The Latest New Jersey Pension Scandal Is Not The Real Scandal You Should Be Worrying About

Everyone here is all upset about elected officials in New Jersey being able to collect a pension from a prior government job and their current salary ($49,000 if in the legislature).  

They’re reporting, editorializing, and generally making those elected officials feel like they have to apologise.

They don’t, but time will be wasted on closing this perceived loophole as money drains out of the system naturally.

Page 34 of the NJ PERS handbook has the offending language exception:

Elected Officials — Under N.J.S.A. 43:3C-3f a retired member of a State-administered retirement system who is elected to public office may either continue to receive a retirement benefit from the former employment and would not be eligible for enrollment in the new retirement system, or may suspend the retirement benefit (and any related health benefits coverage) from the former employment and enroll in the new retirement system while serving in the elected office. Upon termination of the elected office, the retirement benefit from the former employment would be reinstated.

This makes perfect sense.  There is no provision for increasing benefits during a suspension so, to continue receiving their monthly checks, elected officials would draw their salaries but not be re-enrolled for another pension.  There is no scandal here.  The real scandals in New Jersey are participants being able to game the system by spiking salaries, spiking service credits by taking low-paid jobs, and buying service credits when it’s advantageous.*

However in dealing with this supposed abuse effecting maybe 20 people so far there will be changes to the system.  Maybe they’ll force elected officials to suspend their pensions while in office but insert an ‘actuarial’ adjustment that will increase those pensions when they start up again thus having the system lose more money.**  Maybe they’ll bar pensioners from holding elected office.  Maybe they’ll force anyone elected to public office to immediately cease receiving any pension and then create 250,000 new elected positions to which they would draft all New Jersey retirees.***

Whatever the solution, if New Jersey politicians are involved, it will be either malefic, otiose, or both.

* Plus that thing about not funding it.

** Remember it’s the legislators themselves who would be making law changes effecting their own pensions.

***  250,000 may seem like a lot but that’s to those who don’t know New Jersey.  Just make all those appointed positions on all those boards we have here elected and 250,000 might not be enough.

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