Posts Tagged ‘sweeney’

Who Said We Fixed the New Jersey Pension System in 2011?

Today: “no one in their right mind would say that what we did in ’11 totally fixed a problem that is in the 30-40 billion dollar range”
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but they did:
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Pension Aspect of Bridgegate Scandal

The Christie Bridgegate scandal is fascinating for not only revealing the indifference the political class really has for the general public but, in this case, how certain operatives would actively work to damage a segment of that public to whatever degree as long as some level of political gain could be expected.

Obamacare was not intended to be a fiasco.  It was intended to enrich insurance and pharmaceutical companies who would kick back campaign contributions with their excess profits.  The Obama administration did not set out to inconvenience/oppress the public however inevitable that outcome would be considering the level of ignorance/bias the drafters possessed.  The reprisals against the other Hudson County mayor on the Christie enemies list are more in keeping with this nature of governmental dysfunction and they involve pensions.

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Not the Path but the Driver

Yet politicians’ current approach to evading such opposition—that of adopting incremental reforms while repeatedly deferring liabilities—is no longer viable.

The structural defects of defined-benefit plans, as well as their implication in a system of decision making impaired by political considerations, necessitate a wholesale shift from defined-benefit to defined-contribution plans.

Fixing the Public Sector Pension Problem: The (True) Path to Long-Term Reform

The quotes come from a well-reasoned paper by Richard C. Dreyfuss setting out the problem, debunking faux solutions, and offering a five-point plan for comprehensive reform that I too advocate as obvious. The problem is not with the proposed reforms, which are viable, but with those who would be charged with implementing them, like this guy:

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Christie punted on real public pension reform in NJ – and so did Sweeney

I moderated a Q&A at the general membership meeting of the New Jersey Taxpayers’ Association last night regarding pension reforms needed in New Jersey focusing on the deceptions to which the current system is susceptible.  It lasted an hour and rather than posting the whole thing (which none of us are going to sit through when it’s only a one-shot of me) I will excerpt points made.

First up is Neil Coleman, NJTA trustee and legislative liaison, speaking about a meeting he and a group of outside pension experts had with Christie administration people when pension reforms were being hatched:

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Union Power Failure

Public employee unions are very powerful in New Jersey.  They can get tens of thousands of members to rallies and campaign events, finance political candidates, and have ready access to mass media.  What they’ve done with that power is a betrayal of their membership.

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Frustrating Pension Reform in New Jersey

The New Jersey pension system is “teetering on the brink of collapse” according to State Senate President Stephen Sweeney in arguing for a bill that will do absolutely NOTHING to forestall that collapse as admitted in the Fiscal Impact section at the end of that bill summary:

“According to testimony provided by the Department of the Treasury to the Senate Budget and Appropriations Committee, increases in State and local employee contributions to the various State and local pension funds, in accordance with the provisions of the bill, will be $3.9 billion in the first ten years and $120 billion over 30 years….The Administration did not provide the committee with any information about the underlying assumptions for its fiscal estimate.”

I figured the additional annual contribution employees would be making would come to about $250 million and with creative use of compounding $3.9 billion is possible over 10 years*.  Since about $8 billion is being paid out of the fund annually these days and a spate of retirements is certain to come those additional contributions will allow for a few more weeks of payments but will not shave a day off of the drop-dead date of the plan.  That’s because the additional money will come from the employees themselves and simply raise the amount of remaining assets that will have to be returned to all employees when that’s all that’s left in the plan.  That is, if the plan would have had $40 billion dollars in 2014 without any changes (totaling what the participants had put into the plan and not yet received back) then those additional contributions might raise the fund value to $41.5 billion but that would still amount to the total returnable contributions.

Who are these legislators trying to fool?  Don’t they understand the numbers?  How can they believe there is a crisis and “failure to act is not an option” and then fail to act?   Are they complete idiots?

As I write this I have the debate over the bill being held in the State Senate playing in the background on New Jersey Network.  The more I listen, the clearer the answers:  Taxpayers; No; Hypocrisy; Yes.

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* $120 billion over 30 years is too silly of a number to give any credence to unless Weimar-style hyperinflation is assumed along the way.

Delusions of competence on pension reform in New Jersey

State Senate President Stephen Sweeney sees his job as done on pension reform in New Jersey:

There may be a clinical term for this type of behavior and Senate president Stephen Sweeney might not technically be classified a lunatic but anyone believing that the pension aspect of this latest reform bill “clearly fixes the pension for 800,000 people” is some combination of liar and naif.

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Editorializing on the New Jersey pension deal

A major factor in New Jersey being the most corrupt state in the nation is that the state’s largest newspaper is in cahoots with the crooked politicians either by ignoring their numerous ethical lapses or commending their playacting at ‘reform’ that wind up not disturbing the status quo.  So it is with the proposed pension reform where today’s editorial in the Star Ledger wholeheartedly supports pathetically weak changes that won’t avoid plan bankruptcy but will leave the favored interests undisturbed, as have the other pension ‘reforms’ that preceded it.  Rarely has an editorial so consistently maintained a level of naivete that I will quote it in total with my comments.

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The deal on N.J. public workers’ pensions

After much hand-wringing and backroom dealing the long-awaited reform of the New Jersey pension system was leaked today.   On the benefits side, cost-of-living adjustments would be eliminated and new-hires would again have benefits reduced slightly.  On the revenue side, public workers would be be putting in about $250 million more a year and the state would be contractually required to make its payments.

In total, this buys the plan about two more months of life, all due to the COLA elimination.  By point:

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The Obvious Answer to New Jersey’s Pension Mess

Scare the retirees to death.

At least that’s what it looks like when New Jersey’s Senate president Stephen Sweeney tells retirees they could see their pensions cut by two-thirds without reforms.

The bizarre part is he’s absolutely right…..though I don’t think he really believes it.

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