NYC comptroller, mayor seek information as 3 pension funds consider divestment

New York City Comptroller Scott M. Stringer and Mayor Bill de Blasio on Thursday announced a request for information to develop an RFP for consulting services to enable three of the city's five public pension funds to consider divesting fossil-fuel investments.

Mr. Stringer is the fiduciary of the five pension funds that make up the New York City Retirement Systems.

The New York City Employees' Retirement System, the New York City Teachers' Retirement System and the New York City Board of Education Retirement System — each with independent boards — are seeking information about how to divest fossil-fuels assets.

The combined assets for all five pension funds was $194 billion as of February. The teachers pension fund had $71.2 billion in assets, the public employees pension fund had $64.4 billion and the board of education pension fund had $5.9 billion.

The boards of the New York City Police Pension Fund ($39.2 billion) and the New York City Fire Pension Fund ($13.3 billion) oppose divesting fossil-fuel investments, said Tyrone Stevens, a spokesman for Mr. Stringer, in an email.

In January, the comptroller's office and the mayor's office reported that city pension funds had about $5 billion in assets invested in more than 190 fossil-fuel companies. Updated aggregate and fund-specific figures were not available.

"That's why we are doing the study," Mr. Stevens wrote. "We're trying to determine what holdings are fossil fuel-related."

Coal, oil and gas used for energy are the fossil fuels identified in the RFI; responses are due June 1.

The RFI called for ways "to gather insights and knowledge on how to develop and structure a request for proposals" that would "evaluate and determine a prudent strategy for potential divestment and exclusion of securities issued by companies owning fossil-fuel reserves."

The eventual RFP would focus on such investments within a five-year period, "consistent with fiduciary duty and investment objectives" of the pension funds, the RFI said.

Divestment and exclusion "means reduction of the proportional weight in the (pension funds') portfolios of such securities to a level below their proportional weight in total market capitalization, up to and including total exclusion of such securities from the portfolios," the RFI said.

The RFI said the pension funds seek information on "investment risks posed by fossil-fuel reserve owners," the impact of divestment on risk, return and diversification of pension funds' portfolios, and development of a "prudent strategy" that would guide pension funds' divestment practices within a five-year period.

Messrs. Stringer and de Blasio or their representatives are trustees on each of the five city pension fund boards. They announced their intention in January to start examining the fossil-fuel divestment process.