Public Administration and Bureaucracy
12-3-13

NJ Pension Deficits: Who’s Responsible?

When it comes to the pension deficit in New Jersey the public seems to be split on who and what is responsible for this debacle. This is due to a sinister campaign of misinformation on behalf of the interests of the beneficiaries of keeping the public in the dark when it comes to their retirement money. These beneficiaries are politicians, hedge fund managers, bankers, and Wall Street investment firms. The majority of people who I’ve spoken to on the issue in NJ, believe the workers pensions are too generous and because of that simple fact, the fund is unsustainable. This is a story that has been concocted by the powers that be that have manipulated and frankly stole the money in the first place. The very crux of the argument is meant to pit public and private workers against one another. Their like the little red devil on your shoulder. They say “heeeey! look what their getting, look what their giving them, your not getting that right?, doesn’t that piss you off? , those buncha assholes, f#$% those guys amirite?” That’s wasn’t word for word what they say but you get the picture. Those greedy teachers, policemen, and firemen argle bargle etc etc. It’s an argument that’s very surface in its approach and very understandable, relatable and easily sold. It’s playing on very base human emotions of jealousy and anger, two very easy emotions to manipulate especially where monetary issues are concerned. It’s a way harder and less entertaining story to tell on my side throwing numbers at people and talking secretive backdoor deals with sinister sounding organizations, although now that I’m typing it and I’m reading out loud I realize that I’m making it sound like a James Bond movie but in real life; not an interesting story to tell to explain why they pension fund is not underfunded on behalf of the people who are supposed to receive its rewards. It’s not quite as concise as saying “they have more than you, aren’t you angry about that?” It’s not as easy to get people riled up telling them the boring facts of the actual truth. So a party line gets written and the party line gets towed. The party line is being towed by both parties and that party line is this: the pension fund is underfunded because the evil unions and greedy workers are getting too much. This could not be a more simplistic and broad brush stroke conclusion to have come to. Setting aside the fact that, questioning whether the benefits are too generous is absolutely a reasonable question to ask, this conclusion disregards so much information about where this money is going as to be patently ridiculous. I’m going to attempt to explain why the people to blame for the deficit are as I said before politicians, bankers, hedge funds, and Wall Street. Let’s start at the beginning; in 1974 the congress passed the ERISA better known as the Employee Retirement Income Security Act (isn’t it amazing how they name the bill inferring it does the very antithesis of what it actually does). Naming this bill the Employee Retirement Income Security Act is like naming a bill meant to outlaw bicycles the “We Love Bicycles Best Friends Forever Act.” The bill was meant to do what it sounds like it should do, but the one major flaw was a ridiculous loophole that did not cover public workers pensions. “Ooops “said the lobbyists who likely wrote the bill. That was definitely a mistake. This opened the door to politicians in their home states illegally rerouting funds from the workers pensions fund to …well its hard to know exactly what they spent the money on that’s part of the problem. The ERISA says that employers must disclose exactly where the money is going, but since it magically doesn’t cover public worker pensions the state government has no obligation to let anyone know what kind of shady nepotistic deals are being made. And be sure these deals are being made. It’s no stretch of the