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Research

Nearly Two-Thirds of 2016 FDNY Pensions Top $100K

More than 20% of total 15,606 FDNY retirees eligible for six-figure pensions; high retirement benefits attributed to disability-related plan.

By Chris Butera

Although the average pension for 2016 Fire Department of New York (FDNY) retirees is down from the previous year, a majority of them are eligible for six-figure retirement paydays.

According to data from SeeThroughNY, the Empire Center’s transparency website, some 264 of the 420 FDNY 2016 retirees will be receiving pensions of $100,000 or higher—with 17 of them eligible for pensions over $200,000. This brings the six-figure pensioner average to 20% (3,184) of the total 15,606 FDNY retirees—more than doubling 2011’s 8% average (1,297).

The average pension for a 2016 FDNY retiree is $117,914, a slight drop from 2015’s $120,799 average. The highest pensioner is currently Michael A. Vecchi, who collects $316,253. Vecchi retired in 2013 with 41 years of service. The average tenure for a 2016 FDNY retiree was 23.1 years of service, up from 2015’s 22.7 years. The collective pension-eligible service credit averaged 22.4 years.

Firefighter and fire officer pensions tend to reflect a high number of retirees with line-of-duty disability pensions. This allows them to collect 75% of their salaries, compared to the usual benefit rate of 50%. According to Empire Center, higher benefits also include payments from an optional, guaranteed-return supplemental account supported by additional savings contributions by firefighters and fire officers who choose to participate in that plan. The think tank suggests that the slim decline in 2016 pensions is attributed to less disability-based retirements.

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However, the retirement system is the biggest underperformer of New York City’s five municipal employee pension funds, reporting a net liability of $8.9 billion with assets equal to 57% of liabilities in fiscal 2016.

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Home > News > Newsmakers > New Zealand Super Fund Shifts Passive Equities to Low Carbon
Newsmakers

New Zealand Super Fund Shifts Passive Equities to Low Carbon

Fund moves $10.2 billion into eco-friendlier firms, eyes active investments next.

By Michael Katz

The NZ$35 billion ($25.6 billion) New Zealand Superannuation Fund’s (NZ Super Fund) has moved its NZ$14 billion global passive equity portfolio, which accounts for 40% of the overall fund, into low-carbon investments. 

The fund said the  changes have significantly reduced its overall carbon footprint, and are a key part of the trustees’ strategy to address climate change investment risk. As of June 30, the fund’s total carbon emissions intensity is 19.6% lower, and its exposure to carbon reserves is 21.5% lower, than if the changes hadn’t been made.

The transition involved reallocating NZ$950 million away from companies with high exposure to carbon emissions and reserves into lower-risk companies. The fund said the move makes it more resilient to climate change investment risks.

“There is a global consensus that climate change presents material risks for long-term investors,” said Adrian Orr, chief executive of the NZ Super Fund. “Leading investors around the world are adjusting their portfolios to address climate change risk and capture opportunities stemming from the transition to a low-carbon economy.”

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The low-carbon portfolio is based on a carbon measurement methodology for listed equities developed by the fund’s trustees in concert with MSCI ESG Research. MSCI ESG Research also provided independent carbon data and company ratings.

Despite the shift, the fund said it will still hold some companies in its passive portfolio that have a high exposure to carbon emissions and reserves. It said it would limit its investment in these companies to ones  that have been rated better than their peers by MSCI ESG Research, and where there is “evidence of strong management engagement with the challenge of climate change.”

Matt Whineray, NZ Super Fund’s CIO, said financial markets were under-pricing climate change risk over the fund’s long investment timeframe. “The global energy system is transitioning away from fossil fuels,” he said. “For investors with very long horizons, such as the fund, reducing exposure to carbon emissions and reserves is a low-cost insurance policy.”

Whineray added that the fund’s trustees also found that carbon exposures were highly concentrated in a relatively small group of companies. “By targeting this group we have been able to significantly reduce the fund’s carbon footprint while retaining the diversification benefits of passive investment,” he said.

“This will help us capture the upside from companies which are better placed to succeed within the rapidly-transforming energy sector,” said Whineray. “The bulk of the fund’s equity exposure is through its passive mandates, although the fund also still holds high-carbon stocks periodically due to the discretionary decisions of active managers.”

While the NZ Super Fund’s initial focus on reducing its carbon footprint has been with the passive portfolio, Whineray said the  next priority is to reduce carbon exposure in the fund’s  active investment strategies.

“We are also pushing ahead with other aspects of our climate change strategy,” said Whineray, “including incorporating climate change risk into our investment analysis, engaging with portfolio companies to promote better risk management, and identifying new investment opportunities from the global transition to a low-carbon economy.”

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