According to an article published in NJ Spotlight, New Jersey’s public-employee pension fund investments generated returns totaling 9.06% for fiscal year 2018. Some of the investments that were credited for lifting the fund’s overall performance included U.S. equities and real-estate holdings.

The NJ pension system covers the retirements of approximately 800,000 current and retired public workers in New Jersey. The system uses an assumed rate of return of 7.5% in accordance with a policy enacted under Governor Murphy. However, past returns have averaged in the range of 6.17% to 6.75%. As a result Murphy is considering reducing the assumed rate to 7%, which is more in conformance with past perforce.

Despite the good news of better than expected returns, some fear that this year’s returns will be hard to replicate, especially since the returns for fiscal year 2019 are already 2.5% lower. In addition, some analysts expect the booming stock market to slow down in the near future and reduced market performance will likely put more pressure on the state to continue increasing its contributions to the system.

The strong returns have assisted in increasing the pension system’s overall market value above $78 billion dollars. However, the retirement plan remains grossly underfunded as a result of insufficient and/or skipped contributions from State leadership over the past twenty years. Murphy’s budget increased the state payment in the 2019 fiscal-year budget to $3.2 billion dollars. Although this was a record-high contribution, it is still only 60% of what is necessary to restore the pension system to good health over time. It will take years before Murphy brings the state up to the full payment as he’s following a ramp-up plan established by former Gov. Chris Christie that calls for 10 percent increases each year over a 10-year period. Naturally, the slow pace of contributions is putting more pressure on investment performance, which is causing growing concerns due to the potential market slow down.

Clearly Governor Murphy has taken a step in the right direction to assist in fixing the pension crisis.  However it remains to be seen what the Senate and Assembly leadership will do to address the pension and benefit crisis as plans have been floated to switch certain employees from the defined contribution plan that is currently in place to a 401k plan.  While the increased investment returns are a nice “shot in the arm”, they certainly can not be counted on at all to fix the crisis that the State still currently faces.

Tags: benefit reform, Christie, collective bargaining, Contract Negotiations, Governor Christie, health benefits, health care reform, healthcare reform, NJ Pension Crisis, NJ Public Employees, NJ Public Safety Employees, NJ Public Safety Officers, Nj State Senator Sweeney, pension reform, PERS, PFRS, Public Employment Labor Law, Retiree Benefits, Sweeney
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Photo of Frank M. Crivelli Frank M. Crivelli

Frank M. Crivelli’s practice revolves around the representation of over eighty-five (85) labor unions in various capacities, the majority of which bargain for law enforcement entities. He is proud to be called on a daily basis to provide counsel to over 12,000 state…

Frank M. Crivelli’s practice revolves around the representation of over eighty-five (85) labor unions in various capacities, the majority of which bargain for law enforcement entities. He is proud to be called on a daily basis to provide counsel to over 12,000 state, county and local law enforcement officers, firefighters and EMS workers.

Mr. Crivelli specializes his individual practice in collective negotiations.  Over the past twenty (20) years, Mr. Crivelli has negotiated well over one hundred (100) collective bargaining agreements for various state, county, municipal and private organizations and has resolved over thirty-five (35) labor agreements that have reached impasse through compulsory interest arbitration.  Mr. Crivelli routinely litigates matters in front of the New Jersey State Public Employment Relations Commission, the New Jersey Office of Administrative Law, third party neutrals for mediation, grievance and interest arbitration, the Superior Court of New Jersey and the United States District Court for the District of New Jersey.

Mr. Crivelli founded and created the New Jersey Public Safety Officers Law Blog (www.njpublicsafetyofficers.com) approximately fifteen (15) years ago where he and members of his firm routinely publish blog posts regarding legal issues related to the employment of New Jersey Public Safety Officers.  The blog now contains over six hundred (600) articles and is reviewed and relied upon by thousands of public employees.  Mr. Crivelli has also published books and manuals pertaining to New Jersey Public Employee Disability Pension Appeals and the New Jersey Worker’s Compensation System. Currently, he is drafting a publication on how to Prepare and Negotiate a Collective Bargaining Agreement.  He lectures annually at the New Jersey State PBA Collective Bargaining Seminar, the National Association of Police Organization’s Legal Seminar, the New Jersey Public Employment Relations Commission Seminar on Public Employment Labor Law, the United States Marine Corps’ Commander’s Media Training Symposium and to Union Executive Boards and General Membership bodies on various labor related topics.

Prior to entering private practice, Mr. Crivelli joined the United States Marine Corps where he served as a Judge Advocate with the Legal Services Support Section of the First Force Services Support Group in Camp Pendleton, California.  While serving in the Marine Corps, Mr. Crivelli defended and prosecuted hundreds of Special and General Court Martial cases and administrative separation matters.  In addition to his trial duties, Mr. Crivelli was also charged with the responsibility of training various Marine and Naval combat command elements on the interpretation and implementation of the rules of engagement for various military conflicts that were ongoing throughout the world at that time. After leaving active duty, Mr. Crivelli remained in the Marine Corps Reserves where he was promoted to the rank of Major before leaving the service.

For the past fifteen (15) years, Mr. Crivelli has been certified as a Civil Trial Attorney by the Supreme Court for the State of New Jersey, a certification which less than two percent (2%) of the attorneys in New Jersey have achieved.  He is a graduate of Washington College (B.A.), the City University of New York School of Law (J.D.), the United States Naval Justice School, and the Harvard Law School Program on Negotiation.

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