from The Plot Against Pensions

The Pew-Arnold campaign to undermine America’s retirement security – and leave taxpayers with the bill.

By David Sirota, Institute for America’s Future,

Executive Summary

This report evaluates both the general state of the national debate over pensions and the specific effects of the partnership between the Pew Charitable Trusts’ Public Sector Retirement Systems Project and the Laura and John Arnold Foundation. The following is a summary of the report’s findings:

Finding: Conservative activists are manufacturing the perception of a public pension crisis in order to both slash modest retiree benefits and preserve expensive corporate subsidies and tax breaks.

States and cities have for years been failing to fully fund their annual pension obligations. They have used funds that were supposed to go to pensions to instead finance expensive tax cuts and corporate subsidies. That has helped create a real but manageable pension shortfall. Yet, instead of citing such a shortfall as reason to end expensive tax cuts and subsidies, conservative activists and lawmaker are citing it as a reason to slash retiree benefits.

Finding: The amount states and cities spend on corporate subsidies an so-called tax expenditures is far more than the pension shortfalls they face. Yet, conservative activists and lawmakers are citing the pension shortfalls and not the subsidies as the cause of budget squeezes. They are then claiming that cutting retiree benefits the solution rather than simply rolling back the more expensive tax breaks and subsidies.

According to Pew, public pensions face a 30-year shortfall of $1.38 trillion, or $46 billion on an annual basis. This is dwarfed by the $80 billion a year states and cities spend on corporate subsidies. Yet, conservatives cite the pension shortfall not as reason to reduce the corporate subsidies and raise public revenue, but instead a proof that retiree benefits need to be cut.

Finding: The pension “reforms” being pushed by conservative activists would slash retirement income for many pensioners who are not part the Social Security system. Additionally, the specific reforms they are pushing are often more expensive and risky for taxpayers than existing pension plans.

Whether “cash balance” schemes or 401(k)-style defined contribution plans, many of the pension “reforms” being championed by conservative activists risk incurring more costs and increasing risks for taxpayers.

Finding: The Pew Charitable Trusts and the Laura and John Arnold Foundation are working together in states across the country to focus the debate over pensions primarily on slashing retiree benefits rather than on raising public revenues.

Pew’s Public Sector Retirement Systems Project and the Laura and John Arnold Foundation are working in tandem on public pension policy to manufacture the perception of crisis and press for cuts to guaranteed retirement income. This campaign has played an integral role in states passing legislation that cuts guaranteed retirement income – all while those states preserve more expensive corporate subsidies.

Finding: The Laura and John Arnold Foundation is run by conservative political operatives and funded by an Enron billionaire.

John Arnold is an Enron billionaire whose only major experience with pension management was his role in a company that decimated public pension funds. Well-known conservative political operatives and consultants run his foundation.

Finding: The techniques used by conservative activists to gain public support to privatize the public pensions that public workers have instead of Social Security are, if successful, likely to be used in efforts to privatize Social Security in the future.

The current campaign to slash public pension benefits has relied on many of the same public relations strategies as President Bush’s earlier campaign to privatize Social Security. In that sense, the campaign against public pensions is an exercise in perfecting methods that manufacture the perception of a crisis – and then result in cuts to guaranteed retirement income. If the state-based crusade against public pensions is successful, it will probably fuel a renewed effort to privatize Social Security.

See the full report at

Institute for America’s Future
1825 K Street NW, Suite 400
Washington DC 20006
(202) 955-5665


Response to No Child Left Untableted

C of 13 President’s response to Carlo Rotella’s “No Child Left Untableted,” New York Times, Magazine, September 12, 2013.

Putting a tablet in a student hands creates a life-long tech customer, not better learning.

Tablets in the classroom definitely add something: future tech corporation profits. Maybe if the computer could see the light of understanding in students’ eyes; perhaps if it could sense the moment of realizing the importance of caring for others to improving the human condition. Is humanity being engineered out of education?

In the 1980’s Apple computers showed up in every classroom, including my middle grades classroom. It came complete with Oregon Trail. The IIe’s were okay tools and great bribes. Since those days, schools and teachers have been perceived as worsening failures. Meanwhile, Apple has grown about proportionally to that decline in human-on-human education. Apple’s success today is largely due to the market engineering feat of the 80’s. Perhaps the decline of the teaching profession has been engineered too, but that is for another place.

In over thirty years of teaching and relatively numerous statements of praise and gratitude from students and families, I have observed that my success and others’ has been closely aligned with our abilities to care about our students and earn their trust. Perhaps one day, artificial intelligence will achieve a technological equivalent of those qualities. But why bother, when with a little emotional intelligence, humans can achieve that now?

Unless, of course, there’s a profit to be made in artificially intelligent slaves.

Minnesota Legislative Commission on Pensions and Retirement (LCPR), Sept. 11 and 12

The Legislative Commission on Pensions and Retirement (LCPR) met on Wednesday and Thursday, Sept. 11 and 12, to discuss the teacher fund consolidation study, the investment return assumption and post-retirement adjustments (retiree COLAs).

After LCPR staff summarized a memo on possible consolidation of the St. Paul and Duluth teacher retirement funds into TRA, TRA Executive Director Laurie Hacking and Duluth Teachers Retirement Fund Association (DTRFA) Executive Director Jay Stoffel testified to provide an update on how the study will proceed.

Stoffel said that the study would be conducted using detailed actuarial analysis that will quantify the costs of consolidation. He also said that any consolidation must assure that assets of TRA are protected, and noted that past consolidations – such as the Minneapolis teachers and the Minneapolis Employees Retirement Fund (MERF) – were done based on the incoming funds being fully funded upon merging with TRA.

Both the St. Paul and Duluth funds have board meetings on Sept. 18, Stoffel said, at which both boards will be asked to take a preliminary position on merger. While the study continues, St. Paul and Duluth will finalize their decisions. For Duluth, consolidation is “a good solution,” Stoffel said, noting that St. Paul might have a different position on the issue.

Hacking discussed the outline of the consolidation report, which is due on Jan. 6, 2014. She noted that Duluth and TRA have fixed amortization periods for their pension debt, while St. Paul has a rolling 25-year amortization period which will impact consolidation costs estimates. Hacking said that SBI has reviewed the asset holdings of Duluth and St. Paul and the SBI foresees no problems integrating their assets.

Jeff Slocum of Jeffrey Slocum & Associates, DTRFA’s investment consultant, testified regarding fund performance, noting that for the year ended June 30, the fund returned 17.2 percent. Slocum said that an 8 percent assumed rate of return is very realistic and attainable. He added that the Great Recession of 2008-09 was a “once in a lifetime event,” and with pension fund investing, “time is on our side” because it’s a long-term business.

Rep. Tim O’Driscoll disputed the notion of a “once in a lifetime event,” noting that there was a major recession in 1981-82. “I’m sensitive to making sure we do things right,” O’Driscoll said. “The lower the benchmark, the easier it is to reach that benchmark.”

The directors of the three statewide retirement systems testified about how moving the investment assumption downward would negatively affect the funds’ funding ratios and increase their funding deficiencies. LCPR chair Sen. Sandy Pappas called the actuarial information “a reality check.”

On Thursday the panel went through a staff memo on retiree cost-of-living adjustments, which included information on historical trends nationwide and in Minnesota. Sen. Julie Rosen and Rep. O’Driscoll had several questions regarding what level of COLA could be considered adequate. O’Driscoll said that it’s “failed logic” to expect increases to be borne solely by state pensions when retiree income also should take into account Social Security income and income from personal savings.

Rosen added that the commission should discuss how zero-percent COLAs affect retiree purchasing power, and suggested that the panel look at data from the Pew Foundation on states that have been more aggressive than Minnesota on pension reform, particularly those that have moved to hybrid retirement plans.

The October LCPR meetings will focus on PERA salary threshold issues and pension commission policies.

Courtesy of

Susan M. Barbieri

Communications Officer

Teachers Retirement Association

Public Employees Retirement Association

Minnesota State Retirement System