Fossil-Fueled Front Group

That is how the Institute for Pension Fund Integrity (IPFI) has been labeled as they produce white papers supporting the positions of their backers including one that came out this week on The Impact of Political Decisions on Public Pensions which looks to drive home the point that “pension funds would lose millions of dollars if they divest from fossil fuels”, thus harming participants. They cite studies done in New York City, Colorado, and California but ignore a few things:

  1. Public pensions are overwhelmingly Defined Benefit in nature. Participants (in theory) will get their benefits. It is taxpayers, through their governments, who bear the risk (in theory).
  2. If you divest from something that leaves money to invest in something else. Couldn’t the whole climate change crowd be a front group for the solar panel industry? See how it played out in Union County.
  3. If IPFI is correct that the “literature seems to agree that divestment as a means of creating change is ineffective, and more and more, pension funds are rejecting calls to divest” then why is IPFI in business (except to make money)?

There is a need to focus on integrity in public sector pension plans but it is not on account of what these funds are investing in but rather what they are not investing in because they do not have the money they are supposed to have. $4.4 trillion would buy a lot of white papers.

3 responses to this post.

  1. Posted by Tough Love on January 11, 2019 at 6:16 pm

    Quoting ………..

    “There is a need to focus on integrity in public sector pension plans but it is not on account of what these funds are investing in but rather what they are not investing in because they do not have the money they are supposed to have.”

    Yes, AND ………….

    because they have promised WAY too much, and finding the money HUGE amount of money to fund such ludicrously excessive generosity is VERY VERY difficult.

    Bottom line ………… the ROOT CAUSE of the problem is the ludicrously excessive generosity, AND addressing THAT is where Taxpayer efforts* need to be focused.
    —————————-

    * by rewarding politicians who do so, and PUNISHING those who do not.

    Reply

  2. Posted by readslikeamafiabook on January 11, 2019 at 6:34 pm

    New York, Colorado and California. Lands of fruits and nuts.

    Reply

  3. The divestment pushes are idiotic, from a fiduciary standpoint. Whether it’s coal, tobacco, guns, or whatever.

    Alas, no oil company has given me money to say that. (nor coal, tobacco, gun… hey, I’d love some free guns!)

    Also: no, the DB pensioners will not necessarily get their promised benefits. The pensioners in Detroit, Rhode Island, and Prichard would love to know if they’ll get what they thought they were promised.

    California lost a lot of money on “green investments” a decade+ ago, and they were -so- proud of it. That’s when they still thought the taxpayers were an infinite resource. That’s not quite looking so good for them now.

    Reply

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