New York police, fire pension trustees propose rival management plan

By Bloomberg

Published: January 20, 2012

New York City pension trustees representing senior police and fire officers proposed an alternative that would preserve their power over how the city invests retirement funds, according to a copy of the plan.

Mayor Michael Bloomberg and city Comptroller John Liu advocate an independent investment board composed of representatives of the mayor, comptroller and unions that would set pension strategy and hire managers. They said the combined board and a chief investment officer, a new post, would lower costs and depoliticize management of the five funds in the $115.2 billion New York City Retirement Systems.

Trustees representing the officers don’t want to delegate investment authority to a new board. Instead, they’re proposing that the funds’ more than 50 trustees continue to set strategy at monthly meeting and hire investment managers.

Unlike the plan backed by Messrs. Bloomberg and Liu, the counterproposal would leave the city comptroller in charge of the CIO.

“There shall be no reduction, elimination or minimization of the authority and fiduciary responsibility of current trustees of the five pension funds in the New York City Pension System,” according to the proposal from the New York City Police-Fire Superior Officers Alliance.

Bloomberg News obtained the document from a person involved in the discussions who declined to be identified because the meeting was private.

The superior officers also oppose the city’s plan to spin off the asset management bureau, now under the comptroller, into a separate investment management group under the independent board.

New York’s pension funds for teachers, police officers, firefighters, civil employees and school administrators each have their own boards, consultants and investment policies. Mr. Liu serves as investment adviser to the funds. Representatives of the comptroller and mayor also are trustees.

Marc LaVorgna, a spokesman for Mr. Bloomberg, said he hadn’t seen the proposal and declined to comment further. Michael Loughran, a spokesman for Mr. Liu, also said he hadn’t seen it. “The current investment reform proposal will depoliticize the investment process, benefit the city’s pensioners and taxpayers and modernize a system that has operated the same way for 70 years,” Mr. Loughran said in an e-mail.