On Board
PBA begins process to determine representation for new PFRS system n BY MITCHELL KRUGEL
The celebrating and congratulating over Governor Murphy finally singing Senate Bill 5 , which removes control of the Police and Fire Retirement System ( PFRS ) from state purview , lasted about three weeks . At the July 24 NJ State PBA meeting , Middlesex County Corrections Local 152 State Delegate Mike Kaniuk , the union ’ s financial secretary and longest-tenured active law enforcement trustee on the current PFRS board , stepped to the microphone to ask the question on many members ’ minds : What ’ s up with the new board that will oversee PFRS ? Well , those weren ’ t his exact words , but certainly the intensity of his question asked about who would be looking after members ’ pensions in this new system . If the new system can indeed grow the pension fund from its current level in the low 70-percent range back to the mid-90-percent where it needs to be – or higher – who is most qualified to represent the PBA in this endeavor ?
PBA President Pat Colligan could have responded that Kaniuk and fellow PBA PFRS Trustee Charlie Schwartz , the Saddle River Local 348 State Delegate who was elected last year , would be the best men for the job . And they might be . The PBA would be hard-pressed to find two more dedicated and knowledgeable union representatives than Kaniuk and Schwartz .
“ The important part of S5 is that we have six years to get it right ,” President Colligan asserted to members at the meeting . “ If we screw it up , we go back to the old law . So I want everybody to understand that it has to start with an extraordinarily strong foundation .”
A foundation like the one under the Taj Mahal would serve the urgency of this endeavor , for the new PFRS trustees will serve as fiduciaries with a legal obligation to focus on fully funding the pension system and to protect its assets from abuse and mismanagement . So nothing more is at stake really than the financial security for every current , retired and future PBA member .
The new Board of Trustees will consist of 12 members – seven employee and five employer representatives . The presidents of the NJ State PBA , FOP , FMBA and PFANJ will each appoint one trustee . Active members of the PFRS will elect one law enforcement and one firefighter member , and retired PFRS members will elect one member , similar to the way it works now .
The governor will appoint four local government employer members ( as recommended by the League of Municipalities and the Association of Counties ) and one state government representative . This structure precipitates extreme caution and savvy when choosing public safety representatives .
“ The League of Municipalities will probably look at South Brunswick CFO ( Joseph Monzo ) to sit on the board . He is a bright guy who testified against us for the 2-percent arbitration cap ,” Colligan explained . “ There is an extraordinary amount of qualified people . The governor will be sending highly qualified people . It ’ s written in the law .”
The Board of Trustees will have the power to hire professionals – an executive director , chief investment officer , actuaries ,
40 NEW JERSEY COPS ■ AUGUST 2018 lawyers , money managers and staff – to run PFRS day-to-day operations . And it will have exclusive power over the policy that governs the PFRS , including the authority to adjust benefits – COLA , the special retirement percent , contribution levels , tier levels , the cap on pensions for officers hired after 2010 and disability pensions , to name a few – without having to go to the state legislature .
The investment of PFRS assets will be done at the recommendation of the PFRS Board through its investment committee and money managers . The board will have the power to audit and review these investments and the authority to remove PFRS assets from the state treasurer if it is shown that the state has mismanaged those investment choices .
So there ’ s only about as much pressure on these trustees as was on those boys who gathered in the old Pennsylvania State House in 1787 . And as much importance and significance as an interest arbitration hearing . Every day . For the next six years .
Accordingly , Colligan submitted the idea at the July 24 meeting of convening a committee of six or seven members to vet trustee candidates the PBA would appoint and nominate for the elected spot . Anybody who is interested in being part of that committee should contact President Colligan or Executive Vice President Marc Kovar .
Colligan has already received résumés from members who have expressed an interest in the position , including one who has a bachelor ’ s degree in finance and a master ’ s in investment counseling . Others have experience working in accounting or with the New York Stock Exchange . Anybody interested will have to adhere to what Colligan called the most important sentence in S5 : “ The Board shall adopt annually not less than 16 hours of continuing education on defined benefits .”
The PBA reps on the PFRS board will for sure be law enforcement officers but might not have to be at the Tier 1 pension level .
“ I don ’ t feel I have the knowledge to sit on this board , and I pretty much wrote the bill ,” Colligan submitted . “ It would not be responsible for me to look at 33,000 active members and another 15,000 retired members and pick the guys I like . We will look at more than just a resume . We want to shake somebody ’ s hand , look them in the eye and see what their priorities are .”
There is concern that when S5 was signed , there were just 366 days before the new PFRS Board had to go to work . With the clock ticking , Colligan plans to ask the selection committee to work on a tight timeline .
“ The answers aren ’ t on Wikipedia ,” Colligan reminded . “ There is no easy answer . The new pension system doesn ’ t even exist yet . We don ’ t have a building . We don ’ t have by-laws . We have nothing except a 67-page document to give us the framework and appoint a board .” d