 Okay, welcome everybody To the assault on pensions and how to fight back labor notes workshop I'm Barbara Madaloni, and I'm on staff at labor notes for those of you who are new to labor notes we are more than four decade project and We have a magazine and publications and we do workshops like these and consultations And our project is is to support rank-and-file union members to build more democratic transparent fighting unions and We do that because we are We believe that when we do that when unions are democratic when workers have more power We'll be able to build a more just world and this is just one example of how we can do that By taking on Wall Street as Matthew is going to tell us about So just a few things Please keep yourselves muted Until you're asked to speak if you want to speak go ahead and use the Reaction button to raise your hand we can see you there You can also where I write stack and chat, but we'll see you more easily if you raise your hand And we'll call on you. This is really going to be a presentation and a conversation So do ask questions to raise your hand make sure that you're like understanding what's happening. Don't let Matthew slip something by that you're confused about Make sure you say wait a second. I didn't understand that This is we have to make sure that we're all like no one where we're going and leaving on the same page here so Please please do that and again keep yourselves muted When you're not speaking really excited to Introduce and grateful to Matthew for offering to do this our first workshop that I know of online on tensions And Matthew as you may know is a reporter with the lever. He also is the former Public pensions specialist for communication workers of America And a friend of labor notes a former intern of labor notes So Matthew is I'm gonna take it from here And again, you also I also just introduce yourselves in the chat now that most of you are here Where you are who you are? What what local you're from so Matthew I'm gonna hand it off to you Thanks Great. Yeah, thank you Barbara. Yeah, you know I huge fan of labor notes and I you know the genesis of this is is of my interest in pensions as a labor notes connection as well where When I was an intern at labor notes back in 2012 I Got turned on to what was happening with the CTU and so this was before the CTU strike and Then I covered the CTU strike for the nation Later that year and and as the strike was winding down. I was talking to different people At the CTU about okay, so what's what's the next fight on your agenda? And so the two things that came up the most were school closings, which we know a lot about but then This pension fight and I was like, you know, I was 24 years old and I was like well I know nothing about that So I'm interested in and knowing more and so then that began, you know in 11 year now obsession Of mine, which is, you know, basically there's this Over five trillion dollar pool of capital That is workers money, but is used in Really destructive ways for the most part and so why is that the case and and how can we we use our knowledge of this issue to kind of To help to challenge the total aristocracy of the bosses that we currently live under One housekeeping item, I really love Interruptions so again, this is a this is a complicated topic, you know It's you know, the interest from this got me really excited and I was talking to Barbara Earlier being like, oh, you know, well, you know, I'd love to do a health care one Now, which I, you know, it's another issue that I've spent a long time kind of studying and how unions can bargain health care And it made me reflect about just how this is substantially more esoteric and complex issue even than health care, which is a very complicated Issue so Love interruptions, please interject and Barbara's watching the chat and so yeah And this cartoon is is something we commissioned at CWA when I was there, which I you know, I really think kind of helps to underscore some of this whole issue here, which is you know, there's You know, Andrew Cuomo said when he was attorney general, you know, if he if you follow the money in New York state The largest pool of money is is the pension fund And I think that that's really true here, which which is there's You know, this is an extraordinarily tempting Pool of money for politicians to exploit and in particular politicians who don't have our best interests at heart So yeah, wanted to kind of start, you know, especially because we're you know, recording, you know, start out with some kind of vocabulary You know, some of you I know many of you on this workshop And so some of you have actually taken this workshop before in which case welcome back Um, but um Yeah, I wanted to just kind of start out with this because I mean basically and I probably should have done a slide on this But basically, you know, there's two kind of big components of pensions. There's the benefits side and there's the investments side and What I'm trying to do here is kind of cross that bridge here because typically in labor We really only talk about the benefits side and I I think it's really important that we And and so you could say that's the total ulterior motive of or, you know Of this workshop is to try and kind of draw that connection for you all so Yeah, you know, so there's a the defined benefit plans, which is, you know, the gold standard which we are, you know Seeking to maintain in the public sector and in the few places in the private sector that we still have them seeking to maintain And it's a pension plan With a guaranteed benefit for one's retirement. So you bargain with the employer over what the Not the contributions, but what the benefit will be and so Once an employer agrees to or employers in the case of a multi employer plan agrees to what A benefit is going to be that's not changeable and The employer or employers will make contributions to the plan To meet the benefits that have been negotiated with the union In contra distinction to that you have a defined contribution plan So there, you know, if you're a union, you're only bargaining what the employers are paying in and so DC plans tend to have significantly higher fees than defined benefit plans There tends to be poorer practices across the board and then in particular You know, you're really exposed to the vagaries of the market. So, you know, if you retire in 2009 or You know, march 2020 or different times when the market is cratered You see huge losses to the amount That was in your In in in your plan Whereas that's not true with a defined benefit plan the defined benefit plan means that when you retire, you know what you're going to get So it, you know, when when we talk about kind of this move to a 401k style plan, you know, what we're talking about is is exposing unionized workers and workers period To the exigencies of the market, which really is counter in my view to everything about trade unionism and so it's why it's a perfect opportunity, I think for labor notes to help To convene this discussion because you know labor notes is about what trade unionism is supposed to be about And so yeah, you know and then kind of so yeah, these I mean, there's many more turns But I think it's you know, these are words that are thrown at so and actually And Is as it relates to pensions is the person who makes estimates based on mortality statistics typically The form the basis for how much should be put into The defined benefit pension plan Um, and then the actuarially required contribution is the annual contribution to a public plan In this order plan period Made from From employer and employee contributions So yeah in the aftermath of the financial crisis We really saw Massive attacks on defined benefit plans. Um, so almost every state passed legislation that reduced You know included higher employee contributions Higher retirement ages new pension tiers for new employees And the beginning of efforts to shift public employees into 401ks Or dc plans and for the most part, I mean to be clear, you know those efforts to shift employees into exclusively 401ks haven't been Successful for the most part. There's been a few places where it has been Jacksonville, Florida Being one of the key examples there Um, but as the pension benefits become more stingy as these uh nationwide attacks, uh engendered Uh, you see this a greater pressure Uh, that's understandable on individual employees Individual union members to make larger contributions to their 403b or 401k plans to make up for The decline in benefits and their db plan. So it's it's really Really even if you don't see for the most part kind of the elimination of db plans altogether You do see This greater exposure of workers to the exigencies of the market and that's bad so just um Linda is just wanting clarification around that the db plans don't change But the dcs can change Yeah, yeah, so yeah, you know, if an employer over the course of your career makes, you know, let's say $700,000 in cash contributions, you know to your dc plan And $700,000 in contributions to your db db plan You know your db plan is not going to change because your employer is required to make up the difference But if they make that contribution to your dc plan and the market crashes or you're exposed to fees that are too high You know, you're on your own, you know, or you know, in some cases too, you know, you you have a family emergency I mean your kid needs to go to rehab You know, and there's only one good rehab and it costs 200 grand and then you spend, you know A third of your entire nest egg in one go, um You know, that is is another common problem with form and case style plans Whereas, you know, with a traditional defined benefit plan, you know, you get your $2,000 a month And it's just like social security and no matter what happens In your life, you're going to get that $2,000 a month So yeah, you know, I mean you can see, I mean again, it's so similar To the different fights that you face for anything, you know on the job Is like the boss wants you Wants to privatize the risk Of your employment and whether it's healthcare, you know, whether it's wages, you know Or whether it's pensions, they want you to bear the risk, not them And so this is exactly the same dynamic here. And so it really jives With everything that we've seen coming from the right and the Koch brothers and You know, libertarianism writ large, which is that, you know, individual, you know There's that Margaret Thatcher quote, right, that sums it up, you know There is no such thing as society Only individual men and women. Uh, and that's exactly Kind of what is the underlying logic here behind the dc 401k style plan And and Liz is wondering if you could say a little more about that sense about, uh, mass media hysteria overscaled long term liabilities like what are some of the Long term liabilities that they use us to get us afraid about Yeah, so we're going to we're about to go into that. But yeah, you know, I mean, basically, yeah Let's go to the next slide Um Well, yeah, so first of all, sorry, I Don't worry. I'm going to get to that in the side after this. I first want to kind of Describe kind of so, you know, John Arnold. I mean when I started doing this work John Arnold was very front and center and now he's really kind of taken a step back. Um, but he is It's only, you know, stepping back from the public eye His foundation is still and he personally are the number one funders of the People who are quoted almost exclusively about public pension benefits, which is the Pew retirement centers And the brookings institution as well as the urban institute. Those are the three main think tanks. They're very highly respected nonpartisan think tanks But what they do is they say well, you know If you're an ordinary state legislator or a member of the public Or even a public employee yourself, the only thing that you need to worry about are are the funded status of your plan That's the only thing that matters And plans are getting worse and worse funded. And so it's a crisis And the only thing the only way to address the crisis Is to cut benefits or to reduce the size of the plan in one way or another, you know, putting You know multiple tiers, you know, I mean right now, you know, we're fighting tears at you know, the big three and a ups You know, I mean pension funds Have more tiers than any other area of unionized life where you'll see six seven eight tiers Of plans depending on how long You've been working In a pension plan and so that's about right just like you see tiers In the private sector about undermining solidarity. That's exactly what they do in the public sector as well as they You know, the newer workers don't care about their pension because it's Half or less as generous as the pension Of a more senior employee. And so then you're a millennial like me and you're like, I've been a teacher for, you know, 13 years You know, why is my pen now? I've been around a long enough to figure out that my pension is way less generous Uh, then the people who are retiring currently. What's that about? Well, you know This just means that I just need to focus on, you know side hustles or Whatever, you know and put as much money in my four or three b as possible and you know screw these older teachers who who saw this happening when I was 22 and and didn't do anything And so that's you know, that's really again is kind of the underlying source of this attack here Which is it's so much more sophisticated in my view What John Arnold has been able to do than what the Koch brothers have been able to do which is You know, he kind of correctly He read this book Written by some right wing nut job about you know, how public sector unions are taking over America And he was like, well, you know, I'm a sophisticated guy. How can I undercut the political power and influence public sector unions? And I think he was correct to say well, you know going after these pensions Is the most effective way because it's about Dividing the workforce and it's about increasing turnover So when we're in a situation where you know in the better unions, you know have recovered pretty well from Janice But you know, when you have a higher level of turnover Which is caused by having less generous pension benefits, you know and people just leaving Then you're it's so much more difficult to build a strong union culture And so yeah, this he read a book, you know, and then he spent tens of millions of dollars Funding this attack on pensions and it's it's still ongoing today. I mean when you read You know About pension fund statuses You can trace this all to John Arnold where he he has crafted a highly effective narrative That the only thing that matters is funded status And of course funded status matters But the way that it's addressed is twofold, you know, and we'll get into this more, but it's, you know, I mean it's higher taxes on the rich That's an essential component But also, you know, ensuring that the pension funds are well managed Because as we're about to get into, you know, for the most part, they aren't well managed So yeah, we kind of went over this a little bit. But yeah, I mean just to, you know Reiterate, you know, this dc plans are about privatizing the risk To workers at the expense of having a robust defined benefit pension plan and it, you know When you when you move to a dc plan, it's an even more extreme version of having these multiple tiers In public plans higher turnover undermining steward structures and union stability, especially in a post janice environment So unfunded liabilities. So, you know Again, as I said, funded status is important. Um, but look the the These are obligations that can be paid off over 30 or 40 years. So when it's you hear these, you know These huge numbers like, you know, Illinois has, you know I don't have the number in front of me, but you know, 44 billion dollars in pension debt, you know, and It's a crisis, you know, and so and this cartoon, you know, is a perfect example here It's like it's the hinderberg flying into Eiffel tower, you know Like there is no Way to address the pension issue except to cut benefits But there's only been one public pension fund that's ever run out of money Tiny town of pritchard, Alabama. There was, you know, widespread theft And, you know, the the model of of a funded status for pension funds comes from the private sector And so in the private sector companies go bankrupt all the time Uh, you know, and but that is incredibly rare In the public sector and even when they do go bankrupt in the public sector, they come out You know Okay, more or less. I mean Bankruptcy is a whole other bag of cats. I mean every municipal bankruptcy in my view was, you know About generating fees for law firms and not about actually helping cities become more financially stable But yeah, companies don't have a tax base Even the poorest cities and towns in America will have a tax base and perpetuity people aren't going to leave And uh, but what these huge numbers are Are done, uh, the way these huge numbers are used Is are as cudgels, uh to advocate cuts, uh to our pensions So in every place in every battle that I've been a part of to protect pensions The biggest issue that we deal with, uh in state legislatures Are these huge numbers, uh, and it's like, you know, a state senator will say, you know What are we going to do about this crisis of, you know, billions of dollars in unfunded obligations? Uh, and It's a perfect way of of redirecting the conversation away from The crisis of property in our schools the crisis of racial injustice The crisis of the school to prison pipeline the crisis of environmental degradation It's like no instead these huge numbers that are really artificial that don't present a An accurate portrayal of the health of the pension system because it's not accounting for The health of the entire state or or municipality it funds the pension system Uh, no, we need to focus on these big numbers and it's I I mean to be honest It's I mean, it's it's highly effective, uh in convincing everybody including union members that Uh, you need to accept these pension changes And I you know, I think you even see, you know, very well-meaning people Well-meaning labor leaders Buying into this hypothesis of well, you know, we have to do something about the pension people who I deeply respect Uh saying well, we have to do something about the pension and it's like Not really I mean we have to do something about the fact that the benefits aren't generous enough That's what we need to do about it Because you know when we have vacant positions in a school district That hurts children when we have vacant positions in the public sector that hurts Public services and that is a real immediate crisis when there aren't enough teachers That or to or a pair of a pair of professionals or bus drivers That is a real crisis because real people are being hurt in real time by the Failure of the public sector to offer a benefits package that is able to recruit and retain the most qualified staff possible And so unfortunately though, you'll frequently see labor leaders being like well, we need to We need to negotiate with them about this about the these numbers that don't bear any real Coordination with reality in the way that Failing public services in the way that failing to retain qualified Um public employees Has a real concrete effect On how people are living their lives and how people are responding to institutions right now today So, yeah, this is one there's there's a few Slides here that are a little bit on the more difficult side and so I I and for some reason my slide is a little cut off and I so I'll share the the slides with you afterwards but um so Actuaries calculate the value of unfunded pension liabilities by using what's called an assumed Actuarial rate of return or the what also called the discount rate Uh, and so Arnold's pew brookings urban They've been pushing for pension funds to reduce their discount rates And what a reduced discount rate does is it inflates the long-term value of unfunded liabilities And turn forcing higher contributions From states and municipalities So it's really effective double movement So there's more money in the pension for and we're going to get to this in later slides, you know for wall street to extract And then the higher costs Create the basis for more attacks on pensions So in every place where you see kind of organized systematic attacks on pensions the most effective ones You'll see substantial reductions in the discount rate. So detroit was a perfect example of this They reduced the discount rate to one of the lowest in the country And then they said, oh my gosh, this city has so much unfunded debt We need to go into bankruptcy and cut the pensions To to address this debt crisis that we created by changing the accounting method by which Pension obligations are calculated So, I mean to be clear you don't want to go too high With the discount rate. You want to make it so the discount rate roughly reflects The performance of, you know, a stock bond index fund Over, you know, 20 or 30 years. And so for me, that's, you know, somewhere between Seven and seven and a half percent But instead you'll really see People pushing Substantially lower discount rates six percent even lower than six percent The right-wingers are pushing zero percent Discount rates or, you know, somewhere between zero and one percent discount rates And let's be clear about where this is coming from They want these huge numbers that they can throw around So that they can in turn cut the benefits and in turn crush unions. So it's, you know, it's complicated You know, it's it's not the easiest thing to understand And that's by design In my view like they want this to be as inscrutable as possible For ordinary people with as large as numbers as possible so that they can achieve their overarching goal, which is crushing the labor movement and crushing public sector labor unions so, yeah Just to reiterate again, this is a complicated slide. I apologize, but it's, you know So they use the discount rate to calculate the long-term obligations of the plan the long-term liabilities of the plan The lower that discount rate is the higher the long-term obligations are And when those obligations are higher, that's when you get those huge numbers About unfunded liabilities That then is in turn used to advocate cuts to our benefits and you know, I mean, let's be clear It's I'll go ahead Barbara. Yeah. Yeah, I was just gonna say just to be clear like that the so at the discount rate is saying is It's a it's how much you're going to be able to the Investments are going to earn over time. Yes. So they're saying that they're not going to earn that much over time So therefore you need to put more in in order to meet your obligations. That's that's what that means. All right Yeah, exactly. That's exactly right Yeah, and so Yeah, so the lower. Yeah, I I think the other thing that's really important here is Is it's not just frankly a tax on benefits per se because sometimes and these days it's a little bit You know, you'll see more of this where it's they'll be like, oh, well, you know, we're not going after your pension, but you know You know try getting new schools in this environment try getting, you know Higher pay or better healthcare in this environment. We have to make this huge You know contribution to your pension So that means you're not going to be getting anything else that you're asking for whether it's smaller class sizes Whether it's green schools, whether it's expanded social workers or psychologists or counselors or p or Or foreign languages or whatever you're not going to get that because hey We're making this huge contribution to the pension on your behalf And I think the one thing that is A little bit fair. I think is I mean, you know, there's sometimes when You know politicians, you know, don't believe kind of the Kool-Aid, you know, like it's impossible to think that You know the congressional progressive caucus, for example, thought that they were doing rail workers a favor when they voted to crush the rail strike. I can't believe that But in this case, I mean, they really do believe this, you know, and so it's about Explaining to them first that they're wrong, but they do believe that these discount rates are too high And that they do believe that to save the pension, you know that they have to destroy the pension to save it I think that's because because these people have so these people being, you know, actually, you know anti-union actuaries and And kind of these nonpartisan think tanks have so colonized The public debate around pensions I think when you encounter a governor or a finance secretary or whomever, you know, who's spouting this I I don't doubt their Whether or not they're genuine in believing this But I think it's very clear to kind of I mean ultimately intentions don't really matter You know the practical effect of this is to is to advance cuts to benefits to advance cuts to The types of essential services social services that we all know we need at the expense of this Highly technical idea of how Uh, pensions should be funded or maintained that has the practical effect of massively increasing the pot of money for wall street to exploit So that's what we're going to get into Um So yeah, you know, while the media while brookings urban, you know Crow about unfunded liabilities these huge numbers wall street walks to the bank And this is the story that's basically never told so You never hear in the media that public pensions pay out 10 billion dollars or more potentially substantially more to wall street annually and fees uh, and annually um The cost of underperformance is about 70 billion dollars a year. Um So these are huge amounts of money that's flying out the door. Uh, and that is Basically what underperformance is is if you compare the way that the pension fund Is invested currently Against a stock and bond index fund with a similar amount of risk Uh What's the difference? Uh, and so that's where that number comes from So instead of and we're about to get into this more instead of just going the lowest risk the most sensible option possible, which is an index fund Instead they're investing it huge amounts of money tens of billions of dollars uh hundreds of billions of dollars of public pension capital into Some of the most dangerous riskiest highest fee expensive heinous uh entities on the planet and that's what the rest of this workshop is going to Touch on which is private equity private equity real estate and hedge funds and I I you know Just to preface this I don't think I mean from a labor movement perspective I don't think there's a level of disdain That we should hold these people to the hedge fund and private equity managers These are the absolute worst individuals on the planet I mean these are truly offensive individuals. Um You know just to kind of provide some initial context I was friends with somebody who's a private chef for one of these guys And her description of the lifestyles that these private equity and hedge fund managers lead I was astounded by I mean they Don't the families all live in these huge compounds, you know tens of millions of dollars And the kids will just Go out in the morning spend Tens of thousands of dollars hundreds of thousands of dollars on designer clothes Come back in the evening and never wear them And that's just what they do Day after day after day And what we're going to go into is that Tragically those lifestyles are financed by our public pension funds So the growth of hedge fund and private equity, which is now I'm sorry. I should have had the exact number right now. It's about a quarter so About one and a half trillion dollars of the five and a half trillion dollars In total public pension fund assets is invested in hedge funds and private equity and private equity real estate And this is a massive massive increase Just in the past 20 years just in the past decade in the past decade It's gone up by about 40 20 years ago Maybe one tenth of the amount that is currently invested about 150 billion you had In private equity and hedge funds and private real estate And this is universal I mean The only exception there are some county public pension funds in pennsylvania that have avoided this trend the nevada state employees retirement system has Not avoided it entirely by any means but has limited their participation But basically universally public pension funds blue states red states Wherever have massively increased their allocations to hedge fund and private equity And and with private equity real estate being a subset of private equity So, yeah, the in 2022 the top 25 hedge fund managers made an average of $570 million each So that's I mean, that's just yeah, I mean so compare, you know walmart where we kind of Is the poster child for corporate inequality? He made 24 million dollars. So the average it's it's a over, you know Two and a half thousand percent higher The compensation of these guys than even some of the highest compensated CEOs in the country Even amazon You know, I think the average for the last two years for amazon CEO andy jesse is a hundred million a year so These these guys make over Six times what or over five times what Amazon CEO makes so this is this is extreme levels of inequality That are being Engendered by our public pension funds And this you know blackstone to me is kind of the perfect, you know, example here You know, I will just kind of touch a little bit more. I guess I this is giving me a good idea for a few more slides, which is, you know these These investments are not like ordinary stock and bond investments so The they're not regulated They're barely regulated. So stocks and bonds, you know, and You know companies that have stock or bonds have to provide all this public information About what they are doing with The money that investors have whether owning their bonds or owning their stock That none of that applies to hedge funds or private equity hedge fund or private equity funds There's it's opaque. It's a black box The only thing we know about the way that this trillion and a half dollar 1.5 trillion dollars is being invested is what the managers say themselves They're not audited By a third party The contracts are not public if you file a public records request for these contracts The assert trade secrets. They're the only public contracts that are not Accessible to the public You can't access their meeting minutes of the advisory committees that have public officials on them They And then they get this tax treatment That allows these people that that you many of you are probably familiar with but then the carried interest tax deduction which allows them to treat their income As capital gains income. So this 570 million dollars H is taxed at the lower capital gains rate of 15 percent Instead of the top marginal tax rate of of 39 percent So Yeah, that's just I mean and that is really the tip of the iceberg For in my view how criminal this industry is and it's a criminal industry That is entirely dependent on our public pension funds And so Blackstone is just kind of the perfect example here. So it was co-founded by Stephen Schwartzman and Pete Peterson who passed away The latter of whom passed away a few years ago. Pete Peterson was Nixon's secretary of commerce and This this entire company I mean these days Stephen Schwartzman is something like the seventh wealthiest individual in the country. He's worth well over 20 billion dollars And his entire business operation is dependent on public pensions Manages tens of billions of dollars and public pension funds while delivering returns that Appear to not be as well as the market. So I mean there's that's another kind of core issue here Going back to this black box is we don't know how well Uh, these investments actually perform, uh, which seems insane, right? You know, these are supposed to be sophisticated public pension fund investors with tens of billions of dollars at their disposal Highly compensated staff with you know significant financial experience. No, we we if you went up to The CEO of CalPERS or the CEO of the mass prem or the CEO of the Chicago teachers pension fund And you asked them How do you know? As in have you independently verify the performance Of your private equity funds, they would immediately say well, we haven't independently verified their performance. We trust the managers And there's a lot of really important reasons why you shouldn't trust the managers because when they sell off the private equity funds before they mature They enter massive write downs. So CalPERS recently was valuing You know, I I don't have the exact numbers in front of me, but let's say they were Valuing this private equity fund investment at ten dollars and then they sold it for four for six dollars So There is absolutely no reason to trust What the pension funds are saying about how well these pension funds have been performing How how well these private equity funds have been performing and certainly no reason to trust the managers themselves So Schwartzman goes and takes all of his enormous uh Profits that he's gotten from public pension funds And becomes One of the largest republican donors in the country. So every year He contributes somewhere between 15 and 20 million dollars to right wing republican politicians who Are pretty explicitly anti-pension and very explicitly anti-union Um and so this is you know, I mean This is using workers own money to finance A massive coordinated and systematic assault on workers Uh, so if you're familiar with you know, carl marx on alienated labor Can say this in a laborer's crowd You know marx wrote about like, you know the product of the workers that used to enslave the worker This is exactly what you're talking about except it's financialized Where the products of the workers are used to create a massive organized systematic assault on workers and peterson The other co-founder was by far the most effective Advocate for cutting social security medicare and veterans benefits over the past few decades So he spent his blackstone fortune financing An extraordinary way of groups who are saying The only way to that the number one. I mean very similar except writ large You know, which is you know, the national debt is a crisis And the only way to address the national debt Is to cut social security and medicare benefits and veterans benefits And so we're seeing you know, and he he endowed many of these organizations after their death after his death And we're seeing this come up in a in a big way now where Kevin mccarthy the house speaker has talked about a new commission to cut social security and medicare benefits Um, it really seems like this is is on the table again in a big way and that is because More than anybody else that is because of the actions of p. Peterson So again, you know, blackstone gets tens of billions of dollars from pension funds of unionized workers public pension trustees who are union members Many of them active in their union Voting to approve investments in blackstone that we don't know how well they perform We only know that the fees are extraordinarily large And that the transparency is poor And then when the campaign finance records come out, we know that That at least a portion of that money is going to finance Extreme right wing efforts. Um, so yeah, you know, I mean there's I can go on all day about this as you can probably guess, but Schwartzman was one of the few business executives to stand with trump After january 6 and to support his election denial efforts And then there was a very interesting case in 2018 where A rent control ballot initiative in california Their largest donors were private equity funds that Had large public pension fund investments in it. So the the money that was literally supposed to be profits allocated back To the pension funds themselves were using to crush a rent control ballot initiative in california in 2018 So when you have these poor investment returns and these high fees Um, it reduces the funding levels of pensions and it increases contributions From state and municipalities And then the higher costs bolster the case of anti pension advocates for cutting benefits And so I mean this is something that I think is so important Because a lot of times when you're in union circles, there's there'll be some resistance to talking about the way the pension fund Is invested and jay is you know has been uh, and lisa who I know signed up for this But I'm not sure it's on you know, have and I'm sure others of you have as well have been active in fossil fuel divestment issues Where you I'm sure you've encountered this where there's a lot of discomfort in talking about the way that the pension fund has invested uh, and Unfortunately, we don't have any other choice Because when the pension fund performs worse than it should when it performs substantially worse than the market This creates the conditions for an organized attack on our pensions one and two Crowds out means that you know more money has to go to our pension that could go to higher benefits That could go to essential public services So, yeah, you know, I mean kind of going back to what I was talking about before, you know I mean, yeah, schwarzman donated 36 million dollars to republican groups in 2022 and manages billions in fur blue state pension funds paul singer of elliott management donated Manages hundreds of millions of dollars in pension assets And is one of the top donors to the republican governor's association And then a story I reported on and you know and barba and I worked on this back in the day, but you know Nearly all of the top charter school backers in massachusetts Manage money for the state pension fund So again, you know that mean that's it exactly what we're talking about Here where the teacher's own pension money is being used to finance the privatization of public schools And this is you know, massachusetts Was very convenient, you know for this analysis because You know the there was this ballot initiative so the And then there was a lawsuit about disclosing the donors to the ballot initiative and when that Lawsuit was concluded concluded you found out, you know all these major donations from pension fund managers to That ballot initiative committee, but For donations to charter schools. Those are aren't public I mean we we don't know all we know is when they bragged about donating to charter schools And to charter school advocacy efforts, but for the most part that's dark money But what we do know is that the charter school Lobby is extraordinarily well funded seems like it has an unlimited spigot of cash at its disposal And also that You know private equity and hedge fund managers that mentioned manage pension money have Are very vocal in their support of of charter schools So yeah stepping, you know back, you know, I mean again, you know, I think for the labor notes crew we've We attract people who are Very concerned, you know about the way that public plans are invested And you know because we're active in In ecological movements or anti-racism efforts or ldbtq efforts or anti-poverty efforts Or housing efforts So yeah, you know while your pension may be invested in fossil fuels Private prisons the military industrial complex payday lenders speculative real estate In terms of kind of normies, you know who you work with You know, I think the the key thing is to understand, you know that they're That the that the pension is invested in people who are out to get pension funds That's that's kind of I think the most winning and successful Argument that we have at our disposal And once we kind of get people and I was just talking to Jay about this the other day But once we get people On board with the idea that we should care about the way the pension fund is invested Then these other issues start to become Much more palatable to have discussions about then we can really start to get Many more normies and invested in like yeah, we shouldn't be invested in fossil fuels We shouldn't be invested in private prisons or payday lenders But if we if that in terms of the original agitational kind of component To say hey, you know when when we're going all in in private equity and hedge funds You know We're financing our enemies and we're working to undercut the basis for pensions To exist at all that I think is the key Component Here so yeah, you know When you start to have this conversation You know, I mean what some of the most environments talk to me about this I mean some of the most difficult things that you'll encounter Are your own public pension trustees? And I'm not calling every union public pension trustee who votes to approve a private equity investment corrupt I am absolutely not saying that But I do think that there is some history here that's worth noting which is that there's many many instances of Cases where politicians have received large campaign contributions and bribes For giving business to favored private equity and hedge fund firms and this is It's ongoing. So I mean Just a few weeks ago. I had an article about Ron DeSantis About how some of his largest donors Got contracts from the state pension fund And This is something we see with democratic governors and republican governors And basically there's just an inherent moral hazard here Which is that because the fees are so high for private equity and hedge funds 30,000 percent to as much as 60,000 percent higher than fees for index funds There's a huge incentive To just get money in the door For these private equity and hedge fund firms So, yeah, you know, we've seen pay-to-play issues New Jersey, New Mexico, Texas, Florida, California And Basically every state that I've looked at their pension in a systematic way You see You've seen pay-to-play issues And this this is these are the more extreme examples, but in terms of when you're dealing with your public pension trustees Who will say You know, well, I've been on the pension for, you know, 15 years, you know, and I haven't seen anything untoward I think they honestly believe that But I would say that, you know, there is one example and I can say this now because she's not on the On the board anymore, and I won't say the pension fund either But there there's one pension fund trustee that I I've worked with for many years that, you know, that Because I was helping to train them on kind of the pay stakes in here And and we would we would meet up at different pension fund events and, you know, talk and and we were friends And after I had known her for two years and interacted with her many many many times We were just talking and you know, she she was like And it came out that she has dinner With George Roberts the billionaire co-founder of kkr four times a year And that the next time she was going to have dinner with them She was going to ask George to invest in her own business That's plainly illegal This is somebody who comes out of a great progressive militant local was trained By me for years Including on ethics Was You know, I mean this is somebody who I've worked with for a long time and I have to believe she knew that that was Not right But unfortunately, basically when you have people who Are put in charge of these large pots of capital billions and billions of dollars and aren't trained From the beginning It leads to this kind of moral hazard and so and at these pension fund meetings and retreats You know, there's a lot of alcohol There's all these people in suits running around You know saying, you know that these you know giving you all this attention and who went to these very fancy universities And have all this money at their disposal And that's the way that these public pension trustees are trained and that's and that's just on the wall street side Then there's the staff as well The staff of these pension funds, there's a huge revolving door And they they intimidate our trustees that is in every pension I've worked with that is what happens They also make a lot of money. I mean not any as much where near as much as wall street folks, but you know three four Five six hundred thousand dollars a year These pension fund CEOs, they also have degrees from fancy universities And they will threaten our trustees once they start to speak up or ask questions They'll say you're violating your fiduciary obligations by questioning the staff And and saying you can put yourself at risk And they'll have their attorneys write letters to our pension fund trustees saying, you know by asking basic questions You are waiving your indemnification by the pension fund and We will not defend you And if you have any issues with that well, you can hire your own lawyer and you can sue us To try and get your indemnification back As a pension fund trustee So that's kind of you know, there's a very real carrot and stick approach So when as you are active as you start to kind of raise these concerns or questions in your union typically the first person your union leaders will refer you to are the trustees and Almost universally the trustees have been dealing with this carrot and stick approach for many years And they have been trained to defer to the staff And they have been trained that it's okay to uh, you know accept, you know martinis from wall street executives typically that's legal It's legal to accept typically gifts of less than $50 or $25 from people who have business before you um And unfortunately those, you know, $17 cocktails go a long way, you know, most teachers don't have enough money to Drop $18 on a cocktail most bus drivers definitely don't have enough money to drop $18 on a cocktail And just that alone can start to engender A type of view especially if it's combined with this stick approach And i've seen it time and time again So i'm not sure when you I know you're going to start moving into finding backs on maybe your justice, but just to note in the chat that Linda lindey's asking like Are there ways that we've addressed? This very issue about the intimidation of the trustees has there been any sort of successful ways I mean Yeah, I mean, I think the biggest thing is Is demystifying You know as I mean once Once the way the trustees stopped feeling Like both isolated on the one hand and kind of smarter than their colleagues on the other Is by raking fine members speaking up. So in this way, it's I mean, it's the exact same thing that we see When we're pushing for open marketing, right? You know, it's like, you know, the chief negotiator, you know Most locals across the country has been trained over decades by both hr And frankly by their own union leadership and then sometimes by the region Not just sometimes often by the rank and file members themselves You know that they are the ones that by sitting in the room with the boss and sharing, you know, a couple of beers They can get the best deal for the members and Only by the members saying, hey, we want To know what's going on here. We want open marketing Does that change the perspective in any way even with, you know, chief negotiators who are I mean, I've met chief negotiators who are Self-identify is in our co-syndicalists or Our members of the communist party or, you know, other very far left, you know, organizations dsa members, you know Who, you know, believe Even if they will say well, you know, open marketing makes sense in some circumstances Will frequently, you know, think that the best You know and say it explicitly that the best way to kind of resolve issues with management Is one-on-one between a paid union staff person and And management and the hr director, uh, and I've seen people Who, you know, and this is one of the great things about being a union staffer It's not great things as you can see people who are Bernie Sanders supporters through and through And who say they believe in the organizing model, um, who, um, You know, at the end of the day are, you know, believe in in business unionism So I think it's the same thing here is once once we kind of see pensions as Part and parcel of everything else that we we are as a union And that includes not just the benefits, but the way the union the the money is invested Because we recognize that if the money is invested poorly, that's going to impact Our benefits and that's going to be impact, uh, the way That we're able to fund essential social services or not Um, that's when trustees start to Start behaving better. They start to speak up Uh, and they start to at least ask more questions. I mean, look, you know, again, this is labor notes I mean a bunch of the times, you know, you frankly have to defeat people, you know I mean like that's, you know, uh There is both, you know, there's a carrot and stick approach on our some trustees. I think are absolutely movable but In a lot of cases, maybe, you know, I mean, maybe the overwhelming majority of cases, you know, you need fresh blood You know, you need kind of people who are going to kind of enter In and just be like I don't understand any of what you're saying here, but I know that I was elected To manage my own god damn money and so like I'm going to be able to I'm going to ask whatever questions that damn well, please and I'm going to vote However, I want, you know uh, and so yeah, like that's It so much of it is basically is tied. I think to this labor notes vision of unionism More or less, which is that the workers have the answers, you know And even if the workers don't have the answers right then and there they can In the world of the worldwide web They can access information That allows them to make an informed decision independently of union staff independently of experts independently of of management So yeah, you know, I mean, I think, you know, go ahead. Yeah. I mean, I just want to like give an example from the mass teachers association uh, specifically to lindy's question where for We've had sort of the same Members representing being elected on our prune board for years now and at our annual meeting our representative assemblies every year They would get on and be the experts protecting The interest not often of the members is what it felt like but of their knowledge and their relationships But over the last six or seven years at each of those annual meetings There would be some effort on the part of the membership to begin to raise questions to move motions That would require that they raise questions. A lot of that was around fossil fuel divestment And up to like an over the course of time you could see that members in the room Be more confident in their own knowledge about the questions that were being asked And vote more and more against the recommendations Of the representatives until this last time one of our members who I think had spent some time talking to you Matthew About private equity moved a number of motions requiring them to take on private equity Investigations about private equity investments in our pensions And the members overwhelmingly Voted to support those motions In spite of every effort by the trustees to say otherwise And so it was slow But the members are more confident in terms of understanding That they were the ones who should be making the call And they're pushing the trustees that way. So just a small example Yeah, yeah, and I mean we've seen that elsewhere. So yeah, you know, I mean When my boss david serota and then later me we we did a bunch of reporting During chris christie's second term about His mismanagement of the pension And workers got hold of that And they went gangbusters And so and then, you know, then one of the, you know, the cwa local presidents who Before this had been very reticent to was on the pension fund board and before this before we started reporting this had been very reticent to raise questions Even though the governor was, you know, kicking the cwa's ass left and right Uh, you know, then he was like he started getting emails left and right for the members and he was like, well, you know, clearly I have to start raising questions here And so then that happened that, you know, then new jersey then cut their Allocation to hedge funds substantially Uh, and yeah, similarly, you know, I mean, uh, you saw, uh, I mean the this was I mean, this actually did come out of You know, uh, there was a union staff component here that came out of here where, you know, I'm randy wine garden got, um You know, I mean she was, uh In new york they were dealing with these massive, you know, charter school attacks, you know, every year. Uh, and so then Uh, Michael kink who's a friend of hers. It does organizing in new york and it's kind of like her left hand in new york politics, you know Started following the money and was like all this, you know, charter money is coming from pent is coming from Private equity at hedge funds. Um, and so then they launched this campaign called hedge clippers That really went after hedge funds for a few years and and got kind of a bunch of pension funds to divest From hedge funds, um at the time as well. So that was that was kind of, uh, you know, that was more grass topsy I think then kind of what we're, um Talking about here, but it does show that kind of once Once a labor leader or a labor member kind of gets it in their head that it's, you know, this is important You know, uh, you know that, you know, there's um, uh Uh, hundreds of billions of dollars of workers capital that's being used to attack workers. That seems crazy. Um, Then you can you can create change. Um, uh, In a pretty systematic way quickly In vermont, which was a campaign. It was a fun campaign a couple years ago that I was, um, very involved in, which was I mean, it was so funny. I had Just moved home and I had, uh My, uh, my brother had, uh, who's a black man had, uh, passed away from an opioid overdose and I was Very, uh, happy to be home in vermont, uh, because, you know, I was taking care of my family But also very angry about the state And you know the way in which kind of public policy had contributed to contributed to my brother's death. Um So right as I got home, um The state legislature launched this massive coordinated attack on on defined benefit pensions. Uh, it was astounding, uh, to see from It was the only time I've actually seen it, uh, from a democratic state legislature where the pension fund was actually pretty well funded I mean in illinois, you'll see you know, uh Democrats routinely attack pensions, but that's in part because they skimped on the contributions Uh, for decades and then the plans were terribly invested and so you have uh, very low funding levels and But in vermont, it was the first time. Uh, and so, uh, and you had the house speaker. You had The republican governor. You had the set of president pro tem. You had the state treasurer all saying, okay You know, there's a crisis came out of nowhere You need to cut benefits immediately. Uh, and so yeah, I just talked with a few different workers and kind of did some research Um and showed that you know that any of the money that could be gained from cutting benefits Uh Is you know, you could more than gain that back by investing the pension and a plain vanilla index fund Uh and workers ran with it big time Uh, and it was it was not I mean it Did not meet labor notes best practices. I was a basket case You know, I was just talking to tons of people on the phone was basically We weren't we didn't but it didn't have an organizing plan work doing assessments You know, the state legislative session was going to end in two months and we had to stop the bill Uh, and so it was just a bunch of crazy people running around basically Um, but it's a small state, you know, as you know, it's one tenth the size of Massachusetts and so Word gets far and there's 150 state reps and so the districts are only 4 000 people and so Basically the article went super viral and you know, everybody was calling me and emailing me and I was like email your state legislators and just tell them to read the article and respond and Uh, and then the union leadership that initially, you know I mean that that's not totally true the interestingly enough the more I'll tell so a little gossip here, but the the state employees association, which was an independent Was facing a substantial desert effort of its, uh, correctional workers because they had made Some vague pro-black lives matter statements and so the state employees association, which Typically was not aggressive with the legislature Knew that they had to be very aggressive with Defending the pension or else the correctional workers were going to leave immediately Um, and so so they took my article very Typically pretty conservative union and they ran with it big time And then that dragged along the the teachers union as well, which also typically has a pretty, you know Got along to go along relationship With the state legislature. So then the teachers union Took a two and then We stopped it and it was at the beginning we had, you know I mean dozens of state legislators who had endorsed bernie both times who were saying The only way to save the pension is to cut it Every every state legislator Again, it's a small state. So I knew many of these people, uh, you know, every state legislator I talked to people I'd known for decades, you know, we're like telling me on the phone Matthew, I understand, you know, very condescending. I understand Matthew that you've been You know, looking at pensions for a long time, but I've I've done my own research And the only way we can protect this pension is if we cut benefits two weeks later They were like, no, no, no, no, no cuts at all will have a commission will include labor will, you know, and so Uh, I think that underscores basically how effective once you include kind of this analysis of Okay, how is wall street extracting revenue from the pensions? Uh, can you use that to effectively defend your interests in negotiations? Or, you know, at the legislature There's another example too. I mean some seiu locals in los angeles In 2013 They were just embarking interestingly enough And they didn't even really talk about the pension But they did include the enormous fees paid to wall street by the pension fund in their analysis And so they they ran the numbers and they were like, you know in 2012 Los angeles spent more money on fees to wall street than on repairing city streets uh, and that Really altered the whole dynamic in the city. So instead, you know, this was at the peak of anti-public sector union hysteria Uh, and they really flipped the narrative where it's like No, like us trying to get a three percent raise is not the issue here You know instead, it's the enormous fees being paid out to wall street And they were able to get, you know, for the standards of that time, you know Much better bargaining environment now But for the various standards of that time when, you know, three percent was, you know About the best you could get and overwhelmingly unions were negotiating one two percent increases And yeah, they got a great contract And so I think that again underscores when when you kind of do this type of analysis you can Um get great results go ahead for Yeah, so lindy is asking in the chat about like, how do you how do you get that information? Like when you say do that kind of analysis, how do we do that? Where do we start to find the numbers? Yeah, well, I can send us send out some resources after this. Um, I should have collected them beforehand But I apologize. But yeah, you know, there is there is a report That comes out it might be a couple years old at this point, but um There was a report that actually done by a conservative think tank on the Maryland public policy institute um that tracked pension fund fees, uh, that's a great thing, but um You know what? I am going to I will send an example of how you find it but basically You can go to the annual financial report of the pension fund for the fees You can go to the annual financial report for the pension fund And typically if you just search expense in that in that annual financial report You will get to um, you know, what's called the net expense And that's the total fees paid to wall street in a given year So yeah, but it's frankly it's a great idea for a follow-up workshop So I guess I'm I'm trying to get your 12 dollars now For labor notes which is um, yeah, you know, we it could make sense probably does make sense to do a follow-up workshop where I can show you exactly how you can kind of gather this information yourself It can be sometimes a little bit hard to parse. Um, but yeah, you know, I mean certainly Yeah, but that's the other thing. I mean lindy, I don't I don't know which lindy Which union are you with you can unmute yourself? Hi Matthew. I'm with Education Minnesota Okay, well, you know, you can I mean let's chat Because yeah, I can yeah, there's I mean part of it Yeah, definitely. I think I think a workshop, you know, makes sense, but you know, it's also You know, I can help and I'm happy to help and then that can once kind of do you have a researcher at Education Minnesota? Yeah, we do Okay. Yeah, because then that you know typically. Yeah, if you just kind of Train the researcher and then kind of give the rank and filers, you know a broad understanding then folks can can run with it But that's a great question. Okay. Thank you So yeah going back to what I was saying Kind of before, you know, um, it's about shifting the narrative so, you know if we operate on the on the terrain, you know of like you know It's our benefits. We earned it Yeah, I mean that that can be very effective for internal organizing Whether or not that's the best message public facing I think is I would say it's not, you know, I mean again, you know that the problem Really is is wall street predation And uh and that's um And so uh Yeah, when and that's just what the SEIU locals did in Los Angeles, right? You know is once They shifted the terrain. It's like instead of it being about our 3% it's about um The enormous fees paid to wall street They were able to fundamentally upend management's position and negotiations Um, so yeah, it's the same here, you know, um And then in terms of an internal kind of effort, you know, I I think it's, you know, a lot of members don't know Um That their pensions are at risk one I think there's also Uh a lack of understanding that pension benefits could be better Even substantially better. I mean, you know, the the There actually hasn't been too much organized research on this, but I just know from my two grandmothers My grandmother had a same-sex spouse And my my biological grandmother was Uh a teacher in the dc Uh public school system and her spouse was a teacher in the Maryland public school system And the difference between their two budgets was extreme, you know, where my grandmother got, you know, 60 70 000 a year In pensions and her spouse got 25 grand a year In in in their pension. So, you know, I I I do think, you know, for the purposes here You know, we as part of this whole conversation and I said this to jay when we jay on, you know, when we talked The other day is that part of how we have a, you know, for those of us, you know, like myself, you know, who are really concerned about You know, not just these attacks on pensions, but the the horrific social effects of these pension fund investments financing the fossil fuel sector that is seeking to destroy livable life on this planet In my view part of that conversation of how we get, you know, normies on board with fossil fuel divestment Is by having a real conversation about expanded pension benefits That, you know, for the most part, they aren't as generous as they should be, you know, teachers should be able to You know, retire after, you know, 35 years Making the same amount that they did their last year of teaching that is a real Kind of goal that we should have as the labor movement and even more so with Public employees who make substantially less than teachers, you know, bus drivers, you know Paraprofessionals And so I think that that's a, you know, janitors, you know, that's a that's a big component as well as is how can we start talking about As a labor movement and as individual unions more robust benefits period and You know, I mean the great thing is I mean at this point in time is we're really set up to start having that conversation, I think You know More than ever before attrition and turnover And vacant positions are a problem In the public sector More than ever before I think We're not seeing attacks on on pension benefits. And so now is the time I think for us to start having a real conversation About expanded benefits as a component of Of our broader agenda for for dignity on the job in the public sector Oh, okay, sorry. Um, well, here's some I'll share the I want to have a little bit of conversation I did not realize what time it was. I apologize If people can say we can we can go over a little bit Okay, um So, um Yeah, you know, I I mean these are just some kind of sample talking points, you know, which is like, you know How can we afford public sector pensions? You know Instead of being like these are benefits. We earned it, which is very accurate. Of course, that's true It's you know, we get to be on a more expansive bargaining for the common good type ground When we say well the real question is how can we afford these massive payouts to the wealthy on wall street? Why is governor x continuing these massive giveaways with such little oversight? Um, and then, you know, doesn't everybody have to tighten their belt, you know, instead of being like, you know Fuck that public services are going to collapse. That's totally true. You know, say, you know, it's like, okay. Yes You're wrong and redirect public sector workers have already tell you and their belts way too far The question is why the pension fund Is sending out hundreds of millions of dollars to wall street You know, I think beyond the scope of what's possible, you know, in terms of expanded benefits, you know There's also, you know, the way that pension funds have been used in the past, you know So this picture here is a perfect example, you know co-op city in new york this massive Public housing development was built that people live in today You know, it was built in part with union pension fund money That was more tough partly plans. Um, but you know, nonetheless union pension funds Have financed affordable housing. They continue to finance affordable housing today through the AFL CIO's housing investment trust Um, but there's no reason why pension funds can't be used to finance the world that we want to build They can buy the municipal bonds of school districts that are building new schools. Um, they can Finance Mass transit they can finance Anything productive that we know is going to have a long-term rate of return pension funds can how finance that and You know, unfortunately very few unions are talking about this these days and But it's um, it's possible just like anything we push for as possible Um There's a long history It's very little history recent history of pension funds being used for these socially positive gains, but There is a long history decades and decades of pension funds being used to finance Expansive public works projects that benefit the common good um It begins in my view with with wider rank and file involvement in pension issues That's the only way we can get back to this point. Um, so Pensions to the workers. So this is this is the the first volley in my view is this meaning Maybe we can turn it into something historic, you know, where We we in my view, you know, this is exactly the type of place where it starts We're just kind of getting folks interested getting folks excited about Wait, there's, you know, you know trillions of dollars here that we could That right now is going to wall street that we could use to socially productive ends um that that is Uh, that's the way we can kind of potentially do something much more expansive that meets the demands of the moment that we all know we need So with that, you know, I'd love it if we could have a little discussion again There's no that I would love to hear from folks who haven't talked yet about kind of Any of this any comments or questions? No question is too anodyne for this if there was a minor technical point I want to hear it if there's a a broad expansive comment you want to make I want to hear that too Okay. Hi. This is Kathy Cunningham. You see to you local one And I'm interested in doing the research to find out Again, where our fees are going because it seems like we have a tier two pension system in Chicago public Chicago teacher pension fund and so I want to make sure that I have the right vocabulary In order to start the conversation with the trustees when I attend the meetings and ask The hard questions where would I I know you said there was this should be another workshop, but where can I start right now? Yeah, I mean if you look at the Chicago teacher's pension funds, uh, and you will financial report You know, I mean, I do think it's a good it's a good I mean, there's two things that I would suggest and without talking You know just googling kind of me or my boss plus pensions I've written about this. So my boss is David Sarota And both of us who who wrote don't look up this climate change hit on that plugs So both of us have written extensively kind of on this issue So if you just google our name on pensions and then I think it is worth You know, it's fine to I mean I I was a philosophy major So I have no training in numbers whatsoever. You know, I just printed out the annual financial report and Read it and was like Why Is this happening? So yeah, I mean I have written about the Chicago teacher's pension funds specifically you can kind of Look at that there, you know, but yeah There's a question in the chat From lindy. I don't know if you want to Come off you and ask that question out loud Hi, sure. Thanks Matthew. Um, so minnesota has a two-tiered system And the rule of 90 expired so the teachers who could have retired like this year have to wait until 66 To retire now I'm wondering if that happened Anywhere else and we're in a place where we're like fighting for more pension flexibility What were? Well a lot of other Sectors have lost their pension So legislators it feels like hard to get through to them that the cost map like the cost is worth it sometimes Because it's something that should have been a fight for decades to get the rule of 90 extended and now we're like scrambling, you know Um, well, I'm not sure exactly what what do you mean by pension flexibility? So, um A lot of pension plans have If you work 35 years you can retire. This is just like you have to work till the 66 or take really harsh penalties So like any kind of rule any kind of flexibility added They're saying that like if we want to like lower it to 62 we have to play Or pay a ton of employee side contributions Where minnesota's is already really high Um, so yeah, I'm just wondering if you could comment on minnesota's specific situation with teachers because it feels it feels unique But I'm not sure if it is unique My understanding is is is that level of Harshness Is not particularly common that that's my understanding in terms of the benefit structure I mean, I would suggest, you know in terms of a resource, you know, um Uh, so jim cane at nea national is have you have you ever talked with jim? Um, so yeah, he is an amazing resource. I mean, he's really really really bright. Um, and so and they have done research Uh About the benefit plan structures across the country, you know, I mean one thing that I would look for is In the plan that I I I just don't know because I haven't looked at minnesota's plan specifically Is is this question of you know, has there been a reduction in the discount rate kind of recently? Um One uh, two, you know is How are costs being framed? You know, I mean, is it you know, Typically, you know, it's the state legislature Will say oh, well, you know this what I said, you know, there's this huge Amount of money that we have to you know contend with and so, you know, either it's going to come from here or there, you know, whereas, um Uh a discussion about wall street's role is pushed to the side so I mean one of the interesting thing that That many teachers unions have done, uh, kentucky was one place. Um I believe it was done in california As well if I recall, um, I don't have the but um You know the full universe Of pension fund fees is typically not Disclosed. I mean, that's one of the big problems with private equity and hedge funds Is that even the official number that we have for fees is likely a tip of the iceberg? um, and so Uh, that is a fun way to deal with these annoying you know state senate finance committee chairs or you know appropriations if That's the I don't know what it's like in minnesota sometimes. It's been um Is like, okay. Well, you're saying we have to do this. Well, let's You know, we'll kick this cam down the road till next session this session. You like mandate the total universe of fees That's going to be disclosed and then if they're like, well, we're not going to do that Then you're like, well, okay, then then there's no point in us like having a friendly negotiation here You know, we're we're going to pressure you. You know, that's a great way for kind of Making a clear dividing line is like you're saying our pension costs are the problem Yeah, you won't even mandate full defeat disclosure. Okay. Well, this is we're this we're done here So that's that's a fun thing that some teachers you Not not it's mainly came out of aft aft has some So it's education minnesota a dual affiliate or is it just okay? Yeah, so yeah, there's some really great national staff at aft Elizabeth perry jen is one of them um And so who have been involved in this fee disclosure? kind of push so Yeah, jim and nea is really great for that comparative research and some of the more technical stuff and elizabeth is really great for kind of Politics communications kind of organizing aspect of it. Um, so Before we get to show uh, uh, who has her hand up jd at a comment slash question in a chat, uh Wondering about if there are any examples of unions that have started their own Taft hardly funds Uh Recently if they've been able so Sort of wondering about that Um, yeah Yeah, I mean, it's you know, I mean we should do I mean if there's interest I mean we have to figure it out that there's interest for a private pension Workshop, I'd love to do it. You know, I mean, it's a it's a whole Different universe frankly. It's you know, it's it's very different in so many ways than public pensions. There are some overarching similarities, but like for example, I would never say in a private pension workshop that funding levels are not important It's very important in private pensions But, um Yes unions have it's one of the great secrets unions have been starting new Taft Hartley pension funds There are several new Taft Hartley plans started every year Um, so this idea that private pensions are dead, you know, is totally wrong Private single employer pensions Yes, I mean or I mean the idea of an employer Getting an employer to start a new private single employer pension is almost certainly off the table at this point, but I think that Multi-employer plans are poised to make a major comeback. Um the biggest she was just fighting for it You know, I mean you have to It's it goes back to everything that we talk about at labor notes is you know to start a new multi employer plan You need to line up, you know contracts across different employers. You need to have You know cross local, you know or cross unit collaboration. You need to kind of have like escalating actions. You need to have You need to run a coordinated, you know comprehensive campaign You need to do all these things that we talk about at labor notes But is you know hard enough to do in your own single shop but coordinated, you know across multiple shops but yes, I I mean We should talk more. You know, I think it's I was it's not known at all that union. I've talked to some very, you know Some of the most intelligent people I know in the labor movement Yeah, actually, I mean Barbara when I told Mike fatal this was the new executive director of mass twos teachers He was like His jaw dropped. He was like we start for new multi employer plans every year I had no idea That's not neither did I until I talked to the main lawyer for multi employer plans. It's like I start them all the time. So um, yeah, I I do think it's um It's doable, but it it requires a lot of lead up work To start them and yeah, so Sheila, you have your hand up Yeah, hi. Thanks. Um, yeah, I want to go back to something you said much earlier. Um, and um, I was a little confused by it. You said that when these pension funds, you know sell off some of the private equity Um, and uh hedge fund, you know investments They have no I you know, they buy they bought it for $10, but they sold it for for four How come they don't know all during the course of holding these investments? How much the um How much the selling price is worth if if they you know only find they can only find out when they sell it Yeah, it's like a house. Yeah, basically. Yeah, you know, so I mean you You don't know really know that, you know, you're assessed value But you don't know the resale value of your house until you sell it but then But typically at least with your house, you have the assessed value You have what other houses on your street are selling for here. There's so much more black box secrecy where Frequently pension funds won't disclose what they sold Uh, these assets for they'll sell them in one big tranche. So you'll only know You know the total write down, but you won't know the write downs of individual investments So there's no I mean, frankly, you know, I mean, there's right There's hundreds of thousands of realtors and people in the real estate industry Whose job it is to figure out the valuation of houses, which are Is hard enough to do with all those people But here you have, you know, maybe three or four academics, you know in the country actually trying to figure out the value Of these of these hundreds of billions of dollars in investment So does that answer your question or do you have a follow-up question? Um No Well, what so, you know, I mean, maybe this sounds very simplistic. Why don't they try why I mean, you know If you want to find out how some some things how much something's worth Why why why don't you try to sell it to see how much it's worth? I mean, there's absolutely no way that they can they can Approximate this. Um, it just sounds um, you know, even if you want to sell your house, you could put it on the market, you know for a minute and um, you know, see if anybody bites, but um That's what I'm wondering But you can tell me I mean, it's I mean again, I mean, this is the way I toned it down a little bit, you know and other works But I mean it might be what's systematic organized fraud. I mean, there's nothing It's there's there's no other way to put it and unfortunately, you know The pension fund staff and most of the trustees are, you know, or not most of them I mean, many of the trustees are, you know complicit And it it should not be allowed in my view public pension funds shouldn't be allowed to invest in private equity and hedge funds. Um, and um It's Yeah, it's a tragedy. That's more satisfying when I hear that They're fraudulent criminals. Thank you Certainly explains it. Yeah Yeah So Veronica, you had a question that you put in the chat when you're from Veronica and Erica and they'll see where things are for Ready to wrap up or if we have more questions Veronica So, um, hi. Yes Hi, yeah, so, um, I don't know if this is something you've looked into but you know in texas There were a couple bills that passed that prevent state funds from being divested From certain industries like specifically fossil fuels and guns and ammunition Um, and do you think that that's something That could expand to include other industries? Is that something like nationally? We should be on the lookout for Yeah, I mean, I think it's you know, it is um the fossil fuel I mean, it's an interesting setup. You know, I mean the um Like so much of it in my view is is just these extreme right-wing state legislators wanting to settle points That's one, you know Settle scores. That's one Component of it another but a component of this is distracting people from kind of the enormous amounts of wall street predation Occurring that's you know far more relevant. Um, and Uh And it's probably some mix of the two of those things. I think it's it's definitely a concerning Development, you know, I what I do go back to and I said this to Jay, you know, who's very involved in in these efforts is, you know It's unfortunately in my experience I could be wrong. It's it's hard to get, you know, normie rank and file union members to care about something like an uh a A bill that prevents the pension fund from divesting from fossil fuels Um, but if it's if there's a broader education project done about pensions and how You know, how your, you know shitty benefits play into You know, all kinds of bad things in society that we want to prevent and how we have You know an organized approach for reducing, uh For both protecting our plans and also Ensuring that our plans are invested in socially responsible ways Uh, and there's a broader agitational organism organizing conversation that Occurs in the broader context of a revival of the union at the work site through expanded stewards structures ongoing training escalating actions structure tests Um, all of the above then you can then that's how you do get people to care about it but unfortunately kind of going directly from You know You know just trying to kind of get people to sign up for for the union period, which is you know in texas is the main kind of goals You know, there's I don't know the exact density, you know That it is for teachers unions in texas, but it's you know, it's it's There's no collective marketing and there's you know No closed shop either Uh There's there's definitely some steps that it takes to to get people You know to make it so this is an issue that is actually agitational to people It should be in my view immediately agitational to people, but This stuff is mystified. I think for a very specific reason, you know, I mean there's You know the I think it's the way that finance is taught and not taught Uh in america has something very clearly to do with the total wall street control over our democracy and There's a great quote. I came across recently, which was like every successful Fortune begins with a secret Uh, and I I think that that really applies here Erica Erica, I think you're you're muted Erica Sorry about that. I listened to you earlier matt. You said you had done some studying and writing on the Chicago teachers pension fund and um I'm I'm one learning of it at the moment But I have been doing a little bit of studying in the past couple years And one of the things I learned just by looking at the documents that our ctpf website provides is that we have In 2021 we had 66 private equity firms That we had Like on our payroll Yeah 66 like that's a lot of hands in our pot, right? And I was also I also put it some time in to look at the expense At the expense ratios at the fees and obviously I didn't get far that is very cumbersome It's very tedious to look over documents that ctpf provides or i'm sure any Any pension uh group probably um I'm sure and intentionally So that we just kind of give up But I was able to learn that we had 66 private equity firms with their hands in our pot We're paying fees to them And I reached out to staff and them uh, you know with my findings if when my questioning like That's a lot of private equity. That's a lot of firms, you know, do we need any? I also learned that um in texas they did a they did a study or not a study The study that I wanted to bring up in a minute was in pennsylvania But texas itself made um, there was a couple articles that came out in some of the texas newspapers and one of them uh was about comparison they made between public pensions and their investments in private equity firms Compared that to some of the public pensions there who whose Main investments were institutional index funds And they found that over time only three percent of private equity firms actually Made above the actual index funds. Yeah, you know, however three percent Yeah, yeah, and so we're studying this. We're you know Trying to find a way to Like kathy said earlier trying to find a way to talk to our pension trustees or our staff excuse me um, and of course i'm i'm In a position where I want to learn to how to stand my ground Because I throw these facts at them like all these private equity firms these high fees Underperformance over time You know, I throw that and that's pretty much all I got And then they come back with some jargon, right some long-winded jargon explanation about how it's going well with these firms And I understand that some of them do I'll perform it, you know, but in the long run It's it's almost zero And so I came across a study that was done in pennsylvania the pennsylvania's Pension system has been doing really well mostly institutional index funds low fees and earlier in one of your slides You had there that I think new jersey that that was a win for new jersey if I'm correct remember I think it was new jersey on your slide One of the wins that they were able to push out a lot of the private equity firms from their pension holdings and instead Just kind of bring in more index institutional index fund That approach with the lower fees So my question is I would like to like follow their lead like if you I don't know how they did it and in my district Our union does not want to get publicly involved with the C Chicago teachers pension fund Right. We have representation In our as our trustees one of our issues is there's different caucuses in our union And You know, whatever is going outside this the teachers pension fund It's transferring into the conversation, you know of Of the trustees and and the decision making that's going on there Very political But outside of that just as a non-partisan movement How would one, you know, just maybe Maybe you could tell Or in another webinar like how do new jersey do it if it wasn't new jersey? How do they get their trustees their fund? to Fire, you know get rid of eventually little by little maybe these private equity firms And lower their fees and instead, you know, just start investing in You know just passive index funds and with lower fees and just you know following the market Yeah, I mean, I'll I'll do a plug for other labor notes work. I mean, I I do kind of see it as like an organizing kind of issue. You know, I mean, I think that when, you know, I'm You know, somewhat familiar with the caucuses in cdu and I think that You know, there's definitely been a lot of Um Animosity it seems like I mean particularly kind of animosity directed at core But I I I'm vaguely familiar. I was in Chicago a while ago. I mean, my my feeling is that You know, what secrets of the successful organizer kind of teaches and then there was an One of my favorite labor notes article that what I was a student staff are sent out like every month was like How to resolve conflicts in your union? Um, which is, you know, so I mean, do you guys do just a conflict resolution workshop? Barbara No, we don't We're quiet probably Yeah, you know, it's like, I mean, how can there be, you know, kind of A conversation, you know about pension issues, you know that you know Traverses kind of some of these divides that have been raucous, you know, within the caucus environment That would be my question. And so that's That, you know, it's it's difficult, especially kind of when, you know, there have been You know, uh, you know I'll always say is it's difficult, you know, but I think that the best way is like, okay You know, first of all, is like, can there be like a conversation independently of Of kind of previous conflicts, you know, that's about kind of finding a collective common ground and common solution that that's kind of my my My suggestion or my idea on that front Yeah, I was going in the same direction Matthew sort of like what what's this could actually be a unifying issue in spite of the political differences Yeah, yeah, and so like what's the Actually, my question My question was more about Yeah, oh, yeah. Oh, yeah. I mean, I will say New Jersey that was about hedge funds and Chicago teachers did get out of hedge funds a long time ago. Um, so um You know, uh In terms of private equity, it's a tougher net to keep crack. You know, I mean that it's really the the county pension funds in pennsylvania have gotten out of private equity and then nevada Really kept their investments in private equity to begin with and then in the private sector Plans I've gotten out of private equity because there's a broader trend that's not really positive about It's pretty complex about the way the benefits are are determined that makes it so You would want to have as much in bonds as possible Uh The short answer is is, you know, I I mean, I is kind of going back to what I just said I mean, that's kind of why I answered that is that there isn't actually like a perfect Example there have been successes. I would say, you know, but in terms of getting a pension fund You know to uh perfection, you know, I mean my analysis is I mean Chicago teachers, you know Uh, I mean, I'm against private equity generally, but you know, it's actually one of the better run In the country, um because they've limited kind of the amount they've gone into private equity Uh Yeah, and so that's why I did answer with that kind of well How can how can there be kind of a unifying discussion about how we're moving forward on this issue? Like independently of, you know, some of the internal disputes that have occurred over the years that that would be my question in which case You know, I would absolutely suggest, you know, the secrets of a successful organizer kind of workshop series for kind of how to bridge that Divide Thank you. Um It's just about nine o'clock. So I think we should wrap up I will say it seems like it could be very helpful to have sort of a follow-up session. That's like here's some specific ways to do things including the analysis of Of the fees that are being paid How do you bring people into that conversation? Yeah, could be something that we could do and then also sort of taking this idea of How do we start the conversations? Yeah, a lot of secrets of a successful organizer Relative to pensions. What are what are some of those conversations? Maybe look like so that we could think about how to how to begin that work specific to this issue Yeah And then, uh, yeah, that's what I was saying JD sort of had it how to do the research as part of that. So Matthew and I will be in touch about that Um, Matthew want to thank you very much for a really really informative workshop Thank all of you who uh stayed on and and joined us. I will be sending out a link to the reporting I'll include with that. Matthew if you can send me your slides Uh, and I think there was one other piece um, you were going to send Uh something about Some document that you had about research That was uh, yeah, if you can send me that I'll get that out to all of you. Uh who joined us um Thank you very much and uh Solidarity everybody. Have a good night. Thank you everybody for joining That was really fun to have this conversation and thank you so much for everybody who asked questions In particular, I really appreciate that so Our team Go team. All right. Good night. Thank you Thank you. Good night