Gov Cuomo’s Move To Sell Off Oil Assets Could Cost NY Retirees A Pretty Penny
Democratic New York Gov. Andrew Cuomo’s pledge to rid the state pension fund of fossil fuel-related assets could cost New York City’s retirement funds more than $1 trillion over the course of 50 years.
Cuomo is creating a plan to divest the New York State Common Retirement Fund from oil and coal investments as part of his 2018 agenda. The plan will be more fully fleshed out during the governor’s Jan. 3 State of the State speech — the scheme could hit citizens right in the wallet.
The state pension fund, which represents roughly 1 million retired public employees, is the third largest in the nation, with a value of about $200 billion. Most estimates show that $3.68 billion of the pension is invested in the top 200 fossil-fuel companies in the world.
Recent reports show a wholesale selloff could end up costing New York City’s top five pension funds nearly $1.5 trillion over a 50-year time span. The New York City Employee’s Retirement System (NYCERS) would bleed more than $600 billion during that period, according to a report earlier this year from the University of Chicago Law School.
The same report, which is financed in part by Independent Petroleum Association of America, found that the nation’s largest pension fund, California Public Employees’ Retirement System (CalPERS), would also take a huge hit. CalPERS would lose approximately $3 trillion if California enacted a similar divestment plan in that state.
Cuomo’s gamble is getting a frosty treatment from the official responsible for governing the pension.
“We’ve shown that shareholders have the power to compel major corporations, like Exxon Mobil, to address climate change,” State Comptroller Thomas DiNapoli said in his response to the governor’s announcement. DiNapoli, who has committed $5 billion of the fund’s money to green investments, worries that leaving oil assets on the table could hurt Cuomo’s anti-oil plan.
Manufacturers in the state agree. The 10,000-member Suffolk County Association of Municipal Employees, for instance, noted that staying wed to investments in Exxon would give pensioners a seat at the table to force change with the company.
“It’s not an argument on our part that there isn’t a need to address fossil fuels,” union President Daniel Levler told reporters Thursday. “We’re wondering if it isn’t more sound to have a seat at the table to prevent the worst of what this industry might do.”
Oil producers will find other investors who might not be committed to holding them accountable for whatever damage Cuomo thinks they are causing. “If we pull out, someone else is going to jump in … Will that person be guided solely by profits?” Levler added.
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