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The facts are clear that the State and local governments went nearly a decade without making a full contribution into the State pension system, and nearly a full 3 years passed without a penny of employer contributions being made. Unfunded liabilities exploded and combined with a failing economy and pension investments, and what was once an over-funded pension system soon became, in the Governor’s words, “unsustainable.”
But sometimes the facts don’t get in the way of good politics.
The Governor’s mastery of storytelling has rewritten the State’s pension history. So when the pension and health benefit reform law was signed in 2011 and the champagne corks were popped in some circles around the State that public employees were finally put in their place, we were told to be thankful that our pensions were finally “saved” and that the increased employee contributions would only help restore fiscal soundness to the pension fund.
Retired cops in their 70s, 80s and 90s who have small pensions and needed a COLA(cost of living adjustment) to survive were told by the Governor and others that these reforms were leading to a day around the corner when COLA would be given back to them. Active officers who saw their pension contributions jump to 10% and their health care contributions increase to as much as 35% of an uncontrollable premium were told their increased payments were needed to pay off the unfunded liability in THEIR pension system.
So after 3 years and 2 rounds of pension cuts, in which New Jersey law enforcement officers were making their increased payments, we learn the real truth.
As with everything else that has been said about pension reform in New Jersey, the demand that increased employee payments were required immediately to “save their pensions” were a half-ruth designed to mislead the public.
On October 16, the Governor announced that because of the pension changes local governments could skip making another $116 million in payments to the pension system. That was on top of $267 million in “savings” the law yielded after its passage.
So, in the end, the same local governments that skipped billions in pension payments that created the unfunded liability in the pension system that became “unsustainable” are now being rewarded with $383 million in cuts to their current pension obligations.
Now let’s be clear. I don’t oppose using lower pension liabilities to lessen the impact on property taxpayers. The Governor and his allies have done their best to make this an “us versus them” debate.
But I am a taxpayer, too. A solvent pension system is what I was promised, and I am ready to pay my fair share because it matters a lot more to me whether my pension is around for my retirement. But his rewriting of the math is a kickback to local government that reeks of hypocrisy and rewards the same credit card spending politicians who created the crisis in the first place.
This type of playing with the numbers to meet the politics is the same thing that created the perceived chaos two years ago. It puts our pension system back in the same spiral and pushes the costs off to our great-grandchildren and steals benefits from our senior citizens.
Look at it as you would your mortgage, as if you were behind on your payments and the interest was piling on. If you suddenly received a big cash payment, wouldn’t you want to pay down your debt on the house or would you use that money to buy something unrelated? I would like to think you would pay off your house debt to make sure you don’t lose it.
But that is the point the State is missing here. They have demanded that our senior citizen retirees lose their COLA on their pension, have increased our contribution rate to the highest in the State at 10% and have made structural changes to lower their costs. Wouldn’t it make more sense financially and out of fundamental honesty to then take those “savings” and use them to pay down more of the unfunded liability faster? Wasn’t the point of all these changes to lower “unsustainable” pension liability so that employee pensions would be secured for the future?
Any cop will tell you that all they are looking for when they are working is honesty.In this case, we are all wondering where the honesty is in using reduced pension costs to reward State and local government failure to fund their past obligations.
Where is the honesty for an older retired officer who was promised these savings would bring his COLA back quickly but then told by the State that COLA won’t be restored until 2026? Where is the honesty for a cop who is now paying $20,000 more for pension and health benefit costs only to see health care premiums continue to rise while politically connected health care brokers continue to get rich? Where is the honesty as additional pension contributions go to a government that nearly bankrupted his retirement rather than paying down pension debt, as we were told had to be done immediately?
When cops are made out to be the enemy of the people to advance a political agenda, we can see it for what it is. But when we are called on to bail out the government for abuses that caused record losses in our pension and then watch that money leave the pension system, we can’t help but feel disgust and disappointment we didn’t think possible after the last 3 years.
(By Anthony F. Weiners, president, New Jersey State PBA)
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