– John Dillon publishes Pension Vocabulary where this piece was first posted.
My email from Rebecca Rimel couldn’t have come at a worse time.
Bruce Rauner had just won the nomination to run as the Republican gubernatorial candidate in Illinois, and the email from the CEO of the PEW Charitable Trust was just another back-handed indignity, albeit one delivered in far more delicately crafted verbiage than Rauner’s slash-and-burn platform.
Yet, looking at both their desired outcomes, if there is a difference, it’s one of little or no distinction.
You might not remember that very recently New York PBS affiliate WNET was brought to task for accepting considerable amounts of money to promote a PEW-backed research and program regarding needed reductions/changes in public employee pensions in New York. PEW also received like amounts of donations.
Abashed, WNET returned the “donations” to John Arnold, a hedge fund manager who earned millions of dollars in trading at Enron, a dubious distinction at best. For WNET, any exposed connection seemed, well, unseemly; and they quickly dissolved the relationship.
Not so for Rebecca Rimel or PEW Charitable Trusts. In fact, Rimel claims that her well-known bi-partisan research organization is performing a civic service, one tailored to help public workers keep their retirement programs as an alternative to complete dissolution.
In actuality, much of Rimel’s phrasing echoes the wording found in the Laura and John Arnold Foundation’s (LJAF) mission (for the last three years) in guiding state pension systems ‘to be part of a system that is fiscally sound, responsibly managed, and that ensures their retirement benefits…and to develop structural reforms that are comprehensive, sustainable, and fair…”(Principles for Pension Reform | Laura and John Arnold Foundation)
Borrowing the LJAF’s dire numbers, Rimel warns, “Public pension reform is arguably one of the most significant fiscal challenges facing many states and municipalities today. In fact, our research shows that state and local governments have more than one trillion dollars in unfunded pension promises. Although some plans are well-funded, in other places, if changes are not made, retirees, workers, and taxpayers will be left with rising costs and unpaid promises for years to come.”
Rauner’s wording is a bit more direct: “I’ll shake things up.” or describing SB! as “a small bandage on an open wound” or “opining that unions “are the problem” with “Illinois’ economic downfall.”
In fact, for anyone experienced with hedge fund managers, Rauner’s vision of bringing the 30 greatest corproate leaders out of Chicago to serve on a roundtable for saving the state sounds more threatening than helpful. Evidently, Rauner was not schooled in the same etiquette classes as were more wily and artful characters Arnold and Rimel.
One might even consider turning to someone appearing so intellectually concerned for our ultimate welfare – someone like Rebecca Rimel. Something like the PEW Charitable Trusts? And, that’s just what a state legislature did…
On the open letter website at PEW Charitable Trust (Pew President’s Message – The Pew Charitable Trusts ), Rimel glowingly describes PEW’s very recent involvement in the Kentucky legislature’s pension reform as a blend of detente and negotiated brilliance.
“The Republican-controlled Senate favored replacing the defined-benefit plan (a traditional pension) with a defined-contribution plan (such as a 401[k]). The Democratic-controlled House of Representatives argued that was too risky for workers. But with technical assistance from Pew, the two sides came together and created a hybrid plan, borrowing the best elements of both kinds of pensions. The reform package is expected to save Kentucky and its localities billions while protecting the retirement security of current and future workers.”
In PEW’s aftermath, however, Kentuckians may not see their intervention as clearly a path to fiscal salvation:
- The loss of important public safety over time benefits for officers of the law as a result of anti-spiking legislation.
- Changing current workers to a 401K kind of program without anticipating contractual medical benefits of the already retired, sick or needy.
- Bankrupting one of the seven significant services provided for mental health in the state of Kentucky.
- The loss of funding for significant state agencies (from the Roads funding to Fish & Wildlife).
But Pew and Arnold have accomplished in silk stockings in Kentucky what Bruce Rauner and his squad of capos would have in Illinois by breaking wills and heads if necessary.
Once again, a difference with out any distinction.