Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Nope. Which is even funnier because it's a very simple and straightforward question.
So this has been a relatively amusing thread to read but dude, he answered your question, and he did so quite clearly.
You stated (back when your username was Pimbolo):
"...or you could just tell us what the total pension cost is currently in 2014, since you know."
He has replied with:
"The 2015 budget has $681 million contributed for pensions for all the teachers and state workers. That is the amount that is required if the State never missed a payment. Under the 2011 pension law the payment this year was supposed to be $2.25 billion. The actual payment that should be made to properly fund the pension for 2015 in consideration of all the years of missed contributions is $4 billion."
So unless you're trying to ask a different question, he gave you an answer. You may not like, or agree with, his answer, but your trying to claim he's being evasive or obtuse is way off-base; if anything, you're the one coming across that way. However, just to ensure you're receiving the answer you're clamoring for, pensions and health care costs currently represent 10% of the 2014 fiscal year budget BUT it would have taken $6.5 billion, or 20% of the budget, to fully fund pension and health benefit expenses. In round numbers, the $700 million actual pension contribution and $2.8 billion health benefit payment amount to $3.5 billion in employee benefit spending by the State in fiscal year 2014. This was over 10% of the state's $33 billion budget. It would have taken $6.5 billion, or 20% of the budget, to satisfy fully the funding obligation defined by statute.
It's funny, though, how people in this thread are decrying the pension benefits as this huge financial albatross when that's not what the focus should be on; really, it's the health benefits included in the pensions that are such a huge financial drain on the state, not necessarily the monthly pension payments. Look at the 2014 fiscal year, for example: the pension payment was only $700 million whereas providing health care amounted to 4x as much, at a cost of $2.8 billion. If you can't understand how NJ has chosen to provide health care for it's workers and retirees is what's really driving the system to insolvency, then I dunno what to tell ya.
NJ’s unfunded liability for retired workers’ health benefits is estimated at $53 billion. Unless changes are made, health care benefits will rise from 8 percent of the state budget last fiscal year to 14 percent in a decade, amounting to more than $6 billion. They currently cost the state $2.8 billion, with employees also contributing $253 million. From 1997 to 2014, the cumulative difference between NJ's actual pension contributions and what actuaries recommended totaled around $24 billion, and the state’s unfunded pension liability as a whole comes out to only $37 billion. Mind you, that $37 billion is a cumulative total for 17 years of shorting the pensions! That really comes down to an average yearly cost of $2.17 billion; compared to an average yearly budget of $30-35 billion, that's not really so much comparatively.
Part of the problem is that every NJ governor from Whitman onwards hasn't been making the full contribution to the pensions; the yearly outlay for the pension benefits hasn't been that much percentage-wise, but when you consistently don't pay the full amount for 17 years, that's how you end up with a $34 billion shortfall. However, that yearly pension payment is fairly consistent without any huge spikes in what is required of payment; not so with the cost for health benefits!
The cost of insurance in NJ is more expensive than the national average, for a host of reasons, including that NJ had one of the most highly regulated and restricted insurance markets even before Obamacare. But the state has also for years offered Cadillac coverage, and employees traditionally have contributed little. For a family policy costing $19,488 a year, state employees historically have contributed just 8 percent of the total. For public employees nationally, the average is 18 percent, and for all workers nationwide, the average is now 28 percent. When you pay that for what is essentially two workforces–your actual workers plus your retirees- the number comes up very big indeed, especially because NJ state workers retire well before they qualify for federal Medicare. The average retirement age of a state worker is 61.5 years. For a teacher, it’s 61.9 years. For police and fire, it’s 52 years old. It's the cost of providing Callidac health care coverage to these retirees for 20-30+ years, with very little contributions from them, that's really driving the state to insolvency; I mean, the annual cost of providing those health care benefits is expected to more than triple since 2008 alone, from just under $1 billion/year to over $3.5 billion in 2021!
The total cost is not due in one budget. It is due over time. I gave you the cost per budget year. You want the cost in one lump sum like it all becomes due tomorrow.
Bernie yes I agree with you health care is the real problem. That is one reason retirement age was pushed to 65 for most workers.
That's right, because a) that's the question I asked and b) that's the sum I was discussing when you said that I was throwing out incorrect information.
Here's the point:
Regardless of whether it's New Jersey or any other state, county, city, municipality, or company, nobody has ever successfully managed to pay for people to retire and then live in perpetuity without working while drawing a pension. Yet we're told that it's simple, easy, and affordable. All evidence and simple logic says otherwise.
People really go crazy trying to come up with clever arguments about why we should have a pension and that's because it is vital to them to continue getting paid for not working. Meanwhile, the people paying the pensions to public employees are somehow managing to survive and live without pensions themselves. That's called a slap in the face. Someone's sitting around telling you how easy it is for you to not retire so that they can.
I think the important number that everyone wants to know is...how many name changes have you had this week? And since most ppl think you're an obtuse idiot but wouldn't report you, does that mean that the CD moderators really can't stand you?
Earlier in the thread I said I have no issue with converting to a 401k plan going forward. What do you want to do stop the pension for the retired 80 year old or tell the 60 year old with 35 years of credit -guess what no money for you?
I disagree with you that pensions are not sustainable. They are sustainable if both sides follow the compact they agreed to. Now you might say but the private sector got away from pensions years ago. many did but in the private sector employees were not funding 60-70% of the cost.
The calcualtion for the pensions can be easily done because the employer contribution and the pension returns are know amounts. You could easily run the numbers to determine the funding level for the pensions at present.
Private sector employees, instead of being jealous of public sector employees, should ask why very profitable corporations shed their pensions and put the burden of saving for retirement on employees who wouldn't know the S&P 500 from the Daytona 500.
I'm curious where you get your information for continuing to state that public employees retire at middle age. If you want to draw your full pension benefits, the average retirement age of a state worker is 61.5 years. For a teacher, it’s 61.9 years. For police and fire, it’s 52 years old. I find it hard to quantify 61-62 as middle-aged. As for fire/police, that's middle-aged but then again, I'm not the one putting my life on the line on a daily basis so I just accept that as a cost of providing such services. Those are the average ages; the actual minimum ages to retire with full benefits are higher for all classes. I'm sure you have a lot of anecdotes to try to bolster your point but, aside from fire police, that's just not a factual statement.
And again, you're ignoring the rather large elephant in the room; for the defined benefit portion of a pension payment, the cost to the state is really quite low as a percentage of the state budget. You only have this huge number of $34 billion because every governor, Democrat and Republican both, since Whitman have failed to pay what was owed. When you don't make your full payments for 17+ years, you're gonna run up a huge tab, and unless and until someone comes along to start making restitution, the problem is going to get worse and worse. It's even more ridiculous because the defined benefits is actually the one part of the pensions that's fairly controllable as a cost and far easier to forecast for the future, whereas the health benefits being provided is far outpacing state revenues and the ability of NJ to pay.
Again, look at the 2014 fiscal year, for example: the pension payment was only $700 million whereas providing health care amounted to 4x as much, at a cost of $2.8 billion. You honestly mean to tell me that $700 million is a huge driver of costs for a total state budget of $34 billion? Honestly?
Now, you're anti-pension and I get that, but what you really should be is anti-the current state of health care in this country, because THAT'S what's really a huge problem in this country: a system ruled by insurance companies with no incentive to provide transparent cost containment. Health care costs will never become manageable unless and until this changes, and honestly, changing the kind of health benefits the state provides would go much further towards containing costs and reducing the burden upon the state.
That's great, but 61 isn't "old" in today's terms. Also, you're citing those statistics from a report that also blasted New Jersey's common practice of double- and triple-dipping of pensions, which, by the way, would also tend to drive averages up. Finally, many police and firemen retire in their upper 40s. P.S. Full pension is attained at age 55 for teachers.
Yes, I'm citing those facts from the report that the state just paid for detailing the problems with the pensions, so, you know, those are FACTS. If you can please state where your assertions are coming from that disprove those numbers, that would be most welcome, since I can't find any corresponding data to corroborate your claim.
Quote:
Originally Posted by erooomo
That's interesting, but I already mentioned that's merely a talking point which is largely irrelevant for a number of reasons. I'll spell them out specifically for you:
a) Saying "as a percentage of the state budget" is merely an attempt to distract from the actual number being tens of billions of dollars.
b) Using a percentage of the state budget is also irrelevant since it's not describing the total cost, but merely the amount budgeted for a single year.
c) If the cost is so miniscule and affordable, then, as I said, perhaps all the union and public employees should create their own personal pool of union pension funds. Oh, wait, you mean it's small for everyone else to pay, not for the pensioners.
The actual number being tens of billions of dollars is because the state hasn't been paying what it owed for almost two decades. That's like not paying your $50 minimum payment on your credit card; your overall debt will end up becoming exorbitant but your scheduled payment was quite manageable. And again, the cost to pay the defined benefits is only $700 million out of a $34 billion budget; the cost for providing health care is $2.8 billion. $700 million is just not as large as $2.8 billion; that's just simple math.
Quote:
Originally Posted by erooomo
Actually, what you really should be is pro-no government in healthcare, since that's what caused the derailment of market forces in the insurance industry. But I can tell you're extremely liberal and are fighting for not having to pay for any healthcare, either, am I right?
Well, now I can understand why you keep getting banned and having to change usernames. Please continue with the childish name-calling and we'll have to continue this debate under yet another one.
Funnily enough I'm not very liberal at all, just pragmatic, and as an independent contractor, I pay for my own taxes and insurance, which I'm quite happy to do, but please, keep throwing out your opinions as god-given facts; it really serves to drive home that you really have no factual basis for a lot of your assertions. All I'm trying to do is drive this debate back to the facts; can you do the same?
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Which is even funnier because it's a very simple and straightforward question.
