A legislative press release on the bill to give New Jersey police and firefighters management of their pension fund claimed:
It would vest the board with 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 or accounts under the control and management of the board.
……….
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, and Johnson noted that there are many examples of employee and union-managed pension plans in the private sector. Also, Washington, Ohio and Colorado’s police and fire pension funds provide trustees with a variety of fiduciary responsibilities, investment, and policy making powers. This bill is modeled after best practices from those states.
………
A “super majority” vote of at least eight members would be required to take any actions increasing or reducing member benefits — with the exception of restoring cost-of-living increases — or employer contributions if they are not consistent with actuarial recommendations, according to the bill.
If this board can:
- decide on investments,
- increase or decrease member benefits, and
- determine employer contributions,
that’s pretty much everything involved in sponsoring a plan.
Have Washington, Ohio, or Colorado gone this far?
The Law Enforcement Officers’ and Fire Fighters’ (LEOFF) Plan 2 Retirement Board serves over 19,000 active and retired members of the Washington State LEOFF 2 retirement plan. The Board sets contribution rates for the plan and studies related pension issues. The Board also recommends pension policy to the Legislature in the interest of the members and beneficiaries of the plan.
- Adopting administrative rules and policies for the operation of the investment program
- Approving and disapproving disability grants and retirement applications
- Approving and disapproving the appointment of external investment managers
- Adopting the annual administrative budget
- Reviewing annual actuarial reports and the financial audit
- Approving a plan design and retaining an administrator to manage the health care plan available to eligible retirees and their dependents
The Fire and Police Pension Association was established January 1, 1980 and administers a statewide multiple employer public employee retirement system providing defined benefit plan coverage (The Statewide Defined Benefit Plan) as well as death and disability coverage (the Statewide Death and Disability Plan) for police officers and firefighters throughout the State of Colorado. The Association also administers local defined benefit pension funds for police officers and firefighters hired prior to April 8, 1978 whose employers have elected to affiliate with the Association and for volunteer fire defined benefit plans. In addition, Colorado police and sheriff departments who participate in Social Security have the option of affiliating for supplemental coverage through the Statewide Defined Benefit Plan and Statewide Death and Disability Plan.
Burypensions Blog 
Posted by Chris Tobe on March 25, 2018 at 1:38 pm
I am former KY state pension trustee and I favor separation of our City & County plan which is half police and fire from the state plan, because of commingling of illegal investments. Given the bad performance in NJ caused by all high fee high risk hedge funds and private equity in this case separation is warranted. https://www.amazon.com/Public-Pensions-Secret-Investments-Chris/dp/198396011X/
Posted by burypensions on March 25, 2018 at 1:43 pm
Thank you for the book recommendation. I usually check Amazon for new books on this issue and missed this. Just ordered it.
Posted by Tough Love on March 25, 2018 at 1:59 pm
I believe the Union’s focus on controlling the Plan’s “investments” with virtual SILENCE on all the OTHER rights granted under S5, is a ruse to be able to reinstate COLAs bypassing the current requirements in place to do so), increase pensions, and/or decrease employee contributions
Posted by Tough Love on March 25, 2018 at 1:46 pm
It appears that the Washington, Ohio, or Colorado Plans have gone nowhere near as far as the authority that S5 grants the Plan’s trustees ………. the ability to increase pensions and lower employee contributions……… and with the reinstatement of COLAs ONLY requiring the affirmative votes of the 7 Union/retiree Trustees, negating the requirement that the Plan must reach a set (80% ??) funding ratio before reinstatement can be considered.
I get VERY little comfort from the need for the affirmative vote of only 1 Governor-appointed trustee to be able to increase pensions and lower employee contributions for several reasons:
(1) Such trustees may have a conflict of interest in which a family member, or close friend would benefit from such changes
(2) The Gov-appointed Trustees are first and foremost “politicians”, very few of which can’t be BOUGHT for the right price, be that actual cash under the table (yes, it happens) or a promise of huge Union backing and campaign contributions if they vote along with the Union trustees.
(3) Governor Murphy is clearly beholden to the Unions for his election, and we don’t really know how far he may go to repay them. This gives him a way to SECRETIVELY give the Unions a pension increase or contribution decrease w/o signing a bill to that effect. All he has to do is direct/convince one of his appointees to go along.
————————————————
I’m sure most intelligent observers are thinking …………. what the heck is NJ doing? It’s the definition of fiscal insanity to give the Unions the authority to increase their own members’ pensions and/or lower their members’ contributions.
If a Private Sector Corporation’s Board Member proposed at a Board meeting that the company allow it’s workers to determine the generosity of their company-paid pensions, I can envision the entire Board simultaneously looking up from their papers in extended dead silence thinking ………… ARE YOU NUTS.
Posted by Mike on March 25, 2018 at 4:56 pm
Well…there would also be some expletives. Such a move is really dumb.
Actually, I thought such a change – or even a change that just gives investment control to the unions – seems so silly as to make me question the accuracy of the news article. I obtained the actual text of the bill, but then came to a halt as it was too many words to parse.
I hope someone here or elsewhere can take the bill and confirm, or not, that the summary was accurate.
Posted by El gaupo on March 25, 2018 at 5:01 pm
Explain why the hell the unions shouldn’t st the very least be in control of the pension investments? Instead of Christie’s appointees. That hasn’t worked well has it.
Posted by Mike on March 25, 2018 at 5:08 pm
Suppose there is an investment loss. The employer has to make it up. The employer takes all of the investment risk, and therefore should not give away investment responsibility.
I agree that Christie’s choices left much to be desired. Fix that, but not by giving away the job.
Posted by burypensions on March 25, 2018 at 5:15 pm
On paper Christie’s people have done exceptionally well but what those self-valued investments are really worth is open to speculation. We may find out once a real value has to be placed prior to the transfer to the PFRS trustees.
The reason it is a stupid idea (stupid for taxpayers, that is) to have the participants (through their unions) control investments in a DB plan is that they have an incentive to invest in the most speculative securities that offer a chance of massive returns. For an extreme example let’s say they invest in a coin flip with the entire fund. If they win the value of the trust doubles and they argue that benefits should increase. If they lose someone else (taxpayers again) are still on the hook for the benefits and making up the losses.
Posted by Tough Love on March 25, 2018 at 7:13 pm
Re your last paragraph ……….
Exactly, which is why companies that sell Flexible Premium Deferred annuities (where the purchaser can chose the investment categories in which to invest, from the most conservative fixed income investments to the most risky equities) either restrict the percentage of the fund value that can be invested in risky asset categories, or charges a greater risk-charge when the annuity is sold with certain provisions such as guaranteed income or withdrawal benefits.
Only in the world of Public Sector employment can things that have a measurable “risk” and hence a real COST associated with that risk be ignored ……….. because behind the curtain is a “sucker” (the Taxpayers) who can always be stuck with the bill if things go wrong.
Posted by Retired police on March 26, 2018 at 12:55 am
tough no love
As usual your posts are long, boring and yield nothing worth the time to read the same mundane trot. You are a throne in the progress this seperation will produce.
So, please refrain from the one sided tactic you always use. “No COLA, all they want is COLA, COLA, COLA” Try the UN-cola pun intended. Put a cork in it. IT’s all over for your crazy rants, it’s done so you can go away, far away and leave us alone to do what is right and fair for all concerned. No don’t even go there, I can hear you ready to pounce on the word “Fair for all” Stop finding fault with anything concerning the Police and Fireman. If you received a ticket in the past let it go you were wrong then and you shouldn’t hold a grudge.
Posted by Tough Love on March 26, 2018 at 12:59 am
No, S5 will only give the “moochers” more ways to CHEAT the Taxpayers.
Posted by Tough Love on March 26, 2018 at 1:11 am
Don’t like the word “moochers”? Let look at a some simple #s used in a recent comment:
There were ninteen 2016 Bergen County Police Officer retirements (3 due to Disability). Excluding the 3 who retired due to disability:
Average Wages at retirement = $150,988
Average pension upon retirement = $100,385
Average years of service = 26.64
Average age at retirement = 52
——————————
PLUS subsidized retiree healthcare that may cost the Taxpayers as much as $500K PER Officer.
Ludicrously excessive by every and any reasonable metric.
Posted by geo8rge on March 25, 2018 at 5:55 pm
I am still wondering about your previous post. Is the union taking over the PFRS pension or is the PFRS pension being recharacterized? If it is being recharacterized they have unleashed forces beyond their control ultimately bringing in Federal regulation.
Posted by El gaupo on March 25, 2018 at 7:17 pm
The escape hatch will be that if in fact the fund is determined to be a multi employer plan(not likely) than after 6 years the board votes to back to the div of pensions control
Posted by Tough Love on March 25, 2018 at 9:07 pm
Worth reading …………
http://www.bgdailynews.com/opinion/commentary/calling-kentucky-s-pension-class-into-session/article_d2fb4018-a52f-52ab-b1e3-bbc6bebcc56c.html
Posted by El gaupo on March 25, 2018 at 9:40 pm
Wasn’t written by a teacher. And the retirement age should be much higher. 62-65 years of age. Other than that I do t begrudge anyone for trying to better their lot in life.
If my butcher wants to raise prices on his beef because he want more profit, and most folks can afford it but I can’t, should the butcher put the needs of me and my family before his own? His first priority is to make money. His second priority is to offer safe, quality beef to eat. Why on earth would you expect a teacher not to try to fight for a better raise? Isn’t that the American way?
Posted by El gaupo on March 25, 2018 at 9:43 pm
These folks that say sarcastically “but it’s for the children” when speaking of teachers asking for more don’t really seem to say the same thing when a pediatrician or day care center raises their prices.
Because the first priority of any employee or business owner is to make money.
Posted by Tough Love on March 25, 2018 at 9:48 pm
El gaupo,
What I WON’T accept is the Public Sector Unions BUYING the favorable votes of Elected Officials (on Public Sector pay, pensions, and benefits) with BRIBES disguised as campaign contributions and election support.
Posted by El gaupo on March 25, 2018 at 10:48 pm
In all fairness. How do you expect teachers or cops to get fair treatment from mayors and councils and school boards? Before binding arbitration cops got paid next to nothing and went around town asking residents to sign petitions asking for raise some . It didn’t work so well. Residents hated it and they couldn’t keep guys/attract qualified folks. If you got rid of collective bargaining you could possibly have a situation like free agent baseball players. Mr Jones just signed for x I should get that to and maybe a little more because i made a few more arrests than he did. If you don’t give to me, when my individual contract is up, the next town over knows me well and they will lay me a little more. Yes you have that now, unions will use what another town pays but the other way is worse. So again, outside of just asking for a raise separately, how would ensure that teachers and cops got paid fairly and limiting situations like jersey city and West Virginia from happening every single time a teacher contract was up?
Posted by El gaupo on March 25, 2018 at 10:49 pm
Excuse the typos. At least not as bad as Dick days. Lol.
Posted by Tough Love on March 25, 2018 at 11:48 pm
El gaupo,
Since you were “responding to me, how does anything you said respond to my point …………
“What I WON’T accept is the Public Sector Unions BUYING the favorable votes of Elected Officials (on Public Sector pay, pensions, and benefits) with BRIBES disguised as campaign contributions and election support.”
Posted by Tough Love on March 25, 2018 at 11:54 pm
Quoting El gaupo ………… “how would ensure that teachers and cops got paid fairly”
YOUR definition of ‘fair” seems be be what you get right now. I don’t agree.
While I believe that while your wages are “reasonably fair”, when you add to those wages, pensions that are 3.5 to 4 TIMES greater in value upon retirement (than those of similarly situated Private Sector workers) and retiree healthcare subsidies than may approach $500K (that VERY few in the Private Sector get any longer), your Total Compensation package is not “fair”, but LUDICROUSLY excessive.
Posted by Stephen Douglas on March 26, 2018 at 1:13 am
YOUR definition of ‘fair” ?
It’s all relative. From a recent article by Mary Pat Campbell listing the authors of an article…
X’s 2016 pension was $126K
Y’s was $110K,
Z has pension of $104K for 32 years of service
“I’m not quoting these to get snippy about the $100K club – after all, I make more money than that and I don’t think that these are necessarily excessive amounts.”
http://stump.marypat.org/article/823/a-new-category-for-the-hall-of-shame-never-fully-funders
Perhaps TL’s problem is he doesn’t make more money than that, and can’t stand that someone else does.
Posted by MJ on March 26, 2018 at 9:15 am
El gaupo….there is certainly nothing wrong with a butcher or any other business raising the cost of the goods or services that they provide. The BIG difference is that consumers could then decide if they still wanted to shop at said butcher or try to find same product for a lower price elsewhere
As taxpayers we do not have that choice………I have no doubt there are very very qualified people who would work hard and be glad to have a job in the public sector for one pinch of the salaries and benefits that most of these publics receive now……..instead we as taxpayers are stuck with the same old tired politicians, same old tired rhetoric about the poor teachers and public workers……I think the ship has sailed
Posted by El gaupo on March 26, 2018 at 10:24 am
Evidently the ship is still in port….i.e superintendent pay cap gone. You’d be surprised at how few taleneted folks you know in the private sector would take a public sector job for one”pinch” of the salaries/bennies offered now. Get over yourself. Public employees haven’t had a decent raise since 2010.
Posted by El gaupo on March 26, 2018 at 10:28 am
In fact, why don’t you apply for one of these jobs and take that one “pinch” of what’s offered? You’d be doing the collective community a big service. Maybe we can recruit volunteers for public jobs.
You should be first in line with that commie bullshit. All talk…run for office if it bothers you
Posted by MJ on March 26, 2018 at 11:47 am
El guagpo, you sound like an over entitled baby…….one way or another, the ship has sailed and is short a few life boats. Dream on brother….
Posted by El gaupo on March 26, 2018 at 4:15 pm
Lol. I’d be worried if I was in any other pension fund. But not in PFRS. Drop dead date of 2055. Gonna retire in a couple years. You can have my job for a “pinch” of what I make….good luck w your mortgage payment.
Hope ya get in line first in front of all the others wanting to make a “pinch” of my salary🧐
Haha. That’s a good one. A pinch of my salary and bennies would leave me on skid row. The idea that talented folks would work for that is utterly ridiculous.
Posted by Tough Love on March 26, 2018 at 6:26 pm
Just wait till the next 25+% drop in the market ……… then you’ll be begging the Taxpayers to bail you out …… all while you still demand excessive wages, pensions, and benefits.
Posted by Stephen Douglas on March 26, 2018 at 11:29 pm
25%+ drop in the market is irrelevant.
CA pension funds didn’t “lose money” in the Great Recession.
No reason to believe they would lose money in another recession.
View at Medium.com
Another win/win.
Posted by Tough Love on March 26, 2018 at 6:31 pm
El gaupo,
You don’t sound like one who is “talented”……… but definitely like one of the many working in the Public Sector with a oversized sense of entitlement.
Posted by El gaupo on March 26, 2018 at 7:29 pm
You know nothing about me TL. Talented enough to provide for my family.
Posted by Tough Love on March 26, 2018 at 7:35 pm
El gaupo,
Only do to the Union/Election-Official COLLUSION …… you know, providing our Elected Officials with BRIBES disguised as campaign contributions and election support in exchange for their favorable votes on your pay, pensions, and benefits.
Anyone not brain-dead can see the clear trade-off …… you-scrath-my-back-and-I’ll-scratch-yours.
Posted by Retired police on March 26, 2018 at 9:54 pm
To No Love just Hate. This new name fits you the best.
I learned what you do or did for a living, however, I won’t reveal unless I have your permission. With that said you have the audacity to call Police and fireman “moochers”? So do I have your permission?
Posted by Tough Love on March 26, 2018 at 11:25 pm
Retired police,
What did I say to El guapo that so ticks you-off? Do you deny that your Union’s BUYING the Favorable votes of our Elected Officials with BRIBES disguised as campaign contributions and election support is the reason for the Ludicrously excessive Police pensions?
With the PFRS Plan now in the hands of the Union/members, we’ll find out soon enough if “moochers” is a deserved description.
And I’ve stated many times that I work in the Financial Services sector … but no more.
And no, you do NOT have my permission to disclose anything about me.
Posted by Retired police on March 26, 2018 at 11:58 pm
So I take that as a No divulging your duties? I will respect your wishes even though this is a public venue.
Posted by Earth on March 27, 2018 at 12:55 am
Earth to Tough Love: