NEW YORK (AP) — Mayor Michael Bloomberg, Comptroller John Liu and labor leaders announced Thursday they have reached a tentative agreement to combine the management of five city pension funds worth $120 billion, a move meant to improve returns and prevent political considerations from influencing the handling of investments.
Union leaders representing the city’s teachers, firefighters, police officers and other workers joined Bloomberg and Liu at City Hall to announce the proposal. The fine details have yet to be hammered out, and state lawmakers must approve the plan before it can be put into action.
“The best way to increase the value of our pension funds is by professionalizing and de-politicizing how they are managed,” Bloomberg said, adding that the changes would allow the funds to “take advantage of modern portfolio techniques and … be more responsive.”
Under the agreement, a new pension investment board would take over management of the five funds, which for decades have separately served retired teachers, police officers, firefighters, Board of Education employees and other workers. Instead of consultants handling the funds, the city would hire its own investment managers supervised by a chief investment officer answering to the new board.
Until now, the job of the city’s chief investment officer has been a political appointment made by the comptroller, an arrangement that Bloomberg said has prevented continuity between administrations. If the changes are approved, the CIO will be appointed for a fixed term, unaligned with election cycles. The mayor, comptroller and labor will each have a say in who is named chief investment officer.
Bloomberg and Liu are widely perceived as political foes, but the mayor Thursday praised the comptroller for relinquishing so much control, although Liu, the mayor and the unions will still have a role in appointing members of the new, consolidated board.