(Nashville) Representatives from Pew Charitable Trusts caused confusion and controversy at a meeting of the Study & Formulating Committee when they revealed data about the Metro employee pension fund that conflicted with data presented by the city’s actuaries.
On multiple occasions, members of the Study & Formulating Committee attempted to get a straight answer from Pew representatives on the amount that Metro’s pension plan is funded at – a number which is crucial in determining if any reforms to the retirement system are even necessary. In a memo to the Committee on July 22, Pew/Arnold stated that Metro was funded at 77%, a number that was debunked by representatives from Bryan, Pendleton, Swats & McAllister, the independent actuary that serves Metro Government. According to BPS&M, Nashville's open pension plan was funded at a healthy 85% (13% higher than the average state-level pension plan) in 2013. “I want to make sure we aren’t sounding alarms that don’t need to be sounded,” said Glenn Farner, one of the members of the Study & Formulating Committee, to the crowd in attendance.
“It is very disappointing to see an organization like Pew risk its reputation with this kind of fuzzy math in order to push an ideological agenda that puts the retirements of thousands of Middle Tennessee working families at risk,” said Doug Collier, President of SEIU Local 205. SEIU represents public employees in Metro government departments as well as Metro schools support staff, nearly all of whom are covered under Metro’s benefits plan.
Despite its credible name, Pew is partnering with the John & Laura Arnold Foundation to push a particularly dangerous plan to cripple public pensions all across the country. The Wall Street Journal identified Texas billionaire and former Enron executive John Arnold as one of the major forces behind efforts to cut worker pensions at the city and state level. Arnold, who was the subject of a Department of Justice investigation related to his work at Enron (including accusations of insider training and his role in wiping out the retirements of thousands of Enron employees) has funneled massive amounts of money to pension-gutting politicians and their super PACs. His foundation has also directed $4.85 billion to Pew Charitable Trusts' "Public Sector Retirement Systems" project, which has produced anti-pension research used by state lawmakers to justify cutting into public workers' retirement benefits, often replacing them with more expensive, less reliable and widely-discredited 401(k) plans or their newer cousin, "hybrid pension plans," which bring with them hefty bank fees and unnecessary risk for seniors.
The Pew/Arnold work has been called “deceptive” by a host of state legislators in Kentucky after the organizations convinced the state of Kentucky to adopt a new “cash balance plan” which the legislators said “will cost taxpayers millions of dollars, will not reduce our state’s unfunded liability, and will diminish retirement security.” Pew also recently dropped into Jacksonville, Florida to provide policy recommendations addressing the city’s retirement challenges. There, Pew provided a flawed actuarial analysis that wildly overstated the Jacksonville police and fire pension fund’s problems. The city ultimately rejected Pew’s advice.
“It seems like everywhere Pew/Arnold goes, their recommendations are the same – to weaken the retirement security of public employees,” Collier said. According to investment research firm Morningstar, Metro Nashville was the seventh-highest ranked public pension fund in the U.S., with an ROI of 18.3% in 2013. “It ain’t broke, so there is no need for Pew/Arnold to try and fix it,” said Collier.
Another controversy plaguing the Study & Formulating Committee is its agenda. The current committee was formed by Mayor Karl Dean at the request of Metro Council members who asked the mayor to appoint a committee “specifically to consider the provision of domestic partner benefits,” according to a letter signed by 26 city council members on Oct. 2, 2013. “It was never the intent of the Council for this committee to be debating and discussing other employee benefits,” said Collier. “The city spent hundreds of thousands of dollars on an exhaustive study like this only two years ago and the changes that needed to be made were made. It is time for this current committee to be dissolved since their work on domestic partner benefits is concluded.”
The Service Employees International Union is one of the fastest-growing labor unions in the U.S. with over 2.1 million members in North America. In Tennessee, SEIU Local 205 is chartered to represent thousands of public and private sector workers.