Pension officials who manage the retirement savings of the working class are funneling employees’ pension savings to Wall Street and finance industry executives as investments, according to a July 2021 Lever report by David Sirota. Roughly $1 trillion dollars of workers’ pension savings has been recirculated back to financial elites in the form of “alternative investments.” Sirota explains how these investments largely remain hidden to the public while also being funneled into the medical-industrial complex and the fossil fuel industry and intensifying the class war within the United States.
Pensions are a form of payment wherein an employee accepts lower wages while working in exchange for a fund that accrues savings for their retirement. These pension funds are only accessible to workers during their retirement but give workers a “defined benefit,” usually in the form of a guaranteed monthly payment, upon retirement. Due to a lack of adequate employer contributions and state and local governments’ refusal to fully fund the pension system, pension funds are increasingly reliant on hedge funds and other alternative investments overseen by Wall Street companies to meet their obligations to retirees. These companies collect hefty fees in return for managing these investments. Consequently, the American working class’ attempt to maintain adequate retirement savings is deepening the pockets of Wall Street.
Sirota notes that pension officials in Pennsylvania “pumped about two thirds of the state retirement system’s assets into alternative investments.” As a result, Pennsylvania public employees saw a below-average return on their investment at the same time as Wall Street firms managing those investments collected $4.3 billion in fees. Even more concerning, research conducted by CEM Benchmarking found that only half of the investment fees in the United States pension system are being disclosed to the public.
Corporate outlets have generally ignored how finance industry executives profit from alternative investments made by workers’ pensions and how pension money is being redirected by financial firms to strengthen already booming industries. Some notable mainstream coverage of Wall Street gambling with workers’ pensions has come from the Wall Street Journal. In addition, Forbes has also reported on unions and pension fund trustees advocating for the US Securities and Exchange Commission (SEC) to end the mismanagement of public pensions. In a June 18, 2021 op-ed for Forbes, lawyer Edward Siedle detailed more than $143 million in annual fees that the Ohio teachers’ pension paid to Wall Street billionaires “for nothing.” Siedle failed to investigate any further.
Source: David Sirota, “Workers Are Funding the War on Themselves,” The Lever, July 7, 2021.
Student Researcher: Cem Ismail Addemir (Illinois State University)
Faculty Evaluator: Steve Macek: (North Central College)
The post Wall Street Leverages Working Class Pensions appeared first on Project Censored.
This content originally appeared on Project Censored and was authored by Vins.
Vins | Radio Free (2022-04-12T21:04:09+00:00) Wall Street Leverages Working Class Pensions. Retrieved from https://www.radiofree.org/2022/04/12/wall-street-leverages-working-class-pensions/
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