PENSION FUND BLACKMAIL
March 31, 2005
A notable sidelight to the Social Security debate has been Big Labor's battle to keep business from supporting reform. In addition to its usual grassroots and congressional lobbying, the AFL-CIO is threatening to pull its $400 billion pension fund business from any financial services firms backing personal accounts, according to the Wall Street Journal.
For example, three trustees representing the New York City Employees' Retirement System recently sent a letter to a half-dozen investment banking companies demanding a review of their Social Security stance.
Ironically, says the Journal:
- Unions are using the clout they've acquired from investing in the stock market to oppose a plan to let individuals invest their own tax money in the same market.
- According to a Tax Foundation paper, of nearly $2 trillion in public employee pension plan assets, 55 percent are invested in corporate equities.
Labor leaders don't mind stock-market investing when it enhances their own political leverage, the Journal editorializes, but for individual workers to build their own wealth, it is too "risky."
Source: Editorial, "Pension Fund Blackmail," Wall Street Journal, March 31, 2005.
For text (subscription required):
Browse more articles on Economic Issues