Tag: New York

Pension Plunge Puts Eric Adams in Future Financial Squeeze

Mary Pat Campbell

Link: https://www.thecity.nyc/2022/8/1/23287828/pension-plunge-eric-adams

Excerpt:

New York City’s pension funds lost 8.65% of their value for the fiscal year that ended June 30, according to a release Friday from city Comptroller Brad Lander. 

While more detailed information won’t be released until September, the losses reduced the pension funds to about $240 billion.

While the S&P 500 stock index fell 14% in the first six months of 2022, Lander said that all is well with the pension funds “Despite market declines on a scale that hasn’t been seen in decades, the New York City retirement system outperformed our benchmarks and are well positioned to weather market volatility in the long run,” he said in a statement.

But the city budget — currently $101 billion — will still take a hit.

Author(s): Greg David

Publication Date: 1 Aug 2022

Publication Site: The City

New York pension fund wants to remove Twitter’s entire board

Mary Pat Campbell

Link: https://www.protocol.com/bulletins/new-york-pension-twitter-removal

Excerpt:

The New York State Common Retirement Fund, one of the nation’s largest pension funds, announced that it will vote to remove all of Twitter’s directors at this week’s annual shareholder meeting. The vote against the directors is unlikely to result in change, but it shows mounting institutional pressure for Twitter to resist Elon Musk’s vision for relaxed content moderation policies.

Thomas DiNapoli, the New York state comptroller and trustee to the estimated $279.7 billion fund, said the Twitter board of directors had repeatedly failed to enforce the company’s own content moderation policies.

“Allowing this content on social media platforms facilitates the radicalization of individuals through repeated exposure to violent rhetoric, hate speech and examples of previous violence,” DiNapoli wrote in the public letter to Twitter’s directors. DiNapoli placed particular emphasis on Twitter’s failure to remove footage from a livestreamed mass shooting that took place in Buffalo, New York, last weekend. The alleged shooter espoused white supremacy ideology and pointed to social media sites including 4chan as the source of his radicalization.

Author(s): Hirsh Chitkara

Publication Date: 23 May 2022

Publication Site: protocol

DiNapoli: State pension fund adds $350 million to investment funds geared to New York companies

Mary Pat Campbell

Link: https://www.wnypapers.com/news/article/current/2022/06/14/151309/dinapoli-state-pension-fund-adds-350-million-to-investment-funds-geared-to-new-york-companies

Excerpt:

The New York State Common Retirement Fund is committing another $350 million to two investment funds through its in-state private equity investment program, fund trustee and state Comptroller Thomas P. DiNapoli recently announced.

“The in-state program has helped hundreds of New York businesses add and retain thousands of jobs and grow while achieving solid returns for the retirement system members and their beneficiaries that rely on the pension fund for their retirement security,” DiNapoli said. “We’ve committed more than $2 billion through this program to invest in New York state companies, and I’m proud to continue building on our successful track record.”

The fund will provide $50 million in additional capital to the Hudson River co-investment fund III, which it already invests in, and another $300 million in the new Hudson River co-investment fund IV. The funds make equity co-investments (investments alongside a lead sponsor) in growing New York-based companies.

Author(s): Thomas P. DiNapoli

Publication Date: 14 Jun 2022

Publication Site: Niagara Frontier Publications

Biden Administration Sues a City Over “Rampant Overspending on Teacher Salaries”

Mary Pat Campbell

Link: https://www.educationnext.org/biden-administration-sues-a-city-over-rampant-overspending-on-teacher-salaries/

Excerpt:

The Biden administration’s Securities and Exchange Commission is suing the city of Rochester, New York, contending that “rampant overspending on teacher salaries” plunged the Rochester school district into “extreme financial distress,” misleading investors who bought municipal bonds.

The legal action is unusual. Sure, the federal government’s interaction with K-12 education has often extended beyond the bounds of the U.S. Department of Education. The Department of Agriculture administers the school lunch program, and the Department of Defense operates schools serving military-connected children. Under George W. Bush, the Justice Department toyed with the idea of using antitrust law to support charter schools. And in the waning days of the Trump administration, President Trump issued an executive order authorizing “emergency learning scholarships” to be provided via the Secretary of Health and Human Services.

But, notwithstanding Bloomberg columnist Matt Levine’s theory that
“everything is securities fraud,” in practice, the K-12 education beat hasn’t intersected greatly with the fraud provisions of federal securities laws. At least until now.

….

How much has Rochester been “overspending?” The website Seethroughny.com, a project of the Empire Center for Public Policy, lists 717 Rochester City School District Employees who earned more than $100,000 in 2019. The district has about 25,000 K-12 public school students, according to the state of New York. Spending runs about $20,000, a little below the statewide average. Whether that amounts to “overspending” probably depends on one’s view of how much the children are learning, and also one’s view of whether the students could learn more, and how much more, if more money were spent.

….

In practice, the legal aspects of the case will probably turn more on considerations about disclosure to potential bond buyers than about the details of the spending on teacher salaries.

Even so, the mere mention of securities law and bondholders as potential tools to curb school district “overspending” is intriguing, especially when the action comes under a president who campaigned promising to increase school spending so as to pay teachers “competitive salaries.” For years, reformers have complained that teachers unions capture school boards and run school systems for the benefit of adults rather than children. Now a different set of influential adults—bondholders—is, in a way, asserting, via the SEC, its own claim that could be a countervailing force.

Author(s): Ira Stoll

Publication Date: 15 June 2022

Publication Site: Education Next

How Much Private Equity Is Too Much for a Public Pension?

Mary Pat Campbell

Link: https://www.ai-cio.com/in-focus/shop-talk/how-much-private-equity-is-too-much-for-a-public-pension/

Excerpt:

Pension funds around the U.S. are upping their allocations to private equity after a year of record-breaking returns. According to data obtained from Preqin, the average public pension’s allotment to private equity increased to 8.9% in 2021. In contrast, the average allocation was just 6.5% in 2012.

New York City’s pensions are among those that may see an increased allocation to the asset class in their portfolios should a new law pass. Currently, New York State implements a “basket clause,” which prevents public pensions from investing above 25% of their total portfolios in investments considered higher risk, including real estate, infrastructure, hedge funds, international equities, and private equity. The proposed law would increase that allocation to 35% for all pension funds in the state. If the law passed, the boards of New York City’s five public pensions would vote on whether to increase the “basket” for their own pension funds.

New York City Interim CIO Michael Haddad, who is responsible for overseeing investments in the five pension plans across the city, says that while the change in the law isn’t targeted at private equity exclusively, it’s likely that the asset class would increase.

Author(s): Anna Gordon

Publication Date: 10 May 2022

Publication Site: ai-CIO

New York pension money ‘held hostage’ by Vladimir Putin, Russia

Mary Pat Campbell

Link: https://nypost.com/2022/05/14/ny-pension-money-held-hostage-by-vladimir-putin-russia/

Excerpt:

New York employees and taxpayers are unwittingly financing Russian companies and the oligarch pals of Vladimir Putin with at least $519 million invested in assets now frozen by the war-mongering dictator, The Post has learned.

City and state pension systems have pledged to sell off the holdings in protest of Russia’s assault on Ukraine, but Moscow has prohibited foreign investors from dumping the stocks.

“Putin is a thug and he’s holding our money hostage,” said Gregory Floyd, a Teamsters union leader and trustee of the New York City Employee Retirement System, NYCERS.

New York City’s five pension systems – covering teachers, cops, firefighters and other city employees – have invested a total $284.5 million in 33 publicly traded Russian stocks, according to records released to The Post by city Comptroller Brad Lander’s office. 

On Feb. 25, the market value of the Russian assets was $185.9 million, nearly $100 million less than the purchase price, the latest available records show.

Author(s): Susan Edelman, Thomas Barrabi

Publication Date: 14 May 2022

Publication Site: NY Post

Pray Hochul won’t cave to union calls for a big pension giveaway — at NY taxpayer expense

Mary Pat Campbell

Link: https://nypost.com/2022/03/11/pray-hochul-wont-cave-to-union-calls-for-a-big-pension-giveaway/

Excerpt:

Tuesday will be the 10th anniversary of a state legislative landmark: the creation of a new public-pension “tier” reining in the explosive cost of state- and local-government retirement benefits in New York.

While Tier 6 wasn’t the “bold and transformational” breakthrough touted by then-Gov. Andrew Cuomo in 2012, it was a solid net positive for taxpayers, building on incremental changes in the Tier 5 pension reform enacted two years earlier. (Tiers 5 and 6 cover most occupations other than police and firefighters, who belong to other pension plans modified in different ways by the same legislation.)

The reforms have saved billions of taxpayer dollars for the state and local governments over the past decade — including $1 billion this year alone — plus significant added savings for New York City’s separate pension systems.

The state’s well-fed public-sector unions tried to block pension changes at every turn. Now, under the slogan “Fix Tier 6,” they’re pushing the Legislature to roll back pension reform as part of the budget for the fiscal year that starts April 1.

The “fix” sought by the 200,000-member Civil Service Employees Association and other government unions is a return to the state’s enriched pre-2010 pension plans, which (among other sweeteners) required no employee pension-fund contributions after 10 years and allowed for early retirement on full pensions as early as age 55 after a minimum 30 years of service.

Author(s): E.J. McMahon

Publication Date: 11 Mar 2022

Publication Site: NY Post

A Bitcoin mining operation in the Finger Lakes runs up against New York’s climate law

Mary Pat Campbell

Link: https://gothamist.com/news/bitcoin-mining-operation-finger-lakes-runs-against-new-yorks-climate-law

Excerpt:

Residents and business owners in the Finger Lakes region have been protesting for more than a year against a natural gas plant that has powered a bitcoin mining operation in the area. But the plant’s future faces even greater peril from the state as critics and officials say it flies in the face of an ambitious new state law designed to cut down on carbon emissions.

Since spring 2020, the Greenidge Generation power plant in Dresden, New York has powered a 24-7 bitcoin mining operation, wherein computer servers solve complex algorithms to collect electronic currency. It now supports nearly 20,000 computers that last year produced 1,866 bitcoins with a projected revenue of more than $100 million. The endeavor was so profitable that the company plans to double their computing power and increase power generation close to maximum capacity.

But Greenidge’s red brick smokestacks and metal transformers have long been at odds with the pristine vistas and vineyards of the Finger Lakes. Formerly a coal plant that shuttered in 2011, its revival is once again endangering the region environmentally and economically, according to some residents.

It’s also at odds with New York’s Climate Leadership and Community Protection Act, which mandates a reduction of economy-wide greenhouse gas emissions 40% by 2030 and no less than 85% by 2050 from 1990 levels. And the conflict between the state’s climate goals and a burgeoning new industry reflects a growing tension nationally between the fight against climate change and the energy-intensive pursuit of mining for cryptocurrency.

Author(s): Rosemary Misdary

Publication Date: 17 Feb 2022

Publication Site: Gothamist

Opinion: A Slow But Accelerating Crisis—Preserving Affordable Housing for Up to 1.4 Million NYers

Mary Pat Campbell

Link:https://citylimits.org/2022/02/08/opinion-a-slow-but-accelerating-crisis-preserving-affordable-housing-for-up-to-1-4-million-nyers/

Graphic:

Excerpt:

The recent op-ed in Crain’s New York Business by former City Comptrollers Jay Goldin and Elizabeth Holtzman (“Affordable housing initiative worked in the past and can work again today”) recalled a city pension fund program, initiated in 1983, that was specifically designed to finance the renovation of deteriorated rental apartment buildings in lower income neighborhoods. Supported by New York State mortgage insurance, the pension investments financed the restoration of a wide range of apartment buildings and worked uniquely well for small buildings with owners of limited resources. Two percent of the pension funds’ assets were committed for long-term, fixed-rate mortgages, with an interest rate priced at the market, with a two-year rate lock while the capital improvements were made.

Recognizing that these buildings would need some public subsidy—and that many owners lacked the experience to deal with complex government processing—a system evolved whereby these investments were coupled with streamlined city subsidy programs. The program’s goal: to restore a building’s physical and economic health while keeping its apartments affordable. 

The pension funds filled a critical gap as most conventional long-term lenders viewed this market as too complicated and too unprofitable. For many years after its inception, the Community Preservation Corporation was the primary user of the program, using its “one-stop-shop” to originate construction loans for predominantly small properties. Upon construction completion, the long-term mortgage was provided by the pension funds. Over time, other banks were approved to originate loans for the funds, with their focus mainly on financing the renovation of larger buildings. 

….

Fourth, the pension funds should recommit to investing up to 2 percent of their assets (now $5 billion) for long-term financing at a market rate, insured by the State Mortgage Insurance Fund. In the long history of the program, the funds have experienced no losses, the state insurance fund covering the few losses that had occurred. 

Efficient implementation can minimize the use of public funds and provide a large pool of fixed-rate, long-term financing for these properties. Doing so is within the purview of the city’s comptroller and the pension fund trustees.

Author(s):Michael D. Lappin

Publication Date: 8 Feb 2022

Publication Site: City Limits

New York May Develop Life Policy Disclosure Rules

Mary Pat Campbell

Link: https://www.thinkadvisor.com/2022/01/24/new-york-may-develop-life-policy-disclosure-rules/

Excerpt:

An NAIC committee formed the Life Insurance Illustrations Working Group in 2016.

The working group chair report said states should become the laboratories for disclosure standards.

The committee disbanded the working group and put the disclosure standards effort back in the hands of the states.

Author(s): Allison Bell

Publication Date: 24 Jan 2022

Publication Site: Think Advisor

New York pension official, worried about misinformation, seeks Spotify report

Mary Pat Campbell

Link:https://wtvbam.com/2022/02/07/exclusive-new-york-pension-official-worried-about-misinformation-seeks-spotify-report/

Excerpt:

New York State’s top pension official has asked streaming music platform Spotify Technology SA for details about the effectiveness of its new content rules, citing complaints including that podcaster Joe Rogan has spread misinformation about COVID-19 vaccines.

New York State Comptroller Thomas DiNapoli, who oversees funds that hold Spotify shares, requested the report in a letter sent to Spotify Chief Executive Daniel Ek on Feb. 2, which was shown to Reuters.

The letter also urged Spotify to give users an easy mechanism to report content that could violate its rules, and to define how its board oversees content risks and enforcement.

DiNapoli cited reports of Spotify hosting content that has included COVID-19 misinformation, and racist and antisemitic material. Prominent rock musician Neil Young last month left the platform last month because he said Rogan has misled people about vaccines, followed by other stars.

Author(s): Ross Kerber

Publication Date: 7 Feb 2022

Publication Site: WTVB

Why Coney Island and Brighton Beach were hit so hard by omicron

Mary Pat Campbell

Link:https://gothamist.com/news/why-coney-island-and-brighton-beach-were-hit-so-hard-omicron

Excerpt:

The two zip codes encompassing this region — 11224 and 11235 — have experienced 75 deaths per 100,000 people over the last month, a fatality rate nearly three times the citywide average. The pair of zip codes ranked only behind East New York when it came to the pace of COVID deaths between December 24th and January 20th, while their hospitalization rates were also among the highest in the city.

These two zip codes in southern Brooklyn also have lower vaccination coverage than the city as a whole, a common thread between most of the places hit hardest this winter. The area is averaging 66% full vaccination, compared with 75% citywide. In adjacent Gravesend, fewer than two-thirds of residents are fully vaccinated, and meanwhile, some parts of the city are approaching universal coverage.

….

Hospital leaders said undervaccination is having an outsized effect on these oceanside communities because the area’s demographics make residents prone to severe illness from COVID-19. In Brighton Beach and Coney Island, 26% of residents are over the age of 65, compared with about 14% in the borough as a whole. Many of those elderly residents also have underlying health conditions.

….

Citywide, 89% of New Yorkers between ages 65 to 74 are fully vaccinated, but the rate drops to 63% for people older than 85. Municipal data also show coverage varies by region and by other demographics. For instance, just 62% of white seniors in the Bronx are fully vaccinated, and only 65% of Black seniors in Brooklyn.

Author(s): Caroline Lewis

Publication Date: 7 Feb 2022

Publication Site: Gothamist