major pension cuts and millions of participants in other multiemployer plans don’t brace since they don’t grasp the depth of the funding problems facing union plans, the Pension Benefit Guaranty Corporation (PBGC) released their 2016 annual report which they ironically chose to subtitle “Keeping Our Commitment to America’s Workers”.
Notable excerpts from the report: Continue reading