New Jersey police and fire unions are taking another crack at getting control of their pension fund now that former Gov. Chris Christie is no longer in office.
A bill vetoed by Christie last year to spin police and fire pensions off from the government worker pension fund was approved by the state Senate Budget and Appropriations Committee on Monday.
The bill (S5) would give over the Police and Firemen’s Retirement System and its $27 billion in assets to a 12-member board of trustees with control over the fund’s investment strategy, benefits and contribution levels.
Police and firefighter labor leaders pushing for control say they can do better to manage and invest the funds than the state’s Division of Pensions and Benefits or the State Investment Council, which directs the investments of $78 billion in retirement dollars for state and local workers.
They say they don’t take lightly the responsibility of managing a pension fund that has more than 85,000 active and retired workers counting on it for their retirement.
The board, made up of members representing both labor and government, would have broad authority to increase or decrease how much members contribute to their pensions, alter benefits and tell employers how much to contribute each year.
It could overrule an existing freeze on cost-of-living adjustments for retirees that Christie and the state Legislature put in place to dramatically reduce the pension funds’ liabilities. Under current law, COLAs can’t be restored until a fund has assets to cover at least 80 percent of its liabilities and can prove the funded ratio won’t drop below 80 percent by dishing out that extra cash.
The New Jersey League of Municipalities and New Jersey Association of Counties told the Senate budget committee the board is weighted too heavily in favor of public workers, and the government employers who will have to pick up the tab if the fund goes south are outnumbered.
“Taxpayers, through counties and municipalities, will … assume the risk of loss if the fund underperforms,” said John Donnadio, executive director of the counties association.
Donnadio suggested changes to the bill that would have employees share in making up for losses and bar any boost in benefits until the fund is 80 percent funded.
“We think there needs to be some additional protections built into this legislation,” he said.
Christie conditionally vetoed the bill for those reasons in May, calling it a “blank check” to public workers.
State Senate President Stephen Sweeney, D-Gloucester, who sponsored the bill, said Monday the police and firefighters would be entrusted as fiduciaries of the pension fund, and as such deeply invested in its well-being.
“The responsibilities that come with that are enormous,” he said. “And I assume police and fire know that, and they’re still willing to take it on.”