Category: NJ pension reform

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N.J. lawmakers clash over forcing bigger pension payments

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By Samantha Marcus | NJ Advance Media for NJ.com
on January 07, 2016 at 7:31 PM, updated January 08, 2016 at 8:19 AM

TRENTON — State Senate President Stephen Sweeney and labor leaders on Thursday defended his proposal to constitutionally enforce payments into the public pension system against arguments it’s a gift to special interests that will shackle New Jersey’s finances.

The scrap between Sweeney (D-Gloucester) and labor leaders vs. Senate Minority Leader Tom Kean Jr. (R-Union) and business lobbyists centered on what would be worse: a mandated pension contribution that would eat up so much money the state couldn’t respond to fiscal emergencies, or a pension system that continues hurtling toward insolvency.

Sweeney, the Democrat leading the charge on the amendment, told the Senate state government committee it’s in everyone’s interest to pay the bill now. Should a pension fund run out of money, the state would have to pay retirees’ pension benefits out of pocket, he said.

“If we don’t do this, by 2026 or 2027, when the pensions go broke, it’s nine or ten billion dollars. And that’s coming out of the budget. Directly out of the budget,” Sweeney said. “That’s armageddon.”

https://snip.ly/Oi0T#https://www.nj.com/politics/index.ssf/2016/01/nj_senate_labor_business_leaders_clash_over_pensio.html

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If N.J. stands still, it will be run over by cost of its current pension crisis

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Faced with the difficulties of benefits reform, some stakeholders’ instincts have been to stand still and resist change. The state’s current position, however, is untenable: It faces an $82 billion pension deficit which, in the absence of funding increases beyond the realm of reason, will lead to state workers’ pensions beginning to run out of money within a decade. Credit ratings agencies this week again stressed the state’s need to reduce its employee benefits costs. Moody’s Investors Service concluded in assessing the state’s creditworthiness: “Without meaningful structural changes that improve the affordability of the state’s liabilities, the state’s structural imbalance will persist and/or pension liabilities will grow, and the state’s rating will continue to fall.” Samantha Marcus, NJ.com Read more

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N.J.’s credit rating may fall more if court rules against state in lawsuit challenging Christie’s pension-reform law

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N.J.’s credit rating may fall more if court rules against state in lawsuit challenging Christie’s pension-reform law New Jersey’s low-end credit rating could continue to fall if the state Supreme Court rules that retired public workers are entitled to yearly increases in their pensions, according to Moody’s Investors Service. (Salvador Rizzo, The Record) Read more

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Harshest Critics of Public Pensions are Nobel Prize Winning Economists

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Posted July 26, 2015 12:54 pm by WirePoints

By: Mark Glennon*

Nobel Prize winning economists aren’t the hyperbolic type. They usually speak in measured tones, careful to protect the precision of their academic  viewpoints. Two of them have spoken openly about public pensions, including one about Illinois pensions. They are uncharacteristically harsh.

First, there’s William F. Sharpe, a Stanford professor who won 1990 Nobel Prize for Economics for his work in developing models to aid investment decisions. The Financial Analysts Journal interviewed him last year. Here’s what he said:

Is this a disaster? You bet….  It’s a crisis of epic proportions…. [Pensions] value liabilities at 7.5% or 8% on the grounds that they are pretty sure they’ll earn that in the long run. This is crazy. It gets even worse. Because they want to minimize the reported value of the liabilities, they want to use a high discount rate, and in order to justify it, they have to build really risky portfolios. Consequently, they believe that one of the great hings to do is put money in private equity, or maybe a hedge fund, because then they can assume an extra 300 or 400 bps of expected return for an iliquidity premium (or just because hedge fund managers are so smart). So, the tail wags the dog.

Idiotic accounting drives even worse investment decisions. This is the classic case of an organization that borrowed money while issuing purportedly guaranteed payment and then used the money to invest in risky securities. Where have we recently heard that this is not a good thing?

Of course, you can point to the politics to see why politicians might give benefits that are very large to employees, especially those who may be
able to influence elections in various ways. By making sure the benefits are mostly in the future, politicians can pretend that they cost a lot less than they’re going to cost. It’s a very bad situation. [Emphasis added.]

https://www.wirepoints.com/harshest-critics-of-public-pensions-are-nobel-prize-winning-economists-wp-original/

N.J. Senate President Sweeney calls for $1 trillion in US loans to save pensions

JULY 29, 2015, 11:24 AM    LAST UPDATED: WEDNESDAY, JULY 29, 2015, 3:14 PM
ASSOCIATED PRESS
https://www.northjersey.com/news/n-j-senate-president-sweeney-calls-for-1-trillion-in-us-loans-to-save-pensions-1.1382539

 

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Pension fund trustees seek billions in damages from state

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By Samantha Marcus | NJ Advance Media for NJ.com
on July 26, 2015 at 6:00 PM, updated July 27, 2015 at 8:24 AM

TRENTON — In the latest salvo in the battle between New Jersey and its public workers, the heads of the state’s largest pension funds are accusing the state of breaching its contract by underfunding government workers’ pensions.

The pension heads are seeking billions of dollars in damages.

The pension fund trustees’ newly amended complaint opens a new front in the fight for pension funding in which Gov. Chris Christie had already declared victory following a state Supreme Court ruling last month that the state couldn’t be forced to make the payments into the retirement system promised under a 2011 pension law.

That ruling has so far spared the state from having to scrape together billions of additional dollars in pension contributions.

https://www.nj.com/politics/index.ssf/2015/07/pension_fund_trustees_seek_billions_in_damages_from_state.html#incart_river

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N.J. pension investments see a drop-off in returns

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JULY 22, 2015, 5:49 PM    LAST UPDATED: WEDNESDAY, JULY 22, 2015, 10:53 PM
BY SALVADOR RIZZO
STATE HOUSE BUREAU |
THE RECORD

New Jersey’s pension investments are still making money, but the gains appear to be in sharp decline this year, state officials said Wednesday.

Governor Christie’s administration has helped delay a looming crisis in the pension system by playing the global markets over the last five years, drumming up more than $35 billion just by picking winning investments.

But the solid pace of growth for the pension system’s $79 billion portfolio will taper off in coming years, state officials said, opening a new problem for the retirement funds at a time when they already face a series of funding troubles and a political logjam.

“We can’t plan on double-digit returns forever to keep the fund afloat,” Thomas Byrne, chairman of the State Investment Council, said at a meeting Wednesday. “We can’t control market conditions.”

After years of neglect from politicians in both parties, the state pension system is facing $40 billion in unfunded liabilities — making it one of the worst-funded in the country — and it needs every dollar it can find to avoid a bankruptcy expected within the next decade.

At stake is the income security of more than 773,000 public workers and retirees enrolled in the system.

Since Christie took office, the investment portfolio’s performance had been one of the bright spots for the troubled pension system, producing healthy gains above 10 percent in four of the last five years — in other words, more than $35 billion from 2010 to 2014.

But the heyday may be ending. New Jersey is not likely to hit its target rate of 7.9 percent investment gains for the 2015 fiscal year, which ended last month, Byrne said.

Pension investments had posted gains of only 4.58 percent through May, a month before the end of the fiscal year, Byrne said. A final report for the entire year will be released in September, officials said.

The state is on track for a much lower rate of growth compared with the previous fiscal year. In May 2014, for example, returns of 14.3 percent had come in by that point in the fiscal year — far above the 4.58 percent seen this year. In May 2013, growth was at 13.3 percent.

https://www.northjersey.com/news/n-j-gains-on-pension-investments-appear-on-the-decline-this-year-officials-say-1.1378571

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BREAKING :Supremes side with Christie on pension payments

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Posted by Matt Rooney On June 09, 2015 0 Comment
By Matt Rooney | The Save Jersey Blog

Did you hear that noise, Save Jerseyans?

It’s thousands of public sector union heads exploding in unison.

The New Jersey Supreme Court issued an 5-2 opinion in the pension payment case (Christopher Burgos v. State of New Jersey) on Tuesday morning, reversing a lower court’s directive to the Christie Administration to make a billion dollar pension payment. Click here to read it. For a little background on the Christie/pension payment controversy, click here.

The majority opinion (which did not include Chief Justice Rabner) relied on the text of the Debt Limitation Clause:

“No matter how worthy the cause to be advanced by Chapter 78, the Debt Limitation Clause speaks directly to this situation and, in pertinent part, commands:

“‘The Legislature shall not, in any manner, create in any fiscal year a debt or debts, liability or liabilities of the State, which together with any previous debts or liabilities shall exceed at any time one per centum of the total amount appropriated by the general appropriation law for that fiscal year, unless the same shall be authorized by a law for some single object or work distinctly specified therein. . . . [N]o such law shall take effect until it shall have been submitted to the people at a general election and approved by a majority of the legally qualified voters of the State voting thereon.’”

“The purpose to be achieved by the Debt Limitation Clause dovetails with the Framers’ intent for a fiscally responsible annual budget process,” the majority continued. “Efforts to dedicate monies through legislative acts other than the annual appropriations act have no binding effect. They are read as impliedly suspended when contradicted by the budgetary judgment of the presently constituted Legislature acting in concert with the Governor in their constitutionally prescribed budget formation roles. Those debt limitation and appropriations-related constitutional clauses conflict with the contractual language of Chapter 78 and thwart plaintiffs’ impairment claims.”

https://savejersey.com/2015/06/supremes-side-with-christie-on-pension-payments/

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No money left in this year’s budget to restore pension cut, N.J. officials say

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file photo by Boyd Loving

MAY 19, 2015, 12:48 PM    LAST UPDATED: TUESDAY, MAY 19, 2015, 10:33 PM
BY SALVADOR RIZZO
STATE HOUSE BUREAU |
THE RECORD

In a rare moment of agreement, analysts for Governor Christie and the Legislature’s independent budget office said Tuesday that no matter how the state Supreme Court rules in a dispute over funding New Jersey’s pension system, there is no more money left this year to restore more than $1 billion that Christie cut from a payment to the retirement plans.

Using his veto powers at the start of the fiscal year, Christie  reduced a $2.25 billion payment to $681 million, defying pension-reform laws he signed in his first term requiring the higher payment for the strapped retirement system. Public-worker unions promptly sued, arguing that a 2011 law Christie signed gave them a constitutionally protected right to the full amount.

As the case made its way through the courts, the state kept making payments to schools, hospitals, universities and hundreds of other programs. Now with only weeks left before the end of the fiscal year, almost all of the  $33.1 billion in the state budget has been paid out, said David Rosen, the budget chief at the independent Office of Legislative Services.

“If the Supreme Court were to direct the state to make the full pension payment before June 30, I’m not sure that that’s fiscally or physically possible,” Rosen testified before the state Senate Budget and Appropriations Committee, citing “the constraints that we have on how we could come up with that money.”

 

https://www.northjersey.com/news/no-money-left-in-this-year-s-budget-to-restore-pension-cut-n-j-officials-say-1.1337744

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Christie Urges Benefit Cuts as New Jersey Retiree Rush Strains Pension

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Chris Christie is promoting his tell-it-like-it-is style of governing with town-hall meetings in New Hampshire before a possible White House run. Back home, attendees of such forums haven’t heard the whole story of the pension mess throwing New Jersey’s budget into disarray.

What’s missing from the Republican’s weekly narrative, during which he blames Democrats and public unions for the employee costs crowding out other spending, is that he shares the culpability. Record retirements in response to his first-term benefit reductions contributed to the state’s $83 billion pension-funding shortfall; Another wave of departures looms as Christie seeks a second round of cutbacks. (Young/Bloomberg)

https://www.bloomberg.com/politics/articles/2015-04-14/christie-urges-benefit-cuts-as-n-j-retiree-rush-strains-pension

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Christie pushes for teachers to sign on to pension, health benefit changes in town hall meeting

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Governor Christie pushed teachers — a union key to his pension reform plan — to agree to benefits changes Tuesday as his administration argued in a court filing that a judge “fabricated a constitutional right to pension funding.”

Christie is working to overturn a Superior Court ruling that requires the state to adhere to a law he signed four years ago requiring increasing payments to the pension fund.

At the same time, Christie is pushing the public to back his plan to overhaul retirement benefits for all public employees, a plan that requires changes not only to pensions but to medical benefits. Changes in health care benefits will mean savings that can be applied to pensions, Christie has argued. (Hayes/The Record)

https://www.northjersey.com/news/christie-pushes-for-teachers-to-sign-on-to-pension-health-benefit-changes-in-town-hall-meeting-1.1299625

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14 unions make common cause in suit against Christie

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14 unions make common cause in suit against Christie

Fourteen unions under the auspices of the New Jersey AFL-CIO announced today that they want to take Governor Chris Christie to court to compel him to make New Jersey Annual Required Contribution to the pension system for FY 2016.

The suit presses Christie to follow the 2011 pension law he signed, specifically the requirements of Chapter 78. (Pizarro/PolitickerNJ)

14 unions make common cause in suit against Christie | New Jersey News, Politics, Opinion, and Analysis

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Double Dipping Starts at the Top with Loretta Weinberg, D-Teaneck and 17 other assembly and senate incumbents

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Double Dipping Starts at the Top with Loretta Weinberg, D-Teaneck and 17 other assembly and senate incumbents
March 1,2015
the staff of the Ridgewood blog

Ridgewood NJ, In New Jersey, elected officials can start collecting their lawmakers’ pension once they qualify for it (based on a complex system of accumulating so-called retirement credits), yet stay in office and also garner a salary.

New Jersey state senator, Loretta Weinberg, and mentor to our mayor justified taking nearly a $41,000 pension while still collecting a $49,000 salary on grounds that she had lost money in the Bernie Madoff scandal. Despite taxpayer anger after press reports of her dual incomes, Ms. Weinberg’s colleagues elected her majority leader in November 2011.

This continues a disturbing pattern in the Garden State. Last year, during Jersey’s state legislative elections, 18 assembly and senate incumbents from both parties who double-dip were up for reelection, including Senate Majority Leader Loretta Weinberg, who in addition to her $49,000 a year legislative salary receives a pension of nearly $41,000 annually. In her case, both incomes are for the same job because Jersey allows legislators to retire while still in office and get both a pension and salary. All 18 legislators won reelection. Their retirement checks annually cost the overburdened pension system nearly three-quarters of a million dollars.

Elected officials also continue to employ a host of staffers who double-dip, including those working for the governor, the state’s comptroller and the attorney general. Rather than simply resign their state jobs when appointed to the staff of an official, these employees retire, grab their pension and take home a salary, too.

Double-dipping by New Jersey public officials continues to thrive for one big reason: Too many legislators either directly profit or quietly condone a costly practice that drains untold millions from state pension funds.

New Jersey Watchdog found 18 state lawmakers who receive retirement checks totaling $782,000 a year in addition to their legislative salaries. The roster includes leaders of each party in both the Senate and Assembly. (See full list below)

The Assembly’s roll of double-dippers features Deputy Speaker Connie Wagner, D-Paramus; Deputy Majority Leader Joseph Egan, D-New Brunswick; Majority Conference Leader Gordon Johnson, Teaneck; Minority Conference Leader David Rible, R-Wall Township; and Appropriations Officer John DiMaio, R-Bridgewater.

Ranking twin-scoopers in the Senate include Majority Leader Loretta Weinberg, D-Teaneck and Minority Conference Leader Robert Singer R-Lakewood.( https://watchdog.org/category/new-jersey/)

The biggest dipper in the Legislature is Sen. Fred Madden, D-Turnersville, who collects nearly a quarter-million dollars a year from two public jobs and a state pension. In addition to $49,000 in legislative pay, theSenate Labor Committee chairman receives $85,272 from a State Police pension and $111,578 as dean ofLaw & Justice at Gloucester County College.

“Obviously, I don’t have a problem with people doing it,” Madden told New Jersey Watchdog last year.
“It’s not appropriate,” countered Sen. Jennifer Beck, R-Red Bank, one of the few legislators to openly oppose double-dipping. “The pension system is intended to support you at a time you are no longer working. So when you are an active employee, you should not be able to tap into both.”

Gov. Chris Christie has welcomed double-dippers into the ranks of his administration. A New Jersey Watchdog investigation last year found 19 state retirees were rehired under Christie.

Christie’s deputy chief of staff, Louis Goetting, gets $228,860 a year — $140,000 in salary plus an $88,860 pension as a state retiree.
“The governor called him out of retirement,” said spokesman Michael Drewniak. “And we are grateful to have him,”
Also in Christie’s corner are two prominent double-dipping Essex County Democrats who crossed party lines last month to publicly endorse the GOP governor’s re-election bid. (https://watchdog.org/category/new-jersey/)

data provided by https://watchdog.org/category/new-jersey/

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Bergen County Sheriffs Office leads New Jersey in double-dipping by county cops

Bergen County Sheriff Michael Saudino

Bergen County Sheriff Michael Saudino

Bergen County Sheriffs Office leads New Jersey in double-dipping by county cops
February 28,2015
the staff of the Ridgewood blog

Ridgewood NJ, Under Sheriff Michael Saudino Bergen County leads New Jersey in double-dipping by county cops. The sheriff and four of his undersheriffs collectively reap a million dollars a year in pension pay on top of their six-figure salaries.

First-year Sheriff Michael Saudino ranks first among all double-dippers, raking in a whopping $268,000 a year. Saudino, 59, gets a $130,000 pension for retiring as Emerson Borough police chief on Dec. 31, plus a$138,000 salary since taking office as sheriff the following day.
Undersheriff Steven Librie gleans $219,000 a year – $115,000 in salary and $104,000 in pension. Librie, 50,retired as deputy police chief of Teaneck Twp. in August 2010, then was hired as undersheriff in January.
Undersheriff Brian P. Smith hauls in $218,000 a year – his $110,000 salary plus a $108,000 pension. He retired at age 50 from the Paramus Police Dept. in 2005, then he was hired as undersheriff this year.
Undersheriff Robert A. Colaneri receives in $204,000 a year – a $110,000 salary plus $94,000 in pension. Colaneri, 56, was hired as undersheriff in January 2011 after retiring from Carlstadt Borough in 2006.
Undersheriff Harry Shortway Jr. gets $186,000 a year – his $110,000 salary plus $76,000 in pension. Shortway, 72, retired from Ridgewood Village in 2001, then was hired by Bergen County as undersheriff in January 2011.

It gets worse and its a statewide problem ,according to  Mark Lagerkvist of New Jersey Watchdog . Gov. Chris Christie while preaching pension reform hasn’t done much to curb double dipping by public employees.

New Jersey’s costly tradition of double-dipping — allowing government employees to “retire,” start collecting a pension and then return to work for the state, often the next day or week.

By the end of 2012 New Jersey Watchdog found 60 double-dippers who collect a total of nearly $10 million a year — $4.4 million in pensions in addition to $5.5 million in state salaries.

One-third of them were hired under the Christie administration with duties as government officials to protect taxpayers from fiscal foul play and abuses of the public trust. They include:

By the end of 2012 three investigators for the Office of State Comptroller — John Silver, Joseph Celli and Richard Nuel — collectively receive $262,415 a year in pensions plus in $276,000 in salaries. OSC is charged with uncovering waste, abuse and fraud in government.
Assistant Insurance Commissioner Joseph Brennan claims $204,857 a year — $123,000 in salaryand $81,857 from pension. Brennan heads a unit that investigates insurance fraud.
Medical Marijuana Director John O’Brien harvests $167,889 a year — $83,889 in pension plus his$84,000 salary from the Department of Health.
Thomas Flarity, director of security, investigations and audits for the Motor Vehicle Commission, counts on $188,544 a year — $105,000 in salary and $83,544 from pension.
Christie’s Deputy Chief of Staff Louis Goetting (pronounced “getting”) gets $228,860 a year —$140,000 in salary plus $88,860 from pension. Goetting is Christie’s budget guru on cutting the cost of government.

That year Christie gave his deputy chief a $10,000 annual raise this year, following New Jersey Watchdog’s report that Goetting had received$1.1 million in early retirement pay and severance packages from public coffers.

The 60 double-dippers receive an average of $165,000 a year — $73,517 from pension plus $92,461 in salary. Fifty-seven are state law enforcement officials who retired under a special law that allows them to receive full pensions after 25 years regardless of age. Twenty-eight retired while still in their 40s.

While this is only the tip of the iceberg for the state pension mess some estimates for fully funding pension promises accrued to date would require an immediate payment of either $37 billion, $83 billion, or $150 billion depending on whether you get your numbers from public plan actuaries, GASB, or me.https://burypensions.wordpress.com/2015/01/19/how-n-j-got-into-this-pension-mess/

Moody’s says the New Jersey Public Employees Retirement System (PERS)  and the Teachers’ Pension and Annuity Fund (TPAF) “could fully expend their assets as soon as 2024 and 2027… even assuming the funds meet assumed investment returns.”https://www.foxbusiness.com/economy-policy/2014/12/03/moodys-nj-pensions-to-run-dry-in-ten-years/

And by some estimates New Jersey pension system faces as much as a $170 billion short fall.https://watchdog.org/186029/new-jersey-pension-debt/

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“Shocked” Democrats and Union Allies look to Sabotage Christie’s Pension Deal

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‘Shocked’ by budget address, Sweeney and Senate Dems upbraid Christie’s pension plans

TRENTON — Senate Democrats, calling the Republican’s new proposal to overhaul the pension and benefit system a “some roadmap written on a cocktail napkin,” roundly condemned Gov. Chris Christie’s budget address today for failing to lay out a vision for the state’s economy and finances in 2016. (Brush/PolitickerNJ)

‘Shocked’ by budget address, Sweeney and Senate Dems upbraid Christie’s pension plans | New Jersey News, Politics, Opinion, and Analysis

Assembly Dems question administration budget big on pension fixes but short on other issues

TRENTON — Assembly Democrats bashed Gov. Chris Christie’s budget address today for being heavy on talk about fixing a broken public pension and benefit system — but virtually nonexistent on anything else. (Brush/PolitickerNJ)

https://politickernj.com/2015/02/assembly-dems-question-budget-big-on-pension-fixes-but-short-on-other-issues/

 

PBA head challenges Christie to ‘look beyond presidential ambitions’ on pension front

Following up on an earlier statement clarifying that his organization would “never support freezing pensions for our members who have continued paying their required pension contributions while government has skipped their legal responsibility to do so,” the president of a major public sector union in New Jersey further distanced himself from Gov. Chris Christie’s new proposal to overhaul the state’s pension and benefit system. (Brush/PolitickerNJ)

PBA head challenges Christie to ‘look beyond presidential ambitions’ on pension front | New Jersey News, Politics, Opinion, and Analysis

 

Firefighter Rep Donnelly goes after NJEA leadership after Christie budget speech

TRENTON – Gov. Chris Christie won the support of key Building Trades unions’ reps in his first term by seizing on fractures between those private sector unions and public sector labor.

This afternoon, his budget address sparked a fight among public sector reps, as New Jersey State Firefighters Mutual Benevolent Association (NJFMBA) President Eddie Donnelly trained his immediate sights on the New Jersey Education Association (NJEA). (Pizarro/PolitickerNJ)

Firefighter Rep Donnelly goes after NJEA leadership after Christie budget speech | New Jersey News, Politics, Opinion, and Analysis

 

 

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Gov. Chris Christie Panel Proposes Overhaul of New Jersey’s Pension System

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Gov. Chris Christie Panel Proposes Overhaul of New Jersey’s Pension System

Gov. Chris Christie’s committee to study New Jersey’s troubled pension system wants to overhaul the retirement program for public employees, freezing the current setup and replacing it with a “cash balance” plan.

The plan would spread out the current pension system’s unfunded liability over many years, and would more closely reflect benefits in the private sector, according to members of the commission. Mr. Christie endorsed the report conclusions Tuesday in a speech to the Legislature. (Dawsey/The Wall Street Journal)

https://www.wsj.com/articles/christie-committee-proposes-overhaul-of-new-jerseys-pension-system-1424809538