Lawmakers and union leaders in New Jersey are questioning whether the state's pension funds are being invested responsibly.

New Jersey paid $600 million in fees to private financial firms in 2014 to manage the state’s pension system for public workers, according to the chairman of the State Investment Council, Tom Bryne. He contends the growth generated for the pension fund is worth it and the high fees are a result of that growth.

But Adam Liebtag, the public employee union representative on the State Investment Council, told the legislature he believes the council is spending too much on the fees.

“Should the public be in the business of generating $600 million a year in revenue for a handful of hedge fund managers?" said Liebtag, the vice chair of the state panel that oversees pensions.

“I don’t know that that’s the right public policy,” he said.  

A finance and investment expert, Jeffrey Hooke, testified at a state Legislative Oversight hearing Thursday.  He says there's no proof that investing in private equity, known as "alternatives" is worth the return.

“They’ve all drank the cool aid that these alternatives were going to provide these positive attributes,” Hooke said. “But I'm not seeing it.”

Hooke believes the state's fund could have made an extra $2.4 billion if it had stayed with the S&P 500, instead of private equity.