June 23, 2008 - 2:22pm
A few more pension reform questions
By Debbie HoltzWith all the picketing, legal saber-rattling, TV and radio ads, and political arm-twisting over the proposed pension changes, how's the average Jersey Joe and Jane supposed to stay in the know?
This is "inside baseball" at its best. So it's important the daily newspapers distill the facts for readers.
Credit The Record for its Sunday series which went a long way towards reminding us how the State got into this hole -- while sorting out what's now at the heart of the current pension reform controversy.
Still, there are a few questions we'd like the media to ask...
Of the unions: If the state's healthcare and pension funds have a $75 billion-plus shortfall and recent reforms are only in the hundreds-of-millions-of-dollar range, how exactly is the state going to pay this tab without changing the rules for new employees -- particularly when state and local workers now earn more in benefits and contribute the least as compared to most other states.
Of legislators: If as reported by The Record, all appointed and elected officials would now have to work 20 hours a week to join the health system, who is going to keep track of their weekly time sheets? The voters?
And of the governor: The governor told The Record's editorial board on Tuesday "that in the 2007 negotiations with state labor unions, his administration saved $6.4 billion through 2022." But isn't that the annual savings the state should start to realize in the year 2022 - and wasn't that before the healthcare giveback? The real question is how much are the net savings projected for next fiscal year, after the negotiated 3 percent salary increase?
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CONTRIBUTIONS OF PUBLIC WORKERS TO THE PENSION
MS. Holtz I believe your comment that "particularly when state and local workers now earn more in benefits and contribute the least as compared to most other states." is inaccurate.
NJ public workers contribute from 5.5% to 8.5% of their salaries to their separate pension funds over the last 10 years they were among the top contributing public employees to their funds in the US.
In the last 2 years their health benefits were reduced and their pension contributions were increased by 10%. Their Public Government counter parts have one of the lowest contributions in the country.
Pension and Investment Newspaper/Magazine in its annul top 1000 pensions issue determined public employers contributions are TWICE AS MUCH AS THE EMPLOYEES.
IN THE LAST 12 YEARS THE STATE AND LOCAL GOVERNMENTS HAD MANY PENSION PAYMENTS HOLIDAYS AND CONTRIBUTED A LITTLE MORE THEN $3 BILLION THE LAST $1 BILLION PUT IN BY THE STATE EARLIER THIS MONTH. WHERE AS PUBLIC EMPLOYEES CONTRIBUTED INTO THESE FUNDS A LITTLE MORE THEN $11 BILLION ALMOST A 4 T0 1 RATIO OVER PUBLIC EMPLOYERS (the data comes from a survey requested by a former NJ Senator 2 years ago from the office of legislative services).
IF WE WERE TO RUN P&I'S RATIO THEN THE PUBLIC GOVERNMENTS IN NJ SHOULD HAVE CONTRIBUTED $22 BILLION INTO THE FUNDS BUT DIDN'T.
That is one reason why the pension fund for NJ is hurting.
PFRS
I just keep wondering when the guiding lights in Trenton enact similar changes to a more costlier pension system, PFRS. And while they're at it, eliminate the bane of local government known as binding arbitration.
How about a real change!
It's about time we had real change in the pension system. Instead of pensions, how about we give them a 401K plan, like we get in private industry. At the same time, let's kick the age of retirement up to 65 like all of us smucks in the real world have to reach to get full retirement benefits. It's about time the babies in the public sector learn something about the real world!
"The only man who never makes a mistake is the man who never does anything."
--Theodore Roosevelt--