A bill sponsored by four prominent members of the state Assembly, including Speaker Vincent Prieto (D-32), that would give the Police and Firemen’s Retirement System Board of Trustees control of their pensions is heading to Gov. Chris Christie’s (R) desk.
“As you know, over many administrations, we’ve had a pension problem in the State of New Jersey and this is one innovative way to make sure that we’re mindful how we invest in the pension and make sure the management of it is to the people who care most about it, the people who are eventually the recipients,” Prieto said of the legislation.
“There’s safeguards in this to make sure that it’s done right, after six years there would be a review. Always, as a legislature, we’re going to monitor to make sure it’s done properly and make sure everyone is protected – including municipalities in this state.”
Prieto’s remarks came at Thursday’s Assembly hearing, where bill A-99 was approved by a 61-4-10 vote.
The legislation would grant more investment responsibility to employees and union members, with the board acting on behalf of contributing employers, active members of the retirement system and retired members.
This bill would transfer management of the PFRS from the Division of Pensions and Benefits in the Department of the Treasury to the Board of Trustees of the PFRS.
Specifically, it would change the membership of the Board of Trustees of the PFRS from 11 to 12 members. Seven trustees must be present at any meeting of the board for the transaction of its business. The board will consist of:
· Three active policemen – one elected by the active members of the system and two appointed by the heads of unions representing policemen in the State;
· Three active firemen – one elected by the active members of the system and two appointed by the heads of unions representing firemen in the State;
· One retiree elected by retirees in the PFRS;
· Four trustees appointed by the Governor, who either hold or have held an elective local public office or are employed, or have been employed, by a local government as an administrator, manager, or chief financial officer.
· One trustee appointed by the Governor, who holds, or has held, a position in the Executive Branch of State government at the level of division director or above, to represent the interests of State government.
The bill would vest with the board of trustees all the functions, powers, and duties relating to the investment and reinvestment of money in any fund or account under the control of the board.
Furthermore, the bill would require local employers to pay their required contributions to the PFRS on a quarterly basis.
If a local employer does not make a required contribution within 30 days of the due date, the Division of Local Government Services will withhold any State aid payment due to that employer in an amount equal to the amount of the delinquent contribution.
The director will release the withheld State aid payment to the employer upon certification by the board of the receipt of the delinquent contribution.
The bill would require the Division of Local Government Services in the Department of Community Affairs to consult with the board of trustees when a local employer that has not made the pension payment on time but is eligible for transitional aid, in order to develop a payment plan to ensure that the required payment and interest owed is paid in a timely manner.
The bill does not diminish the non-forfeitable right PFRS members have to receive the benefits provided under State law or affirmed by the State’s courts.
Nothing in the bill relieves the State or local government employers of any past, present, or future obligations to the PFRS or its members.
Majority Conference Leader Shavonda Sumter (D-35), Budget Chairman Gary Schaer (D-36), and Majority Leader Lou Greenwald (D-6) also sponsored the measure.
Almost exactly one year ago, Prieto introduced plans for a new minimum survivor benefit bill that would aim to give the families of fallen first responders a compensation package of at least $50,000 to $60,0000, but that legislation never got off the ground.