Pension reforms unfairly impact retirees, who should instead be prioritized for financial security
In a series of recent developments, public servants in New York City have expressed their concerns over the politicization of their pension funds. Seven members of the New York City Fire Department have penned a letter to city Comptroller Brad Lander, urging him to cease the politicization of their pensions.
The issue at hand revolves around fossil fuel divestment, a topic that has been raised in the context of a lawsuit and the letters from firefighters. A group of retirees have filed a lawsuit against the New York City Retirement System (Wong v. New York City Employees' Retirement System), alleging that political considerations are guiding investment decisions.
The trustees of the city's two other pension plans - the police and firefighter funds - have stated after a meeting that they would not divest, asserting that such action would be a dereliction of their fiduciary duties. The trustees of the New York City Teachers' Retirement System (NYC TRS) and the New York City Police Pension Fund have echoed similar sentiments, stating that divestment would violate their fiduciary duties.
The promise made to public servants, according to the Uniformed Firefighters Association President Andrew Ansbro, is to keep politics out of their pensions. Investment decisions, he stresses, should not be influenced by a particular agenda. The retirement systems, he believes, exist to deliver the strongest possible returns to retirees, and every dollar earned by these pension funds represents food on the table and dignity maintained for those who gave their working lives to the city.
A half-percentage point in annual return can mean the difference between security and struggle for retirees. With retirement security and confidence already at crisis levels, it is crucial that the promise made to public servants is upheld. Public servants, it should be noted, did not sign up for political activism, nor did they agree to their pensions being used as pawns.
The trustees, in their duty to the pension funds, must prioritise maximising returns over political considerations. Fiduciaries making decisions based on anything other than maximizing returns puts pensions at risk. Pensions are not political footballs but lifelines that were long promised to city workers.
The lawsuit is not about ideology, but about accountability. It is about ensuring politics remains out of the boardroom when managing pensions. The only way to honour the promise made to New York's public servants is to let elected officials debate policy and let fund managers deliver returns.
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