BREAKING NEWS
April 4, 2007
N.J. Pension Fund Endangered
In 2005, New Jersey put either $551 million, $56 million or nothing into its pension fund for teachers. All three figures appeared in various state documents - though the state now says that the actual amount was zero.
The phantom contribution is just one indication that New Jersey has been diverting billions of dollars from its pension fund for state and local workers into other government purposes over the last 15 years, using a variety of unorthodox transactions authorized by the Legislature and by governors from both political parties.
The state has long acknowledged that it has been putting less money into the pension fund than it should. But an analysis of its records by The New York Times shows that in many cases, New Jersey has overstated even what it has claimed to be contributing, sometimes by hundreds of millions of dollars.
The discrepancies raise questions about how much money is really in the New Jersey pension fund, which industry statistics show to be the ninth largest in the nation's public sector, with reported assets of $79 billion.
State officials say the fund is in dire shape, with a serious deficit. It has enough to pay retirees for several years, but without big contributions, paid for by cuts elsewhere in the state's programs, higher taxes or another source, the fund could soon be caught in a downward spiral that could devastate the state's fiscal health. Under its Constitution, New Jersey cannot reduce earned pension benefits.
The New York Times |
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New Jersey Leads the Way Down the Pension Fund Hole
By: Pete Kendall, April 5, 2007 |
Bailouts generally come near lows; the push for this one hit within days of the stock market’s peak, which means it will only expand to unrivaled proportions as the bear market and economic contraction roll in. But it won’t work. Chrysler and Continental Illinois were “too big to fail;” the unfolding crisis will be “too big to bail.”
The Elliott Wave Financial Forecast, April 2007 |
Uh ... ooops!
--Tiane
This is what happened while the markets were still going up. As the across-the-board decline, including all of the exotic “alternative” investments in venture capital, real estate, hedge funds and foreign securities and bonds, starts to dig in the questions are going to shift from “Where’s the funding” to “Where are the investment assets.” The quote above relates to bailouts because that’s what many pensions are going to require. When their need of a good public servants is keenest, New Jersey and other states will have to drastically reduce the best perk of government work, a fat pension.
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