New Report Exposes Pension Fund Cronyism
Report examines bad practices and calls on lawmakers and trustees to achieve greatest possible returns for workers and retirees
FOR IMMEDIATE RELEASE
Contact: Ashley Pratte
Arlington, VA (December 14, 2016) – Pension fund cronyism has run rampant throughout the country as some lawmakers and trustees recklessly place political agendas ahead of what’s best for workers and retirees. Cronyism further threatens financially distressed state and local pensions by introducing more risk into the system, according to a new report, Keeping the Promise: Getting Politics Out of Pensions, released today by the American Legislative Exchange Council (ALEC).
Written by Jonathan Williams, Theodore Lafferty, Kati Siconolfi, and Elliot Young, the report discusses the current underfunded status of public pension funds and the three main categories of pension fund cronyism that negatively affect public pension performance: economically targeted investments, political kickbacks and political crusades.
“Unfortunately, some lawmakers and pension plan officials have other priorities besides doing what is best for workers,” said Jonathan Williams, Vice President of the Center for State Fiscal Reform at ALEC. “They see the billions of pension fund dollars they manage as an opportunity to advance their own political agendas. Rather than investing to earn the best returns for workers, they use pension funds in a misguided attempt to boost their local economies, provide kickbacks to their political supporters, reward industries they like, punish those they don’t and bully corporations into silence and behaving as they see fit.”
The full report can be found here.
Keeping the Promise: Getting Politics Out of Pensions exposes the dishonest practices and shows state and local policymakers what they can do to get politics out of their pensions and focus on keeping the promise to workers and retirees alike. In order to keep promises to workers and retirees, pension funds should be managed for the exclusive purpose of providing retirement benefits to workers, with pension trustees doing their best to achieve the greatest possible return on investments.
The American Legislative Exchange Council is the largest nonprofit association of state legislators dedicated to the principles of limited government, free markets and federalism. Nearly one quarter of all state legislators are members of ALEC and represent more than 60 million Americans. ALEC member companies, which range from small businesses to Fortune 500 companies, create roughly 30 million American jobs. To learn more, visit www.alec.org.