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Regulation

NJ Lawmakers Revive Police, Firefighter Pension Spin Off Bill

Under new policy, PFRS would shift management from the state to a 12-member board.

By Chris Butera

Now  that Chris Christie no longer operates as New Jersey’s governor, state lawmakers are looking to relaunch a pension management movement his replacement’s administration may be in support of.

The measure, known as Bill S-5, will spin off the $27 billion Police and Fire Retirement System (PFRS) from the state’s $78 billion system to a 12-member board of trustees. The new board will then be responsible with hiring its own executive director, actuary, CIO, and ombudsman.

“The reason that we are where we are today is not because of us and it’s not because of local government,” Eddie Donnelly, president of the New Jersey State Firefighters Mutual Benevolent Association, said, reported by Northjersey.com. “It’s because of the reckless policies and enactments from state government, from the governor and the treasurer’s office.”

The website reports that although municipal and county group representatives opposed it, the managerial swap has received backing from four police and firefighter unions and was unanimously accepted by the Senate state government committee on Thursday.

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Last year, then-Gov. Christie had vetoed a similar bill claiming that a management spinoff would allow labor unions to boost benefits, levied by taxpayers.

“Unfortunately, this bill goes too far and undoes significant portions of the bi-partisan pension reform legislation I signed into law in 2011, unduly jeopardizing the financial health of PFRS,” Christie said in the veto. “I understand that police and firefighters (and, for that matter, all current and future pensioners) have concerns with the fiscal health of the pensions systems… But I refuse to repeat the mistakes of prior Governors and Legislatures who enacted pension legislation without ensuring appropriate safeguards for taxpayers nor securing significant concessions from labor.”

The same sentiments are still felt by the New Jersey State League of Municipalities and the New Jersey Association of Counties, who opposed the bill Thursday, requesting that amendments be made to the proposal for equal balance among union and employer board representation, as well as tightening the abilities the board would have when it comes to benefit increases for participants.

However, the campaign of Christie’s successor, Gov. Phil Murphy,  revolved around the support of organized labor. Bill S-5 could see approval if it finds its way to the governor’s desk.

“It’s a ludicrous argument because it’s our pension system,” Patrick Colligan, president of the New Jersey State Policemen’s Benevolent Association, told Northjersey.com. “We’re here because we want to save the system.”

The Senate Budget and Appropriations Committee will review Bill S-5 Monday.

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Home > News > Research > Private Pensions Boost British Wealth
Research

Private Pensions Boost British Wealth

Survey finds that more than half of UK wealth growth comes from private pensions.

By Michael Katz

Private pension wealth accounted for more than half (53%) of the growth in aggregate total wealth in the UK over a two-year period, according to recent survey from the Office for National Statistics (ONS).

The ONS’ Wealth and Assets Survey found that between the periods of July 2012 to June 2014 and July 2014 to June 2016, private pension wealth increased 20% to £5.3 trillion from £4.4 trillion. The report attributed some of this increase to market factors changing over this period, but said that even after this is taken into account, private pension wealth would still account for 41% of the change in aggregate total wealth.  

The percentages of households with pension wealth held in defined contribution pension plans increased during the same two-year period, which the ONS said was driven by a rise in membership of occupational defined contribution plans. This rise is likely a result of automatic enrollment in workplace pensions, according to ONS, as participation in them has been increasing since 2012, when automatic enrollment was introduced as a provision of the Pensions Act 2011 and 2014. Meanwhile, the percentage of households with wealth in all other types of private pension remained largely unchanged when compared with July 2012 to June 2014.

Although membership of current occupational defined contribution plans increased between July 2012 to June 2014 and July 2014 to June 2016, the median value of wealth held in those plans decreased during this period for almost all age groups, according to the survey. The ONS said this is a result of the increase of occupational defined contribution membership from automatic enrollment. It said that because these members have had less time to accumulate their wealth, they end up dragging down the median wealth of all current occupational defined contribution schemes.

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Findings from the survey also suggest that the pension gender gap is continuing to widen, as males aged 25 to 34 years were the age group with the largest growth in membership during the periods covered in the survey. Between July 2014 and June 2016, 30% of men were contributing to a defined contribution plan, up from 20% during the period of July 2012 to June 2014. At the same time, participation of employed women aged 16 to 64 years rose to 21% in the July 2014 to June 2016 period, from 16% during the same period two years earlier.

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