Don't fire pension managers for speaking up: NYC

Reuters News
Posted: Jun 07, 2011 6:53 PM
Don't fire pension managers for speaking up: NYC

NEW YORK (Reuters) - New York City should not fire outside pension managers whose views clash with those of the pension trustees, a city official said on Monday, responding to a controversy over remarks by a Blackstone Group LP manager.

Trustees of New York City's police pension fund are considering a motion to give them this new power, a development that illustrates one of the ways unions are seeking to make their opinions heard in the public sphere.

Department of Finance Commissioner David Frankel, in a letter to the police pension trustees, said he opposed the motion.

"This clause is likely an unconstitutional restraint of free speech, is wholly unnecessary, and threatens to distract the board from its fiduciary obligation to invest fund assets in the best interest of its members," he said.

Last year, Byron Wien, Blackstone's economic adviser, was quoted as saying that retirement benefits for state workers are too generous.

"The retirement benefits for state workers, really not only in New York, California and New Jersey, but throughout the country, are very generous. Too generous," Wien was quoted in June by Pensions & Investments publication as saying during a webcast.

New York City pension funds had pressed Blackstone to repudiate those comments, Bloomberg, the news agency, earlier reported.

A spokesman for Mayor Michael Bloomberg said the mayor supports the policy, articulated by his finance commissioner. Spokesmen for Blackstone and city Comptroller John Liu, who helps manage the city's pension funds, had no immediate comment.

(Reporting by Joan Gralla)

(This article has been modified to correct the 8th paragraph to show that the mayor supports the policy; removes reference that mayoral spokesman had no comment)