The news of New York City teachers’ pension fund selling off its stock in gun manufacturing isn’t all that surprising — at least not as much as it should be. It should be surprising because most people don’t make their financial decisions based on politics. But you can’t assume that public school officials would make such rational decisions, can you?
New York isn’t the only place where public pension funds are being sacrificed for a political agenda. Cities like Chicago and Los Angeles have also forfeited profitable investments for politics, which really makes you wonder: What is the role of a pension manager — to make money for teachers’ retirement funds, or to use the heft of a public pension fund as a weapon to hurt political opponents?
Something tells me New York, Chicago and L.A. probably wouldn’t object to investing pension funds in failing alternative energy schemes which would lose money, but investing in profitable gun manufacturers… that’s apparently a no-go.
Update: The mismanagement of these worker pensions is even worse when you consider this:
Western New York (WKBW) School districts across the State are now trying to figure out how to pay a 37% increase for a mandated Teachers Retirement System.
“Could it be devastating? Very much so. It is one more expense,” said Jane Burcynski, Executive Director of the Erie County Association of School Boards.
Currently, school districts contribute at a rate of 11.84%.
For the 2013-2014 school year, the employer contribution rate will rise to 16.25%
The New York State Teachers Retirement System has 277,000 active members and 149,000 retired members
“The increase in the employer contribution rate is primarily due to lower investment returns as a result of the financial crisis and continued global economic volatility,” added Heidi Brennan, spokesperson for the State Teachers Retirement System.
The increased expense could cost local school districts millions of dollars, and force administrators to consider layoffs, consolidations, and school closures.