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Pension Funds

NYC pension funds settle suit against aerospace company

Updated with correction.

The five pension funds in the New York City Retirement Systems have settled a lawsuit with TransDigm Group Inc., enabling the funds' shareholder proposal on greenhouse gas emissions to be considered at the aerospace company's annual meeting.

The funds sued Cleveland-based TransDigm in December, alleging that the company intended to exclude the shareholder proposal from the TransDigm proxy for its 2019 annual meeting, the date of which has not been publicized.

According to a Jan. 18 settlement agreement filed in a U.S. District Court in New York, the parties agreed to discontinue litigation and TransDigm agreed to withdraw a complaint filed with the Securities and Exchange Commission opposing inclusion of the pension funds' proposal in the 2019 proxy materials.

"The need for climate leadership is more urgent than ever," Scott Stringer, the New York City comptroller and fiduciary for the five pension funds in the $193.73 billion New York City Retirement Systems, said in a Jan. 23 news release discussing the settlement. "That's why as investors, we're using our voice to pressure companies to step up and address their role in climate change."

TransDigm initially opposed including the pension funds' proposal in its 2019 proxy materials by filing a no-action request to the SEC, arguing that the proposal covered "ordinary business," the news release said.

If the SEC had approved the no-action request, the pension funds' proposal would have been denied, so the pension funds sued in the case of New York City Employees' Retirement System et al. vs. TransDigm Group Inc.

The pension funds' proposal said the company should "adopt a policy with time-bound, quantitative, companywide goals for managing greenhouse gas emissions, taking into account the objectives of the Paris Climate Agreement, and report, at reasonable cost and omitting proprietary information, on its plans to achieve these targets."

The proposal added that "the nature, timing and level of the goals" will be "entirely up to TransDigm's discretion. The proposal is not an attempt to micromanage but to set a guiding direction that can be assessed by shareholders."