Legislation sponsored by Senate Republican Leader Tom Kean to transfer governance of the Police and Firemen’s Retirement System (PFRS) from the New Jersey Division of Pension and Benefits to a newly empowered PFRS Board of Trustees has been approved by the New Jersey Senate.

Sen. Tom Kean’s legislation transfers governance of the Police and Firemen’s Retirement System from the Division of Pension and Benefits to a newly empowered PFRS Board of Trustees. (SenateNJ.com)

Kean sponsors the bipartisan measure, S-3040, with Senate President Stephen Sweeney.

“The police and fire unions covered by PFRS spent two years researching this proposal, including meetings across the country with representatives of other states’ pension systems to learn what works and what doesn’t,” said Kean. “This proposal represents the culmination of that diligent effort. I have no doubt that they have the best interests of all their members at heart, and was glad to work on this innovative approach to help strengthen the pensions earned by our first responders.”

Under current law, the PFRS Board of Trustees has limited advisory power, with the Division of Investment in the state’s Treasury Department possessing all functional decision making authority on investments. Contribution and benefit levels are set in statute.

This legislation would transfer governance of PFRS to the system’s Board of Trustees, including decision making authority on investments, contributions and benefit levels. Significant oversight protections are mandated, including auditors and actuaries, to ensure that decisions made by the Board are fiscally responsible and not detrimental to the long-term health of the system.

Unions representing the overwhelming majority of PFRS members support and worked on the plan, including the NJSPBA, NJSFOP and the NJFMBA.

“New Jersey’s police and fire unions have a proven history of making fiscally responsible choices regarding their pensions, which is why PFRS is arguably the strongest of the state’s public employee pension funds,” added Kean. “With many of the unions that represent the employees of the other pensions systems lacking such a disciplined track record, it’s not surprising that the PBA, FOP and FMBA want the power to go their own way with their pension fund. Quite simply, our police and firefighters have earned it.”