(Bloomberg) -- Governor Phil Murphy conditionally vetoed legislation that would give New Jersey police and firefighters control of their pensions. The Senate president promised to amend the bill.
“I am proposing technical changes that are necessary to ensure that the reforms are implemented in an appropriate manner that protects both the stability of the fund and New Jersey taxpayers,” Murphy, 60, said Thursday in a statement.
Murphy, a Democrat who replaced two-term Republican Chris Christie in January, objected to removal of the fund’s assets from the broader pool.
“I am advised by the state treasurer that such a massive transfer would risk immediately destabilizing the value of all the State’s pension funds,” Murphy wrote in his veto statement. He also demanded actuarial analysis of any benefits changes.
Senate President Steve Sweeney, a Democrat from West Deptford who sponsored the bill, said the recommended revisions will be made. “This will give the unions the ability to make the best investment decisions for their members,” Sweeney said in a statement issued by his spokesman, Richard McGrath.
The emergency workers are trying to break from state oversight of seven pension funds worth a combined $78 billion. Though New Jersey’s public pensions are the least-funded among U.S. states, the police and firefighter pool is in the best shape, with 69 percent of assets needed to support retirees. The other systems have an average funded ratio of 60 percent, according to the veto statement.
Twenty years ago, the Police and Firemen’s Retirement System was over-funded and among the healthiest in the U.S., according to a statement by Pat Colligan, president of the New Jersey State Policemen’s Benevolent Association, with 33,000 union members.
“With this bill competent professionals and a focused board of trustees will protect the fund from abuse and control investment decisions,” Colligan said.
Christie had vetoed earlier legislation, citing concerns about taxpayer costs. The latest proposal is for a 12-member management board including five governor-appointed trustees, three police officers, three firefighters and a first-responder retiree.
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