JOEL L. NAROFF
POSTED: Sunday, April 5, 2015, 1:09 AM
Pension reform is like the weather: Everybody talks about it, but nobody does anything about it.
Despite years of dire warnings that pension shortfalls could become the monster that ate state budgets, little progress has been made to reduce the gap. Since changes must occur, it’s time to understand the causes of the crisis so past mistakes will not be repeated.
Pensions in Pennsylvania and New Jersey are staggeringly underfunded. This misery, though, has lots of company. Recently, the Dallas Morning News wrote an editorial about the looming crisis in Texas, which it called “an embarrassment.”
Not being alone is no excuse. Public-sector pensions are promissory notes between the public, through their elected representatives and government workers, for future payments. Unfortunately, politicians have been very willing to fail their fiduciary responsibilities.
Pension plans are underfunded because governing bodies have underfunded them. Contractually agreed-to plan payments have been diverted to other uses, and the trend continues. In New Jersey, a state court recently ruled the Christie administration violated a 2011 pension-reform law by not making this year’s required pension payment.
Let’s be clear: The failure to make necessary pension payments was not because of an inability to pay. The funds that should have gone to the pension plan went, instead, to fund other programs and to keep taxes from rising. The fiscal capacity to fund the pensions was there. The political will was not.
Who got the billions of dollars that didn’t go into the pension plans? The beneficiaries were individuals and businesses who paid lower taxes, and programs that received extra funding. In other words, everyone, which is why this is a politically feasible transfer of income.
Read more at https://www.philly.com/philly/business/20150405_How_states_got_into_such_a_pension_fix.html#M5Kojp7yDCs2SuO3.99
I personally do not believe there is politician in the state of NJ who has the BALLS to do what is right.
#1: The problem with that argument is, what exactly is “what is right”? There is no single opinion. As for how it happened, it’s basically an enormous enigma, consisting of mismanaged funds, stock market collapse, and a mathematical model that turned out to be hopelessly unsustainable. It isn’t purely a NJ problem. The same factors exist everywhere. We can point fingers, demand jail time, launch lawsuits, etc., but the simple fact is, there’s no money there. Even if it was somehow possible to “put the money back”, the only way to do this would be by taking it from somewhere else, and that somewhere else is then out the money that was theirs. Politicians really have no choice but to keep kicking the cans down the road, just like Social Security, Medicare, Government Debt, etc., but eventually, the remedy will be forced upon us, and it won’t be pleasant.
Well hear from the crybaby who always post about these pensions. They will try to dazzle us with all the abbreviations and numbers. The article speaks for itself
It all began with Christy Whitman using the money.
Right you are Declan but here is a start. Politicians like our Governor should follow the law first. You remember the Law he signed about the pensions. Don’t sign the law and then say NJ can’t afford it.
Promissory notes are broken everyday…..it’s called bankruptcy and
That’s exactly where the state is. The union pigs have feed at the trough
For too long and at the expense of the good citizens of NJ. Enough. Kicking the can days are over and the scumbag politicos can do the job.
So now it’s up to us. NO MORE
Declan..well said….and 517…grow a pair or keep hiding..
Hit a never 6:26?
Nerve, sorry about that would want you to crucify me for misspelling
so you’re hiding… declan posts his name, i post mine, why are you hiding? and no, I am not on the NJ pension plan… and yeah, the blog doesnt have spellcheck…
Mr. 5:17 is part of that status quo, living high off a +$100K annual pension that he’s had since retiring in his early 50s. On top of that, he gets a $26,000 annual health plan for only $480 out of pocket (the rest is all subsidized by Village property tax payers). So now that people are questioning the cost of all of the above, he labels us “cry babies” and claims to have “hit a nerve”. More like he’s a pensionista who only wants the good times to keep rolling to sustain his gold-plated lifestyle. Not once does this thug question whether or not the benefits and pension he was promised are unsustainable – he just expects to get a $100K pension + $26,000 health care plan every year until he dies and the rest of us have to pay for it. If he lives to his mid-80s he’ll make more money in retirement than he did when he was working. So here’s my message to Mr. 5:17: “You’d better go and get some more “free Viagra” (paid for by the rest of us) at the drugstore, because your days of screwing Villagers are coming to an end.”
And who is this person 6:31 who retired in his 50s with all that you say he gets? It sound personal to me. You should really enter some sort of therapy This kind of personal hated will consume you life and that not good for your health.
Made up names. who kidding who?
Nope 8:25, that’s my name…
Nobody ever asks if the entitlement promises made were just unsustainable; it’s always just assumed that they are at a level that can be sustained by assumed 8-10% plan contributions from current workers out of their pay, plus annual 7.95% plan returns (not indexed for inflation), and state & local taxes. No one ever asks, “Hey wait a minute, we’re charging 8%+ state income taxes and 2-3% of the assessed values of homes every year to pay for all of these promises made, maybe the promises were just too generous and need to be scaled back to a more sustainable level?”