State Pension Power- How State Policymakers Can Fight Against Attacks On Workers’ Retirement Funds.
By Meron Lemmi
Public pensions hold trillions of dollars of workers’ capital — wages earned by teachers, firefighters, nurses, and public workers who keep our society running. But this money is under attack.
In a webinar hosted by Americans for Financial Reform Education Fund (AFREF) and The Horizon Project, leading labor and state officials laid out strategies to protect public pensions from federal attacks and use state pension power to grow a strong economy for retirees, workers, and the public. The discussion followed AFREF’s recently released policy roadmap, which provided strategies for state leaders to defend pensions and direct investments to benefit workers and the public.
You Can Watch The Entire Webinar Here.
Across the country, public pensions are facing coordinated attacks at both the state and federal level. These attacks are part of a broader anti-ESG (which stands for environmental, social, and governance) campaign, backed by fossil fuel and corporate interests, that aims to reverse progress on labor rights, climate, and racial justice. Ignoring financial risks related to these issues threatens workers’ money. “These funds are not just about securing retirement,” moderator Renaye Manley of The Horizon Project and the Center for Labor & a Just Economy explained. “They’re also leveraging economic power that strengthens local economies, ensures responsible investment, and advances policies that benefit the public.” Public pensions can invest in affordable housing, better infrastructure, local jobs, and a just and sustainable future. But control over these funds is being wrestled away from the people it belongs to. Natalia Renta, Associate Director for Corporate Governance and Power at Americans for Financial Reform Education Fund, explains, “It’s worker’s money — it shouldn’t be weaponized against them.”
Unfortunately, that’s exactly what’s happening. For example, Arizona State Senator Lauren Kuby described a “zombie bill” that resurfaces every session that would effectively ban environmental and social considerations, even when they are financially relevant. She described it as a politically driven deceptive attack on so-called “woke” capital that harms pensioners and retirement savers.
Maryland Comptroller Brooke Lierman explained how Maryland is taking proactive steps, including forming a climate advisory panel to guide pension decisions. She stated that climate risk is financial risk. Additionally, she noted that ignoring risks that come from labor violations is financially irresponsible, as is ignoring the benefits of investing in firms owned by women and people of color.
Minnesota Attorney General Keith Ellison added a national perspective. He described how conservative attorneys general (AGs) sued large asset managers, making preposterous antitrust claims that Ellison firmly debunked. These attacks, he argued, are “coordinated bullying” set to protect fossil fuel profits and short-term gains over workers’ long-term retirement security.
However, state actors aren’t powerless. Public pensions are governed by state law, which gives policymakers real tools to act. The policy roadmap’s author, Natalia Renta, laid out key actions that state policymakers can take. For example, state AGs and legislators can clarify fiduciary duty to make it clear that risks like climate change and labor violations can be considered in investment decisions. Renta also warned about pensions’ growing investments in private funds, like private equity. These investments are opaque, illiquid, fee-laden, and high risk, and can carry hidden labor and climate risks. State lawmakers and pension fund trustees can demand stronger disclosure and set standards for where workers’ money goes. She also stated that they can reclaim their shareholder voting power over the companies in which they invest. Too often, asset managers like BlackRock and State Street vote the pension shares in ways that go against workers’ interests. States can take back that authority or choose asset managers that better align with workers’ interests.
American Federation of Teachers (AFT) President Randi Weingarten emphasized that trustees are key and that there is a need to educate and empower them so that corporate or asset managers’ agendas do not usurp their power. She explains that trustees shouldn’t “rubber-stamp” recommendations from asset managers. Instead, “they must be able to call balls and strikes.” To that end, AFT runs a national council to educate trustees so they have the knowledge to act in the best interests of pension beneficiaries.
As state and federal policymakers debate the future of public pension funds, panelists emphasized the urgent need to resist attacks and protect long-term financial security. Panelists also emphasized that everyone has a role — not just trustees and lawmakers but also the broader public. Whether it’s speaking up at public meetings or organizing locally, anyone can fight for these funds to serve the people they belong to. Or, as Ellison put it: “Lean in. Fight back. Speak up. It’s our money.”
###