Philadelphia News & Search
TRENTON — Gov. Christie on Monday vetoed legislation that would have allowed police and firefighters to manage their own pension fund, declaring it lacked “sufficient guardrails that adequately protect pensioners and taxpayers.”
The Democratic-controlled Legislature passed the bill with broad bipartisan support in March. Unions representing police and firefighters had pushed for the legislation, arguing that the state had been a poor steward of their members’ retirement funds.
In a sharply worded statement Monday, leaders of three of the unions wrote that Christie’s decision to conditionally veto the bill “is the final proof, if proof were needed, that he is intent on destroying the pension system before his term is complete.”
New Jersey’s $73 billion pension fund for 769,000 active and retired public workers is composed of seven underlying plans, including the Police and Firemen’s Retirement System.
The fund is managed by a Treasury Department unit with oversight from the State Investment Council. A majority of the council is appointed by the governor.
Under the legislation Christie vetoed, the state would have relinquished management of the police and firefighters’ plan to a newly composed board of trustees, comprised of seven labor representatives and five employer representatives.
The new board would have had the authority to hire actuaries, investment professionals, and others to manage the plan. It also could have voted to change benefit and contribution levels, as well as the retirement age.
This new system would have inoculated the police and firemen’s fund “from the political interference and blatant mismanagement,” the state Fraternal Order of Police, Firefighers Mutual Benevolent Association, and Policemen’s Benevolent Association said in a joint statement.
Through a conditional veto, Christie, a Republican, returned the bill to the Legislature with recommendations. The governor called for a board that would consist of equal labor and employer representation, which he said “more accurately represents stakeholder interests and ensures that local municipal officials have an appropriate voice in decision-making.”
He also proposed that the new board bear more risk, require it to comply with the state’s public records law, and cap compensation for unused sick days.
Michael J. Darcy, executive director of the New Jersey League of Municipalities, said the group supported Christie’s conditional veto. Because employees’ contributions are capped by law, taxpayers would have to make up the difference to fill any shortfall, Darcy said.
“It’s not equitable for our property taxpayers to carry all the risk with little control, and that’s why putting our taxpayers on equal footing is vital,” he said. “We urge the Legislature to accept and advance the governor’s recommendations.”
The unions said Christie wasn’t interested in compromise and indicated that they would prefer to work with the next governor. Christie’s term ends in January.
“Thankfully he will no longer be governor in eight months, and we look forward to moving this commonsense proposal when his time in Trenton mercifully comes to an end,” the unions said.
New Jersey’s pension system is the worst-funded in the nation, according to Bloomberg.
As of 2015, it had 37.5 cents for each dollar in future benefits owed to retirees, the worst in the country, according to an analysis by Pew Charitable Trusts.
For the fiscal year that begins July 1, Christie has proposed a $2.5 billion contribution to the fund, about half the amount actuaries recommend.
Philadelphia News & Search