NJ Pension Trustees Struggle to Initiate Audit

The board of the New Jersey Public Employee Retirement System has been trying since April to initiative an audit of the system’s investments; of particular interest to the trustees is the fees paid by the system to outside managers, and how they compare to peers and previous years.

But New Jersey’s deputy state attorney general and Gov. Christie have told the board that they have no authority to initiate such an audit – a circumstance that has left the trustees frustrated.

More from NJ.com:

Tom Bruno, chairman of the board of trustees for the Public Employee Retirement System, said the audit demanded by two pension boards that raised questions about how the money is invested has been stalled and blocked since April.

“We’re in a little bit of a stalemate here with this thing,” Bruno said. “We have a fiduciary responsibility but no authority to act.”

The trustees received a legal opinion last Wednesday from a deputy state attorney general saying that only the State Investment Council and the Division of Investment have are the power to order an audit, according to Bruno and Bill O’Brien, vice chairman of the retirement system.

“Frankly, it’s a bit off that the very people who we’re questioning … have the final authority in calling for an audit,” Bruno said. “The odds are that they won’t do it. Why would somebody kind of look over their own shoulder?”

[…]

Tom Byrne, chairman of the State Investment Council, said he was not clear what the trustees are seeking, and that the type of forensic audit they have requested could cost pensioners hundreds of thousands of dollars.

“I think most people are actually pretty happy with the amount of information we’ve provided,” Byrne said. “It remains true that some people are unhappy with our alternative investments because of the fees involved.”

The State Investment Board manages $80 billion in assets for the Public Employees Retirement System.

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