Senate approves police and fire pension bill
TRENTON » The Senate approved legislation Monday that would authorize the police and firefighter unions to manage their own pension funds.
The bill, authored by Senate President Steve Sweeney, would transfer management of the Police and Firemen’s Retirement System (PFRS) from the Division of Pensions and Benefits in the Department of the Treasury to the Board of Trustees of the Police and Firemen’s Retirement System.
The Senate vote was 342.
“This will give the unions the ability to make the best investment decisions for their members,” Sweeney said in a written statement. “It has worked effectively with private-sector unions and with public sector unions in other states where the investment returns under union management have outperformed public boards.”
The bill gives more management responsibilities for the investments made under the PFRS to employees and union members. The board would act exclusively on behalf of the contributing employers, active members of the retirement system, and retired members as the fiduciary of the system. The primary obligation of the board would be to direct policies and investments to achieve and maintain the full funding and continuation of the retirement system for the exclusive benefit of its members.
The fundamental nature of the PFRS plan would not be changed by the bill.
The bill would vest with the board of trustees all the functions, powers, fiduciary responsibilities and duties pertaining to the investment or reinvestment of pension funds, including the purchase, sale or exchange of any investments or securities in any funds or accounts under the control and management of the board.
The bill would require the 12-member PFRS investment board to include three active police officers and three active firefighters. The Governor would appoint four trustees who either hold, or have held, an elective public office or have been employed by a municipal or county government as an administrator, manager, or chief financial officer to represent the interests of local government employers. The board would also include one retired police officer or firefighter and a high-ranking state employee to represent state government.
A “super majority” vote of at least eight members would be required to take any actions increasing or reducing member benefits — including cost-ofliving increases — or employer contributions if they are not consistent with actuarial recommendations, according to the bill.