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Village Council Meeting


Police and fire unions’ power grab sticks New Jersey’s taxpayers with the pension bill

Andrew Sidamon-Eristoff

In 1866, Surrogate Gideon J. Tucker wrote that “[n]o man’s life, liberty or property are safe while the Legislature is in session.” Over a hundred years later, the New Jersey Legislature is doing its very best to keep Surrogate Tucker’s warning pertinent by once again advancing special-interest legislation that reaches for a new low in bad public policy and stunning indifference to taxpayers.

The issue at hand is the state Senate’s recent unanimous approval of S-3040, a bipartisan bill to transfer “management” of the $26 billion Police and Firemen’s Retirement System (PFRS) from the Department of the Treasury’s Division of Investment and the State Investment Council to a union-controlled board of trustees. The stated rationale includes giving PFRS’s beneficiaries more control over the investment of their retirement savings and insulating pension-asset investment decisions from nefarious political influence. That sounds benign, even reasonable. As the bill’s prime sponsor stated: “It’s a matter of enlightened self-interest for people who have skin in the game.”

“Self-interest”? Certainly. “Enlightened”? Not so much.

Here are only a few of the many reasons why this bill is a very, very bad idea:

Control without risk: sticking local taxpayers with the tab

Although it’s possible to make a straight-faced argument for giving PFRS and other pension-fund beneficiaries a greater role in making investment decisions, it makes absolutely no sense for government employers to turn over investment management while retaining all investment risk. And it’s demonstrably insane to give public employees unqualified power to set their own benefit levels and require that government employers (and taxpayers) pay the tab. Yet that’s exactly what this bill does.

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