Jersey Pension Chief Quits, Gets New Assignment

November 18, 2002 ( - The top state official of New Jersey's troubled pension fund resigned on Friday, but he won't be unemployed, according to the state Treasurer's office.

Steven Kornrumpf, who was director of the New Jersey Division of Investment, which manages the state’s investment portfolio and its $56 billion pension fund, will continue to be employed by the Garden State as an assistant treasurer – and will keep his current pay of $ 132,500 , according to Dow Jones.  

The fund, which lost more than $6 billion in the last quarter, has come under fire of late.   Compared with other state pension funds measured by  Wilshire Associates , New Jersey’s pension fund ranks near the bottom.   In fact, nearly all (94%) of the state funds did better over the three years ending June 30, 2002, according to State Treasurer John McCormac.  

Among other challenges for the fund, which is managed in-house and overseen by an 11-member State Investment Council, is its current policy of trading securities only on Tuesdays (see  NJ Fund Weighs On Garden State Budget ).

There has been speculation that Kornrumpf would be forced out because of the losses, but a person close to the matter denied that was the case, according to Dow Jones.

While Kornrumpf’s successor hasn’t been named, New Jersey’s Investment Council, which sets the state’s investment policy, will recommend candidates to the Treasurer, who will make the final decision, according to the report.

Orin S. Kramer, who was elected chairman of the state’s Investment Council two months ago, has said he plans to make changes in the way the council operates, but hasn’t yet articulated specific changes.

The state has now hired a private company, Independent Fiduciary Services, a Newark, New Jersey-based firm, to perform an audit of its system. Two former governors, Thomas Kean and Brendan Byrne, as well as Princeton University professor and former Federal Reserve Vice Chairman Alan Blinder, have also been appointed by Governor James McGreevey to examine the state’s ailing pension system.