Climatists Exploit Pensioners and Taxpayers

New York city signed up for “Me Too” commitment to Paris Accord, and the city’s pensioners are paying the price as their retirement funds suffer from virtue signaling divestment from oil companies.  Jeff Patch writes in Real Clear Policy End the Political Games With Public Pensions  Excerpts below with my bolds.

There’s a link on New York City Comptroller Scott Stringer’s website to an outline of his office’s Powers and Duties Under New York State Law. The 159-page overview covers an extensive spectrum of legal responsibilities, ranging from arts and cultural affairs to worker compensation. Nowhere does the list reference shareholder activism, directing city environmental policies, or — for that matter — leveraging the $190 billion in pension fund assets his office stewards to pursue a political agenda.

And yet that’s exactly what Mr. Stringer is doing. The professional investment managers of the city’s five public-sector pension funds, their board members, and Stringer himself are all exploiting their positions as custodians of the retirement savings of the city’s workers to promote their own political objectives. Politics seems to pervade every action of the city comptroller’s office, which just last month announced a plan to divest pension holdings from fossil-fuel interests, regardless of the impact on financial performance.

A new report from the American Council for Capital Formation sheds light on how such political machinations have impacted New York’s public pension funds, highlighting the price residents pay for their leaders’ political predilections. Specifically, the report finds that nearly $1 of every $5 of personal income taxes the city collects go to paying down the pension system’s liabilities. Meanwhile, the liabilities continue to grow, with nearly $10 billion from the City’s proposed 2018 budget needed to cover a pension funding shortfall that ranges between $65 billion and $142 billion.

As the person responsible for the management of those funds, one might expect Mr. Stringer to focus on making prudent investments. Fiscal diligence should be the top priority of any comptroller’s office. Instead, Stringer and his staff have continued using public monies as a political tool to pressure social change in corporate boardrooms.

For instance, last year, his office launched the second phase of a project aimed at pressuring public companies on various social issues, including his Boardroom Accountability Project 2.0, which pushes companies to disclose demographics on members, including their sexual orientation. Over the course of 2017, New York City Comptroller’s Office has become one of the nation’s most aggressive sponsors of activist shareholder proposals, submitting close to 100 measures, including a new initiative to divest public funds entirely from fossil fuels by 2020.

The ACCF report uncovers numerous instances of fiduciary irresponsibility. It reveals how fund managers have chosen to systematically increase investments in the Developed Environmental Activist stocks, despite the classes continued underperformance against the rest of the fund. (Those assets now make up 12 percent of the total fund.) And it details how Stringer prioritizes headline-grabbing political appearances ahead of resolving the under-performance of his funds.

Perhaps most concerning point is that a majority of Stringer’s constituents — the teachers, nurses, policemen, and firefighters who dutifully pay into public pension funds every month — remain oblivious to this emerging crisis. Last week, a separate study released by the Spectrum Group revealed that 80 percent of the city’s current and former employees were unaware that their pensions were not fully funded. Two-thirds of all respondents said they wanted their funds’ managers to concentrate on maximizing their returns.

Taken together, these reports make two points abundantly clear. First, there is a very real disconnect between the objectives of the people who own the funds and their professional managers. Second, this disconnect has consequences not just pension fund members, but also for taxpayers across the city. In short, everybody loses — except Stringer and his political supporters.

The city comptroller has a duty to put the financial interests of taxpayers and public employees above his narrow political ambitions. If Mr. Stringer wants to set social policy, he should run for city or state office instead. Until then, he should focus on safeguarding the future of his constituents’ pension funds.

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