Searches and Hires

New Jersey wants adviser to study moving state assets to pension fund

The New Jersey Treasurer treasurer's office is searching for financial advisory firms to help the state determine if certain state assets — such as roads, transit facilities and airports — could be used to help finance the New Jersey Pension Fund, Trenton.

The request for qualifications seeks to determine if these and other assets could be used not only to help the state pension fund but also to help finance other post-employment benefits — namely state health-care obligations — as well to help pay down economic development bonds or the pension bonds that were issued 22 years ago.

New Jersey used such a similar approach to hire Bank of America as a financial adviser to help the state transfer the assets of the state lottery to the $70.9 billion pension fund.

In July 2017, then-Gov. Chris Christie signed into the law making the lottery a pension fund asset and providing approximately $1 billion a year for the pension fund through lottery revenue.

The recent RFQ said the state would select one or more advisory firms to assess the feasibility of using the assorted assets to help the pension fund and other entities.

"We're currently waiting for responses to the state's RFQ, which is open to all eligible bidders," William Skaggs, a Treasury Department spokesman said in an email.

The assets could include "real property, buildings, roads or other improvements, transit facilities, rights of way, air rights or other development rights, naming rights, and infrastructure such as airports, bridges, water facilities, ports, parks and recreational facilities," the RFQ said.

The state wants to asses "feasibility of maximizing the value of these assets through sale, lease, transfer, securitization or other types of transactions in order to generate funds" for pensions, health-care and bond obligations, the RFQ said.

The RFQ envisions a three-step process, the first of which is an asset/liability study, which is due May 15. The second phase "will consist of a more detailed analysis and structuring of some or all of the options," which were identified in the first phase, the RFQ said. This review will take 90 days, assuming the state decides to proceed, the RFQ said.

For the third phase, the advisers will help the state complete the asset transfer. The advisers will assist the state in preparing RFPs for firms to conduct the transfers and assist in evaluating RFP responses.

The RFQ is available on the treasurer's website. Proposals are due by mail or courier by 3 p.m. Feb. 22 at: Office of Public Finance, 50 West State Street, 5th Floor, P.O. Box 005, Trenton, N.J. 08625. ATTN: David K. Moore, deputy director. A hiring schedule was not provided.