Category Archives: generational equity

Long Term Pension Data for New York and New Jersey to 2016: Teacher Pensions

Across the country taxpayer pension costs for public schools are soaring, and state and local taxes are being increased while money actually spent on education is being cut to pay for it. You see it in California, where a huge tax increase “for education” went exclusively to pensions, and in Illinois, where the City of Chicago’s schools are on the brink of bankruptcy. You see it in Kansas and Oklahoma. In some cases soaring pension costs are the result of past taxpayers’ unwillingness to fund the pensions teachers had been promised, promised for some in lieu of Social Security, which those teachers will not be eligible to receive. In other cases pension costs are soaring because politically powerful teachers’ unions cut deals with the politicians they controlled to drastically increase pension benefits, beyond what had been promised and funded. In many cases there is a mix of both factors.

New York City happens to be the place where the teachers’ union, the United Federation of Teachers (UFT), is perhaps the most guilty, and taxpayers are the least guilty, with regard to the pension crisis. And it the place where the burden of teacher retirement is the greatest. The result is large class sizes despite extremely high public school spending, and a host of services that New York City children do not receive. With virtually all New York politicians in on the deals that have left the New York City Teachers’ Retirement System (NYC TRS) among the most underfunded in the country, however, there has been a desperate attempt to cover up the damage. So the consequences of retroactive pension increases for NYC teachers (and police officers and firefighters) have shown up not so much in education (and policing and firefighting), but in every other public service in New York. And all of this is under Omerta.

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Long Term Pension Data for New York And New Jersey to 2016: The Large Plans for Most Public Employees (With Commentary on Hedge Funds)

New York City and New Jersey, like most places, have separate pension plans for teachers, police officers, and firefighters, and large general pension plans for all other public employees combined. This post is about updated Census Bureau data, for the years 1957 to 2016, for the general pension plans: the New York City Employees Retirement System (NYCERS), which also covers New York City transit workers, the New York (state) Public Employees Pension and Retirement System, which also covers local government workers (including police officers and firefighters) in the rest of New York State, and the New Jersey Public Employees Retirement System, which covers most public employees in New Jersey. In general the findings are the same as they were the last time I analyzed this data.

https://larrylittlefield.wordpress.com/2014/07/20/updated-long-term-pension-data-for-new-york-and-new-jersey-the-large-plans-for-most-public-employees/

It has been a few years, however, so I have decided to repeat the analysis and update the charts below, and add a further discussion on hedge funds and the rate of return at the end. The data shows a pension disaster not only for New Jersey, where taxpayers have contributed very little over the years, but also for New York City, where taxes are high and taxpayers have contributed massively. The New York State system is in somewhat better shape – but in much worse shape than a decade ago.

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Public Employee Pensions in New York And New Jersey: Updated Data from the U.S. Census Bureau Through 2016

Last year, when I went to update the tables I had compiled of U.S. Census Bureau data on public employee pensions over the decades, I found that the City of New York had started misreporting data for the NYC teacher pension fund.

https://larrylittlefield.wordpress.com/2016/07/26/census-bureau-pension-data-for-2014-and-2015-not-usable-thanks-to-nyc/

Reporting to the Bureau that the teachers’ own money in their Tax Deferred Annuity (TDA) accounts was actually pension fund money, to make the pension fund deficit seem less disastrous. And not reporting the payments from the actual pension fund to those TDA accounts as pension benefits, to make teacher pensions seem less costly than they actually are. I spoke with the Bureau about this, and they told me that they intended to speak with NYC about it, but no corrections would be made until this year. So I chose not to finish updating the tables and write posts.

This year I downloaded the data, and found the same errors. The Bureau told me it had intended to make a correction, but the incorrect data had “crept back in.” But if I waited until next year at this time, surely the data will be corrected. But instead of waiting another year, I decided to use the Annual Report of the NYC Teachers Retirement System to correct the data myself. The results are in the spreadsheets linked and available for download below.

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What the Social Security Administration Knows, and Could Tell Us

Last December I wrote a quick post expressing concern that the U.S. might have reached peak transparency, now that the Democratic Party, as a result of the rising burden of public employee pensions, has turned against the dissemination of accurate, factual information about government and society. Joining the Republicans, who have been against providing access to such information for a couple of decades.

https://larrylittlefield.wordpress.com/2016/12/10/nobodys-gonna-pay-you-to-tell-the-truth-or-worse/

Since then I’ve seen the same concern expressed by many others, now that Donald Trump, hardly Mr. Transparency himself, is President, with reports of government bureaucrats spiriting away statistical information to a secure location before the change of regime, lest it be deleted. Even so, I’m always on the hunt for alternative sources of actual facts, and this January I happened to think of one – the Social Security Administration. And wrote a letter to the Deputy Chief of the Office of Long-Range Actuarial Estimates, the office “responsible for estimates for up to 75 years in the future, based on economic/demographic assumptions developed for the annual Trustees Report.”

I didn’t receive an answer. Given that people need to keep their jobs until they can collect their pensions, and having worked for the government for 20 years myself and knowing what it’s like, I didn’t expect one. It is fair to say that I wrote the letter that follows for the purpose of publishing it on this blog after a reasonable period of waiting for a response had passed.

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Generation Greed: They Aren’t Using Those Words, but Some Folks Are Starting to Connect the Dots

After a three-decade party, with some folks getting to party a lot more than others, there is suddenly no way to avoid the reality other than drifting into closed-eyed fantasy. The generations I have identified as Generation Greed, the richest in American history, are leaving the generations to follow are much worse off in many ways. And, in many cases, those at the back end of Generation Greed are facing old age much worse off then they themselves had been, forced by their prior excess consumption, debts and prior lack of savings to downsize a material lifestyle that for many of them had been the whole project of their lives. As I most recently noted in detail in my previous post.

https://larrylittlefield.wordpress.com/2017/04/25/generation-greeds-last-economic-orgy-federal-reserve-z1-debt-data-for-2016-rising-housing-prices-census-bureau-data-on-worse-off-young-adults-falling-life-expectancy-etc/

The consequence of this realization has not been an increase in empathy or an attempt to change the worst aspects of a collective legacy while there is still time. There is still no willingness to make any personal sacrifices in the present for the collective future. The fact that the non-greedy minority of Generation Greed hasn’t stepped up to face the facts and battle for their own offspring is one final disappointment. The desperate desire of some of its rich to insulate their own children from the consequences of a diminished society — by repealing the estate tax — is the only effective example of concern by today’s seniors with what they will leave behind. Rather, the media they dominate remains filled with demands for scapegoats and rationalizations, and one more round of “what about my needs!” Needs that are somehow supposed to be met by latter born generations that are poorer, and yet are having large economic burdens shifted to them that will diminish their entire future.

But if one uses the right search terms, one can find some examples over the past year of younger generations beginning to resent the country they have inherited, albeit not enough to get off the couch and do something about it.

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Generation Greed’s Last Economic Orgy: Federal Reserve Z1 Debt Data for 2016, Rising Housing Prices, Census Bureau data on Worse Off Young Adults, Falling Life Expectancy, Etc.

The problem with socialism is that you eventually run out of other people’s money” – Margret Thatcher in 1976

The problem with capitalism is that given enough inequality, eventually businesses trying to sell things run out of other people’s money” — Larry Littlefield, 2016

For 35 years, generations of Americans born after 1957 or so have been paid less but sold more, with the difference covered first by more household members in the workforce, then by inadequate requirement savings, and then by soaring public and private debt. The richest and most entitled generations in U.S. history worked hard and were very creative, but they over-consumed what even they were able to produce and expected too many years in retirement with too little in savings, at the expense of the poorer generations that have followed them. With some members of those generations grabbing far more than the others. With too much money in too few hands, the whole world economy has become dependent on Americans spending more than they had. And since America finally started to go broke with millions retiring into poverty, the world economy has faced a global crisis of demand.

When you put all the trends together, as I have below, it adds to a shocking picture that puts every current debate in context. Today’s young adults paid less than Generation Greed was paid at the same age in 1975, and forced by government policy to pay more for housing. Life expectancy falling. Personal and federal debts once again soaring, all the mistakes of the 2000s being repeated. Topping it off, we now have Donald Trump as President. Does this mean that the U.S. is finally prepared to admit, face and tackle its problems? Or does it mean that the most over-privileged and entitled members of the most over-privileged and entitled generations in U.S. history are just grabbing more, in one last economy orgy before the final collapse?

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Infrastructure: Census Bureau State and Local Government Finance Data for FY 2004 and FY 2014

If there is one thing that virtually every public policy commentator and politician seems to believe, it is that more should be spent on infrastructure. And yet the direction of public policy has been in the exact opposite direction, with maintenance often unfunded or funded by debts that now soak up a large share of revenues dedicated to roads, bridges, airports, and transit, water and sewer systems. The trend has been at its worst in the Northeast. And as costs from the past, including pension funding and debt service, increased between FY 2004 and FY 2014, expenditures on the future – on the infrastructure – decreased when measured per $1,000 of personal income. It’s a trend that, according to anecdotal evidence, continues to this day, with consequences that continue to appear over time as the sold out future becomes the present.

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