Searches and Hires

New Jersey chooses Ernst & Young to study using state assets to finance pension fund

New Jersey Treasury Department hired Ernst & Young Infrastructure Advisors to examine the possibility of using certain state assets to help finance the $74.9 billion New Jersey Pension Fund, Trenton.

Ernst & Young was chosen from among eight candidates who responded to a request for qualifications issued by the department in February, according to a notice posted on the department's website.

The firm will help the department determine whether state assets — such as roads, airports and transit facilities — can provide similar assistance to the pension fund as was the case with the state lottery. In July 2017, then-Gov. Chris Christie signed a law making the lottery a pension fund asset and providing about $1 billion a year for the pension fund through lottery revenue.

The RFQ requested that the advisory firm determine whether these and other assets could also be used to help finance state health-care obligations and/or help pay down economic development bonds or the pension bonds that were issued 22 years ago.

According to the RFQ, assets under review 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 calls for 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" that are 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, Ernst & Young will help the state complete the asset transfer, assisting the state in preparing RFPs for firms to conduct the transfers and in evaluating RFP responses.