US - Newly hired managers for part of New York City's $108 billion pension might be fired if they criticise workers' benefits, according to a trustee of the police retirement fund.
Joseph Alejandro said he proposed that the fund's board be able to dismiss future managers who disparage a public pension, "its beneficiaries or any trustees or employees".
The Fire Department Pension Fund and the Employees' Retirement System are also considering the provision, he said. Blackstone Groups chief strategist, Byron Wien, strained relations with New York unions last year when he said benefits are "too generous".
"The intent isn't to chill analysts who provide legitimate information," Alejandro said in an interview yesterday. "We are trying to prevent money managers from taking positions that are essentially opinions based on political viewpoints."
Unions across the US, including the American Federation of State, County and Municipal Employees, are rallying members and lobbying lawmakers to counter what they call an assault on recession-weary working people by governments trying to lower costs. New York Mayor Michael Bloomberg, who presents his 2012 budget this week, has made trimming pension expenses a priority for his third term.
The mayor, confronting a $2.4bn deficit in a $67.5bn spending plan for the fiscal year beginning July 1, has proposed that new workers must reach 65 to collect full benefits. He would also increase worker pension contributions and end an annual $12,000 payment to retired police and firefighters that costs at least $600m a year.
Restricting pension-fund managers' comments wouldn't run afoul of freedom-of-speech rights under the US Constitution, said Charles Sims, a First Amendment lawyer at Proskauer, a New York-based firm. The amendment applies only to government actions, he said.
"Even considering a public pension board to be part of government, it still can require confidentiality or other speech restrictions in a contract," Sims said.
The proposal is being reviewed by the New York City comptroller's office, which oversees pensions, said Alejandro, treasurer of the Patrolmen's Benevolent Association. Michael Loughran, a spokesman for Comptroller John Liu, declined to comment. Harry Nespoli, chairman of the Municipal Labor Committee, didn't return a message left with his office.
"There have been no such discussions" with trustees of the United Federation of Teachers, said Richard Riley, a spokesman for the union's president, Michael Mulgrew. A telephone call to the office of the Board of Education Retirement System wasn't answered.
The city's five pensions had $108.6bn of assets at the end of November, according to the comptroller's office. Nycers, with more than $38bn, paid $140.6m in fees to investment managers in the year that ended June 30, according to its website. The $22bn Police Pension Fund paid $80m.
The Teachers' Retirement System, with $39bn of assets, paid about $100m in management fees in the previous fiscal year, the latest publicly available figure. The Board of Education Retirement System, with $2.6bnof retirement assets for administrators and non-teacher school workers, paid about $9.8m. The $7.2bn Fire Department Pension Fund doesn't post pension information on its website.
Blackstone, the world's largest money manager, has been trying to mend relations with the pensions after Wien's comments. Its president, Tony James, met in May with representatives from one of the five plans that have $750m committed to the firm.
The People's Pension, Atlas Master Trust and The Cheviot Trust have been granted authorisation from The Pensions Regulator (TPR), taking the total number of authorised master trusts to 18.
Pension schemes have been warned they may now face a more challenging legal test if they wish to fix drafting errors.
The Greene King Pension Scheme has appointed XPS Pensions as its actuarial and investment adviser following a competitive tender process.
Professional Pensions has compiled a list charting the progress of master trust authorisation. View our list in full here...