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Thursday, January 1, 2015

Don't Fret, John!

We discuss pension funding from time to time and the problem UC has in keeping its pension plan from being swept into laws and ballot propositions covering all public pensions.  Whether there will be another ballot threat to UC depends on whether proponents of such initiatives have the money to get them on the ballot, at least a million dollars and probably more for signature-gathering firms. Turns out that there may be an out-of-state sugar daddy available to finance such an effort. In fact, he already put money into one California effort. (The effort was pulled before fully getting under way when the state attorney general put a title on the initiative's petition its backers didn't like.) Read on:

Enron billionaire frets about public pensions' solvency

When former Enron trader and Texas billionaire John Arnold donated more than $1 million to a November 2014 initiative to reform the public pension system in Phoenix, pension activists took notice... Arnold’s donation to Proposition 487, also known as the Phoenix Pension Reform Act, constituted close to 75 percent of total donations for the ballot measure, which failed. Had it passed, it would have moved new state employees from a defined benefit plan into a less generous (and less expensive) defined contribution plan such as a 401(k). Despite his Arizona defeat, no one believes Arnold is done... Arnold’s critics argue that he exaggerates the insolvency of public pensions nationwide. They also question his fitness to evangelize for pension austerity, given that he made his fortune at a company that in its 2001 collapse wiped out $2 billion of its own employee pension funds and cost public employees whose pension funds invested in Enron an additional $1.5 billion. “We’re talking about a former Enron executive who profited off a bankruptcy that destroyed the retirement savings of millions of hard-working Americans,” says Randi Weingarten, president of the American Federation of Teachers. Still, Arnold is undeterred... 

San Jose Mayor Chuck Reed... tried, unsuccessfully, to place an initiative on California’s November 2014 state ballot that would have allowed public employers, under specific circumstances, to reduce employee benefits and to increase contributions to underfunded plans. Arnold bankrolled the entire effort, to the tune of $200,000...

Full story at http://www.politico.com/story/2014/12/enron-billionaire-frets-about-public-pensions-solvency-113842.html

Anyway, we're really sorry to learn that Mr. Arnold is fretting:
video


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