Groups representing public employees have suggested the same:
ALEC and TIAA-CREF Join The Assault On Public Pensions
The right-wing American Legislative Exchange Council has jumped into the conservative effort to dismantle public pension systems in a big way, making it one of its top 2014 legislative priorities, a public pension advocacy group has warned. The National Public Pension Coalition, which represents public sector employees, in a statement today flagged ALEC’s entry into the public pension battle as a threat to the financial security of millions of state and local public employees. It’s an escalation of the campaign against public pensions highlighted in the Institute for America’s Future Report, “The Plot Against Pensions.” That report focuses on the work of a foundation founded by John Arnold, a former Enron executive, and a public pensions project of the Pew Charitable Trusts to promote the notion that there is a public-pension “crisis” that can only be solved by substituting these pension programs for programs that shift risks to workers, eliminate benefit guarantees and create new profit streams for Wall Street money managers. “Studies” that take advantage of the Pew reputation as a reputable, unbiased source of information have encouraged several states to take actions to privatize their retirement systems that, as the report points out, leaders in some of those states have already begun to regret.
ALEC set the stage for its own intervention into the public pension debate with a report in August that encouraged states to convert their public pension (“defined benefit”) plans into 401(k) plans or other “defined contribution” plans. The report said that the “unfunded liabilities” incurred by state pension plans could range anywhere from “$750 billion to more than $4 trillion.” To address the shortfall, the report concludes, “There is ample evidence to suggest that legislators should move from defined-benefit systems to properly designed alternatives, such as defined-contribution, cash-balance, or hybrid plans.” That report was followed by a paper issued earlier this month by TIAA-CREF Institute, the research arm of the Teachers Insurance and Annuity Association–College Retirement Equities Fund, which markets the kind of plans that ALEC wants states to move to. That paper was written by an associate of the Laura and John Arnold Foundation, and asserts that a defined-contribution plan is not necessarily more expensive for workers and taxpayers than a defined-benefit pension plan...