Pondering or Sleeping on NJ Pension Reform?

Thomas J. Healey, a senior fellow at Harvard’s Kennedy School of Government, coordinated the work of the New Jersey Pension and Health Benefit Study Commission which has been totally ignored leaving him little to do but vent in a Baron’s editorial* that concludes:

Elected officials have an obligation to look beyond short-term political expediency and undertake comprehensive reforms that do right by their employees, retirees, and taxpayers. Everyone must wake up to the fact that unfunded pension and health benefit liabilities are explosive. Expecting conditions to improve with an uptick in the stock market or the imposition of a new tax or two is irresponsible, if not delusional, governance.

Which will continue at least through 2017 and the next gubernatorial election but Mr. Healey may have unintentionally hit upon the reason for the stasis earlier in his piece:

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Milliman’s GASB 68 Gambit

We got a new study of the funded status of some public pension plans. This one with a $1.9 trillion Scare-Number. Though, this year, with a twist:

Starting with our 2016 edition of the Milliman Public Pension Funding Study, we have shifted our focus away from the accrued liability figures that are used to determine a plan’s funding requirements; rather, our study is now based on the Total Pension Liability figures used for financial reporting under Governmental Accounting Standards Board Statements No. 67 and 68 (GASB 67/68), which apply to governmental entities.
The New Jersey website where those GASB valuations can be found explains:
Government Accounting Standards Board (GASB) Statement No. 68 supersedes financial reporting requirements for the State and local governmental employers under GASB Statements No. 27 and No. 50 as they relate to pensions that are provided through the State-administered retirement system. This new statement establishes standards for measuring and recognizing on each participating public employers’ financial statements their allocated share of the plan’s net pension liability (NPL), deferred inflows and outflows, and pension expense. Each participating public employer must begin disclosing the information required under GASB 68 in their financial statements for reporting periods beginning after June 15, 2014.
As it turns out Milliman did not have to go too far to get the numbers on the New Jersey Teachers’ Pension and Annuity Fund (NJTPAF) since they do that valuation (which at a funded ratio of 28.7% happens to be the second lowest in their study) but when you compare discount rates…..

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Fewling Stasis

The New York Timesrecent article “A Sour Surprise for Public Pensions: Two Sets of Books” was remarkably incisive in exposing a scam multiemployer (union) plans have been using for decades in valuing pension liabilities at different rates for different purposes but there was pushback at the time and more from Alicia Munnell yesterday admitting that this is a complex issue and concluding that “[a]rticles like ‘Sour Surprise,’ however, do not help the process one iota.”

Ms. Munnell is dangerously mistaken on both counts.

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Breaking News: Barlyn Settles

Bridgegate is the most obvious Christie political scandal but the first, and possibly most heinous based on what we are allowed to know so far about this administration, took root in Hunterdon County in early 2010.

That case, it has just been announced, is settled.  The cost….

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If Illinois Has “Weak Financial Management” Then….

A new study by S&P Global on the fiscal situation of the states included a handy chart on each state’s bond rating.  As of Friday that chart is outdated.

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NJ Public Employees Will Lose $170K Each

A new study by S&P Global estimates the median pension debt among all 50 states comes to $806 per resident. Steven Malanga today in the Star Ledger honed in on New Jersey under this headline:

N.J. residents owe $15K per person in pension debt. Compromise is the only fix.

But looking at it another way:

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Scumbag Politician Chronicles

Sundown (and a Friday) before a major Jewish holiday so what better time to stick it to New Jerseyans? Three months ago they floated this scheme and now it looks like a done deal.

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