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Lawmakers push to expand N.J. pension investments to Transportation Trust Fund

Friday, December 9, 2016   (0 Comments)
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NJ.com 12/09/16

New Jersey lawmakers said Thursday they want to take "the handcuffs off" the state's ability to make safe investments to help boost its ailing public employee pension system. Senate President Stephen Sweeney unveiled bi-partisan legislation that would allow the newly funded Transportation Trust Fund to beef up its ability to sell bonds directly to the pension fund. Currently, the State Investment Council has a 10 percent cap on pension investments for any single bond sale. The proposed legislation would only remove the cap for TTF investments. Sweeney (D-Gloucester) argued it would give the state greater flexibility on a "risk-free return on investment." If, for example, the TTF borrowed $1.2 billion at a 5 percent interest rate, then the $60 million would go to support the pension fund, Sweeney said.

"We're lifting the cap on investing in New Jersey," Sen. Dawn Addiego (R-Burlington), the bill's Republican co-sponsor, said. Both also argued putting TTF debt with the state's pension fund would save the state bond underwriting fees. "Why are we letting other people make interest off of us?" Sweeney asked at the Statehouse news conference announcing the legislation. Neither the governor or the State Investment Council has been briefed on the legislation, Sweeney said. But he expressed confidence the bill would pass both houses and be approved by the governor since it would merely give the investment council the option to go beyond the current cap.

The bill is just another proposal lawmakers recently rolled out to help improve the pension system. Last month, lawmakers voted overwhelmingly to send Christie a bill that will require the state to make quarterly payments to New Jersey's ailing public worker pension system. The proposal, which cleared the state Senate by a 35-0 vote and the sate Assembly 72-0, is a reworked version of similar legislation Christie twice vetoed. It would require the governor to make pension payments on a quarterly basis by Sept. 30, Dec. 31, March 31 and June 30 of each year, instead of at the end of the fiscal year in June. In exchange, the pension fund would reimburse state treasury for any losses incurred if the state has to borrow money to make a payment.


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