Governor Murphy this morning has signed Senate Bill 5 into law marking an historic change in the management of the PFRS and the beginning of a new focus on prioritizing the full funding of the pension system for our retired members and every current and future member of the law enforcement community in New Jersey. The law dramatically restructures the PFRS Board of Trustees and grants them broad powers over the policy making and investment strategy for PFRS. Under the new law, PFRS will be managed on a day to day basis by an Executive Director and money managers who will report to the Board of Trustees. The law removes the control of the pension system from the State and provides the PFRS Board with the exclusive power to select the investments for PFRS assets and make decisions about how PFRS pension policies will be governed. Amongst the PFRS Board’s new powers are the ability to adjust COLA, modify the procedure for approving disability pensions and make changes to benefits limited by Chapter 78. All benefit changes require actuarial certifications and a “super majority vote” of the Board.
The new PFRS Board of Trustees will take office on the first day of the seventh month from today and will begin the process of selecting a staff including an Executive Director, Chief Investment Officer, attorney’s, auditors and other staff. The new Board and their staff will take complete control of the PFRS on or about July 4, 2019.
Statement of State PBA President Pat Colligan on the signing of S5
“Today marks an historic day for the Police and Firemen’s Retirement System (PFRS). The signing of Senate Bill 5 into law will have a profound impact on the future of our retirement system and it places in the hands of PFRS members and their employers the tools to do what the State has failed to do for too long: focus on fully funding the system. I am grateful to Governor Murphy for his support in our efforts to restore the health and independence of the PFRS.
When the State PBA began researching this concept and the best practices of healthy pension systems around the nation more than 4 years ago, we were convinced that making PFRS independent from the State was our only option.
Nearly 20 years ago PFRS was overfunded and amongst the healthiest pension systems in the United States. But after years of fiscal gimmicks and State ineptitude our pension fund has sunk to levels that we could no longer ignore. This law provides the PFRS Board of Trustees with exclusive powers over the investment, policy making and management of the pension system. Today's changes establish a pathway for the future funding of our pensions. No longer will PFRS members be forced to suffer from the poor decision making and political expediency that marked the State’s stewardship of our pensions over the years. This law ensures competent professionals and a focused Board of Trustees will protect the fund from abuse and control investment decisions designed only to grow the value of the PFRS.
I want to especially thank Senate President Sweeney for sponsoring this law and for his passionate leadership in advocating for this concept to protect our pensions. A new era in pension management begins today in New Jersey. The growth of PFRS protects the promise of a pension and security for their families made to our members when they became law enforcement officers.
The intent of this law is clear: PFRS members and their employers want to fully fund the PFRS and we now finally have the vehicle to make that a reality.”