TRENTON – Legislation sponsored by Senate President Steve Sweeney and Senator Troy Singleton that promotes a “Responsible Contractor Policy” to ensure that contractors, investors, managers and consultants selected by the state’s retirement system make investments that support fair wages and benefits for workers was approved by the Senate today.
The bill, S-857, would set conditions on domestic equity investments in the private real estate, private equity, and private infrastructure asset classes in which the New Jersey Division of Investment has more than a 50 percent interest. The bill would also establish requirements for the protection of public sector jobs and the selection of external managers.
“We have an interest in workplace conditions of those employed by managers, contractors and subcontractors so they are consistent with the ideals of labor unions and others who advocate for workers’ rights,” said Senator Sweeney (D-Gloucester/Salem/Cumberland). “We believe that workers should be treated with respect and fairness, and compensated with fair pay and benefits. A workforce that is treated fairly is more productive and more effective.”
The bill defines a “responsible contractor” as one who submits to the property manager a responsible contractor self-certification form; provides the Director of the Division of Investment and the external manager with responsible contractor documentation; and pays workers fair wages and fair benefits including employer-supported family health care coverage, pension benefits and apprenticeship training programs.
“The Responsible Contractor Policy will help to ensure that the State is investing with entities that respect and promote workers’ rights and fairness in the workplace,” said Senator Singleton (D-Burlington). “With this legislation, we are literally putting our money where our mouth is – we cannot just simply talk about putting New Jersey’s workers first, we must also invest pension assets with those who uphold these standards and share these values.”
“The New Jersey State AFL-CIO thanks Senate President Sweeney and Senator Singleton for this worker-friendly and fiscally prudent bill,” said Charles Wowkanech, President of the New Jersey State AFL-CIO. “It ensures that, when investing worker pension funds, the state does so responsibly. This bill will promote investment in projects that provide good jobs paying fair wages and benefits in safe workplaces. It also maintains job security for our union brothers and sisters in the public sector, and enhances their retirement security through wise investments.”
The policy adopted pursuant to this bill is prospective and the bill does not require the divestment of any pension funds that may be held at the time of enactment.
The bill also prohibits the division from approving any investment that has the potential to eliminate public sector jobs, would pose a reputational risk to the state-administered retirement systems, or could bring public or regulatory scrutiny to the retirement systems.
The bill further requires the director to exercise due diligence in the selection of external managers and requires those managers to be of good character.
The bill was approved with a vote of 21-12.