• Views: in the last
  • 15Week
  • 12Month
  • 73Total


  • NJ A99
  • Transfers management of PFRS to Board of Trustees of PFRS.
Introduced
(3/16/2017)
In Committee
(3/20/2017)
Crossed OverPassedSignedDead/Failed/Vetoed
2016-2017 Regular Session
This bill transfers management of the Police and Firemen's Retirement System from the Division of Pensions and Benefits in the Department of the Treasury to the Board of Trustees of the Police and Firemen's Retirement System. Structure of the Board of Trustees The bill changes the membership of the Board of Trustees of the Police and Firemen's Retirement System (PFRS) from 11 to 12 members. The bill requires that the trustees be elected or appointed six months after the date of enactment of the bill. Seven trustees must be present at any meeting of the board for the transaction of its business. However, the bill requires at least eight votes of the authorized membership of the board to approve any enhancement or reduction of a member benefit, other than for the activation of the now suspended cost of living adjustment for retirees, or to approve any increase or decrease in the employer contribution that is more than what is recommended by the actuary for the system for the purpose of the annual funding requirements of the system. The bill requires the board of trustees to have a minimum of one meeting each calendar month. The chair of the board of trustees, or vice chair in the chair's absence, serves as the primary contact with board staff, coordinates and approves meeting agendas, and has the power to authorize any special staff action necessary to execute any of the board's duties. The board may remove a trustee, upon a majority vote of the trustees, for violating the trustee's oath of office or if a trustee is absent without a valid excuse for more than three of the board's meetings in any calendar year. The bill prohibits any vacancy occurring on the board from lasting for more than 60 days. Employee Representatives Under the bill, the board will consist of three active policemen and three active firemen. One policeman and one fireman will be active members of the retirement system and elected by the active members of the system. The remaining active policemen and firemen will be appointed as follows: one policeman appointed by the President of the New Jersey State Policemen's Benevolent Association; one policeman appointed by the President of the New Jersey State Fraternal Order of Police; one fireman appointed by the President of the New Jersey State Firemen's Mutual Benevolent Association; and one fireman appointed by the President of the Professional Firefighters Association of New Jersey. In addition, the board will contain one retiree from the system elected by retirees from the system. Employer Representatives The Governor will appoint four trustees, who either hold, or have held, an elective public office as a mayor, member of a municipal council, or member of a board of chosen freeholders or is employed, or has been employed, by a municipal or county government as an administrator, manager, or chief financial officer to represent the interests of local government employers. Finally, the Governor will appoint one trustee, who holds or has held a management or supervisory position in the Executive Branch of State government at the level of division director or above to represent the interests of State government. Powers and Duties of the Board of Trustees The bill vests with the board of trustees all the functions, powers, and duties for, or relating to, investment or reinvestment of moneys, and the purchase, sale or exchange of any investments or securities, of or for any funds or accounts under the control and management of the board. The Division of Investment in the Department of the Treasury currently performs these functions and duties. Under the bill, the board of trustees may make and execute agreements with private enterprises that are necessary or convenient for the management of the investments of the retirement system. The bill requires the board to hire an executive director, actuary, chief investment officer, and ombudsman. The bill creates an Audit Committee and Actuary Committee to assist in the selection and oversight of the auditors and actuary appointed by the board, and an Investment Committee to assist in the oversight of the investments selected by the board and the management of the investments of the retirement system. Under the bill, the board of trustees has the authority to establish a process for the review, approval, and appeal of applications for retirement. The bill provides the board of trustees with authority to modify the system's member contribution rate; cap on creditable compensation; formula for calculation of final compensation; age at which a member may be eligible for and the benefits for service or special retirement; and standards for approval, medical review policies, and benefits provided for disability retirement. The bill allows the board to reinstate cost of living adjustments for retirees. The bill also allows the board of trustees to apply an adjustment to the monthly retirement allowance or pension originally granted to any member. The bill provides that the board may, in its discretion and at such time and in such manner as the board determines, enhance any benefit set forth in statute for the PFRS as the board determines to be reasonable and appropriate, or modify any benefit. The bill also requires all trustees, officers, and employees of the board to participate in annual ethics training on the New Jersey Conflicts of Interest Law and any other applicable law, rule, or standard of conduct relating to the area of ethics. Lastly, the bill requires the board of trustees, at the end of six years following the enactment date of this bill, to conduct a review of the performance and funding levels of the retirement system, as compared to available market data including but, not limited to, the performance of the State Investment Council and Division of Investment with regard to the investment of other State-administered retirement systems or funds and the Bloomberg Barclays Indices, and may, based on, and allow the board, based on a majority vote of the authorized membership, to petition the Legislature to consider legislation that reverts control of the system to the Department of the Treasury or such other agency as the State deems appropriate. Employer Contributions to PFRS Moreover, the bill requires employers to pay to the board of trustees their required contribution to the retirement system on a quarterly basis. If employers do not make payment of the required amount of an employer's obligation within 30 days of the due dates, the board of trustees must notify the Director of the Division of Local Government Services in the Department of Community Affairs. Upon certification by the board to the director of an employer contribution payment being 30 days past due, the director will withhold any State aid payments that are disbursed by the Division of Local Government Services from the employer in an amount equal to the amount of the employer contribution due to the board. The director will release the State aid payments held to the employer upon certification by the board of its receipt of the delinquent employer contribution. The bill further requires the Division of Local Government Services to consult with the board of trustees when a local employer that has not made the pension payment on time but is eligible for transitional aid, in order to develop a payment plan to ensure that the required payment and interest owed is paid in a timely manner. Non-forfeitable Right Moreover, the bill does not diminish the non-forfeitable right PFRS members have to receive the benefits provided under State law or affirmed by the State's courts. Nothing in the bill relieves the State or local government employers of any past, present, or future obligations or their normal cost or unfunded liabilities required to be paid into the retirement system. Effective Date The bill, if enacted, will take effect on the 366th day next following enactment, except the provisions concerning the election, appointment, and composition of the new Board of Trustees of the Police and Firemen's Retirement System, set forth in section 15 of the bill, will take effect as specified in that section and the new board of trustees will take office on the first business day of the seventh month next following the date of enactment of this bill. The Board of Trustees of the Police and Firemen's Retirement System, the Division of Pensions and Benefits, and the Division of Investment may take such anticipatory administrative action in advance as shall be necessary for the implementation of the act.
2nd Reading in the Assembly, Substituted by another Bill
Substituted by S3040 (1R)  (on 3/23/2017)
 
 

Date Chamber Action Description
3/23/2017 A Substituted by S3040 (1R)
3/20/2017 A Reported out of Assembly Committee, 2nd Reading
3/20/2017 Assembly Appropriations Hearing (19:00 3/20/2017 *A4177, A4597, S2997 (1R) are all pending referral)
3/16/2017 A Introduced, Referred to Assembly Appropriations Committee
Date Motion Yea Nay Other
Detail 3/20/2017 Assembly Appropriations Committee: Reported Favorably 11 0 0