State unions: Change desperately needed in managing N.J. public pension funds
By Charles Wowkanech
Union pension trustees almost fell out of their chairs at last week’s State Investment Council meeting, when Chairman Tom Byrne boldly declared that “the pension funds are healthy until 2025.”
Perhaps he missed the record high 11 credit downgrades the state has suffered during Gov. Chris Christie’s term – the most of any governor in our state’s history. Most of these downgrades were directly attributed by rating agencies to the failing pension systems.
Or perhaps he missed the recent Bloomberg report that showed New Jersey has the weakest pension system in the entire nation. Regardless, it was a startling statement by the man who is charged with leading the $73 billion pension investment strategy for roughly 800,000 current and future retirees.
With this in mind, it was no surprise that this time last year Byrne stonewalled the labor initiated proposal to drastically reduce hedge funds. After an 18-month struggle, ending in a contentious meeting that resulted in a tie vote to reduce hedge funds from 12.5 percent of the portfolio down to 4 percent, Byrne ultimately settled on a reduction to 6 percent.