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TROUBLE IN HIGH PLACES: The city's police unions have withdrawn from a pilot program under which the five pension funds have made joint investment decisions for the past six years, with one union leader claiming returns had been disappointing compared to what the Police Pension Fund previously made independently. One insider said frustration on the part of some union representatives with their treatment by City Comptroller Scott Stringer's Bureau of Asset Management, based on the upper floors of the Municipal Building, had also been a factor.

The city's police unions have voted to end the participation of the Police Pension Fund in a joint investment arrangement with the four other city funds launched six years ago by City Comptroller Scott Stringer, with one union leader saying that the returns had been disappointing, even as Mr. Stringer contended the systems as a whole had benefited.

He created the Common Investment Meeting in 2015, saying it would consolidate operations by ending the practice of holding separate monthly meetings between his office and the five funds while also improving the return on investments for all of them.

Not Better for Cops' Fund?

When the Daily News broke the story in mid-September of the police unions' decision to leave the consortium, Mr. Stringer said the joint operation had been a success, noting the rate of return for the five funds had been 11.58 percent in the first five years of the pilot program, compared to 7.02 percent over the previous five years when they were making separate investments.

But Detectives' Endowment Association President Paul DiGiacomo said in an Oct. 5 interview that while the return cited by Mr. Stringer might have been better for the five funds collectively, "We get more of a return on our own than we had in this program. We were higher than 20 percent at times when the Police Pension Fund was acting on its own. While you can't predict what it would have been these last few years, based on our prior experience, we feel we might have done better continuing on our own."

One problem with the joint venture, he said, was that "you get sort of lost when you're just one of five funds, and there are others that are much bigger than us," referring to the New York City Employees' Retirement System and the Teachers' Retirement System.

The Comptroller's Bureau of Asset Management lists the Police Pension Fund's assets at $46.2 billion, compared to TRS's $91.4 billion and the $77.4 billion in NYCERS.

Shared by Other Unions

Mr. DiGiacomo said the other union trustees of the Police Pension Fund had "the same concerns." The Police Benevolent Association, which has by far the most members in the system, has three votes on the fund's board, with the representatives of the DEA and the unions representing Sergeants, Lieutenants and those in the ranks of Captain and higher each casting a half-vote. 

The Comptroller, the Mayor, the Police Commissioner and the city Finance Commissioner each have 1.5 votes on the board.

PBA President Patrick J. Lynch responded to questions about the decision with a statement saying "we are focused on the unique situation of the Fund and the unique needs of its members. We were invited to participate in the common investment meeting on a trial basis. Based on that trial, we have determined that the current format is not the most efficient or effective way to address our members' needs. We look forward to continuing to work with both the current Comptroller and the next one to provide the best possible stewardship of our members' funds."

The police unions have had an uneasy relationship with Mr. Stringer since he sided with the Defund the Police movement last year as anger over George Floyd's death at the knee of a Minneapolis cop led to pressure here to sharply cut the Police Department's budget. When Mayor de Blasio and the City Council slightly more than 15 months ago cut the spending allocation for the NYPD by what they claimed was $1 billion—just one-third of what the protesters had demanded—Mr. Stringer asserted they had exaggerated the amount cut by roughly $240 million, further antagonizing the unions.

Less Enthused by Lander

The man expected to succeed Mr. Stringer, Democratic nominee for Comptroller Brad Lander, as a City Councilman has been an outspoken critic of the NYPD for the past decade and a supporter of the defund effort.

But one insider familiar with the discussions that culminated in the police-union withdrawal of support for the CIM said that distaste for the politics of Comptrollers, like unhappiness with collective bargaining or disability-pension denials for union members, typically did not influence pension-investment decisions.

Speaking conditioned on anonymity, this insider said that while those matters "are contentious by nature, pensions should not be, because all sides should have the same goal: protecting and growing the pension investments."

He said that the Board of Education Retirement System, which oversees the pensions of non-Teachers in the Department of Education, used its own investment team rather than relying on the Comptroller's advisers, and had not only the best returns but was the best-funded of the five systems. While it was fully funded, he said, the five funds as a whole had a 60-percent funded rate, about 20 points below what is considered desirable.

Ignored by BAM?

The insider said it was his understanding that Mr. Stringer's Bureau of Asset Management hadn't been sufficiently responsive to a number of union representatives of the pension funds, not just those from the police unions. Such behavior might have been considered "tolerable if their performance was fantastic, but they have significantly underperformed their peers," he contended.      

He added, "I believe the police are leaving the CIM because they think the system is broken, and could be fixed with some cooperation and communication."

Mr. Stringer last month urged Mr. Lynch to reconsider the decision to withdraw, saying in a statement to The News, "The men and women of the NYPD and their families deserve a secure retirement. It defies all logic and reason that certain police trustees want to pull out of a system that has made money for their members." 

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