Posts Tagged ‘study’

Most Generous New Jersey Pension

In one of the sillier broadsides in the propaganda war over the worth of a New Jersey public pension a ‘think’ tank probably funded by unions released a report today claiming that New Jersey’s non-public-safety plans “rank 95th in pension generosity out of 100 top plans nationally” based on criteria they made up:

To rank each pension plan’s overall generosity, we first compare our 100 largest state pension plans on three separate measures of pension generosity:
  • The strength of their automatic inflation protection (assuming 2.5 percent inflation).
  • The amount by which pensions increase with each additional year of public service as a percentage of “final average salary,” an amount commonly referred to as “the multiplier.” (Final average salary is usually calculated as the average salary over the final three or five years of an individual’s public service.)
  • The amount employees contribute to their own pensions. When employees contribute less, we consider their pension more generous.
Overall generosity is determined by giving each pension plan a score out of 100 based on its rank on these three separate dimensions of pension generosity. A pension plan ranked first on one of the dimensions receives 100 points, a pension plan ranked 100threceives one point. Adding up the three ranks generates the plan’s overall generosity score. The 1st-place-ranked and most generous pension plan received an overall score of 225.5. The least generous pension plan by far, with a score of 24.5,covers municipal employees in California’s Contra Costa County. The pension plan ranked 99th, the New Hampshire Retirement System, received an overall generosity score of 74.5, not far below New Jersey’s 85.
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Using their criteria I can easily design a plan that would rank in the top 5 in generosity without costing taxpayers a dime.

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Pension Study Commission Members Announced

I predicted they would be a combination of five patsies and quislings but apparently Governor Christie could not fill out that roster so he settled on some professional people but raised the number to nine so as to assure that his original intention (having this commission rubber-stamp whatever study the Divisions of Pensions is almost done with) will play out though not through blind obeisance as originally intended but through internal bickering which this commission is certain to have plenty of.  The members, per the press release:

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The Myth of the Static Multiplier

Buck Consultants (Buck) screwed up again. This time it was the Teachers’ Retirement System of Illinois (TRS) where in May they did a study that projected savings of $130.74 billion from Senate Bill 1 but now they say the savings will really be only $106.25 billion due to “a mechanical error in the spreadsheet summarizing the results.” In a letter to the members of the First Conference Committee on Senate Bill 1 the Executive Director of the TRS threw Buck under the bus:

I sincerely apologize for this error. As noted above Buck has reviewed its other analyses and no change is required to any other information that you have received from TRS. TRS staff is working closely with Buck to ensure adequate quality control on their work, including adding an additional level of review. We value the trust that the General Assembly and this conference committee has placed in TRS to provide sound analysis. We will do everything possible to ensure that we continue to deserve that trust.

But who’s to say that Buck’s original estimate won’t turn out to be closer to reality?

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P(h)EW, that wasn’t so bad

The PEW Center on the States released a study today entitled: The Widening Gap: The Great Recession’s Impact on State Pension and Retiree Health Care Costs which put that gap at $1.26 trillion as compared to $1 trillion in last year’s study while providing a convenient rationale for the increase that they term the ‘Great Recession’.  The real reason: the Great Lie.

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