Gov. Andrew Cuomo and New York City Mayor Bill de Blasio recently called for public pension plans to divest from fossil fuel energy companies. They do this under the guise of “socially responsible investing.” While well intentioned, these proposals are misguided.
State Comptroller Tom DiNapoli is the sole fiduciary of the state pension fund. That is an extraordinary responsibility and his decisions impact not just the more than 1 million public employees and retirees who rely on the fund, but all New Yorkers.
Since the 2008 recession, the fund’s investments have earned strong returns, averaging 10.17 percent over the last five years. Investment returns pay 75 percent of the benefits for retirees, and higher returns mean lower contributions from state and local governments. Forcing the comptroller to divest from the fossil fuel industry would limit investment options and could hurt returns. Interfering with the comptroller’s autonomy poses a risk to both current and future retirees, and taxpayers.
Additionally, there has been a considerable lack of recognition for the actions DiNapoli has already taken. Two years ago, his office created a low-emissions stock index, becoming the first public pension fund in the nation to take such a step. Last month, at the Investor Summit on Climate Risk at the United Nations, the comptroller announced the doubling of investments in that fund, which is a low-cost and low-risk way to support firms that reduce emissions of climate-changing greenhouse gases. This is the responsible way to invest.
Climate change is a serious matter, but using the state pension fund as a political tool to demonstrate progressive bona fides is the wrong direction to take New York. Retirees depend on this fund, and taxpayers benefit from its strong returns. DiNapoli’s record shows that he has been a socially responsible investor as well as a strong voice on behalf of New York’s public retirees. He doesn’t need someone else dictating how he should do his job.
Jack McPadden is president of the Retired Public Employees Association.
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