Opinion: Heads They Win, Tails You Lose

Andrew Sidamon-Eristoff In 1866, Surrogate Gideon J. Tucker wrote that “[n]o man’s life, liberty or property are safe while the Legislature is in session.” Over a hundred years later, the New Jersey Legislature is doing its very best to keep Surrogate Tucker’s warning pertinent by once again advancing special-interest legislation that reaches for a new low… Read the rest of this entry »

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Christie calls for interested parties to “come to the table” to solve pension crisis

Photo by Paul Scharff

Governor Chris Christie reacted to the New Jersey Supreme Court decision that he has the authority to cut pension payments from the State Budget and that the political branches of government…the Governor and Legislature…not the Court…must “deal with one another to forge a solution to the tenuous financial status of New Jersey’s pension funding in a way that comports with the strictures of our constitution,” by calling for “all interested parties” to come together and solve the New Jersey’s pension and benefit crisis “once and for all.”

“This decision is an important victory not only for our taxpayers who simply cannot afford these unsustainably high costs, but for limited, constitutional government that recognizes the proper role of the executive and legislative branches of government,” the Governor said in a statement issued by his office, “The Court’s position is clear, as is mine, it is time to move forward and work together to find a tangible, long-term solution to make our pension system and public employee health benefit costs affordable and sustainable for generations to come. In light of today’s decision, I urge all interested parties to come back to the table and partner with me to finally solve this problem once and for all.”

Assemblyman Declan O’Scanlon, R-Monmouth, the Assembly Republican Budget Officer, said,

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MEET THE BIGGEST ‘TRIPLE-DIPPER’ IN THE NEW JERSEY STATEHOUSE: SEN. FRED MADDEN POCKETS $241,000 A YEAR IN PAY & PENSION

By Mark Lagerkvist, NewJersey.Watchdog.org

For state Sen. Frederick Madden Jr., the path of public service also has been a road to personal wealth.

Madden collects more than $241,000 a year in public salaries plus retirement pay. He gets $49,000 as a legislator, a $106,983 as a police academy dean and an $85,272 annual pension as a State Police retiree. 

Since he “retired” at age 48 nearly a decade ago, Madden has cashed $770,156 in New Jersey retirement checks. Among the 15 legislators who draw state pensions, no one pockets more than the senator from the state’s 4th Legislative District, which includes parts of Gloucester and Camden counties.  (See chart below.)

It may madden taxpayers, but double-dipping practices by public officials generally are legal under state law.

“There are those who have an issue with people retiring from one organization and going to work someplace else,” Madden told New Jersey Watchdog. “Obviously I don’t have a problem with people doing it. I’ve accepted that in my own personal life. I don’t have a problem with it at all.”

The problem is whether the state can afford such generosity. New Jersey’s pensions are underfunded by $36 billion, according to the State Treasury’s latest numbers. Other studies have estimated the shortfall as high as $144 billion.

‘Special Retirement’

How did Madden retire with a fat pension at 48? Other public employees in New Jersey typically must wait until 60 or older to retire with full benefits. Under federal Social Security, the full retirement age is 66.

The answer is simple: “Special Retirement.” It is a rule that only applies to law enforcement officials in the Police & Firemen’s Retirement System (PFRS) or State Police Retirement System (SPRS). The special retirement provision allows officers to retire at any age after 25 years of service, without reduced benefits.

“It’s basically a young person’s job,” said Madden. “The system is set up for them to retire early to keep the forces young. We have mandatory retirement at 55.”

Two months before he turned 21, Madden was hired as a $9,088-a-year state trooper who would climb up the organizational chart. He could have retired at 45 with full benefits, but Madden maximized his nest egg by staying for four more raises, three more birthdays and two big promotions to lieutenant colonel and deputy superintendent. Then he retired June 30, 2002.

“I had reached the top of my career in policing. It was in my best interest to move on, so I decided to retire,” Madden said.

Four months after his 48th birthday, Madden began receiving a SPRS pension for life. It will pay him more than $2.5 million, if he lives until age 80 — the average life expectancy for a 57-year-old white male in the United States, according to federal statistics.

“I’ve earned that,” said Madden. “I paid into that system like every other trooper. You can make it sound like I’m getting something I don’t deserve, and that’s wrong.”

Madden’s pension is based on 27 years of service and a final salary of $112,451 a year. Previous years of lower pay and smaller retirement fund contributions are not part of the calculation. Under the statutory formula, his pension pay is 67 percent of his final salary, plus cost-of-living increases.

The senator noted the State Police does not participate in Social Security. Employees do not contribute to the federal program and typically do not qualify for its retirement benefits.

One-Day Retiree

The first thing Madden did after he retired was return to the government payroll in a law enforcement job.

On July 1, 2002 — one day after he left the State Police — Madden started a new job as chief of detectives for the Gloucester County prosecutor. His new $105,000 salary, along with a pension of roughly $75,000, boosted Madden’s annual income to $180,000.

“There are a lot of positives to taking retirees that have strong resumes and productive work experience and placing them in other public jobs,” said Madden.

One state rule is supposed to prevent workers from temporarily retiring from public employment to take advantage of pension funds. A retirement only is considered to be legitimate, or “bona fide,” if “there is a good faith action to retire” and “there has been a cessation of employment of at least 30 days,” according to SPRS and PFRS handbooks.

If a retirement is not “bona fide,” the state can force the employee to return any benefits paid.

The rule often is ignored and seldom enforced. Previous New Jersey Watchdog investigations uncovered numerous examples of one-day retirements by officials who currently work for the state attorney general, county sheriffs and prosecuting attorneys.

Back to the State Police

In a twist of fate, Madden returned from his “retirement” to head the State Police temporarily as a result of someone else’s scandal. 

Gov. James McGreevey named Madden acting superintendent in October 2002 when Superintendent Joseph Santiago resigned amid allegations of “gross mismanagement.” The appointment lasted four months.

“One Friday morning, I showed up at the prosecutor’s office for work. That afternoon, I was in the governor’s office assuming command of the division,” recalled Madden.

It was good news for Madden’s paycheck. The Gloucester prosecutor gave him a $20,000 raise — upping his pay to $125,000 a year — then assigned Madden to the State Police on an “intergovernmental loan.”

Meanwhile, Madden’s state pension kept rolling in at a rate of $75,000 a year, boosting his annualized income to $200,000.

Triple-Dipping

When the State Police found a new superintendent, Madden quit the Gloucester County prosecutor in February 2003 to run for state Senate as a Democrat.

“I was thinking, ‘If they can do this job…’” Madden chuckled. “I think I bring morals and ethics and truthfulness to the seat. I had been policing my entire life, and I wanted to try something different.”

In a close election decided by recount, Madden beat Republican incumbent George Geist by 63 votes. One of the victor’s spoils was the $49,000 annual pay received by legislators.

In May 2006, Madden found a third stream of public income. He was hired as acting dean of the Gloucester County Police Academy with a $76,128 a year salary. Two years later, Madden was promoted to dean of the academy, a law enforcement training program at Gloucester County College in Sewell. His pay was boosted to $96,500 per annum.

“I have no problem balancing them,” said Madden, referring to his two jobs. He said he has flexible hours at his 35-hour-week college position and takes vacation time to attend Senate sessions when necessary.

He contends that state taxpayers benefit because he can hold two public positions in New Jersey concurrently.

“If I go across the bridge to Temple University (to work in Pennsylvania), those people get the benefit of my training and the college degrees that the people of New Jersey have invested in,” he said.

Madden’s police academy salary is now $106,374 a year. Cost-of-living hikes have boosted his annual pension to $85,272, while his legislative salary remains at $49,000.

Bottom line: Madden rakes in $241,255 a year from a state pension plus two public salaries. He said he is not earning additional pensions from the college or Legislature.

15 NJ Legislators Collect State Pensions

New Jersey Watchdog found 15 current legislators — six senators and nine Assembly members — who receive state retirement checks in addition to legislative salaries, according to public records. The nine Democrats and six Republicans receive an average of $43,000 in annual pension pay.

Not coincidentally, those who get the biggest checks are retirees of PFRS or SPRS. State pension formulas and regulations favor law enforcement officials over other public employees.

For example, if Madden had retired as a member of the Public Employees Retirement System (PERS) at the same age, salary history and years of service, his pension would have been cut in half.

Of the 15 lawmakers who receive state pensions plus legislative salaries, three are on the payrolls of other public agencies in New Jersey. In addition to Madden:

• Sen. Jim Whalen receives $154,637 a year — $70,477 as a teacher in the Atlantic City School System; $35,160 from PERS as a retired municipal official and $49,000 as a legislator.
• Sen. Robert Singer gets $88,404 a year — $5,000 a year as chairman of the Lakewood Municipal Utility Authority in Ocean County; $34,404 from PERS as a retiree of multiple governmental agencies and his $49,000 legislative salary.

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STATE LEGISLATORS WHO COLLECT NEW JERSEY PUBLIC PENSIONS

New Jersey Watchdog’s research focused on current state legislators who draw retirement pay from state pension funds. Data are from pension, payroll and personnel records obtained from the New Jersey Department of Treasury, Civil Service Commission and local governmental bodies through state’s Open Public Records Act requests. Pension amounts and employment status are current as of December 2011.

Rible receives a pension for “accidental disability retirement,” which is not based on age or years of service. For details, click here for New Jersey Watchdog’s investigative report on Rible’s disability pension.

Key to abbreviations for state pension plans: PFRS – Police and Firemen’s Retirement System; SPRS – State Police Retirement System; TPAF – Teachers’ Pension and Annuity Fund; PERS – Public Employees’ Retirement System.

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Pension and Health Care Bill Signing Broadcast Live at 2PM

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Christie, Legislative Leadership Come To Terms On Pensions And Health Care

Trenton, NJ – This evening, Governor Chris Christie, Senate President Stephen Sweeney, Assembly Speaker Sheila Oliver, Senate Minority Leader Thomas Kean, Jr. and Assembly Minority Leader Alex DeCroce released the following joint statement:

“After months of serious discussions, we are pleased to announce that we have reached agreement on legislation to reform our public pension and health benefits systems in New Jersey.

“The legislation to be considered tomorrow by the Senate Budget Committee and Monday by the Assembly Budget Committee protects taxpayers, saves the public pension system for current and future retirees, and enhances fairness and choice in our health benefits system.

“We all fully support this legislation and will work together to assure its passage by both houses of the Legislature and enactment into law no later than June 30, 2011.”

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Chris Chrisite: The Day of Reckoning is Here

By Art Gallagher

Governor Chris Christie was featured prominently in the 60 MINUTES segment, State Budgets: Day of Reckoning last night.  See InTheLobby for a synopsis and links to the broadcast and extra footage.

There were two key phrases Christie used that caught my attention when talking about the state’s pension and retiree health care obligations. 1) Christie said that most of the general public is incredulous that there are still people still getting pensions.  Most of us have 401K’s that have been hammered and we don’t know how we are going to fund our retirements. 2) Christie said, as I have heard him say before, that while public employees are up in arms now, if he doesn’t take the necessary actions to reform the pension and benefits system, it won’t exist in 10 years.

I hope the second comment is not an indication that Christie is going to try to save the pension and benefits system.  It is beyond saving and it is not appropriate to try.

As Christie’s two least favorite conservatives (besides Sarah Palin), Paul Mulshine and Rick Merkt wrote in September, if the state pension system was a private pension system the federal government would have shut it down already.

If the federal government is not going to do the right thing regarding the insolvent state pension systems throughout the county, New Jersey and Chris Christie should lead the way.  Scrap the pension system.  Distribute the money in the system equitably to its beneficiaries’ retirement accounts and let’s move on.  Set up 401K type retirement programs for government workers and retirees.

The private sector has already handled this crisis and have given the states a model for how to do it. It’s not fair and it won’t be pretty, but it has to be done.  All we need is a leader with the courage to do it. 

I believe Chris Christie is that leader.  I hope I am right.

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