The New Jersey Senate and General Assembly on Monday overwhelmingly voted to allow the state Police and Firemen's Retirement System to become a separate pension fund away from the New Jersey Pension Fund and the state Department of Treasury's administration and investment management.
The police and firefighters pension system is the second-largest New Jersey public pension plan. It had $24.5 billion in assets as of June 30, 2017, the end of the previous fiscal year. The New Jersey Pension Fund, Trenton, had total assets of $76 billion at the end of the fiscal year.
The legislation, which now goes to Gov. Phil Murphy, a Democrat, is virtually identical to the legislation that received a conditional veto from former Gov. Chris Christie, a Republican, in May 2017. Although both legislative houses are dominated by Democrats, the legislators didn't offer a revised bill last year and didn't try to override Mr. Christie's veto.
On Monday, the Senate voted 34-2 for the bill. The General Assembly vote was 67-2, with 10 legislators abstaining or not voting.
The legislation transfers the police and firefighters' pension fund from the Department of the Treasury to a newly constituted board of trustees with 12 members instead of the current 11. Police and firefighter union members will hold seven of the board seats, up from five currently.
The legislation's proponents have argued that a separate pension system can perform better than being aggregated with the other six pension funds whose investments are managed by the Treasury Department's division of investment.
Mr. Christie and current critics said the proposal puts too much control in the hands of employee representatives. The legislation allows the trustees to change the formula for calculating pension compensation rates and change standards for assessing special retirement and disability retirement claims. It would allow the pension system to reinstate cost-of-living adjustments, which have been suspended for all participants in the New Jersey Pension Fund.
The legislation requires the independent pension system's board of trustees to evaluate performance and funding levels.