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police and fire running their systems independently in
Colorado, New York, Ohio, Illinois and Washington. The
system in Washington State is presently funded at 114
percent.
The “PFRS Governance and Investment Act” would
have its own board made up of employees and employers and be independent of political interference.
The board would have police and fire representatives
elected by the members, as they are now, but also have
professionals, including an executive director, general
counsel and chief investment officer, rather than members of state government such as the attorney general
and state treasurer making all the decisions.
If the PFRS became an independent system, it would
still be the 28th largest of its kind in the U.S. The new
system would be large enough to attract the best investment opportunities and rebates in the market, even
the same as the California Public Employee Retirement
System, the biggest in the country.
As part of its due diligence, which included inviting all
major New Jersey public safety unions to be in on the
discussions, the unions made a considerable investment getting a legal review of the plan. “Every right you
have to a pension today, you will have under the new
system,” Donnelly stated.
The new system will not burn through 35 percent of its
assets to be invested in alternative funds, and $1.6 billion in investment fees, major contributing factors to
the 76-percent level.
The new board structure also offers “checks and balances” to preserve funding and benefits, and it would
administer all pension policy.
And then Colligan wrapped with what amounted to the only
campaign promise from this presentation, which marked the
first time the major public safety unions had been invited to
speak in front of the League – its one-time-adversary-turnedpartner – since anybody can remember:
“If this proposal can do a couple of things, it can prevent
the pension holidays and it can ensure the 1.5 percent of our
salary put into the pension system by Chapter 78 that we
didn’t ask for actually gets credited to our pension system,”
he asserted. “That money did not go into our pension system;
it was credited back to municipalities for tax relief. If we can
stop those two things and continue to enjoy the rights and
privileges we have today, then I think it’s a no brainer.” d
www.njcopsmagazine.com
■ DECEMBER 2016 27