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New York, pension funds diverge on addressing BDS investment

New York State Comptroller Thomas DiNapoli

New York state and the largest public pension plans there don't take a uniform approach to addressing the boycott, divestment and sanctions movement against Israel.

Gov. Andrew Cuomo issued an executive order in 2016 for state agencies under his authority to "divest their money and assets from any investment in any institution or company" identified via state research as supporting BDS and that no future investments should be made with violators of the executive order.

However, the largest public pension plans have different policies because they aren't covered by the executive order.

"There are no statutory provisions in New York State on this issue and we do not have a board policy on it," said John Cardillo, a spokesman for the $111.1 billion New York State Teachers' Retirement System, Albany, adding that the pension system isn't an "affected state agency" under the governor's jurisdiction.

The New York State Common Retirement Fund, Albany, also isn't covered by the governor's order. However, state Comptroller Thomas DiNapoli, the pension fund's sole trustee, announced in June 2016 that the $197.3 billion fund will review its portfolio to determine if any companies in its portfolio participate in the BDS movement.

"We're putting companies engaged in BDS activities on notice that there will be consequences if their anti-Israel activities expose our investments to financial harm," Mr. DiNapoli said at the time.

The pension fund has an "engagement process for companies that may have been involved in BDS activities," but it hasn't placed any on a restricted list and hasn't divested any, said Matthew Sweeney, a spokesman for the comptroller.

The process includes monitoring by staff of BDS activities, conducting research to see which companies might be engaged in boycotts against Israel, and contacting companies to determine if they are participating or not participating in BDS activities.

If a company is involved in boycotting Israel, the New York plan's CIO will determine if the plan, through its actively managed global equity separate accounts, should prohibit new investments, freeze current investment or divest investments "in a prudent manner and time," the pension plan rules say.

Although some pension funds within the $193.7 billion New York City Retirement System have divested holdings in gun retailers and private prisons, it doesn't appear that the system has a BDS policy. Tian Weinberg, a spokeswoman for Scott Stringer, the city comptroller and fiduciary for the five pension funds within the city system, declined to comment.