The Wall Street Journal has an editorial this morning highlighting an American Federation of Teachers report that divides professional money managers into two groups — a "watch list"of managers that have any "directors, managers, advisers and executives" who "have contributed to, or sit on the governing board of" organizations that favor a move to defined-contribution pension plans, and a "worker-friendly" list of companies "that have publicly and credibly declared their neutrality."
The AFT headlined its press release about the report, "AFT spotlights investment managers' unsavory connections."
If anything, this strengthens the case for defined-contribution pensions managed by individuals with choices rather than by politicians or union leaders. Such a system would not only reduce the chance of taxpayers being on the hook for shortfalls, it would reduce the chance that the unions or the politicians could throw their weight around in an effort to prevent the money managers from participating in the conversation about public policy.
This is an important situation, right up there with the Byron Wein episode as an example of the power of the public-pension-industrial-complex.
