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titanic1

Wallstreet is looting the pension funds

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There's $2.6 trillion in state pension money under management in America, and there are a lot of fingers in that pie. Any attempt to make a neat Aesop narrative about what's wrong with the system would inevitably be an oversimplification. But in this hugely contentious, often overheated national controversy – which at times has pitted private-sector workers who've mostly lost their benefits already against public-sector workers who are merely about to lose them – two key angles have gone largely unreported. Namely: who got us into this mess, and who's now being paid to get us out of it.

The siege of America's public-fund money really began nearly 40 years ago, in 1974, when Congress passed the Employee Retirement Income Security Act, or ERISA. In theory, this sweeping regulatory legislation was designed to protect the retirement money of workers with pension plans. ERISA forces employers to provide information about where pension money is being invested, gives employees the right to sue for breaches of fiduciary duty, and imposes a conservative "prudent man" rule on the managers of retiree funds, dictating that they must make sensible investments and seek to minimize loss. But this landmark worker-protection law left open a major loophole: It didn't cover public pensions. Some states were balking at federal oversight, and lawmakers, naively perhaps, simply never contemplated the possibility of local governments robbing their own workers.

Politicians quickly learned to take liberties. One common tactic involved illegally borrowing cash from public retirement funds to finance other budget needs. For many state pension funds, a significant percentage of the kitty is built up by the workers themselves, who pitch in as little as one and as much as 10 percent of their income every year. The rest of the fund is made up by contributions from the taxpayer. In many states, the amount that the state has to kick in every year, the Annual Required Contribution (ARC), is mandated by state law.

Chris Tobe, a former trustee of the Kentucky Retirement Systems who blew the whistle to the SEC on public-fund improprieties in his state and wrote a book called Kentucky Fried Pensions, did a careful study of states and their ARCs. While some states pay 100 percent (or even more) of their required bills, Tobe concluded that in just the past decade, at least 14 states have regularly failed to make their Annual Required Contributions. In 2011, an industry website called 24/7 Wall St. compiled a list of the 10 brokest, most busted public pensions in America. "Eight of those 10 were on my list," says Tobe.

Among the worst of these offenders are Massachusetts (made just 27 percent of its payments), New Jersey (33 percent, with the teachers' pension getting just 10 percent of required payments) and Illinois (68 percent). In Kentucky, the state pension fund, the Kentucky Employee Retirement System (KERS), has paid less than 50 percent of its ARCs over the past 10 years, and is now basically butt-broke – the fund is 27 percent funded, which makes bankrupt Detroit, whose city pension is 77 percent full, look like the sultanate of Brunei by comparison.

Here's what this game comes down to. Politicians run for office, promising to deliver law and order, safe and clean streets, and good schools. Then they get elected, and instead of paying for the cops, garbagemen, teachers and firefighters they only just 10 minutes ago promised voters, they intercept taxpayer money allocated for those workers and blow it on other stuff. It's the governmental equivalent of stealing from your kids' college fund to buy lap dances. In Rhode Island, some cities have underfunded pensions for decades. In certain years zero required dollars were contributed to the municipal pension fund. "We'd be fine if they had made all of their contributions," says Stephen T. Day, retired president of the Providence firefighters union. "Instead, after they took all that money, they're saying we're broke. Are you f**king kidding me?"

There's an arcane but highly disturbing twist to the practice of not paying required contributions into pension funds: The states that engage in this activity may also be committing securities fraud. Why? Because if a city or state hasn't been making its required contributions, and this hasn't been made plain to the ratings agencies, then that same city or state is actually concealing what in effect are massive secret loans and is actually far more broke than it is representing to investors when it goes out into the world and borrows money by issuing bonds.


http://www.rollingstone.com/politics/news/looting-the-pension-funds-20130926

As impotent as the pension fund movement was during the bubble years and amidst the wreckage of the post-bubble years, as one scam or scandal after another was revealed, it's back in the headlines in early 2017. In April, CalPERS (the pension fund for California state employees), the New York City pension fund, and many other public pension funds announced they were going to challenge some or all of the Wells Fargo directors for not knowing about the crooked schemes the company was up to, such as opening 2 million false new accounts to make it look like their client base was expanding. Most of these directors were top executives at other corporations, along with a former dean of a business school in Nebraska and the head of a consulting firm. As the board gathered for the annual company meeting in the Florida resort town of Ponte Verda, the New York City comptroller asserted that "If there is a serious failure in oversight, directors need to be held accountable." "Board members are elected by shareholders to be our watchdogs," intoned the treasurer of the state of Rhode Island. He thought it was inexcusable to be unaware of widespread fraud within the company they were "directing." But one of the two richest people in the United States, Warren Buffett. who owns 10% of Wells Fargo's stock, along with numerous other wealthy investors and corporate pension funds, thought it was enough that the CEO had been fired, along with 5,300 other employees; in the end, every director received at least 53% of the overall vote, and nothing changed as far as the Board of Directors (Cowley, 2017; Cowley & Crookery, 2017).

This long introduction was meant to give you some quick -- and hopefully provocative -- highlights of the ongoing story about pension funds, which are always in peril for one reason or another. Now it's time to show how all of this relates to the structure and distribution of power in the United States, and what it tells us about the study of power by journalists and social scientists. It's a history that should prepare readers to expect more allegedly "new" twists and turns in the future, which turn out to not be very new after all.

Pension funds and other institutional investors
One of the most persistent claims about corporations in America is that the rich people who benefit from their stock dividends do not control them. The idea is that everybody owns and controls the corporations, even though the corporations seem to dominate the economy to the benefit of a wealthy few. Taking this idea to its extreme, a few analysts have claimed that the accumulations of money owned by everyone through various types of public employee pension funds, union pension funds, mutual funds, and other forms of "institutional investors" might even come to have a significant role in shaping corporate behavior.


Peter Drucker
The idea that pension funds could be used to control corporations first gained visibility through the claim by management guru Peter Drucker (1976, 1993) that workers' legal right to their pensions -- whether through a company or a local or state government -- meant they now owned a significant percentage of corporate stock. It followed for Drucker that this was a form of socialism. As the dramatic first sentence of his 1976 manifesto put it: "If 'socialism' is defined as 'ownership of the means of production by the workers' -- and this is both the orthodox and the only rigorous definition -- then the United States is the first truly 'Socialist' country" (Drucker, 1976, p. 1). Now that workers owned the economy, it was just a matter of asserting control.

But as the most detailed analysis of the role of pension funds points out, "The idea of 'pension fund socialism' is an exercise in political rhetoric rather than reality" (Clark, 2000, p. 43). Employees who contribute to pension funds have a legal right to their pensions, but they rarely have any rights when it comes to voting any stock purchased by the pension fund. As for the pension fund trustees themselves, they have a fiduciary responsibility to invest the money they receive from employees as wisely and prudently as possible, but no legal ownership of any stock they purchase. To exert any influence on corporate boards they have to argue that insisting on "good corporate governance" is part of their fiduciary duty because it makes shares more valuable. This line of reasoning is rejected by corporate leaders and most Republicans.

Drucker's flawed idea led nowhere, but the possibility of public pension funds as active participants in corporate governance arose again in the mid-1980s when partners at the Wall Street investment firm of Kohlberg, Kravis, Roberts convinced the director of the pension fund in the state of Oregon to contribute major sums to their takeover projects. Takeover specialists soon drew other public pension funds into the action. For a while, pension managers made some extra money for their funds, but it was clearly the private financiers who were calling the shots and making the big money.

However, the full extent of the private financiers' lucrative use of public pension funds from the 1980s to the present was never fully grasped by anyone until the New York Times commissioned a special study of the ten largest of these funds in early 2010 (Anderson, 2010). Between 2005 and 2008, eight of the 10 handed 45% or more of their total funds to private equity firms to manage, which is why these financiers could make $17 billion investing workers' future pensions between 2000 and the end of 2009. (Recall that the financiers receive a 2% management fee on the amount of money they manage and also receive 20% of any profits they make.)

The author of the study asks why the pension funds agreed to these huge fees and profits for private equity firms. The answer is not hard to find. First of all, the private financiers claimed that their superior talents would lead to higher returns for the pension funds than they would receive if mere public employees invested the money in the ordinary ways. In fact, they often said they would likely make 20% to 30% returns with the pension fund money.

http://www2.ucsc.edu/whorulesamerica/power/pension_fund_capitalism.html

Edited by titanic1
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I've seen $$ figures many times but how many people does this affect? How many working Americans dumped money into other peoples pockets with the promise of a retirement nest egg only to find out they have NOTHING or they're handed 10% of it and told to be happy they got that much? What's mind boggling to me is that people STILL put their hard earned money into these schemes.

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The only "good investment" is the one you have actual, physical control over. Putting some other jackass in charge of your money in some far away office has never, and will never, be good for anyone but that jackass.

I made that mistake once, back in the nineties with a stock broker I went to school with, I lost just north of $130,000.00 in roughly 90 minutes.

he got paid to make all his piss poor moves, I lost my balls.

Fast forward to about four years later when I saw him and his new wife in a restaurant and beat the ever loving shit out of him in the parking lot.

(and I mean the "in the hospital" kind of beating) smartly, he and his bride took my suggestion and reported his "attempted robbery with unknown assailant"...

quick note, if you're gonna screw people over:

1) don't flaunt the fact that YOU didn't lose anything and walk around dressed in fancy, movement constricting, custom made suits. Makes defending yourself difficult at best.

2) don't have that smarmy ass look on your face when you see someone you've screwed, especially when out with your new wife. (The patronizing wave, followed with the knowing smirk eye roll to his wife wasn't especially helpful either)

3) best to probably learn how to defend yourself if you're gonna be THAT kind of asshole and stick around town amongst the people you screwed over.

Just sayin

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Retirement plans were better with the Greatest generation than they are now...even though they had the war bonds, the 401(k) may or may not pay off especially in the volatile markets...too shaky to be putting money into anything...

I think I'll go slug the parking meter, maybe I'll get rich when the thing has too many coins in it, it can't hold them all...

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Well they finished raiding the 9 trillion that should be in the Social (In)Security Trust Fund around 2009.

So now pensions, tomorrow 401ks, IRAs and FDIC personal accounts.

South America is looking better every day.

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1 hour ago, RhetoricalRebel said:

South America is looking better every day.

Until it's taken over by muslims.... Luckily for now its only rich and wealthy muslims in SA!

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I cringe when I see people approaching retirement going further into debt. So many are : (

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17 hours ago, Automan63 said:

The only "good investment" is the one you have actual, physical control over. Putting some other jackass in charge of your money in some far away office has never, and will never, be good for anyone but that jackass.

I made that mistake once, back in the nineties with a stock broker I went to school with, I lost just north of $130,000.00 in roughly 90 minutes.

he got paid to make all his piss poor moves, I lost my balls.

Fast forward to about four years later when I saw him and his new wife in a restaurant and beat the ever loving shit out of him in the parking lot.

(and I mean the "in the hospital" kind of beating) smartly, he and his bride took my suggestion and reported his "attempted robbery with unknown assailant"...

quick note, if you're gonna screw people over:

1) don't flaunt the fact that YOU didn't lose anything and walk around dressed in fancy, movement constricting, custom made suits. Makes defending yourself difficult at best.

2) don't have that smarmy ass look on your face when you see someone you've screwed, especially when out with your new wife. (The patronizing wave, followed with the knowing smirk eye roll to his wife wasn't especially helpful either)

3) best to probably learn how to defend yourself if you're gonna be THAT kind of asshole and stick around town amongst the people you screwed over.

Just sayin

Most people don't get away without that level of felony assault or terroristic threats to report false info.....then post that at a public forum?

You must have to explain where you got that kind of immunity????.....and money to invest?

Do all people like TI's.....also enjoy the immunity to seek revenge that pigs- surveillance vigilantes  enjoy and share with their pals???!!!!!

What is my remedy when FBI refuses to open a civil rights investigation?

Brad Seiler (the fat punk joker slob at SD US Attorneys) publicly stated that his civil rights policy involves a lack of funds (necessitating the hiring of a civil rights wall of bureaucratic indifference) and....."there's a civil suit remedy" available to all TI's???!!!

Gang stalking includes subverting and chilling all attorney contacts....and....there is no admission by FBI what they did and who was part of their conspiracy: NO actual and explicit notice means.....you sue who with what corroborated facts???!!!!

This is a game for pigs and scum like SD US Attorneys: they pretend there are options and public service when there is no option but revenge.

Fatboy punk Brad Seiler and the SD US Attorneys have never talked to me......it's their policy of indifference and apathy: NO POlice state actor can ever be indicted under any state or fed laws....and surveillance is never ending and maximizes the intrusion....for THIRTY f**kING YEARS????!!!!!!

BOB MUELLER said, "......our hands are tied, just following our protocol....."???!!!!

How are these hands tied...by whom?  People without badges tied FBI hands on civil rights?

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6 minutes ago, Red Rascal said:

Most people don't get away without that level of felony assault or terroristic threats to report false info.....then post that at a public forum?

You must have to explain where you got that kind of immunity????.....and money to invest?

Do all people like TI's.....also enjoy the immunity to seek revenge that pigs- surveillance vigilantes  enjoy and share with their pals???!!!!!

What is my remedy when FBI refuses to open a civil rights investigation?

Brad Seiler (the fat punk joker slob at SD US Attorneys) publicly stated that his civil rights policy involves a lack of funds (necessitating the hiring of a civil rights wall of bureaucratic indifference) and....."there's a civil suit remedy" available to all TI's???!!!

Gang stalking includes subverting and chilling all attorney contacts....and....there is no admission by FBI what they did and who was part of their conspiracy: NO actual and explicit notice means.....you sue who with what corroborated facts???!!!!

This is a game for pigs and scum like SD US Attorneys: they pretend there are options and public service when there is no option but revenge.

Fatboy punk Brad Seiler and the SD US Attorneys have never talked to me......it's their policy of indifference and apathy: NO POlice state actor can ever be indicted under any state or fed laws....and surveillance is never ending and maximizes the intrusion....for THIRTY f**kING YEARS????!!!!!!

BOB MUELLER said, "......our hands are tied, just following our protocol....."???!!!!

How are these hands tied...by whom?  People without badges tied FBI hands on civil rights?

You have to sue SD prosecutors......forcing them to apply the law.

That costs money.

And judges are convinced that they decide if some police state actor can be sued and deposed.

If pigs want to arrest me for aggressively investigating civil rights abuses......does "...my hands are tied..." also apply for the benefit of TI's.

That question has to be answered by county-state-fed prosecutors......and they don't have to talk to any citizen about anything: THEY seem to be too important and too dedicated to public service.

AUSTIN TEXAS PD IAD.....never once called me and asked for an interview.

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Just now, Red Rascal said:

You have to sue SD prosecutors......forcing them to apply the law.

That costs money.

And judges are convinced that they decide if some police state actor can be sued and deposed.

If pigs want to arrest me for aggressively investigating civil rights abuses......does "...my hands are tied..." also apply for the benefit of TI's.

That question has to be answered by county-state-fed prosecutors......and they don't have to talk to any citizen about anything: THEY seem to be too important and too dedicated to public service.

AUSTIN TEXAS PD IAD.....never once called me and asked for an interview.

My remedy in fed court seeks a court order announcing MY IMMUNITY TO DO ANY ACT OF REVENGE ON ANY POLICE STATE ACTOR who refused to investigate and give me actual and explicit notice of all facts needing sunlight.

Since there is no reasonable or meaningful public service after 30 years......it's pretty obvious pigs have all ripped up the social contract....therefore....prosecutors have also ripped up the social contract since they only prosecute what pigs admit to.

Can a fat punk f**k named Brad Seiler and his staff.....wrap their f**king heads around their duty and the shirking if that duty.....while also remaining silent about my call for justice in some form.

Go send this to fat face punk Brad Seiler at SD US ATTY (use their crime tip online form) and ask him, ".....how come your not talking to this guy about your public service....that you are offering to the public as service......today?"

See if you can get a dialogue with that fat f**k punk.

See if any US attorney answers an email or phone call.

Watch what happens when you mention murder of South Dakotans by FBI-NSA.

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16 minutes ago, Red Rascal said:

My remedy in fed court seeks a court order announcing MY IMMUNITY TO DO ANY ACT OF REVENGE ON ANY POLICE STATE ACTOR who refused to investigate and give me actual and explicit notice of all facts needing sunlight.

Since there is no reasonable or meaningful public service after 30 years......it's pretty obvious pigs have all ripped up the social contract....therefore....prosecutors have also ripped up the social contract since they only prosecute what pigs admit to.

Can a fat punk f**k named Brad Seiler and his staff.....wrap their f**king heads around their duty and the shirking if that duty.....while also remaining silent about my call for justice in some form.

Go send this to fat face punk Brad Seiler at SD US ATTY (use their crime tip online form) and ask him, ".....how come your not talking to this guy about your public service....that you are offering to the public as service......today?"

See if you can get a dialogue with that fat f**k punk.

See if any US attorney answers an email or phone call.

Watch what happens when you mention murder of South Dakotans by FBI-NSA.

Go post this up at a forum for the local paper in Sioux Falls, SD....and watch what happens.

Nothing

Gang stalking and the impotence and implausibility of the courts serving the citizenry.....with gang stalking and torture and retaliation against anyone who signs a DOJ complaint as official DOJ policy....is a real story that frightens tough guy pigs (pretending that they are public servants).

Feds are protecting vigilantism and the illegal dissemination of tainted evidence.

You won't see a story published on civil rights apathy in Sioux Falls.....even with political murders and maimings including the brain stroke of SD US SEN Tim Johnson after I visited his congressional office??

The reporters know the facts going back some ten years and the paper won't publish to put heat on Brad and the SD fed family.....who exist for themselves.....not the best interests of the public.

There has never been an investigation of local gumshoe felon, Marc Tobius?

No analysis of torture and the legal parameters of pseudo legalized torture by FBI, who admitted they contracted out torture and gang stalking: without notice, no one has standing to sue or seek judicial protection from stalking and torture and invasive surveillance techniques.

It seems as though THE FBI CONTROLS THE INFO, and therefore controls the actions of FED JUDGES....who apply standing analysis. Do fed judges know what the FBI gets away with? Do they want to know?

STANDING requires facts and public service.......from the FBI who has jurisdiction over all fed civil rights violations.....so......uh.......when FBI violates civil rights, whose gonna police and investigate the FBI and their coconspirators. How will a judge prohibit and sanction and control the FBI-DHS-DEA-NSA???!!!

FBI has spent 30 years investigating THOMAS S BEAN...for...30 years????!!!!!!

 

I'm saying " county-state-fed prosecutors all know about secret felonies that are some how rationalized as......public service....by mere civilians with no authority??????".

That's Brad Seiler's community policing program: secret felonies and access to fed enabling laws despite NOT having badges, police powers, or professionalism leading to disciplined adherence to specific prohibitions in the form of guidelines, policies, supervision....prosecution.

During war times.......no law applies to governments....so they manufactured the spin to make wartime hysteria seem real.

Edited by Red Rascal

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You'll notice as a TI.....that the US Attorneys have knowledge or could have knowledge of crimes that format a nationwide policy of civil rights abuses.....and they did not litigate or challenge the policy preferring secret subversion of the entire country....while also making sure no one else could challenge the policy or actors....while also claiming to be serving the best interests of the community with secrecy?

Congress voted without knowledge of what they funded and enabled?

Congress counts on disclosure and media to educate them.....they react to facts supplied by someone else.

To America's detriment, Sen Leahy and his staff....never communicated with me: but they scripted Mueller's spin control hearing...never did Leahy ask Mueller or FBI about murders and attempted murders....even with Cheney ordering The Christina Moore Murder of a pregnant Christian housewife???!!!....or torture of the guy sending a DOJ OIG complaint.

Congress has no curiosity about anything they did or could have done better: they handed the blank checkbook....to baby burners, momma shooters, murderers, and drug dealers???!!!!

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