NJ pension fund manager resigns amid investigation into conflict of interest issues in New York

The chief investment officer of the state police and fire department pension system has abruptly resigned from his post, just days after trustees launched an internal investigation into conflict of interest charges raised in connection with a New York pension fund that once employed him.

“The PFRS Board of Directors has accepted the resignation of Russell Niemie as Chief Investment Officer, effective immediately,” a spokesperson said Tuesday afternoon. “The board is working to retain the services of a consulting firm to lead the search for a new chief investment officer.”

The spokesperson did not specify why Niemie resigned. Niemie could not be reached for comment and had not returned previous emails after PFRS hired an outside law firm to conduct its investigation.

This investigation follows a $96 million arbitration case by the New York State Nurses Association that was finalized last week in federal court.

According to court documents, Niemie had recommended a contract renewal with investment advisory firm White Oak Global Advisors after having discussions with White Oak about a job there. He was then hired by White Oak as Chief Risk Officer.

Niemie left White Oak in late 2020 to become Chief Investment Officer of the New Jersey Police and Fire Retirement System, one of seven funds in the New Jersey Retirement System. The fund manages $31 billion in retirement investments on behalf of its 80,000 members across the state. Hired after what officials called “an exhaustive search conducted by a global organizational consulting firm,” he earns a salary of $350,000 a year, according to public records. Niemie has not made any investments for the New Jersey pension fund with White Oak since joining, officials said.

The New York State Nurses Association pension plan, which manages about $4 billion in assets, filed for arbitration in July 2018 after Niemie had already left for a position at White Oak, which the court said revealed “allegedly undisclosed conflicts of interest”. .”

The plan managers said they entered into a two-year investment management agreement in 2013 with White Oak on the recommendation of Niemie and other members of the plan’s investment staff. But in late 2015, when that deal was set to expire, they learned he had begun speaking with White Oak in an “undisclosed series of employment discussions,” according to court documents.

According to filings, Niemie recommended that the association’s pension plan renew its agreement with White Oak, which it did. And then shortly after, he left to work for them, according to the document.

Neither the arbitrator nor the judge, however, found that White Oak did anything improper in hiring Niemie, or that he did anything improper in coming to White Oak, the documents show. deposited.

Niemie was not a defendant in the case, nor was he cited as the cause of the $96 million arbitration award by U.S. District Judge Lewis Kaplan, who found White Oak defaulted. its financial obligations, including a “failure to return plan assets” upon termination. of its investment management agreement and “numerous prohibited transactions”.

In her own submissions to the Federal Court, White Oak said the Nurses Association benefited “at all times” from her investments in the company.

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Ted Sherman can be reached at [email protected]. Follow him on Twitter @TedShermanSL.