De Blasio Rolls Out Plan to Put Pension Fund to Work Creating Local Jobs

With City unemployment stalled at just under 9 percent, Public Advocate Bill de Blasio today set in motion a plan for the City’s largest pension fund to dramatically expand local investments in housing and infrastructure. In two resolutions sent to the New York City Employee Retirement System (NYCERS), of which de Blasio is a trustee, the Public Advocate called for an additional $350 million in immediate local affordable housing investment, and for a new system to help the fund seek out investment opportunities in local infrastructure by this coming summer. Industry standards indicate the initiatives could create over 10,000 good jobs across the five boroughs.

“We are leaving resources on the table that we should be putting to work right here in the five boroughs. This is a very real opportunity to do right by our bottom line as a pension fund and spur job creation at the same time,” said Public Advocate Bill de Blasio.

The $40-billion NYCERS is the City’s largest public pension fund. It is already authorized to invest 2% of its assets—or $800 million—in locally target projects. The $450 million invested so far has yielded above-benchmark returns, as well as built or rehabilitated over 14,000 units of affordable housing units across the city. The remaining $350 million has yet to be locally invested. NYCERS has actually made no significant new local investments since the recession began.

De Blasio’s resolutions call on the fund to:

• Immediately double NYCERS’ locally targeted investments by allocating the remaining $350 million in potential funds to current managers in the affordable housing sector.
   
• Develop new investment policies by May 2012 that will enable the fund managers to seek out investment opportunities in local and regional infrastructure, including transportation, utilities and communications.

The resolutions can be taken up as early as February 28th by the NYCERS board. Public Advocate de Blasio also announced the creation of a Working Group to analyze additional investment opportunities in economically targeted investments and infrastructure that promise responsible returns.

Pension funds across the country are profiting from locally targeted investments that support new industries and create thousands of jobs. The California Public Employees’ Retirement System has earmarked up to $800 million for investments in regional transportation, energy and communications over the next three years. Both Florida and North Carolina’s state pension funds have invested in high-growth, home-grown industries like bio-technology and renewable energy.