Jobs as judges, prosecutors, and municipal business administrators are the crock of gold at the end of a politician’s rainbow here and with bailouts, unlimited debt, and an apathetic tax base ripe for plucking politicians have an opportunity to sweeten the pots. According to politicoNJ that is exactly what they are planning on doing with five bills (one already enacted).
A4313: transfers Administrative Law Judges from the Defined Contribution Retirement Program to the Public Employees’ Retirement System. The Office of Legislative Services (OLS) estimates that this bill will lead to annual State cost increases resulting from the transfer of Administrative Law Judges from the Defined Contribution Retirement Program to the Public Employees’ Retirement System. The first-year cost could approximate $2million.In subsequent fiscal years, the annual State cost will grow as a function of increases in judges’ salaries and other economic factors. The bill may also make Administrative Law Judges eligible for healthcare benefit sat retirement that are not available in the Defined Contribution Retirement Program.
S3197: Clarifies eligibility for deferred retirement for certain judges in JRS. PoliticoNJ guessed at who could benefit:
The bill appears to have been written with Middlesex County Prosecutor Yolanda Ciccone in mind, as she otherwise would have to leave the prosecutor’s position when she reaches the mandatory judicial retirement age of 70 in 2024 in order to collect her judicial pension. It also could potentially apply to Judge William Daniel, whom Murphy nominated last week as the next Union County prosecutor.
Clearly, we need to do everything we can to cut the cost of our annual pension payments at both the state and local levels in order to continue to guarantee the retirement payments our retirees have earned and to reduce the unfunded liability that is such a burden to taxpayers.
That is why we have developed legislation to enable our state and local pension systems to add revenue-generating assets like water and sewage treatment systems, High Occupancy Toll (HOT) lanes, parking facilities and real estate to provide new, diversified sources of revenue for their investment portfolios.
According to the EMMA website New Jersey borrowed another $400 million last week for which they had to provide an Official Statement which included 20 pages on the situation with public pensions and benefits. Excerpts follow.
The contribution of the Lottery Enterprise is valued as of June 30, 2020 at $12.569 billion, based on a 30-year straight line amortization. However, the first reevaluation of the value of the Lottery Enterprise required by LECA has not yet been performed. If the contribution of the Lottery Enterprise were not taken into consideration in calculating the funded ratio of the Pension Plans, the funded ratio of the Pension Plans as of June 30, 2020 would have been 37.6% instead of 49.8%. (page I-60)
The state income tax eventually failed to stem the rise in the highest property taxes in the country since it was based on providing money to hundreds of de facto fiefdoms with no oversight. Ms. Egea goes on to speculate that Governor Murphy, with an even more pressing need for revenue, has another new tax in mind:
In 1976, New Jersey voters passed a constitutional amendment that dedicated the entire income tax to the Property Tax Relief Fund and lower property taxes in 1997 did help Brendan Byrne get reelected. There is no time for that this year so expect the massive debt and structural budget deficit to be the excuse for this new tax that should be hitting in 2022.
The Comprehensive Audited Financial Statement Report (CAFR) for the State of New Jersey, Division of Pensions and Benefits, as of June 30, 2020 appeared on the state website this month which means the actuarial reports should be out soon.
Financial Highlights Fiduciary Funds –Pension Trust Funds and Other Postemployment Benefit (OPEB) Plan (page 3)
Fiduciary net position decreased by $2.4 billion as a result of this year’s operations from $87.3 billion to $84.9 billion.
Additions for the year are $10.2 billion, which are comprised of member, employer, nonemployer, and employer specific and other pension contributions of $8.9 billion and net investment income of $1.3 billion.
Deductions for the year are $12.7 billion, which are comprised of benefits, refund payments, and transfers of $12.6 billion and administrative expenses of $62.0 million.
I am researching what counties been paying into the New Jersey Retirement System for their Public Employees (PERS) and Police and Fire Personnel (PFRS) since Union County has been budgeting more than they were billed but the 2021 budgets for 7 of the 21 counties are not out yet so that project is on hold.
But in going over the history of what Union County has been sending to PERS and PFRS since 2005 (which presumably would be in line with other localities) there have been some politically motivated swings but, bottom line, Union County’s ‘fair share’ is now defined as 25 times more than what it was in 2005 for PERS and 8 times more for PFRS.
Public employees and their unions are certainly to blame for allowing promises made to not be fully funded,
Those contributions that public employees make are negotiated at levels they have input into (nothing to do with funding benefits honestly); and
What worthwhile programs for New Jerseyans did those tens of billions of dollars in missed payments fund and, if that money was invested wisely, shouldn’t New Jerseyans be reaping some benefits around now? If the money was not invested wisely then why begrudge not having more of it to waste?
Since I can’t find where they define time-weighting the best I can do is assume that the 3.04% rate of return for June 30, 2015 was mistakenly augmented to 3.41% which was enough to drop the rate of return below the 6.36% barrier.
Annual pension contributions from local employers in New Jersey come due next week based on the June 30, 2019 actuarial valuations. The state website only has the breakdown in pdf format but it was easy enough to export the numbers into excel for the PERS and PFRS plans.
Many local employers are also drafting their 2021 budgets so it was interesting to see what one of them (Union County) allocated as pensions costs for 2021.