NJ Politics Digest: Can State Afford Pension Investments With ‘New Jersey Values’?

It's no secret New Jersey's public pension funds are in crisis.

Phil Murphy Offers Compromise Regarding Tax Hikes
New Jersey Gov. Phil Murphy. Dave Kotinsky/Getty Images for William Hill Race & Sports Bar

It’s no secret New Jersey’s public pension funds are in crisis.

But, as The Bergen Record reports, “New Jersey is increasingly putting retirees’ money where Gov. Phil Murphy’s mouth is.”

Since Murphy took office, the state has been shifting the state’s nearly $77 billion in pension investments to reflect Murphy’s progressive agenda and to punish those companies that don’t fit in with it—or at least try to get them to change their ways, according to the report.

The state investment council is now working on a formal policy on investing in a way that reflects the Murphy administration’s social values—considering environmental, social and governance factors in deciding where to put pension investments—according to the report.

Supporters say the state can use its large pension fund to ensure companies are good corporate citizens. Opponents, however, argue that state, which is facing difficulty in meeting its pension obligations, should be seeking the best return on its investments. The report points out that a November 2016 study by the Center for Retirement Research at Boston College, found that funds with divestment policies earned an average of 0.4 percentage point less than other plans. In New Jersey, that means the state will forgo more than $300 million a year to make a social statement.

Quote of the Day: “Do they really want to have a battle over taxes in a year where Donald Trump screwed New Jersey on taxes? It seems like they’re really leading with their chin on this.” — Democratic consultant Brad Lawrence on plans by Republican congressional candidates’ intention to make Democratic tax hikes in the state budget an issue in their campaigns.

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NJ Politics Digest: Can State Afford Pension Investments With ‘New Jersey Values’?