Dear Chairman Bruno,
I am writing in response to your letter of March 19, 2021 addressed to the New Jersey Senate in regard to S3522. While I will not debate your decision to oppose this bill, I must comment on your mistruths and misrepresentation of the Police and Firemen’s Retirement System of New Jersey.
It is factually inaccurate for you to state that the administrative costs have “shot through the roof”. The passage of Chapter 55 calls for an entirely new organization to be built, including an Executive Director, Chief Investment Officer, Chief Counsel, Board Secretary and staff. With the addition of these new positions, the PFRSNJ system still operates 20% lower than most funds its size. That cost also includes support from both the Division of Pensions and Benefits and the Division of Investments, each of which have agreements to continue to perform operational duties.
To insinuate that work is “passed” through to the Division of Pensions and Benefits by our Board Secretary is as dishonest as it is insulting. Our staff has tirelessly continued serving our members and municipalities during the worst pandemic in 100 years, even when the Division of Pensions and Benefits ground to an absolute halt. Our staff professionally and attentively serves our members and makes every effort to ensure their retirement needs are met.
Furthermore, the PFRSNJ has NOT yet separated its assets from the Division of Investments, therefore no such impact to the economies of scale can be debated, nor can there be an honest discussion on the impact of the Division’s ability to negotiate fees. For the record, the Division of Investments has not participated in any of these “larger buys”, they simply participate in many “smaller buys” in the illiquid asset class. Perhaps you should be less concerned about sending “larger buys” to Wall Street banks and hedge funds, and more concerned that the Division of Investments continues to underperform its own benchmarks.
Senate President Sweeney believes at his core that union members should have direct oversight of their retirement. The decision making process should not be left to a small group of Wall Street types who seek power and influence and not what is in the best interest of the retirement system. The old way of administering and investing the pensions system must move in a direction that those who pay the vast majority have more oversight. For PFRSNJ and Local PERS, that is the members and municipalities. I am very proud of the work our Board and staff have accomplished in two years, and I will not allow that work to be portrayed negatively.
While your letter assumes that doing business as usual will continue, the reality is that New Jersey’s Pension Systems have been neglected and mismanaged for years. I caution you on where you received your “facts” as it pertains to PFRSNJ and I strongly suggest you consult with us before you publicly comment again. Should you want to discuss this further, myself and our Executive Director will be available to walk you through the facts, and if you’re interested, on the process of taking politics out of the pension system.