NYC Pensions Seek Divestment Plan Guidance

Three New York City retirement systems have issued a request for information seeking input and recommendations on how best to create a strategy to divest from fossil fuel companies within five years.

In January, the New York City Employees’ Retirement System (NYCERS), the Teachers Retirement System (TRS), and the Board of Education Retirement System (BERS), which together represent 70% of the city’s $193 billion in pension fund assets, passed a joint resolution to begin evaluating ways to divest from fossil fuel-related investments.

The New York City Retirement System also recently launched a comprehensive fossil fuel study on whether divesting from fossil fuel stocks is economically feasible from an investment returns viewpoint.

The request for information, issued this past week, will collect advice, information, and analysis from experts whose insights will be used to develop a request for proposal for services to determine the best way to divest and exclude securities issued by companies owning fossil fuel reserves from the pensions’ investment portfolio.

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“We believe that a green economy is a thriving economy,” New York City Comptroller Scott Stringer said in a release. The request for information “reflects our commitment to growing our funds for pension fund beneficiaries and protecting our planet.”

Experts sought for advice include those with backgrounds in investment, finance, legal, scientific, and environmental policy, with responses due on June 1. Those who respond to the request for information may be selected to make oral presentations to the trustees and staff. After New York City Mayor Bill de Blasio and the city’s bureau of asset management review the responses, the bureau will develop and issue the request for proposal.

In the request for information, the systems said they will use an investment consultant to provide analysis, evaluation, and advice on investment risks posed by fossil fuel reserve owners; determine the impact of potential approaches to divestment on the risk, return and diversification of the systems’ portfolios; and develop a strategy and timetable for divesting.

Any divestment approach must fulfill the investment policies and objectives of the systems, and comply with fiduciary duty. The boards will also seek legal opinions to determine whether any proposed divestment plan and actions would comply with the fiduciary duty to beneficiaries.

The request for information is only for informational purposes, and is not a solicitation for the award of a contract. Additionally, a response to the request for information is not required in order to respond to a request for proposal.

Tags: Comptroller Scott Stringer, Divestment, Fossil Fuels, New York City, Pension

Daryn Miller, CIO of the Kern County Employees’ Retirement Association.

Daryn Miller will start his new role as CIO of the Kern County Employees’ Retirement Association ($4 billion) Monday, replacing Peter Tirp, who resigned in August.

Prior to his start date with the California fund, Miller was the senior investment officer of the $3 billion San Jose Police & Fire Department Retirement Plan and the $2 billion San Jose Federated City Employees’ Retirement System. Miller served as interim CIO of both retirement plans until recently due to former CIO Arn C. Andrews’ May 2017 jump to assistant town manager of Los Gatos, California. In January, the San Jose pension plans had brought on Prahu Palani as CIO.

Miller, who was appointed as CIO on April 12, will oversee the entirety of the Kern County fund’s investment program and assume responsibility for its investment policies and objectives. Kern is one of California’s biggest counties and one of the nation’s largest farming areas. It also encompasses the Bakersfield area.

Since Tirp’s departure, the Kern County fund had been utilizing consultants Verus Advisory and Albourne America for help with its investment decisions as the former CIO was the fund’s one-man investment team.

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Tags: Daryn Miller, Kern County Employees' Retirement Association, San Jose Federated City Employees' Retirement System, San Jose Police & Fire Department Retirement Plan