For Immediate Release: Contact: Senator Shirley Turner
February 23, 2015 (609) 323-7239
February 23, 2015 (609) 323-7239
TURNER-BARNES BILL WOULD PROTECT PUBLIC PENSION INVESTMENTS
FROM POLITICAL FAVORITISM
TRENTON — Legislation authored by Senator Shirley K. Turner and Senator Peter J. Barnes that would help protect public employee pensions from being used as political favors received final legislative approval today in the Assembly.
The bill, S-2430, would apply the same pay-to-play prohibitions on contributions to national political organizations by private investors that apply at the state level. It would also require more transparency by the State Investment Council, requiring the public disclosure of private money managers and the fees they receive for managing pension investments. Previously approved by the full Senate last year, the bill was in response to the disclosure that donors to the Republican Governors Association and the Republican National Committee were rewarded with investment deals with New Jersey pension funds. Governor Christie serves as chairman of the RGA.
“This administration shouldn’t be playing politics with the public employees’ pensions,” said Senator Turner, D-Hunterdon and Mercer. “Retired workers deserve the fund allotted to them, not to be used for political gain. This is why selecting investors on performance and merit rather than campaign contributions is important, especially as investments should be made for the best financial reasons.”
Reports show that employees and others tied to private firms managing portions of the state’s $80 billion pension funds have given more than $7.1 million to the RGA and more than $3.9 million to the RNC.
The former head of the State Investment Council, which approves the selection of private fund managers, is a political ally of the governor. State and federal laws ban money managers from collecting fees from states where they have financed political candidates, but these pay-to-play laws don’t cover national political organizations, such as the RNC and RGA. In fact, the Christie Administration adopted a rule in 2013 specifically stating the prohibitions don’t apply to federal donations.
The legislation would require the investment council to put in place a rule prohibiting firms it selects to invest pension funds from making contributions to any national political organization. New Jersey also does not require the regular disclosure of the fees paid to the private investment firms selected to manage pension funds.
“The best thing to do is to remove even the appearance of any political influences when pension fund investments are made,” said Senator Barnes, D-Middlesex. “Through this bill, we can ensure that retirees’ interests are protected while also preventing future conflict of interests among political parties and money managers.”
The bill would require quarterly reports by the investment council detailing the investment returns of the private firms and the fees they receive. The report would have to be submitted to the governor, the Legislature, and the State Treasurer and posted online to be made available to the public.
The bill was approved by a vote of 53-15. The Senate approved it with a vote of 25-8 in October. It now heads to the Governor’s desk.