Governor Christie's Pension Task force is a waste of time & resources. Here is why.

   

Governor Christie said "it's time to think out of the box" when he recently appointed nine people to serve on the bipartisan commission that will evaluate how New Jersey "can create an affordable and sustainable retirement and health benefits system" for taxpayers, current employees, and retirees.  He is sounding like an visionary; someone who is thinking of new and untested methods to conduct a "study" that has already taken place.  Let's be clear about one thing.  He is not thinking out of the box.  In fact, he is doing what many politicians have done in the past. Copy & paste.  He is NOT reinventing the wheel.  He is simply making it SEEM like he is.

     In 2005, Acting Governor Richard Codey created the "benefits review task force" that had ten members.  Actually, it was probably nine, like the current one, since the tenth member was a "Counselor to the Governor," who was there as an "Advisor to the Benefits Review Task Force".  So let's go with nine; the same as the current one.  These members weren't just anyone.  They were people who were professionals in a multitude of fields ranging from a retired Phillip D. Murphy, a Wall St. executive, David Alai, a Vice President Corporate Human Resources, Thomas A. Meyers, Senior Vice President & Chief Financial Officer from NJM Insurance Group, Richard D. Quinn Managing Director – Human Resources,
Public Service Enterprise Group, William M. Rodgers, III Professor and Chief Economist, John J. Heldrich Center for Workforce Development, Edward J. Bloustein School of Planning and Public Policy,
Rutgers University, and Paula B. Voos Professor of Labor Studies and Employment Relations, School of Management and Labor Relations, Rutgers University.  The task force also included Thomas D. Carver Commissioner, Department of Labor and Workforce Development, John E. McCormac State Treasurer, and A. J. Sabath Commissioner, Department of Labor and Workforce Development.  These were powerhouse people to have on this task force; People who were respected in their fields.

   The task force was charged with the following:

• Examining the current laws, regulations, procedures and agreements governing the provision of employee benefits to State and local government workers; 
• analyzing the current and future costs of the benefits; 
• comparing the level of benefits provided to government employees in this State to the benefits provided to other workers; 
• recommending changes to the laws, regulations, procedures,  and agreements designed to control the costs of such benefits to the State's taxpayers, while ensuring the State's public employees a fair and equitable benefit system.

This task force was Chaired by Phillip Murphy, and so the report was known by many as the Murphy Report.

     Without getting into all the boring details, they gave a final report.  Let's look at a few of their recommendations.  This is a quote from the report:

     "Government Must Meet Its Obligation
No More Pension Holidays — State and local government must meet their full obligation to make
annual payments to the pension plans.
No More Actuarial and Valuation Gimmicks — State government must use consistent and generally
accepted actuarial standards.
No more pension bonding.
The $12.1 billion unfunded deficiency must be immediately addressed." (remember, this was 2005)

     Sound familiar?  This was from 2005!  Nine years ago.  These recommendations were given to the State Government almost a decade ago, and we're still going round and round as if the Murphy Report never happened.  The report clearly states "Government must meets its obligation" (they didn't listen to this one), "no more pension holidays" (we know they didn't listen to this one either).

After making their recommendations, the Task Force went into a detailed review of the "history of pension and healthcare benefits". In this review, they talk about how "sound funding principles over the years allowed New Jersey’s plans to grow into one of the largest and well-funded pension plans in the country", and then goes on to say "this growth and stability has attracted administrations to use the Pension Fund Systems as a tool to balance the State budget. The funds were used to offset tax reductions and some were to maintain or expand current programs".  

     In 1999 and 2000, the pension funds rate of return was an +14%.  From 2001 through 2005 (the year of this study), it averaged negative 9.1%.  The report claimed that "the combination of enhancements, reduced contributions and lower rates of return have resulted in a $12.1 billion unfunded accrued liability that must be addressed."  It wasn't addressed.

     If anyone is interested in reading the complete Murphy Report, feel free to click here.  It's long and boring, but it contains some very current gripes, problems, complaints, issues, etc.  I can GUARANTEE you that the "Pension Task Force" will come up with the exact same problems, and the exact same recommendations.  This is nothing more than smoke and mirrors designed to make the general public think he is doing something about a problem that was already addressed by his predecessor.  Governor Christie, if you want your study, here it is.  Maybe you should read it.

My pension does not belong to politicians

   
 My pension should not be a political pawn.  Say it again:  My pension should not be a political pawn.  Okay, now that we've gotten that out of the way, lets get back to reality.  Right now, Governor Chris Christie is taking the national political stage, and he needs something meaty to bring to the table (insert food joke here). Unfortunately for countless government workers who are not making the big bucks unlike the political power-brokers, our pension is the meat; and the table is the national stage.  Governor Christie has been targeting the broken system (that he helped break) as the reason for all of the State's problems.  Fix the pension "problem", and all is well, right?  Uh, no.  Is the pension issue really a problem?  Maybe.  Maybe not.  As I've written previously, I don't see the pension as a crisis.  I see it as a scandal; a scandal that needs to be investigated by non-partisans as if this was a potential criminal act committed by our political leaders.

     When I started my public worker career years ago, my salary was relatively low compared with the private sector.  I accepted this in part due to the benefit package that came with the job.  One of the parts of the benefits package included a pension.  Not a free handout, but one that required me to pay a nominal part of my pay into the pension system that would afford me the "luxury" of a guaranteed income after I do my time. This is similar to Social Security, which by the way I never paid into and will never get.  For all you in the private sector, please read that last sentence.  I will never get a penny from Social Security because my employer did not take this from my check. Instead, they took a higher percentage of my salary (as compared to the 6.2% I would have paid as required according to Social Security Administration).  The last few years I paid 10% of my salary into my pension.  Before that I paid 8.5%.  Did you see that little two letter word two sentences back?  Who's pension did I say it was?  Mine.  I did not pay  into the Governments pension, I paid it into MY pension.  It was mine when I began my career, but lately it seems that Governor Christie wants the public to believe it's his to do with as he pleases.  Don't get me started (again) about how every governor since Christie Todd Whitman stole BILLIONS from MY pension, or how Governor Christie failed to make the required pension payments even though every foot soldier of a cop/firefighter/teacher made every payment without even a chance of skipping one.

   According to the Department of Treasure, the average firefighter & police pension benefit from this state is just under $58,000, while teachers get about $40,000.  Right now, there is no C.O.L.A. (cost of living increase), so the number you get is the number you get.  Forever.  Take into account that the average police officer dies within five years after retirement and reportedly has a life expectancy of twelve years less than that of civilians. (according to the national criminal justice reference service https://www.ncjrs.gov/pdffiles1/pr/109485.pdf)

     Why is New Jersey's pension issue such a hot topic?  Because politicians made it so.  Not only did they create the problem, but once they realized just how bad it got from their mismanagement, they shouted from the highest mountain telling everyone else how bad it was and now it needs to be fixed.  What makes New Jersey different than other states?  Why aren't other states' pensions in such disarray too?  Mainly because their Governors didn't raid it like their personal cookie jars like our Governors did for decades.

     The words of Mark Webber from NJSpotlight.com,  ring true here.  He stated "These states have proved that a sustainable pension system is not a fantasy; all it requires is honesty, discipline, and an ethical code that asserts that debts must be paid. If I run up my credit cards, I don’t get to walk away from my debts just because I don’t want to make sacrifices. States are no different: New Jersey can’t abandon its obligations just because tax hikes would get in the way of Chris Christie’s presidential ambitions".

     That is what this is all about.  The political ambitions of one Chris Christie.  The man who currently makes $175,000 a year (according to data universe), was also the U.S. Attorney for the district of New Jersey (can you say "federal pension"?).  This is also the same person who was elected as a Republican to the Board of Chosen Freeholders for Morris County in 1994 (can you say another pension?).  And lets not forget that in 1993, he was made a partner for the law firm of Dughi, Hewit & Palatucci of Cranford, NJ (can you say "cha-ching!!!").  So this is not a man that cares about the little guys.  He's a shark and we are bait fish.  He'll make sure we don't grow any bigger by eating us en mass.  He's doing this little by little every time he "reforms" the pension system.  But he's not reforming it, he's destroying it.

     If the government kept its nose out of my pension, maybe I'd support someone like Christie.  Remember the letter?  You know which one I'm talking about.  I wrote about it in my first blog post on this site.  Let me remind you about "the letter" in which he described the "sacred trust" and that he would never change our pension.  He did this for our votes, which he got, and almost immediately afterwards, reversed course telling the public that the pension needs to be fixed.

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     Governor Christie, do not politicize my pension.  It is the contractual compensation I have earned for work done.  I paid for it without skipping a beat, while you have paid when it was convenient for you.  It is not yours to play politics with.  It is mine to live my life with.