Why Should NJ Public School Employees Care About Divestment?
Our Pension Is the Least Funded in the Country!
According to NJ.com, “New Jersey’s pension fund for government workers remains the most severely underfunded in the nation” (9/28/19). Chris Christie insisted that school workers contribute more, but the state did not maintain its promised contributions, leaving a gap in pension funding and shrinking paychecks. The most recent S&P Global Ratings comparison of public pension liabilities shows that “the public pension fund had enough money to cover just 38.4 percent of what it needs to provide retirement benefits to some 800,000 current and future retired workers.” As school employees who give our all to our students, the prospect of not having a reliably funded source of income in retirement is alarming!
We Must Maximize Our Pension Returns By Removing Sectors That Underperform --Such As Fossil Fuels!!!
During the early 1980s, seven of the top ten companies in the Standard and Poor’s 500 were fossil fuel stocks; today, there are none. In 2018, energy stocks were the worst performing sector of the S & P's 500. According to the New Jersey State Investment Council’s own report (9/25/19), in the first eight months of 2019, the energy sector has been down by 16%, underperforming every other sector in the portfolio by a long shot. Exxon Mobil, which outperformed the index from 2003-2014, has since been underperforming, and acting like a drag on the entire index, an indication of the decline of the oil and gas sector as a whole. It paid out $43 billion to shareholders in 2008, but only $13.7 billion in 2017. As the data clearly indicates, past performance does not predict future results! Can we afford to include such investments that are clearly and dramatically reducing the growth of our portfolios?
The Future of Fossil Fuels Looks BLEAK!
In their report on “The Financial Case for Fossil Fuel Divestment,” The Institute for Energy Economics and Financial Analysis emphasizes that “The fossil fuel sector is shrinking financially, and the rationale for investing in it is untenable. Over the past three and five years, respectively, global stock indexes without fossil fuel holdings have outperformed otherwise identical indexes that include fossil fuel companies. Fossil fuel companies once led the economy and world stock markets. They now lag.” The paper underscores that “fossil fuel stocks are now increasingly speculative” and that “volatile revenues, limited growth opportunities, and a negative outlook [will cause] fossil fuel investments to become far riskier” (7/10/18). As renewables and battery storage become less expensive and electric vehicles (EVs) become the norm, do we want to continue investing in a sector with disappearing future prospects?
Fossil Fuels Are Causing Irreversible Harm to Our Planet
As school employees and parents, safeguarding the planet for our students and children is of utmost concern. New Jersey is especially vulnerable to climate effects. State climatologist and Rutgers professor, David Robinson, who has spent decades analyzing New Jersey’s climate, asserts, “What we’re seeing lately is unprecedented in the magnitude of the changes and the speed at which they are occurring” (northjersey.com 8/23/19). From flooding to algal blooms to sea level rise twice the global average, the effects of climate change are being felt across the state. Temperatures in our state are also rising faster than the national average, helping to fuel more extreme weather events such as Superstorm Sandy, and causing fish migration northwards and record cases of West Nile virus. In good conscience, can we continue to finance an industry that is quite literally destroying our planet and the futures of the next generations?
Don’t Let Fossil Fuels Burn Up Our Pension!