The issue requires a number of solutions
1) Stop all new public employee hires from getting a paid pension Enable a 401k retirement plan similar to what many private employees subscribe to Why should we pay for these employees for decades they aren’t working
2) significantly increase public employee health care contributions This is real requirement for any chance at resolving the costs issue
3) increase the time worked requirement to 30 years and stop the multiple public job/pension/health cycle If you retire from a public role you are not eligible for another public pension
4) reduce the union requirements for public work contracts NJ costs to build are ridiculous due to union requirements This is sole reason states such as Florida have significantly less cost to build anything Put the bids out for all laborers union or not and set a fair price
5) Absolutey need to consolidate the various towns schools, fire, police, etc There has to be a way to provide services while consolidating and cutting overhead costs How many school administrators, fire trucks, vehicles, police officers are really needed in these small villages How many police and fire personal are getting paid or on pension just in RW?
N.J. public worker pensions not so generous after all, study says
pensions.JPG
Members of the CWA protested the Christie administration’s pension proposal to dip into New Jersey’s unfunded public employee pensions to balance the budget at the Statehouse in June. (2014 Star-Ledger file photo)
Print Email
Samantha Marcus | NJ Advance Media for NJ.com By Samantha Marcus | NJ Advance Media for NJ.com
Email the author | Follow on Twitter
on December 17, 2014 at 1:20 PM, updated December 18, 2014 at 7:30 AM
N.J. Pensions
Ex-N.J. attorney general: Why N.J. is so hard to govern. (Hint: It’s in our DNA)
You’re in charge now, Phil Murphy. Here are 7 menacing Jersey issues staring right at you.
No surprise here: N.J. pension-grab bill signed
N.J. and towns could be slammed by Christie pension move, Trump tax law and more
13 moments that hurt Chris Christie the most
All Stories
TRENTON — New Jersey’s public employee pension plans ranked among the least generous of top public pension plans in the country, according to a report released today.
The study shows New Jersey’s pensions are more modest than 94 of the country’s 100 largest plans.
Gordon MacInnes, president of New Jersey Policy Perspective, a left-leaning think tank, said the results push back against the myth that New Jersey’s public workers enjoy lucrative pensions.
“It’s crucial that we not be misguided by… inflammatory statements that depict New Jersey’s benefits in a light that is inaccurate,” he said today.
The study considered whether pension plans protect retirees from rising inflation, how benefits are calculated and how much employees contribute to their plans.
New Jersey fell in the bottom half in all three fields, which Stephen Herzenberg, the Executive Director of the Keystone Research Center, who authored the report, called the three most important dimensions of generosity.
“New Jersey public employees face a triple-whammy that gives them among the worst pensions in the country,” he said today. “They contribute heavily to their own pensions, receive only modest pension increases with each additional year of service and get no inflation protection at all in their benefits.”
Workers kick in 6.93 percent of their pay — and that number is rising — while employees contribute less in more than half of the other systems, according to the findings.
New Jersey’s retirees do not receive yearly cost-of-living adjustments to offset inflation, unlike 69 other plans included in the study that offer some protection from inflation. Retirees are suing to restore the cost-of-living increases that Gov. Chris Christie suspended as part of a 2011 pension reform package.
The state’s formula for calculating pension payments also uses a low multiplier — 1.67 percent — that lands it in the bottom quarter of plans.
The report notes that Garden State workers also receive some of the lowest pension benefits, but those were not factored into the rankings.
On average, pension benefits are $26,000 a year. Local government employees receive less on average, $16,000, while teachers receive more, $40,000. State employees collect $25,000.
Because police and fire retirees do not participate in Social Security and receive higher payouts their plans were not considered.
“In addition to being some of the least generous pensions in the country, New Jersey’s pensions are modest in dollar amounts, even though the Garden State remains one of the highest-cost states in which to live,” according to the report.
The policy group argued public workers shouldn’t be saddled with blame for the state’s strapped pension system.
New Jersey has roughly $82.8 billion in unfunded pension liabilities (that figure more than doubled under new accounting rules). And the two largest pension plans, Public Employees Retirement System and the Teachers Pension and Annuity Fund, could run out of money by the end of 2024 and 2027, respectively, according to the Christie administration.
The pension system has been underfunded since 1996, with governors regularly deferring or skipping legally required payments in order to plug gaps in the state budget.
Gov. Chris Christie is on that list of governors. In June, he broke a promise to increase payments into the system in return for a reform package that raised the retirement age from 62 to 65, eliminated those cost-of-living increases and required workers to contribute more toward their pensions and health benefits.
Prior to those changes made in 2011, New Jersey’s generosity may have ranked in the middle of the heap, Herzenberg said.
“Employees’ sacrifices made in 2011 were huge,” he said. “In a situation where lots of states were walking backward in terms of the generosity of pensions, New Jersey walked a long way back.”
Christie has warned that overhaul wasn’t enough and additional changes are necessary to prevent the pension problem from crippling New Jersey’s finances.
Most observers expect a committee Christie commissioned to find solutions the pension crisis will recommend slashing health care benefits, which add another $53 billion to the unfunded liabilities.
A spokesman for Christie did not immediately respond to a request for comment.
Couldn’t agree more on each point. Unfortunately the state pension fund operates like a Ponzi scheme – it requires new hire contributions to fund current liabilities. Putting new hires into 401K’s would bankrupt the funds almost immediately.
Good luck, cops get out at 25 and regardless of age , nice ,
Ironically the state that is taking the most aggressive stance on current pension payouts and unfunded liabilities is good old california.im sure unions here are following the events very closely
here are at least twenty (20) $100K a year public pensioners now in Ridgewood… not sure how many of them get their checks sent to Florida or the Carolinas, but bet most of them do… oink, oink, sooooooey! This population will continue exploding in the next decade just as most of NJ’s seven public pension funds go insolvent. Maybe the money will grow on trees?
Facts are facts. Life expectancy, even for cops and firemen retiring after 25 years of service despite their age, is much longer than when these pension and healthcare plans were started. So the math doesn’t work anymore. The average age of a PFRS retiree is 52 years of age. Does that make sense, to start paying them 65% of their average final few years of wages at age 52? They could live for another 30+ years based on average life expectancy, longer than they even served. 8:18 is correct, when you have less people paying in to the pension fund than those drawing it down, you’re running a Ponzi scheme. So benefits will have to be diminished, and all ready sky high taxes will have to be raised. Just as interest rates spike. There’s no other solution, unless the state figures out a way to file for bankruptcy, after which they’d have to negotiate reduced benefits with the unions.
Well , the union’s are hear to stay.
Start with the police and fire .