A Lawsuit to Protect Pensions From Climate Politics

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from The Wall Street Journal,

New York City leaders have boasted about using worker retirement savings to advance their climate agenda. They may come to regret it after several city workers this month sued their pension funds for putting climate over financial returns.

his could be a significant test of politicized investment by public pensions. New York law and regulation impose strict fiduciary duties on trustees of such funds. Plans are required to invest “for the exclusive benefit of the participants and beneficiaries” and with “care, skill, prudence and diligence.” State courts have ruled that trustees owe a “duty of undivided and undiluted loyalty” to retirees and workers.

Yet three big public pensions—the New York City Employees’ Retirement System, Teachers’ Retirement System of the City of New York, and Board of Education Retirement System of the City of New York—have instead made investment decisions based on climate goals. The three plans manage about $150 billion.

Former Mayor Bill de Blasio led this climate socialism in 2018 when he declared that city pension plans would have to divest fossil-fuel-related assets within five years to show the city is “leading the fight against climate change.”

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