Patrick Colligan, President
"Pension Study Commission"
- Cheat Sheet
Executive Order No. 161 was hand delivered by the governor Aug. 1 on the steps of the Parsippany Municipal building at 1 p.m. In effect, it officially forms the non-partisan “New Jersey Pension and Health Benefit Study Commission,” hereinafter known as the “Study Commission.”
Thirty days after organizing, the commission is required to deliver a status report and will issue a report on its findings and recommendations "as soon as possible." It is now Friday afternoon at 2:47 p.m. at the State PBA Office in Woodbridge. The office will observe our summer hours and be closing in 13 minutes. I have just officially commissioned myself (with 13 minutes to go) to issue my own findings and recommendations. If the "Study Commission" wants a cheat sheet, here it is:
1. Chapter 78 (a law as defined by the Constitution) was signed on June 11, 2008 by Gov. Christie requiring in very specific terms how he must fund the pension.
FINDINGS: Please advise Gov. Christie to comply with the law that he signed.
2. Chapter 78 required an additional 1½-percent contribution of PFRS employees to the system for a total of 10-percent employee contributions (probably the highest in the nation). It generated another $57 million. In March, the governor gave more than $50 million back to local governments and called it “tax relief”.
FINDINGS: That’s our money. We earned it and it was deducted from our paychecks. Please put it back into the PFRS system.
3. Want to explore a “Hybrid Pension System?” Similar to a 401K, “Hybrid Pensions" have to be paid by the state with each and every paycheck.
FINDINGS: The state doesn't pay its pension bills now with a signed law in place! Who do we call when the Hybrid payments aren't made every two weeks? Can I tell my members that at least I got a pinkie swear?
4. New Jersey now ranks second in the country for investments in high-risk, highfee hedge funds in their state pension funds. Well-known political donors and high priced "investment advisors" are raking in $1.2 billion in fees and commissions.
FINDINGS: $1.2 billion performs better in our portfolio than in a millionaire’s bank account and those high- risk hedge funds are returning lower yields than traditional investments that don't pad donor’s pockets.
5. In 2005, Acting Governor Richard Codey formed a Benefits Review Task Force to try and resolve the unfunded pension issues. The task force subsequently released a comprehensive document called the Murphy Report. Anybody care to guess what was suggestion No. 1? For the state to start “paying up and ending the gimmicks.” That Murphy strikes me as a pretty smart guy.
FINDINGS: The "Study Commission" should find that Murphy Report, photocopy it and call it the “2014 New Jersey Pension and Health Benefit Study Commission.” Your work was done already in 2005. No need to reinvent the wheel folks.
6. Last month, the governor's office released a "No Pain, No Gain" movie trailer that shamefully mocked every hard-working public employee in the state (the ones that have made every single payment into the pension). That movie trailer wasn't cobbled together in a few minutes on a laptop. It took a lot of time and state resources.
FINDINGS: Somebody has too much free time and lots of extra money in their budget. Immediately transfer them to the New Jersey Economic Development Authority or the Department of Labor and Workforce Development. The last time I looked at the governor's performance numbers, I think those two departments could definitely use the help. The new "Study Commission" could probably use their creativity too.
7. The public pensions throughout the country that are performing the best are truly run by their membership. Investments are made by a committee with their skin in the game. ALL their skin! New Jersey has an Investment Council with very little influence on how and where our investments are made. The director is appointed by the treasurer; the treasurer is nominated by the governor.
FINDINGS: Legislate a change to our Investment Council and give it some teeth. Let US decide who gets OUR money and what kind of risk and fees we want to pay. It should not be in the hands of a person politically connected to a sitting governor - ANY sitting Governor. The time is now 3:08 p.m. I am now disbanding my commission after 21 minutes of work resolving the New Jersey pension crisis. I really wish I could say that this is in jest and an exaggeration, but unfortunately and sadly it isn't. The work and the research really have been done already. All the answers are well known to everybody. My job right now is to make sure that whoever is sitting at this desk a decade from now will not be dealing with yet another "new" commission from another governor that has to deal with an unfunded pension. Fool us all Mr. Governor; make a quarterly payment and show us some good faith. Some politicians just break promises. Not making these payments is breaking the law.