Strapped with steep investment losses, surging unfunded liabilities, a shrinking public workforce, and cash-strapped local governments following the 2008 crash, public pension funds wanted out of a hole, fast. Distressed assets flooded the market and private equity, real estate investment trusts, and private credit were there to sweep it up in multifarious, intersecting mechanisms, front the costs, and offload the risk to creditors or the governing bodies they were purchasing from.<\/p>\n
In this regard, it\u2019s useful to take another look at Christophers\u2019s chapter on the infamous sale of Chicago\u2019s parking meters and underground lots to Morgan Stanley, which resulted in an immediate cash drain on the city. Still, what Christophers\u2019s account misses is that the Illinois Municipal Retirement Fund (IMRF)\u00a0\u2014 the largest in the state\u00a0\u2014 in the prior year\u2019s (2007\u2019s) disclosures<\/a>, reported over $100 million invested in a Morgan Stanley real estate fund and $17 million in their public stock. The dots don\u2019t always connect in a straight line, but the same story is now decades old: public pensions are funding their own gravediggers<\/a>. These investments routinely grow the wealth of right-wing, anti-union oligarchs and their corporate monopolies.<\/p>\n The fight in Pension Fight Club is as much against the alt-investment managers\u2019 operations as it is the uphill battle to convince the public, especially those without pensions, that banal local pension policies matter. Pension funds are no longer bundled up in fixed-income municipal bonds and Treasuries. Nor are they simply overexposed to equities, which they are and were in the lead-up to 2008. Public pensions acted as the underwriters to an absurd new class of private equity multimillionaires and billionaires\u00a0\u2014 the new power brokers on Wall Street and Silicon Valley.<\/p>\n When the Los Angeles Lakers sold to a venture capital consortium recently for a jaw-dropping $12.5 billion, it was a final signal for the sports world that private equity is here to stay. The team\u2019s historic rival, the Boston Celtics, also sold to private equity players for $6 billion a year prior. But where did Joshua Kushner\u2019s (brother of Jared\u2019s) Thrive Capital<\/a> get its seed funding to make such a purchase? Of the first billion it raised, $300 million came from a CalPERS investment<\/a>, that is, from California\u2019s state pension fund. To put the matter truthfully but a little too plainly, the workers now own a stake in the Lakers, even though none of them can afford to attend a game at the new Crypto.com Arena.<\/p>\n The Pension Fight Club documentary offers valuable evidence that there\u2019s a long way to go in the push-and-pull between reform and deregulation in the field of workers\u2019 capital. My sense is that if the movement to unearth pension funds\u2019 investments remains limited to union activism and siloed lawyers alone, it may not be enough. Any taxpaying resident has good reason to care about how pensions are invested. The first reason is that shoring up these policies will lighten the tax load on local governments which are losing money; the second is the need to quell the idea that pensions are \u201cunaffordable\u201d due to what retirees are being paid.<\/p>\n Pensions are a functional structure in need of serious repair, and the crisis can hardly be blamed on meager cost-of-living adjustments or sweeteners offered to working-class retirees. While the media latches onto stories of superintendents and administrators earning six-figure pensions to characterize the problem, the majority of retirees with pensions are bringing in under $40,000. This is a crisis of short-term governance, financial capture, and the unaccountability of this industry.<\/p>\n","protected":false},"excerpt":{"rendered":"Strapped with steep investment losses, surging unfunded liabilities, a shrinking public workforce, and cash-strapped local governments following the…\n","protected":false},"author":2,"featured_media":837180,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[39],"tags":[28,147,530],"class_list":["post-837179","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-business","tag-personal-finance","tag-personalfinance"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/837179","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=837179"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/837179\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/837180"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=837179"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=837179"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=837179"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}