A truly radical, extreme push to divest public pension funds from fossil fuel energy companies would slash the value of the pension funds by taking money out of smart investments, and put taxpayers on the hook for it.
It may sound complex, but it would have a simple impact: it will cost taxpayers more, and risk losses in public pension funds.
It is a scheme only a narrow set of environmental interests could cook up, as they risk real New Yorkers’ money, and pensions, in their desperate attempts to attack energy companies.
Sadly, it is a scary proposition as Albany lawmakers wind down toward end-of-session this week, when last minute shocks are possible.
The big proposal in play now, from Senator Liz Krueger, is aimed at the state’s $170 billion-plus pension fund.
Divesting state pensions from sound investments in energy companies is opposed by the State Comptroller, who said, “The Fund works to maximize returns and minimize risks. Key to accomplishing this objective is diversifying the Fund’s investments… including the energy sector, where fossil fuels continue to play an integral role.”
It goes against the duty of the Comptroller to protect the pension system and defend against politicizing the fund.
New York taxpayers already pay for the worst tax burden in the nation. They don’t need a pension fund that is ruled by the same special interest-driven decision making that rules Albany politicians.
The state pension fund is target one, but these anti-energy crusade is after other pension funds. Sen. Krueger, and Sen. Brad Hoylman have a bill to force SUNY, and CUNY to jeopardize their investment portfolio as well.
The New York City pension funds are another target of the radical interests behind this push. If the New York City Employee Retirement System divested, it would lose $500 billion to nearly $700 billion due to lower returns over 50 years.
That is craziest part of an already confused campaign: Public employees would be hurt as unhinged environmental interests play games with their futures.
The very politicians who are fronting the movement should be on the side of these public employees. To try and pretend they are, they’ve outrageously claimed pension divestment is a sound decision. They’ve claimed it will help, but the numbers clearly show it will hurt.
Most hurt would be taxpayers. New York’s overburdened taxpayers could have to pay for the state and city pension funds losses (and the transaction costs).
They’re also paying many times over for subsidies, tax breaks, and credits for renewable energy companies. The same renewables that Sen. Krueger and company claim make for better investments, despite their need to be held up by taxpayers.