New York Pushing Political Agenda with Pensioners’ Funds

This week, New York State Comptroller Tom DiNapoli went on CNBC’s Squawk Box to explain why the Big Apple’s pension fund was divesting from the oil and gas sector. His position is best reflected in a release from the Comptroller’s office earlier this month:

Climate change is an increasingly urgent risk facing all investors, and I am determined to protect the state’s pension fund by keeping it at the forefront of efforts to mitigate risks to our investments.

To justify such an approach as fiscally prudent, he went on to claim:

Consistent with my fiduciary duty to maximize investment returns for the benefit of our members and retirees, these actions should help accomplish the goals of our Climate Action Plan.

It’s this brand of financial double talk that inspired ALEC’s State Government Employee Retirement Protection Act, model policy that prevents government officials from using funds meant to secure their state employee’s retirement to promote a political agenda.

“Politically motivated investment schemes are also a growing threat to the solvency of state pension funds,” said ALEC Chief Economist and Executive Vice President of Policy Jonathan Williams. “These strategies reduce investment returns over the long term, which leads to underfunding in state pension plans across the country with taxpayers ultimately footing the bill for the shortfalls.”

Similar legislation was recently passed in Arkansas, Montana, and South Carolina and has become the gold standard for state fiduciary rules meant to protect public pension plan beneficiaries from the hazards politicized investment strategies like environmental, social, and governance (ESG).

New York currently has $368,166,261,391 in unfunded pension liabilities – the 4th most in the country – as detailed in our 7th edition of Unaccountable and Unaffordable unfunded public pension liability report.

You can watch the full interview here.