Senate President Sweeney has introduced legislation (S-3522) that would divide the Public Employees’ Retirement System (PERS) into two parts. A State Part for State employees and a Local Part for all other employees. The Senate President has indicated that he is advancing this legislation as a mean of protecting the local part of the PERS from being co-mingled with the State.
This is the second of a four part blog series summarizing the board’s operation.
Oath of Office
Taken by the trustee.
- Willingly, diligently, and honestly fulfill board duties.
Will not knowingly violate or willingly permit and provisions to be violated.
Filed with Secretary of State.
4 trustees must be present for a meeting. A majority of the board constitutes a quorum for transaction of business
The Board of Trustees must annually establishes rules and regulations for the administration of the funds created by this act and for the transaction of the board's business.
The Board will appoint a secretary of the board. The administration of the program will be performed by personnel selected by the board.
Board must keep a record of all proceedings and open to public inspection.
Board must publish an annual report showing fiscal transactions of preceding year of the local part, the amount of accumulated cash and securities, and the last balance sheet, showing the financial condition by actuarial valuations.
The board shall hold an initial meeting on the 1st business day of the 7th month following enactment of the bill.
At the initial meeting, the board will contract with the Division of Pensions for the Division to perform the administrative tasks that it performed prior to the enactment of the law and such other tasks as the board may require. The division will receive compensation from the board for the performance of the administrative tasks that the Division performed prior to the enactment of law in an amount equal to the cost the Division incurred for the performance of those administrative tasks prior to the enactment of that act. At the expiration of the term of the contract negotiated by the board with the division, the board may contract with the Division or with a private entity to perform administrative tasks that the board determines to be necessary or convenient for its operation.
Board may, at its discretion, select and employ, or contract with legal counsel, with demonstrated expertise in law governing retirement systems for public or private sector employees, to advise and represent the board. If the board does not select legal counsel, the State’s Attorney General will be the legal adviser of the retirement system, except if the Attorney General determines that a conflict of interest would affect their ability to represent the board.
Board selects the actuary of the system. The actuary is a technical advisor on matters of operation of the funds. The actuary is an independent contractor retained by the board with demonstrated experience in providing actuarial services to a defined benefit system for public employees and be a fellow with Society of Actuaries and active member of the American Academy of Actuaries.
Board, in consultation with the actuary, will establish actuarial funding policies for the system. At least once every 3 years make an actuarial investigation into morality, service, and compensation experience of Local Part PERS members. Board must adopt for Local Part PERS such morality, service, and other tables deemed necessary & certify rates of contribution. Based on such table recommendations by actuary, the Board must adopt regular interest. Actuary must make an annual valuation of assets and liabilities of the fund.
The board of trustees must retain an independent actuary selected by the State Treasurer. The independent actuary must have demonstrated experience in providing actuarial services to retirement systems for public or private sector employees, to review prior investigations into the mortality, service, and compensation experience of the members and beneficiaries of the retirement system and to review the 3 prior actuarial valuations to certify that the actuary of the retirement system conducted the investigations and valuations in accordance with generally accepted actuarial standards.
Board must have at least 1 meeting each calendar month.
Each public employee who is a board of trustee or on a committee is entitled to time off from duty with pay, including reasonable travel time, to attend regular or special meetings or committee meetings.
Board has the authority to formulate and establish, amend, modify, or repeal such policies as it may deem necessary and proper to govern the methods, practices, or procedures for investment, reinvestment, purchase, sale, or exchange transactions to be followed by the Division of Investments.
Board may also review and approve agreements which may be necessary or convenient for the management of the investments of the Local Part of the retirement system.
Board has the authority to inspect and audit the respective accounts and funds administered by the Division of Investments and take appropriate action as necessary to effectuate the long-term viability of the Local Part of the PERS.
The Division of Investments Director and the State Investment Council will retain all functions, powers and duties relating to the Common Pension Fund L assigned to the Division of Investment, The Director of the Division of Investment, and State Investment Council by N.J.S.A. 5:9-22.5 et seq.
Board selects and employs an executive director. The executive director is:
- Responsible for the strategic direction of the board from an investment and operational perspective.
- Must provide strategic direction, planning, and leadership to the board; organize, develop, and supervise a management team to provide optimal investment results.
- Maintain oversight of investment and administrative operations conducted by the board.
- Develop an annual budget and a salary and compensation guide for any managerial positions that are not subject to Civil Service.
- Arrange board agendas with the approval of the board’s chair.
- Appoint administrative staff.
- Execute contracts on behalf of the board,
- Perform any other responsibilities designated to the executive director by the board.
- Executive Director must have a Bachelor degree and 5 years managing experience in accounting, finance, public administration, government pension and retirement planning, investment banking, financial consulting, cash management or similar field. No member, retiree or other beneficiary of the system will be eligible.
- Executive Director has no term and may be removed after a public hearing by majority vote of the Board.
Board has the authority to retain other administrative and professional staff as required to implement the duties and responsibilities required to ensure a smooth transition of responsibilities and authority from the Division of Pension to the board.
Board cannot employ an immediate former trustee and may employ a former trustee only if the former trustee has not held trustee position for more than 2 years.
Board is authorized to access operating funds from the system necessary for the management of the fund and to employ staff immediately upon their appointment, provided that the qualified status of the retirement system under federal law is maintained.
Board selects and employ a chief investment officer, who:
- Oversees the development of methods, practices, and procedures for investment in coordination with the Investment Committee.
- Establishes and maintains a policy to monitor and evaluate the effectiveness of investments made on behalf of the board, in coordination with the Investment Committee.
- Reports to the Executive Director.
- Chief Investment Officer must have a Bachelor degree and 5 years managing experience in accounting, finance, public administration, government pension and retirement planning, investment banking, financial consulting, cash management or similar field. No member, retiree or other beneficiary of the system will be eligible.
Board may make and execute agreements pursuant N.J.S.A. 52:34-6 et seq., which may be necessary or convenient for the management of the investments of the retirement system.
Board must select and employ an ombudsman, who:
- Provides individual death and disability consultation and information to plan members and their dependents.
- Answer questions from, and provide information to, members related to the process of applying for retirement and retirement benefits.
- Coordinate with other State and local agencies on behalf of members,
- Maintain federal, State, and local death and disability benefit resources; recommend policy changes to the board.
- Conduct educational presentations for employers on death and disability benefit options for members.
- Publish information about the organization of the board for members, employers, and the public.
Contact: Lori Buckelew, Assistant Executive Director, email@example.com, 609-695-3481, x112.